Marla Grossman Exclusive, Part 2

Marla Grossman

Marla Grossman is an attorney and partner with the American Continental Group,where she represents clients before the White House, US federal agencies and the US Congress. In other words, Grossman is a lobbyist, but not just any lobbyist. Her clients are a whose-who among the elite in the entertainment industry.

In part 1 of our interview we discussed the prospects of patent litigation reform, the likelihood that Congress will open up the Copyright Act and pursue legislative reforms, and how to get a message heard on Capitol Hill. In part 2 of our interview, which appears below, we pick up where we left off discussing how to take a message to Congress, and then we transition into discussing how quickly legislation can be derailed, as was the case with SOPA, and the unfortunate need to continue to fight the same policy battles time after time. We end generally discussing the political climate in Washington, DC, and how it has changed over the years.

Without further ado, here is the finale of my interview with Marla Grossman.

QUINN: I also think that there is a fundamental misunderstanding on the part of many. I wonder whether it’s an intentional misunderstanding or whether it’s just that they don’t know any better, but there are a lot of people who seem to think that putting out a product is innovation. While it may be a new product to them, that’s not what innovation is about. What that is in many cases is about something you said earlier – many seem to want to be able to take the intellectual property of other people without consequence. How do we combat that kind of growing definition of innovation or growing understanding of innovation

GROSSMAN: I think that the key to preserving the benefits of innovation and creativity to our Nation is better education. We need to educate both our public policymakers and the general public. Someone like Dean Kamen does a fantastic job of educating youth, the general public as well as public policymakers about what innovation really is, how it helps improve the human condition, and why it’s important to protect the rights of those who create it. Of course I wish there were more Dean Kamens, but there are other parties out there whose mission is to help educate public policymakers as well as the rest of the nation about the benefits of innovation. That is the core mission, the reason for their existence, of groups like the Intellectual Property Owners Association. They advocate for effective and affordable IP ownership rights and disseminate information to the general public on the importance of such rights. Groups like IPO spend a lot of time on Capitol Hill explaining to public policymakers in very concrete terms what true innovation means to their constituents, to their workers, to the companies in their districts, and to job in their districts.

QUINN: That’s the other thing that just doesn’t compute to me. On some level in today’s world I would expect more and more Members of Congress and their staffs to be attuned to the interests of the creators and intellectual property owners because that’s where the jobs come from. You look at the companies out there that are the ones who you might say are non-innovators; who are maybe IP takers. It doesn’t strike me that that’s where you get an awful lot of job creation. Whereas when people are actually creating and invest is flowing and businesses are being built that is where the job creation comes from.

GROSSMAN: I agree with you. A report released by the Global Intellectual Property Center found that IP-intensive industries employ 55.7 million Americans across dozens of sectors of the economy. In every state of this nation, millions of jobs hinge on the protection and enforcement of intellectual property rights and supply wages 30% higher than non IP jobs. I think that increasingly reports such as these, will demonstrate, with hard facts and figures, to public policymakers the importance of intellectual property rights in promoting creativity and innovation in the U.S. economy, and thereby counter the popular and trendy notion that consumers should get everything they want instantaneously and for free.

QUINN: Right. That’s very politically correct the way you just said that. I would call it a false narrative. What bothers me about it is we have over time all of these studies to show the pro-IP side of the argument is correct. The other side simply creates some fictitious problem with the historical facts and studies of the pro-IP community and then they ignore everything. On top of that they then have the audacity to say “once I’ve ignored all of your evidence you have no evidence. So all available evidence supports us.” Does anybody really fall for that juvenile, Monty Python type argument? Unfortunately the answer apparently seems to be yes, there are many people that do fall for that argument. Maybe it’s just because it’s convenient and it leads to what they really want, which is a justification to take original creations and innovations for free.


QUINN: I know from my own situation where we’re creating all the time every day. I could spend a large portion of almost every day just policing stuff on the Internet that has been unlawfully copied. But then you don’t have time actually create. Personally I was really, really disappointed with the way that SOPA played out. And I don’t necessarily want to go into whether SOPA was the correct substantive law, but what really bothered me in that scenario was that some Internet activists said openly that if Congress passed SOPA they we’re going to shut down the Internet.



GROSSMAN: I think one of the most important lessons that we can learn from the Stop Online Piracy Act (SOPA) is that we need to be prepared to deal effectively and forcefully with hyperbolic assertions. Even a false narrative can be very effective if it’s delivered with tremendous force and conviction. If intellectual property owners are not prepared to defend their rights and policies with equal conviction, they risk losing those rights. The problem of false narrative is not unique to the intellectual property realm. It appears in many areas of public policy that affect the American public. With intellectual property – like with other rights that we enjoy – if we are complacent, if we don’t vigorously defend them, we risk losing those rights. Of course, it can be frustrating to have to spend so much time and attention dealing with canards. But after the experience with SOPA, that is the current reality with intellectual property policy. Consequently, we simply need to be prepared to put time, attention, resources and “shoe leather” behind continually educating public policymakers and consumers of the importance of innovation and creativity as the best means of fostering future growth and welfare. We need to fill in the dots for people about how our intellectual property rights that are rooted in the U.S. Constitution have been a critical factor in making our country the strong economic powerhouse that it is today. But that is a message that we cannot tell once and then assume that it will be absorbed, understood, and passed from generation to generation. Rather, it is a story that we will have to tell over and over again to both the general public and public policymakers because the pitch that consumers should have everything they want as soon as they want it and for free has great superficial appeal to some parties. There are groups that have strong emotional and financial interests in continuing to promote their false narrative. We have to be prepared to rebut it, and to demonstrate with hard facts and figures why intellectual property remains worthy of protection. We can’t let our guard down.

