To Crown a Copyright Czar

Filmmakers, pharma companies, and a host of legislators want beefed-up U.S. efforts to combat counterfeit goods and pirated entertainment

Corporate America wants to bring in bigger guns in its battle against counterfeit drugs and pirated songs and DVDs. So a coalition of legislators and companies is pushing for the appointment of a White House-based copyright czar.

Congress should establish an Intellectual Property Enforcement Representative, say some drugmakers, music companies, and filmmakers represented by the Motion Picture Association of America (MPAA). The federal official would work from the White House and coordinate efforts of some nine departments, including the Justice Dept., State Dept., and Patent & Trademark Office, in combating the theft of intellectual property.

The push to crown a copyright czar underscores companies' mounting frustration with intellectual-property (IP) theft in its various forms, including fake pharmaceuticals, imported counterfeit goods, copyright infringement, and illegal music and movie downloads. Legislators say existing efforts to thwart IP theft fall short. "The lack of coordination between the federal agencies seems to be one of the biggest hurdles we face," Senator Patrick Leahy (D-Vt.) said at a June 17 Senate Judiciary Committee hearing focused on strengthening protection of intellectual property. "Enforcement, protection of these rights is too important to be piecemeal."

Growing Bilateral Support

Leahy, the chairman of the committee, is drafting a bill that may include a provision for the copyright czar. He's expected to finish the draft within a month, and given rising bilateral support, the legislation could be passed as soon as this year. Leahy's bill is likely to resemble the one for Prioritizing Resources and Organization for Intellectual Property (PRO-IP), which dramatically increases penalties for piracy and allocates more dedicated IP enforcement officers to government agencies. The PRO-IP bill also includes the creation of a copyright czar and was passed by the House in May.

Other efforts are afoot to strengthen the government's hand in combating IP theft. Earlier this year, Senator Evan Bayh (D-Ind.) and Senator George Voinovich (R-Ohio) introduced a bill specifically seeking the creation of a copyright czar. Senator Orrin Hatch (R-Utah) is at work on his own bill, designed to ensure that counterfeit goods, estimated to cost the U.S. economy 750,000 jobs and $250 billion annually, are caught at customs.

The federal government already has a person responsible for enforcing IP regulations. The U.S. has had a Coordinator for International Intellectual Property Enforcement since 2004. The most recent appointee, Wayne Paugh, was put in place by President George W. Bush on June 5. Under Paugh's predecessor, Chris Israel, the government seized nearly $200 million in counterfeit goods last fiscal year, up 27% from a year earlier, according to a government report. Over the same period, 287 people were sentenced for IP-related crimes, up 35%.

MPAA Favors Better Enforcement

Trouble is, the coordinator oversees a budget of about $1 million and his National Intellectual Property Law Enforcement Coordination Council functions under the auspices of the Commerce Dept., not the White House. "The current structures have not produced the needed levels of coordination and leadership," says Rick Cotton, general counsel for NBC Universal, which is owned by General Electric (GE) and Vivendi. "Counterfeiting and piracy severely undercut future growth of the U.S. economy. Our current enforcement efforts are inadequate."

Also in favor of stepped-up IP protections is the MPAA, whose members include Sony Pictures Entertainment (SNE), Viacom's (VIA) Paramount Pictures, and Disney's (DIS) Walt Disney Studios Motion Pictures.

A copyright operating under the auspices of the White House would have greater clout, supporters say. The person would chair an interagency committee much like the one that exists today, but it would include higher-ranking agency officials. The new czar would oversee an annual budget of about $30 million and may have the authority to commandeer other agencies' staff resources. "It's all adding to a much higher profile for this issue," says Israel, who left his post in March to become managing partner at policy consultancy PCT Government Relations in Washington. "Because the problem is growing, keeping up with the challenges is what we face," Israel adds.

Consumers Concerned About Access

The U.S.-based Center for Medicines in the Public Interest predicts that counterfeit drug sales will reach $75 billion globally in 2010, up 90% from 2005. The Institute for Policy Innovation estimates that global music piracy results in losses of $12.5 billion and costs 71,060 U.S. jobs a year.

Some companies and public-interest groups have voiced concerns that in stepping up efforts to combat IP theft the government may also thwart consumers' access to information and increase fines for purportedly illegal downloading. Late last year, William Patry, senior copyright counsel at Google (GOOG), publicly voiced concerns over legislative efforts to impose more stringent penalties on those accused of copyright infringement. "The question is cost-benefit analysis," says Gigi Sohn, president of Public Knowledge, a consumer-rights group that opposes legislation it believes would stymie innovation. "How many taxpayer dollars should be put towards protecting a private industry?"

Others say the government shouldn't add another bureaucracy to handle challenges that might be better addressed by international legislative efforts and courts. Establishing a new copyright czar "is window dressing at best and insertion of more bureaucracy at worst," says Paul Goldstein, law professor at Stanford University. "It certainly has the appearance of accomplishing something, but all these resources are already there."

Drivers in Danger

But are those resources working together in the right ways? Industries that say they're being ripped off answer with a resounding no. Jeffrey Thurnau, counsel to auto parts maker Gates, showed senators counterfeit timing belts that he says could put drivers, passengers, and other motorists in danger. "We want better coordination between enforcement agencies," he says.

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