President Bush recently signed into law the Prioritizing Resources and Organization for Intellectual Property Act of 2008, better known as the "PRO-IP Act." In addition to increasing penalties for certain forms of infringement of intellectual property, the Act will increase resources for the Department of Justice to enforce federal criminal laws protecting intellectual property and seek to promote better coordination among various federal and state agencies in combating counterfeiting and piracy.

The PRO-IP Act includes the following provisions, among others:

  • Creation of an "IP Czar": A new position, the "Intellectual Property Enforcement Coordinator," will be appointed by the President. The new position replaces an inter-agency group that carried out the same function and is to be on a par with the U.S. Trade Representative and "Drug Czar." The duties of this "IP Czar" will include coordinating the efforts of various federal agencies to combat counterfeiting and other forms of intellectual property infringement.
  • Doubling of Statutory Damages for Counterfeiting: Under U.S. law, in cases where a trademark is not merely infringed but counterfeited, the mark holder is entitled to "statutory damages," which may be awarded without proof of actual harm. The PRO-IP Act doubles these statutory damages to a range of $1,000 to $10,000--and up to $2 million if the counterfeiting was "willful."
  • Easing Requirements for Copyright Registration: Under the PRO-IP Act, inadvertent and harmless errors in a copyright registration will no longer invalidate the registration. This is important because, under federal law, a valid copyright registration is a requirement for the enforcement of the copyright in federal court and entitlement to certain remedies (such as statutory damages and attorney's fees).
  • Increasing Certain Criminal Counterfeiting Penalties: In cases where an act of counterfeiting would also knowingly or recklessly cause (or attempt to cause) death or "serious bodily injury," the counterfeiter may be imprisoned for life or up to 20 years, respectively. Examples cited by Congress include counterfeit pharmaceuticals, UL labels and brake pads.
  • Expansion of Government Power to Seize Equipment: In criminal enforcement matters, equipment used in the commission of the criminal infringement may be seized and forfeited. It is unclear how far this new provision will extend, but if broadly interpreted, it could include not only the infringer's equipment but also any equipment provided by another party, such as the infringer's employer, Internet service provider, and telephone company.

As originally introduced in Congress earlier this year, the PRO-IP Act was considerably tougher and more controversial. In the face of opposition by public interest groups and the Bush administration, the PRO-IP Act has been watered down. Most significantly, a controversial provision that would have empowered federal prosecutors to file civil actions to enforce copyrights has been removed--probably because of pointed opposition by the Bush administration.

The PRO-IP Act was backed by groups that represent the interest of copyright and trademark holders, such as the Recording Industry Association of America (RIAA) and the Software and Information Industry Association (SIIA), as well as the U.S. Chamber of Commerce and the AFL-CIO. These groups point out that the United States is the leading producer of intellectual property in the world and argue that additional protections are necessary to increase the nation's global competitiveness.

Critics expressed concern that the PRO-IP Act will do little or nothing to protect intellectual property rights but would make casual and innocent infringers liable for penalties far out of proportion to the offense. Critics also worry that the new forfeiture provisions may be too far-reaching, perhaps allowing the government to seize the equipment of innocent parties.

The full text of the PRO-IP Act is available at this link.

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