Intellectual Property Bill Becomes Law: Critics Say It Goes Too Far

New law gives authorities more leeway to prosecute thieves who steal sensitive data for piracy or espionage

President Bush yesterday signed a bill that toughens current laws on the theft of intellectual property and establishes a new White House cabinet position to oversee the IP infringement effort.

The Prioritizing Resources and Organization for Intellectual Property Act (Pro-IP), which was passed by the House and Senate earlier this month, establishes the position of intellectual property enforcement coordinator ("IP czar"). It also steepens penalties for IP infringement and increases resources for the Department of Justice to coordinate for federal and state efforts against counterfeiting and piracy.

The bill has broad support among businesses, particularly the Recording Industry Association of America, which has been pushing for stiffer legislation to protect the copyrights of music and film. The law could also pave the way for stiffer penalties against those who steal IP from companies via online or insider attacks.

However, some critics say the new law goes too far. "Vesting greater power in prosecutors to pursue IP theft/infringement and seize associated assets is not a good practice," says John Dozier, an attorney who has represented clients on both sides of IP infringement law.

"Greater power gives the prosecutor far greater discretion," Dozier notes in his blog. "And it seems to me, from what we are seeing, that broader prosecutorial discretion in complex IP and IT cases is a recipe for disaster."

In his own blog, copyright lawyer William Patry agreed. "The bill’s title is designed to constitute the acronym 'Pro-IP,' but it will have the opposite effect," he wrote. "Although the bill is touted as dealing with counterfeiting and piracy, even scratching the surface of the bill reveals a grab bag of previous proposals whose origins are the suits brought by the music industry against in 2000, and not Nigerians selling illegitimate Prada bags in Times Square."

But many business executives say the law is necessary to protect IP and maintain a culture of innovation in U.S. business. "What the Congress recognized and the president has ratified is the critical importance of innovation, technical invention, and creativity to the U.S. economy," said Rick Cotton, executive vice president and general counsel of NBC Universal. "This law will dramatically move the priority of IP enforcement up the agenda in critical ways."

The bill passed the Senate unanimously and received strong bipartisan support in the House. The Bush administration initially opposed the measure and considered a veto, but withdrew its opposition after a provision that would have allowed the Department of Justice to pursue civil litigation against copyright infringers was removed.

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