TLJ News from August 11-15, 2012

Antitrust Agencies to Host Workshop on MFN Clauses

8/15. The Department of Justice's (DOJ) Antitrust Division and the Federal Trade Commission (FTC) announced that they will host a series of panel discussion on September 10 titled "Most Favored Nation Clauses and Antitrust Enforcement and Policy".

The DOJ has found MFN clauses to be anticompetitive in tech related agreements, including the original proposed class action settlement of two Google Books cases brought by publishers and authors, and in the Apple e-books case filed in April.

The DOJ stated in a release that "The most commonly used MFN provisions guarantee a customer that it will receive prices that are at least as favorable as those provided to other buyers of the same seller, for the same products or services. Although at times employed for benign purposes, MFNs can under certain circumstances present competitive concerns. This is because they may, especially when used by a dominant buyer of intermediate goods, raise other buyers' costs or foreclose would-be competitors from accessing the market. Additionally, MFNs can facilitate collusion and stabilize coordinated pricing among sellers."

MFN clauses are at issue in the DOJ's e-book antitrust action against book publishers and Apple. See, story titled "DOJ Sues Apple and Book Publishers Alleging E-Book Price Collusion" in TLJ Daily E-Mail Alert No. 2,368, April 11, 2012.

MFN clauses were also an issue in the DOJ's objections to the original proposed class action settlement of some of the Google Books copyright infringement cases. The District Court rejected the proposed settlement.

On September 18, 2009, the Department of Justice's (DOJ) Antitrust Division filed a pleading [32 pages in PDF] titled "Statement of Interest of the United States of America Regarding Proposed Class Settlement" in which it urged the Court to "reject the Proposed Settlement in its current form". See also, story titled "DOJ Files Pleading in Google Books Case" in TLJ Daily E-Mail Alert No. 1,985, September 21, 2009.

The proposed settlement agreement provided for a Books Rights Registry to be created. The original agreement also provided that the Registry would give Google MFN treatment.

This clause provided that "The Registry (and any substantially similar entity organized by Rightsholders that is using any data or resources that Google provides, or that is of the type that Google provides, to the Registry relating to this Settlement) will extend economic and other terms to Google that, when taken as a whole, do not disfavor or disadvantage Google as compared to any other substantially similar authorizations granted to third parties by the Registry (or any substantially similar entity organized by Rightsholders that is using any data or resources that Google provides, or that is of the type that Google provides, to the Registry relating to this Settlement) ..." (Parentheses in original.)

The DOJ wrote that this MFN clause in the original proposed settlement agreement "discourages potential competitors (including those sponsored by rightsholders) from attempting to follow Google into digital-book distribution because it could not obtain better terms than Google." (At page 24. Parentheses in original.)

The parties to that settlement dropped the above quoted MFN language in the amended proposed settlement agreement. The District Court later rejected that agreement for reasons other than MFN. See, mark up copy of settlement agreement.

The upcoming event is open to the public. The DOJ and FTC request written comments. The deadline to submit comments is October 10, 2012. However, they have already selected speakers. The event will be held from 9:00 AM to 5:30 PM. it will be held in the FTC's Satellite Building and Conference Center at 601 New Jersey Ave., NW. See, event web site.

Obama Issues Annual Routine Emergency Export Regulation Declaration

8/15. President Obama sent notices to the Speaker of the House of Representatives and the President of the Senate titled "Continuation of the National Emergency with Respect to Export Control Regulations".

The President stated that "Section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)) provides for the automatic termination of a national emergency unless, within the 90-day period prior to the anniversary date of its declaration, the President publishes in the Federal Register and transmits to the Congress a notice stating that the emergency is to continue in effect beyond the anniversary date. In accordance with this provision, I have sent to the Federal Register for publication the enclosed notice, stating that the emergency caused by the lapse of the Export Administration Act of 1979, as amended, is to continue in effect for 1 year beyond August 17, 2012."

This is the twelfth in a series of routine perfunctory annual declarations under which Presidents Bush and Obama have maintained the export regulation regime. This regime implements the "Export Administration Act", which expired in 2001.

Some members of the House and Senate worked on enacting replacement legislation a decade ago. However, no replacement bill was enacted, and there has been little legislative activity since on this subject.

The Department of Commerce's (DOC) Bureau of Industry and Security (BIS) -- previously named the Bureau of Export Administration (BXA) -- continues to revise and enforce implementing regulations for dual use items, which include many information and communications technology products. These regulations pertain to, among other things, exports and "deemed exports" of computers, software, and encryption products. These regulations also regulate employment in some situations.

The export control regime is outdated, complex, burdensome, and harms the competitiveness of some US companies. The Obama administration has revised the regime administratively rather than legislatively. See, story titled "Obama Addresses Export Control Reform Process" in TLJ Daily E-Mail Alert No. 2,185, December 21, 2010.

See also, story titled "President Issues Another Routine Emergency Declaration to Continue Export Regulation Regime" in TLJ Daily E-Mail Alert No. 2,288, August 13, 2011.

Commerce Spectrum Management Advisory Committee to Meet

8/15. The Department of Commerce's (DOC) National Telecommunications and Information Administration (NTIA) announced that its Commerce Spectrum Management Advisory Committee (CSMAC) will meet at the DOC on October 4 from 10:00 AM to 1:00 PM.

The agenda includes reports from the Sharing, Unlicensed, and Spectrum Management Improvements Subcommittees on identifying radio spectrum for wireless broadband.

There will also be reports from five working groups:

 • WG1 1695-1710 MHz Weather Satellite Receive Earth Stations.
 • WG2 1755-1850 MHz Law Enforcement Surveillance and other short-range fixed.
 • WG3 1755-1850 MHz Satellite Control Links and Electronic Warfare.
 • WG4 1755-1850 MHz Fixed Point-to-Point and Tactical Radio Relay.
 • WG5 1755-1850 MHz Airborne Operations.

The deadline to submit written comments in association with this meeting is September 28, 2012.

This meeting will be held at the DOC main building, Room 4830, 1401 Constitution Ave., NW.

See, notice in the Federal Register, Vol. 77, No. 158, August 15, 2012, at Pages 48968-48969.

More News

8/15. AT&T announced a public education campaign regarding texting and distracted driving. See, AT&T release, and statement by FCC Chairman Julius Genachowski.

OUSTR Seeks Comments on Notorious Markets

8/14. The Office of the U.S. Trade Representative (OUSTR) published a notice in the Federal Register (FR) that requests comments to assist it in preparing its 2012 Notorious Markets List. This report will identify internet and physical notorious markets located outside of the US that make available intellectual property infringing products.

The deadline to submit comments is September 14, 2012. See, FR, Vol. 77, No. 157, August 14, 2012, at Pages 48583-48584.

This notice states that "Potentially helpful information could include: Location; principal owners/operators (if known); types of products sold, distributed, or otherwise made available; information on the volume of Internet traffic associated with a Web site (such as a recent Alexa ranking); any known civil or criminal enforcement activity against the market; other efforts to remove/limit infringing materials (e.g., a Web site's responsiveness to requests to remove or disable access to allegedly infringing material); and any other relevant information, including with respect to positive progress made by operators of the market in addressing infringing activity." (Parentheses in original.)

