|Rep. Issa Introduces Alternative to
1/18. Rep. Darrell Issa (R-CA) introduced
HR 3782 [LOC |
"Online Protection & Enforcement of Digital Trade Act", or "OPEN
Act", as an alternative to the SOPA.
Rep. Issa released a draft
[18 pages in PDF] of this bill last month, just before the
House Judiciary Committee (HJC) began its mark up
of HR 3261 [LOC |
"Stop Online Piracy Act" or "SOPA". See, story titled "Rep. Issa
and Others Propose USITC Based Approach to Web Sites Dedicated to Infringing
Activity" in TLJ Daily E-Mail Alert No. 2,318, December 14, 2011.
The OPEN Act affects trade and intellectual property law. It was referred to
the House Ways and Means Committee (HWMC) and HJC.
It would amend the USITC's
Section 337 authority,
by adding a new subsection titled "Unfair Trade Practices Relating to
Infringement of Copyrights and Trademarks by Certain Internet Sites".
It would provide that once the USITC has issued a cease and desist order
under this new subsection, "a financial transaction provider shall expeditiously
take reasonable measures 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 subject to the order".
Similarly, "an Internet advertising service shall expeditiously take technically
feasible measures intended to cease serving advertisements to the Internet site 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".
Rep. Issa and others issue a
joint release that states that the OPEN Act "delivers stronger intellectual
property rights for American artists and innovators while protecting the open,
accessible Internet Americans deserve."
The list of original cosponsors includes several other members of the HJC:
Rep. Jason Chaffetz (R-UT),
Rep. Jared Polis (D-CO),
Rep. Dennis Ross (R-FL),
Rep. Jim Sensenbrenner (R-WI), and
Rep. Zoe Lofgren (D-CA).
Rep. Polis demonstrated during debates in the
first phase of the HJC's mark up of the SOPA that he has a deeper understanding
than most of his colleagues of the contents of the SOPA, and the technologies
and business practices that would be affected by the SOPA.
He stated in the joint release that "Unlike SOPA
and PIPA, the OPEN Act will effectively combat piracy from foreign websites
while preserving Internet freedom. By using a 'follow-the-money' approach we can
shut down foreign sites that steal intellectual property while ensuring that the
Internet remains an engine of innovation, information and job creation. Without
access to capital, these foreign websites will wither and die while the Internet
continues to grow and thrive."
Rep. Chaffetz stated in this joint release that "SOPA threatens our cyber
security, undermines freedom of speech, and chills innovation in one of the few
sectors of our economy that is actually working. While I understand and
appreciate the need to protect intellectual property, SOPA is a massive and
inappropriate overreach. Instead, I strongly support the OPEN Act. This
bi-partisan legislation addresses the problem of online piracy without causing
collateral damage to the Internet as SOPA would."
|Comparison of the Key Processes of SOPA and
1/18. HR 3261 [LOC |
"Stop Online Piracy Act" or "SOPA", and HR 3782 [LOC |
the "Online Protection & Enforcement of Digital Trade Act", are both directed at
reducing the harms caused for foreign web sites dedicated to infringing
intellectual property rights.
These are broad bills with many provisions. However, the key component of the
SOPA is a
Department of Justice (DOJ) brought in the
U.S. District Court. The key component of the OPEN Act is a rights holder action
before the U.S. International Trade Commission.
The SOPA's main process is to allow content companies to approach ex parte the DOJ with their grievances
against foreign infringing web sites. The DOJ in its discretion could then bring an action
in any U.S. District Court against a foreign web site owner or operator (an in personam
action against persons or entities unlikely to receive actual service of process) and the
web site and domain name (nominally an in rem cause of action).
The role of Court would be minimal. Its main function would be to issue an
immediate ex parte cease and desist order, and authorize service of that order
upon U.S. internet service providers, internet search engines, payment network
providers, and internet advertising services.
These entities would then be required by the SOPA to take certain actions. For example,
an ISP would be required to prevent access by its subscribers located in the U.S. to the
foreign infringing site that is subject to the order. Similarly, a search engine
must prevent the serving, in response to a query, of a direct hypertext link to
the foreign infringing site that is subject to the order.
Also, under SOPA a payment network provider would be required to prevent its service from
completing payment transactions involving its customers located in, and who have accounts in,
the U.S., and the payment accounts of an foreign infringing site that is subject to the order.
In contrast, under the OPEN Act, content companies would petition, in an open proceeding,
the USITC to launch
an investigation into, among other things, the imports of infringing digital products into
Then, the USITC would be authorized to initiate an investigation, and issue a cease and
desist order against foreign web sites that provide illegal digital imports. A USITC order
would compel financial transaction providers and internet advertising services to cease
providing financial and advertising services to the foreign web site.
