Tech Law Journal Daily E-Mail Alert
Alert No. 2,318, December 14, 2011.
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Rep. Smith Releases Revised Version of SOPA to Be Marked Up on December 15

12/12. Rep. Lamar Smith (R-TX), the sponsor of HR 3261 [LOC | WW], the "Stop Online Piracy Act" or "SOPA", released a revised version of his bill on Monday, December 12, 2011. See, amendment in the nature of a substitute [71 pages in PDF].

The House Judiciary Committee (HJC), which he chairs, is scheduled to mark up this bill on Thursday, December 15, 2011, at 10:00 AM. This bill is the only item on the agenda.

Rep. Smith also released a summary of this amendment.

The related bill in the Senate is S 968 [LOC | WW], the "Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011" or "PROTECT IP Act". The Senate Judiciary Committee (SJC) amended and approved this bill on May 26, 2011.

Rep. Issa and Others Propose USITC Based Approach to Web Sites Dedicated to Infringing Activity

12/14. Rep. Darrell Issa (R-CA), Rep. Zoe Lofgren (D-CA), Sen. Ron Wyden (D-OR), and others have announced, but not yet introduced, a competing bill to be titled "Online Protection & Enforcement of Digital Trade Act". This title provides a near acronym -- "OPEN Act". See, draft [18 pages in PDF].

Their summary of the draft states that their proposal would give new authority to the U.S. International Trade Commission (USITC) to deal with rogue foreign web sites.

The summary states that the USITC is already "an arbiter of whether imports violate U.S. intellectual property rights and should or should not be allowed into the U.S. Under current law, rightsholders can petition the ITC to investigate whether certain imports violate U.S. trademarks and copyrights. The ITC is authorized to not only investigate these issues but to initiate actions to prevent the imports in question from entering into the U.S."

It elaborates that "Under our proposal, the ITC would be authorized to initiate an investigation at a rightsholder's request and issue a cease-and-desist order against foreign websites that provide illegal digital imports and/ or facilitate the importation of counterfeit goods. In order to issue such an order, the ITC would need to find that the foreign website is ``primarily´´ and ``willfully´´ engaging in infringement of U.S. copyrights or willfully enabling imports of counterfeit merchandise. This standard comports with existing copyright and trademark law. An ITC cease-and-desist order would, under this proposal, compel financial transaction providers and Internet advertising services to cease providing financial and advertising services to the foreign website."

It also states that "respondents would have a right to be heard", but that the USITC could issue emergency ex parte orders.

It also proposes "immunity for those entities that are complying with the ITC orders, including financial transaction providers and Internet advertising services that voluntarily refuse to provide services to foreign websites that endanger public health by supplying illicit prescription drugs."

The draft bill provides that "It shall be unlawful to operate or maintain an Internet site dedicated to infringing activity."

Then, if the USITC "determines ... that an Internet site dedicated to infringing activity is operated or maintained in violation" of this prohibition, the USITC may "issue an order to cease and desist the infringing activity of the Internet site against the Internet site and to the owner and the operator of the Internet site".

The draft also provides that a "financial transaction provider shall take reasonable measures, as expeditiously as reasonable, designed to prevent or prohibit the completion of payment transactions by the provider that involve customers located in the United States and the Internet site associated with the domain name subject to the order ..."

Also, "an Internet advertising service shall, as expeditiously as reasonable, take technically feasible measures intended to cease serving advertisements to the domain name subject to the order ... in situations in which the service would directly share revenues generated by the advertisements with the operator of the Internet site associated with that domain name."

The draft contains numerous immunity provisions for intermediaries. For example, "No cause of action shall lie in any court against a financial transaction provider or an Internet advertising service on which a copy of an order is served ... or against any director, officer, employee, or agent thereof, other than in an action ... for‚ (i) any act reasonably designed to comply with this subsection or reasonably arising from the order; or (ii) any act, failure, or inability to meet the obligations under this subsection of the provider or service if the provider or service, as the case may be, makes a good faith effort to comply with such obligations."

Critics and Proponents Dispute Merits of SOPA

12/14. Proponents and critics of the SOPA have been waging intensified lobbying and advertising campaigns in the run up to mark up of HR 3261 [LOC | WW], the "Stop Online Piracy Act" or "SOPA"

A large group of individuals, who describe themselves as the people who "designed the Internet the first time", sent a letter to members of Congress on December 15 opposing the SOPA. The group includes Vint Cerf, who has worked for Google since 2005.

