DoJ, coalition disagree on intellectual property bill

The Department of Justice is at odds with an unusual coalition of business and labor groups over a new intellectual property enforcement bill intended to crack down on piracy.

The bill, known as the PRO IP Act, would increase damages for counterfeiting and add more personnel to help coordinate international policing. House Judiciary Committee Chairman John Conyers Jr. (D-Mich.) is the bill’s sponsor, and Rep. Lamar Smith (Texas), the committee’s ranking Republican, is a co-sponsor. More than 400 labor and trade groups, including the Teamsters, the U.S. Chamber of Commerce and the National Association of Manufacturers, also support the proposals.

{mosads}The Justice Department, however, has warned the bill’s bipartisan backers that their measure could undermine efforts Justice already has in place by setting up new offices dedicated to enforcing intellectual property rights in both the Justice Department and under the Executive Office of the President. It charges these new offices would overlap with and disrupt work by Justice’s criminal division, which already enforces intellectual property law.

“The department has stated on past occasions that we should be careful not to divert finite resources away from our core prosecution mission merely to fuel the creation, maintenance and servicing of additional bureaucracy,” said Deputy Assistant Attorney General Sigal Mandelker, who spoke before a hearing of the Subcommittee on Courts, the Internet and Intellectual Property last week.

Mandelker said the criminal division already works with at least five other offices, an arrangement that has led to arrests overseas for illegal pharmacies and other pirated goods.
Supporters of the PRO IP Act, however, charge that Justice in recent years has not been aggressive enough in policing intellectual property theft. They say the new bill will provide a spark for tougher anti-piracy efforts.

David Israelite, president of the National Music Publishers’ Association, said that the bill would help re-energize efforts to combat intellectual property theft, which was a priority of the Justice Department under John Ashcroft. Israelite was Ashcroft’s deputy chief of staff and the head of an intellectual property task force.

“I’m sure more would have been done if [Ashcroft] had continued as attorney general, but I’m hopeful that the new attorney general will make prosecuting IP crimes as much a priority as Mr. Ashcroft did,” he said.

According to a study commissioned by the coalition of unions and businesses that support the bill, the United States loses $250 billion yearly due to piracy, which affects 19 sectors, including software, electronics and auto parts.

“By creating a separate IP division at the Justice Department, this bill provides new leadership and new impetus at the department for protecting intellectual property,” Smith said.

The bill’s sponsors reached out to the Justice Department before they introduced the legislation and included many of the department’s recommendations in it, Smith said. What’s important is that intellectual property rights are enforced, he said.

In addition to the Justice Department’s opposition, three Judiciary Committee members — Reps. Zoe Lofgren (D-Calif.), Rick Boucher (D-Va.) and James Sensenbrenner Jr. (R-Wis.) — don’t like how the bill would calculate damages for copyright infringements of compiled works.

Current law allows an award of up to $150,000 for the infringement of one item in a copyrighted compilation, such as one track on a CD or one photo in a stock photo album. The bill calls for that amount to be multiplied by the number of works in that compilation.

“The threat of large damages may not only prevent innovation — such as the innovation we have seen in the invention of the VCR, TiVo and MP3 devices which enable legal copying — but also encourage the filing of frivolous lawsuits,” wrote Lofgren, Boucher and Sensenbrenner in a letter to other committee members.