A USITC order, under this bill, would not, however, compel action by search engines to
not return hyperlinked search results for web sites covered by the order; nor would it compel
internet access service providers to block access to domain names covered by the order.
|Obama Hypes Proposal to Consolidate
Some Trade Related Agencies
1/13. The White House news office stated in a vaguely worded
release that states that President Obama wants to consolidate the
"Department of Commerce's core business and trade functions, the Small Business
Administration, the Office of the U.S. Trade Representative, the Export-Import
Bank, the Overseas Private Investment Corporation, and the U.S. Trade and
The White House news office also released a second vaguely worded
release that states that "there will be one Department where entrepreneurs
can go from the day they come up with an idea and need a patent, to the day they
start building a product and need a warehouse, to the day they are ready to
export and need help breaking into new markets overseas". It adds that this
Department would have one mission -- "helping American businesses succeed".
This announcement bears many attributes of a statement intended for public consumption,
made for the purpose of swaying public opinion during a presidential election year, and touted
without any realistic expectation of implementation.
Neither release names the Department of Commerce's
(DOC) "core business and trade functions". Neither release references either the
DOC's National Telecommunications and Information
Administration (NTIA), or its responsibilities with respect to the
Internet Corporation for Assigned Names and Numbers (ICANN)
and internet governance. Nor does either reference the DOC's
Bureau of Industry and Security (BIS), which regulates
President Obama did not include within his consolidation proposal numerous other trade
related agencies in the federal government. For example, he did not include any of the trade
related functions of the Department of State (DOS). Nor
did he include the U.S. International Trade Commission
(USITC). Nor did he include units of the Department of the
Treasury (DOT) involved in regulating trade in financial services and foreign investment,
such as the DOT's Financial Crimes Enforcement Network
(FinCEN) and the DOT's
Committee on Foreign Investment in the US (CFIUS). Nor did he include the
functions of the Federal Communications Commission (FCC) related to
international telecommunications. Nor did he include the Department of Agriculture's
(DOA) Foreign Agricultural Service (FAS).
President Obama spoke about government reform in his January 2011 state of the union speech.
His next state of the union speech will be on January 24. The present announcement may have been
made without an expectation that government agencies will actually be combined, but rather to
substantiate statements in the forthcoming speech that progress is being made on government
Reorganizing government agencies is an immensely difficult task. Major reorganizations
usually occur after major crises. For example, the Department of Homeland Security (DHS) was
created out of many existing units of other departments after the terrorist attacks of
September 11, 2011. The event that precipitated President Obama's government reform proposals
was the Republican gains in the 2010 Congressional elections.
Reorganizing government requires the approval of the Congress. Yet, President
Obama did not consult with numerous key members of Congress before announcing
this proposal. Requisite Congressional support is absent.
One of the stated purposes of this proposal is to promote trade. Yet, to date
President Obama has assigned trade promotion a lower priority than other recent
Presidents, Republican and Democratic.
Finally, many affected interests, and members of Congress, may conclude that
if the government were reorganized pursuant to this proposal, trade and the
benefits that flow there from would not be greater than under the status quo.
The DOC is tasked with both promoting commerce and regulating commerce. Often, achieving
one regulatory goal comes at the expense of the attaining the other goal, and vice versa.
For example, the BIS is tasked with regulating exports. Its main tool is blocking the export
of products, software, and technology. Its function is to reduce exports. This reduces
revenues of US businesses, and overall employment in the US. In contrast, the
International Trade Administration (ITA) has as its goal the
promotion of non-agricultural exports and market access. And, it is not a
particularly significant entity.
The Office of the U.S. Trade Representative
(OUSTR), which is independent of the DOC, and has a trade promotion task, but no
regulatory task, is more effective, and has accomplished much more, to promote
trade, consumer welfare, and employment. The perception held by many in Congress
is that were the OUSTR to be absorbed by the DOC, it would be reduced to the
level of government efficiency and effectiveness of the DOC, an already a
bloated and unwieldy bureaucracy plagued by inconsistent missions.
It should be noted too that some prior DOC Secretaries have sought, but
failed to obtain, control of the OUSTR, in part, for these reasons.
Sen. Max Baucus (D-MT), the Chairman
of the Senate Finance Committee (SFC),
and Rep. Dave Camp (R-MI), the Chairman of
the House Ways and Means Committee
(HWMC), promptly criticized the proposal. These two committees have jurisdiction
over trade issues.
