House Judiciary Committee Approves PRO IP Act

April 30, 2008. The House Judiciary Committee (HJC) amended and approved HR 4279 [LOC | WW], the "Prioritizing Resources and Organization for Intellectual Property Act of 2007" or "PRO IP Act". The HJC revised the language regarding coordination of government enforcement efforts, and regarding forfeiture of property used in intellectual property crimes.

The HJC approved a managers' amendment [PDF] by unanimous voice vote. The HJC then approved the bill as amended by voice vote. Rep. Zoe Lofgren (D-CA) voted against the bill.

Rep. John Conyers (D-MI), Rep. Lamar Smith (R-TX), Rep. Howard Berman (D-CA), and others introduced this bill on December 5, 2007. It addresses remedies for infringement and counterfeiting, and the organization and funding of government efforts to enforce intellectual property rights (IPR). For a summary of the bill as introduced, see story titled "Representatives Introduce PRO IP Act" in TLJ Daily E-Mail Alert No. 1,683, December 5, 2008.

The HJC's Subcommittee on Courts, the Internet and Intellectual Property (SCIIP) amended and approved the bill on March 6, 2008. See, managers' amendment [PDF]. For a summary of the amendment, see story titled "House Subcommittee Amends PRO-IP Act" in TLJ Daily E-Mail Alert No. 1,727, March 05, 2008.

Rep. Berman stated at the full Committee mark up on April 30 that the managers' amendment attempts to address the Bush administration's concerns about the bill's provisions regarding organization of executive branch enforcement efforts. However, he added that the HJC has not yet received detailed proposals from the Bush administration regarding what would satisfy their concerns.

He added that the bill as amended by the managers' amendment maintains prosecutorial discretion at the Department of Justice (DOJ) and trade authority at the Office of the U.S. Trade Representative (OUSTR). However, he said that there needs to be greater coordination of intellectual property enforcement efforts.

The managers' amendment also addressed forfeiture. Section 202 of the bill pertains to forfeiture of property used in various criminal violations of intellectual property laws. That is, it applies in criminal actions brought by the government under 18 U.S.C. § 2318 (regarding trafficking in counterfeit labels), 18 U.S.C. § 2319 (regarding criminal infringement of copyright), 18 U.S.C. § 2319A (regarding unauthorized fixation of and trafficking in sound recordings and music videos of live musical performances), and 18 U.S.C. § 2319B (regarding unauthorized recording of motion pictures in a motion picture exhibition facility).

The amendment approved by the SCIIP on March 6, 2008, added the requirement that "the Government shall establish that there was a substantial connection between the property and the offense."

The amendment approved on April 30, 2008, further clarifies the substantial connection requirement. This amendment inserts the following clause into the various forfeiture provisions: "except that property is subject to forfeiture under this clause only if the Government establishes that there was a substantial connection between the property and the violation".

Rep. Lofgren (at right) said, regarding the forfeiture language, that the Committee has "not yet reached the proper balance". She asserted that innocent persons' property, such as computers, could be seized because of someone else's conduct.

She noted that there are procedures available to recover property wrongfully seized by the government, but that parents and students are unlikely to avail themselves of these remedies.

Rep. Berman noted that the forfeiture provisions for intellectual property (IP) crimes, under existing law, and as stated in this bill as amended, are "significantly narrower" than the forfeiture provisions of federal drug laws.

Rep. Lofgren and Rep. Berman (at left), who represent Silicon Valley and Los Angeles districts, respectively, continued to spar.

While Rep. Berman thought it appropriate to compare IP to drug prosecutions, Rep. Lofgren thought it pertinent to consider IP prosecutions in light of recent peer to peer infringement actions. She said that the Recording Industry Association of America (RIAA) has sued students and other innocent people, who as a result have "ended up financially behind the eight ball".

Rep. Berman, who is the Chairman of the SCIIP, said that for the government to seize property there is a requirement that the property "be under the predominant control of the offending party".

The forfeiture language of the bill includes the following: "The following property is subject to forfeiture to the United States ... owned or predominantly controlled by the violator or by a person conspiring with or aiding and abetting the violator in committing the violation".

Rep. Berman also said to Rep. Lofgren that we will continue to work to find balance in this bill.

Rep. Lofgren said that "what has happened with the RIAA lawsuits is that they have made a business out of extorting money from students". She added that "I think that this is the same type of situation".

Rep. Berman joked about her characterization of these lawsuits as "extortion".

Also, the RIAA lawsuits to which Rep. Lofgren referred are private civil actions brought by record companies. In contrast, the forfeiture provisions of HR 4279 apply to only seizure of property in criminal proceedings. This bill does not enhance the remedies available to record companies in civil actions. There are far fewer federal prosecutions than record company civil actions. Moreover, federal prosecutions tend to be brought by professional prosecutors with no financial stake or interest in the outcome of their actions.

Rep. Conyers stated that this bill "will help our economy by protecting our high-tech jobs now and long into the future. This bi-partisan bill recognizes and puts forth the necessary resources commensurate with the substantial and rising importance of intellectual property to this nation’s economy."

Rep. Sheila Lee (D-TX) said that she wants the DOJ's Computer Hacking and Intellectual Property (CHIP) units to be more racially diverse. However, she offered no amendment.

Gigi Sohn, head of the Public Knowledge, stated in a release that "We are pleased that the Committee amended the bill (HR 4279) to make clear there has to be a 'substantial connection' between property to be seized, such as a computer, a car or a house, and any violations of the copyright law."

Patrick Ross, head of the Copyright Alliance, praised the bill. He wrote in a release that "With a weakened economy and rising unemployment, it is critical that the creative industries -- providers of millions of high-paying US jobs -- have their rights protected. The PRO IP Act contains numerous means to increase copyright enforcement both domestically as well as abroad, where the US Trade Representative's most recent report shows piracy remains rampant."

Dan Glickman, head of the Motion Picture Association of America (MPAA), stated in a release that "The Judiciary Committee took a positive, bipartisan step today by passing the PRO-IP Act. By further protecting intellectual property, this legislation will be a boost for the American economy and will help generate more American jobs for our workers. Given the difficult economic times we currently face, the PRO-IP Act is welcome by both the business and labor communities because it will help strengthen our nation’s economic outlook. I hope the full House and the Senate will both move quickly in order to make this bill law."

David Israelite, head of the National Music Publishers Association (NMPA), stated in a release that "Today’s action represents important progress for everyone concerned about better enforcement of America’s intellectual property rights. Having spent time at the Justice Department tackling IP enforcement and coordination issues, I understand the challenge of managing resources effectively and applaud the Subcommittee’s efforts to provide leadership in this area. This bill will go a long way towards making sure law enforcement agencies have what they need to get the job done on both domestic and international fronts."