The Prioritizing Resources and Organization for Intellectual Property Act of 2008 (PRO-IP Act of 2008, , , )OpenCongress - H.R.4279 PRO-IP Act of 2008 is a United States law that increases both civil and criminal penalties for trademark, patent and copyright infringement. The law also establishes a new executive branch office, the Office of the United States Intellectual Property Enforcement Representative (USIPER).Congress' copyright reform: seize computers, boost penalties, spend money
Background The PRO-IP Act would serve to further protect rights holders in the case of secondary infringement, in which a consumer becomes liable for infringement committed by another. In Capitol Records v. Deborah Foster (2004), the Recording Industry Association of America (RIAA) could not charge Oklahoma woman, Debbie Foster, with infringement of shared files. Judge Lee suggested that Foster could not be held responsible for the download of files, which were attributed to her adult daughter and estranged husband who used her IP number. The RIAA's use of IP numbers to charge users with infringement was not sufficient evidence to charge Ms. Foster and other defendants in the past. However, in another RIAA case, Elektra v. Santangelo, the judge did find Patti Santangelo potentially liable for file-sharing in her home via Kazaa software, despite the fact that she may not have been aware of the illegal downloads.
In one case, Capitol v. Thomas, Capitol Records did receive an award of $9,250 in statutory damages for each of the twenty-four infringed songs. Although the jury settled on charging the defendant with only $9,250 out of the possible $150,000 per song, through these cases, Capitol Records, the RIAA and others were primarily concerned with sending a message to the public that illegal distribution and download of copyrighted music was unacceptable.
In addition to these domestic issues, United States has a history of participating in global enforcement of intellectual property rights. In 1995, the U.S. participated in negotiating in the World Trade Organization (WTO) on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which established a minimum standard for protecting various areas of IP rights. Throughout fiscal years 2004 to 2009, the government has tracked the importation of counterfeit goods, including pharmaceuticals, cigarettes, apparel, footwear, computers, software, toys and electronics. In 2006, the government confiscated, for example, cargo containers of counterfeit Nike Air Jordan shoes, as well as counterfeit Abercrombie and Fitch clothing, which together were valued at about $19 million. According to the U.S. Government Accountability Office's April 2010 report, "Observations on the Efforts to Quantify the Economic Effects of Counterfeit and Pirated Goods," such goods undercut American competition with lower prices, thus causing damage to the domestic economy. The U.S. government was also strongly concerned about the illicit distribution of digital products through peer-to-peer networks, streaming sites, and one-click hosting services. At the time, there was no government agency that collected or tracked data on digital copyright violation. Alongside potential lost revenue, these unauthorized goods pressure producers and IP owners to compete with the counterfeit producers. Overall, this contributes to loss of brand value and reputation, as well as lost investment and innovation. Also, American companies are forced to expend further funds on protecting intellectual property in court.
Proponents of PRO-IP frequently cited a study from the U.S. Chamber of Commerce, claiming that intellectual property theft costs American businesses an estimated $250 billion each year, as well as an estimated 750,000 jobs. A subsequent investigation by the technology news site Ars Technica revealed that these statistics were both inaccurate and decades old. A report issued by the Government Accountability Office in 2010 confirmed that these figures had not been derived from any reliable research, and could not be substantiated.
Legislative history
The origin of the legislation was the Intellectual Property Rights Enforcement Act, S.1984 introduced on November 9, 2005, in 109th Congress by Senator Evan Bayh (D-IN) and Senator George Voinovich (R-OH), and re-introduced on February 7, 2007, in the 110th Congress as S.522.
S.522 required the President to appoint an Intellectual Property Enforcement Coordinator, who would serve in the Office of Management and Budget (OMB) in the Executive Office of the President. The Coordinator would be responsible for coordinating inter agency activity on IP enforcement, developing a Strategic Plan detailing objectives and strategies, working with the private sector and other outside groups, and reporting to the President and Congress. New provisions were added later that year.
On December 5, 2007, John Conyers (D-MI) introduced the newly expanded legislation into the House of Representatives. The bill (H.R. 4279) was known as Prioritizing Resources and Organization for Intellectual Property (PRO-IP) Act of 2008. Lamar Smith (R-TX), Howard Berman (D-CA), Adam Schiff (D-CA) and Bob Goodlatte (R-VA) were among the sponsors of the bill.
Intellectual-property holders, such as entertainment companies, auto parts manufacturers, pharmaceuticals and unions, championed the bill.
On May 8, 2008, the House of Representatives passed the bill 410 to 11. Only 12 representatives did not vote. On July 12, 2008, H.R. 4279 was received in the House and referred to the Committee on the Judiciary. On July 24, 2008, Senator Patrick Leahy (D-VT) introduced the bill (S.3325) in the Senate as Enforcement of Intellectual Property Rights Act.