QUINN: That’s true. And I think it’s unfortunate because it seems like we’ve had all these debates in the past. The same is true with Bayh-Dole criticism. We’ve had arguments over and over and over again over now for several generations and it seems like every generation raises the same arguments that failed and were debunked previously. Yet those who need strong IP protections have to be ready and willing to fight the battle over and over again because the pro-IP side must win every argument while those who want to dismantle the systems we have in place need to win only once. And I think the thing that surprised me maybe more than anything about SOPA was just how fast it all seemed to collapse. It seemed that there was not a preparedness to handle that sudden groundswell, the onslaught against it that arose. It almost seemed like people thought this was a done deal and then when the opposition appeared it was shocking.

GROSSMAN: I think it was the first time where the intellectual property community had faced that type of broad digital grassroots opposition that could not be countered by reasoned argument and facts. It took the intellectual property community by surprise. Since the promotion of that false narrative proved so successful, I think that we can count on it being repeated. The intellectual property community simply must be prepared to counter those efforts, to demonstrate the great risks they pose to our economic and cultural well- being.

QUINN: That, I think, is the big takeaway from SOPA. You have to be ready to move forward. And to me it’s shocking because it seems self-evident that if you do not allow creators to benefit from their creations you’re just going to get less creations. And maybe in the copyright area that’s even more directly the case because on some level anybody can be a creator in the copyright world. You simply get an awful lot less when people have to do other things in order to support themselves. And to me that’s just self-evident.

GROSSMAN: Well, you’re definitely preaching to the choir.

QUINN: Oh, I know, I know. But I also know that this is something that you and your partners have to struggle with, right? You’re dealing with Members of Congress and their Staff who sometimes are new to these issues. And even if they’re not new to the issues, over the last several cycles you’ve had to deal with a great amount of turnover in Congress. So I know you are thinking about how to convey this to a new group of people who maybe are not as steeped in it as we are.

GROSSMAN: Well, we tackle this from different perspectives for both new and experienced policy makers. First we explain that the founders of our republic considered copyright and patents protection so important to unlocking the creative and economic potential of this country that they explicitly called for protection and promotion of those intellectual property rights in our Constitution. We also explain to them how copyrights and patents are intertwined with the interest of the public. It’s not that the interest of the copyright and patent holder are in opposition to the interest of the public. They’re complementary. Indeed, the Supreme Court has recognized repeatedly that while the immediate effect of our intellectual property law is to secure a fair return for an author or an innovator, the ultimate reason for doing that is to stimulate artistic creativity and innovation for the general public good. We do not rely solely on these strong policy considerations. We support our policy contentions with hard economic facts and figures. We point to the many companies in that Senator’s state that rely on patents or copyrights. We indicate how many jobs are being provided in that public policymaker’s district by firms who utilize copyrights and patents and patents. We bring in the people whose livelihoods are dependent on or positively affected by intellectual property rights so they can talk to the public policymakers and the staff about the importance of preserving and promoting those rights. Such creators and innovators can say, “I’m able to do my work and to put out this product because of the existence of patent or copyright or trademark protection.” In this manner we combine the public policy concepts enshrined in the Constitution and their beneficial effects on working people. We can also point to the concrete damage that piracy and counterfeiting does to both the original innovators and the public at large. I think that all of those aspects of the education are important.

QUINN: I see whenever I write about it I get the nonbelievers whose arguments are just almost so ridiculous it’s hard for me to even retell them while still doing justice because it just seems so bizarre. But one of the arguments I hear all the time can be characterized as flat out denial. The critics say they’re involved in drugs because that is where the real money is. And then I think to myself, wow, this person is simply uninformed. The real money is in counterfeiting. The profit margins are extremely high and the jail time if you get caught is almost nonexistent. Whereas if you get caught running drugs there’s a whole lot of competition, there’s a whole lot of risk to your life. And if you get caught you’re going to go away to jail for a very long period of time. So increasingly terrorist organizations and organized crime are moving into counterfeiting, yet people are still buying their counterfeits. Now I understand people buy counterfeits and don’t always know they’re counterfeits. But if you’re in New York City and you dip down an alley and you’re buying a Coach bag for $5 a light ought to go on somewhere. Either they are Coach bags that have been stolen or they’re not Coach bags.


QUINN: But yet people do it.

