“Stop Online Piracy Act” (‘SOPA’): now who could be against such a bill, surely good citizens do not want to promote piracy. How ironic that just when dictators are falling to internet based revolutions, the United States in embroiled in a fight over this bill which opponent give labels such as ‘censorship’ and proponents describe as protecting American industry.   This is actually a replay of the fight started by Napster as the music and film industry watched their profits vanish/be stolen by ‘pirate’ Internet site.  Go over to the Lefsetz Letter if that last sentence puzzled you.  I don’t agree with everything the man says but I do enjoy reading his posts, like this recent one on SOPA.

I will focus on the actual text here because few article actually do so.  At the same time I tried to keep this short (honestly) so there are links to sources and additional reading at the end.  Also, for clarity I will only cover SOPA although there is a similar bill in the Senate called the Protect IP Act (‘PIPA’).  I will also include comments on the key differences offered by Lamar Smith in December.  His bill would substitute his text of SOPA by amendment.  This is called a Manager’s Amendment.  Lamar Smith office issued a summary of the changes his bill makes, some of the key points are discussed below.

Some of the general criticisms of SOPA is that it targets whole websites even if only a small part (maybe just one web page) violates the act. Furthermore, the act requires broad technical changes to networks within just 5 days of a court order.  The Lamar Smith alternative comes right out in Section 2 Savings Clause adding that nothing in the bill shall require constant monitoring of the network, requires a redesign of a network or use a particular technology, nor do anything that would impact the network integrity or security.  Furthermore, his bill removes the 5 day requirement and has a much more lenient standard (reasonable/feasible) of action required.

Most of the criticism of SOPA has focused on free speech and the potential fracturing of the Internet.  The idea is that if the U.S. regulates the DNS forwarding an alternative system could emerge and the tremendous ability of the Internet to connect the world would be jeopardized.  More to the point, in my opinion, nothing in any of these bills truly block access to any site.  The bills block the resolution of an IP address (a series of numbers) to the website name.  Type the numbers instead of the name and you go to the same Internet site.   Also, the ‘slippery slope’ argument is always used against legislation.  If we do such and such it will be the end of us all.  Still, it is hard to believe people (kids?) will not be clever enough to type in numbers instead of letters.  The rest of us not so clever (older) will just go to the iTunes store.  I do not have as much problem with Lamar amendment to the extent there is a judicial proceeding, but the immunity against voluntary acts and secondary liability are clearly taking us to where we have not been before (not in the good Star Trek way either).   As of this writing it seems passage of SOPA is unlikely as as President Obama has backed away from the bill and many supporters in Congress and even some the bills sponsors are withdrawing support after a day of Internet protests on Wednesday January 18.

 

Here is H.R. 3261 Sec 2 Savings and Severability Clauses

 SEC. 2. SAVINGS AND SEVERABILITY CLAUSES.

 (a) SAVINGS CLAUSES.—

 (1) FIRST AMENDMENT.—Nothing in this Act shall be construed to impose a prior restraint on free speech or the press protected under the 1st Amendment to the Constitution.

(2) TITLE 17 LIABILITY.—Nothing in title I shall be construed to enlarge or diminish liability, including vicarious or contributory liability, for any cause of action available under title 17, United States Code, including any limitations on liability under such title.

(b) SEVERABILITY.—If any provision of this Act, or the application of the provision to any person or circumstance, is held to be unconstitutional, the other provisions or the application of the provision to other persons or circumstances shall not be affected thereby.

Now, here is the Smith version

SEC. 2. SAVINGS AND SEVERABILITY CLAUSES.

(a) SAVINGS CLAUSES.

(1) FIRST AMENDMENT.Nothing in this Act shall be construed to impose a prior restraint on free speech or the press protected under the First Amendment to the Constitution.

(2) TITLE 17 LIABILITY. Nothing in title I shall be construed to enlarge or diminish liability, including vicarious or contributory liability, for any cause of action available under the Lanham Act or title 17, United States Code, including any limitations on liability under such title, nor shall awareness of, receipt of, or response to any notice provided under section 102 (b) or 103 (b), or any order issued or served under section 102 or 103, serve as a basis for determining eligibility for a limitation on liability under section 512 of title 17, United States Code.

