While Espinel has certainly been a lot more open to talking with those of us concerned about the state of intellectual property laws (and has actually seemed quite willing to pay attention to what we're saying -- which I appreciate), these kinds of meetings appear quite troubling. I understand why the meetings are focused on so-called "illegal pharmacies," because then everyone supporting these actions can hide behind the claim of "protecting Americans from dangerous fake drugs." But the truth is that while some online pharmacies are quite questionable, many are simply "gray market" attempts to import drugs to the US from elsewhere where the identical drugs are sold for much less. In a global economy, that should be allowed. In fact, one could argue that keeping drugs artificially expensive in the US does a lot more harm to Americans than the chance of them getting a fake pill.
On top of that, it seems out of line for the US government to be involved in pressuring these companies, whether they're ISPs, domain registrars, payment processors or ICANN itself, to "voluntarily" block websites without a trial or due process. Yes, I can recognize that there can be legitimate health concerns with some of these websites, but those are better dealt with elsewhere. If a company is selling fake or harmful drugs, then laws within that country should be able to deal with it. If there are concerns about such drugs getting across the border, then it seems like a matter for border control. Asking internet companies to act as de facto "voluntary" censors seems like a big step too far.
And, of course, if it starts with such gray market pharmacies, you can only imagine how long it will take until the RIAA/MPAA/etc. come calling for the same sort of "voluntary cooperation" from the same companies for sites "dedicated to infringing activities," potentially killing off all sorts of innovation, before the market has a chance to adapt. When world wide web inventor Tim Berners-Lee and tons of other internet luminaries have come out against COICA, shouldn't the White House be a bit more careful before trying to get various internet players to voluntarily do the same thing with even less due process?
In what looks like a big round of political theater, US IP Enforcement Coordinator Victoria Espinel presented to a Congressional committee her plans for fighting copyright infringement overseas, and it seems to boil down to "blame China." Apparently, all of the elected officials were on board with that, and then asked what to do... to which Espinel provided the same answer that US officials have always given: put pressure on the Chinese to respect US intellectual property. How's that been working so far? Exactly. It's a plan for handwaving -- which, honestly, might really be the best thing. China really doesn't care what the US has to say about IP policy, and US lawmakers know this. They also know that the US needs China more than China needs the US right now. That's why suggestions made by some politicians -- such as Rep. Ted Poe about blocking visas for Chinese students and tourists -- was dismissed out of hand by others:
Rep. Bill Delahunt... responded to Poe's argument that we should reduce the number of student visas for China by pointing out this would harm people in his state.
He said many of those would-be students from China attend schools in New England. Not only that, but the families of these students visit, which helps Massachusetts' business people.
The fact is that waving arms about China ignoring IP isn't going to do anything. It's all just a big political exercise, and it's pretty meaningless. The supposed "harm" has been seriously overblown by companies, and the ability to do something about it is miniscule. If we really wanted to "respond" to Chinese disrespect for US intellectual property, we should be helping companies (1) compete better and (2) adapt to use the situation to their advantage. Instead, we get political grandstanding that won't help anyone.
"We used to have a problem in this town saying this," Biden told reporters Thursday at a press conference in Washington D.C. "But piracy is theft. Clean and simple. It's smash and grab. It ain't no different than smashing a window at Tiffany's and grabbing [merchandise]."
Except, it wasn't "a problem" saying it. It was people recognizing that theft and infringement are very, very different. The Supreme Court has made this clear for centuries, going all the way back to the Wheaton ruling, and more recently in the Dowling case, where Justice Blackmun stated explicitly:
Since the statutorily defined property rights of a copyright holder have a character distinct from the possessory interest of the owner of simple "goods, wares, [or] merchandise," interference with copyright does not easily equate with theft, conversion, or fraud. The infringer of a copyright does not assume physical control over the copyright nor wholly deprive its owner of its use. Infringement implicates a more complex set of property interests than does run-of-the-mill theft, conversion, or fraud.
