by Gary Shapiro

Today, Congressional advocates for the anti-innovation legislation Stop Online Piracy Act (SOPA) and PROTECT IP Act (PIPA) formally declared defeat and said they would pull the legislation from consideration. I had confidentially and publicly predicted this result in early December.

With this victory fresh in mind, I want to make sure the CE.org audience knows my view of how this happened.

First, many of you know (especially if you have been around for a while or read my book The Comeback), I have spent more than 30 years fighting for innovation and against efforts to restrict it. Often this meant going head to head with the copyright lobby, who always wanted to ban, restrict, and/or tax almost every CE innovation. Think of the VCR, DAT, minidisc, DCC, PVR and even the Internet. We won many battles in Congress and the courts, but there is no question that the content lobby has in every case spent much more than us on lobbying; given more in campaign contributions; and had a more single-focus on copyright legislation while we cover other issues like the environment, labor, trade, etc. Indeed, Politico recently estimated that we have recently been outspent by a factor of 10 to one.

So along the way the content community successfully extended the copyright term 14 times since LBJ, enhanced penalties for infringement beyond reason, expanded the definition of copyright and even forced design changes in certain CE products. Most of these changes to the law hurt the American public and were unhelpful to innovation. Indeed, many of these Congressional acts had real-world consequences. When Congress expanded the copyright term they extended it to works that had been in the public domain including music performed by school orchestras and bands nationwide. On Wednesday, the Supreme Court said that Congress had the power to do this, however harmful to the public and despite the “limited” term mandate in the Constitution.

But we won a big one this week also as a public avalanche of input persuaded politicians that they should actually read the legislation they cosponsor and support. Internet sites, including CEA’s, went black in protest, and a record number of people contacted Congress in one day. Politicians declared their opposition or withdrew their support for the legislation. By Friday even the final supporters retreated. Members of Congress gave various reasons, but the truth is it was simply political calculus that swayed the day.

What we did right was being there first to warn members of Congress that this was really bad legislation. This has been CEA Senior VP of Government Affairs Michael Petricone’s passion, and he has been nonstop for a year with our friends at association CCIA and the public interest group Public Knowledge. At first it was a lonely exercise. Few believed the legislation was as bad as we claimed. Another technology association even suggested a few minor changes and suggested they would support it. But Michael, recognized as one of the best lobbyists in Washington, and his team work hard and get things done and just smile as other groups claim credit. Michael contacted many other groups, explained the legislation to them and slowly gained allies. CEA members understood and engaged. Conservative groups like the Tea Party and Heritage Foundation and liberal groups like Move-On saw the harm and spoke up. A few Members of Congress, especially Senator Ron Wyden (D-OR) and Congressman Darrell Issa (R-CA), took the time to read and understand the legislation. They spoke up early and forcefully and were so concerned they made stopping it a top priority.

And even the White House officials listened. In October I participated in a university conference on innovation and was thrilled to see a breakout session with a top White House official report back to the larger group that a priority to encourage innovation was to defeat this legislation. I don’t know if the ultimate White House decision opposing the legislation was as politically motivated as Hollywood crudely claimed, but every indication is that this was a decision grounded in substance.

And we never gave up. Our main legislative message to the more than 150,000 attendees at International CES last week was that we needed an “army of geeks” to defeat this legislation.

What our opponents did wrong is more obvious than what we did right. It really comes down to arrogance.

I had a great early career and was cautioned that “pride cometh before the fall.” I made many mistakes and am more humble, although I still try to grow CEA and International CES by taking risks. With CEA owning and running the world’s leading trade show, I remind our staff frequently that we cannot take our success for granted and must be honest and fair with our customers, partners and constituents, including the media.

But look at what we confronted with PIPA and SOPA: The Senate Judiciary Committee never held a hearing and passed the bill by voice vote. We failed in our efforts to get any opposition or any focus on the legislation. Chairman Leahy (D-VT) – of Batman fame – and his Republican counterpart Orrin Hatch (R-UT) – a songwriter – were rightly convinced that piracy abroad is hurting U.S. companies, but they may have overly trusted their friends in the content community in concluding that the legislative approach was fine and did not require a hearing or much scrutiny. By skipping a fair and balanced hearing and simply relying on moneyed “friends,” these lawmakers missed an opportunity to improve the legislation to make it more of a rifle shot and less a nuclear bomb.

A similar process occurred in the House Judiciary Committee, albeit without a final vote. The Committee did hold a hearing and did allow one witness in opposition. This approach also did not succeed in disclosing the grave harm to national security, the Constitution, the Internet, innovation and small business creation that many of the same politicians who supported the legislation now describe. In several hours over two days in late December, the Committee rejected almost every effort to improve the legislation.

My, how things changed in a few weeks! Almost all the supporters are now on record opposing the legislation.

These politicians have to look at this as cautionary. It can’t just be the outpouring of a public tired of money controlling policy. This is truly legislation that would have had horrible consequences, and yet it almost passed. They should be angry at those in industry who advocated for the legislation and misled them on the consequences, which they either did not know or did not understand – or they were intentionally deceptive.

The Chamber of Commerce led the support for the legislation. It took out daily ads pushing the bill and listing companies allegedly supporting the legislation. Many of these companies quickly insisted their names be removed as supporters as they had simply signed on to a letter decrying piracy – not supporting the specific legislation. More, how the Chamber even ended up supporting this legislation is not clear. I suspect that the Chamber staff is paid to get revenue, and the content community provided new revenue so the Chamber forgot its substantive, free market, pro-growth and anti-litigation brand and let this content community subgroup draft and endorse the PIPA and SOPA legislation.

And what about the content community? With MPAA heads Jack Valenti and Dan Glickman gone, there is no real trusted leader. Current MPAA President Chris Dodd is ducking any responsibility as he says he just does strategy and cannot lobby, but the strategy is what failed here. The strategy was to push a one-sided approach, ignore objections and rely on your well-financed friends on the Judiciary Committees simply to approve whatever you give them. The overreach was so huge, the arrogance so large, the result so horrid – that they truly hurt their so-called friends. That’s why the legislative process should have fair and balanced hearings.

And this past week MPAA head Senator Dodd and his movie mogul constituents have made the situation worse by bashing Obama as not staying “bought.” Every fear that Americans had about a broken political system has been reinforced by the MPAA special interest approach.

This is the first time the standard copyright lobby playbook has been exposed to sunlight, and it is not only cautionary, but it is also mortifying how the public can be thrown to the wolves to satisfy the insatiable hunger of crony capitalism.

Thankfully, CEA’s reputation as an honest broker – asking for little more than that the government leave our companies alone to innovate and sell – has remained intact and is probably enhanced.

But it is never over. Be assured we need you active, engaged and aware.  And we need to confront the real issue of piracy of trademarks and copyrights. We will continue to post ways for you to contact your members of Congress on these issues via email, Facebook and Twitter at our Innovation Movement site, DeclareInnovation.com. Please keep our voices strong and loud.

And let me know what you think.