(3) NO DUTY TO MONITOR.Nothing in title I shall be construed to impose a duty to monitor activity on the network or service of an entity described in section 102(c) or 103(c).

(4) NO TECHNOLOGY MANDATES.Nothing in title I shall be construed to impose a duty on an entity described in section 102(c) or 103(c) to design its network, technology, or service to forestall or prevent acts that would actually or potentially create a cause of action under such title, or to utilize any particular type of technology to comply with the requirements of such title.

(5) NO IMPACT ON SECURITY OR INTEGRITY. Nothing in title I shall be construed to authorize a court to require compliance with an obligation under section 102(c) in a manner that would impair the security or integrity of the domain name system or of the system or network operated by or on behalf of the party subject to the obligation. (b) SEVERABILITY.ÑIf any provision of this Act, or the application of the provision to any person or circumstance, is held to be unconstitutional, the other provisions or the application of the provision to other persons or circumstances shall not be affected thereby.

 

The Smith version also has some differences in the definitions sections and is organized slightly differently, mostly for the better.  Smith limits the definition of Internet Protocol Allocation to the American Registry of Internet Numbers (ARIN), limits definition of Internet Site to specified portion identified, narrows definition of Internet search engine to site where search is the primary function and removes owner from the definition of owner/operator.  It also affirms that all DMCA safe harbor (Section 512 of Title 17 DMCA) provisions are still valid.  These changes address many criticisms regarding the overly broad wording of the original bill.

Section 102. Action by AG to Protect U.S. customers and prevent U.S. support of foreign infringing sites.

This is the first action section.  Here the bill identifies actions against infringing Internet sites a court may require of  Service Providers, Internet Search Engines, Payment Network Providers and Internet Advertising Services.  This section allows the Attorney General to take legal action against Internet sites determined to be a “foreign infringing site”.  It also permits the Attorney General to do so even if the site has no legal presence in the United States.  Such presence is normally required for a court to have jurisdiction to decide a case.  This is called a ‘in rem’ action.  Now there are provisions for an Internet site to defend itself against such an action but only if it consents to U.S. jurisdiction which is unlikely.  This is compounded by the fact that an Internet site can be subject to such an action just because a small portion of the site falls within the definition of a “foreign infringing site”.  Also secondary liability is expanded beyond long-established law by making owners and operators are liable for this content.  Lastly, it requires Internet Service Providers, Internet Search Engines, Payment Network Providers and Internet Advertising Services to block, within 5 days of a court order, the DNS IP forwarding to the named site.

The Lamar amendment removes the 5 day requirement and requires reasonable measures and states there is no duty to monitor nor take any action that would compromise the network.

Here are the primary parts of Section 102-  the full text can be found here (will open separate window)

The main part of Section 103 is below.  The full text can be found here at the judiciary.house.gov site- Section 103 (link to full text of Sec 103)  The Lamar amendment/substitute can be found here.

 

SEC. 103. MARKET-BASED SYSTEM TO PROTECT U.S. CUSTOMERS AND PREVENT U.S. FUNDING OF SITES DEDICATED TO THEFT OF U.S. PROPERTY.

Section 103 enable any intellectual property owner who claims that an Internet site is infringing on its right may take legal action against such site much like the Attorney General can take action in Section 102.  In rem actions are authorized, a defense by a non-U.S. site requires consent to U.S. jurisdiction and it requires Payment Network Providers and Internet Advertising Services to take action within 5 days of a court order.  This section has been heavily criticized as allowing private persons to easily censor information.  It is interesting to note, current legal recourse against such site fall under the DMCA.  Google has stated most of its DMCA requests are directed at a competitor’s website.  Laurence Tribe makes a powerful free speech argument against this section.  He notes that the section permits the suppression of speech without a hearing in violation of the “prior restraint” doctrine,  the definition of “dedicated to theft of U.S. property” is unconstitutionally vague and liability for “enables, or facilitates” does not follow established law for such secondary liability.  Laurence Tribe letter to Congress can be found here and a letter in support of SOPA by another First Amendment expert Floyd Abrams can be found here.  I highly recommend reading the Tribe letter.