But why let the actual details get in the way of protecting your friends in Hollywood? However, as you start to dig into the full report (pdf), it looks like Espinel actually did consider at least some of the concerns that many of us presented in our filings. Again, this is a bit surprising since her initial request for comment seemed to pre-suppose that the industry's position was entirely fact-based, rather than faith-based. Below is the full report.
The report definitely still leans towards stronger and stronger enforcement and protectionism -- despite all of the evidence suggesting this doesn't actually help to "promote the progress." But there are some hopeful signs that they at least realize that there's more to copyright than simply protecting the entertainment industry's business model. Thankfully, it talks about "effective enforcement" rather than just "more" enforcement. It discusses "promoting innovation" rather than just "strengthening protections." There is plenty in the report that is problematic as well, but there is, at least, some recognition that only strengthening copyright has costs as well. For example:
By the same token, fair use of intellectual property can support innovation and artistry. Strong intellectual property enforcement efforts should be focused on stopping those stealing the work of others, not those who are appropriately
building upon it.
While it's not much, at least having a nod to fair use and the importance of creativity inspired by building on the works of others is a small step in the right direction. It's not often you see any such admission in government discussions on copyright law.
There are numerous challenges to meeting these goals of predictability and enforceability. Our effort must be coordinated, efficient and comprehensive. Solutions will require strong and decisive government action, transparency and cooperation from rightholders, importers, exporters and entities that currently benefit from infringement.
Again, perhaps it's subtle, but the admission that there should be transparency, and that any discussion should include stakeholders, who also "benefit from infringement," at least recognizes that this isn't as one-sided as the entertainment industry makes it out to be. While the industry goes on and on about "losses" from infringement, it never admits that other parts of the industry actually benefit quite a lot. Still, notice who is missing from that list? Consumers. You know, the public, whom copyright law is supposed to serve. What about them?
The Administration supports improved transparency in intellectual property enforcement policy-making and international negotiations. As such, the U.S. Government will enhance public engagement through online outreach, stakeholder outreach, congressional consultations and soliciting feedback through advisory committees, official comment mechanisms such as Federal Register notices (FRN), notices of proposed rulemaking (NPRM) and notices of inquiry (NOI), as appropriate for the relevant process. In the context of trade negotiations, the Administration will pursue these objectives consistently with the approaches and considerations set out in the President's 2010 Trade Policy Agenda, including consideration
of the need for confidentiality in international trade negotiations to facilitate the negotiation process.
This is a clear statement on the concerns that many commenters raised about ACTA. While this report and Espinel's role are not directly related to ACTA (yet), ACTA is definitely on a lot of people's minds and they made that clear in their filings. It's good to see Espinel point out that these negotiations need to be a lot more transparent and be willing to bring in stakeholders.
The next part is the part that I'm most happy about. It actually admits that the data on infringement is bunk and that the government should make policy based on actual data:
There is no known comprehensive study that attempts to measure the economic contributions of intellectual
property-intensive industries across all U.S. business sectors. Improved measures of intellectual property linked with measures of economic performance would help the U.S. Government understand the role and breadth of intellectual property in the American economy and would inform policy and resource decisions related to intellectual property enforcement.
To assess the feasibility of improving measures of intellectual property and linking those measures to economic performance, the Economic and Statistics Administration (ESA) within DOC, in coordination with the IPEC, will convene an inter-agency meeting with relevant agencies to establish a framework for conducting this work. Once that framework is established, ESA will test the feasibility of developing improved intellectual property measures and, if those measures can be developed, they will be linked to measures of economic performance. The resulting analysis and datasets will then be made public.
I do have some fear as to how this will be conducted, but it's nice to see the government admit that it needs real data, even if elsewhere in the report it relies on faith-based processes currently in place.
Of course, there's still a ton in the report that is troubling. It regularly refers to infringement as "theft." Even the name of the report claims that infringement is theft, despite that not being accurate at all. On the more questionable side, we've got things like the following:
Strong intellectual property enforcement supports American jobs, protects American ideas and invigorates our economy. Intellectual property laws provide not only legal protection for creators and consumers, but incentives to encourage investment in innovation.
