Content Industry Rejects Alternative to SOPA, PROTECT IP

The bill would authorize the ITC to consider petitions from private rights holders and initiate investigations against foreign websites that provide illegal digital imports or facilitate the importation of counterfeit goods. If the ITC finds that a website is “primarily” and “willfully” engaged in infringement of U.S. IP or willfully enabling the importation of counterfeit goods, the agency would issue a cease and desist order that compels financial transaction providers and Internet advertising services to cease business with the site. The bill would also offer immunity for financial providers and advertising companies that comply with ITC orders.

The OPEN Act seeks to challenge two bills aimed at curbing online theft: the PROTECT IP Act, S-968, introduced by Senate Judiciary Committee Chairman Pat Leahy, D-Vt., and SOPA, HR-3261, introduced by House Judiciary Committee Chairman Lamar Smith, R-Texas. Leahy and Smith argue that their bills are necessary to protect American jobs, which they say are being lost through the theft of IP online.

Issa dismissed comments attributed to a House Judiciary aide that called the legislation a “dramatic and costly expansion of the federal bureaucracy,” in an interview late Wednesday night. “It costs more to make a federal judge of the regular court than it costs to make an administrative judge of the International Trade Commission,” Issa said. “The really interesting question is which can dispose of a case faster? Administrative law judges with flexibility and jurisdiction, or a federal court case that can go on with Department of Justice and lawyers for eons,” he told us. “I can tell you an administrative law judge is a lot cheaper and easier and quicker than you can get a lifetime-appointed federal judge."

Issa said he felt positive the ITC could handle the potential influx of IP cases his proposal would create. “We are limiting this to foreign piracy as opposed to SOPA, which included the whole world and all the U.S. There is a much smaller world that [the ITC] will be dealing with than SOPA so by definition we will use less judges than they would use,” he said. “The additional case load is likely to be handled with existing judges and only a small amount of additional counsels.”

Members of the content industry largely opposed the legislation and issued a series of separate statements that commended the bill for addressing the issue, but dismissed it for not adequately curbing the threat. “While the creative community appreciates the recognition by bill sponsors of the need to address massive online infringement, the ‘Digital Trade Act’ unfortunately fails that test on a number of fronts,” said Copyright Alliance Executive Director Sandra Aistars. Specifically the proposal “sets up impossible procedural and evidentiary burdens for enforcement; is rife with loopholes that allow rogue sites to escape liability; and does not require participation by Internet intermediaries like ISPs and search engines,” Aistars said.

The MPAA immediately denounced the new bill as a false alternative to the SOPA and PROTECT IP bills. “This draft legislation fails to provide an effective way to target foreign rogue websites and goes easy on online piracy and counterfeiting,” said Michael O'Leary, MPAA senior executive vice president-global policy and external affairs. “By changing the venue from our federal courts to the U.S. International Trade Commission, it places copyright holders at a disadvantage and allows companies profiting from online piracy to advocate for foreign rogue websites against rightful American copyright holders."

But Center for Democracy and Technology Senior Policy Counsel David Sohn disagreed with the MPAA argument. “To suggest that a follow-the-money approach is going easy on rogue foreign sites doesn’t make sense to me and is inconsistent with everything we have learned.” The OPEN Act shows that “it is possible to craft a legislative proposal that could make a difference without causing all the collateral damage that the critics of SOPA and [PROTECT IP] are worried about,” Sohn said. “Targeting the money going to these sites will be by far the most effective approach. Far more effective than creating a facade of blocking which doesn’t work.”