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CEA’s Shapiro Defends Consumer Recording Rights At CATO Event

4/26/2006 09:37:00 AM Eastern

Arlington, Va. — The content industry must stop its campaign to thwart technological innovation and restrict consumer rights, stated Consumer Electronics Association (CEA) president/CEO Gary Shapiro this morning during a CATO Institute event.

Shapiro made his comments during a conference, titled, Copyright Controversies: Freedom, Property, Content Creation and the Digital Millennium Copyright Act (DMCA). His comments underscored written testimony submitted with the U.S. Senate Judiciary Committee on behalf of the Home Recording Rights Coalition as the committee considers new legislation, which would restrict well-established consumer recording practices.

“Our nation's leadership in innovation is being threatened by the content industry's campaign to extend intellectual property law so as to grant them the right to dictate the design of technology,” Shapiro told the CATO audience. “The content industry's campaign is to the detriment of consumers, business and the nation's economy. It's time for them to stop.”

He stressed, “Passing HR 1201 would be a good first step to cleaning up this mess. This bill would merely ensure that consumers, libraries and educators can use new technology without threat of liability, so long as they don’t violate the copyright law.”

In his comments, Shapiro outlined four major trends, beginning with the fact that the major content providers have pushed to define copyright as if it was real property.

“The content community has undertaken a slick public relations and positioning campaign to distort the law of copyright to make it seem as if it is a subset of the law of real property. What they totally ignore, is that the United States Constitution accorded patents and copyrights a different treatment allowing Congress to grant patent and copyright terms for limited times. By contrast, the ownership of real property has no such restriction and is perpetual.”

Shapiro went on to say that the term “intellectual property” is misleading since it actually is only a license.

“It is not only intellectually disingenuous to treat copyright as a real property, it distorts the debate so that fair use becomes less relevant and consumer rights and the constitutional goal of broad public access and public domain works become marginalized to the point of vanishing.”

The second trend Shapiro identified is the gross extension of copyright protection — from 14 years in 1790 when the law first was established to more than 120 in some circumstances today, depending on the author and length of his life. He pointed out that 11 of the 13 total term extensions have been made in the past 40 years alone.

“This sudden increase in copyright terms means that copyright has shifted from a brief exclusive monopoly to a very long monopoly where the public is foreclosed from access. This not only benefits the incumbent content community, but it deprives creative uses of new technology, documentary films and scholars form accessing or using historic and even commercially valueless content.”

Shapiro also noted that it is much easier to qualify for copyright protection today and that copyright owners have broader powers to control their copyrighted works today thanks to new digital rights management technologies.

“Congress has created entirely new rights, through laws such as the DMCA. Indeed, even as we speak, there is a hearing going on in the Senate Judiciary Committee on a proposal to restrict how consumers can enjoy satellite radio services. The amazing thing is that the Recording Industry Association of America wants Congress to mandate more design restrictions on digital radio receivers even though the satellite companies pay them for the music and the manufacturers pay a royalty to the music industry for every recording device. On top of that, every recording device already has technical limitations that the recording industry asked for, claiming that would forever solve any issue they had with digital recording products. What are we to believe now? The game of crying wolf is not only tiresome. It's harmful to consumers and innovation.”

Shapiro's third and fourth trends centered on the fact that copyright owners have received new royalty flows and new restrictions have been put on creation of technology and distribution of copyrighted content. The consequences of all four trends are troubling, according to Shapiro.

“Makers of pioneering technologies are now routinely subject to expensive and time-consuming lawsuits, which discourage innovation. Meanwhile, venture capitalists are reluctant to touch new technologies and inadvertently invest in a lawsuit. The constant threat of lawsuits impedes the ability of U.S. companies to compete globally, and encourages U.S. companies to make and hold innovation offshore. Finally, the opportunities for consumers are unnecessarily constricted-just when new technologies are enabling everyone to be a creator. It's time the balance shifted back to the entrepreneur and away from a handful of big content companies.”

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