Victoria Espinel, the Obama administration’s “intellectual property and enforcement coordinator,” has released a White Paper with recommendations to Congress on intellectual property issues, such as sentencing guidelines for criminal infringers, streaming, infringement, circumvention, wiretapping and public performance right for sound recordings. In her position, created when President Bush signed the “Pro IP ACT” in 2008, Espinel has through her paper expressed particular concern over online piracy and counterfeiting.

The administration advisory recommends increases in sentencing guidelines for “trademark and copyright offenses when infringing products are knowingly sold for use in critical infrastructure, national defense, national security or by law enforcement.”  Espinel also carefully notes that sales indirectly affecting national defense would not be swept in this provision.

Other pertinent recommendations include three proposed legislative changes to give enforcement agencies tools they need to combat infringement. These clarify that infringement by streaming is a felony, expressly authorizing government communications with rights-holders on infringement and circumvention and allowing wiretapping in criminal copyright and criminal trademark investigations.

Streaming a felony?

The first recommendation clarifies that, in appropriate circumstances, infringement by streaming or by “other similar new technology,” is a felony. Some have criticized this recommendation as vague because they say its definitions of “appropriate circumstances” and “streaming” are unclear.

Perhaps this recommendation sets the stage for more discussion by lawmakers on another version of the Combating Online Infringement and Counterfeits Act (COICA), which failed to become law last year. One provision in the act allowed the seizure of an Internet site dedicated to infringing activities – including infringement via streaming or other transmission. Espinel’s white paper recommendations appear to be in line with proposals in the failed act.

Another issue that Congress may need to address is placeshifting, which utilizes streaming technology to allow users to watch content remotely, say on laptops and smartphones. Its proponents say this technology is analogous to time shifting, which has been upheld in noteworthy cases like Sony v. Universal City Studios. Critics point out that placeshifting often lacks digital rights management, and, therefore, inherently is vulnerable to copyright infringing activities. A Japanese court recently ruled that a service that transfers TV programs to overseas viewers is illegal. It is unclear how Congress might address placeshifting and its role in infringing streaming activity.

Sharing infringement, circumvention information pre- and post-seizure

The administration also recommends that Congress expressly authorize the Homeland Security department to share information with rights-holders on copyright infringement and circumvention to improve the accuracy of identifications of those who infringe on goods and with circumvention devices. Officials urge this sharing of information to occur both before and after seizures. The congressional authorization would let the Homeland Security agency share information without worry of violating the Trade Secrets Act.

The White House argues that sharing information on the seizure of infringing products would aid rights-holders in combating infringement. Sharing information on seized circumvention devices would help them adjust their technologies — a proven tough tactic, demonstrated with businesses battles with DeCSS and the Sony PS3 “jailbreak,” both propagated via the Internet.

The movie industry, via a news release, has welcomed the administration proposals, lauding a cooperative Homeland Security role as a practical proposal to “help ensure only legitimate content is entering the U.S. marketplace.”


The administration, in its white paper, also urges Congress to amend 18 U.S.C. § 2516 to let law enforcement  seek wiretaps for criminal copyright and trademark offenses, noting that statutes already provide for this technique in numerous other crimes; officials also argue that this expanded power would help authorities investigate organized crime and its roles in these offenses.

But strenuous opposition to these proposals has developed among the likes of the Computer and Communications Industry Association and a trade group that represents AMD, Facebook, Oracle, Yahoo, Google and Microsoft.  Opponents say they find the administration proposals as problematic as the Patriot Act and they complain that wiretapping would be over-reaction to the content industry’s legitimate concerns.

Right of public performance of a sound recording

This Obama advisory also includes a short section with potentially big impact in its recommended creation of the right of public performance of a sound recording. This would give rights-holders the ability to collect overseas royalties abroad.

Record companies and recording artists (represented by the Recording Industry Association of America) would have the most to gain from creating this right, since they would start receiving royalties when radio stations play their sound recordings. Those favoring this proposal say the era has passed of royalty-free music, in exchange for free promotion of music on the radio. Instead, they note that consumers have turned to the Internet to find and hear music. For webcasts, there has been a public performance right for “digital audio transmissions” since 1995, and the Copyright Office just published an updated pricing schedule. Proponents of the new right say requiring royalties for sound recordings on the radio is merely establishing “parity” with the webcasting pricing models.

Radio broadcasters, represented by the National Association of Broadcasters, object to this proposal as an “onerous, jobs-killing fee on America’s hometown radio stations”  — an unusually strong condemnation from a powerful group with a track record of successful lobbying Congress to prevent passage of legislation to create a performance right.