The Stop Online Piracy Act (SOPA), also known as H.R. 3261, is a bill that was introduced in the United States House of Representatives on October 26, 2011, by Representative Lamar Smith (R-TX) and a bipartisan group of 12 initial co-sponsors. The bill expands the ability of U.S. law enforcement and copyright holders to fight online trafficking in copyrighted intellectual property and counterfeit goods. Now before the House Judiciary Committee, it builds on the similar PRO-IP Act of 2008 and the corresponding Senate bill, the Protect IP Act.
The originally proposed bill would allow the U.S. Department of Justice, as well as copyright holders, to seek court orders against websites accused of enabling or facilitating copyright infringement. Depending on who requests the court orders, the actions could include barring online advertising networks and payment facilitators such as PayPal from doing business with the allegedly infringing website, barring search engines from linking to such sites, and requiring Internet service providers to block access to such sites. The bill would make unauthorized streaming of copyrighted content a crime, with a maximum penalty of five years in prison for 10 pieces of music or movies within six months. The bill also gives immunity to Internet services that voluntarily take action against websites dedicated to infringement, while making liable for damages any copyright holder who knowingly misrepresents that a website is dedicated to infringement.
Proponents of the bill say it protects the intellectual property market and corresponding industry, jobs and revenue, and is necessary to bolster enforcement of copyright laws especially against foreign websites. Opponents say that it infringes on First Amendment rights, is Internet censorship, will cripple the Internet, and will threaten whistle-blowing and other free speech.
The House Judiciary Committee held hearings on SOPA on November 16 and December 15, 2011. The Committee is scheduled to continue debate when Congress returns from its winter recess.
Contents
The bill would authorize the U.S. Department of Justice to seek court orders against websites outside U.S. jurisdiction accused of infringing on copyrights, or of enabling or facilitating copyright infringement. After delivering a court order, the U.S. Attorney-General could require US-directed Internet service providers, ad networks, and payment processors to suspend doing business with sites found to infringe on federal criminal intellectual property laws. The Attorney-General could also bar search engines from displaying links to the sites.
The bill also establishes a two-step process for intellectual property rights holders to seek relief if they have been harmed by a site dedicated to infringement. The rights holder must first notify, in writing, related payment facilitators and ad networks of the identity of the website, who, in turn, must then forward that notification and suspend services to that identified website, unless that site provides a counter notification explaining how it is not in violation. The rights holder can then sue for limited injunctive relief against the site operator, if such a counter notification is provided, or if the payment or advertising services fail to suspend service in the absence of a counter notification.
The bill provides immunity from liability to the ad and payment networks that comply with this Act or that take voluntary action to cut ties to such sites. Any copyright holder who knowingly misrepresents that a website is dedicated to infringement would be liable for damages. The second section increases the penalties for streaming video and for selling counterfeit drugs, military materials or consumer goods. The bill would make unauthorized streaming of copyrighted content a felony.
Ramifications
Gary Shapiro, CEO of the Consumer Electronics Association, spoke out strongly against the bill, stating that “The bill attempts a radical restructuring of the laws governing the Internet,” and that “It would undo the legal safe harbors that have allowed a world-leading Internet industry to flourish over the last decade. It would expose legitimate American businesses and innovators to broad and open-ended liability. The result will be more lawsuits, decreased venture capital investment, and fewer new jobs.”
Art Bordsky of advocacy group Public Knowledge similarly stated that “The definitions written in the bill are so broad that any US consumer who uses a website overseas immediately gives the US jurisdiction the power to potentially take action against it.”
According to co-sponsor Representative Bob Goodlatte (R-VA), chairman of the House Judiciary Committee’s Intellectual Property sub-panel, SOPA represents a rewrite of the PROTECT IP Act to address tech industry concerns. Goodlatte told The Hill that the new version requires court approval for action against search engines. The Senate version, PROTECT IP, does not.
A news analysis in the information technology magazine eWeek stated, “The language of SOPA is so broad, the rules so unconnected to the reality of Internet technology and the penalties so disconnected from the alleged crimes that this bill could effectively kill e-commerce or even normal Internet use. The bill also has grave implications for existing U.S., foreign and international laws and is sure to spend decades in court challenges. SOPA is the House version of a Senate bill called the Protect IP Act (S. 968) that is very different. As a result, both bills if passed in something resembling their current states will have to be considered by a conference committee.”
