Protect IP: A Dramatic Step In US Anti-Piracy Legislation

The Protect IP Act (Senate Bill S968), short for Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property, is the US Government’s latest attempt to enforce online copyright and trademark protection.  The bill aims to combat piracy and the sale of counterfeited goods by using the already existing Domain Name System. It also takes a no-nonsense financial approach.

Precedent

The Domain Name System has been the focus of recent debates over online intellectual property protection. This is the mechanism that gives memorable names to various Internet servers, and helps users browse for content online more easily. Web-based content is stored on servers, and every server has a dedicated IP (Internet Protocol) address.  Berklee College of Music’s web site, for example is hosted at the IP address 192.136.22.15.  This set of numbers would be difficult for most to remember, while a domain name such as Berklee.edu is much easier for the user to comprehend.

A previous bill, The Combating Online Infringement and Counterfeits Act or COICA, was nearly passed by the Senate. It aimed to expand the list of circumstances under which it would be appropriate for law enforcement agencies to alter the configuration of a domain name that was found to be infringing upon trademarks and copyrights. Usually, users seeking content from such a domain would see a government warning in place of the site that was previously there.

COICA had encountered–as had the existing law–strong dissent from computer scientists, civil liberties groups, political action coalitions, and law professors. The scope of COICA would have extended to foreign domains.  While the seizure of any foreign domain would be clearly outside of the jurisdiction of the US Government, the bill also sought to block US citizens’ ability to visit foreign sites hosted at those domain names by giving the US Attorney General power to force American service providers to ignore attempts to visit a targeted foreign site.  COICA’s domain name provisions garnered most of the public criticism, and were most likely the reasons why Senator Ron Wyden (D-OR) blocked it before it could come to a vote.

COICA had two further provisions, however, and neither created much controversy.  It would have enabled the US Attorney General to both stop credit card companies and online advertisers from doing business with targeted websites. This would take out two main streams of revenue from infringing sites, so the two provisions could be effective in the fight against piracy.

The Proposed Legislation

Protect IP is a more memorable named and improved upon successor of COICA. It was approved by the Senate Judiciary Committee on May 26 and was last revised on September 17.  The bill makes no mention of domestic domain name seizures but includes measures intending to alter the DNS system to block Americans’ access to infringing foreign sites.  It also gives copyright holders the ability to get court orders that would prevent financial transaction providers and online advertisement services from doing business with such sites.  Wyden has again become one of the more outspoken publicly elected officials to dispute the bill.  He is particularly concerned that the bill relies too much on the already-questionable existing seizure laws combined with the fact that access to foreign sites could be blocked.  Wyden’s main reason for disputing the bill is the fact that it leaves no opportunity for a targeted site to defend itself.  Wyden further argues that certain provisions in the bill would give the government the ability to stifle free speech at will, basically allowing the government to act as both judge and jury.

Visa, Google, Copyrights and Trademarks

Despite these points of contention, Protect IP shows promise.  Almost every site that offers copyright infringing media to Internet users generates revenue through subscriptions, selling advertising space on their page, or a combination thereof.  Visa and other payment processors along with companies such as eBay and Google are already involved with voluntary efforts to deal with online infringement.  These companies have adopted a set of “Best Practices for Voluntary Measures in Addressing the Sale of Counterfeits on the Internet.”

Visa, for example maintains a program that allows for right-holders to lodge a complaint if an infringing website is accepting Visa payments for counterfeit goods, or (not included in the joint agreement) pirated media.  During a six-month period however, the program only received a total of 30 inquiries worldwide.  Other participating companies have also experienced a lack of complaints from intellectual property owners.  In a testimony given at a hearing to the Senate Judiciary Committee in February of this year, a Visa attorney stated: “Other payment systems have shared similar experiences.  Intellectual property owners have not explained their reluctance to report instances of online infringement to us.”  Reticence on the part of the right-holder might be attributed to a lack of knowing that such programs exist.  More importantly, such reticence might be caused by the fact that there is no coordinated effort of enforcement.  If a single avenue of payment was shut down—Visa payments, for example—the infringing site is still able to accept other credit cards.  Furthermore, credit card companies “cannot permanently eliminate the problem when unlawful merchants hide behind multiple shell companies that enter into contracts with multiple banks to accept credit cards under false pretenses.”  The need for legislation is apparent.

Internet advertising networks are also taking similar steps voluntarily.  Google does not allow its clients to advertise counterfeit or trademark infringing goods.  Google also claims that it works to “prevent its advertising products from being used to monetize material that infringes copyright.”  Ironically, one can plainly access plenty of infringing torrent sites after initiating a simple search.

Although Google receives a lot of complaints from right-holders about trademark infringement (when ads show up for counterfeit or infringing goods), the company “receives very few complaints from brand owners”  about its advertising being used to turn infringement into a profit.  This greatly reflects the difference between trademark holders and copyright holders.  Where a trademark is concerned, typically infringers profit from the sale of tangible goods.  It would not be worthwhile financially for an infringer to give away bogus goods without earning a profit.  In the context of copyright however, illegal duplicates of picture, video, and music files are easily given away at such a low cost—sometimes for free even—advertising is many times the sole method that a site of this nature can use to generate revenue.  While trademark holders pursue the sellers of counterfeit goods, it makes more sense for copyright holders to go after the source of income of the copyright-infringing site.  Copyright holders most likely believe that the sheer volume of ad networks is so great that it would not be worth trying to prosecute each infringing site individually on a case-by-case basis.  Again, the need for legislation is apparent.

Google has been one of the more outspoken critics, most likely because it stands to lose revenues from its advertising service should such legislation ever become law.  Google’s executive chairman, Eric Schmidt, is wary that government plans to block access to illicit websites through the DNS system could set a “disastrous precedent” for freedom of speech.  Schmidt stated that even if the bill were passed into legislation, Google would still attempt to fight it.

Musicians and the Law

The bill has received the support of former presidential candidates, Senators John McCain (R-Arizona) and Joseph Lieberman (D-Connecticut).  Several associations in the entertainment industry have also expressed their support for the bill,  including: The National Music Publishers Association, Nashville Songwriters Guild, US Chamber of Commerce, Viacom, and NBCUniversal.  Individuals such as First Amendment expert Floyd Abrams and Don Henley of the Eagles have also been vocal in their support of the bill.  Henley, in an editorial piece for USA Today, warns of the dangers of a free Internet.  He cites the ease with which children can access stolen, harmful, and inappropriate goods online.  He furthermore goes on to argue that the stealing of American entertainment products and counterfeit goods is not simply a federal crime—it threatens the financial stability of American businesses.  Henley furthers his point by saying: “There is no First Amendment right to infringe intellectual property rights.”

Overall, there seems to be a significant mass of support for the Protect IP Act and from musicians. Certainly, altering the Domain Name System and restricting access to websites might prove to be a complicated step to take for the government, for legitimate e-commerce startups would be threatened if they were found to be infringing on intellectual property in any unknown way. So would existing Internet-dependent businesses, and neither would have much recourse in the law. Yet the financial provisions in the Protect IP Act are strong and relatively uncontroversial. That is were the power of the new legislation is likely to bite with abandon.

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