Opposition Groups Bemoan House Intellectual Property Bill
House Judiciary Committee Chairman Lamar Smith, R-Texas, introduced legislation Wednesday to stem online theft of intellectual property, to a mixed reception from industry stakeholders and copyright advocates. Smith said the Stop Online Piracy Act, HR-3261, promotes American jobs by giving law enforcement and copyright holders more tools to bring action against infringing websites. Opposition groups jumped on Smith’s bill, saying it would impose unfair mandates and federal regulation on the computer and Internet industries.
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The bill would help “stop the flow of revenue to rogue websites and ensures that the profits from American innovations go to American innovators,” Smith said. “The bill prevents online thieves from selling counterfeit goods in the U.S., expands international protections for intellectual property, and protects American consumers from dangerous counterfeit products.”
Smith’s bill differs from the Senate PROTECT IP Act, S-968, by modifying a provision that enables a private right of action against copyright infringers. HR-3261 provides rights holders with a two-step process to seek “unlimited injunctive relief” against infringing websites. Rights holders must first contact and provide information to financial intermediaries and ad providers to seek action and sever ties with a website dedicated to infringing activities. If the intermediaries fail to act, the rights holder may then seek a federal court injunction against an infringing website. The Senate bill does not require copyright holders to exhaust intermediary support in order to pursue legal action against infringing websites.
The bill was sponsored by House Judiciary Committee members including Ranking Member John Conyers, D-Mich., IP Subcommittee Chairman Bob Goodlatte, R-Va., and Rep. Howard Berman, D-Calif. “I look forward to working with all of the entities in the online ecosystem to effectively choke off the funding for rogue websites and eliminate their safe-havens as the bill becomes law,” Conyers said. “Millions of American jobs hang in the balance, and our efforts to protect America’s intellectual property are critical to our economy’s long-term success."
Rep. Marsha Blackburn, R-Tenn., touted the bill as a means to preserve jobs and the overall American economy. “If we want to see job growth now, in the next decade, and the next two decades we have to create an environment where our innovators can innovate and bring concepts to the marketplace,” she said. “Intellectual property gives the foundation for us in the United States economy to boost our global competitiveness and we want to make certain we are protecting that.”
But the CEA believes the bill would actually “kill jobs and innovation and slow down one of the few bright spots of the economy,” said CEA President Gary Shapiro. “The notoriously litigious content industry could simply accuse a site that it is selling a product that could ‘enable or facilitate’ a copyright infringement, thereby allowing accusations to shut down sites vital to the Internet economy,” Shapiro said. “This scenario is unacceptable and could lead to mass shut downs of websites and Internet-enabled services.” The CEA said it has coordinated a group of 15 venture capitalists to meet with lawmakers Thursday to protest the bill.
The bill is not perfect but it will help stem the theft of American intellectual property and preserve American jobs, the RIAA said. The bill is “not a panacea, it’s not going to fix all our problems, but it is a tool and we need it,” said Mitch Glazier, RIAA executive vice president-public policy and government relations. “This won’t ruin the Internet and it will give incentive to invest in viable businesses on the Internet,” he said.
The U.S. Chamber of Commerce applauded Smith’s bill and said the legislation “stands up to the mass theft of American intellectual property.” “Websites that blatantly steal the creativity and innovation of American industries violate a fundamental right to property,” said Thomas Donohue, president of the Chamber. “Operators of rogue sites threaten American jobs, endanger consumer safety, and undermine the vitality of the online marketplace.”
Smith ignored the pleas of industry stakeholders who asked that lawmakers delay the bill so they could offer their input on the final text. Last Friday, House Judiciary leaders discussed a draft of the bill with representatives from the Computer and Communications Industry Association, CEA and NetCoalition. In a letter sent Monday to Smith, IP Subcommittee Ranking Member Mel Watt, D-N.C., and Conyers and Goodlatte, the groups asked lawmakers to hold off introducing the legislation until the “affected stakeholders can comment meaningfully.” The letter said that “we urge you to reconvene affected stakeholders and experts when a draft has been prepared and utilize the input that they may provide before introducing legislation.” A spokesman from Smith’s office declined to comment.