IT piracy bills draw criticism

OLYMPIA – Bills aimed at fighting the theft of information technology around the globe were criticized Monday by retailers and some high-tech companies as legislative committees tried to reconcile different proposals on that topic that passed each chamber with large margins.

The bills are sought by Microsoft, which estimates as much as 90 percent of manufacturing in China is done with stolen software and information technology, and supported by the Motion Picture Association of America.

Nancy Anderson, an attorney for Microsoft, said the bills have been reworked to overcome some objections that they are too broad or put too much burden on stores. The proposed laws now would target primarily manufacturers, and only when an IT company sends them a “demand letter” to stop using stolen technology.

“If you manufacture a product for sale in Washington state, you must use legitimate IT,” Anderson said. The letter itself should be enough for most companies to “get legal” with their software, she contended.

But the Washington Retail Association, Fred Meyer stores, IBM, General Motors and an information technology association to which Microsoft no longer belongs all oppose the bills, saying they would embroil stores and manufacturers in lawsuits.

Stores don’t want to buy merchandise made with pirated software or technology, but when they do it inadvertently, they “don’t want to be the policing force,” said Charlie Brown, a lobbyist for Fred Meyer.

The Legislature should study the issue and try to come up with a better bill next year; in the meantime it should send Congress a resolution that calls for tougher information technology piracy laws on the national level, said Mark Johnson of the retail association.

With Microsoft arguing that piracy costs the state jobs and revenue, both bills received strong support in their first passes through the Legislature. The House version passed 90-4 and the Senate version passed 39-7.

But they aren’t without legislative critics. Sen. Adam Kline, D-Seattle, wondered about the state getting involved in fights over intellectual property, which is not subject to a property tax.

“It bothers me that the industry that has been a leader in evading taxes on intellectual property wants the courts to protect it,” he said during a hearing in the Senate Labor and Commerce Committee. “We’re talking about (creating) a cause of action that doesn’t currently exist and the costs of litigation are going to be borne by the courts.”