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CAPITAL CURRENTS - Intellectual Property Enforcement

Thu, 09/30/2010 - 8:10pm
Jeffrey Krauss President of Telecommunications and Technology Policy

The IP plan.

One of the most important people in Washington you’ve never heard of is Victoria Espinel. Her title is U.S. intellectual property enforcement coordinator, but informally she is the “copyright czar.” This position, part of the White House staff, was created by the Prioritizing Resources and Organization for Intellectual Property Act of 2008 (the PROIP Act). She was responsible for preparing the 2010 Joint Strategic Plan on Intellectual Property Enforcement, which she sent to President Obama in June. While the FCC’s broadband plan runs 370 pages, this IP plan is a mere 65 pages.

Jeffrey KraussEarlier this year, she asked for comments and recommendations for improving the government’s intellectual property enforcement strategy. Among the comments was a 23-page submission from the self-named “Creative Community.” This group consists of the American Federation of Television and Radio Artists (AFTRA), the Directors Guild of America (DGA), the International Alliance of Theatrical Stage Employees (IATSE), the Motion Picture Association of America (MPAA), the National Music Publishers’ Association (NMPA), the Recording Industry Association of America (RIAA) and the Screen Actors Guild (SAG).

Not surprisingly, these folks supported the enactment of the PRO-IP Act, which increases penalties for trademark and copyright infringement. According to one comment, someone copying 50 songs from a boxed CD set could now be liable for $7.5 million in damages, instead of the previous $150,000.

Also not surprisingly, that law was opposed by groups such as Public Knowledge, the Center for Democracy & Technology (CDT), the Association of Public Television Stations (APTS), the Library Copyright Alliance (LCA), the Computer & Communications Industry Association (CCIA), NetCoalition and the Printing Industries of America.

Anyway, I saw the comments submitted in March by the Creative Community. They claimed that they were incurring losses in the billions of dollars per year, a value calculated by estimating the number of pirated CDs and DVDs sold and multiplying by the retail prices. Those claims were disputed on the basis that most customers of pirated movies and recordings would never be willing to pay the retail price – 10 times the pirated price or more – for legal recordings.

Among the requests from the Creative Community that caught my eye was that “Customs forms should be amended to require the disclosure of pirate or counterfeit items being brought into the United States.” Let me think – if I borrowed a music CD from my neighbor and ripped the songs to my iPod, are they “pirated”? I doubt that adding such a question would be popular with international travelers.

The IP plan turns out to be a pretty dull document, at least the first half. It starts off by recommending that government agencies and federal contractors should not buy or use counterfeit software. Duh. And it includes goals like improving information sharing among government agencies and avoiding duplication and waste. And having the government estimate the real cost of piracy, rather than relying on the MPAA’s numbers.

The plan reads: “To assess the feasibility of improving measures of intellectual property and linking those measures to economic performance, the Economic and Statistics Administration (ESA) within DOC, in coordination with the IPEC, will convene an interagency meeting with relevant agencies to establish a framework for conducting this work.” That language could almost have come from a Dilbert comic strip.

While it’s easy to make light of some of the comments, and the plan itself, there is real piracy going on. To confirm this, the IP plan reviews recent U.S. government IP enforcement activities. For example: “In May 2010, two defendants pleaded guilty to conspiracy to produce and sell counterfeit video gaming machines, commonly known as slot machines. The defendants admitted that they conspired to make and sell unauthorized copies of computer programs designed for video slot machines and counterfeit video slot machines bearing registered trademarks. One of the defendants was arrested in Riga, Latvia, and extradited from Latvia to the U.S. on Oct.23, 2009. This defendant is the first individual to be extradited from Latvia to the U.S. under a new extradition treaty between the U.S. and Latvia, which entered into force on April 15, 2009.”

And closer to home: “In 2009, an investigation uncovered a scheme to sell free-to-air satellite TV receiver boxes, which would illegally decrypt Dish Network/Nagrastar signals and provide them free to the free-to-air receiver box purchasers. The main defendant hired computer hackers to break the encryption algorithm that Dish Network/Nagrastar used (known as Nagra 3) for placement into his free-to-air boxes. His co-conspirators received over $650,000 in payments from the main subject for their part in recruiting and trying to crack the encryption. Dish Network estimated its losses would have been more than $100 million if the subjects had succeeded in breaking the encryption. The three defendants pled guilty to conspiracy to violate the Digital Millennium Copyright Act. In January 2010, the main subject was sentenced to 18 months in custody, followed by three years supervised release. The two co-defendants were sentenced to one month in custody and five months of house arrest.”

E-Mail: jkrauss@krauss.ws

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