Technical concerns
It has been argued that open source software projects may shut down under this bill, under a provision which the EFF believes targets Mozilla, the browser used for about a quarter of all web searches. Mozilla refused in early 2011 to pull the Mafiaafire add-on from its website, asking “Have any courts determined that the Mafiaafire add-on is unlawful or illegal in any way?”
“It would cover IP blocking. I think it contemplates deep packet inspection” said Markham C. Erikson, head of NetCoalition, a group that includes Google, Yahoo and eBay. An aide to sponsor Lamar Smith said that the judge would decide what sort of blocking to order. Cary Sherman, Chairman and CEO of the RIAA wrote in a guest editorial for CNET that the proposed law targeted “only the illegal subdomain or Internet protocol address rather than taking action against the entire domain.” (sic)
Americans may simply switch to offshore DNS providers such as CloudFloor who offer encrypted links, said David Ulevitch, the San Francisco-based head of OpenDNS. U.S. entrepreneurs might also move offshore. “We can reincorporate as a Cayman Islands company and offer the same great service and not be a U.S. company anymore”, he said.
Andrew Lee, CEO of ESET North America, has expressed concerns that since the bill would require internet service providers to filter DNS queries for the sites, this would undermine the integrity of the Domain Name System. On November 17, 2011, Ars Technica reported the appearance of a new anonymous top-level domain, Dot-BIT (.bit), outside of ICANN control.
Edward J. Black, president and CEO of the Computer and Communications Industry Association, wrote in the Huffington Post that “Ironically, it would do little to stop actual pirate websites, which could simply reappear hours later under a different name, if their numeric web addresses aren’t public even sooner. Anyone who knows or has that web address would still be able to reach the offending website.”
Bill targets more than infringing website
A Center for Democracy and Technology paper says that the bill “targets an entire website even if only a small portion hosts or links to some infringing content.” Answering similar criticism in a CNET editorial, RIAA head Cary Sherman wrote: “Actually, it’s quite the opposite. By focusing on specific sites rather than entire domains, action can be targeted against only the illegal subdomain or Internet protocol address rather than taking action against the entire domain.”
According to A.M Reilly of Industry Leaders Magazine, under SOPA, culpability for distributing copyright material is extended to those who aid the initial poster of said material. For companies that use virtual private networks to create a network that appears to be internal but is spread across various offices and employees homes, any of theses offsite locations that initiate sharing of copyright material can put the entire VPN and hosting company at risk of violation.
DNS blocking and filtering
The Domain Name System (DNS) servers, most often equated with a phone directory, translate browser requests for domain names into the IP address assigned to that computer or network. The bill requires these servers to stop referring requests for infringing domains to their assigned IP addresses.
Representative Zoe Lofgren, Democrat, whose district includes part of Silicon Valley, and who has called the bill “the end of the internet as we know it”, on November 17 released and posted to her website a technical assessment she requested from Sandia National Laboratories of the House and Senate bills. Neither would effectively control piracy and they would delay implementation of DNSSEC, her statement said, summarizing Sandia’s response. Sandia National Laboratories is an agency of the US Department of Energy that does nuclear, computer, and military research.
The Sandia letter mostly agrees with a white paper criticizing the DNS provisions of the Senate bill. It disagrees with the contention of harm to DNSSEC implementation because, it says, DNSSEC remains so far mostly unimplemented although the need for it is clear.
An editorial in the San Jose Mercury-News agreed with Lofgren’s statement that the bill would mean “the end of the internet as we know it”, stating, “Imagine the resources required to parse through the millions of Google and Facebook offerings every day looking for pirates who, if found, can just toss up another site in no time.”
Center for Democracy and Technology lawyers David Sohn and Andrew McDiarmid, in an article for The Atlantic, wrote, “In addition to domain-name filtering, SOPA would impose an open-ended obligation on Internet Service Providers (ISPs) to prevent access to infringing sites…Preventing access to specific sites would require ISPs to inspect all the Internet traffic of its entire user base—the kind of privacy-invasive monitoring that has come under fire in the context of ‘deep packet inspection’ for advertising purposes.”