Last year the OUSTR released its notorious markets report on December 20, 2011. See, report [6 pages in PDF] titled "Out-of-Cycle Review of Notorious Markets", and story titled "OUSTR Releases Notorious Markets Report" in TLJ Daily E-Mail Alert No. 2,321, December 21, 2011.

The December 2001 report identified numerous web sites and online services. It listed a class of Russian web sites identified as "Allofmp3 clones". It listed "deep linking" web sites, for which the infringing works reside on third party servers, such as Sogou MP3 and Gougou in the People's Republic of China (PRC). It listed the business to business and business to consumer web sites Taobao in the PRC and and Consolesource in Canada. It listed several BitTorrent indexing web sites that are used for locating and downloading of infringing works, including ThePirateBay (Sweden), IsoHunt (Canada), Btjunkie (Sweden and Netherlands), (Canada, Ukraine and Romania), and (Canada, Panama and Switzerland). It listed BitTorrent tracking web sites, including Rutracker (Russia), Demonoid (Ukraine), and zamunda (Bulgaria). It also listed the social media web site vKontakte (Russia), the cyber lockers Megaupload (Netherlands and Hong Kong) and Putlocker (United Kingdom), the forum web site Warez-bb (Luxembourg, Switzerland and Sweden), and the sports programming retransmission peer to peer service TV Ants (PRC).

The OUSTR notorious markets report is part of the Special 301 process. Section 301 is the statutory means by which the U.S. asserts its international trade rights, including its rights under World Trade Organization (WTO) agreements. In particular, under the "Special 301" provisions of the Trade Act of 1974, the OUSTR identifies trading partners that deny adequate and effective protection of intellectual property or deny fair and equitable market access to U.S. artists and industries that rely upon intellectual property protection. See, 19 U.S.C. § 2242.

Section 2242 contains no reference to the identification of notorious web sites, or notorious markets. Rather, it requires the OUSTR to identify "foreign countries". The OUSTR must identify, for example, countries that "deny adequate and effective protection of intellectual property rights, or ... deny fair and equitable market access to United States persons that rely upon intellectual property protection".

Beginning in 2006, the OUSTR included sections on notorious markets in its annual Special 301 reports. In 2010, the OUSTR announced that it would also produce stand alone notorious markets reports. See, story titled "OUSTR Announces Separate Notorious Markets Process" in TLJ Daily E-Mail Alert No. 2,138, October 4, 2010. The OUSTR released its first notorious markets report in February of 2011.

IPEC Receives Comments Regarding Next Version of Joint Strategic Plan for IP Enforcement

8/14. The Executive Office of the President's (EOP) Office of the Intellectual Property Enforcement Coordinator, or IPEC, is working on the second release of its "Joint Strategic Plan Against Counterfeiting and Infringement". The 2008 PRO-IP Act created the IPEC, required this plan, and set a deadline of October 13. However, the IPEC was late in releasing the first version of this plan.

The IPEC was created in the 110th Congress by Section 301 of S 3325 [LOC | WW], the "Prioritizing Resources and Organization for Intellectual Property (PRO-IP) Act of 2008". This section requires the IPEC to "coordinate the development of the Joint Strategic Plan against counterfeiting and infringement".

This section also requires that "Not later than 12 months after the date of the enactment of this Act, and not later than December 31 of every third year thereafter, the IPEC shall submit the joint strategic plan to" Congressional committees.

Former President Bush signed S 3325 into law on October 13, 2008. It is Pubic Law No. 110-403. The first release of the plan was due by October 13, 2009. The IPEC released it on June 22, 2010. See, document [65 pages in PDF] titled "2010 Joint Strategic Plan on Intellectual Property Enforcement", and story titled "IPEC Releases Plan on Intellectual Property Enforcement" in TLJ Daily E-Mail Alert No. 2,099, June 22, 2010.

The second release is due by October 13, 2012. August 10 was the extended deadline to submit comments to the IPEC.

The web site, where these comments are published, states that the IPEC received 254 comments in response to its request for comments. Although, some comments are posted multiple times. Most of the extensive comments were submitted by interest groups. Most of these were submitted by groups that represent corporate rights holders, and especially copyright based companies. However, comments also addressed patents, trademarks, proprietary data, and trade secrets.

Moreover, these comments addressed many other topics that are relevant to IP or innovation, such as market access by IP based companies, secondary and parallel markets in online auction web sites, expansion of top level domains, seizure of domain names, immigration of workers in IP based industries, information sharing between customs officials and rights holders, training of IP enforcers abroad, and compulsory licensing or transfers of technology, rights, or secrets.

The IPEC also received countervailing views from some groups that represent information technology companies, including those that offer products or services with which people make use of copyrighted works. These comments exhibited a lack of enthusiasm for current levels and methods of IPR enforcement, and some of the pending proposals for enhanced enforcement.

Some tech companies submitted their own comments, focusing a narrow range of interests. For example, eBay expressed concern about the use of IP law to limit online secondary or parallel markets in goods that are not counterfeits.

Groups that represent rights holders, such as the Recording Industry Association of America (RIAA) and Motion Picture Association of America (MPAA), filed extensive comments urging the IPEC and other government entities to do more to limit counterfeiting and infringement. In opposition, groups such as the Computer and Communications Industry Association (CCIA), NetCoalition (NC), and Electronic Frontier Foundation (EFF) filed extensive comments urging the IPEC and others to do less to limit infringement, provide more balance, and avoid unintended consequences of enforcement efforts.

The comments submitted to the IPEC cover a vast landscape of issues. Comments addressed what the law is, or should be, for copyright, trademark, patent, trade secrets, bans on circumvention, and compilations of data. Comments of rights groups frequently argued that the DMCA notice and take down regime is inadequate. They also tended to praise the Special 301 process, the ACTA, and ongoing TPPA negotiations.

Opposition groups criticized statutory damages and other remedies in private actions, urged the expansion of exceptions and limitations to copyright in international negotiations, and cautioned against domain names seizures and other overbroad enforcement actions by governments.

Most commenters did not respond to the IPEC's threshold questions regarding costs to the economy, and threats to public safety, caused by IP infringement. The IPEC asked for information regarding "costs to the U.S. economy resulting from infringement of intellectual property rights, both direct and indirect, including any impact on the creation or maintenance of jobs" and "threats to public health and safety posed by intellectual property infringement".

However, a few did offer some responsive information. See, IIPA comments at pages 9-10, BSA comments at page 2, PHRMA comments at pages 2-6, and CCIA comments at pages 9-16. Also, some commenters provided data on total employment, total wages, total revenues, and total taxes paid, but made no attempt to estimate losses from counterfeiting and infringement. See for example, comments of the MPAA and comments of the IFTA.

The IPEC did not ask about, and few commenters addressed, threats to the promotion of "the Progress of Science and the useful Arts". See, related story in this issue titled "IPEC and Progress of Science and the Useful Arts".

Some groups filed comments. Some groups filed joint comments with other groups. And, some umbrella groups, whose members are groups, filed comments. Hence, some groups were a party to multiple filings. Also, some companies are members of multiple groups, and hence, may have had input through multiple filings.