Where is the actual evidence for this? There is none. The actual evidence has suggested otherwise. It has shown that weaker IP enforcement has actually resulted in greater creative output and greater opportunities for creators, consumers and investors.
Included in USTR's annual Special 301 report is the Notorious Markets list, a compilation of examples of Internet and physical markets that have been the subject of enforcement action or that may merit further investigation for possible intellectual property infringements. While the list does not represent a finding of violation of law, but rather is a summary of information USTR reviewed during the Special 301 process, it serves as a useful tool to highlight certain marketplaces that deal in infringing goods and help sustain global piracy and counterfeiting.
USTR will continue to publish the Notorious Markets list as part of its annual Special 301 process. Additionally, USTR, in coordination with the IPEC, will initiate an interagency process to assess opportunities
to further publicize and potentially expand on the list in an effort to increase public awareness and guide related trade enforcement actions.
This is too bad. The USTR Special 301 report is a joke. It is not evidence-based at all. It's entirely based on what the industry claims is a problem. It's too bad that the IPEC would suggest that this plan makes sense and should be continued. We were hoping the IPEC would move to a more evidence-based process, but this is not that.
It is critical that we station overseas personnel in countries of concern to ensure intellectual property is made a priority.
This is another problem. The US has been pushing its own IP laws on other countries for far too long. And the real problem here is that it's actively locking in other countries to rules that have not been shown to help promote progress or creativity, but really are to prop up a few specific companies with big lobbying budgets. We should not be continuing that practice.
The use of foreign-based and foreign-controlled websites and web services to infringe American intellectual
property rights is a growing problem that undermines our national security, particularly our national economic security. Despite the scope and increasing prevalence of such sites, enforcement is complicated because of the limits of the U.S. Government's jurisdiction and resources in foreign countries.
To help better address these enforcement issues, Federal agencies, in coordination with the IPEC, will expeditiously assess current efforts to combat such sites and will develop a coordinated and comprehensive
plan to address them that includes: (1) U.S. law enforcement agencies vigorously enforcing intellectual property laws; (2) U.S. diplomatic and economic agencies working with foreign governments and international organizations; and (3) the U.S. Government working with the private sector.
Yes, this is the "we must shut down The Pirate Bay" part of the plan.
All in all the report isn't nearly as bad as we expected, but it's also pretty vague. What may be interesting is what comes out of the review of regulatory needs (to be completed in 120 days) or seeing how other aspects of this plan are actually implemented.
The ProIP Act added the role of the IP Enforcement Coordinator, a role that was filled by Victoria Espinel. We have been quite concerned that Espinel has viewed her role as protecting jobs in one particular industry (often at the expense of jobs and progress elsewhere) -- a concern that was not alleviated by Espinel's request for input on what she should focus on. That request made all sorts of assumptions about the impact of intellectual property infringement that were not actually supported by fact. Mike Arrington also reported recently on a meeting with Espinel where she made it clear that her role was to help the entertainment industry.
So, it's unfortunate, but hardly a surprise that the Senate's hearing on "oversight" of Espinel's work involves only people on the entertainment industry's side. The panel who will discuss Espinel's performance includes the CEO of Warner Bros., the CEO of the "Global IP Center" of the Chamber of Commerce (whose views on IP are positively neanderthal, complete with some of the most ridiculous studies), the CEO of Carlin America (a music publisher) and the president of the AFL-CIO, who has already done some horse trading to be an official representative of the RIAA's position.
Talk about regulatory capture. It's as if the Senate is admitting that the role of the IP Enforcement Coordinator is to be the entertainment industry's top cop, and her performance will be reviewed by the industry itself. The Constitution says that copyright and patents are for the purpose of "promoting the progress of science and the useful arts." But that's not what Espinel is doing. She's protecting a particular industry, often at the expense of progress. To then have her review be done by such a one-sided panel of folks -- folks who are receiving extreme benefits from her role -- is just ridiculous.