A white paper by several internet security experts, including Steve Crocker and Dan Kaminsky, wrote, “From an operational standpoint, a resolution failure from a nameserver subject to a court order and from a hacked nameserver would be indistinguishable. Users running secure applications have a need to distinguish between policy-based failures and failures caused, for example, by the presence of an attack or a hostile network, or else downgrade attacks would likely be prolific.”
Internet security and DNSSEC
There have been concerns raised that SOPA would harm the usefulness of the Domain Name System Security Extensions (DNSSEC), a set of protocols developed by the Internet Engineering Task Force (IETF) for ensuring internet security. A white paper by the Brookings Institution wrote that “The DNS system is based on trust,” adding that DNSSEC was developed to prevent malicious redirection of DNS traffic, and that “other forms of redirection will break the assurances from this security tool.”
House cybersecurity subcommittee chairman Dan Lungren told Politico’s Morning Tech that he had “very serious concerns” about SOPA’s impact on the Internet security protocol, DNSSEC, adding “we don’t have enough information, and if this is a serious problem as was suggested by some of the technical experts that got in touch with me, we have to address it. I can’t afford to let that go by without dealing with it.”
Detection considerations
Google voluntarily blocks child pornography using methods that begin by detecting fleshtones, said Google representative Katherine Oyama at the November 16 hearing, but does not know how to detect copyright infringement. Under current law, Google must rely on copyright holders to bring offending material to its attention.
Legal concerns
According to some opponents, its requirements would overturn the Digital Millennium Copyright Act’s (DMCA) process requiring copyright owners to submit notices of infringement to websites and ask for the infringing material to be taken down, legal observers say. “If any website sets itself up in a way that does not actively log or monitor user behavior, a rights holder can always allege that the site is “avoiding confirming” the use of the site for infringement. That rights holder allegation is sufficient to put the website at major risk of losing access to payment and ad networks,” said CDT lawyer David Sohn.
Provider suspensions will likely target entire accounts, said the Electronic Frontier Foundation, and the bill’s provisions “grant them immunity for choking off a site if they have a ‘reasonable’ belief that a portion of a site enable(s) infringement, (and) give the payment processors a strong incentive to cut them off anyway.”
Law professor Jason Mazzone wrote, “Damages are also not available to the site owner unless a claimant ‘knowingly materially’ misrepresented that the law covers the targeted site, a difficult legal test to meet. The owner of the site can issue a counter-notice to restore payment processing and advertising but services need not comply with the counter-notice”.
Effect on web businesses
Harvard Business Review blogger James Allworth wrote, “Is this really what we want to do to the internet? Shut it down every time it doesn’t fit someone’s business model?” concluding that the bill would “give America its very own version of the Great Firewall of China.”
Christian Dawson, COO of Virginia-based hosting company ServInt, predicted that the legislation would lead to many cloud computing and Web hosting services moving out of the US to avoid lawsuits: “I see SOPA as a stimulus package for Asia and Europe and their Internet economies,” he said.
Conversely, Michael O’Leary of the MPAA argued at the November 16 Judiciary Committee hearing that the act’s effect on business would be more minimal, noting that at least 16 countries block websites, and the internet still functions in those countries. Denmark, Finland and Italy block The Pirate Bay after courts ruled in favor of music and film industry litigation, and a coalition of film and record companies has threatened to sue British Telecom if it does not follow suit. Maria Pallante of the US Copyright Office said that Congress has updated the Copyright Act before and should again, or “the U.S. copyright system will ultimately fail.” Asked for clarification, she said that the US currently lacks jurisdiction over websites in other countries.
Copyright
Goodlatte stated, “Intellectual property is one of America’s chief job creators and competitive advantages in the global marketplace, yet American inventors, authors, and entrepreneurs have been forced to stand by and watch as their works are stolen by foreign infringers beyond the reach of current U.S. laws. This legislation will update the laws to ensure that the economic incentives our Framers enshrined in the Constitution over 220 years ago – to encourage new writings, research, products and services – remain effective in the 21st Century’s global marketplace, which will create more American jobs. The bill will also protect consumers from dangerous counterfeit products, such as fake drugs, automobile parts and infant formula.”
