2006 US Election Provides New Landscape For IP Reform

By John T. Aquino for Intellectual Property Watch
The 2006 elections in the United States have presented the world of intellectual property with a new set of guardians.

In the 7 November congressional elections, Democrats took control of the House of Representatives and the Senate from the Republicans, who had been the majority party in both Houses for the last 12 years. What effect this change of management will have on intellectual property policy is uncertain.

One school of thought is that the new guardians will leave it alone. Others say the issues may need looking after as intellectual property is rapidly growing and changing. Still others are concerned they may do damage to IP policy that they favour. What is beyond dispute is that the people who have the authority to influence the creation or block the creation of new legislation concerning copyrights, trademarks, patents and trade secrets will be different people starting in January 2007.

The party in the majority in the House and the Senate controls the agenda. In the House and Senate, the Democrats will now have the majority leaders, committee chairpersons, and decide what bills come to committee. This change in congressional leadership can potentially have a substantial effect on IP-related legislation.

Anthony W. Shaw, partner in the Washington, DC office of Dewey Ballantine LLP, is uncertain exactly how much effect the change of congressional leadership will have on IP. “I have personally always regarded IP issues as being essentially party neutral. And certainly the election results were not a referendum on IP reform.” Shaw adds, however, that there will likely be some short-term effect. “Democrats have some items they’ve wanted to address for a while, those will be their top priorities in the near term, and IP reform isn’t among them. So immediate priorities may shift away from IP reform.”

IP Issues Under Republican Congress

For their part, the Republican Congresses of the past dozen years have been very active in IP issues. This has been important because of the vast changes in technology that has occurred over this period, which in turn have reshaped a number of issues related to intellectual property. According to the American Intellectual Property Law Association, the 109th Congress (2004-2006) introduced 40 IP-related bills in the House and 6 House resolutions and 37 Senate bills and 4 Senate resolutions.

From this activity, President Bush signed four bills into law: the Copyright Royalties Technical Corrections Act (PL 109-303), the Family Entertainment and Copyright Act (P.L. 109-09), the Trademark Dilution Improvement Act (P.L. 109-312), and the Stop Counterfeiting in Manufactured Goods Act (P.L. 109-181. A similar number of IP-related bills had been introduced in the 108th Congress (2002-2004, 43 House bills, 26 Senate), and in the 107th (2000-2002, 36 House, 18 Senate). And while the Republican-controlled 105th Congress (1996-1998) introduced just over a dozen bills between the two houses, the laws that were signed by then-President Clinton were significant, including the Digital Millennium Copyright Act of 1998 (DMCA), the Sony Bono Copyright Term Extension Act, and the Trademark Law Treaty Implementation Act.

If the Republicans had retained control of both houses of Congress, it is probable that IP legislation and, more specifically, IP reform, as Shaw referred to it, would have continued at something like the same pace.

Among the bills introduced in the 109th Congress with no action taken were the Patent Reform Act (S. 3818), sponsored by Republican Senator Orrin Hatch of Utah and Democratic Sen. Patrick Leahy of Vermont, and its sister House bill, HR 2795, sponsored by Republican Rep. Lamar Smith of Texas.

The intent of the patent bills was to streamline the US patent process with international standards by shifting from an emphasis on a “first-to-invent” system to “first-to-file.” The House and Senate each held several hearings on the issue. Rep. Smith also sponsored the Copyright Modernization Act (HR 6052). Its purpose was to provide for licensing of digital delivery of musical works and for the limitation of remedies in cases in which the copyright owner cannot be located.

Smith withdrew the bill in late September and pledged to reintroduce the legislation in the 110th Congress where, it was thought, he would have been the next chairman of the full House Judiciary Committee if the Republicans had retained control. Both Smith and Hatch were re-elected, but with the power shift new committee leaders will decide whether the patent and copyright bills will be re-introduced, be rethought, or no longer exist in any form.

Democrats in Charge

The common wisdom is that leading financial contributors to the party in power influence legislation. Google has emerged as arguably the leading Internet-related company through its purchase of YouTube.com. As a result of that purchase, it has inherited YouTube’s copyright infringement litigation and its potential copyright infringement litigation. How Google deals with the litigation and the practices that produced it and Congress’ reaction to what Google does could affect IP activity in the US and the world. According to the Federal Election Commission, Google employees gave 97% of their 2004 election contributions to Democrats. Google has been criticized for what has been called “left-leaning political bias” in ads that it has run. Hollywood movie studios and stars also have traditionally made political contributions primarily to Democrats.

But, political contributions notwithstanding, the rights of IP owners may conflict with particular perceptions of personal liberty. In March 2005, Rep. Rick Boucher (D-Va.) co-sponsored the Digital Media Consumers Rights Act of 2005 (H.R. 1201) that would have amended Section 1201 of the DMCA to allow bypassing a technological lock that controls access to and use of a copyrighted work.

Boucher openly clashed with the Motion Picture Association of America in its efforts to pass legislation to re-instate the concept of a “broadcast flag” that would require broadcast copy protection; Boucher insisted that the “fair use” that the DMCA had taken away be reinstated. Rep. Boucher is reportedly poised to take the chairmanship of the house IP subcommittee. Sen. Leahy, who at this writing is considered likely to chair the Senate Judiciary Committee, has been an active member of that committee as it has dealt with IP. But the agenda had been set by the Republicans.

Perhaps the most important influence will be the issue of trust. Gridlock in government has became more and more of a reality over the years; with an almost evenly divided Senate and the Democrats having the barest of majorities in the House, more gridlock is seen to be likely. Those interviewed for this article for attribution and background agree that IP reform will occur in the 110th Congress only if the two parties join together on these and other issues and help IP continue to grow.

John T. Aquino may be reached at info@ip-watch.ch.