US Chamber Urges More IP Protection As Job Booster; Tech Supporters Disagree

The United States Chamber of Commerce this week released a letter urging the US government to take a series of steps to boost jobs in America, including passing controversial legislation to allow the US to unilaterally crack down on international websites it deems to be in violation of US intellectual property rights. But some, including experts at Yale Law School, see this as a flawed approach.

The Chamber’s “Labor Day” letter (the US holiday was 5 September) offers proposals in six policy areas, including to:

“Protect intellectual property. IP-intensive industries support 19 million American jobs. Congress can take immediate steps to safeguard these jobs and create new ones by passing a patent reform bill as well as legislation to shut down foreign rogue websites. These websites are stealing sales from American companies by violating trademarks and copyrights.”

At issue is the “Protect IP Act,” formally called the Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act (IPW, US Policy, 15 May 2011).

Mark Elliot, executive vice president of the Chamber’s Global IP Center, issued this statement:

“By no means is job creation easy, but there are some steps that can be taken right now to get us back on track. Congress already has the tools, in the form of the Protect IP Act and America Invents Act, to strengthen American industries and their ability to employ; now they just need to use them. The Global Intellectual Property Center urges policymakers to tackle the rogue websites issue. Rogue sites threaten American jobs, circumvent international IP laws by stealing private property, and harm unsuspecting consumers. Operators of rogue sites do not provide American jobs, they do not pay taxes, they do not follow laws, and they do not care who they hurt. We ask that Congress stand up to these leeches of US innovation and enact rogue sites legislation today.”

But the US technology industry and others have argued that too much IP protection can actually backfire and have the undesired effect of stifling innovation and job growth.

Margot Kaminski, executive director of the Yale Law School Information Society Project (ISP), told Intellectual Property Watch:

“The Labor Day letter to Congress presents a one-sided approach to intellectual property enforcement, claiming that stronger IP protection results in more American jobs. This claim is wrong. Overly strong IP enforcement, whether in free trade agreements or the Protect IP Act, creates real barriers to innovation and free communication, and threatens the security of Internet architecture.”

“As America becomes increasingly employed by the tech sector and dependent on the internet,” she added, “Congress shouldn’t assume that maximalist protectionism is in America’s best economic interest. It’s not.”

David Robinson, a Knight Law and Media Scholar at the Yale ISP, offered an analysis of the plan. He said it is “striking” that the six steps are mostly about other trade issues such as urging passage of the pending FTAs and tax relief.

“The primary goal of the Protect IP Act is to disrupt foreign sites that are dedicated to infringing activities, in order to stop those sites from harming the legitimate interests of US rightholders,” Robinson said. “Contrary to Mr. Donohue’s remark, however, the Protect IP Act generally would not ‘shut down’ targeted foreign sites. Instead, the law would allow law enforcement officials to modify the official domain name information for targeted sites, to make them unreachable at their familiar domain names. Where US officials lack the power to modify such records (e.g., when the records are offshore), the Protect IP Act could require US internet service providers to ignore the official addressing information, and to withhold from their users the true location of targeted sites.”

Domain name-based IPR enforcement strategies, he said, including the existing US effort known as In Our Sites, “are rapidly gaining in popularity, and they have had some success, but their effect is often short-lived. Targeted sites can quickly move to new domain names in different jurisdictions or, if necessary, abandon domain names entirely in favour of peer-to-peer distribution methods.”

Innocent bystanders are the other issue, Robinson said. “Protect IP style enforcement strategies can cause, and indeed have caused, significant harm to American businesses and consumers.” One example he gave was a February 2011 raid that attempted to deploy the In Our Sites technique against child pornographers (rather than infringers). This led to tens of thousands of innocent web sites, including many small businesses, being briefly taken offline and replaced with a banner message that inaccurately suggested they were violating child pornography laws.

“Disrupting offshore infringement havens is an important goal,” he said. “But we need to be careful when evaluating both the likely benefit and the likely cost of each proposed change to existing enforcement strategies.”