Chapter 385

(L-R) Ken Paulson, CEO of the First Amendment Center; Mitch Glazier, Sr. Exec. VP RIAA; Congressman Howard Berman (CA); Fred von Lohmann, Sr. Copyright Counsel Google; and Mark Montgomery, CEO of FLO thinkery. Photo: Donnie Hedden.

For songwriters, publishers and intellectual property owners, piracy and theft is an issue of paramount importance. This week’s discussion of the pending legislation, Stop Online Piracy Act (SOPA), hosted by the Copyright Forum at Belmont University and Nashville Songwriters Association International (NSAI) showed the seriousness of the issues and the strong emotions which surround them. SOPA attempts to build a framework of legal remedies against rogue sites that are located outside U.S. borders. (At the end of the article please click on some of the links with more information.)

Participants included Moderator Ken Paulson, CEO of the First Amendment Center; Mitch Glazier, Sr. Exec. VP RIAA; Congressman Howard Berman (CA); Mark Montgomery, CEO of FLO thinkery; and Fred von Lohmann, Sr. Copyright Counsel Google. Also in the audience was Tennessee Congressman Jim Cooper. The well-attended event was held at Ocean Way Studio on Music Row on Jan. 10.

Content owners and the tech community find themselves on different sides of the aisle with respect to SOPA. Both agree that intellectual property owners need to be compensated. But will the act ultimately stop piracy or will an unintended consequence be that it hinders the kinds of innovation that could solve the problem organically if left to the marketplace?

Let’s take a seat and join the session, in progress…. (remarks have been slightly edited for print)

Ken Paulson: The copyright issues explored here today were formulated during a two-year period in American history. In 1789 we ratified the U.S. Constitution and it contained a provision that essentially said if we are going to be a great nation and encourage creativity and inventiveness we need to make sure that people who do that kind of work are rewarded for it. The principles we are discussing today go back to the very birth of the republic.

Mitch Glazier: We currently have a law, the Pro IP act, that allows the Justice department to use its power to take down a website that is dedicated to theft if that site is in the U.S. So the next question is what happens when the Attorney General (AG) seizes a site but it then moves to the Ukraine and changes its URL? The site jumps to a foreign country, but is still stealing American product and peddling it back into the U.S. market. SOPA is about stopping their access to the US market, the biggest market in the world. The AG can’t seize a foreign site, but it can serve the order to the U.S. ISPs, ad services and payment providers and to cut off all affiliations with the site, effectively denying them access to the US market and/or payment through US intermediaries.

There are some differences between the house (SOPA) and senate versions (PIPA, Protect IP Act). The senate bill is domain name centric, the house bill is site centric bill so arguably if something is not applicable to a domain name, but it is for an FTP site it could still be covered. They are fairly similar, but have a few important differences. Only the U.S. AG can serve the order on either a search engine or ISP. No individual has the authority to deny access to the U.S. market—only the AG can make that decision. Another key point is the bill incorporates a high standard of due process. There is a good reason for doing that. Before you cut off access to something outside the U.S. you want to make very certain that you prove there is immediate and irreparable harm.

Fred Von Lohman: SOPA basically creates four new remedies.

• Site blocking: ISPs would be required to block sites from being accessible by U.S. users;
• Search removal: allow sites to be removed wholesale from search. (Infringing material that shows up in search results is being removed all the time under the 1998 law DMCA. Copyright owners already have that power. In the last year Google processed removals for more than 5 million items. What the bill does differently is to remove entire sites on a wholesale basis.)
• Ad networks would have to stop doing business with these foreign sites;
• Payment processors would also have to stop doing business with these foreign sites.

There’s a lot about these bills that Google and others in the tech community are fully on board with. The provisions regarding payments and ads make sense. Those were not part of the DMCA. Google has a payment processing arm and a large ad network and already works hard to do those kinds of things, we think others should too. Foreign rogue sites are all in it for the money. They are selling counterfeit goods or pirating material supported by payments and/or ads. Until you dry up the money supply they will keep showing up. It is easy to register a new domain and transfer your site. It’s the money that makes them exist. We are supportive of those two parts.

There’s also provisions that allow private citizens to sue American Internet companies if they believe we haven’t done enough. That is something we take very seriously. Private rights of action are often an invitation to abuse and can basically, put money into the pockets of folks who will hire unscrupulous lawyers to put pressure on American Internet companies that are trying to create jobs in this economy. So for us there are things in this bill we like and things we don’t. The most problematic thing in our view is the ideas of site blocking and search removal. It sets an incredibly dangerous precedent which moves this from an issue about enforcing American law to an international trade.

If the U.S. blocks Baidu.com at our borders what do you think China will do at their borders? More than 50% of Google’s revenue comes from outside of the United States. And that is true for many of the U.S. internet companies. If we can’t access markets around the world it creates a huge problem for our economy, our content creators, and future growth. We agree that enforcing domestic law and cutting off the money is important. But in our view, for the USA to reach for the censorship tool sets up a dispute that will hurt a lot of American companies. So we don’t believe site block and search removal should be in there. It’s a dangerous precedent.

Congressman Howard Berman: A massive amount of what happens on the Internet is about distributing infringing materials. That has a huge cost, in job losses and disincentives to creators who are concerned about what the rewards will be in a world where everything is free online. People want government to regulate finance, home mortgages and more, but online they don’t. Yet online there are scams, consumer fraud and more. There are estimates that 20-25% of what goes on in the internet is involved in the distribution of stolen files. For the government to walk away from a huge problem is wrong. It’s not just about music or motion pictures, people use the internet to buy counterfeit drugs, not just cheaper drugs, pills that don’t do what they are supposed to do which gets to life and health issues.

Fred Von Lohmann: Prominent domain name experts say is that meddling with domain name servers [site blocking] will create incentive for American Internet users to hunt for [and others to create] what would be a less secure domain name service and is a bad idea. This is not a debate as Congressman Berman suggests about whether we should have no government regulation of the internet. Copyright is important, but we have the DMCA and other laws and we are in favor of half the things this law proposes.

Mark Montgomery: Creators should be compensated for their work. That is the right position to take. The key to this whole problem is balance. And there is a lack of trust on the part of consumers with the incumbent industries that are perceived as sponsoring this bill. Is this just a way to return ourselves to the days before ubiquitous distribution? Back to when the industry could tightly control its content? Regardless of what industry we discuss, the reality is that the way out of these issues is through innovation, not by attempting to litigate or legislate market share. Historically litigation doesn’t work very well. The consumer is speaking with their wallets and is empowered at a higher level than ever before. I was fortunate to be in the audience at the launch of the iTunes music store. Steve Jobs said, “We need to provide a compelling alternative to free.” At every step in the process, the incumbents have fought change. The idea that the legislation has changed significantly has not altered the consumer’s perception. There is reason to distrust the content industries historically because of their past behavior. That said, it’s absolutely not right for consumers to steal music. We need to deal with those offenders, but there needs to be balance in all this and that is what I am looking for. So to me, innovation is the crux of it all. How do we protect the rights of the creators, without stifling the innovation that has brought us so much.

• • •

Links About The Bill

http://www.fightonlinetheft.com

Representative Marsha Blackburn

NSAI

Go Daddy No Longer Supports SOPA