Three-Strikes Law Seen Not Desirable for U.S. Copyright Infringers
Lawmakers are more eager than federal officials to target individual file-swappers in the U.S. for copyright infringement, judging by the back-and-forth at a House Oversight Government Management Subcommittee hearing on intellectual property enforcement Wednesday. They quibbled over the balance between pursuing operators of illicit- content networks, which often requires the cooperation of foreign governments, and Internet users downloading from them, who can be spooked by a warning letter from their ISP. Officials defended the opportunities for reduction in piracy and counterfeiting from some of the worst IP offenders in the U.S. government’s view, such as China. But lawmakers seemed unimpressed with other countries’ efforts.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Subcommittee Chairman Diane Watson, D-Calif., asked whether Internet access cutoff provisions recently approved in the U.K. and France would work in the U.S. “I'm not sure that type of activity would be something that the United States would want to follow,” said Commissioner for Patents Robert Stoll. The U.S. fights piracy “in many manners” but the so-called three-strikes approach probably isn’t “palatable” here, he said.
“It’s my view that the technology is not the problem” but how it’s used, said Jason Weinstein, deputy assistant attorney general in the criminal division, agreeing a cutoff provision isn’t ideal for the U.S. The department works closely with industry to identify and prosecute “warez” groups and BitTorrent network operators. It has also secured convictions, last year putting away “the most prolific” camcording suspect on the East Coast in a District of Columbia case. Sites distributing illicit content often are hosted overseas, but “it’s not the safe haven it used to be,” Weinstein said.
“It gets me nervous when we don’t have the intestinal fortitude of the French,” said Ranking Member Brian Bilbray, R-Calif. Stoll responded that antipiracy enforcement is “a balancing act of interests” and said three-strikes probably isn’t “in the interests of our society” because it would harm beneficial uses of the Internet, such as for education. Rep. Chris Murphy, D-Conn., said he was discouraged by officials’ dismissal of “demand-side restrictions” on piracy. Law enforcement is playing “Whac-a-Mole” with commercial infringers, who can move their servers to a different country whenever they feel threatened, he said.
Such a person is “much more vulnerable than he ever has been before,” Weinstein said. The U.S. has its greatest impact in “supply-side” enforcement, such as its stationing of intellectual property law enforcement coordinators, known as IPLECs, in piracy hotspots such as southeast Asia. Such efforts are expensive but “we view it as a sound investment,” sharing evidence quickly with local officials and building relationships, Weinstein said. Pirated content online keeps growing because it has a “magnitude that is far greater than the resources” agencies have to deal with it, he told Murphy.
Federal officials made a strong pitch for their ability to tackle piracy and counterfeiting under current initiatives. The Office of the U.S. Trade Representative’s Special 301 review of countries’ IP enforcement, now in its 20th year, has been crucial, said Stanford McCoy, assistant USTR for intellectual property and innovation. “If [countries] know that we are holding a magnifying glass up to their actions, they will be less likely to break the rules,” he said.
The U.S. intellectual property enforcement coordinator position is “one step forward” but its duties aren’t clear, said Rep. Judy Chu, D-Calif. McCoy said the coordinator, newly-confirmed Victoria Espinel, just started work Tuesday and was “burning the midnight oil her first day” when they first talked. “We already work intensively with the other agencies” through the Trade Policy Staff Committee led by USTR, McCoy said. The Anti-Counterfeiting Trade Agreement, which is under negotiation and controversial among digital- rights groups and some trade associations for its possible provisions on Internet liability, was mentioned only in passing by McCoy and Watson.
The Patent and Trademark Office trains about 4,000 domestic and foreign officials in IP every year, and it’s planning to run seminars on more specific legal topics, Stoll said. The State Department has trained 1,500 customs and police officials in several countries, said William Craft, acting deputy assistant secretary of state for the Bureau of Economics, Energy and Business Affairs. It just helped Mexico with a mass arrest of people involved in illegal camcording, he said. The FBI’s Summer Solstice operation with Chinese authorities last year netted $2 billion worth of counterfeit software, among other “great successes” with foreign counterparts, Weinstein said.
The interagency IP Rights Coordination Center in suburban Washington has provided “one-stop shopping for industry” to report IP problems abroad as well -- 29 private leaders joined officials for lunch Monday, he said. Agencies have much improved coordination since the PRO-IP Act was implemented, said Loren Yager, GAO director of international affairs. But long-term success abroad requires “careful attention to human capital planning” -- the top challenge is recruitment and retention of officials with cultural expertise in their host countries, he said.
Lawmakers weren’t in the mood to see much good from China. Its government’s new rules for information-technology procurement, which give priority to proprietary technology from Chinese companies, could violate trade law and bilateral agreements, Chairman Watson said. “Innovation is no excuse for discrimination,” McCoy agreed. The relevant U.S. interagency team, led by Ambassador Jon Huntsman, “has sprung into action.” Rep. Darrell Issa, R-Calif., said China was backhanding the U.S. for “this bargain that’s been so favorable to them” -- the loss of manufacturing jobs to China as the U.S. pursued high-tech industries. IP remains “at the core” of the World Trade Organization’s reluctance to let in Russia even as China has failed to “gain any respect” for IP since joining, Issa said.
Countries with the biggest IP problems are often the “most engaged” in addressing them, Weinstein told Ranking Member Bilbray, who compared China’s strategic importance in IP to Somalia’s in stopping piracy at sea. China’s economic success in tandem with its perceived disregard for IP shows other countries “'you can get away with this,'” Bilbray said. Trading partners with the U.S. could just as well conclude that China is “decimating” its own IP industries, McCoy said. Told by Rep. Gerry Connolly, D-Va., that the estimated $300 million in goods seized at the U.S. border last year “sounds pretty low,” Weinstein said the problem was inadequate resources.
But a single IPLEC for a region can make a big difference, Weinstein said. That official in eastern Europe helped Ukrainian authorities, using a dial-up modem and old computer, take down a pirate site, he said. The GAO’s Yager said he learned from a trip to piracy hotspots that businesses “felt very well served” wherever a full-time IP official was serving. But they need an “unusual combination of expertise” to be effective, Yager said.