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House panel kills controversial copyright provision

By , IDG News Service
March 06, 2008 12:40 PM ET

IDG News Service - A U.S. House of Representatives subcommittee has stripped out a provision in a copyright enforcement bill that would have increased fines for compilation CDs containing pirated music by 10 times or more.

Critics of the original version of the Prioritizing Resources and Organization for Intellectual Property (PRO IP) Act had complained that one provision would assess fines for each separate copyright work on a compilation work such as a CD, meaning the fines for a 10-song compilation CD would range from US$7,500 to $1.5 million, instead of the current $750 to $150,000. But the House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property voted on Thursday to approve an amendment that stripped out the controversial provision.

Critics, including online civil rights group Public Knowledge, had complained that the compilation provision in the original bill would have gone too far with new penalties. The compilation provision would have treated each song on a compilation CD as a separate copyright violation, instead of treating the entire CD as one copyright violation, as is the practice now.

"We are pleased that the subcommittee deleted from the bill the section ... that would have allowed multiplied damages for infringement of a compilation far beyond any reasonable levels," Public Knowledge President Gigi Sohn said.

The compilation provision in the original bill raised too many questions, said Representative Howard Berman, a California Democrat and subcommittee chairman. Lawmakers need "more time to identify the appropriate legislative solution," he said during a hearing to amend the bill.

Several lawmakers, including Representative Zoe Lofgren, a Democrat representing part of Silicon Valley in California, praised sponsors of the bill for removing the compilation provision. "I was concerned that [the compilation provision] would stifle innovation by exposing American business to uncertain, and potentially crushing, liability," she said.

The PRO IP Act would still increase other penalties for copyright infringement, including a doubling of damages in counterfeiting cases, with the maximum penalty for a counterfeiting offense rising to $2 million. The bill would create an Office of U.S. Intellectual Property Enforcement Representative in the White House, and would create an intellectual-property division in the U.S. Department of Justice.

Lofgren and Representative Robert Scott, a Virginia Democrat, said they still have concerns about the bill. The White House intellectual-property office's mandate is unclear, and could end up going after legitimate businesses, Lofgren said. The amendment approved by the subcommittee softened a provision that would allow for forfeiture of devices and property used to create counterfeit goods, the bill could still allow law enforcement authorities to seize devices that were used without the owner's consent, Lofgren said.

The forfeiture provision also appears to create a new form of seizure, in civil lawsuits involving copyright claims, Scott added. Scott had no objections to property seizure in criminal copyright cases, where the defendants have been charged and convicted, but the new civil forfeiture provision "starts to raise flags," and could result in overly aggressive seizures of property, he said.

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