The most detailed, reasoned and lengthy comments submitted by copyright holder groups include:

The most detailed, reasoned and lengthy comments submitted by opposition groups include:

See also, comments of IP groups:

See also, comments of creator groups:

Some comments represented a mix of perspectives. For example, the Consumer Electronics Association (CEA) submitted comments urging the government to make a priority of protecting against the counterfeit of devices, which are made by CEA member companies, but to deprioritize protection of copyrighted content online, which consumers access using devices made by CEA members.

Some groups submitted comments on only one or a few issues. See, for example:

IPEC Plans and the Progress of Science and the Useful Arts

8/14. The Office of the Intellectual Property Enforcement Coordinator, or IPEC, requested comments about threats to the US economy and US jobs. It did not ask for comments regarding threats to the promotion of "the Progress of Science and the useful Arts".

The IPEC's first version of its "Joint Strategic Plan Against Counterfeiting and Infringement" did not address the progress of science. See, document released in June of 2010.

The Constitution, at Article I, Section 8, Clause 8, provides that this is the purpose of intellectual property protection. Few comments from either advocates or skeptics of IP enforcement were relevant to this underlying purpose. Although, there were comments regarding the advancement of medical science in the context of patent and data protection. See for example, comments of the Pharmaceutical Research and Manufacturers of America and piece titled "Why Trade and Intellectual Property Matter".

In contrast, the IPEC received a flood of comments pertaining to copyrights in music and movies, which rarely make any contribution to science or useful arts.

And, Louis Vuitton did not argue in its comments that protecting its handbags promotes the progress of science.

The Congress passed the PROTECT IP Act, and created the IPEC, in 2008, not to promote the progress of science and the useful arts, but to protect the revenues and profits of IP based companies, and the jobs of the workers they employ.

Nevertheless, this article summarizes some of the comments that may be relevant to the promotion of the progress of science and the useful arts.

The American Business Media (ABM), whose members include publishers of scientific journals, is a group involved in the progress of science.

It complained in its comments about the National Institutes of Health (NIH) and other government agencies that have "sought to override publishers' copyrights in instances where they deem the information contained in copyrighted works important to the public. Such government attempts to mandate public dissemination of copyrighted works of scientific, technical and medical (``STM´´) materials is a growing threat to all information content providers and the millions of readers and users who rely on their work and publications".

An appropriations bill mandated this. Members of the House Judiciary Committee (HJC) have sought for several Congresses to undo this, both as an affront to copyright principles, and as an infringement upon the jurisdiction of the HJC.

In the 111th Congress, see, HR 801 [LOC | WW], the "Fair Copyright in Research Works Act", and story titled "Conyers Reintroduces Fair Copyright in Research Works Act" in TLJ Daily E-Mail Alert No. 1,893, February 6, 2009. In the 112th Congress, see HR 3699 [LOC | WW], the "Research Works Act", and story titled "Rep. Issa Introduces Research Works Act" in TLJ Daily E-Mail Alert No. 2,330, January 17, 2012.

The ABM also argued that "data compilations should receive legal protection". This would require Congressional legislation, because of the Supreme Court's 1991 opinion in Feist v. Rural Telephone Directory, 499 U.S. 340. Rep. Howard Coble (R-NC) and others worked to pass such legislation over a decade ago, but failed. One of the key opponents, former Rep. Rick Boucher (D-VA), lost his seat in 2010.

The University of Iowa also submitted comments. It describes itself as a "small scholarly book publisher". It complained about the insufficiency of the DMCA notice and takedown provisions for protecting rights in scholarly works.

It wrote that "The same titles appear over and over again on the same sites, so it's a constant game of whac-a-mole trying to keep them off the internet. The book and document sharing site Scribd uses a "digital fingerprint" technology to block its users from uploading the same file twice. As a result, I never have to tell Scribd to remove the same title more than once. Perhaps cyberlocker sites and other common infringers could be given incentives -- or required -- to use this kind of technology. It's absurd that they claim ignorance as to any infringement when they permit the same infringing titles to be uploaded over and over again."

The American Society of Journalists and Authors (ASJA) submitted comments about the ongoing infringement by Google via the scanning of books in libraries for its Google Books program.

The ASJA also wrote that legislative efforts in the EU and United Kingdom to allow unauthorized publication of purported orphan works constitutes "a growing threat to the livelihoods of U.S. writers." The ASJA did not reference legislative efforts in the US, either via the court rejected Google books litigation settlement, or Congressional legislation. Rep. Bob Goodlatte (R-VA) stated in early in the 112th Congress, in response to a question from TLJ, that there are still efforts to enact an orphan works bill in the U.S. House of Representatives.

Other comments, including those submitted by the Computer and Communications Industry Association (CCIA), NetCoalition (NC), urged passage of orphan works legislation. See, related story in this issue titled "CCIA and Net Coalition Offer Recommendations for IPEC Plan".

Finally, the ASJA cited the problem of "off-shore book pirates".

Another group whose members promote the progress of science is the Association of American Publishers (AAP) -- especially its members that publish scientific and academic works.

From their perspective, even in the US, academic publishers have been unable to effectively enforce their copyrights. One reason has been the Rehnquist court's unfortunate opinions extending immunity to state universities in actions for damages for copyright infringement. To date, legislative efforts to undo these opinions have stalled.

Another reason has been the U.S. District Court's (NDGa) disregard for copyright law, and the rights of authors, in Cambridge University Press v. Georgia State University, D.C. No. 1:2008cv01425. Cambridge UP and the other plaintiffs are AAP members.

Yet, the AAP filed no comments with the IPEC.

The AAP is a member of the IIPA, which did submit comments. However, the IIPA barely touched these or other publishing industry issues. One footnote on unlicensed use of software by governments adds this: "Similar principles should ... prevent public educational institutions from using infringing copies of textbooks or other educational materials."

Individuals' Comments for the IPEC Plan: Creators v. Users

8/14. Most of the lengthy comments filed with the Office of the Intellectual Property Enforcement Coordinator, or IPEC, were submitted by groups that are active in Washington DC law and policy making activities. However, the IPEC also received numerous comments from individuals. Most are short. Many are inarticulate. These comments disclose a huge and hostile divide on certain copyright issues.

On one side of the divide, authors, composers, musicians and others who work in creative industries lament the lack of copyright protection and enforcement, and the ability of internet based companies to derive ad revenues from infringing activities. They condemn current law as ineffective, and the federal government as inactive. Some single out Google for criticism. In short, they argue that their livelihoods are being taken away from them by unconstrained copyright infringement.

On the other side of the divide, some internet users decry excessive IP rights and enforcement. Many offer vitriolic comments about music and record companies, and their trade groups. In short, they argue that evil content companies, and the government agencies that serve them, are stifling innovation, undermining free speech, and threatening the internet.

Commenters on both sides of this divide assert moral righteousness. Both sides describe greed in the other -- either web sites dedicated to infringing activity and downloaders, or the content corporations. Both sides accuse the other of undermining creativity and innovation, and threatening the American culture.

For example, John Eppstein submitted comments in which he wrote that "Federal anti-piracy enforcement has been weak to nonexistent for the past 10 to 15 years. ... Of course those who have vested interests in infringement (which include some very well known and powerful tech companies) will spread propaganda about how this infringes ``human rights´´ and will ``break the internet´´. DON'T LISTEN TO THEM -- the only ``right´´ being ``infringed´´ is ``the right to steal´´."

