Pro IP Act Raises Concerns

Oct 21, 2008

President Bush signed The Prioritizing Resources and Organization for Intellectual Property Act of 2008 (PRO-IP) into law on October 13. The act is designed to give the government more leverage in pursuing pirated or counterfeit media software, and pharmaceutical drugs. The act also creates an IP enforcement coordinator—or IP czar—position to oversee and enforce the new, strengthened laws.

The signing of this bill into law, undoubtedly delights backers of the bill, like the MPAA and RIAA. Others have not been so enthusiastic. Sherwin Siy, staff attorney and director of the Global Knowledge Initiative, at Public Knowledge questions many aspects of the new law. "Our first reaction was to question if it’s actually necessary," says Siy. "If we’re going to pass new laws and increase penalties then we want to see it do some good. Passing legislation for the sake of passing legislation doesn’t do any good, and, in fact, it can do harm."
"What should be done to US law first, is a good hard look at what we are and are not going to consider infringement," says Siy, criticizing the government’s emphasis on enforcement. By creating an "IP enforcement officer" rather than a general position to oversee IP policy, shows where the government’s mindset is, says Siy. "It speaks to a set of priorities and a particular agenda that is concerning." 

Though Siy was happy to see many of the provisions in earlier versions of the bill gone, there were still some elements he found concerning. Among other things, the PRO IP Act increases the statutory damages that can be awarded in civil counterfeiting cases, and strengthens remedies available in the prosecution of criminal cases—including set standards for forfeiture.

In the past, standards for forfeiture varied, but the new, standard laws make it possible for equipment to be seized even when it doesn’t belong to the accused pirate. This could effect everyone from the parents of teenagers downloading music, to companies whose employees have committed acts of piracy on office computers, remote servers and networks—putting it all at risk. In theory, of course, this potential liability would prompt parents, employers, etc. to be more vigilant in monitoring the usage of this equipment.

Also concerning for Siy, were potential repercussions on "the people experimenting at the fringes." He expressed concern over the effect rising statutory damages may have on small businesses working on innovative projects. If a company was ever worried about possible infringement litigation, it may reconsider its work in light of heavier penalties, effectively putting a stop to what could be important work. "The point at which IP law does not serve to promote the advancement of science and useful art," is where it crosses a line, says Siy.

While the new law may have dire consequences for American teens looking for free music (and their parents) it seems that, at least to some extent, the law may be ineffectual when it comes to combating some of the worst piracy culprits.

According to the fifth annual global PC software piracy study from the Business Software Alliance (BSA), "Although piracy of software on personal computers (PC) declined in many countries in 2007, fast growing PC markets in some of the world's highest piracy nations caused overall numbers to worsen--a trend that is expected to continue. Moreover, dollar losses from piracy rose by $8 billion to nearly $48 billion." So, while countries like the United States continue to crack down piracy at home, emerging economies present an entirely different challenge.

According to the BSA, "The three lowest-piracy countries were the United States (20%), Luxembourg (21%), and New Zealand (22%). The three highest-piracy countries were Armenia (93%), Bangladesh (92%), and Azerbaijan (92%)."
"I think this bill is a very positive step in terms of preserving our economy," says Mike Dager, CEO of Arxan Technologies. That doesn’t mean there aren’t problems, however. Countries like Japan, England, France, and Germany are already on the anti-piracy boat, according to Dager, but in other regions—much of Asian, for example—it is still a huge, and growing problem. "The important thing to note is that it’s a great thing…but the reality is 95% of all piracy occurs outside of the United States," says Dager. "We can’t use this law to make the Chinese stop pirating software."   

He adds; "The only thing we can do with this law is use it as a lever against other governments…get them to enforce anti-piracy laws." Dager’s company, Arxan, is a provider of solutions that protect applications against tampering; piracy; malware insertions; or other unauthorized use. In other words, Arxan puts a stop to piracy before it starts. As Dager says, "Just because there is a police station down the street doesn’t mean you don’t lock your doors."