Bush signs Pro-IP Act into law

Yesterday, President Bush signed into law the Pro-IP Act, a new piece of legislation designed to stiffen U.S. enforcement of pirated or counterfeit media, software and pharmaceutical drugs. One of its major effects, for instance, argues Sherwin Siy, a staff attorney with Public Knowledge, is that statutory damages would be significantly higher than they currently are -- going from $7,500 to $1.5 million for infringing on a 10-song album. Currently, those damages are capped at $150,000 for the entire album. The bill passed without opposition in the Senate last month (it was led by Sen. Patrick Leahy (D-Vt.), and passed by a large margin in the House a few weeks ago. In addition, this law also creates a high-level "IP czar" within the White House to enforce these new provisions. That being said, it probably will fall to the next president to actually appoint this new IP-enforcer-in-chief. Not surprisingly, major stakeholders are in favor of this new law, including the U.S. Chamber of Commerce, the RIAA, the AFL-CIO and NBC Universal. Its opponents? The usual digital advocacy suspects, including the Electronic Frontier Foundation, Public Knowledge and even the American Library Association. Tom Donohue, the president of the U.S. Chamber of Commerce, told Reuters late yesterday: "By becoming law, the PRO-IP Act sends the message to IP criminals everywhere that the U.S. will go the extra mile to protect American innovation." He also implied that if the current law can be abused to the point where a Minnesota single mother (in Capitol v. Thomas) can be fined $222,000 for 24 instances of music piracy, then this new law will take things that much further. "It increases the number of things that the government can confiscate," he said. "If a computer is being used for [illegal] downloading and also for homework, they can take it now, which would be more difficult to do before." William Patry, a long-standing authority on copyright law, and current senior copyright counsel for Google, said, "It seeks to expand radically the amount of statutory damages that can be recovered, and in cases where there are zero actual damages. The provision is intended to benefit the record industry but will have terrible consequences for many others; the provision has nothing to do with piracy and counterfeiting; instead it seeks to undo rulings in the 2000 MP3.com litigation, a decidedly non-piracy or counterfeiting case, instead involving the use of digital storage lockers. Under the original MP3.com decision, where a CD had twelve tracks, there was only one award of statutory damages possible. Under the bill, there may be 25: there would be 12 for each track on the sound recording, 1 for the sound recording as a whole, and 12 for each musical composition. Under this approach, for one CD the minimum award for non-innocent infringement must be $18,750, for a CD that sells in some stores at an inflated price of $18.99 and may be had for much less from amazon.com or iTunes. The maximum amount of $150,000 then becomes three million, seven hundred and fifty thousand dollars per CD. Now multiple that times a mere ten albums, and one gets a glimpse at the staggering amount that will be routinely sought, not just in suits filed, but more importantly in thousands for cease and desist letters, where grandmothers and parents are shaken down for the acts of their wayward offspring. These private non-negotiable demands don't see the light of day, but they have resulted in 'settlements' wherein ordinary people have paid abnormal amounts of money rather than be hauled into court and thereby incur costs that will bankrupt them. One only wishes Congress would hold a hearing on this practice."