Monster Cable example points to ‘E-Parasites’ flaws, critics say

Josh Peterson Tech Editor
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The tech world entered Halloween weekend with a chill and a gloom: E-Parasites, introduced Wednesday as the House version of the Senate’s “Protect IP” bill — generated immense opposition from bloggers and techies. Critics point to as the perfect example of why the legislation is dangerous and overreaching.

Larry Downes,  Senior Fellow with the nonprofit think tank TechFreedom, told The Daily Caller that the proposed law, aimed at prosecuting foreign-based intellectual property thieves, expands federal authority to give law enforcement powers it already has under the Trademark Act.

Monster Cable, an entertainment electronics maker known for its ironclad warranty policy, recently identified a list of “rogue” sites, including eBay, Craigslist, Costco and Sears. The sites were included, critics say, not because they sell illegal or counterfeit goods but because they sell legitimate goods at discount prices. Monster, among other trademark holders, sees them as illegal.

“Not only are they trying to genuinely trying to stop counterfeiters, they are trying to stop the selling of their goods in the so-called gray markets,” Downes told TheDC.

Rep. Zoe Lofgren said that the E-Parasites bill (Enforcing and Protecting American Rights Against Sites Intent on Theft and Exploitation Act) was “the end of the Internet was we know it.” Writing at TechDirt on Thursday, Mike Masnik said Lofgren was right.

“The more you look at the details, the more you realize how this bill is an astounding wishlist of everything that the legacy entertainment gatekeepers have wanted in the law for decades and were unable to get,” wrote Masnik.

Masnik was not alone in his assessment; Downes echoed a similar analysis of the drama unfolding in Congress.

“What we’re seeing is Hollywood versus the tech community,” said Downes. “This is a dream bill for the entertainment industry. It gives them vast new powers to manipulate the structure and content of the Internet.”

Downes pointed out that sites like Monster Cable who support the bill also have interests beyond stopping the sale of counterfeits. Downes said the reason these sites are targeted is because goods are often bought at closeout and resold to consumers at lower prices and outside the manufacturers distribution chain, undermining the sales of retailers.

Stopping the sale of used goods, however, might not entirely be profit-motivated: Customer service provides another argument favoring Monster Cable’s blacklist. Monster’s site warns customers that if they purchase Monster Cable products on those “rogue sites” they will not be covered under warranty.

Howard Gantman, corporate communications vice president at the Motion Picture Association of America, defended the legislation on the MPAA’s blog: “More than 2.2 million hard-working, middle-class people in all 50 states depend on the entertainment industry for their jobs.  They work behind the scenes in production, and in small businesses like equipment rental, transportation, construction and food service.”

“Millions more people work in theaters, video stores, retail, restaurants and other businesses that depend on entertainment,” wrote Gantman. “For all of these workers and their families, digital theft means declining incomes, lost jobs and reduced health and retirement benefits.”

Monster Cable, Sears and eBay did not return TheDC’s request for comment.

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