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OPEN Act Would be Ineffective at Stopping Online Piracy


Written by Gene Quinn
Patent Attorney & Founder of IPWatchdog, Inc.
Principal Lecturer, PLI Patent Bar Review Course
Posted: February 15, 2012 @ 8:30 am

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Congressman Darrell Issa (R-CA)

Recently Congressman Darrell Issa (R-CA) introduced the Online Protection and Enforcement of Digital Trade (OPEN) Act. See House version of OPEN Act. Senator Ron Wyden (D-OR) introduced the Senate version of the OPEN Act in December 2011.  It is hoped by many that the OPEN Act may be able to achieve a consensus where the Stop Online Piracy Act (SOPA) and PROTECT IP Act (PIPA) failed earlier this year. For more see Stopping Online Piracy in the Age of Entitlement and Will Congress Break the Internet?

Simply stated, the OPEN Act would be completely and totally ineffectual and, therefore, it must be opposed.  There is simply no point in enacting more pointless legislation, we have enough pointless legislation already.

Anyone who is at all familiar with intellectual property knows that thanks to the digitization of content and the advent of the Internet infringement is rampant.  With great frequency articles posted to IPWatchdog are cut and pasted and posted to various websites.  On a daily basis companies and even government agencies are copying IPWatchdog articles verbatim and circulating them internally, presumably believing that the internal copying and distribution is not copyright infringement.  Being a content creator, whether large or small, is exceptionally difficult because most people either don’t care or they don’t stop to think about what they are doing.

Content creators cannot create in a vacuum devoid of economic reality.  If you take eyeballs away and/or provide things for free that are supposed to be paid for you are causing injury and making it all the more difficult to be a content creator.  Think about it for a second.  The content that you most value, is that created by commercial enterprises or people just doing it for free as a hobby in their spare time?  If you are honest with yourself we both know the answer.

The industry needs, and deserves, a real solution to rampant infringement before it is too late and there are few, if any, content creators willing to invest in the creation of original content.  The OPEN Act needs much work, and in fact to be a solution should more closely approximate SOPA.  In fact, rather than throwing SOPA out with the bath-water it should be used as the framework, not supplanted with an entirely new and completely ineffectual solution.

What is truly tragic, however, is that real attempts to protect artists, content creators and the companies that invest in creation have been thwarted by those who would prefer to protect blatant copyright infringers.  Pathetic if you ask me.  But what is more pathetic is the fact that Congress would consider OPEN an appropriate compromise.  Giving in to protests and offering an ineffectual solution for industry isn’t acceptable.  When is this Congress going to wake up and start protecting the rights of productive members of our society rather than giving into the tantrums of freeloaders?

The OPEN Act, as introduced in the United States House of Representatives, requires businesses, individual artists and creators from across the country to litigate claims of flagrant copyright infringement against foreign rogue sites in Washington D.C., in front of the International Trade Commission (ITC) rather than in their home jurisdictions. This provision alone makes the OPEN Act completely impotent, at least as far as the overwhelming majority of artist and content creators are concerned. Sure, large entities may be capable of going after foreign rogue websites at the ITC, but what about smaller businesses and individuals? Sometimes you have to wonder whether Congress is at all in touch with the average person and small businesses that are the backbone of the U.S. economy.

Why does litigating at the ITC make no sense as a requirement? Other than mandating the jurisdiction and preventing choice of forum, which is nearly a sacred principle in the federal judicial system, the proposal raises numerous other problems. For example:

1. Many, if not most, firms that specialize in litigation before the ITC are large law firms, or at least firms with a Washington, D.C. presence. What this means is that the corresponding hourly rates for litigation before the ITC are quite high. Independent artists, content creators and small businesses are unlikely to be able to afford such representation, particularly where no damages can be recovered against the infringing site.

2. The procedure followed when a complaint is before the ITC is substantially different than the procedure followed in a Federal District Court. The practice peculiarities before the ITC increase the costs and burdens of using the forum, further making it an unsuitable forum for independent artists, content creators and small businesses. For example, litigants at the ITC must engage in a detailed pre-suit investigation and produce voluminous documentation supporting their claims even before institution of an investigation by the ITC. This process typically lasts several months and requires meetings with the ITC for evaluation of a detailed complaint and evidentiary submission prior to the opening of a proceeding. In Federal District Court the process is dictated by the Federal Rules of Civil Procedure, which rely on the substantially less onerous “notice pleading” rules. Notice pleading simply requires that parties plead their allegations and defenses in short plain statements sufficient for the parties and the court to understand the allegations and identify the issues, and disagreements, presented in the dispute. If this process is good enough for copyright infringement, patent infringement, trademark infringement, Antitrust disputes and the literally many hundreds of other types of disputes handled by Federal Courts, why isn’t it good enough to stop blatant, flagrant copyright infringement by foreign rogue websites that don’t care what damage they do to U.S. industry and the U.S. economy?

