Wednesday, April 23, 2008

The FAIR USE Act: The Unraveling of Innovation and Trade

The latest version of H.R. 1201, the ill-named "Freedom and Innovation Revitalizing U.S. Entrepreneurship" (FAIR USE) Act, is Rep. Rick Boucher's (D-VA) latest attempt to unravel the Digital Millennium Copyright Act (DMCA), while taking the Supreme Court's unanimous Grokster decision and recent U.S. trade treaties down with it in a single piece of legislation.

According to a study released today from the Institute for Policy Innovation (IPI), written by Lee A. Hollaar, Boucher's bill has little to do with "freedom," "innovation," "revitalizing entrepreneurship," or even "fair use."

According to Hollaar, H.R. 1201 would:

-- Protect those who take from others -- by blocking statutory damages for those found contributing to piracy, actively inducing others to pirate, or benefiting from piracy under their control. And shielding those who create piracy-inducing software leaves only consumers to pay for their actions.

-- Ignore the Supreme Court's Grokster decision, in which the Court unanimously recognized inducement as a form of secondary copyright infringement. By leaving out this precedent, H.R 1201 would grant yet another free ride to those contributing to or inducing copyright infringement.

-- Compromise U.S. trade treaties, such as CAFTA, by making permanent several anti-circumvention exemptions in violation of the treaties' carefully crafted intellectual property protections beneficial to electronic commerce. Loss of such vital protections would harm U.S. innovators and entrepreneurs.

The risk is obvious: H.R. 1201 is a misleading bill which attempts to stealthily repeal provisions outlined not just in the DMCA, but also established by Supreme Court decision and international trade treaties.

"H.R. 1201 should not be the mechanism for putting the United States in violation of its trade agreements," said Hollaar.

"Changes to the DMCA, and other copyright provisions, should be made carefully so as not to cause future problems just to give backers of the bill a free ride from liability for their help with copyright infringement," concluded Hollaar.

The Institute for Policy Innovation is a national, non-profit public policy organization based in Dallas, TX.

For information regarding IPI's 3rd annual World Intellectual Property Day event, visit our website at

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