Opposition mounts to bill enabling US to prosecute suspected IP thieves

With the recording industry reportedly prosecuting tens of thousands of cases of intellectual property theft, the federal government is considering whether it should appoint a new agency head to take care of that job instead.

As the US Senate prepares to debate a bill introduced last July that would enable federal law enforcement agencies to seek, arrest, and prosecute suspected traffickers of intellectual property -- including unauthorized file-sharers -- a cavalcade of trade, industry, and advocacy groups, including the Electronic Frontier Foundation, American Library Association, and Consumers Union, began a joint counter-offensive against the legislation.

The Enforcement of Intellectual Property Rights Act of 2008 (PDF available here), S.3325, would create a new appointed federal office called the Intellectual Property Enforcement Coordinator (IPEC), who would report directly to the President. That person would chair what the bill describes as an "interagency advisory committee" on IP law enforcement, as well as serve as the principal coordinator of policy with regard to anti-counterfeiting and anti-piracy activities.

But opponents see this IPEC position as a potential loose cannon, with the authority to seize and destroy equipment suspected of being used in IP trafficking activities, and to launch federal lawsuits on behalf of copyright holders where limits on damages would be raised to higher limits than ever before.

Speaking on the Senate floor last July in support of the bill he's co-sponsoring, Sen. Evan Bayh (D - Ind.) said, "American businesses lose $250 billion every year, and we have lost more than 750,000 jobs because of intellectual property theft. The American auto industry estimates it could hire an additional 200,000 workers if we eliminated the trafficking of counterfeit auto parts. If hundreds of our cargo ships were being hijacked on the high seas or thousands of our business people were being held up at gunpoint in a foreign land, there would be a great sense of alarm and unshakable government resolve to act. That, in effect, is what is happening today, yet we are not doing nearly enough to stop it."

A letter sent by opponents yesterday to members of the Senate Judiciary Committee, including the bill's author, Chairman Patrick Leahy (D. - Vt.), raises the issue of what federal agents think they may have the right to do with any computer equipment seized by IPEC agents (to coin a new phrase) during a raid.

As the letter reads (PDF available here, from Wired online), "If an information storage device such as a server is forfeited, does the government require a search warrant to review the contents of the server? If not, then forfeiture and impoundment could be used as a mechanism to circumvent the warrant requirement."

As the bill currently reads, the government must establish there is a "substantial connection" between the equipment it seizes and the act that prosecuted individuals are suspected of committing, before it can seize that equipment. But the language then goes on to say the impounded equipment must be destroyed...or at least that what it appears to say:

"At the conclusion of the forfeiture proceedings, unless otherwise requested by an agency of the United States, the court shall order that any property forfeited under paragraph (1) be destroyed, or otherwise disposed of according to law," S. 3325 currently reads.

The allied advocacy groups, in their letter to the Judiciary Committee, also argue -- rather curiously -- that an entity already exists to represent the rights of copyright holders in court. That entity, they imply, is the recording industry; and they go on to argue that it should stay that way.

"The recording industry has threatened or filed over 30,000 lawsuits against individual consumers," the groups' letter reads. "Movie and television producers, software publishers, music publishers, and print publishers all have their own enforcement programs. There is absolutely no reason for the federal government to assume this private enforcement role."

But in introducing the original text of this legislation last November, Sen. Leahy argued that the recording industry does not represent the majority of copyright holders in America, or the world at large. Indeed, there's intellectual property everywhere you look, and no one stands up for the rights of small business, he said -- including, in one example, snowboarders.

"Clearly, IP theft is big business, and that can devastate small businesses. No one knows this better than Vermont companies such as Hubbardton Forge, Vermont Teddy Bear Company, and Burton Snowboards. Each of these companies, and many others like them across the nation, invests time, money, and effort in the development of new products. When their products are infringed, it devalues the product and threatens the company," remarked Leahy.

No hearings are currently scheduled for the Judiciary Committee to consider marking up the bill, although it will hold hearings next week on potential legislation that may rethink, and perhaps limit, the role of the FBI in civil matters. The FBI would undoubtedly be one of those agencies with which the IPEC -- the would-be IP czar of the US -- would interoperate.