They wrote in a
joint statement that "we are concerned about the impact that the President's
proposal could have on the ability of the United States to aggressively open new
markets to American-made goods and services and create U.S. jobs".
Sen. Baucus (at right) and Rep. Camp
continued that the OUSTR "is nimble, lean and effective -- and time and again it delivers on its mission and creates
jobs here at home. Taking USTR, one of the most efficient agencies that is a model of how government
can and should work, and making it just another corner of a new bureaucratic behemoth
would hurt American exports and hinder American job creation."
Similarly, Sen. Orrin Hatch (R-UT), the ranking Republican on the
SFC, wrote in a release that "After three years in the White House presiding over the largest
expansion of government in generations, the timing of this announcement and the failure to consult
Congress raise questions about the President’s commitment to a real reorganization and reduction
in the size of the federal government."
"What's disconcerting is that the President has again chosen not to work with
Congress -- even after I specifically asked the Obama Administration to fully
brief Congress if it chose to reorganize our trade agencies." Sen. Hatch concluded, "I ... will expect a full accounting by the
Administration in short order".
Also, Sen. Charles Grassley (R-IA),
another member of the SFC, responded in a release
that "The enactment of trade agreements has been a hard slog with the President. Any
reorganization that disrupts trade negotiations and expanded markets for U.S. businesses and
farmers would cause me serious concern. Consolidation that doesn't hurt export opportunities
might make sense. Congress will need to look at this proposal carefully. It's not
surprising that the President is focusing on this area for consolidation. Trade
is already a lower priority than it should be for this White House."
|This issue contains the following items:
• Rep. Issa Introduces Alternative to SOPA
• Comparison of the Key Processes of SOPA and OPEN Act
• Rep. Smith Responds to Critics
• Obama Hypes Proposal to Consolidate Some Trade Related Agencies
New items are highlighted in
|Thursday, January 19
The House will meet at 10:00 AM. Day one of a three day event titled "House
Republican Issues Conference". See, Rep. Cantor's
The Senate will not meet.
9:00 AM - 3:30 PM. Day one of a three day event
hosted by the International Intellectual Property Institute
(IIPI) and U.S. Patent and Trademark Office (USPTO) titled
"Seminar on Specialized Intellectual Property Rights Courts". The speakers
will include David Kappos (head of the USPTO), Shinjiro Ono (former Deputy Commissioner of the
Japan Patent Office), and Jorge Amigo (former Director of the Mexican Institute of
Industrial Property). The deadline to register is January 13. Free. See,
notice. Location: USPTO, 600 Dulany St., Alexandria, VA.
11:45 AM - 1:45 PM. The Tech
Freedom (TF), Competitive Enterprise Institute (CEI) and
Cato Institute will host a panel discussion titled
"Unintended Consequences of Rogue Website Crackdown". The program will address
three bills under consideration by the House and Senate: (1) HR 3261
WW], the "Stop
Online Piracy Act" or "SOPA", (2)
draft [18 pages in PDF] of the
"Online Protection & Enforcement of Digital Trade Act", or "OPEN Act",
and (3) 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 speakers will be
Berin Szoka (TF),
Larry Downes (TF),
Allan Friedman (Brookings
Institution), James Gattuso
(Heritage Foundation), Dan Kaminsky,
Julian Sanchez (Cato Institute). Lunch
will be served. Free and open to the public. The deadline to register is 12:00 NOON on
January 18. See, notice and
registration page. Location: Reserve Officers Association of the US, One Constitution
12:30 - 1:45 PM. The Federal Communications Commission's (FCC)
Wireless Telecommunications Bureau's (WB) Division
Chiefs will hold a meeting. The speakers will include Mary Bucher
(Technologies, Systems and Innovation
Division), Nese Guendelsberger (
Spectrum and Competition Policy Division), Roger Noel
(Mobility Division), Blaise Scinto
(Broadband Division), and Margaret Weiner
(Auctions and Spectrum Access Division).
The price to attend is $17. Registrations and cancellations are due by 12:00 NOON on
January 16. See,
The Federal Communications Bar Association (FCBA) states that
this is an FCBA event. Location: Wiley Rein, 1776 K
6:00 - 8:15 PM. The Federal
Communications Bar Association's (FCBA) Wireline Committee will host an event titled
"Understanding the Connect America Fund Order". CLE credits. Prices vary. See,
notice. Location: Dow Lohnes, 1200 New Hampshire Ave., NW.
|Friday, January 20
The House will not meet. Day two of a three day event titled "House
Republican Issues Conference". See, Rep. Cantor's
The Senate will meet at 2:00 PM in pro forma session only.
