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FAQ: What to expect from a new IP cabinet position

If signed into law, the Prioritizing Resources and Organization for Intellectual Property Act will create what may amount to an IP "czar."

The intellectual property enforcement bill Congress passed over the weekend has won strong bipartisan support and wide-ranging approval from the business community. It remains to be seen, however, whether the president will sign into law the Prioritizing Resources and Organization for Intellectual Property Act, or Pro-IP Act.

The bill is likely to be sent to the White House within a week, giving the president 10 days to sign or veto it. It would likely survive a veto, unless the president vetoed or ignored the bill while Congress is out of session. Congress intended to adjourn this week ahead of the November elections, but the financial bailout bill has kept it in session.

The bill's major stumbling block is a provision calling for the president to appoint a Senate-confirmed Intellectual Property Enforcement Coordinator. The creation of a new cabinet position is a significant--and perhaps most controversial--part of the bill. What exactly would the IP coordinator do, and why does it matter? Here's a look at some of those concerns.

What exactly would the IP enforcement coordinator do?
The IPEC would provide guidance to other federal departments and agencies in their efforts to combat IP infringement. The IPEC would mainly achieve this by chairing an IP enforcement advisory committee, made up of the Office of Management and Budget, the Justice Department, the Commerce Department, the Office of the United States Trade Representative, the State Department, Homeland Security, Health and Human Services, the Agriculture Department, and the U.S. Copyright Office.

The IPEC cannot control how these agencies investigate or prosecute IP infringement cases--but he or she will guide the development of a "Joint Strategic Plan" the advisory committee is charged to create to combat counterfeiting and infringement. The aim of the strategic plan is to disrupt counterfeiting and IP infringement both in the U.S. and abroad, ensure that enforcement efforts aren't duplicated by the various agencies, establish a protocol for consulting with private industry, establish international standards for IP enforcement, and help other countries improve their IP enforcement efforts.

The chances of President Bush appointing an IPEC seem slim. The bill calls for the advisory committee to submit its strategic plan to Congress no later than 12 months after its enactment, so filling the cabinet position and putting the committee together could be left for the next administration.

The creation of the IPEC and the advisory committee would essentially replace the National Intellectual Property Law Enforcement Coordination Council, an interagency group that implemented the Strategy for Targeting Organized Piracy Initiative.

Is there opposition to the creation of this position?
In a letter from the Commerce Department and the Justice Department, the Bush administration voiced its opposition to two components of the Pro-IP bill, one being the creation of the IPEC. Requiring the president to appoint an IPEC, the letter said, was objectionable on constitutional separation of powers grounds. It would "improperly micro-manage the internal organization of the executive branch" and create "unnecessary bureaucracy."

The added bureaucracy could create an undue burden for taxpayers, others argue. Julie Jennings, a trademark attorney with the St. Louis law firm Senniger Powers, said it might be premature to create the IPEC position.

"I'm wondering if the same thing could take place by revising copyright laws without creating this entirely new cabinet position and all of the secondary positions that are going to fall underneath that," she said.

So why create this position?
Despite her concerns, Jennings said the new cabinet position could be useful since "more needs to be done" to enforce IP laws, and the new position would send a clear message of the country's economic priorities.

The Pro-IP Act would "escalate the visibility and priority of intellectual property law and enforcement, and the key to that is the creation of a major executive in the White House," said Rick Cotton, executive vice president and general counsel of NBC Universal, who is not surprisingly in favor of it. "This is an enormously powerful package in terms of increasing the effectiveness of our enforcement activities."

Certainly, IP infringement is no small matter. The software industry lost nearly $48 billion in sales to piracy last year, according to a study by the Business Software Alliance.

Regardless of whether it turns out to be a good or bad move, creating the IPEC is a significant part of the Pro-IP Act because it focuses on policy while the rest of the legislation largely focuses on increasing penalties for criminal copyright violations and IP infringement.

What will this mean to consumers?
It's debatable whether the Pro-IP Act ultimately will have a positive or a negative impact on consumers. On the one hand, advocacy groups like Public Knowledge say "the bill only adds more imbalance to a copyright law that favors large media companies."

Certain provisions could seem stacked against the consumer, such as the section allowing courts to seize "any property used, or intended to be used, in any manner or part to commit or facilitate the commission of" certain infringement offenses.

Public Knowledge attorney Sherwin Siy wrote, "Any number of multipurpose devices--even those not owned by the infringer--could get caught up in the net of forfeiture penalties."

However, the Pro-IP bill could benefit consumers, Jennings said, by decreasing the number of unsafe counterfeits on the marketplace, such as counterfeit pharmaceuticals.

With respect to the IPEC, however, the impact on regular citizens seems minimal beyond the cost of the added bureaucracy.

"If the forces of government are going to be against you, one more little box doesn't make a difference," said Art Brodsky, Public Knowledge's communications director. "When you get one person working across agencies, there will be so much bureaucratic infusion, they could get nothing done--or they could marshal their forces together. It's a little soon to tell how this bill is going to shake out."

Will this actually stop piracy and counterfeiting?
It's likely nothing could ever entirely stop it. But the Pro-IP Act could create a larger deterrent for counterfeiters since it increases penalties for IP infringement. Intellectual property will be further protected "by improving the management, coordination, and effectiveness of our nation's intellectual property enforcement efforts," said Sen. George Voinovich, R-Ohio, a co-sponsor of the bill.

Besides guiding a strategic plan, however, the IPEC has no authority to direct different agencies' enforcement approaches.

"Just sticking someone in the White House isn't enough," said James Lewis, a director and senior fellow for technology and public policy program at the Center for Strategic and International Studies. "You have to give them the authority to compel action and attach them to the president in some way."

Lewis is part of the CSIS's Commission on Cybersecurity for the 44th Presidency, which is recommending the next president shift responsibility for cybersecurity from the Department of Homeland Security to the White House.

"One of the things (the commission is) looking at is how to make sure that any new White House office doesn't become isolated and powerless, since they'll face powerful interagency competitors," he said.

Speaking on his own behalf--not that of the commission--Lewis said: "I wonder if more jawboning, even from the White House, will produce much more benefit. Especially since U.S. credibility as an economic leader has been damaged, our sermons on IP may have less traction with foreign audiences."