The Lamar Amendment/Substitute changes a qualified plaintiff to a person having standing to bring a civil action and limits injunctive relief to what is provided by the Federal Rules of Civil Procedure.

Here is the primary parts of Section 103- the full text can be found here (pop-up window)

SEC. 103. MARKET-BASED SYSTEM TO PROTECT U.S. CUSTOMERS AND PREVENT U.S. FUNDING OF SITES DEDICATED TO THEFT OF U.S. PROPERTY.

(a) Definitions- In this section:

(1) DEDICATED TO THEFT OF U.S. PROPERTY- An `Internet site is dedicated to theft of U.S. property’ if–

(A) it is an Internet site, or a portion thereof, that is a U.S.-directed site and is used by users within the United States; and

(B) either–

(i) the U.S.-directed site is primarily designed or operated for the purpose of, has only limited purpose or use other than, or is marketed by its operator or another acting in concert with that operator for use in, offering goods or services in a manner that engages in, enables, or facilitates–

• (I) a violation of section 501 of title 17, United States Code;
• (II) a violation of section 1201 of title 17, United States Code; or
• (III) the sale, distribution, or promotion of goods, services, or materials bearing a counterfeit mark, as that term is defined in section 34(d) of the Lanham Act or section 2320 of title 18, United States Code; or

 (ii) the operator of the U.S.-directed site–

(I) is taking, or has taken, deliberate actions to avoid confirming a high probability of the use of the U.S.-directed site to carry out acts that constitute a violation of section 501 or 1201 of title 17, United States Code; or

(II) operates the U.S.-directed site with the object of promoting, or has promoted, its use to carry out acts that constitute a violation of section 501 or 1201 of title 17, United States Code, as shown by clear expression or other affirmative steps taken to foster infringement.

 (2) QUALIFYING PLAINTIFF- The term `qualifying plaintiff’ means, with respect to a particular Internet site or portion thereof, a holder of an intellectual property right harmed by the activities described in paragraph (1) occurring on that Internet site or portion thereof.

(b) Denying U.S. Financial Support of Sites Dedicated to Theft of U.S. Property-

(1) PAYMENT NETWORK PROVIDERS- Except in the case of an effective counter notification pursuant to paragraph (5), a payment network provider shall take technically feasible and reasonable measures, as expeditiously as possible, but in any case within 5 days after delivery of a notification under paragraph (4), that are designed to prevent, prohibit, or suspend its service from completing payment transactions involving customers located within the United States and the Internet site, or portion thereof, that is specified in the notification under paragraph (4).

(2) INTERNET ADVERTISING SERVICES- Except in the case of an effective counter notification pursuant to paragraph (5), an Internet advertising service that contracts with the operator of an Internet site, or portion thereof, that is specified in a notification delivered under paragraph (4), to provide advertising to or for such site or portion thereof, or that knowingly serves advertising to or for such site or portion thereof, shall take technically feasible and reasonable measures, as expeditiously as possible, but in any case within 5 days after delivery the notification under paragraph (4), that are designed to–

(A) prevent its service from providing advertisements to or relating to the Internet site, or portion thereof, that is specified in the notification;

(B) cease making available advertisements for such Internet site, or portion thereof, that is specified in the notification, or paid or sponsored search results, links, or other placements that provide access to such Internet site, or portion thereof, that is specified in the notification; and

(C) cease providing or receiving any compensation for advertising or related services to, from, or in connection with such Internet site, or portion thereof, that is specified in the notification.

 

SEC. 104. IMMUNITY FOR TAKING VOLUNTARY ACTION AGAINST SITES DEDICATED TO THEFT OF U.S. PROPERTY.