Indeed, even simple claims at the ITC can cost millions of dollars to litigate.  Which independent artists, content creators or small businesses can afford millions of dollars in legal fees?  Allow me to answer — NONE!  How big do you have to be to see millions of dollars in legal fees as a path worth choosing?  Simply put, the OPEN Act would only benefit the largest of the large.  Congress will once again throw “the little guys” under the bus.

But surely determinations by the ITC will be better and more uniform than decisions of 94 disparate Federal District Courts spread all over the country, right?  Well, you might think that but there is no requirement in the OPEN Act that the hearings officer at the ITC have any intellectual property experience.  The only requirement of the newly created position of hearings officer is that appointees “shall possess a minimum of 7 years of legal experience and be licensed to practice law…” The Commission “may promulgate such other regulations,” but are not required to do so.  Why not just require at least some technical expertise and relevant intellectual property experience in the statute?  So we have to hope that the Commission does the appropriate thing.  Placing faith in government to do the right thing?  Sounds rather naive given the plight Congress and the Executive Branch have cooked up for us over so many years, don’t you think?

But the OPEN Act will certainly address the root problem, right?  Not so fast!  The OPEN Act would require proof that the foreign rogue website is primarily and willfully engaged in copyright infringement.  Perhaps the niceties of proof have escaped Congress, but isn’t conclusively determining willfulness a question about the state of mind of the infringer?  How is the complainant in an ITC proceeding going to be able to proof willfulness if the rogue operator simply refuses to participate in the U.S. proceeding?

Interestingly, even if you can afford to go to the ITC and you figure out how to handle proving the state of mind of a party that surely won’t submit to U.S. jurisdiction, the OPEN Act would still be ineffectual for its stated purpose.  You see, pursuant to Section 337, the Commission is authorized to issue two types of remedy orders: (1) exclusion orders; and (2) cease and desist orders.  An exclusion order directs the U.S. Customs and Border Protection to exclude articles from entry into the United States. A cease and desist order directs the defendant in the Commission investigation to cease its unfair acts. Unlike exclusion orders, cease and desist orders are enforced by the Commission, not by U.S. Customs.

Unfortunately, the OPEN Act only authorizes cease and desist orders, not exclusion orders.  Exactly how is the ITC going to get foreign rogue websites to comply with a cease and desist order?  Ask pretty please, perhaps?  It is ridiculous to think that those who flagrantly are infringing copyrights will comply with a cease and desist order, even if it comes with sugar on top!

Why in the name of logic would Congress want to provide an ineffectual and extremely expensive paper-tiger remedy? The fact that this non-solution will make them feel good, allow for the issuance of press releases and the appearance of an accomplishment doesn’t change the reality that OPEN will not be a solution, pure and simple.

It almost seems as if Congress doesn’t understand the industry, or perhaps they want to make it more difficult to shut down foreign rogue websites that are causing real and substantial damage to artists and content creators in the United States. Sometimes any more it seems as if Congress is more interested in protecting the rights of foreigner than the rights of U.S. citizens and businesses. This is a truly troubling, and puzzling trend.

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Posted in: Congress, Copyright, Gene Quinn, Internet, IP News, IPWatchdog.com Articles, US Economy

About the Author

is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.

 

11 comments
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  1. I’ve made a couple of posts on your board but keep missing your replies since I do my Twitter feed in the morning, but I appreciate your thoughtful articles.

    If cost is the issue, I’m not sure that the federal process is all that much better, unless we’re operating on the assumption that default judgments are inevitable. Traditional copyright legislation is expensive, and given that quite often small businesses haven’t registered their copyrights, there are plenty of incidental costs. You’re really just talking about a question of sequencing. Discovery costs are going to happen at some point. Plenty of attorneys are familiar with heightened pleading standards given that many states don’t allow traditional notice pleading. But experienced IP attorneys in many states are often limited to big firms, especially as boutiques are gobbled up. My clients generally balk at the prospect of any litigation, period. I don’t know that SOPA would be all that accessible for most small businesses.

    Frankly the best argument for SOPA is that small businesses would benefit from having bigger companies do all the heavy lifting, which basically is the status quo re: “rogue” sites. Why would an indie firm go after MegaUpload or Pirate Bay when the big studios will dump millions in lobbying the Feds to take care of it? I’m not sure that is a desirable situation because it assumes that big players will always act in good faith, but it’s not going to change post-SOPA.

