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President signs new federal IP law: Legislation considers piracy issues, creates 'copyright czar'

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The United States is stepping up to better protect intellectual property.

If there was any doubt before, it's official now with a new law signed by President George W. Bush Oct. 13. Known as the Prioritizing Resources and Organization for Intellectual Property Act of 2008, or PRO IP for short, the law is designed to strengthen existing copyright laws, create civil forfeiture clauses so equipment believed to be used in an IP crime can be seized, and establish a cabinet-level position to oversee this country's IP enforcement and educate other countries about the laws in effect here.

Seen as sweeping IP enforcement legislation combating the billions of dollars in entertainment industry sales lost each year to piracy, the Senate unanimously approved the bill in its final form in September. Prior to that support, the legislation was widely seen as controversial in its earlier stages.

One of the most controversial measures of the bill gave the Justice Department the authority to sue copyright infringers on behalf of Hollywood and the music industry. That aspect was removed after the White House lobbied against those new powers, arguing it would create unneeded bureaucracy and would amount to federal prosecutors becoming "pro bono lawyers for private copyright holders regardless of their resources."

Though that aspect of the legislation was ultimately removed, the final version of this bill was backed by the movie and recording industry, unions, manufacturers, and the U.S. Chamber of Commerce.

"This sends a stronger message that we're serious about IP rights and enforcement," said L. Scott Paynter, a partner with Krieg DeVault in Indianapolis. "Part of it parades our views on intellectual property, and in that sense we're trying to send a warning or message that we'll tackle this issue seriously."

One of the most publicized portions of the new law is an executive-level position of "Intellectual Property Enforcement Coordinator," which is being dubbed as a copyright czar. This person would need Senate confirmation just as any federal judge or prosecutor, and the post is similar to the drug czar created by Congress in the 1980s to wage a war on drugs.

The new copyright czar will oversee what's now handled by various agencies and committees - government anti-piracy crackdowns and training for other countries about IP enforcement. That person's primary responsibility will be to chair the "intellectual property enforcement advisory committee," created in Section 301 of the act, a group brought together from several agencies that include the Department of Justice, Department of Homeland Security, Patent and Trademark Office, and the Office of the U.S. Trade Representative. The law says the person in this position "may not control or direct any law enforcement agency in the exercise of its investigative or prosecutorial authority" but that the primary function is to develop a "joint strategic plan" to wage war on those who infringe on copyrights, which includes facilitating the sharing of information among law enforcement agencies and other countries. The bill also doubles the penalties for copyright infringement and counterfeiting.

"The establishment of this federal position will focus our initiatives outside our borders," said Indianapolis attorney Todd Vare, who chairs Barnes & Thornburg's IP practice group. "We're trying to do exactly what happened when the drug czar was created, collaborating with other countries and working with them to eliminate IP infringement and these notorious piracy efforts."

Paynter, who often handles software registration issues for clients, said what strikes him about the new law more significantly than the copyright czar position is a harmless error provision.

All information from databases isn't always available and can lead to inaccurate or inconsistent data, he said. Prior to this law, that could result in harsh penalties if that information was deemed inaccurate.

"This helps insulate you from that," Paynter said. "That harmless error provision jumped out at me more than the czar aspect."

Vare said it's hard to tell what the impact will be in Indiana and across the country, but he doubts it will result in big companies filing suits to rake in damages for profit.

Attorney Jonathan Polak with Taft Stettinius & Hollister in Indianapolis said the cornerstone of the new law is the improved statutory damages scheme, but that practically nothing much is changing because judges will have the final say on what damages are awarded. This act provides guidance in clarifying what constitutes "use" of copyrighted material, which is necessary to avoid inconsistent court rulings, Polak said.

"What IP holders need is certainty as to the scope and enforcement of their rights, and legislation that promotes certainty in those areas is always good," he said. The court system takes it from there. In five years, we'll know whether this accomplishes those goals or whether it was, as its opponents feared, making government nothing more than Hollywood's proxy." •
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