The letter states that "If enacted, either of these bills will create an environment of tremendous fear and uncertainty for technological innovation, and seriously harm the credibility of the United States in its role as a steward of key Internet infrastructure. Regardless of recent amendments to SOPA, both bills will risk fragmenting the Internet's global domain name system (DNS) and have other capricious technical consequences. In exchange for this, such legislation would engender censorship that will simultaneously be circumvented by deliberate infringers while hampering innocent parties' right and ability to communicate and express themselves online."

The Tech Freedom (TF), Competitive Enterprise Institute (CEI), Americans for Job Security (AJS), and Americans for Limited Government (ALG) sent a letter on December 14 to Rep. Lamar Smith (R-TX) and Rep. John Conyers (D-MI) in which they wrote that "While we applaud the manager's amendment proposed by Chairman Smith, there simply has not been time to properly evaluate its real-world consequences. Although the proposed changes would indeed improve the bill, they leave several legitimate objections unaddressed."

They wrote that there is a "massive grassroots campaign" against "Internet censorship", and "profound public skepticism". Hence, "If SOPA is ultimately enacted, any public perception that Congress failed to carefully balance the competing interests of copyright enforcement, free speech, due process, and Internet freedom will further erode public support not only for Congress, but also for copyright itself. The erosion of public respect for copyright is a primary factor behind the dramatic increase in infringement in recent years."

They urged the HJC to postpone the mark up, hold additional hearings, and allow sufficient time for preparation of proposed amendments.

The Internet Society (IS) announced on December 12 that its Board of Trustees "has expressed concern with a number of U.S. legislative proposals that would mandate DNS blocking and filtering by ISPs to protect the interests of copyright holders."

The IS wrote in a release that it is "concerned with provisions in both bills regarding Domain Name System (DNS) filtering. DNS filtering is often proposed as a way to block illegal content consumption by end users. Yet policies to mandate DNS filtering will be ineffective for that purpose and will interfere with cross-border data flows and services undermining innovation and social development across the globe."

The IS continued that "Filtering DNS or blocking domain names does not remove the illegal content -- it simply makes the content harder to find. Those who are determined to download filtered content can easily use a number of widely available, legitimately-purposed tools to circumvent DNS filtering regimes. As a result, DNS filtering encourages the creation of alternative, non-standard DNS systems."

"From a security perspective, DNS filtering is incompatible with an important security technology called DNSSEC.  In fact, DNSSEC would be weakened by these proposals. This means that the DNS filtering proposals in SOPA and PIPA could ultimately reduce global Internet security, introduce new vulnerabilities, and put individual users at risk."

"Most worrisome", the IS concluded, "DNS filtering and blocking raises human rights and freedom of expression concerns, and often curtails international principles of rule of law and due process. Some countries have used DNS filtering and blocking as a way to restrict access to the global Internet and to curb free expression."

The Computer & Communications Industry Association (CCIA) stated in a release on December 14 that "All who value the economic and political freedom of the Internet need to join in opposing the overly broad Internet censorship and regulatory regime, which SOPA and PIPA would create. The fact that some in the House Judiciary Committee are so dismissive of the concerns of so many diverse stakeholders from cybersecurity experts and venture capitalists to human rights groups and tech industry leaders is perplexing."

Eric Schmidt, Executive Chairman of Google, spoke at an event in Washington DC on December 12. The moderator of the program asked him why he opposes this bill. He responded, "mostly because it criminalizes the intermediaries".

He stated that it provides that "we are going to criminalize the linking and structure of the internet itself". He said that this is "censorship of the internet links". Moreover, governments will also use this to censor speech. And, as a result, "the internet is going to get balkanized". See, video of event.

Rep. Smith responded to some of his critics, including Google. He wrote in a December 14 release that "It's disappointing that some critics of the Stop Online Piracy Act do not understand what the bill actually does. The manager's amendment introduced earlier this week narrows the scope of the bill to ensure that it only applies to foreign rogue websites. The bill defines rogue sites as foreign websites primarily dedicated to the sale and distribution of illegal or infringing material or foreign websites that market themselves as websites primarily dedicated to illegal or infringing activity. Lawful companies and websites like Google, Twitter, Yahoo and Facebook have nothing to worry about under this bill."

He continued that "Unfortunately, that has not stopped some of the bill's critics from spreading lies about the legislation in an attempt to stall efforts by Congress to combat foreign rogue websites. Companies like Google have made billions by working with and promoting foreign rogue websites so they have a vested interest in preventing Congress from stopping rogue sites."

Rep. Smith also raised the subject of Google's own illegal activities. "In August, Google paid half a billion dollars to settle a criminal case because of the search engine giant's active promotion of foreign rogue pharmacies that sold counterfeit and illegal drugs to U.S. patients. Their opposition to this legislation is self-serving since they profit from doing business with rogue sites that steal and sell America's intellectual property."