As part of the mis-named ProIP act, the newly created IP Enforcement Coordinator (generally called the IP Czar) is supposed to help figure out what an effective "intellectual property enforcement strategy" would be. While we have questions about why this position or this plan is really needed in the first place, here's a bit of good news: rather than just doing the typical consult with industry lobbyists, the administration is, again, asking for public comment (pdf):
This request for comments and for
recommendations for an improved
enforcement strategy is divided into two
parts. In the first, the IPEC seeks written
submissions from the public regarding
the costs to the U.S. economy resulting
from intellectual property violations,
and the threats to public health and
safety created by infringement. In the
second part, the IPEC requests detailed
recommendations from the public
regarding the objectives and content of
the Joint Strategic Plan and other
specific recommendations for improving
the Government's intellectual property
enforcement efforts. Responses to this
request for comments may be directed to
either of these two parts, or both, and
may include a response to one or more
requests for information found in either
The link above has more details, and the comments are due by Wednesday, March 24, 2010.
Now, I know when I posted my comments submitted to the USTR about the Special 301 process, a number of commenters wondered if the USTR would care, or even bother to look at, let alone consider, comments from the public beyond industry lobbyists. It is a valid concern. And while I do still wonder how much public comments will play a role in the actual strategy (compared to industry responses), in this case, the IPEC specifically reached out to Techdirt to let us know about this request for comment, to see if we would be interested in alerting our readers of their opportunity to take part. Now, the cynical response is that this is just window dressing -- and it's a lot easier to ask for comments from the public than to listen to them, but the fact that they are specifically reaching out to this community (among others) at least suggests an interest in what folks here might have to say. With that in mind, I'm hopeful that some of you will take the time to submit thoughtful comments on the subject.
We were already somewhat concerned about the nomination of Victoria Espinel for the IP Czar job in the administration (forced on the administration by the silly and pointless "ProIP" Act from last year). On Thursday, she had her confirmation hearings where she said pretty much what we expected about how important intellectual property is, and how she viewed her job as coordinating different government agencies to crack down on infringers. Much of her (brief) testimony (pdf) talked up the usual industry claims about the importance of intellectual property on the economy, not recognizing how misleading they are. These are stats that simply credit anything covered by intellectual property laws, as if the only reason those industries exist is because of those laws. That's a mistake.
But more troubling? Espinel made it clear that her job is not to do as the Constitution requires, and make sure that intellectual property laws are properly "promoting the progress of arts and the useful sciences" (she never mentions this part), but, instead she claims her focus is cracking down on infringement to protect jobs:
If I am confirmed as the United States Intellectual Property Enforcement Coordinator, I will work side by side with agencies, Congress, stakeholders and the public to ensure that jobs that depend on intellectual property are not compromised by others' unwillingness to respect and enforce the rule of law....
But intellectual property law is not about "protecting jobs" it's about encouraging innovation. Innovation can be disruptive. Jobs can get shifted around. Protecting jobs is not encouraging innovation. It's the opposite.
Better and smarter protection and enforcement of intellectual property rights will create more jobs...
There's simply no evidence to support that. Shouldn't our IP Czar rely on actual evidence rather than broad industry claims that are unproven?
Then, on being questioned she appeared to support Hollywood's position that any net neutrality laws won't apply to mandating content filters on ISPs. It's looking like -- just as was initially feared -- this position is really to get Hollywood's own representative in the White House. What a shame. If you must have an "IP Czar" shouldn't it be someone who's actually focused on making sure progress is being promoted, rather than someone who wants to blindly crack down on infringement with no thought towards whether or not it makes sense?
In a move that surprises no one, the Obama administration finally got around to officially nominating Victoria Espinel to be the IP Czar, a position that was created out of thin air a year ago in the ProIP Act, though the position went entirely unfilled until now. Hollywood lobbyists have been pushing the administration to appoint someone ever since the spring, and VP Joe Biden had to come out and calm Hollywood execs and lawyers by promising them the "right person" would be appointed (meaning: not someone who is interested in copyright reform).