Rights-holders see intermediaries as the only accessible defendants. “This is the last stand—the guys who have the pipes,” says Peter Mensch of Q Prime, which represents bands such as Metallica and the Red Hot Chili Peppers.
Brooklyn Law School professor Jason Mazzone warned, “Much of what will happen under SOPA will occur out of the public eye and without the possibility of holding anyone accountable. For when copyright law is made and enforced privately, it is hard for the public to know the shape that the law takes and harder still to complain about its operation.”
DMCA
Critics of the bill, including Google, have expressed concern about the bill’s effect on provisions of the existing Digital Millennium Copyright Act which protect Internet companies that act in good faith to remove user-uploaded infringing content from their sites.
Goodlatte added, “We’re open to working with them on language to narrow [the bill's provisions], but I think it is unrealistic to think we’re going to continue to rely on the DMCA notice-and-takedown provision. Anybody who is involved in providing services on the Internet would be expected to do some things. But we are very open to tweaking the language to ensure we don’t impose extraordinary burdens on legitimate companies as long as they aren’t the primary purveyors [of pirated content]“. The DMCA provision known as safe harbor protects YouTube and other sites such as social networks hosting uploaded user material from liability, provided the sites promptly remove infringing material brought to their attention, removing “the risk that the few users among millions who post copyrighted material, libelous statements or counterfeit goods would subject the site to business-crushing legal liabilities.”
The MPAA’s O’Leary submitted written testimony in favor of the bill that expressed guarded support of current DMCA provisions. “Where these sites are legitimate and make good faith efforts to respond to our requests, this model works with varying degrees of effectiveness,” O’Leary wrote. “It does not, however, always work quickly, and it is not perfect, but it works.”
The EFF has warned that Etsy, Flickr and Vimeo all seem likely to shut down if the bill becomes law. According to critics, the bill would ban linking to sites deemed offending, even in search results and on services such as Twitter.
Jobs and the economy
On October 28, 2011, the EFF called the bill a “massive piece of job-killing Internet regulation,” and said, “This bill cannot be fixed; it must be killed.”
Sponsor Rep. John Conyers (D-MI) said, “Millions of American jobs hang in the balance, and our efforts to protect America’s intellectual property are critical to our economy’s long-term success.” Smith added, “The Stop Online Piracy Act helps stop the flow of revenue to rogue websites and ensures that the profits from American innovations go to American innovators.”
The MPAA representative who testified before the committee said that the motion picture and film industry supports two million jobs and 95,000 small businesses. A study in early 2011 found that the internet created 2.6 jobs for every job lost to it and that “in the mature countries we studied, the Internet accounted for 10% of GDP growth over the past 15 years. And its influence is expanding. Over the past five years, the Internet’s contribution to GDP growth has doubled to 21 percent.”
“Total U.S. commerce in 2008 (the latest year reported on) was about $22 trillion. Of this about $3.7 trillion was in the form of e-commerce, mostly over the Internet. Most of this (92%) was business-to-business,” said Harvard University’s Technology Security Officer Scott Bradner, citing census data in a discussion of the economic effects of net neutrality. US Department of Commerce figures for the third quarter of 2011 show a 13.7 percent increase for e-commerce from the third quarter of 2010 and a total retail sales increase of 8.2 percent for the same period. E-commerce sales in the third quarter of 2011 accounted for 4.6 percent of total sales, according to the Commerce announcement.
Startups and venture capital
Lukas Biewald, founder of CrowdFlower, stated that “It’ll have a stifling effect on venture capital. The venture capitalists have been pretty vociferous opponents of this bill. If it’s making investors nervous, that’s bad for me and other startup founders. No one would invest because of the legal liability.”
Booz & Company on November 16 released a study finding that almost all of the 200 venture capitalists and angel investors interviewed would stop funding digital media intermediaries if the House bill becomes law. More than 80 percent said they would rather invest in a risky, weak economy with the current laws than a strong economy with the proposed law in effect. If legal ambiguities were removed and good faith provisions in place, investing would increase by nearly 115 percent. The study was funded by Google and researched and written by Booz.