He added that "The DMCA needs amendment to fix the problems that require content owners to post and endless stream of takedown notices for recurrent postings of the same material. There is no reason that more than one takedown should be required for any given work. It is impossible for an independent artist such as myself or even the operator of a small record label to deal with the flood of infringing uploads under the present system."

Another composer wrote that "this is also a Human Rights issue as well. Without protective enforceable legislation in place, my livelihood, for which I have been well-trained and educated, is vulnerable to systematic abuse and ultimate decline."

And, from the other side:

Content Industries Offer Recommendations for IPEC Plan Against Counterfeiting and Infringement

8/14. The Motion Picture Association of America (MPAA), Recording Industry Association of America (RIAA) and National Music Publishers' Association (NMPA) submitted joint comments [28 pages in PDF] to Executive Office of the President's (EOP) Office of the Intellectual Property Enforcement Coordinator, or IPEC, to assist it in writing the second edition of its "Joint Strategic Plan Against Counterfeiting and Infringement".

The just filed comments by content industry groups may be among the most significant for the IPEC.

This filing first reviews trends in the content industries.

It next lists and describes the major infringement related services:

This filing identifies mobile applications that induce or are designed to facilitate infringement of sound recordings, and extra-territorial web sites dedicated to infringing activity, as the two main emerging threats.

It argues that existing legal tools for rights holders, such as the Digital Millennium Copyright Act (DMCA) notice and takedown process, are inadequate.

The DMCA, at 17 U.S.C. § 512, provides for limitation on liability for web sites that contain copyright infringing works, provided that they maintain the notice and take down regime specified by the statute.

The content groups comments elaborate that "the DMCA is not producing the cooperative, effective approaches to the problem of online infringement that Congress intended, due in large part to judicial misinterpretations of the statute. Copyright owners are forced to engage in a never-ending notice-and-takedown process that produces few results. Rights holders take on the burden of finding infringing content hosted by the provider in question, while site operators reap substantial profits from infringing activity while doing little (if anything) to discourage it, or in too many cases actively encouraging it. The process to collect, verify and refer infringements is lengthy and resource-intensive and too often does not result in the content staying down from the site at issue. Even if the site responds to the takedown notice by removing the infringing content (and plenty do not), most sites do nothing to stop the removed content from being endlessly reposted." (Parentheses in original.)

These comments also state that at online locker web sites, "Copyright owners must identify links to infringing copies of our content that are stored on and distributed by the hubs. Typically, these hubs create multiple links to the same file, presumably to make infringing files more difficult for copyright owners to remove. When copyright owners locate and send an infringing link to a hub, the site typically just breaks the single link to the infringing movie, rather than removing the underlying copy of the movie itself (only it knows the location of the movie on its servers)." (Parentheses in original.)

This filing complains that these locker web sites "are not searchable".

Perhaps it should be noted, in comparison, that comments submitted to the IPEC, and published in the web site, are not searchable either. So, for example, to find comments on a particular issue, or submitted by a particular group, one must open and view hundreds of comments. And, President Obama has stated that this is the most data driven and most transparent administration ever.

The content industry groups also state that civil litigation is costly. "Pursuing lawsuits against large-scale infringers also presents problems. Litigation, even when it is successful, often takes years to conclude and demands significant financial investments. While lawsuits are pending, infringing services often remain operational."

They also argue that "Right holders must have the ability to search for infringement online, and to send notices, in a manner that is commensurate with the scope of the infringing activity that they must combat, and there must be confidence that a site will not repost the same content after receiving such notice."

They argue that intermediaries must do more, and offers some suggestions.

They state that even though House and Senate stopped active consideration of the SOPA and PROTECT IP Act early this year, the problem has not gone away, and legislation remains necessary to address foreign based web sites dedicated to infringing activity.

See, HR 3261 [LOC | WW], the "Stop Online Piracy Act" or "SOPA", and S 968 [LOC | WW], the "Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011", "PROTECT IP Act", or "PIPA".

More generally, the content industries want the Congress to enact all of the recommendations contained in the IPEC's twenty legislative recommendations released in 2011. See, story titled "Espinel Offers 20 IP Legislative Recommendations" in TLJ Daily E-Mail Alert No. 2,212, March 30, 2011.

Among these IPEC recommendations are making infringement by streaming a crime, creating a right of public performance for copyright owners for sound recordings transmitted by over the air broadcast stations (which is effectively opposed by the National Association of Broadcasters), and allowing the Department of Homeland Security's (DHS) Customs and Border Protection (CBP) to share pre-seizure information with rights holders to help the DHS to determine whether products are infringing or devices are circumvention devices.

The content industries also want the IPEC to continue to foster an environment that encourages cross-industry talks and development and implementation of best practices that will assist in the fight against the online copyright theft. They want the IPEC's assistance in expanding such talks to include advertising networks and advertising service providers, domain name registrars and registries, and search engines.

However, these comments offer little guidance for the IPEC regarding how to entice such entities to engage in talks and agreements with the content industries, when it is not in their financial interest to do so.

These content industry groups also praise the Office of the U.S. Trade Representative's (OUSTR) Special 301 process, and encourage the IPEC to work with the OUSTR. They also praise law enforcement efforts.

CCIA and Net Coalition Offer Recommendations for IPEC Plan

8/14. The Computer and Communications Industry Association (CCIA) and NetCoalition (NC) submitted joint comments to the Office of the Intellectual Property Enforcement Coordinator, or IPEC, to assist it in preparing its next "Joint Strategic Plan Against Counterfeiting and Infringement". These are the most thorough comments submitted in opposition to many of the assertions of the content industries.

1. IP Infringement and the Economy.
2. Exceptions and Limitations to Copyright.
3. Secondary Markets and Copyright.
4. SOPA and PIPA.
5. Domain Name Seizures.
6. Statutory Damages for Copyright Infringement.
7. Orphan Works.
8. Copyright Abuse.

1. IP Infringement and the Economy. The IPEC sought information about the costs to the economy of intellectual property infringement. The IPEC asked for information regarding "costs to the U.S. economy resulting from infringement of intellectual property rights, both direct and indirect, including any impact on the creation or maintenance of jobs". Moreover, the IPEC sought data, and wanted to know the sources of the data, and the methodologies used to make calculations.

Yet, very few comments provided responsive information. Those that did provided only cursory information. Some cited a report [76 pages in PDF] by the Department of Commerce's (DOC) U.S. Patent and Trademark Office (USPTO) and Economics and Statistics Administration (ESA) titled "Intellectual Property and the U.S. Economy: Industries in Focus", and earlier studies prepared for the International Intellectual Property Alliance (IIPA). See, story titled "USPTO Reports on IP Industries' Contribution to the Economy" in TLJ Daily E-Mail Alert No. 2,369, April 12, 2012.

The CCIA and NC comments contain the most extensive section on "costs to the U.S. economy". The CCIA/NC argue that this DOC/USPTO report "does not in any way demonstrate the cost to the U.S. economy resulting from IP infringement".

