On September 20, 2010 Senate Judiciary Committee Chairman Patrick
Leahy, joined by nine other Senators, introduced S. 3804, the “Combating
Online Infringement and Counterfeits Act”. If enacted, this proposal
would expedite Department of Justice (DOJ) actions against domains that
abet the sale or distribution of unauthorized copyrighted materials and
counterfeit goods. It would also give U.S. law extraterritorial effect
by requiring certain actions of third parties beyond ICANN-accredited
registries and registrars.
The ICA certainly supports effective efforts to curb the online
piracy of copyrighted materials as well as the distribution of
counterfeit goods. But we also have some specific and general concerns
about the bill as introduced and intend to monitor its progress through
the legislative process and work with lawmakers and other parties of
interest to address those concerns.
At the outset, it’s important for domain investors and developers
to understand that this is in no way a new version of the Snowe bill of
several years ago, which would have set up a domain name trademark
infringement regime in addition to and in conflict with the
Anticybersquatting Consumer Protection Act (ACPA). S. 3084 focuses on
the activities facilitated by domains, and not on the domain name
itself. Further, the bill only authorizes actions by the Attorney
General and creates no new private cause of action.
Also, the seizure of domains involved in facilitating online
intellectual property (IP) infringement is not unprecedented. The DOJ
seized nine unauthorized movie streaming websites this spring. While S.
3084 would make such domain seizures/blockages a regular part of DOJ IP
enforcement actions, to the extent that it sets forth statutory
standards and requires judicial oversight that is probably a good thing.
And, while the bill establishes in rem jurisdiction against websites,
that precedent was established a decade ago by the ACPA.
But there are certain aspects of the bill that raise legitimate
concerns. Our review of its statutory language finds that it covers not
just websites that directly infringe IP but also those that include “the
provision of a link or aggregated links to other sites or Internet
resources”. While one hopes for prosecutorial discretion in utilizing
such power, the linkage nexus could encompass both search engines and
non-infringing websites that unintentionally provide 1-click access to
infringing materials.
The proposal also allows DOJ to establish a public list of domain
names that it believes are “dedicated to infringing activities but for
which the Attorney General has not filed an action”. Various parties
would be immunized from any negative actions they took against such a
listed website absent any judicial review to prevent mistakes or abuse,
and that seems like a highly questionable concept at odds with basic due
process.
In attempting to reach websites for which neither the registry or
registrar is domiciled in the U.S., the proposal gives DOJ the
authority to cause Internet Service Providers, financial transaction
providers, and advertising networks to block access to and withdraw
their services from such domains. This aspect of the bill may well be
opposed. The banking industry, for one, did not like being “deputized”
to withdraw payment services from Internet gambling websites and has
been hoping to get that legislation repealed – a goal shared by House
Financial Services Committee Chairman Barney Frank.
The proposal also lacks any consideration of defensive factors
such as notice and takedown policies to remove infringing materials and
links – and such policies have provided shields for such services as
Google and eBay in civil IP infringement litigation.
Online fair use and civil liberties groups may well raise their
own concerns. Public Knowledge, for example, has already issued a
statement that reads in part:
“The bill has some troubling political and technical
implications, particularly as it attempts to extend U.S. control over
the worldwide Internet addressing system.
“Domestically, we are
concerned that the bill would establish an Internet black list of sites
that the Justice Department thinks are ‘pirate’ sites but against which
it hasn’t taken action. Putting an innocent site on this list could
seriously harm the business of legitimate Web site operators. The
remedies in the bill for those guilty until they prove themselves
innocent are inadequate.
“We are also concerned about some of the vague
definitions of what constitutes an infringing site and of the level of
proof needed. It’s quite possible that this bill would have allowed
entertainment companies to throttle YouTube at the beginning of its
creation by alleging piracy and the young company would have been unable
to defend itself.”
The likelihood of enactment in the few remaining days of the
111th Congress is exceedingly slim. That said, Chairman Leahy has added
the bill to the Judiciary Committee’s calendar for consideration on
September 23rd – and we think that’s a bad idea. Our experience is that
no legislative proposal is perfect upon introduction and that proceeding
in regular order, with hearings that allow for constructive input and
subsequent amendment, is the sound way to create good law. Judiciary
Committee rules allow for any member to object to a bill and
automatically defer its consideration until the following business
meeting and we would hope that option is exercised on this proposal.
Aside from tightening the bill’s language, any consideration of
this measure should seriously consider some broader implications. These
include whether U.S. actions against domains for which there is no
domestic nexus will be cited as justification by foreign regimes that
regularly block their citizens’ access to websites that contain
“subversive” speech and ideas. Further, will such U.S. assertions of
extraterritorial authority against wholly foreign domains in any way
undermine ICANN’s legitimacy and thereby provide ammunition to those who
seek to transfer ICANN’s functions to the ITU or a similar body — a
development that would place DNS management solely in the hands of
governments to the exclusion of business and civil society?
The goals of this legislation are laudable. But when access to a website
is blocked, or when it is deprived of critical payments and advertising
services, the speech and commerce it facilitates are terminated. If
mistakes are made the operators of such a blocked website may have been
effectively denied the resources they need to obtain judicial redress.
Congress needs to proceed deliberatively so that all relevant
considerations are examined before a law this sweeping is enacted.