Counterfeit and misbranded drug industry
John Clark, spokesman for Pfizer, testified at the committee hearing that patients could not always detect cleverly forged websites selling drugs that were either misbranded or simply counterfeit. RxRights, a consumer advocacy group, issued a statement saying that Clark failed “to acknowledge that there are Canadian and other international pharmacies that do disclose where they are located, require a valid doctor’s prescription and sell safe, brand-name medications produced by the same leading manufacturers as prescription medications sold in the U.S.” They had earlier said that SOPA “fails to distinguish between counterfeit and genuine pharmacies” and would prevent American patients from ordering their medications from Canadian pharmacies online.
Bill sponsor Lamar Smith (R-TX) accused Google of obstructing the bill, citing its $500 million settlement with the DoJ of charges that it allowed ads from Canadian pharmacies, leading to illegal imports of prescription drugs. “Given Google’s record, their objection to authorizing a court to order a search engine to not steer consumers to foreign rogue websites is more easily understood,” Smith said at the hearing. “Unfortunately, the theft of America’s IP costs the U.S. economy more than $100 billion annually and results in the loss of thousands of American jobs.” Shipment of prescription drugs from foreign pharmacies to customers in the US typically violates the Federal Food, Drug and Cosmetic Act and the Controlled Substances Act, whether or not the drugs or the pharmacies are legitimate.
Free speech concerns
In an op-ed by Rebecca MacKinnon, she argued that making companies liable for users’ actions could have a chilling effect on user-generated sites like YouTube. “The intention is not the same as China’s Great Firewall, a nationwide system of Web censorship, but the practical effect could be similar”, she says.
According to the EFF, proxy servers, such as those used during the Arab Spring, can also be used to thwart copyright enforcement and therefore may be made illegal by the act.
On Time’s Techland blog, Jerry Brito wrote, “Imagine if the U.K. created a blacklist of American newspapers that its courts found violated celebrities’ privacy? Or what if France blocked American sites it believed contained hate speech? We forget, but those countries don’t have a First Amendment.” Similarly, the Center for Democracy and Technology warned, “If SOPA and PIPA are enacted, the US government must be prepared for other governments to follow suit, in service to whatever social policies they believe are important—whether restricting hate speech, insults to public officials, or political dissent.”
The AFL-CIO’s Paul Almeida, arguing in favor of SOPA, stated that free speech was not a relevant consideration, because “The First Amendment does not protect stealing goods off trucks.”
On November 18, 2011 the European parliament adopted by a large majority a resolution that “stresses the need to protect the integrity of the global Internet and freedom of communication by refraining from unilateral measures to revoke IP addresses or domain names.”
CNET correspondent Larry Downes wrote, “A bill that was to target only the ‘worst of the worst’ foreign Web sites committing blatant and systemic copyright and trademark infringement has morphed inexplicably into an unrestricted hunting license for media companies to harass anyone foreign or domestic—who questions their timetable for digital transformation.”
Penalties for illegal streaming
An aide to bill sponsor Lamar Smith has said, “This bill does not make it a felony for a person to post a video on YouTube of their children singing to a copyrighted song. The bill specifically targets websites dedicated to illegal or infringing activity. Sites that host user content—like YouTube, Facebook, and Twitter—have nothing to be concerned about under this legislation”.
Lateef Mtima, Director of the Institute for Intellectual Property and Social Justice at the Howard University School of Law expressed concern with the bill’s language, saying, “Perhaps the most dangerous aspect of the bill is that the conduct it would criminalize is so poorly defined. While on its face the bill seems to attempt to distinguish between commercial and non-commercial conduct, purportedly criminalizing the former and permitting the latter, in actuality the bill not only fails to accomplish this but, because of its lack of concrete definitions, it potentially criminalizes conduct that is currently permitted under the law.”
Mtima continued, “The Senate version requires that a video has more than ’10 performances’, which legal experts say is equivalent to ‘views’. In the House version, only 1 view is required. In the House version, the market value of licensing the work only needs to be $1,000 (a merely nominal licensing fee for any popular music) or greater to qualify as a criminal offense.”