Rather, the CCIA/NC argue that IP enforcement, not lack of enforcement, harms the US economy. For example, they argues that there is "dysfunctionality in the patent system" and that "patent litigation has imposed enormous costs on companies in patent-intensive industries". Moreover, "trolls" have a chilling effect upon creativity.

The CCIA/NC also quote financial data to support their contention that despite online copyright infringement, copyright based industries are thriving. Hence, "industry complaints about the harm caused by copyright infringement are overstated".

The CCIA/NC cite data on movie and record industry revenues, profits, and CEO compensation. They do not, however, quote employment data.

There may be an argument -- although it was not advanced in comments to the IPEC -- that Bureau of Labor Statistics (BLS) data shows a decline in total employment for certain job categories in copyright based industries. TLJ cited some of this data in a story titled "ITIF Paper Addresses 10 Year Trend in IT Employment" in TLJ Daily E-Mail Alert No. 2,423, August 7, 2012. Taking BLS data for 2001 and 2011, total employment contracted for journalists, photographers, writers, and musicians and singers. On the other hand, BLS data, displayed in that ITIF paper, shows that for many IT sector job categories, employment grew rapidly during this time period.

2. Exceptions and Limitations to Copyright. The CCIA/NC addressed the Office of the U.S. Trade Representative's (OUSTR) ongoing negotiation of a Trans-Pacific Partnership Agreement (TPPA) and the issue of exceptions and limitations to the exclusive rights of copyright.

They praise the OUSTR's statement on July 3 proposing that the TPPA "obligate Parties to seek to achieve an appropriate balance in their copyright systems in providing copyright exceptions and limitations for purposes such as criticism, comment, news reporting, teaching, scholarship, and research."

Groups such as the Business Software Alliance (BSA) criticized the OUSTR's July 3 statement in their comments.

The CCIA/NC continued that "By forcing other countries to intensify their enforcement of IP rights without also requiring them to adopt the full range of balancing exceptions, the U.S. government has actually subjected U.S. Internet companies to greater risk overseas. This must stop."

3. Secondary Markets and Copyright. The CCIA/NC also expressed their concern that the TPPA may include "troubling language concerning international exhaustion and parallel imports -- in essence prejudging an issue now before the Supreme Court in Kirtsaeng v. John Wiley & Sons".

This case pertains to how the first sale doctrine of the Copyright Act applies to goods made abroad. At issue for book publishers is their ability to charge different prices in different national markets. Secondary markets, and particularly online sales sites that enable third party sellers, undermine publishers ability to engage in such price discrimination.

Since publishers tend to charge more in the US market, there is an opportunity for intermediaries, such as Supap Kirtsaeng, to purchase books outside the US at the publishers' lower prices, import them into the US, and then resell them via internet platforms such as eBay's auction web site at a profit to consumers in the US.

At issue for US book consumers is the ability to purchase lower priced foreign printed books online from intermediaries like Kirtsaeng. At issue for companies like eBay is the fees that they collect from online sellers like Kirtsaeng. eBay submitted comments in which it expressed its concerns about this issue, and this case.

See, story titled "Supreme Court Grants Certiorari in Case Regarding First Sale Doctrine" in TLJ Daily E-Mail Alert No. 2,372, April 16, 2012. See also, story titled "Supreme Court Affirms in Costco v. Omega on 4-4 Vote" in TLJ Daily E-Mail Alert No. 2,178, December 14, 2010.

4. SOPA and PIPA. The CCIA/NC again stated their opposition to the SOPA and PIPA. See, HR 3261 [LOC | WW], the "Stop Online Piracy Act" or "SOPA", and S 968 [LOC | WW], the "Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011", "PROTECT IP Act", or "PIPA".

5. Domain Name Seizures. The CCIA/NC raised the subject of government seizure of domain names. They noted that "Serious questions have been raised with respect to some of these seizures, including whether the sites in fact engaged in infringing activity, and how federal prosecutors have interfered with these sites' ability to resume their lawful activities." (Footnote omitted.)

They also wrote that "prosecutors have made it difficult for innocent users to access their information stored on the Megaupload system, another website seized by federal authorities."

See, story titled "DOJ and DHS Seize Domain Names of Web Sites Engaged in Infringing Sales" in TLJ Daily E-Mail Alert No. 2,167, December 3, 2010, and story titled "Indictment Charges Megaupload With Criminal Copyright Infringement" in TLJ Daily E-Mail Alert No. 2,333, January 23, 2012.

The Public Knowledge (PK) and Electronic Frontier Foundation (EFF) complained about domain name seizures in their comments. In contrast, some rights holder groups praised the action against Megaupload.

6. Statutory Damages for Copyright Infringement. The CCIA/NC state that the award of statutory damages for copyright infringement under 17 U.S.C. § 504 is "arbitrary and unfair", and has a "chilling effect on innovation".

They argue that Section 504(c)(2) should include the following limitation: "The court shall remit statutory damages for secondary infringement, except in a case in which the copyright owner sustains the burden of proving, and the court finds, that the act or acts constituting such secondary infringement were done under circumstances in which no reasonable person could have believed such conduct to be lawful."

This proposal has been around for some time. For example, former Rep. Rick Boucher (D-VA) included it in legislation that he sponsored. See, for example, in the 109th Congress, HR 1201 [PDF], the "Freedom And Innovation Revitalizing U.S. Entrepreneurship Act of 2007" or "FAIR USE Act". See also, story titled "Rep. Boucher Introduces FAIR USE Act" in TLJ Daily E-Mail Alert No. 1,545, February 28, 2007.

The CCIA/NC also propose that Section 504 be amended to provide that "The general statutory minimum should be reduced to $250, and the minimum for innocent infringement should be reduced to $100." Also, "In determining the award of statutory damages, the court shall attempt to compensate the copyright owner for the actual damages he or she suffered by virtue of the infringement."

The EFF also complained about statutory damages in its comments.

7. Orphan Works. The CCIA/NC also urge the Congress to pass legislation to limit liability for infringement of works purported to be "orphan works"

The wrote that "courts should have the discretion to reduce or remit statutory damages if a user made a reasonably diligent search for a copyright owner prior to the user, but could not identify or locate her".

There were substantial, but ultimately unsuccessful, efforts to pass legislation in the 109th and 110th Congresses. The Copyright Office (CO) advocated such action.

The introduction of legislation followed the CO release of its report [133 pages in PDF] titled "Report on Orphan Works" in January of 2006. See, story titled "Copyright Office Recommends Orphan Works Legislation" in TLJ Daily E-Mail Alert No. 1,302, February 2, 2006. The primary author of the report, Jule Sigall, subsequently went to work for Microsoft. See, story titled "Jule Sigall Joins Microsoft" in TLJ Daily E-Mail Alert No. 1,510, December 27, 2006. Maria Pallante, then employed by the Guggenheim Museum, and now the Register of Copyright, also advocated passage of orphan works legislation in Congressional testimony.

For the 109th Congress, see HR 5439, the "Orphan Works Act of 2006". Another version of it was made a part of HR 6052, the "Copyright Modernization Act of 2006". However, neither bill became law. See also, stories titled "House CIIP Subcommittee Holds Hearing on Orphan Works" in TLJ Daily E-Mail Alert No. 1,326, March 9, 2006, "Rep. Smith Introduces Orphan Works Act of 2006" in TLJ Daily E-Mail Alert No. 1,377, May 24, 2006, and "House CIIP Subcommittee Approves Orphan Works Act of 2006" in TLJ Daily E-Mail Alert No. 1,378, May 25, 2006.

