Published by LawTechie - October 27, 2011 - LawTechie

Yesterday I analyzed the Senate’s version of the Protect IP Act, concluding that the text did not support all of the harsh talk in the media about intellectual property laws harming innovation. Specifically, the article was meant to address all of the stated fears that the Protect IP Act would allow intellectual property owners to “destroy the internet” by forcing websites to shut down with a mere letter accusation of copyright infringement (this turned out not be the case). Growing confused as to why so many people seemed confused, I decided to take a look at the Stop Online Piracy Act, 112 HR 3261 (the House’s version of the Protect IP Act) and, lo and behold, it seems that (1) people are confusing the two versions of the Act, and (2) the House’s version is as bad as they say.

Here is the nasty section that has everyone up in arms:

Sec. 103. Market-Based System to Protect U.S. Customers and Prevent U.S. Funding of Sites Dedicated to Theft of U.S. Property.

That section outlines a “notice and take-down” procedure which is very similar to the current DMCA procedure for forcing websites to delete sources of alleged copyright infringement. Specifically, an intellectual property owner can send notice to “Financial Service Providers” (e.g., credit card gateways) and “Advertising Service Providers” (e.g., possibly Google, Yahoo, etc…) that a site they link to or support is engaged in copyright infringement, and said Provider must cut ties to the site (e.g., Google de-lists, Paypal stops processing, etc…) unless the site owner sends a counter-notification.

Compared to the Protect IP Act, the House’s version is indeed cause for alarm.

Where the Protect IP Act requires application for a court order to do any of the above, the House’s empowerment of intellectual property owners under it “market-based system” runs a substantial risk of internet censorship. Where judges have traditionally been stalwart defenders of the First Amendment — as I mentioned in the previous article, those court orders are a pretty tall order — notice and take-down procedures would make it fairly easy to silence foreign website owners who are unlikely to receive proper notice of their alleged copyright infringement when Google, for example, de-lists them.

Moreover, while the House’s act allows parties accused of copyright infringement to send counter-notice and then take the dispute to court, it is very much not the same thing to force a potentially innocent foreign business owner to spend resources in the US court system after their business has been effectively placed on moratorium pending judgment.

The Senate’s version of the Act requires a preliminary court order before take-down, which applications judges will analyze even in the absence of opposing counsel. The House’s version of the Act forgoes the judges and, in so doing, creates a far more serious risk of internet censorship.

LawTechie is a blog focusing on trends in tech and digital media. Areas covered include intellectual property, cyberlaw, venture capital, transactions and litigation as they relate to the emerging sectors. The blog is edited by the firm's partner Tim Bukher with contributions from the firm's experts in their respective areas of law.

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