See also, story titled "Google to Pay $500 Million for Allowing Its AdWords Program to be Used to Promote Illegal Online Drug Sales" in TLJ Daily E-Mail Alert No. 2,292, August 24, 2011.

Michael O'Leary of the Motion Picture Association of America (MPAA), stated in a release that "Google Executive Chairman Eric Schmidt again engaged in sky is falling rhetoric in attacking important legislation that targets criminals who profit from online piracy and counterfeiting."

O'Leary wrote that "Schmidt's comment that the legislation ``criminalizes the intermediaries´´ is a new weapon in their arsenal of hyperbole. There is broad recognition that all companies in the Internet ecosystem have a serious responsibility to target criminal activity. This type of rhetoric only serves as a distraction and I hope it is not a delaying tactic."

Chris Dodd, head of the MPAA, gave a speech in Washington DC on December 13 in which he stated that "Hollywood is pro-Internet. We stand with those who strongly oppose foreign governments that would unilaterally block websites, and thus deny the free flow of information and speech. So I want to make it clear right at the outset that our fight against content theft is not a fight against technology. It is a fight against criminals. Nor is it a fight to protect a stagnant and outmoded business model. Indeed, it is fundamentally a fight to protect jobs."

Former Senator Dodd continued that "Contrary to piracy apologists, the operators of these fraudulent sites aren't overzealous film buffs or political activists making a statement about freedom of information. They are criminals, plain and simple: they don't innovate, they don’t adhere to manufacturing standards, and they certainly don't pay taxes on the proceeds from their scams. They dupe honest consumers into accepting stolen -- and in many cases counterfeit and dangerous -- goods."

"Therefore", Dodd concluded, "I find absolutely reprehensible the comparisons some have made between efforts to shut down foreign rogue sites and the policies of repressive governments. We have not proposed, nor would we ever support, any efforts to block political websites, censor social media, or silence artists because of what they want to say. It's an outrageous false comparison."

A large collection of movie, record, book publishing and other content companies, as well as related unions, stated in an ad run in New York based newspapers that "illegal foreign websites are destroying American jobs and causing billions in lost revenue. They threaten the jobs of some of the best-known creative talent in the world, many of whom belong to New York guilds and unions. And they threaten the jobs of hundreds of thousands of musicians, songwriters, artists and professionals in entertainment companies, worldwide sports organizations and telecasters -- in New York and across America. That's why we all strongly urge you to protect the jobs and intellectual property of American citizens by supporting" the SOPA and PROTECT IP Act.

Maria Pallante, the Register of Copyright, stated at an event in Washington DC on December 12 that passage of this legislation is one of the two top priorities of the Copyright Office. The other is passage of orphan works legislation.

In This Issue
This issue contains the following items:
 • Rep. Smith Releases Revised Version of SOPA to Be Marked Up on December 15
 • Rep. Issa and Others Propose USITC Based Approach to Web Sites Dedicated to Infringing Activity
 • Critics and Proponents Dispute Merits of SOPA
Washington Tech Calendar
New items are highlighted in red.
Monday, December 12

The House will meet at 12:00 NOON for morning hour, and at 2:00 PM for legislative business. The House will consider numerous non-technology related items under suspension of the rules. Votes will be postponed until 6:30 PM. See, Rep. Cantor's schedule for the week.

11:00 AM - 1:00 PM. The Copyright Clearance Center (CCC) will host a panel discussion titled "Copyright & Commerce: Orphan Works and Fair Use in a Digital Age". The speakers will be Maria Pallante (Register of Copyright), Victor Perlman (American Society of Media Photographers), and Cecilia Kang (Washington Post). This is an invitation only event. For more information, contact Craig Sender at csender at copyright dot com or 978-646-2502. See, notice. Location: Newseum, 555 Pennsylvania Ave., NW.

Tuesday, December 13

The House will meet at 10:00 AM for morning hour, and at 12:00 NOON for legislative business. See, Rep. Cantor's schedule for the week.

10:30 AM. The Federal Communications Commission (FCC) will hold an event titled "open meeting". Location: FCC, Commission Meeting Room, 445 12th St., SW.

1:00 - 2:30 PM. The Information Technology and Innovation Foundation (ITIF) will host an panel discussion titled "Benefits and Limitations of Self-Regulation for Online Behavioral Advertising". The speakers will be Daniel Castro (ITIF), Fernando LaGuarda (Time Warner Cable), and Morgan Reed (Association for Competitive Technology). See, notice. Location: Microsoft, 11th floor, 901 K St.,  NW.

