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Redefining the Debate Over Protecting Intellectual Property

INDUSTRY LEADERS AND POLICYMAKERS FOCUS ON PROTECTING CONSUMER RIGHTS AT CEA’S NEW IP AND CREATIVITY CONFERENCE

Congressman Boucher and CEA’s Shapiro Call on Industry To Continue the Fight to Save Betamax

Arlington, Virginia — 3/18/2005. The need to defend consumer’s fair use rights, preserve innovation and redefine the nature of the debate over protecting intellectual property dominated the keynote presentations and panel discussions during the Consumer Electronics Association’s (CEA) new IP and Creativity Conference: Redefining the Issue, held Wednesday in Washington, D.C. The conference attracted more than 200 representatives from the consumer electronics, technology, content creation, broadcasting, video game and cable industries along with top government officials.

The theme of the day was set in the opening keynote delivered by CEA President and CEO Gary Shapiro. “The technology industry, the media and the policymakers, have given the content community a free hand in defining the issues of how technology affects creativity,” Shapiro stated. “The content industry has been flexible, clever and ruthless in defining the terms of the debate. I submit it is time we recast the discussion and change the language of the debate.”

Congressman Rick Boucher (D-VA) followed Shapiro with the congressional keynote. In his address, he echoed Shapiro’s comments and placed the conference in the context of the upcoming Supreme Court case, “MGM v. Grokster”. He noted that the outcome of Grokster could undermine the historic Betamax case decided by the Court 20 years ago. Betamax is widely lauded as setting the framework to allow for the explosion in innovation in the United States during the last two decades. Boucher told the audience that, “the technology community must martial forces and be prepared for a legislative fight no matter the outcome of Grokster in order to ensure that the rights and freedoms that were established in the Betamax case are maintained.” Boucher noted that he introduced a bill, HR-1201, in the House Committee of Energy and Commerce last week aimed at codifying the protections established in Betamax and adding an addendum to the Digital Millennium Copyright Act of 1998.

The impact of technology on creativity dominated the debate during the first panel session of the day – “How Technology Impacts and Encourages Creativity – What the Numbers Say.” Moderator Gary Arlen, president of Arlen Communications, led panelists through a frank and heated discussion on the impact of peer-to-peer file sharing on record sales. Despite strong disagreements on this issue, most panelists agreed that premature regulation would stifle technological innovation and serve to protect the status quo. Panelists also discussed digital rights management and shared their feelings on legal peer-to-peer file sharing and other new business models for digital content distribution. Looking forward to next year, the panelists believe the same issue will be on the table – that is, how to manage both copy protection and innovation.

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During a panel session entitled “Creativity and Innovation: Which Direction Should/Does the Law Go?” moderated by Jonathan Krim of The Washington Post, panelists largely agreed that peer-to-peer networks are here to stay and that the content industry needs to define new business models that defend fair use rights instead of trying to impose laws making them illegal. While some panelists agreed with the Recording Industry Association of America’s (RIAA) decision to sue a number of small file sharers, most believed that attempts to impede technological innovation have gone too far. “You can’t hold technology responsible for the illegal activity of some users,” said Stacie Rumenap of the American Conservative Union. “We have metal detectors in schools and wonder what has come of this world,” said panelist Mark Cuban of HDNet. “What’s next, patent attorneys in every classroom making sure little Johnny or little Susie doesn’t steal copyrighted materials?”

The conference also featured a luncheon ceremony honoring Craig Barrett, president and CEO of Intel, as CEA’s Industry Digital Patriot for his defense of innovation. In his acceptance remarks, Barrett touched on the obstruction of technology stating that, “innovation should be left to the engineers and taken out of the hands of the government.”

Following the award presentation, Senator Norm Coleman (R-MN) delivered a keynote address and asserted the importance of finding the right balance between copyright protection and continued innovation. He noted that both content providers and manufacturers are in difficult positions – content providers trying to protect copyrighted materials and manufacturers struggling to innovate to keep up with foreign competitors. Coleman called upon both industries to work together to find a balanced solution without government regulation.

“Solutions do not lie in more laws or legislation. Solutions lie in the common ground between all players in the debate,” said Senator Coleman. “Congress will be eager to hear these solutions, but don’t come knocking until you’re done talking.”

The first panel session of the afternoon, led by moderator David Leibowitz of CH Potomac, focused on how the content industry needs to continue embracing new technology while still using the rights and freedoms established under Betamax. The panelists overwhelmingly agreed that the content industry needed to continue to focus on meeting consumer expectations, whether it meant the involvement of the government or not. The development of new technology for consumers faces many hurdles such as the issues of privacy and surveillance but the speakers agreed that it was important to balance consumer and creator rights.

The day’s closing session: “The Industry Leaders React, Can’t We All Just Get Along?”, brought together industry executives with different viewpoints on how best to handle the thorny question of copyright protection. With the Grokster hearing less than two weeks away, the leaders engaged in a energetic debate on the best solution to protect content owners and encourage creativity while still allowing technology companies to innovate unfettered from government regulation. Led by Los Angeles Times Staff Writer Jon Healy, the panel consisted of Mitch Bainwol, chairman and CEO, Recording Industry Association of America (RIAA); Markham Erickson, executive director NetCoalition; Congressman Dan Glickman, president and CEO Motion Picture Association of America (MPAA); and Gary Shapiro, CEA president and CEO.

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Despite the sometime heated sparring, Shapiro extended the olive branch when he said: “Let’s work together.” He added, “Sony Betamax allowed the technology and content industry to bloom and gave us a more connected world – that is the standard to use.”

Markham said, “Every new technology has been sued. If new and developing technologies are threatened with litigation and lawsuits, that atmosphere will shut down innovation. I hope this is a one or two year debate and both industries can provide cheap, portable, affordable content to consumers.”

“We have more in common than we have differences,” noted Glickman. “We should work together on areas of common concern.”

For more information visit: http://www.ce.org/ipandcreativity

About CEA:
The Consumer Electronics Association (CEA)is the preeminent trade association promoting growth in the consumer technology industry through technology policy, events, research, promotion and the fostering of business and strategic relationships. CEA represents more than 2,000 corporate members involved in the design, development, manufacturing, distribution and integration of audio, video, mobile electronics, wireless and landline communications, information technology, home networking, multimedia and accessory products, as well as related services that are sold through consumer channels. Combined, CEA’s members account for more than $121 billion in annual sales. CEA’s resources are available online at www.CE.org, the definitive source for information about the consumer electronics industry.

CEA also sponsors and manages the International CES – Defining Tomorrow’s Technology. All profits from CES are reinvested into industry services, including technical training and education, industry promotion, engineering standards development, market research and legislative advocacy.

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