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Hearing of the Courts, the Internet and Intellectual Property Subcommittee of the House Judiciary Committee - Intellectual Property Act of 2007

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Date:
Location: Washington, DC

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REP. BOB GOODLATTE (R-VA): Well, thank you, Mr. Chairman, and I will abbreviate my statement.

Because the United States has been the pioneer for intellectual property protections it's no surprise that the copyright industries are so successful and are so crucial to our national economy. The U.S. copyright industries have created millions of high-skilled, high- paying U.S. jobs and have contributed billions to our economy. However, the proliferation of copyright piracy in America is growing and is threatening to undermine the very copyright protections our founding fathers envisioned. The same fast Internet connections and innovative technologies that continue to bring us wonderful new products can also be used to download, upload and otherwise share illegal copies of songs, movies, games and software at an unprecedented level.

To combat this rising theft I'm pleased to cosponsor this legislation, which strengthens many provisions in the law, including increasing penalties for civil violations and repeat offenders, allowing treble damages in counterfeiting cases, increasing statutory penalties in counterfeiting cases and increasing the maximum penalties for trafficking in counterfeit goods when those offenses endanger public health and safety.

The bill creates an Office of U.S. IP Enforcement Representative within the Executive Office of the President to coordinate all the various agencies and departments that work on IP enforcement issues and to serve as the president's principal advisor for IP matters. In addition, it increases the number of IP liaisons from the Patent and Trademark Office and U.S. embassies around the world and enhances the Department of Justice's computer crime units to make sure they are equipped and being used to prosecute IP violations.

While I am a cosponsor of this legislation and believe it is a very good start I also acknowledge that the bill is not perfect and note that some of the technology in online sectors in the Internet users community have raised concerns about the effect that some of the damages provisioned in the bill could have on innovation and their legitimate operations. I look forward to working with the chairman and others on these issues as we consider this comprehensive update of our nation's intellectual property laws.

And I yield back.

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REP. GOODLATTE: Thank you, Mr. Chairman.

I wonder if Ms. Mandelker -- is that how you pronounce it?

MS. MANDELKER: Yes.

REP. GOODLATTE: Would you explain in some more detail some of the concerns you have about the provisions in the bill that require reorganization within several federal agencies? What are your specific concerns?

MS. MANDELKER: Yes, thank you for that question.

In particular I would note that we have a current structure of coordination within the administration that works quite effectively. As it currently stands, we have an IP law -- IP coordinator who sits in the Department of Commerce and who regularly ensures that we as an administration convene and coordinate as appropriate.

So, for example, we meet month -- I meet personally monthly with my colleagues in the other departments. We coordinate regularly on international programs. We work very closely, for example, with the State Department (on the ?) deployment of our intellectual property law enforcement coordinators. We recently put on a conference both with the Patent and Trade Office and the State Department in Bangkok, Thailand in which we launched a new regional network.

That type of coordination is very important and it is happening at very high levels within the administration. Our concern with putting an office within the Executive Office of the President is -- in particular for the Department of Justice, we are always going to be concerned when you have somebody at the White House who may be in a position of directing our enforcement priorities or directing what cases we should do and what cases we shouldn't do. That would be contrary to the long-standing tradition of the department making independent decisions when it comes to law enforcement decisions.

In addition, as I noted, what we have right now is actually quite effective. While we don't coordinate with the USTR, for example, on all matters, we do contribute to the Section 301 process. We do provide them guidance as necessary when it comes to criminal enforcement policy that they seek to push overseas; likewise with the State Department.

What we have really right now is a flexible coordination process that can adjust to the changing needs of the different departments. And it doesn't impose unnecessary bureaucratic reporting structures.

REP. GOODLATTE: Thank you.

Mr. Cotton, we've been talking about the compilations and I wanted to give you an opportunity to explain the rationale for allowing damages for each individual piece of those compilations. I wonder if you might explain the nature of what compilations are and the rationale.

MR. COTTON: Let me just speak carefully here, Mr. Goodlatte. The change in the law was not part of the original CACP proposals, which is the organization I'm representing today. We have strongly endorsed the committee leadership's bill, including 104. And in doing so, we really are focused not necessarily on the specifics of that provision but on the anomaly, really that the chairman reflected, which is that it does seem a problem to us in terms of the fact that the current penalties for a compilation, which may include 12 or 16 or many multiples of that in terms of individual works, remains the same -- is the same penalty as for the infringement of a single work. And those works in a compilation may have different owners and different creators.

And so the -- in terms of resolving that anomaly, we do think it is worth the effort to try to find a resolution which does recognize the fact that it is, in many circumstances, a more extensive violation of copyright in the context of a compilation and in the infringement of an individual work.

REP. GOODLATTE: Ms. Sohn?

MS. SOHN: Yeah, I think I finally have the answer to Mr. Berman's question. And I think it will also answer yours. What we -- the reason that a compilation is looked at as one work is because you're looking and differentiating that from, you know, engaging 20 different or 10 different acts of infringement, is that you look at the act.

You don't want to punish somebody 10 times for one act of infringement. So if I'm infringing on 20 separate photographs, I've engaged in 20 different acts of infringement. If I infringe on one album, I've engaged in only one act of infringement.

And it seems to me to be a pretty dangerous tool, again getting back to the answer that I originally gave you, to a copyright holder to all of a sudden turn one act of infringement into 10 or 20 or, you know, depending on how big a compilation is, even more.

REP. GOODLATTE: Do you want to respond to that, Mr. Cotton?

MR. COTTON: Yes, I would say -- I mean, I think the law's tradition has been precisely to make those kinds of tradition. Petty larceny is not viewed the same as grand larceny. So the precise question that gets addressed in a criminal assessment is exactly the extent of the damage and the extent of the criminal act.

And certainly one likely, I would say, grounds on which to make that assessment is the number of infringements involved and therefore the extent of the damage to what, as I say, may be multiple different owners and creators.

REP. GOODLATTE: Thank you.

Thank you, Mr. Chairman.

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