House CIIP Subcommittee Holds Hearing on Piracy Deterrence and Education Act

July 17, 2003. The House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property (CIIP) held a hearing on HR 2517, the "Piracy Deterrence and Education Act of 2003." This bill would enhance the government's resources for prosecuting intellectual property crimes, and involve the Federal Bureau of Investigation (FBI) and Department of Justice (DOJ) in educating and warning the public regarding internet based copyright infringement.

Rep. Lamar Smith (R-TX) is the lead sponsor of the bill, and the Chairman of the CIIP Subcommittee. He presided at the hearing. He stated that "law enforcement officials must be more aggressive in their enforcement of existing laws."

Rep. Lamar SmithRep. Smith (at right) also stated that "we expect to mark up this bill next week".

HR 2517. This bill provides that the FBI shall "develop a program to deter members of the public from committing acts of copyright infringement by -- (A) offering on the Internet copies of copyrighted works, or (B) making copies of copyrighted works from the Internet, without the authorization of the copyright owners". It further provides that such program shall include "warnings to individuals" engaging in internet based infringement that "they may be subject to criminal prosecution". The bill, however, makes no changes to the criminal code.

The bill also provides that the FBI shall "facilitate the sharing among law enforcement agencies, Internet service providers, and copyright owners of information concerning" internet based infringement.

The bill also provides that each of the DOJ's Computer Hacking and Intellectual Property (CHIPs) units shall have "at least one agent to support such unit for the purpose of investigating crimes relating to the theft of intellectual property". It also requires training of that agent.

The bill also requires the DOJ to create a "Internet Use Education Program" to "educate the general public concerning the value of copyrighted works and the effects of the theft of such works on those who create them", and to "educate the general public concerning the privacy, security, and other risks of using the Internet to obtain unauthorized copies of copyrighted works".

The bill makes three minor changes to the Copyright Act, regarding registration (17 U.S.C. § 411), infringing importation (17 U.S.C. § 602), and importation prohibitions (17 U.S.C. § 603).

It provides that "An action for infringement of the copyright in any United States work shall not include any action brought by the Government of the United States or by any agency or instrumentality thereof." That is, the government is relieved of the obligation of registering a copyright before bringing a prosecution for infringement.

The bill was introduced on June 19, 2003. See also, story titled "Representatives Smith & Berman Introduce Internet Piracy Education Bill" in TLJ Daily E-Mail Alert No. 686, June 24, 2003.

Statements by Subcommittee Members. Rep. Howard Berman (D-CA) is a cosponsor of the bill, and the ranking Democrat on the CIIP Subcommittee. He advanced several arguments for enhanced criminal prosecution of intellectual property crimes. First, he stated that many authors and creators are individuals who cannot afford the financial cost of litigating to enforce their rights. For these people, government prosecution can provide the only deterrent.

Second, Rep. Berman stated that many copyright infringers are judgment proof, which renders civil enforcement ineffective. He added that for these people too, prosecution offers the only effective deterrent.

Rep. Ric Keller (R-FL), whose Florida Congressional district includes many employees of Universal Studios, spoke favorably about the bill. Similarly, Rep. Anthony Weiner (D-NY) stated that "there is no deterrent value now" resulting from the actions of law enforcement authorities. He added that "the government seems to be taking it not very seriously".

Rep. Zoe Lofgren (D-CA) submitted a prepared statement for the hearing record. She wrote that "Online piracy is indeed a threat to America's copyright owners, and I'm glad that this Congress is taking the issue seriously." However, she added that "I am becoming increasingly dismayed by the fact that this Subcommittee only examines digital issues from one perspective. We have had numerous hearings this year on how online piracy affects content owners."

She continued that "My point is that this Subcommittee should examine digital issues from all sides, not focus solely on how they affect copyright owners. We should look at how our laws affect the technology industry. We should examine whether or not the DMCA is chilling investment and innovation."

She then promoted her bill, HR 1066, the "Benefit Authors without Limiting Advancement or Net Consumer Expectations (BALANCE) Act of 2003". This bill adds a reference to "analog or digital transmissions" to § 107 (the fair use section) of the Copyright Act. Second, the bill creates a new § 123 in the Copyright Act that limits the basic exclusive rights of § 106. This new section allows copying of lawfully obtained copies for storage, or for use on a preferred digital media device. Third, the bill limits the enforceability of non-negotiable license terms. Fourth, the bill expands the § 109 right of sale to digital works. Fifth, the bill limits the anti circumvention provisions of the Digital Millennium Copyright Act (DMCA). See, story titled "Rep. Lofgren Re-Introduces Digital Fair Use Bill" in TLJ Daily E-Mail Alert No. 618, March 6, 2003.

Witness Testimony. The Subcommittee heard testimony from four witnesses. Unlike most prior hearing on related matters, there was only one representative from any of the entertainment industries. (Maren Christensen testified on behalf of Vivendi Universal.) There were two representatives of individual creators, who testified regarding the inability of individuals to stop piracy of their works online.