For the 110th Congress, see HR 5889 [LOC | WW], the "Orphan Works Act of 2008", and S 2913 [LOC | WW], the "Shawn Bentley Orphan Works Act Of 2008". Neither bill became law. See also, story titled "House IP Subcommittee Approves Orphan Works Bill" in TLJ Daily E-Mail Alert No. 1,762, May 7, 2008, "Senate Judiciary Committee Amends and Approves Orphan Works Bill" in TLJ Daily E-Mail Alert No. 1,767, May 15, 2008, and "Orphan Works Bills Discussed" in TLJ Daily E-Mail Alert No. 1,798, July 23, 2008.

8. Copyright Abuse. The CCIA/NC wrote several pages on "copyright misuse" and "abuse". They argue that the Congress should consider "codifying a copyright misuse provision that creates predictable and meaningful deterrents to the misuse of copyrights".

Currently, the doctrines of patent abuse and copyright abuse exist only as infrequently applied court made law. It is not clear from the comments which opinions they want to be codified.

Judge Richard Posner has discussed copyright abuse in at least two opinions. Posner reasons that the doctrine of copyright misuse prevents copyright holders from leveraging their limited monopoly to allow them control of areas outside the monopoly. See, story titled "Posner Addresses Copyright Misuse" and "7th Circuit Rules in Copyright and Database Protection Case" in TLJ Daily E-Mail Alert No. 788, November 28, 2003.

Earlier opinions applied the doctrine in this sense, and as a defense to copyright infringement. See, for example, Lasercomb America v. Reynolds, 911 F.2d 970 (4thCir 1990); Practice Management Information Corp. v. AMA, 121 F.3d 516 (9thCir 1997), Alcatel U.S.A., Inc. v. DGI Technologies, Inc., 166 F.3d 772 (5thCir 1999), and DSC Communications Corp. v. DGI Technologies, 81 F.3d 597 (5thCir 1996).

The CCIA/NC cite some of these cases. However, their list of instances where of misuse or abuse has occurred would not be remedied by the availability of a defense to infringement. Rather, they complain about outlandish copyright warnings at the beginning of DVDs, and DMCA Section 512 notices. These are not lawsuits for infringement in which a defense of misuse could be asserted.

They also cite attempts "to use the prohibition on circumvention in section 1201 to prevent competition in aftermarkets". Such attempts have occurred. However, the courts have rejected such attempts, under Section 1201, and on other grounds, but without resort to the doctrine of copyright misuse. See, Chamberlain v. Skylink, 381 F.3d 1178 (FedCir 2004), and story titled "Federal Circuit Rejects Anti-Circumvention Claim in Garage Door Opener Case" in TLJ Daily E-Mail Alert No. 971, September 7, 2004, and Lexmark v. Static Control Components, 387 F.3d 522 (6thCir 2004) and story titled "6th Circuit Vacates Preliminary Injunction in DMCA Case" in TLJ Daily E-Mail Alert No. 1,012, November 5, 2004.

Hypothetically, the Congress could codify misuse in many ways. It could provide that certain acts, such as misleading copyright notices on DVDs, are unfair or deceptive trade practices under the Federal Trade Commission Act, enforceable by the FTC. Creating a private right of action under the Copyright Act would make little sense because very few is any purchasers of DVDs with an obnoxious warning notices would have suffered sufficient harm to make it worth their effort and cost to file a lawsuit. The Congress might treat abusive Section 512 notices in similar fashion in the FTC Act, for similar reasons. Neither web sites nor those who post copyrighted video clips are likely to sue to enforce a misuse provision in Copyright Act.

The Congress could codify a limitation to the Section 1203 remedies for violation of the anti-circumvention provisions that is similar to the Section 107 fair use limitation to the Section 106 exclusive rights of copyright. The Congress could also add another limitation to the exclusive rights of copyright that codifies Judge Posner's statements, and the holdings of cases such as Lasercomb and DSC Communications.

Unfortunately, the CCIA/NC comments do not put the IPEC on notice as to what exactly they want the Congress to do. Nevertheless, the CCIA/NC comments are far more specific than any of the other comments filed with the IPEC that counterpose those of the rights holders.

More Comments for the IPEC's Plan Against Counterfeiting and Infringement

8/14. The Office of the Intellectual Property Enforcement Coordinator, or IPEC, is working on the second release of its "Joint Strategic Plan Against Counterfeiting and Infringement". This article summarizes some of the key technology related comments not covered in other articles in this issue.

1. Consumer Electronics Association.
2. American Intellectual Property Law Association.
3. Business Software Alliance.
4. International Intellectual Property Alliance.
5. Public Knowledge.
6. Electronic Frontier Foundation.
7. Future of Music Coalition.
8. Research in Motion.
9. eBay.
10. Other Notable Comments.

1. Consumer Electronics Association. The CEA complains in its comments about "patent trolls". As a remedy, it urges passage of HR 6245 [LOC | WW | TLJ], the "Saving High-tech Innovators from Egregious Legal Disputes", or "SHIELD Act". See, story titled "SHIELD Act Would Allow Court to Award Costs and Attorneys Fees to Prevailing Parties in IT Patent Cases" in TLJ Daily E-Mail Alert No. 2,420, August 4, 2012.

The CEA also wrote that "A trend which should cause alarm, and should be a priority for IPEC, is the combination of (1) the assertion of rights to which an entity is not entitled, (2) the availability of statutory damages making it too risky to fight even a dubious claim, and (3) the specter of indirect liability for products or services, which can elevate damage claims to levels unendurable by even the largest companies." (Footnotes omitted.)

It added that "these agreements are becoming increasingly controversial -- not because of debates over trade, but because of the inclusion of extreme IP language at the behest of US proprietary interests. This extreme language is extraneous to the trade agreements."

The CEA also wrote that "It should be an international priority for the U.S. government, and for IPEC, to promote cooperation to locate and eliminate counterfeits. Cooperation in this arena should be a part of future free trade agreements. Such activity should receive a higher priority than seizing web sites or filing “grey area” criminal cases that would be dubious24 even if filed civilly." (Footnote omitted.)

2. American Intellectual Property Law Association. The AIPLA addressed design patent and new gTLDs, among other things.

It wrote in its comments that "it is easier and more practical for" the DHS's Customs and Border Patrol (CBP) "to enforce trademarks and copyrights at the border than it is to enforce patents, partially because of the nature of infringing products and the relative difficulty of determining potential infringement. However, AIPLA believes that design patents, at least, are of the nature that they may be enforced at the border in a way similar to the enforcement of trademarks and copyrights, and would favor looking into the possibility of including design patents within CBP authority."

It added that "the government should strive to reduce the cost of enforcement on IP owners by reducing court costs, streamlining litigation, speeding up time to judgment, and removing barriers to collection of judgments."