On September 26, 2008, S.3325 passed in the Senate with unanimous consent. Two days later, S.3325 passed in the House 381 to 41. In this final House vote, 2008 presidential candidates, Ron Paul and Dennis Kucinich, voted against the bill.
On October 13, 2008, President George W. Bush signed the bill into law. The official name of the bill reverted to its original title when it was introduced into the House, Enforcement of Intellectual Property Rights Act.
Content
The PRO-IP Act makes changes to prior intellectual property law in the areas of civil enforcement, criminal enforcement, coordination of federal intellectual property efforts and funding and resources of the Department of Justice intellectual property programs.
For civil enforcement, the PRO-IP Act increases the maximum $30,000 penalty for compilations and increases penalties for repeat offenders. It raises the penalty for statutory damages for counterfeit goods from $1,000 to $200,000, which was originally a range from $500 to $100,000. For repeat offenders, the maximum statutory damages range from $1–2 million. In addition, the Justice Department has the authority to conduct civil asset forfeiture, in which any computer or network hardware used in the act of a copyright crime may be seized and auctioned off.
In civil forfeiture, the plaintiff may also access bank accounts, financial information and other documents in order to trace the source of the infringing goods. In criminal enforcement, the PRO-IP Act offers the government more authority in seizure and forfeiture in the trafficking of counterfeit labels, documentation, and packaging.
Under Title II of the Act, the manufacturers of these products face new criminal penalties, especially if the offender knowingly or recklessly causes serious bodily injury or death, as with counterfeit pharmaceuticals. The Act also prohibits the transshipment or exportation of such goods, which would be in violation of the Trademark Act of 1946 or the Lanham Act.
Section 602 of the Copyright Act states that it is only illegal to import products that infringe a copyright. Section 105 of PRO-IP makes exports of such materials illegal as well.
U.S. Customs and Border Protection also provides the opportunity for musicians and performers to register their work with the agency, enabling CBP to notify the artist if unauthorized copies of their work are tracked entering the U.S. from other countries.
The PRO-IP Act also established the position of the Intellectual Property Enforcement Coordinator within the Executive Office of the President. The purpose of this new position was to coordinate the anti-infringement efforts of the Department of Justice, the Patent and Trademark Office and the Office of the U.S. Trade Representative.
The appointed IPEC would be responsible for developing and implementing a Joint Strategic Plan, a program to battle counterfeiting and copyright infringement. The appointee would also serve as chief advisor to the President on both domestic and international intellectual property enforcement policy.
Under Section 304, the IPEC must submit an annual report to Congress and must update the strategic plan every three years. The legislation also allocates $25 million annually to state and local governments to train law enforcement, educate the public and purchase technology to combat counterfeit activity.
Additional resources, for example, were allotted to the Federal Bureau of Investigation, which now operates a department of at least five full-time Special Agents who work with the Department of Justice's Computer Crime and Intellectual Property Section (CCIPS).
The Congressional Budget Office estimated that the federal budget would allocate approximately $429 million between 2009 and 2013 for the implementation of the PRO-IP Act.
Proponents and opponents
Proponents Based on the White House's 2010 Joint Strategic Plan, proponents stated that the PRO-IP Act would protect the growth of the national economy. They believed it would promote creativity, research and innovation, which are essential to the technology, pharmaceutical, automobile, and entertainment industries and in turn, protect the jobs in those fields. The U.S. federal government also depends on the promotion of innovation to solve global problems and to preserve national and economic security, including the prevention of criminal activity, such as the sale of counterfeit drugs that cause fatal harm to consumers. In addition, supporters said the Act reaffirmed Article I, Section 8 of the Constitution, which aims to promote scientific and artistic creativity.
In a speech at the Export-Import Bank's Annual Conference in March 2010, President Obama remarked: "...we're going to aggressively protect our intellectual property. Our single greatest asset is the innovation and the ingenuity and creativity of the American people. It is essential to our prosperity and it will only become more so in this century. But it's only a competitive advantage if our companies know that someone else can't just steal that idea and duplicate it with cheaper inputs and labor. There's nothing wrong with other people using our technologies, we welcome it –- we just want to make sure that it's licensed, and that American businesses are getting paid appropriately."
When the bill was initially introduced, co-sponsor, Rep. Howard Berman, defended the Digital Millennium Copyright Act. He suggested that individuals are willing to steal intellectual property and that the PRO-IP Act would prevent such crimes.
American businesses, such as the Business Software Alliance, Motion Picture Association of America and the Recording Industry of Association of America, were long time supporters of the bill, since it was first introduced into the House. NBCUniversal Media also supported the Act due to countless unlicensed works on counterfeit DVDs and online, which were circulated throughout the U.S. and abroad.