2:30 PM. The Senate Intelligence Committee (SIC) will hold a closed meeting. See, notice. Location: Room 219, Hart Building.

6:00 - 8:15 PM. The Federal Communications Bar Association (FCBA) will host an event titled "Litigating Appeals in the D.C. Circuit". Prices vary. CLE credits. Registrations and cancellations are due by 12:00 NOON on December 12. See, registration form. Location: Dow Lohnes, 1200 New Hampshire Ave., NW.

6:00 - 9:15 PM. The DC Bar Association will host an event titled "IP Year In Review Series 2011:The New Patent Law and More". The speakers will be Bradley Wright (Banner & Witcoff) and Eric Wright (Stites & Harbison). See, notice. The price to attend ranges from $89 to $129. CLE credits. For more information, call 202-626-3488. Location: DC Bar Conference Center, 1101 K St., NW.

Wednesday, December 14

The House will meet at 10:00 AM for morning hour, and at 12:00 NOON for legislative business. See, Rep. Cantor's schedule for the week.

9:00 AM. The House Commerce Committee's (HCC) Subcommittee on Communications and Technology will hold a hearing titled "ICANN’s Top-Level Domain Name Program". The witnesses will be Fiona Alexander (NTIA), Joshua Bourne (Coalition Against Domain Name Abuse), Thomas Embrescia (Employ Media), Anjali Hansen (Council of Better Business Bureaus), Daniel Jaffe (Association of National Advertisers), and Kurt Pritz (ICANN). See, notice. Location: Room 2123, Rayburn Building.

9:30 - 11:30 AM. The Senate Banking Committee's (SBC) Subcommittee on Securities, Insurance, and Investment will hold a hearing titled "Examining Investor Risks in Capital Raising". See, notice. Location: Room 538, Dirksen Building.

10:00 AM. The House Ways and Means Committee (HWMC) will hold a hearing on the status of negotiations for a Trans-Pacific Partnership (TPP). See, notice. Location: Room 1101, Longworth Building.

10:00 AM. The Senate Commerce Committee (SCC) will meet to mark up numerous bills, including S 1953 [LOC | WW], the "Research and Innovative Technology Administration Reauthorization Act of 2011". See, notice. Location: Room 253, Russell Building.

10:00 AM. The Senate Judiciary Committee (SJC) will hold a hearing titled "Oversight of the Federal Bureau of Investigation". The only witness will be Robert Mueller (FBI Director). See, notice. Location: Room 226, Dirksen Building.

Thursday, December 15

The House will meet at 10:00 AM for morning hour, and at 12:00 NOON for legislative business. See, Rep. Cantor's schedule for the week.

The Senate will meet at 9:30 AM. It will consider the nomination of Morgan Kristen to be a Judge of the U.S. Court of Appeals (9thCir).

9:00 -10:30 AM. The American Enterprise Institute (AEI) will host a panel discussion by proponents of giving green cards to foreign students who graduate from U.S. universities with advanced degrees in STEM fields. The speakers will be Rep. Tim Griffin (R-AR), Madeline Zavodny (Agnes Scott College), and Sudhakar Shenoy (IMC). See, notice. For more information, contact Matt McKillip at matthew dot mckillip at aei dot org or 202-862-7197. Location: AEI, 12th floor, 1150 17th St., NW.

9:30 AM - 5:00 PM. The Federal Communications Commission's (FCC) North American Numbering Council will meet. Location: FCC, Commission Meeting Room (Room TW-C305), 445 12th St., SW.

9:30 AM. The House Financial Services Committee's (HFSC) Subcommittee on Capital Markets and Government Sponsored Enterprises will hold a hearing on HR 3606, the “Reopening American Capital Markets to Emerging Growth Companies Act of 2011". See, notice. Location: Room HVC-210, Capitol Visitor Center.

10:00 AM. The House Judiciary Committee (HJC) will meet to mark up HR 3261 [LOC | WW], the "Stop Online Piracy Act". See, notice. See also, amendment in the nature of a substitute [71 pages in PDF] to be offered by Rep. Lamar Smith (R-TX). Location: Room 2141, Rayburn Building.

10:00 AM. The Senate Judiciary Committee (SJC) will hold an executive business meeting. The agenda includes consideration of no technology related bills. The agenda includes consideration of the nomination of Brian Wimes to be a Judge of the U.S. District Court for the Eastern and Western Districts of Missouri. See, notice. Location: Room 226, Dirksen Building.

Friday, December 16

The House may meet at 9:00 AM for legislative business. See, Rep. Cantor's schedule for the week.

Monday, December 19

No events listed.

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