The AIPLA also wrote about the impending increase in the number of Top Level Domains (gTLDs) by the Internet Corporation for Assigned Names and Numbers (ICANN). It wrote that "The current plan still requires businesses to pay for defensive registrations or file IP claims in connection with hundreds of new gTLDs, at prices that are unconstrained by ICANN or other regulatory bodies. These defensive registrations will be necessary to prevent consumer fraud and confusion on the part of users who are rightfully concerned about deceptive websites and online scams. Moreover, the legal expenses and domain acquisition costs of defensive registrations and IP claims will not be offset by potential economic or informational value to either registrants or Internet users. Indeed, ICANN's own economic studies indicate that there is no compelling economic need to introduce new gTLDs, and that the current gTLD structure adequately accommodates the current and forecasted needs of Internet users."

3. Business Software Alliance. The BSA submitted comments with numerous requests. The BSA wants a requirement that all federal contractors use licensed software. It wants more progress on IP issues in the PRC. It praised the OUSTR for its ongoing Special 301 and TPPA activities. And, it commented that there may be a gap in copyright protection that warrants legislation; that is, unauthorized access to a cloud computing services may not violate any of the the exclusive rights of copyright, but should.

The BSA wants the US government to continue to press for measurable progress against software theft in the People's Republic of China (PRC) by the government, by government owned enterprises, and in the private private. The BSA wants reform of copyright related laws in the PRC.

In addition, the US should press the PRC for the elimination of "indigenous innovation" policies that "compel transfers of IP to access the market".

The BSA praised the Office of the U.S. Trade Representative's (OUSTR) Special 301 process, and the ongoing negotiation of a Trans-Pacific Partnership Agreement (TPPA). In particular, the TPPA should include "Robust protection of technological protection measures against circumvention and against trafficking in circumvention devices", "Protection of temporary reproduction" such as when software is loaded into RAM, availability of statutory damages for infringement, safe harbors from liability for infringement for ISPs that have notice and take down systems, criminalization of commercial software infringement. Also, the TPPA should not include provisions that allow nations to weaken copyright protection by creating overbroad exceptions and limitations to infringement.

The BSA also addressed how software copyrights might be infringed via cloud computing, either by unauthorized use of a cloud service, or unauthorized cloud services.

The BSA wrote that with unauthorized use of a cloud service, "No copies, permanent or temporary, are made on the user's computer. While streaming of music or audiovisual content constitutes a public performance, it's unclear whether the same could be said of delivery of software functionality over the Internet. Consequently, it is uncertain which, if any of the exclusive rights under copyright law apply when one uses a cloud service without authorization. this may be an are that requires legal clarification in the US and overseas."

4. International Intellectual Property Alliance. The IIPA comments praise the Department of Justice's (DOJ) Criminal Division program that places Intellectual Property Law Enforcement Coordinators (IPLECs) in foreign countries, and urge its expansion. The IIPA also urges the placement abroad of International Computer Hacking and Intellectual Property coordinators (ICHIPs).

The IIPA advocates information sharing between customs officials and rights holders to facilitate the seizure of circumvention devices and counterfeit products.

"Copyright industries are well-positioned to help CBP identify the type and origin of the circumvention devices, technologies, or components seized by it, as well as infringing goods. Regulatory or (if necessary) legislative changes would facilitate this assistance, and advance the shared goal of effective enforcement, by clarifying CBP’s authority to share information and samples of seized product with industry experts."

The IIPA praises the OUSTR's special 301 process.

The IIPA also wants the US government to work to remove "market access challenges for creative industries that rely on intellectual property rights". It explains that "All efforts to crack down on piracy will be unavailing if legitimate products and services cannot be brought into a market to meet consumer demand."

The IIPA also argues that ongoing TPPA negotiations are important, and should provide for "1) establishment of adequate criminal remedies to deter piracy in all its forms; 2) adequate and effective measures to deal with damaging online piracy; and 3) measures that promote effective civil remedies, investigations, evidentiary standards, and border measures".

5. Public Knowledge. The PK submitted comments criticizing the seizure of domain names by the U.S. government.

The PK argued that "the US government’s enforcement strategy should be directed at large scale commercial infringers of copyright and not small scale operations. To be successful, that enforcement strategy has to be targeted and avoid collateral damage to innocent actors. Certain practices the government has adopted, in particular the seizures of domain names and servers, have not followed this targeted approach. As a result, the government's actions have adversely impacted the due process and free speech rights of innocent third parties."

Citing seizures of domain names in late November of 2010 by the DOJ and Department of Homeland Security (DHS), the PK wrote that this tactic has focused "on entire websites rather than particular infringing content", and has "prevented access not only to links to the allegedly infringing content, but also the many legitimate blogs". See, story titled "DOJ and DHS Seize Domain Names of Web Sites Engaged in Infringing Sales" in TLJ Daily E-Mail Alert No. 2,167, December 3, 2010.

Also, while the PK's comments to the IPEC do not address ongoing TPPA negotiations, or exceptions and limitations to copyright, on August 14 the PK published a short piece by Rashmi Rangnath that does. Moreover, it comments on a "leaked" draft that neither the OUSTR nor any other party to the negotiations has publicly released.

While copyright based industries are pressing the OUSTR to further copyright protection abroad in negotiations such as the recently concluded ACTA, and the ongoing TPPA, the PK is pressing the OUSTR to use the TPPA negotiations to substantially diminish the scope of copyright protection.

The PK argues that the TPPA "should define certain limitations and exceptions" to the exclusive rights of copyright, including "criticism, commentary, news reporting, research, and scholarship", and "fair uses".

Moreover, the PK argues that the TPPA should require that "countries shall ... promote uses of works by people with disabilities" and "promote educational uses of works including by transmission over wired or wireless networks".

Finally, the PK wants the TPPA to provide that member countries may abrogate "contract rules" affecting use of copyrighted works, and authorize the circumvention of a technological measures, such as digital rights management, that control access to protected works, for the purpose of exercising any copyright limitations or exceptions.

6. Electronic Frontier Foundation. The EFF submitted comments critical of current IP enforcement policies and activities.

First, it argued that government IP enforcement efforts are causing "significant collateral damage" and the government "does not appear to be concerned about mitigating that harm". It also complained about DHS/CBP domain name seizures, where government lawyers act as the "hired gun of the content industry".

The EFF also complained about the July 2011 agreement [36 pages in PDF] between broadband internet access service (BIAS) providers, major movie and record industry companies, and their trade groups, titled "Memorandum of Understanding". This MOU is an enforceable contract between certain content providers and certain BIAS providers. See, story titled "BIAS Providers and Content Industries Announce Copyright Alert System" in TLJ Daily E-Mail Alert No. 2,254, July 8, 2011.

The EFF did not advocate that the IPEC abrogate private contracts. However, it wants future contract negotiations to be "subject to appropriate user oversight".

The EFF also argued that "statutory damages provisions are in dire need of reform", and that the IPEC should support changes that "limit damages to harm actually done". Also, the IPEC should "make health and safety risks from fake or adulterated products the highest priority" rather than "copyright infringement".

The EFF reiterated its opposition to SOPA and PROTECT IP.

The EFF again stated its views that the negotiation of multinational trade agreements, such as the ACTA and TPPA, lack transparency, constitutes "forum shifting and policy laundering", and has "chilling effects on due process and civil liberties".

