Congress must set limits on copyright infringement rewards, encourage voluntary rights-protection systems and classify unauthorized Internet streaming as a felony, witnesses said in testimony prepared for a Thursday hearing by the House Subcommittee on Courts, Intellectual Property and the Internet. High statutory damages in copyright infringement cases have had “two unintended consequences,” said Computer & Communications Industry Association Vice President for Law and Policy Matt Schruers. “They empower copyright trolls and create extraordinary liability risks that discourage tech innovation, particularly by start-ups,” he said. To ameliorate these consequences, Congress should encourage more investment in “robust voluntary rights-protection systems for right-holders,” he said. “Congress already encourages the use of such systems via Section 512, limiting relief against compliant services.” But it could go further by specifying which remedies “are made available to plaintiffs who do not take advantage of these voluntary systems designed to reduce litigation.” Congress can also reduce the incentives to pursue litigation by ensuring “statutory damages be limited to a reasonable multiplier of actual harm,” said Sherwin Siy, vice president-legal affairs at Public Knowledge. “Congress could also adjust the existing minimum and maximum awards amounts, or set caps on awards,” he said. “These adjustments could be tied to particular fact patterns, such as cases involving personal, noncommercial uses of works, or scenarios like secondary liability.” Congress must also be wary of those committing copyright infringement, said David Bitkower, acting deputy assistant attorney general in the Criminal Division. The newest problem is infringement through Internet streaming, Bitkower said. Congress has previously updated copyright law to address new copyright infringement techniques, he said, pointing to the Artists’ Rights and Theft Prevention Act of 2005. “Internet streaming, however, generally implicates a different right -- the right to public performance, violations of which currently correspond only to misdemeanor charges,” he said. Bitkower said the administration supports Congress’ passing legislation to classify Internet streaming copyright violations as a felony.

The House Homeland Security Committee reported to the House Wednesday an amended version of the National Cybersecurity and Critical Infrastructure Protection Act (HR-3696) after the House Oversight and Science committees agreed to waive their jurisdiction over the bill (http://1.usa.gov/1rebvQx). Neither the Oversight nor Science committees had taken action on the bill, while House Homeland Security cleared it in February (CD Feb 6 p7). The bill would codify the Department of Homeland Security’s existing role in dealing with cybersecurity issues, but would not extend the department’s powers. HR-3696’s supporters have been pushing behind the scenes for the bill to get a House vote before the upcoming recess, an industry lobbyist said. The version of HR-3696 reported to the House Wednesday included the removal of a section that would have dealt with federal civilian networks, which sponsors agreed to remove because of a “jurisdictional issue” with House Oversight, along with other minor changes, a House Homeland Security aide told us. House leaders are considering the bill for floor action “in the near future,” the aide said.

The Senate Commerce Committee scheduled a hearing on wireless cramming for 2:30 p.m. Wednesday in 253 Russell, it announced. Committee Chairman Jay Rockefeller, D-W.Va., has dug into the practice of cramming for years. “In light of increasing consumer use of mobile phones and emerging evidence of cramming in this context, Chairman Rockefeller in 2012 opened an inquiry to examine the scope of wireless cramming and industry practices to protect consumers against unauthorized charges on their wireless bills,” the committee said (http://1.usa.gov/1ujtFWx). “The hearing will review findings of the Chairman’s wireless cramming inquiry and examine consumer protections as carrier billing technologies and practices continue to evolve.” Witnesses weren’t announced.

One House Communications Subcommittee Democrat attacked the subcommittee’s Republican leadership for conducting its proposed overhaul of the Communications Act in a partisan way. Rep. Mike Doyle, D-Pa., has “some concern” and sought, looking to Subcommittee Chairman Greg Walden, R-Ore., “to urge you in the most friendly and kind way that we move forward” in a more open process and “to engage our side in meaningful discussion so we can put forward a bipartisan discussion,” he said during a Thursday subcommittee hearing on three bills unrelated to the initiative. The overhaul process will not work without reaching out to lawmakers and staff “on our side of the aisle,” Doyle said. He praised the House Republicans for issuing their Communications Act update white papers this year, calling them “important issues” that the subcommittee should address. Walden did not directly address concerns at the hearing. “We'd be happy to have that conversation,” he said of Doyle’s objections, “at another time."

MPAA’s $350,000 in Q2 2014 U.S. federal lobbying spending was a slight uptick compared with $330,000 in Q1, according to lobbying disclosure forms. The deadline for lobbying disclosures was Monday. MPAA’s 2014 spending is down from 2013 levels: $730,000 (Q1); $490,000 (Q2 and Q3); and $450,000 (Q4), it said. Former House Judiciary Committee member Howard Berman, D-Calif., lobbied on behalf of MPAA via Covington & Burling, where he’s a senior adviser, it said. MPAA paid the firm $80,000 for lobbying on IP protection issues in Q2, it said.

