Wyden Introduces OPEN Act as Reid Moves To Secure a January Vote on Protect IP Act

Access practice tools, as well as industry leading news, customizable alerts, dockets, and primary content, including a comprehensive collection of case law, dockets, and regulations. Leverage...

By Tamlin H. Bason  

Sens. Ron Wyden (D-Ore.), Jerry Moran (R-Kan.), and Maria Cantwell (D-Wash.) formally introduced the Online Protection and Enforcement of Digital Trade Act Dec. 17, the same day that Sen. Harry Reid (D-Nev.) maneuvered to bring about a vote on the Protect IP Act when the Senate resumes its next legislative session in late January.

Both bills concern rogue foreign websites that profit by infringing the intellectual property rights of U.S. businesses.

The Protect IP Act (S.968) was approved by the Senate Judiciary Committee May 26.

Unlike S.968 and the House's Stop Online Piracy Act (H.R. 3261), Wyden's OPEN Act (S.2029) would not allow U.S. rights holders to file private actions against foreign rogue websites in U.S. federal courts. Instead, the bill would amend the Tariff Act of 1930 in order to grant jurisdiction over these websites to the International Trade Committee, which already has the authority to prevent the importation of goods that infringe on a U.S. company's patents.

The OPEN Act also lacks provisions from the other two bills authorizing the Office of the U.S. Attorney General to order that a rogue website be blocked at the domain name system level, a remedy that has been subject to a great deal of criticism by opponents that claim such a remedy could make the domain name system less secure.

“The OPEN Act expands the ability of the ITC to investigate IP infringement— providing a forum for due process without messing with the inner workings of the Internet,” Wyden said in a press statement. “The same goals are met, without the collateral damage SOPA and Protect IP will leave in their wake.”

Senate Will Begin Debate on S. 968 Jan. 24

Wyden moved to introduce his bill just hours after Reid filed a cloture motion Dec. 17 to force a vote on whether to proceed on the Protect IP Act. Reid called that bill, which was introduced May 12 by Sens. Patrick J. Leahy (D-Vt.), Orrin G. Hatch (R-Utah), and Chuck E. Grassley (R-Iowa), “a bipartisan piece of legislation which is extremely important.”

Immediately after the Senate Judiciary Committee approved the Protect IP Act, Wyden issued a statement announcing that he would place a hold on the bill's move to the Senate floor.

After Reid filed the cloture motion, Wyden took the floor to reiterate his intent to filibuster the bill once it reaches the Senate floor.

“Over the past few weeks more than a million Americans have weighed in strongly in opposition to this legislation,” Wyden said, referring to the public's outcry of opposition both to the Senate's bill and to the House's Stop Online Piracy Act. “Therefore, I will be working with colleagues on both sides of the aisle over the next month to explain the basis for this wide-spread concern and I intend to follow through on a commitment that I made more than a year ago, to filibuster this bill when the Senate returns in January.”

OPEN Act First Circulated Dec. 9

Rep. Darrell Issa (R-Calif.), who is a staunch critic of both SOPA and the Protect IP Act, first hinted at the possibility of an alternative bill in the days leading up to a Nov. 16 House Judiciary Committee hearing on H.R.3261.

Issa and Wyden on Dec. 8 began circulating a document that they hoped would serve as a starting point for the legislation, and on Dec. 9 the lawmakers released the draft text of the bill. At that time, the public was invited to go to the website keepthewebopen.com in order to review and make comments on the draft bill and to share their concerns on SOPA and the Protect IP Act.

Bill Would Amend Tariff Act of 1930

S.2029 is a 44-page bill that contains six separate sections.

The second section is by far the most substantive component of the legislation. It would amend Title III the Tariff Act of 1930, 19 U.S.C. §1304 et seq., to create a new Section 337A, “unfair trade practices relating to infringement of copyrights and trademarks by certain internet sites.”

Under this section, “nondomestic” websites engaging in copyright or trademark infringement would be subject to investigations by the ITC, either under its own initiative or pursuant to a complaint. However, the ITC would lose power to take action against websites whose operators consent to the jurisdiction of U.S. federal courts for copyright and trademark actions.

For websites that do not submit to federal court jurisdiction, the ITC may issue a cease-and-desist order that can be served on the website. However, such an order cannot be issued until after the operator of the website has been given an opportunity to be heard.

The ITC would also be empowered to direct financial transaction providers to take “reasonable measures, as expeditiously as reasonable” to prevent transactions between rogue websites and U.S. customers. Online advertisers could similarly be ordered to take commercially reasonable as well as “technically feasible” measures to stop serving ads to a rogue website.

Such service providers would be immune from legal action arising from their compliance with such an order. Furthermore, service providers would be immune from action if they voluntarily cut off service to websites that credible evidence shows are dedicated to infringing activity.

In a press release, Wyden said, “The OPEN Act embraces remedies against true foreign, ‘rogue' sites that are the most effective: shutting off the money.”

ITC Would Appoint ‘Hearing Officers.'

The bill also creates authority for taking action against an “internet site that endangers the public health,” specifically by selling prescription medication in the absence of a valid prescription.

Section 3 of the bill would allow the ITC to appoint “Section 337B judges,” defined as hearing officers “other than administrative law judges” to handle such proceedings.

Section 4 would authorize the U.S. Department of Homeland Security to notify the owner of a trademark or copyright of suspicions that infringing goods are being imported.

The ITC would also be directed to promulgate regulations regarding “procedures for receiving information from the public about Internet sites dedicated to infringing activity” and other matters relating to the implementation of Section 337A.

The president would also be directed to issue a report two years after enactment of the bill on enforcement and effectiveness.

Opinion at http://pub.bna.com/ptcj/OpenAct.pdf    


Request Intellectual Property on Bloomberg Law