Supreme Court conference day. See,
1:00 - 2:30 PM. American Bar
Association's (ABA) Section on Intellectual Property Law will host a webcast panel discussion
titled "Prosecution Strategies: Tackling USPTO Obviousness Rejections". The
speakers will be Janet Hendrickson (Senniger Powers), Gregory Hillyer (Feldman Gale), Michelle
O'Brien (O'Brien Jones), and Zachary Stern (Oblon, Spivak). The price ranges from $70 to $150.
CLE credits. See, notice.
|Saturday, January 21
Day three of a three day event titled "House Republican Issues
|Monday, January 23
The House will meet. Votes will be postponed until 6:30 PM.
The Senate will meet at 2:00 PM for morning
business. The Senate may also consider S 968
"Preventing Real Online Threats to Economic Creativity and Theft of Intellectual
Property Act of 2011" or "PROTECT IP Act".
6:00 - 9:15 PM. The DC Bar
Association will host a program titled "Introduction to Export Controls".
The speakers will be Carol Kalinoski (solo practitioner) and Thomas Scott (Ladner &
Associates). The price to attend this and the companion program on February 8 ranges from
$169 to $229. CLE credits. See,
notice. For more information, call 202-626-3488. The DC Bar has a history of barring
reporters from its events. Location: DC Bar Conference Center, 1101 K St., NW.
|Wednesday, January 25
The House will meet. Day one of a three day event titled "House
Democratic Issues Conference".
10:00 AM. The House Homeland
Security Committee's (HHSC) Subcommittee on Oversight,
Investigations and Management will hold a hearing titled "Is DHS
Effectively Implementing a Strategy to Counter Emerging Threats?". See,
notice. Location: Room 311, Cannon Building.
12:15 - 1:30 PM. The Federal
Communications Bar Association's (FCBA) Homeland Security and Emergency Communications and
State and Local Practice Committees will host a brown bag lunch titled "Emergency
Communications Policy Issues in the National Capitol Region". The speakers will be
interoperability coordinators for the national capital region (NCR),
Michele Farquhar (Hogan Lovells),
Chris Essid (Director of the DHS's
Office of Emergency
Communications (OEC), and Trey Forgety (National Emergency
Number Association). For entry upon arrival, call Alex Kreilein (DHS/OEC) at 202-603-8702.
Location: Bureau of Alcohol, Tobacco, and Firearms, Room 3200, 650 Massachusetts
5:00 - 7:00 PM. The Net Caucus will
host an event titled "15th Annual Kickoff Tech Policy
Exhibition & Reception". Free. Open to the public. Location:
Room 902, Hart Building.
|Thursday, January 26
The House will not meet. Day two of a three day event titled "House
Democratic Issues Conference".
2:30 PM. The Senate
Intelligence Committee (SIC) will hold a closed meeting. See,
notice. Location: Room 219, Hart Building.
|Rep. Smith Responds to
1/18. Rep. Lamar Smith (R-TX)
responded to recent criticism of HR 3261 [LOC |
"Stop Online Piracy Act" or "SOPA".
He stated in a
that "I realize some people are nervous because of misinformation about this
bill, but I am confident that ultimately the facts will overcome fears. We will
continue to work with members, outside organizations and stakeholders to reach
consensus and produce strong legislation that protects both intellectual
property and technology."
"Contrary to critics' claims, SOPA does not censor the Internet. It only
targets activity that is already illegal, and only targets foreign websites that
steal and sell America’s technology, inventions and products. And it is similar
to laws that already govern websites based in the U.S."
He continued that "I am open to constructive suggestions that protect American inventors
and intellectual property rights holders. Unfortunately, some critics simply want to maintain
the status quo which harms U.S. companies, consumers and innovators. Illegal piracy and
counterfeiting cost the U.S. economy $100 billion and thousands of jobs every year. Congress
cannot stand by and do nothing while some of America’s most profitable and productive industries
are under attack."
He concluded that "We need strong and effective legislation to protect American
technology and put foreign thieves out of business. I will continue to work to address
legitimate concerns and encourage members and stakeholders to provide substantive
recommendations for how best to address the problem of online theft."
Sen. Charles Grassley (R-IA) stated in a release
on January 18 that "It's critical we protect the intellectual property rights of our
businesses and fight online infringement, but at the same time, we can't do harm to the
internet, the Constitution, or the ability of businesses to grow and innovate. Internet piracy
is illegal, and we need to find a way that works for all sides. The current
Protect IP Act needs more due diligence, analysis, and substantial changes. As
it stands right now, I can't support the bill moving forward next week."
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