7. Future of Music Coalition. The FOMC submitted comments in which it advocates several changes to law -- that would provide for the establishment of voluntary international databases of music rights, that would limit the rights of copyrights holders in works purported to be orphan works, that would enable the music "sampling and remix culture", and that would revert to the creator a copyright that has been transferred but not commercially exploited for three years.

The FOMC comments also state that "§§ 114 and 115 of the Copyright Act should be undertaken to ensure that the statutory language enables, not inhibits, artist compensation and the promulgation of more legal, licensed services".

8. Research in Motion (RIM) submitted comments regarding patents, and abusive Section 337 actions at USITC. It wants the USITC to apply the same four prong test of the issuance of injunctions that the Supreme Court requires in patent infringement cases in the District Court, under eBay.

Without mentioning the People's Republic of China, RIM wrote that "Some foreign governments require transfers of IP as a condition for foreign companies to operate in their markets. IPEC and USTR should pursue such countries vigorously ..."

Finally, RIM addressed online copyright infringement and ongoing TPPA negotiations. It wrote that "any international trade agreement addressing notice and takedown mechanisms should: (i) give sufficient time to the recipient of takedown notices, including app store and other platform providers, to enable them to review and process takedown notices before liability is triggered; (ii) be worded in a manner that clearly covers non-traditional recipient of takedown notices such as legitimate app store providers (provided that they follow the prescribed DMCA procedures);

9. eBay. eBay submitted comments in which it argued that the IP enforcement should focus on counterfeit items, rather legitimate parallel market items.

eBay wrote that there are "some stakeholders who desire to use intellectual property law to focus on stopping the trade of legitimate goods, for competitive purposes. In particular, there are ongoing efforts to expand existing legal authorities and to marshal enforcement resources beyond combatting counterfeits".

One case cited by eBay is Kirtsaeng v. Wiley. For more on this case, see related story in this issue titled "CCIA and Net Coalition Offer Recommendations for IPEC Plan", at section subtitled "Secondary Markets and Copyright".

10. Other Notable Comments. The state of Mississippi submitted comments suggesting that states should be able to enforce state copyright laws. Currently, the Copyright Act has strong preemption language.

Sixteen members of the EU Parliament submitted comments in which they wrote that "extraterritorial IPR enforcement concerns us", citing the US action to shut down MegaUpload. They also wrote that "The tensions in this policy area will persist if we do not establish a realistic and balanced approach to IPR enforcement online. Increasing coercive legal actions to defend a legal construct which appears to be outdated in the digital environment will not fix the underlying problems."

The Internet Society submitted comments in which it argued that "enforcement attempts  ... should ensure and not jeopardize the stability, interoperability and efficiency of the Internet, its technologies and underlying platforms." It elaborated that "There are significant concerns from using the DNS as a channel for intellectual property enforcement and various contributions have been made on this issue by both the Internet Society1 and the technical community. It needs to be highlighted that from a security perspective, in particular, DNS filtering is incompatible with an important security technology called Domain Name Security Extensions or DNSSEC. In fact, there is great potential for DNSSEC to be weakened by proposals that seek to filter domain names."

The Internet Commerce Coalition submitted brief comments opposing the targeting of "intermediaries for liability" in international negotiations, expressing concerns about ICANN creation of new top level domains, and urging the US not to devote enforcement resources to online resale of non-counterfeit goods.

Lakeshore Records submitted comments in which it wrote that "Our company has issued in excess of 40,000 DMCA takedown notices in less than a year and only our top 5 titles. These request do not even include Google search who up until recently required submitting DMCA notices ONLY via Fax and Mail. Please close the loophole in the DMCA that allows the same site on the same day to reload the same infringing content repeatedly. No one should ever have to send more than one DMCA notice to a site more than once. Let alone multiple times in a single day."

People and Appointments

8/14. Rep. Cliff Stearns (R-FL), the Chairman of the House Commerce Committee's (HCC) Subcommittee on Oversight and Investigations, narrowly lost in the Republican primary election for the 3rd District of Florida. Following redistricting, Rep. Stearns ran as a candidate in a district with little overlap with his current district.

8/14. Sen. Herb Kohl (D-WI), the Chairman of the Senate Judiciary Committee's (SJC) Subcommittee on Antitrust, Competition Policy and Consumer Protection, is not running for election in November. Tommy Thompson, a former Governor of Wisconsin, and former Secretary of Health and Human Services, won the Republican Senate primary election on August 14. He will run against Rep. Tammy Baldwin (D-WI), whose current House district includes Madison and the University of Wisconsin at Madison. She is a member of the House Commerce Committee (HCC). Previously, she was a member of the House Judiciary Committee (HJC).

8/14. Sen. Joe Lieberman (D-CT) is not running for election in November. On August 14 Linda McMahon won the Republican Senate primary election, defeating former Rep. Chris Shays (R-CT). The Democratic candidate is Rep. Chris Murphy (D-CT). In 2010, Sen. Richard Blumenthal (D-CT) defeated McMahon for the seat previously held by for former Sen. Chris Dodd (D-CT), who is now head of the Motion Picture Association of America (MPAA). Sen. Lieberman is the Chairman of the Senate Homeland Security and Governmental Affairs Committee (SHSGAC), and sponsor of S 3414 [LOC | WW], a bill that would impose a cyber security regulatory regime. Two other members of the SHSGAC are not running for re-election, Sen. Susan Collins (R-ME) and Sen. Daniel Akaka (D-HI).

8/14. The Public Knowledge (PK) hired Christopher Lewis as VP of Governmental Affairs. He will replace Ernesto Falcon, who will become Special Advisor. Lewis previously worked at the Federal Communications Commission's (FCC) Office of Legislative Affairs. Also, the PK recently hired Bartees Cox as Communications Associate. He was previously an intern at the Free Press.

More News

8/14. The Federal Trade Commission (FTC) published a notice in the Federal Register (FR) announcing recent Hart Scott Rodino (HSR) grants of early termination of the waiting period provided by law and the premerger notification rules. See, FR, Vol. 77, No. 157, August 14, 2012, at Pages 48520-48523.

People and Appointments

8/13. The National Institute of Standards and Technology (NIST) published a notice in the Federal Register (FR) that announces the members of the NIST Performance Review Board (PRB): Delwin Brockett, Robert Dimeo, Stella Fiotes, Ellen Herbst, Anna Gomez, and Sivaraj Sunder. See, FR, Vol. 77, No. 156, August 13, 2012, at Pages 48129-48130.

8/13. Yahoo named Ron Bell General Counsel. He has worked for Yahoo since 1999. See, release.

More News

8/13. The Federal Trade Commission (FTC) released a notice, to be published in the Federal Register, that announces, describes, recites, and sets the comment deadline for, proposed changes to its premerger notification rules that would require companies in the pharmaceutical industry to report proposed acquisitions of exclusive patent rights to the FTC and the Department of Justice (DOJ) for antitrust review. The deadline to submit comments is October 25, 2012.

8/13. John Wiley & Sons, a publisher of books, journals and related products, announced in a release that it has "entered into a definitive agreement to sell all of its travel assets, including all of its interests in the Frommer's brand, to Google".

Go to News from August 6-10, 2012.