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Our Initial Take on the Protect IP Act

We’ve spoken a bit about copyrights already on this blog and plan on doing so quite a bit more in the future.  In our practice, we have seen many American companies damaged by the sale of pirated and bootlegged material on the internet. This material can range from a new movie or song to pharmaceutical products. The main issue surrounding this loss of billions of dollars to American creators is that usually the owners of the rogue websites, if not the domains and the hosting companies supporting these websites are found outside of the U.S., which greatly limits the power of the Department of Justice and copyright holders to prevent the sale of illegal material.

A recently proposed law, the “ Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property,” or Protect IP for short, was introduced to try to combat the problem of pirate websites with foreign domains hosted internationally. The Act was proposed by Senator Patrick Leahy (D-Vt.) as an attempt to respond to severe criticisms of an earlier bill attempting roughly the same thing, “Combating Online Infringement and Counterfeits Act” or COICA. Overall, the bill is aimed at protecting copyrighted and trademarked goods by giving the Department of Justice power to effectively shut down pirate or rogue web sites that may offer unlicensed copies of protected content. However, many severe criticisms still linger about Protect IP despite the recent changes, including from public interest groups, domain registries, and even members of Congress. While some of the areas of COICA receiving the largest criticism have been changed in the Protect IP Act, domain companies are generally still not satisfied with the overall bill.  In fact, some believe that the Protect IP Act is even worse than COICA.

Currently as drafted, Protect IP only applies to foreign domains . This could potentially help rights holders because lawsuits concerning domains outside of the U.S. are usually timely and costly to pursue. On the other hand, critics note that “fair use” laws may not be the same globally and other nations may use a similar law to pull down content from American domains that would otherwise be protected in the U.S.

Under the current provisions, the Act would require advertising networks and financial transaction service providers to end relations with foreign domains that were found to point to websites hosting trademarked or copyrighted material unlawfully. This would also include search engines to comply with the act. However, another new provision also encourages advertisers and financial transaction service providers to voluntarily end relations with domains they feel are hosting illegal material. Under the act, Protect IP would grant these service providers protection from any liability for damages inaccurately caused against domains.  This provision, which can be extremely helpful to the copyright holders, also opens up a large can of worms.  What would be the cost of compliance?  In addition, critics argue that because differences in the way the DNS system works around the world, this Act would in effect “fracture” the entire DNS system.

Another key provision of the act is that the Department of Justice is able to sue the foreign domain name holder. Protect IP has also added another stipulation to this that allows copyright and trademark holders to sue the foreign domain owner directly. After a lawsuit has been filed, drafted law would permit the Department of Justice or a private party to shut down a non-domestic website temporarily until the courts have made a decision concerning whether it violated copyright or trademark laws – which can be dangerous.

One of the harshest criticisms of COICA is that it was too vague in it’s definitions of the type of websites that could be shut down by the Department of Justice. However, the definition of an “internet site dedicated to infringing activities” is still vague in Protect IP. Critics warn that this may lead to innocent websites being temporarily shut down erroneously until court proceedings can take place.

Another large criticism of the bill was that it gives too much power to the Department of Justice to block non-domestic domains. Critics also noted that there were already other measures in place in prevent the illegal selling of copyrighted goods such as the 1998 Digital Millennium Copyright Act. Also under the DMCA, rights holders have the right to force site operators to remove some content (but not remove such websites from search engines); this has worked especially well with domains such as YouTube and eBay. Rights holders say, however, that these additional steps under Protect IP are necessary to curb piracy, particularly with movies.

Despite other disparagements, critics seem to be most concerned with the Act leading to legal and innocent domains being filtered.  This is our largest concern.  For instance, based on the way the Act is now written, an unrelated blogger on WordPress (if it was a foreign domain), could have their website shutdown because of something a fellow blogger did.

Our Initial Take

Although this seems to be a step in the right direction for protecting copyright and trademarked materials, this Act is simply not good enough yet. We agree that there need to be more protections for rights holders, however, we are hesitant to agree with an Act that could possibly infringe on the rights of innocent domain holders and raises so many legitimate questions.

This blog was written with the very helpful assistance of Heather Mims.

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2 Comments Post a comment
  1. Excellent writing! Thank you for this wonderful source of information.

    September 17, 2011

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