Small Impact on Practice Predicted from White House IP Recommendations

When the White House's intellectual-property enforcement coordinator, Victoria Espinel, submitted a wish list to Congress in March recommending 20 changes to federal intellectual property law largely aimed at ramping up criminal punishment for IP infringement, IP lawyers said the white paper recommendations would likely have only a tenuous effect, if any, on civil IP litigation or patent prosecution.

Among the most widely publicized of the Obama administration's proposed legislative changes was the recommendation that Congress make copyright infringement via streaming media and other similar technology a felony offense under “appropriate circumstances.” Benjamin E. Leace, a shareholder at IP boutique Ratner Prestia in Valley Forge, PA, says it remains to be seen what “appropriate circumstances” would be if Congress were to enact the proposals into law. “You don't know if it applies to the [seven]-year-old who's downloading music,” he says. According to Espinel's report, there has been some question as to whether streaming media constitutes felony distribution of copyrighted works or merely performance of those works, which is not a felony offense. The administration is now asking Congress to put that debate to rest with a law stating the former.

But Kevon Glickman, a principal in Offit Kurman's Philadelphia office who focuses his practice on entertainment law, including intellectual property, wrote in an e-mail that if Congress were to heed the White House's recommendation regarding streaming, felony prosecutions would likely be reserved only for streaming operations “related to organized crime.” Otherwise, “things will continue as they are until commercial agreements are worked out,” he says, adding that many of the largest copyright infringers in the United States have legitimate functions that shield them from lawsuits and from being shut down. “America is very big into letting markets find their own way rather than through legislation and the hope is that commercial agreements will eventually conquer all.”

Glickman believes this recommendation as it relates to entertainment copyright holders “lacks teeth,” in part because “many of the conglomerates are content creators/owners as well as Internet service providers. So who are they going to sue?” Glickman asks. “One division suing the other division? No, the pressure will be on to form commercial agreements.”

So, following that logic, could tougher laws against streaming result in more work for transactional lawyers? Glickman says it's possible, but most likely only for “Comcast's in-house guys or AT&T or Time Warner.”

Andrew B. Katz, one of the principals of Philadelphia IP boutique Belles Katz, says ramping up illegal streaming to a felony offense would merely “close a loophole” in criminal law. But as for whether such a change would increase civil suits, Katz explains that illegal streaming has always had the potential to spark civil actions whether it was considered a felony offense or not.

Still, while harsher penalties for copyright infringers might not create a boom in civil IP lawsuits, Leace says increased government crackdowns on criminal activity almost always have reverberations in civil litigation. “Whenever you have government enforcement you have the potential for enhanced civil suits because you have the firepower and the resources of the government doing some of the work for you.”

The only recommendation on the White House's wish list that doesn't have a criminal law focus and the one that has, along with streaming, received the most media attention, is the call for Congress to give record companies and recording artists a right to public performance compensation when terrestrial radio stations play their works. Glickman says that if Congress enacted such a payment scheme as law, a surge in IP litigation would be unlikely because there would be little room for debate. A collection agency would be given enforcement power and would sue radio stations if they didn't comply, he explains. “And [the radio stations] won't be able to beat them, just like if you were a nightclub and you didn't want to pay ASCAP/BMI.”

When the White House's intellectual-property enforcement coordinator, Victoria Espinel, submitted a wish list to Congress in March recommending 20 changes to federal intellectual property law largely aimed at ramping up criminal punishment for IP infringement, IP lawyers said the white paper recommendations would likely have only a tenuous effect, if any, on civil IP litigation or patent prosecution.

Among the most widely publicized of the Obama administration's proposed legislative changes was the recommendation that Congress make copyright infringement via streaming media and other similar technology a felony offense under “appropriate circumstances.” Benjamin E. Leace, a shareholder at IP boutique Ratner Prestia in Valley Forge, PA, says it remains to be seen what “appropriate circumstances” would be if Congress were to enact the proposals into law. “You don't know if it applies to the [seven]-year-old who's downloading music,” he says. According to Espinel's report, there has been some question as to whether streaming media constitutes felony distribution of copyrighted works or merely performance of those works, which is not a felony offense. The administration is now asking Congress to put that debate to rest with a law stating the former.

But Kevon Glickman, a principal in Offit Kurman's Philadelphia office who focuses his practice on entertainment law, including intellectual property, wrote in an e-mail that if Congress were to heed the White House's recommendation regarding streaming, felony prosecutions would likely be reserved only for streaming operations “related to organized crime.” Otherwise, “things will continue as they are until commercial agreements are worked out,” he says, adding that many of the largest copyright infringers in the United States have legitimate functions that shield them from lawsuits and from being shut down. “America is very big into letting markets find their own way rather than through legislation and the hope is that commercial agreements will eventually conquer all.”

Glickman believes this recommendation as it relates to entertainment copyright holders “lacks teeth,” in part because “many of the conglomerates are content creators/owners as well as Internet service providers. So who are they going to sue?” Glickman asks. “One division suing the other division? No, the pressure will be on to form commercial agreements.”

So, following that logic, could tougher laws against streaming result in more work for transactional lawyers? Glickman says it's possible, but most likely only for “Comcast's in-house guys or AT&T or Time Warner.”

Andrew B. Katz, one of the principals of Philadelphia IP boutique Belles Katz, says ramping up illegal streaming to a felony offense would merely “close a loophole” in criminal law. But as for whether such a change would increase civil suits, Katz explains that illegal streaming has always had the potential to spark civil actions whether it was considered a felony offense or not.

Still, while harsher penalties for copyright infringers might not create a boom in civil IP lawsuits, Leace says increased government crackdowns on criminal activity almost always have reverberations in civil litigation. “Whenever you have government enforcement you have the potential for enhanced civil suits because you have the firepower and the resources of the government doing some of the work for you.”

The only recommendation on the White House's wish list that doesn't have a criminal law focus and the one that has, along with streaming, received the most media attention, is the call for Congress to give record companies and recording artists a right to public performance compensation when terrestrial radio stations play their works. Glickman says that if Congress enacted such a payment scheme as law, a surge in IP litigation would be unlikely because there would be little room for debate. A collection agency would be given enforcement power and would sue radio stations if they didn't comply, he explains. “And [the radio stations] won't be able to beat them, just like if you were a nightclub and you didn't want to pay ASCAP/BMI.”