Legal Bytes: SOPA – The debate over copyright infringement rages on

By David K. Hou
Posted: 5:48 pm Tue, January 24, 2012

Unless you’ve been living under a rock these last few weeks, you could not have escaped notice of the headlines surrounding the federal government’s attempt to stop copyright infringement on the Internet, through the Department of Justice’s take-down of file sharing site Megaupload late last week, to the hoopla involving Congress’s Stop Online Piracy Act and its sister legislation in the Senate, the Protect IP Act.

Further action by Congress on SOPA was recently halted amid an Internet “blackout” protests by sites like Google and Wikipedia, and a growing public outcry from its opponents: everyone from academians and the Electronic Frontier Foundation to such heavyweights as Microsoft, Twitter, Facebook and Google.

The Department of Justice’s prosecution of Megaupload and the fight over SOPA/PIPA are only just the latest skirmishes in the larger battle between balancing the interests of copyright holders and the interests of the general public’s modern expectations and perceptions of how it (we) should be able to control and access content (our own and that belonging to others) on the Internet.

Much had been debated over SOPA’s legitimacy. In a nutshell, SOPA was intended to permit the U.S. copyright holders (acting through the Department of Justice) to shut down primarily foreign-based websites (those with country-specific top-level domains, such as websites ending in .tv, .uk, etc.) known to be trafficking in infringing content.

SOPA would have enabled intellectual property rights holders (such as SOPA’s principal proponents, the Recording Industry Association of America and the Motion Picture Association of America) to force Internet service providers to essentially pull the plug on websites (which would otherwise be beyond the jurisdiction of U.S. law) that were determined to be hosting infringing content, and permit payment processors to shut down the payment accounts of such sites, all without due process.

SOPA would also have increased the scope of penalties for copyright infringement, including potentially criminalizing copyright infringement, while at the same time granting broad immunity to content providers or payment processors who proactively (i.e., without due process) shut down sites that they consider to be infringing copyright.

The vagueness of SOPA’s scope, as viewed by its opponents, opened the door for abuse and lack of accountability by content owners. Websites (and all of the content on them, even if non-infringing), could potentially have been shut down or confiscated without notice or prior adjudication of infringement; owners of legitimate content would have lost all access to their content.

Existing “safe harbor” protections would have been weakened and the immunity incentive granted to proactive service providers would potentially create an Internet “blacklist,” creating a situation rife with potential for anti-competitive abuses by content owners. (Imagine Google, which owns YouTube, not just filtering, but actually delisting competitive video search results from sites it “deemed” to be hosting copyrighted material, and you get the picture).

A day after the Internet protests against SOPA, the Department of Justice unveiled its indictment against file-sharing site Megaupload and, working with authorities in several countries, arrested several of Megaupload’s officials.

Under the 2008 PRO IP Act, U.S. based websites (such as those ending with .com) are already subject to being shut down by the federal government. It was Megaupload’s domain (a .com site), and its lease of some servers located in the U.S., as well as the cooperation of friendly foreign jurisdictions, which enabled Megaupload’s downfall. SOPA would have ostensibly extended the Department of Justice’s reach to shut down foreign sites even though it could not directly prosecute the entities behind such sites.

Few would dispute that copyright piracy is a bad thing, but statistics on the cost of piracy vary depending on the source, and so the issue of curbing copyright piracy remains very much alive. Balanced against the current framework of efforts to curb copyright infringement enforcement are concerns of such efforts’ potentially chilling effect on free speech under the First Amendment, as well as on technological innovation.

While courts have already determined that the First Amendment does not generally protect speech that consists of copyright infringement, there has been considerable debate over the potential for SOPA to be used and abused (under the thin guise of copyright infringement) to act as a restraint on the legitimate exercise of free speech rights; the inherent problem with regulation like SOPA being that shutting down websites (as opposed to prosecuting infringers directly) also eliminates any all other lawful expression hosted on that site. The perpetual danger with any such legislation is in throwing the proverbial baby out with the bathwater.

As I’ve written about before, entrusting cloud-based service providers comes with its own unique set of security concerns. We live in a technological age where our reliance on cloud-based services, whether for business or personal uses, is the norm; our expectations have risen to the level of an entitlement, to an “always on” unfettered ability to communicate and exchange information via the cloud — whether through proprietary services, Facebook, Twitter, or through the (legitimate) use of file-sharing services; First Amendment free speech rights are necessarily implicated when these communicated rights are potentially impinged upon. What we’ve witnessed in the SOPA debate is the see-saw balancing of these vying interests within the public discourse, and its effect on our lawmakers.

The story of SOPA/PIPA is likely far from over. The controversial issues raised by SOPA will likely be reconsidered and reworked. In the meantime, an alternative legislative proposal has been announced by U.S. Rep. Darrell Issa (R-Calif., and who had previously opposed SOPA). Dubbed the OPEN Act, OPEN would, among other things, shift enforcement of copyright infringement by “rogue” websites from the Justice Department to the International Trade Commission. As the debate continues over how governments balance regulating the Internet for copyright enforcement against legitimate uses, we’ll have to wait and see whether OPEN can survive the same level of due scrutiny and criticism that torpedoed SOPA/PIPA.

David K. Hou is a senior associate at Boylan Code LLP, concentrating his practice on Commercial Litigation and Intellectual Property matters. For more information, contact David at (585) 232-5300 or dhou@boylancode.com.