I vote this section as the most underrated.  It grants immunity for voluntary blocking sites if there is a reasonable belief the blocked site is dedicated to the theft of U.S. property or violates its terms of service.  No judicial proceeding, just a ‘reasonable belief’ and a site can be blocked without any repercussions.  The Lamar Amendment changes Section 104 to a limitation on the scope of action against Internet sites to just the portion identified as infringing rather than the whole Internet site.  The Lamar Amendment then adds a new Section 105 regarding immunity for compliance incorporating actions taken against Internet sites endangering the public health.

 

SEC. 104. IMMUNITY FOR TAKING VOLUNTARY ACTION AGAINST SITES DEDICATED TO THEFT OF U.S. PROPERTY.

 No cause of action shall lie in any Federal or State court or administrative agency against, no person may rely in any claim or cause of action against, and no liability for damages to any person shall be granted against, a service provider, payment network provider, Internet advertising service, advertiser, Internet search engine, domain name registry, or domain name registrar for taking any action described in section 102(c)(2), section 103(d)(2), or section 103(b) with respect to an Internet site, or otherwise voluntarily blocking access to or ending financial affiliation with an Internet site, in the reasonable belief that–

(1) the Internet site is a foreign infringing site or is an Internet site dedicated to theft of U.S. property; and
(2) the action is consistent with the entity’s terms of service or other contractual rights.

 

Lamar Amendment/Substitute

SEC. 104. EFFECT OF ORDERS SERVED ON THIRD-PARTY ENTITIES

(a) RELIEF LIMITED TO SCOPE OF VIOLATION.—In any case in which only a specifically identified portion of an Internet site is identified by the court as a foreign in- fringing site or as an Internet site dedicated to theft of  U.S. property, and made subject to an order under section 102(b)(5) or 103(b)(5), the relief granted under such sub-section, and the obligations of any entity served with a copy of an order under section 102(c) or 103(c), shall be confined to that specified portion so identified and made subject to the order. Nothing in the order shall be interpreted to impose obligations on any entity served with a copy of the order with respect to any other portion of an Internet site not specified in the order.

SEC. 105. IMMUNITY FOR TAKING VOLUNTARY ACTION AGAINST SITES THAT ENDANGER PUBLIC HEALTH.

Section 105 addresses counterfeit medications sold on the internet  This section has not received as much publicity but it also grants immunity for voluntary action if the blocking was done “in good faith and based on credible evidence”.  The full text can be read here.

 

 

RESOURCES FOR FURTHER READING:

Pro Public Journalism for the Public Interest

SOPA for Dummies by anonymous (not perfect but simple explanation of IP forwarding)

Wikipedia

Electronic Freedom Federation

Text of SOPA HR 3261

Text of Lamar Smith Managers Amendment/Substitute to SOPA

Politico coverage

Wired magazine

 

The first sale doctrine states that a copyright owner’s rights terminate upon the sale of a protected work under section 109 of the Copyright Act. The rule applies to works “lawfully made” pursuant to the Copyright Act. Section 109 states:

(a) Notwithstanding the provisions of section 106 (3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.

This traditionally was used to prevent the first sale doctrine to apply to infringing works. A recent case has now made it clear that the ‘lawfully made’ invokes the copyright act as a whole. Therefore, if a work is not protected by the Copyright Act, it cannot receive the benefit of the first sale doctrine. The case was John Wiley & Sons v. Kirtsaeng, where the court held a work made outside the United States is not “lawfully made under this title” and therefore the first sale rule does not apply.
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(This is not legal advise nor does it create an attorney-client relationship. This is just a blog post. It cannot address the many different issues for individual cases.)

The DMCA Take-Down Notice
The first course of action when you find infringing works on the internet is to get it removed. This requires sending a DMCA letter as required under section 512(c)(3) “Elements of Notification”. A DMCA notice must be a written letter, signed (electronic s/s/ signatures are okay), under penalty of perjury, by the owner or person authorized to act on behalf of the owner sent to the ISP agent and provide sufficient contact information of the complaining party for the ISP to be able to respond. The ISP can be identified by using WHOIS.com. It must specify the copyright alleged to have been infringed, identify the infringing work and include contact information of the notifying party.

