Bill gives Web legal backbone

WASHINGTON — The last remaining obstacles to Hollywood’s willingness to fully embrace the Internet as its next business frontier are crumbling as Congress moves to protect digitally transmitted movies, music and software from Web-cruising pirates.

Legislation approved Thursday by the Senate and expected to pass the House today makes it illegal to create and distribute unauthorized copies of copyright material via the Internet or other digital means. This protection had never been spelled out before now.

Additionally, the imminent ratification of the World Intellectual Property Organization treaties by the Senate introduces cyberspace to the concept of intellectual property and is expected to further ease content creators’ Internet phobias.

New avenue

Hollywood and Silicon Valley love the idea of using the Internet as a distribution avenue but have been worried that computers and modems would allow copyright pirates to distribute limitless illegal perfect copies throughout the free-wheeling digital world. It is already a serious problem for the recording industry, which has been battling Web-based music pirates in the courts.

“For the first time, we have given copyright protection to pay-per-view and other video-on-demand products on the Internet,” said Motion Picture Assn. of America prexy Jack Valenti.

The legislation not only makes the Internet a more legally secure place to do business but also protects any intellectual property that has been transformed into digital content. “It makes the world safe for the DVD,” said Time Warner VP Arthur Sackler.

Under the new copyright law, it will be illegal to circumvent the studios’ efforts to protect their copy-righted material through encryption on a DVD or other digital platform.

U.S. conforming to new laws

The bill, which conforms U.S. law with two World Intellectual Copyright Organization treaties, came about after intense lobbying from studio representatives in Washington. MPAA prexy Valenti cashed in many of the political chits he has built up to push the bills forward.

Approval of the WIPO-related legislation wraps a great week for Hollywood in Congress. On Wednesday, Congress signed off on a bill that will extend the copyright term on creative works by another 20 years. The copyright term extension means that much valuable property slated to go into public domain will continue to reap residuals for companies like Disney and Time Warner, which used their clout to win final votes before Congress goes home for midterm elections.

Databases not included

The motion picture, recording and software industries at the last minute overcame a potential deal-blocker that would have extended copyright protection to databases. The provision, which had been sought by publishers but was opposed by key lawmakers who vowed to block the overall bill if it included database protection, was removed from the legislation. Among the supporters of the database language was Daily Variety’s parent company, Reed-Elsevier.

Although six countries have already approved the WIPO treaties, the U.S. is the only major nation to move on the international agreement. Creative industry lobbyists said U.S. action was important because it will now serve as a model for the European Union, which is expected to begin debate on the treaties.

All three creative guilds also sought and won a provision that ensures their members will earn residuals when a work is transferred from one copyright owner to another. Screen Actors Guild president Richard Masur said the provision was needed to ensure that guild members continue to benefit once works are sold — whether or not they are in a digital form. “This is a real economic benefit to our members,” said Masur.

In other Internet-related news, the Senate approved a bill that blocks any taxation of Internet transactions for three years.

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