The House Judiciary IP Subcommittee hearing on copyright remedies will be at 1:30 p.m. Thursday, instead of the originally scheduled 2 p.m., in 2141 Rayburn, said the committee site (http://1.usa.gov/1mnU4sl) Wednesday. The hearing’s witnesses are David Bitkower, deputy assistant attorney general-criminal division; Matt Schruers, Computer & Communications Industry Association vice president-law and policy; CEO Steven Tepp of Sentinel Worldwide, an intellectual property consulting firm; Sherwin Siy, Public Knowledge vice president-legal affairs; and Nancy Wolff, Cowan DeBaets partner, according to a committee document. “The first duty of a remedies system must surely be to end infringements, or ideally to prevent them from occurring,” said Tepp in prepared testimony he provided us. Tepp was formerly chief IP counsel at the U.S. Chamber of Commerce’s Global Intellectual Property Center. “Equitable, injunctive relief is available for precisely these purposes,” he said. “Consistent with the goal of preventing infringement, section 503 of the Copyright Act grants courts the authority to order the impounding of infringing copies, the means by which those copies are reproduced, and records documenting the manufacture and sale related to the infringement,” Tepp said. “It can scarcely be argued that allowing infringing copies or the implements with which they are produced to remain in the hands of infringers is good policy,” he said. “In some cases the existing remedies are punitive, which discourages innovation,” said Schruers, in prepared testimony he sent to us. “The existing statutory damages framework has created incentives for so-called copyright trolling, or predatory enforcement,” he said. Secondary liability infringement claims can inflict “potential exposure to large damages, often for the acts of customers,” Schruers said. Section 504(c)(2) of the Copyright Act “could limit statutory damages only to cases of direct infringement,” he said. “Alternatively, Congress could forbid aggregation in secondary liability cases,” he said.

The House version of legislation (HR-5161) that would allow CE manufacturers to display electronically the required FCC label of approval instead of physically on the device or product was introduced Tuesday by Rep. Bob Latta, R-Ohio, with bipartisan support. The Senate version (S-2583) of the so-called E-LABEL Act was introduced July 10 and was hailed by CEA as “a commonsense approach for the digital age” (CD July 11 p16). CEA didn’t immediately comment on HR-5161.

A line in the new Republican Party of Arkansas’ platform for 2014-2016 opposing Internet sales taxes by the federal government isn’t keeping Rep. Steve Womack, R-Ark., from supporting the Marketplace Fairness Act (MFA) (HR-684), Womack’s spokeswoman said Wednesday. “We oppose any Internet sales tax imposed by the federal government,” said the platform, which was created July 19, but hasn’t been publicly released, according to the spokeswoman. The MFA allows states to tax remote sellers with annual revenue exceeding $1 million (http://1.usa.gov/1odfGwN). Womack is the original House sponsor of HR-684. Womack “would have a problem with the federal government imposing a sales tax,” but “that’s not what the Marketplace Fairness Act does,” said the spokeswoman. “MFA enables states to enforce existing state sales and use tax laws,” she said. Senate Finance Committee member Mike Enzi, R-Wyo., introduced the Marketplace and Internet Fairness Act July 15, which combines the principles of the MFA and the Internet Tax Freedom Act. Senate Commerce Committee member Kelly Ayotte, R-N.H., criticized the MFA in a Union Leader op-ed (http://1.usa.gov/WrHUcJ) July 20.

Two Senate Commerce Committee members are eyeing the Satellite Television Extension and Localism Act reauthorization process as the vehicle for a piece of legislation they introduced. Sens. Cory Booker, D-N.J., and Deb Fischer, R-Neb., introduced legislation Tuesday that would require the FCC to study designated market areas and their effect on local and in-state broadcast programming. It would also compel the agency to report to Congress on “how to increase localism in states served by out-of-state media markets,” a Booker news release said (http://1.usa.gov/1pcFTef). The Let Our Communities Access Local TV Act (S-2643) was referred to the Commerce Committee. The Committee has not released its draft of STELA legislation and expects to mark it up in September. “Access to local broadcasting is really important -- especially when we look at low income communities where the digital divide persists,” a Booker aide told us Wednesday by email. “It’s critically important to study the way media markets effect access to programming and STELA seems like a great vehicle to include this type of study."

Sen. Mark Udall, D-Colo., wants the FCC to make sure more of his constituents have access to local television. “DirecTV subscribers in Grand Junction, Colorado and its surrounding communities do not receive local television programming, which prevents them from viewing the news, weather and emergency information most relevant to them,” Udall told FCC Chairman Tom Wheeler in a letter Monday (http://bit.ly/1pabTQ5). “I ask that you review whether it is economically and technologically feasible for DirecTV to offer local-into-local service in the Grand Junction-Montrose DMA [Designated Market Area] and work with DirecTV to ensure steps are taken to offer this programming.” NAB backed the request.