On Wednesday, October 26th Rep. Lamar Smith (R-TX), Chairman of the House Judiciary Committee, along with eight other cosponsors, introduced HR 3261, the ‘‘Enforcing and Protecting American Rights Against Sites Intent on Theft and Exploitation Act of 2011’’, also known as the “E-PARASITE Act”.
This House bill appears to be an even more controversial counterpart to the Protect IP legislation (S. 968), which has been languishing in the Senate since being reported from its Judiciary Committee months ago. While only Senator Ron Wyden (D-OR) has placed a formal hold on S. 968, we’ve heard that many Senators from both parties have approached their respective leadership offices and asked that the bill not be brought up for Senate debate until outstanding issues have been worked out. In turn, Senate Majority leader Harry Reid (D-NV) has reportedly told Senate Judiciary Committee Chairman Patrick Leahy (D-VT) that he will give the bill floor time in the Senate next spring – if the House has passed counterpart legislation by that time. So House passage of E-PARASITE seems to be critical not only in its own right but in clearing the way for Senate consideration of Protect IP.
While we are still digesting the complex 79-page House proposal, one provision stands out as particularly worrisome. It would require payment providers and ad networks to terminate their services to a website upon mere receipt of a letter from a rights holder alleging that the website was one “dedicated to theft of U.S. property”. Any domain registrant who has ever received an aggressive and unsupported cease-and-desist letter from a trademark attorney has got to be concerned by the prospect of having a domain’s ad and payment services shut down absent any court review. The bill would provide the website owner with the ability to seek after-the-fact judicial lifting of the ad and payment suspension – but this expensive and uncertain option would occur during a period when the website had been deprived of all income! Overall, this approach creates major due process concerns and clearly tips the balance against domain registrants and in favor of rights holders.
The bill’s provisions regarding foreign websites directed to the U.S. are even more draconian, requiring ISPs and search engines to block access to all websites placed on a “blacklist”. This has already led to charges that the bill would create a “Great Firewall of America”, and runs completely counter to the message that has been delivered by Secretary of State Clinton to other nations in support of Internet freedom.
Another major concern generated by the legislation is an apparent undermining of the careful balance worked out in the Digital Millennium Copyright Act (DMCA) that has allowed for flourishing innovation in the development of U.S.-based Internet services. Indeed, our initial reading of the bill is that it appears to require affirmative content filtering by domestic websites – a sharp departure from the DMCA’s notice-and-takedown approach for the removal of infringing content – and could be a death knell for all domains that provide a platform for user-generated content.
E-PARASITE was drafted with strong participation from Hollywood entertainment interests and the US Chamber of Commerce, while technology and public interest groups were largely excluded from that process. A wide range of high-tech trade groups and companies, search engines, and ISPs, along with a diverse range of civil society organizations ranging from the Electronic Frontier Foundation to the Tea Party, are expected to dig in and fight it.
The House Judiciary Committee will reportedly hold a hearing on the proposal on November 16th, with the intention of holding a “markup” to report it out of Committee shortly thereafter. U.S. domain investors and developers who have concerns about this bill should immediately contact their Representative and deliver that message, and at a minimum request that the Judiciary Committee hold multiple balanced hearings to explore all the aspects of this complex and controversial proposal before proceeding to any votes. A complete list of members of the House Judiciary Committee can be found at http://judiciary.house.gov/about/members.html .
ICA will be carefully monitoring House consideration of this bill and will be communicating its members’ concerns to Capitol Hill.