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By Tamlin H. Bason
If Congress does not do something to help prevent online piracy then “the U.S. copyright system will ultimately fail,” Register of Copyrights Maria A. Pallante said during her testimony before the House Judiciary Committee Nov. 16.
Pallante was one of the witnesses asked to give testimony on the House's Stop Online Piracy Act, H.R. 3261, which is aimed towards equipping U.S. law enforcement agencies, and rights holders, with the tools necessary to combat the massive amount of infringement that takes place over the internet—often by foreign actors.
“The U.S. copyright system is based on a set of exclusive rights, and if those can't be enforced and can be usurped then they will become meaningless,” Pallante testified.
H.R. 3261 was introduced Oct. 26 by Rep. Lamar Smith (R-Texas), chairman of the House Judiciary Committee (209 PTD, 10/28/11). Proponents claim the bill—along with its Senate counterpart the Protect IP Act—is both necessary and overdue, as evident by the massive amount of copyright infringement and counterfeiting that is taking place online, depriving American innovators of the fruits of their labors (215 PTD11/7/11). Critics argue that while both bills are overbroad, the House bill is especially troubling because it would place new burdens on internet companies and thus results in an uncertain legal environment that could stifle innovation.
Smith spent a sizeable portion of his opening remarks criticizing Google Inc. for seeking to “obstruct the Committee's consideration of bipartisan legislation.” Smith did not cite any specifics of how Google tried to prevent the legislation from going forward. Rather, he rehashed Google's recent forfeiture of $500 million to settle claims that it allowed Canadian pharmacies to purchase AdWords in order to target and sell prescription drugs to U.S. consumers in violation of Food and Drug Administration regulations.
“Given Google's record, their objection to authorizing a court to order a search engine to not steer consumers to foreign rogue sites is more easily understood,” Smith said.
Katherine Oyama, Google's copyright counsel, said that the search engine was not against combating online piracy. Google dedicates its “best engineers” and millions of dollars annually to combat online piracy. Furthermore, Google tirelessly processed take-down notices sent pursuant to the Digital Millennium Copyright Act, which has resulted in over five million take downs so far this year, Oyama said.
“We are as motivated as anyone to get this right,” Oyama said. “But the Stop Online Piracy Act is not the right approach.”
Oyama said that the bill is overbroad, and “undermines the Digital Millennium Copyright Act, which has for more than a decade struck a balance.”
Part of the problem, Oyama said, is that actions may be brought—by a private rights holder who targets the website's payment system—against any website that “enables or facilitates” infringement. This right of action, which Oyama said is already overbroad, is further extended by the fact that such actions may be brought against a website in which a “portion” of the site was “primarily operated for” infringement.
Under this language, Oyama said that any website that relies on user-generated content could be susceptible to an action under Section 102 of the bill because such content could be infringing, unbeknownst to the website owner. Oyama said “Congress got it right under the DMCA. It leaves up legitimate content. It takes down infringing content.”
On this point, Oyama and Rep. Howard Berman (D-Calif.) got into a testy exchange regarding whether the DMCA has been effective in eliminating piracy. Berman criticized Google for not de-indexing known infringement websites such as Pirate Bay. Although Google can remove a single page pursuant to a DMCA takedown request, the company cannot, under existing statutory authority, prevent Pirate Bay from appearing in users' search results when they query that phrase.
Berman asked whether it would make sense to provide Google with such a tool. “You cannot look at what is going on since the passage of the DMCA and say that Congress got it just right,” Berman said.
Michael O'Leary, senior executive vice president global policy and external affairs for the Motion Picture Association of America, said, “Fundamentally, this is a bill about jobs.”
His testimony stressed that not only does online piracy hurt American actors, producers, and directors, but it has a profound impact at every level of the entertainment industry. He said that everyone, from stunt men, to caterers, to contractors who work on movies sets, is hurt when pirates are able to put unauthorized content online.
“When we are given an opportunity to compete globally, we succeed,” O'Leary said. “Where we have trouble is where we don't have the opportunity to compete freely. And one of the problems we have is with people who are trying to steal our stuff.”
John Clark, chief security officer of Pfizer, was even more blunt. He noted that online sales of counterfeit pharmaceuticals can have a devastating effect, particularly when the counterfeit medicine either does not have the active ingredient of the authentic medicine, or contains toxic ingredients.
“My biggest fear is that counterfeit medicines are not seen as a serious crime yet,” Clark said. He added that while it was almost certain that counterfeit medicine was resulting in deaths, it was difficult to calculate the full scope of the problem.
Both O'Leary and Clark supported the bill in its current form. Another witness, Linda Kirkpatrick, group head of customer performance integrity at MasterCard, detailed the extensive efforts that her company has taken on its own to combat online piracy. In her written testimony, Kilpatrick identified “a number of key areas where we believe that changes to the bill would ensure that MasterCard can continue to play an appropriate and effective role.”
In one suggestion, MasterCard said that the five-day window within which a payment processor must cut off the funds to a website after being served notice by a rights holder would be difficult to comply with, and is “an artificial deadline.”
Ultimately, Rep. Bob Goodlatte (R-Va.) seemed to agreed that there may be some room for improvement with the bill. While he called it “a good bill,” he said “A number of the issues raised about it need to be carefully addressed.”
Both Reps. Darrell Issa (R-Calif.) and Zoe Lofgren (D-Calif.) criticized the bill in its current form, with Issa saying that the bill “fails to use tools that are generally better than the tools we have at our disposal.”
Issa then said that he would soon introduce a competing bill that would vest continuing jurisdiction to hear online piracy cases with the International Trade Commission.
Issa suggested that the ITC would be an appropriate panel to hear piracy cases and to grant only injunctive relief, similar to the way it currently does with patent infringement cases.
Lofgren took issue with the “dismissive” nature in which opposing views were being treated by her fellow lawmakers on the committee. She was referring to various colleagues who had chided the bill's opponents for claiming that SOPA would “kill the internet.”
“I understand why the cosponsors of the legislation are not happy with the widespread criticism of the bill, but I think impugning the motives of the critics rather than engaging in the substance of the criticism is a mistake.”
Lofgren, who agreed that online piracy was an issue that needed to be addressed, said that H.R. 3261 is not the best approach.
Google also agreed that online piracy needs to be addressed. However, Oyama argued that rather than focusing on the public-facing aspects of an infringing website by engaging in domain name system filtering, the better approach would be to follow the money.
Oyama pointed out that WikiLeaks was shut down only after law enforcement targeted the payment networks that the website relied on.
Pallante said that while following the money is a good start, “it does not bring in everybody in the ecosystem.” She pointed out that ISPs are not affected by a follow the money approach, and that many of the most offensive sites simply give the pirated content away and do not run advertisements.
Berman said that it was not enough for Google and other Silicon Valley companies to simply criticize H.R. 3261 and to offer vague suggestions. “The tech community needs to put forward concrete and specific recommendations for how to deal with this problem,” Berman said.
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