Senate panel passes bill against piracy websites

A China-based website displays fake LVMH handbags as seen on a Reuters computer screen in Washington in this September 10, 2010 file photo.

WASHINGTON (Reuters) - U.S. agencies and officials would get new powers to go after foreign websites that sell counterfeit goods and pirated music, movies and books under a bill passed on Thursday by the Senate Judiciary Committee.

The bill, which supporters hope will set the stage for action next year, targets "rogue websites" in countries such as China that are outside the reach of U.S. law.

The measure, approved by the Senate panel in a 19-0 vote, has the backing of companies including Disney, Nike, Merck and Time Warner and groups such as the Screen Actors Guild, the Motion Picture Association of America and the U.S. Chamber of Commerce.

Critics like the Electronic Frontier Foundation, a digital rights group, have attacked it as "Internet censorship" that could harm the credibility of the United States as a steward of the global domain name system.

The panel approved the "Combating Online Infringement and Counterfeits Act" with little time left this year for it to be passed by Congress and signed into law. Lawmakers are out next week for the U.S. Thanksgiving holiday and are expected to work only a few weeks in December.

A new Congress will be seated in January.

The bill allows the Justice Department to seek a court order against the domain name of websites offering illegal music or movie downloads or ones that sell counterfeit goods ranging from fake tennis shoes to pharmaceutical products.

Once the Justice Department has the order, it could shut down the site by requiring the U.S. registrar to suspend the domain name.

If the registry is located outside the United States, the U.S. Attorney General could go after the website by requiring U.S.-based Internet service providers, payment processors and advertising networks to stop doing business with it.

Committee aides said they worked with companies like MasterCard, PayPal and AT&T to develop the legislation.

The bill was modified to address some concerns that critics raised. One provision was struck out that would have allowed the Justice Department to publish a "blacklist" of domain names that provide access to websites touting counterfeit or pirated goods, even if it did not seek a court order against them.

U.S.-CHINA IPR TALKS

The panel vote came as a senior Chinese official was in Washington for talks with the U.S. Trade Representative's office and the Commerce Department on concerns over how to protect intellectual property rights, or IPR.

The visit will lay the groundwork for high-level U.S.-China talks in mid-December known as the Joint Commission on Commerce and Trade.

Chinese Commerce Vice Minister Chong Quan told a U.S. business group his country has launched a six-month campaign to crack down on pirates and counterfeiters and is establishing new "long-term mechanisms" to curb the theft.

He pledged Chinese government agencies would only use legal versions of software and would plan for that by incorporating the cost in their budgets.

"The Chinese government is unswervingly committed to the fight against IPR infringement. China will improve its protection of IPR of all companies, including those foreign-founded companies," Chong said.

The U.S. business community welcomes the new drive but "the success will be measured by results," including whether it leads to more Chinese purchases of U.S. software and higher penalties to deter IPR theft, said Jeremie Waterman, director of China for the U.S. Chamber of Commerce.

(Reporting by Doug Palmer; Editing by John O'Callaghan)