Lawmakers Call for Tougher Infringement Penalties

The same bipartisan group that pushed patent reform through the U.S. House calling for reduced infringement awards introduced legislation Dec. 5 to increase criminal and civil penalties for copyright and trademark infringement.

The Prioritizing Resources and Organization for Intellectual Property Act of 2007, or PRO IP, would also create an Office of the United States Intellectual Property Enforcement Representative at the White House and a separate IP-enforcement division at the Department of Justice.

The new penalties include a provision that would allow the DOJ to seize any computer or network hardware used in infringement activities. Rep. John Conyers, D-Mich., a co-sponsor of the bill and chairman of the House Judiciary Committee, promised to begin hearings on the bill next week.

“This legislation is an important and necessary step in the fight to maintain our competitive edge in a global marketplace,” Conyers said in a statement. “By providing additional resources for enforcement of intellectual property, we ensure that innovation and creativity will continue to prosper in our society.”

The ranking Republican on the panel, Lamar Smith of Texas, added, “Counterfeiting and pirating intellectual property costs American jobs, reduces American prosperity and threatens the existence of American companies. By protecting intellectual property, this bill preserves American jobs, encourages innovation and helps build a strong American economy.”

Conyers said piracy costs the United States between $200 and $250 billion annually in lost sales, including 750,000 jobs.

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Rep. Howard Berman, D-Calif., chairman of the House Subcommittee on Courts, the Internet and Intellectual Property, said next week’s hearing would include both industry experts and labor and consumer advocates.

The bill’s introduction drew the immediate praise from NBC Universal and the Motion Picture Association of America, while Public Knowledge, a public advocacy group, said the proposed legislation could have harmful, if unintended, consequences for consumers.

Calling global piracy and counterfeiting a “worldwide pandemic of crime,” NBC Universal said in a statement, “The bold mandate in this legislation for high-level executive leadership—starting at the White House and the Department of Justice—and for dedicated prosecutorial, investigative and international resources will dramatically advance the cause of protecting U.S. innovation, technological invention and creativity.”

MPAA Chairman Dan Glickman said in his own statement that the American business community could “speak in one voice today in support of these legislative efforts to protect intellectual property.”

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Public Knowledge, though, found problems with the increased penalties and the asset seizure provisions of the bill.

“The bill rightly targets enforcement of copyright law against commercial infringers, but some of these same enforcement provisions are likely to hurt ordinary consumers,” Public Knowledge President Gigi B. Sohn said in a statement.

“Seizing expensive manufacturing equipment used for large-scale infringement from a commercial pirate may be appropriate. Seizing a family’s general-purpose computer in a download case, as this bill would allow, is not appropriate.”

Sohn also noted that Public Knowledge is a strong supporter of the House patent reform legislation that originated in the House Judiciary Committee.

“The bill also takes a direction opposite from that taken in recent patent legislation. The House has passed legislation limiting patent damages relative to actual harm, a strong policy that will promote competition and innovation,” Sohn said. “This bill takes already extraordinary copyright damages and increases them, expanding the threat of litigation intended to stifle competition and innovation.”

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