GROSSMAN: I think that there will always be some people who will take the easier, cheaper way regardless of the consequences, both short and long-term, to society or other individuals. But I think that a combination of increased education and increased enforcement can significantly reduce the problem. Over the past few years, federal enforcement agencies have cracked down on several significant counterfeiters, and I do think that that’s made a big difference. Several illegitimate websites have been shut down. For instance, leading up to last year’s holiday shopping season, US federal law enforcement officers teamed up with foreign law enforcement agencies to seize over 700 domain names that were illegally selling counterfeit merchandise online to unsuspecting customers.

Back in the beginning of 2012, the New Zealand Police placed Kim Dotcom in custody in response to US charges of criminal copyright infringement concerning his Megaupload website. As you know, Kim Dotcom was accused of costing the entertainment industry $500 million through pirated content uploaded to his file-sharing site, which had 150 million registered users. Not only was Kim Dotcom taken into custody, but there’s been a lot of negative media attention about him. These developments have shed light on how often organized crime is behind these counterfeiters. In addition, I also think that the increased availability of easy and inexpensive legal options against counterfeiting will turn the tide in favor of legitimate manufacturers.

QUINN: I love that you bring that up because I couldn’t agree more. And for years I just didn’t understand why the recording industry was fighting the MP3 technology so hard. I mean they were refighting the same battles that they had fought with every major technological advance. For example, Napster proved that people liked MP3s. And then Steve Jobs went and monetized that and in an incredibly successful way. Now you can buy music for a $1 and never go to a black market area where you might download viruses.

GROSSMAN: I agree with you. I think that today, as opposed to 15 years ago, consumers have legitimate and almost immediate access to vast amounts of video and music and books and photographs from a large number of digital platforms. The creators of these works are promoting methods of distribution that provide audiences with many options for experiencing legal creative and innovative content. The availability of these legitimate options reduces the incentive for consumers to pursue illegitimate options. I think that there is even more that can be done to enable consumers to more easily differentiate between what’s legitimate and what’s illegitimate, and to get that one stop shopping that they want. The more legitimate options that creators and innovators provide, the more likely it will be that consumers will favor those options.

QUINN: All right, well I know we’re getting towards the end of our time here. And there’s something I’m dying to ask you. So maybe we can end on this note. And it’s not strictly IP but I know you’ve been around D.C. for a long time and you worked on Senator Leahy’s staff for a long time and now you’ve been in the private sector on K Street for a long time, so you have a wealth of experience in DC. So let me ask you: Has the way things are accomplished in DC changed as much as the evening news suggests it has?

GROSSMAN: I think it has. However, as I indicated earlier, I think intellectual property is still one of those areas where there can be bipartisan agreement. But there used to be more camaraderie across the aisle on Capitol Hill than there seems to be today. I remember working at the Senate Judiciary Committee when we were developing what became the Digital Millennium Copyright Act and the No Electronic Theft Act. At that time, we were really working very well together on a lot of different pieces of intellectual property legislation, many of which got enacted into law. I, a Democratic counsel, could walk into the Republican cloakroom with my Republican counsel counterpart without much ado. And I remember going to hearings at the House Judiciary Committee whose wonderful Republican Chairman, Howard Coble, would see me in the back of the room and call me up to sit with his staff. Chairman Coble is retiring at the end of this session, and we will sorely miss him. Those were wonderful times for constructive, bipartisan cooperation on many different issues, particularly those involving intellectual property. You see less of that bipartisan cooperation nowadays, although thankfully, intellectual property and technology remain areas where cooperation still occurs. It’s one of the reasons why I enjoy working in this field so much; we can get things done. It might be more difficult than it used to be, but I think the difficulty has to do more with complexity of some of the issues raised by digital communication and the fact that lobbying is being done on a broader grassroots scale and this has introduced greater emotionality and less reason into the debates. Sometimes it can get so noisy that facts and substance are drowned out. This simply means that we have different challenges today. But I remain optimistic that we will not face many partisan obstacles when it comes to technology and intellectual property, because both parties recognize the importance of the issues to our national well-being.

QUINN: Well that’s good. I guess D.C. isn’t completely broken. I just look at it and it seems the philosophy of President Regan and Speaker of the House Tip O’Neil is gone. Both understood it was better to have half a loaf of bread than no loaf of bread at all. I’m afraid we’ve lost that. Many of our politicians no longer believe that to be true.

GROSSMAN: I think that’s correct in many realms. I still am optimistic, however, when it comes to intellectual property. I have a picture in my office where then-Chairman of the Senate Judiciary Committee, Orrin Hatch, was giving my boss – then ranking number and now Chairman Leahy a Rush Limbaugh tie, and Senator Leahy was giving Senator Hatch a Grateful Dead tie. I am sitting in between the Chairman and Ranking Member laughing at the tie exchange. Although that happened 15 years ago, I could envision a similar exchange happening tomorrow at a Senate Judiciary hearing about patent litigation reform. This is still an area where members on both side of the aisle are working quite well together. And I think it’s one of the reasons why we’ve been able to get some legislation enacted in recent years. This takes me back to the first question you asked me—whether I think we will see some form of patent litigation reform in this Congress. I remain optimistic that we will.

QUINN: Okay, well, that’s probably a very good place to wrap things up. I really appreciate your taking the time to talk to me.

GROSSMAN: Absolutely. It’s has been my pleasure.


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