Linn Skinner, an old lady who makes and sells embroidery designs, spoke of the widespread scanning and copying of her works on the internet. She testified that she has been powerless to stop the theft of her works, and that federal prosecutors have taken no action on her behalf. She endorsed HR 2517. See, prepared testimony [49 pages in PDF], most of which is documentation of online infringement embroidery designs.

Similarly, David Trust testified on behalf of individual photographers. He testified that "the costs of pursuing a copyright claim are beyond the reach of almost all photographers, giving the infringer a de facto license to steal. This is compounded by copyright registration requirements that make it nearly impossible for photographers to obtain statutory damages or attorney’s fees." See, prepared testimony.

The Subcommittee also heard from Maren Christensen of Vivendi Universal Entertainment, who recounted the recent criminal prosecution of the person who pirated its movie, The Hulk. See, prepared testimony. Finally, the Subcommittee heard from Jana Monroe, head of the FBI's Cyber Division. A main purpose of the bill is to get the FBI and the U.S. Attorneys Offices to bring more prosecutions. See, prepared testimony.

Opposition to HR 2517. The panel included no witnesses who opposed to the legislation. Most of the members of the Subcommittee who were present are cosponsors of the bill. However, one member of the CIIP offered criticism -- Rep. Rick Boucher (D-VA). Rep. Boucher has a long history of opposing legislation that expands intellectual property rights, or provides further civil and criminal procedures for enforcement of intellectual property rights, especially those pertaining to copyright. He has also sponsored many bills to weaken the scope of intellectual property protections.

Rep. Rick BoucherRep. Boucher (at right) asked a series of mostly rhetorical questions to make points about the proposed legislation.

First, he said that "Section 3 of the bill directs the FBI to deter the offering by the public of unauthorized copies of copyrighted works from the internet. ... Can anyone on the panel tell me what ``unauthorized´´ means in this context? Does it mean that the consent of the owner of the copyright has not been obtained for the download. Or, is ``unauthorized´´ in this context a synonym for ``unlawful´´? There is a very substantial difference between the two.

Section 3 provides, in full, that "The Director of the Federal Bureau of Investigation shall--
  (1) develop a program to deter members of the public from committing acts of copyright infringement by -- (A) offering on the Internet copies of copyrighted works, or (B) making copies of copyrighted works from the Internet, without the authorization of the copyright owners; and
  (2) facilitate the sharing among law enforcement agencies, Internet service providers, and copyright owners of information concerning activities described in subparagraphs (A) and (B) of paragraph (1).
  The program under paragraph (1) shall include issuing appropriate warnings to individuals engaged in an activity described in subparagraph (A) or (B) of paragraph (1) that they may be subject to criminal prosecution."

Rep. Boucher asked Christensen, the industry witness, if her interpretation is that "when the word ``unauthorized´´ is used here, your interpretation is that it really means ``unlawful´´? Meaning that the download does constitute an infringement?"

She stated that "I think the download has to constitute an infringement."

Rep. Boucher continued that "If someone is downloading for the exercise, for example, of their fair use rights to excerpt a section from something they see on the internet that is copyrighted, that would be conduct that the FBI should be deterring? That is unauthorized in the sense that the copyright owner has not given his direct permission to download that excerpt, but your opinion would be that in that particular instance the FBI should not deter? Is that stated correctly?

Christensen stated that "in the context of this bill, when you are talking about file trading on a public peer to peer network, you are almost never going to find an instance in which it is fair use to upload somebody's property onto that network."

Rep. Boucher added that "I am not suggesting that we alter the definition of fair use here, or that we expand it into new areas. What I am saying is that when something is unequivocally a fair use application, it would not be your intent that this language be used in order to deter the downloading of that." He also asked "Would you agree that we should change the language here from ``unauthorized´´, which is ambiguous, in its interpretation, at least, essentially, in the minds of some, to the simple word ``unlawful´´?"

Christensen said "I don't think it is necessary Congressman."

Rep. Boucher next addressed the bill public education provisions. He said that "I am concerned also by the notion that we are going to direct the Federal Bureau of Investigation to launch a public education campaign about the niceties of copyright laws. And, I am just wondering, and I would ask Ms. Monroe this question, will the agents, or the individuals at the Bureau responsible for fashioning this public education campaign include material on the fair use rights of consumers, and the devote substantial effort and volume of the communication to that to make sure that those rights are also fairly communicated."

Monroe, the FBI witness, responded that "At this point I am not permitted to testify on the merits of any legislation."

Finally, Rep. Boucher addressed the resources of the FBI. He said that "I see no authorization in this legislation for additional money. And so presumably, this bill anticipates that you will carry out the new responsibilities of mounting an education campaign, assigning agents under section 4, mounting this deterrence program under section 3, with your existing resources, and existing personnel. Do you have sufficient existing resources and personnel to undertake all of these responsibilities without any new dollars from the Congress?" He cut off the FBI witness from answering.