Tough Copyright Laws Chill Innovation, Tech Companies Warn Lawmakers

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In a brief submitted to the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet, the tech industry warns that tougher copyright legislation may stifle innovation. The CCIA, which includes Google, Facebook and Microsoft as members, further points out that the devastating piracy numbers reported by the copyright industry often lack objectivity, and sometimes deserve the label "fiction."

msfacebookSince the SOPA and PIPA revolt last year, the copyright industry and the major tech companies have been living at odds.

Both sides often stress their interdependence, but also their differences in opinion. A new letter sent to lawmakers by the Computer & Communications Industry Association (CCIA) is an example of the latter.

On Thursday the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet organized a hearing on the role of copyright as a driver of innovation in the United States.

For copyright holders this was a good opportunity to remind lawmakers why they need strong copyright protections. On the other side, however, other voices tried to balance the debate by arguing that more copyright protections are no guarantee of more innovation.

The CCIA, which includes members such as Google, Microsoft and Facebook, submitted a statement debunking what they see as copyright industry propaganda. The tech industry association explains that tougher copyright can actually hinder innovation.

“Arguments that ever stronger regulation incentivizes innovation overlook the ways in which excessive protection can inhibit innovation,” the CCIA writes.

“Every year that a work is covered by a copyright is a year that subsequent users cannot build on that work. While incremental protection may provide additional reward to the author, society pays for this reward by being deprived of follow-on use, while the author and his or her heirs accumulate profits.”

“For this reason, protection exceeding the amount necessary to incentivize innovation represents a dead weight loss to the economy”

The tech companies provide many examples of how more enforcement can be detrimental to innovation. In addition, they stress that under current copyright law this is already taking place. Among other things, CCIA mentions that with statutory damages of up to $150,000 per copyright infringement, copyright holders can put enormous legal pressure on small tech companies.

“The threat of enormous damages encourages rights-holders to assert aggressive theories in the hope of coercing quick settlements, and also causes technology companies to withhold new products and services from the market. Effort to quantify the amount of innovation caused by IP must also account for the amount of innovation inhibited by remedies of this nature.”

The tech companies further note that copyright trolls are abusing high statutory damages to force individuals into paying settlements, such as in the numerous mass-BitTorrent piracy lawsuits that are currently ongoing.

“The feature of the copyright system that most incentivizes aggressive litigation postures, encourages trolls, and thereby chills innovation, is the availability of statutory damages in copyright infringement cases. Under [copyright law], a plaintiff can obtain up to $30,000 in damages for each work infringed, regardless of the actual injury it suffered.”

Finally, the tech companies say that the copyright lobby often uses subjective statistics to back up their requests for tougher copyright laws.

“For years, advocacy for stricter copyright has relied on rights-holder supplied data, some of which has been openly questioned by governments and intergovernmental organizations,” CCIA writes in its letter.

Among other examples they cite the Government Accountability Office report which found that there is no solid evidence that piracy leads to massive losses. The tech companies also cite several journalistic investigations, some of which describe the industry-funded reports as “fiction.”

“Media investigations into the source of such industry-driven statistics have found little or no basis for these numbers, dismissing them as ‘fiction.’ Objective analyses indicate that rights-holder-funded research has drastically overestimated counterfeiting and copyright infringement costs,” CCIA writes.

The above are just a few highlights of the letter, which is available in full below. The document makes it crystal clear that on some topics the tech and copyright industry have certainly not settled their differences.

This makes Government plans to realign copyright law with the present times a tough project. Both sides are expected to crank up lobbying machines to make sure that their voices are heard.

CCIA’s statement


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