And yet... there was no appointment for so long. Why? Well, a few weeks ago, it was explained that there was a fight over where to put the position and under what group Espinel's office would exist. The most obvious group was the Office of Science and Technology Policy. The problem? Most of the folks in OSTP actually seem to understand the problems of copyright law. They're fans of openness and understand things like Creative Commons. Entertainment industry lobbyists started to freak out again, that even if they got someone on "their side," that placing them in OSTP would stifle them, as the rest of the group might (gasp!) actually push back on attempts to stretch copyright enforcement towards the maximalist position. Instead, they wanted the position to be either its own office (entirely unlikely) or, in the Office of Management & Budget. Why OMB? No good reason. The position doesn't fit there at all... but putting it there keeps it away from those darn "copyleftists" in OSTP.
So where did the position end up? Yup... it's a part of OMB, just like Hollywood wanted. Lobbyists on all sides of the equation -- including consumer advocacy group Public Knowledge, though, are saying that Espinel is a good appointee. I certainly hope so, though I disagree that the position should exist at all. Also, Espinel was formerly the IP boss for the US Trade Representative -- a group that has been known to push for more draconian IP laws, and to do so cloaked in secrecy. So... I'm hoping to be surprised, but putting the office in OMB and having someone from USTR isn't encouraging.
from the since-when-does-industry-dictate-stuff? dept
As you may remember, last year, thanks to lots of lobbying from the entertainment industry, Congress passed the totally unnecessary "ProIP" act, which made copyright even more draconian. Luckily, the most ridiculous parts of the bill -- like getting the Justice Department involved in civil litigation over copyright -- was dropped. But there was still plenty of bad stuff in there -- including the establishment of an "IP Czar" or "Copyright Czar" who would basically be the entertainment industry's personal representative in the White House, in charge of "coordinating" (i.e., "driving") strategy on making sure that the entertainment industry's obsolete business model is always protected directly from the White House.
Earlier this year, the Senators who pushed this through got antsy and pleaded with the White House to hurry up and appoint someone to the post. In response, the White House sent Joe Biden to an industry gathering, where he promised that the White House would pick "the right person" to represent the industry's interests. And yet... since then, there's been nothing.
It's been a poorly kept secret that Victoria Espinel is likely to be the IP Czar -- and, as former IP person at the USTR (who has always been strongly in support of stronger IP), it definitely seems like the industry will be happy with her. But why has it taken so long? Michael Scott points us to a report from last month that the "problem" is that the White House can't figure out where to place this role:
A stand-alone office. While this is probably the most desirable in terms of making the position as prominent within the Administration as IP owners would like, it remains [an] uphill battle.
Office of Science and Technology Policy (OSTP). OSTP is known for espousing views that are less then favorable to the IP community. Placing the IP Czar within OSTP would make no more sense than coupling Oscar and Felix (or for a more modern reference, coupling Harry Potter with Voldemort).
Office of Management and Budget (OMB). If a stand-alone office is not in the cards than this may be the best alternative. While OMB does not usually establish policy, it does coordinate with numerous agencies on various projects, which is certainly within the purview of the IP czar.
Of course, OSTP is the department that makes the most sense -- but as the writeup notes, the folks in OSTP are actually more technologically focused, and are believers in openness and collaboration -- and are the sorts of folks who are skeptical of the need for greater IP protection (and, yes, some of them read Techdirt). But... given the role, it does seem like the most reasonable spot. In fact, it seems rather problematic that the White House would agree not to put it there, just because the entertainment industry is afraid that OSTP isn't going to just bend over for the copyright industry's interests. If Hollywood is basically getting their own representative in the White House, at the very least it seems fair to temper that position by putting it in a department that will at least debate how strong copyright protection needs to be.
The fact that the White House hasn't simply placed the role in OSTP certainly feels like it agreeing not to do that because the industry lobbyists who pushed for the role in the first place won't like it. That doesn't seem like the way government should be run.