Internet Service Providers (‘ISPs’) routinely take down properly identified works although they usually will not remove anything that is not identified in the notice even if it would be easy to identify them. This means every location an infringing image, for example, appears must be identified. A recent U.S. court decision, however, gave copyright owners more power. The case stated that the notice may still give notice to an ISP of infringing works even if every instance is not identified. For example if a serial infringer can be identified by user name and the copyright works are identified to the ISP, the ISP may have the burden to remove the infringing works. The court stated,

“[b]ecause we conclude that the service provider was provided with a notice of infringing activity that substantially complied with the Act, it may not rely on a claim of defective notice to maintain the immunity defense provided by the safe harbor.”

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(This is not legal advise nor does it create an attorney-client relationship. This is just a blog post. It cannot address the many different issues for individual cases.)

Congress passed the Digital Millennium Copyright Act of 1998 (‘DMCA’) to try to modernize copyright law to deal with the growth of the internet and its easy access to infringing data. The DMCA has five titles including provisions implementing 1996 World Intellectual Property Organization (‘WIPO’) treaties and technologies controlling access to copyrighted material. This post will only cover Title II of the DMCA and its protections for internet service providers from copyright liability if certain procedures are followed. Title II of the DMCA is found in Section 512 of the Copyright Act.

DMCA enables internet service providers to avoid liability (‘safe harbor’) for copyright infringement. The law evolved, in large part, out of the 1995 court decision Religious Technology Center v. Netcom On-Line Communications, where the court tried to reconcile copyright law and the workings of the internet. The law covers four area of infringement: transmissions (512(a)), caching (512(b)), storage (512(c)), and location information (512(d)).
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Let’s review the basics covered over the past couple of weeks

Intellectual property, broadly speaking, refers to patents, copyrights, trademarks, and trade secrets. Patents and copyrights both arise from Section 8, Clause 8 of the Constitution.
“To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;” Trademarks originate from a federal statute, Landham Act, which Congress authorized based on the interstate commerce clause of the constitution. Trade secrets are not found in any federal statute, rather are only found in state common law.

Copyright law under section 102 protects “original works of authorship fixed in any tangible medium of expression.” The protection begins the moment it is fixed, although there are significant advantages to registering a copyright and using a copyright notice. Copyright gives you a bundle of rights that can each be transferred. A copyright is not a monopoly. Another author can build on it or change it into a new work, although there are limitations. In fact, the public has the right to freely use a work regardless of copyright protection under certain conditions. This is called “fair use” and is getting a lot of attention because of how easy copying images is on in todays connected world.

Unlike the artistic protection of copyright provides, patents protect the utilitarian- the machine or product of commerce. Patents are Section 101 of the Patent Act granted to “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof …”
An application for patent protection must qualify within one of the categories and be ‘new and useful’. We also discusses how software, plants, and nonfunctional designs may receive patent protection.

Trademark law protects the creativity used to distinguish a product from the competition. The Landham Act created a system of nationwide trademark registration, although registration is not required and, absent registration, the first to use a trademark has priority. You can register a trademark prior to actual use. A trademark can be a word, slogan or a graphic logo and may include a sounds, colors or even a smell as long as it is used to identify and distinguish his or her goods from others and to indicate the source of the goods. (15 USC 1127)

Trade secrets are not always considered when intellectual property is discussed. This may be because there is no federal legislation although most states have trade secret laws based on the proposed Uniform Trade Secret Act. However, some of the oldest and most valuable commercial information has been protected as a trade secret to this day. In the fast-moving high-tech world often a trade secret is the best protection. Trade secret protection only protects certain novel business information. The information must take sufficient steps showing it regards it as a secret. Just as a new but obvious product may not receive patent protection, new but easily knowable information will be considered a trade secret.

Intellectual property is often a company’s most valuable asset. Ironically, it’s abstract nature makes it easily overlooked. Often people are not willing to take time to protect intellectual property until after they see success and are being copied. Unfortunately, the competition moves fast and it may be too late to protect your idea or product once it enters commerce. Fortunately, a few simple and affordable steps can avoid costly mistakes. For more details please read the previous posts listed below and subscribe to the blog to be informed of future posts.

Copyright law

Trademark law

Trade Secrets

Patent law