Infringement Inducement Bill Not Ready, Opponents Argue

S-2560 is one of 22 bills on the markup agenda, although few are as controversial. The committee is also slated to consider 14 nominations, including former Leahy counsel Beryl Howell for the U.S. Sentencing Commission. While any committee member has the right to hold over a bill the first time it’s on the agenda, S-2560 was already on the agenda last week, so tech companies, ISPs and consumer groups are pressuring committee members to express reservations about the bill in hopes Hatch will choose to postpone deliberations. Several opponents of S- 2560 have also complained that the latest draft was distributed at the start of Yom Kippur, preventing some from considering it properly right away. Nothing would keep Hatch and Leahy from offering yet another draft at the markup.

Among committee members targeted by opponents are Constitution, Civil Rights and Property Rights Subcommittee Chmn. Cornyn (R-Tex.) and Sen. Durbin (D- Ill.). Cornyn is a vocal proponent of intellectual property protection, and the sponsor of legislation to that end. But according to a letter circulated by a consumer group, RadioShack Vp-Governmental Affairs Arnold Grothues wrote Cornyn saying questions about S-2560 drafts “are arising faster than any items are being resolved.” Noting copyright reform usually takes more than one Congress, he urged at least one more committee hearing, and insisted that “I see no evidence of foot-dragging by anyone in the consumer electronics, information technology, or legitimate Internet communities.”

Cornyn, in turn, joined Durbin in writing Hatch about S-2560. While praising the bill’s objectives as “laudable” and agreeing Congress should “take appropriate action to prevent continued damage to a vibrant and important part of our economy,” Cornyn and Durbin said the bill “must represent a balance between defending copyrights and ensuring that legitimate technology interests are also protected.” They said the “sound compromise language” circulating in committee appears close to a solution, but said it was important that “we can work both with the creative and technology communities to move legislation forward.”

Content industries have remained silent as many drafts have circulated but none have satisfied opponents. Verizon Assoc. Gen. Counsel Sarah Deutsch told us that the sponsors continue to “refuse to narrow the scope of the bill” to target parties willfully encouraging infringement, the measure’s stated purpose. Instead, she said the current draft would permit courts to reinterpret the Sony fair-use decision, and the exceptions listed in the bill could be evaded by a clever attorney. While Deutsch said her company would welcome a more explicit exemption for ISPs, she said “we need a balanced bill that works for the whole tech sector.”

Verizon was one of about 50 companies, trade groups and consumer groups that wrote Hatch and Leahy on Tues. opposing the latest draft. Some, such as the American Library Assn., have mobilized their members to call committee members. The Electronic Frontier Foundation promoted a web site, www.savebetamax.org/eff, where people could voice to all U.S. senators their opposition. The effort is a follow-up to an earlier phone campaign by EFF ally Downhill Battle (WID Sept 15 p3).

The Center for Democracy & Technology didn’t sign the 50-member coalition letter, but sent its own to Hatch, Leahy and committee colleagues Tues. Pres. Jerry Berman wrote that CDT “remains supportive of the goal… of narrowly targeting bad actors who intentionally cause large-scale copyright infringement, without banning particular technologies or undermining the legal precedents so important for innovation.” However, he said the latest draft failed to meet this goal and would chill technological development: “Much work remains to be done and we urge you not to pass S-2560 out of committee at this time.” He promised CDT was committed to working with committee members “to take up this very real problem.”

Hatch and Leahy have both made it clear they'd like to see legislation become law this Congress. There also continues to be talk of combining it with other Senate and House legislation in a larger copyright bill. Part of what’s driving Hatch and Leahy is the interpretation of Sony in the Grokster decision that has allowed P2P software companies to escape liability for secondary infringement. The final provision in the latest draft of S-2560 invites courts to reinterpret Sony, which might lead to a different Grokster decision. But Deutsch said a reinterpretation might stall development of new products and services. Berman said the language would mean a Sony defense would be “of little relevance when aggrieved copyright owners sue under the broad new inducement action.” That is a concern of CE manufacturers as well.

Universal Studios Pres. Rick Finkelstein, meanwhile, was on the Hill Wed. to meet with committee members and staff on the issue. We're told that Universal has yet to take a position on the latest draft of S-2560, but Finkelstein argued that jobs and money will continue to be lost if P2P piracy is allowed to continue without some kind of legislation. In ads taken out in Roll Call and The Hill, Universal urged Congress to “close the loopholes that increasingly allow electronic piracy to rob America of its greatest export.”