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Gigi Sohn

Gigi Sohn

Posted: September 25, 2008 01:14 PM

Move Over Wall Street, Hollywood and the Chamber of Commerce Want Their Handouts Too


After proposing to dump over $1 trillion into Wall Street coffers in less than a month (all the while looking at the wrong side of a $483 billion budget deficit ), you might think that Congress would be careful about taking on new financial obligations. Of course if you thought that, I might have a bridge in Alaska to sell you.

At the same time that our financial institutions are crumbling and taxpayers are footing the bill, the Senate is rushing to pass, of all things, a bill that would spend additional taxpayer dollars on civil law suits against alleged copyright infringers. S. 3325, the Enforcement of Intellectual Property Act of 2008 would, for the first time, give the Justice Department the authority to bring non-criminal law suits against individuals and companies that Hollywood and the recording industry believe are violating copyright law (Justice has long had the power to bring criminal actions). These lawsuits could be brought even if the copyright holder has sued the alleged violator for civil damages; meaning that your tax dollars could be used to punish the same person or company twice, with large media companies pocketing the proceeds.

The copyright industries appear to need no help in initiating lawsuits against infringers. The recording industry alone has filed over 30,000 lawsuits alone against peer-to-peer file sharers over the past five years. These suits have turned out to be a nice source of income for the companies because just about everybody settles rather than engage in a prolonged battle against deep-pocketed companies. Clearly, the problem is not that the copyright industries cannot pay their legal bills -- it is just that they would rather you pay them.

The grant of civil enforcement power to the Justice Department is only one of several problems with this sweeping bill. For example, the bill seeks to expand and harmonize already strong (and some would say draconian) intellectual property enforcement, and in doing so leaves open the possibility of abuse of power and unintended consequences. For example, the bill would allow government seizure of any property "used or intended to be used" in the commission of a copyright crime. However, nothing in the bill requires that property to be owned or predominantly controlled by the infringer. Given the distributed nature of online content and Internet communications, this provision subjects the property of unaffiliated, innocent third parties like search engines and internet service providers, to forfeiture.

While there is nothing unusual with a Democratically-controlled Congress helping to protect the copyrights of Hollywood and the recording industry, those parties were not the supporters cited by the Senate Judiciary Committee when it passed the bill. Instead, the U.S. Chamber of Commerce and the National Association of Manufacturers were mentioned as the most fervent advocates for the legislation in the Committee's press release. The Chamber, in particular, can hardly be called a Democratic constituency, consisting as it does of the largest (and mostly Republican-leaning) corporations. Even more ironic is that the bill (and its companion bill already passed in the House) would increase the politicization of the already highly politicized Justice Department by placing an IP enforcement "czar" in the White House.

Regardless of what one thinks of the merits of ratcheting up copyright enforcement and punishment beyond what is provided for some violent crimes, it is hard to think of a less opportune time to pursue it. We don't even know how much the bailout of financial institutions is going to cost us. So why throw even more taxpayer dollars at an industry that not only is adept at protecting itself, but is thriving?

UPDATE: The Departments of Justice and Commerce Wednesday night sent this letter to Senators Leahy and Specter opposing the parts of the bill giving Justice civil enforcement authority and putting an IP czar in the White House. Among other things, the letter says that "[i]n an era of fiscal responsibility, the resources of the Department of Justice should be used for the public benefit, not on behalf of particular industries that can avail themselves of the existing civil enforcement provisions." Amen!