Published by LawTechie - October 26, 2011 - LawTechie

Gary Shapiro, President and CEO of the Consumer Electronics Association, has published a scathing opinion in Forbes about the PROTECT IP ACT, S. 968 and its potential implications on current intellectual property law. Mr. Shapiro argues that the Act is nothing more than Hollywood trying to break the internet and is liable to hurt intellectual property innovation in several major ways. Let’s see how his arguments stand up to analysis of the text:

The PROTECT IP Act would allow copyright owners – movie studios and other content providers – simply to accuse a website of copyright infringement, which could lead to that site being shut down by court order and entire links to the site being wiped clean from the Internet. Any website with a hyperlink, such as Twitter, Facebook or a blog, would be subject to liability. More, non-infringing sites could be inadvertently shut down under the proposal.

The Protect IP Act provides that, “On application of a qualifying plaintiff following the commencement of an action under this section, the court may issue a temporary restraining order, a preliminary injunction, or an injunction, in accordance with rule 65 of the Federal Rules of Civil Procedure, against the domain name used by an Internet site dedicated to infringing activities, or against a registrant of such domain name, or the owner or operator of such Internet site dedicated to infringing activities…” In other words, the Protect IP Act allows plaintiff intellectual property owners to do what they can do now anyway: Go to court and move for an injunction against websites engaged in copyright infringement.

Contrary to Mr. Shapiro’s suggestion, the Protect IP Act does not provide any sort of “automatic” take-down of a website based on simple accusation. The Act specifically provides that an intellectual property owner must move for a court order pursuant to FRCP 65. This means that the plaintiff has to convince the judge that copyright infringement is going on, that plaintiff is more likely than not to win on the merits, and all that other good stuff which makes it not so easy to get court orders.

Mr. Shapiro writes:

For instance, the bill is so broadly written that, in theory, it would allow any copyright owner to shut down a legitimate retail website, such as Amazon or Best Buy, by alleging that one product being sold on the site could “enable or facilitate” an infringement.

Any copyright owner can shut down Amazon or Best Buy today if he or she can convince a judge to grant that court order. As I mentioned, this is a tall order. Since the Protect IP Act still requires the plaintiff to get a court order, it does not at all change what a plaintiff can do to fight copyright infringement under today’s intellectual property law.

Indeed, just as with today’s status quo, the Protect IP Act requires notice to the defendant and provides opportunities for the defendant to oppose or vacate a successful order.

So does the Protect IP Act add anything new to current intellectual property law as it relates to copyright infringement?

Now that’s the question. Really, it seems that the Act adds only one thing: It allows intellectual property owners to go after foreign infringers which they cannot so easily do today because our courts lack jurisdiction against foreign entities. The Protect IP Act enables the courts to pass their injunctions and other orders against US-based domain name registrars, search engines, and financial transaction providers who, in one way or another, facilitate the action of the “unreachable” foreign infringer (e.g., a US court cannot force a foreign website host to shut down a site but, under the Act, would be able to force Google to stop displaying that site in search results).

Again, all of the above is accomplished via court order, which is what intellectual property law requires today in order to shut down copyright infringement. The Act in no way lowers the standard for getting court orders (it actually reinforces the standard by citing to the Federal Rules of Civil Procedure). The only thing the Act seems to do is expand the reach of US courts, the pros and cons of which are better suited to a foreign policy debate rather than a domestic economics debate.

Mr. Shapiro’s characterization of this issue as “a question of whether the content sector can use the government as club to go after the innovation sector and everything it represents” seems somewhat misguided and knee-jerk. While I agree that any new law or regulation carries a serious risk of stifling business and innovation, I am (as yet) unconvinced that the Protect IP Act could even function as a regulation — again, it seems that the Act merely increases US foreign reach while doing nothing new as far as our domestic intellectual property law is concerned.

Update:

I allowed one of the Act’s paragraphs to slip past me:

5(a) In General- No financial transaction provider or Internet advertising service shall be liable for damages to any person for voluntarily taking any action described in section 3(d) or 4(d) with regard to an Internet site if the entity acting in good faith and based on credible evidence has a reasonable belief that the Internet site is an Internet site dedicated to infringing activities.

While this can, indeed, be construed to mean that an intellectual property owner could send a letter to, say, Google, asking the search engine to stop advertising a certain allegedly infringing site and, pursuant to this paragraph, Google could comply sans court order and be immune from a lawsuit, I cannot say that this changes the status quo much either. Website operators do not have any intrinsic “right” to have their site listed on Google (Google is, after all, a private company).

Further Update:

This article is meant merely to analyze the text of the Senate’s Protect IP Act in relation to public perception of what is in the bill; it is in no way mean to opine on the constitutionality of some of the bill’s articles with respect to the First Amendment (we do see quite a few problems there but will leave that to a future post).

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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