  2. I agree that OPEN will be ineffective at combating online piracy. The solution to this problem will have to involve enforcing U.S. copyright law on offshore servers because if the United States does not take that step than any new law will not be effective at combating online piracy and we will be back to square one. I hope we can come to a consensus solution that enforces rights holders’ legal right to not have their intellectual property stolen.

  3. Gene, are you farmiliar with the actual text of SOPA/PIPA?

    Because it seems like there are people who

    a) Oppose SOPA/PIPA, despite acknowledging the problem
    b) Might approve of alternative legislation (even something stronger than the OPEN act), if it takes a different approach

    Maybe you should talk to them and find out their concerns (rather than call them unsophisticated, or calling them a freeloader and/or anarchist, or claim they might have a hidden agenda, or generally impugn their motives).

    One large problem with SOPA/PIPA was how ambiguous its provisions were. They were far more ambiguous than DMCA provisions that courts are still disagreeing about today (over a decade later). If anything like the most recent iteration of SOPA became law, there would be years of legal uncertainty for many small businesses. If certain statutory interpretation questions were decided a certain way, it would put many out of business entirely.

    One way it could be interpreted is to make any person who owned a website (and allowed user-created content) ultimately responsible for blocking copyright infringement inside user-created content. This applies to most such companies, from Youtube, to Veoh, to Wikipedia, to a small blog that allows comments.

    In fact, prior to SOPA’s manager’s amendment (and still in the last-known version of PIPA), the private right of action provisions applied to domestic companies as well as foreign companies (unlike the attorney general provisions which only applied to foreign companies). So while you said in a previous post that you merely wanted Internet companies to act more like web hosts, there was a huge question as to whether the DMCA safe harbor was effectively being curtailed. (One of its cosponsors in the House, Rep Goodlatte, said that “it is unrealistic to think we’re going to continue to rely on the DMCA notice-and-takedown provision.”)

    Ultimately, any bill that makes website owners effectively responsible for proactively monitoring their user’s content (or any bill that could conceivably be read that way) will fail. There are numerous reasons why this is true. The first is primarily political; as you saw, the companies that rely on a free Internet are not about to let similar bills pass without a fight (and without significant changes, like with the DMCA before it passed).

    The second is that any bill that specifically or by implication creates an obligation to monitor others’ content will inevitably stifle significant core first amendment speech completely unrelated to piracy (in addition to clearly-not-protected piracy). Any provision that creates such a chilling effect will either be interpreted to not create a duty to proactively monitor (out of Constitutional avoidance), or will be thrown out. While Congress has the authority to create copyright enforcement laws, Congress is expressly forbidden from stifling other non-piracy protected speech incidental to their efforts to prevent piracy.

    Sometimes, that means that Congress can’t effectively go after clearly-not-protected activities like piracy. But that is ultimately the content creators’ problem; not everyone else’s. That is the point of the first amendment (as interpreted by the Supreme Court) — when in doubt, more speech wins.

    The DMCA safe harbor provisions do not have this problem; they specifically target pirated content. A web host is only incentivized (through immunity) to take down actual infringing content, and only if there is no counter-notification. They do not have to actively monitor their users’ content (as the recent case against Youtube shows). The responsibility rests with content creators, to find the content and send the notices.

    Moving the duty away from content creators (to file the notifications) to website operators (to essentially monitor their users’ content), is not going to happen. If your goal is to actually help content creators, you should aim for an approach that actually targets pirates (and no one else). Because any bill that ends up targetting everyone, solely to add to the effectiveness of the targeting of pirates, will not pass in the first place (and will be thrown out in the unlikely event that it does pass).

  4. Gene, are you farmiliar with the actual text of SOPA/PIPA?

    Because it seems like there are people who

    a) Oppose SOPA/PIPA, despite acknowledging the problem
    b) Might approve of alternative legislation (even something stronger than the OPEN act), if it takes a different approach

    Maybe you should talk to them and find out their concerns (rather than call them unsophisticated, or calling them a freeloader and/or anarchist, or claim they might have a hidden agenda, or generally impugn their motives).

    One large problem with SOPA/PIPA was how ambiguous its provisions were. They were far more ambiguous than DMCA provisions that courts are still disagreeing about today (over a decade later). If anything like the most recent iteration of SOPA became law, there would be years of legal uncertainty for many small businesses. If certain statutory interpretation questions were decided a certain way, it would put many out of business entirely.

    One way it could be interpreted is to make any person who owned a website (and allowed user-created content) ultimately responsible for blocking copyright infringement inside user-created content. This applies to most such companies, from Youtube, to Veoh, to Wikipedia, to a small blog that allows comments.

    In fact, prior to SOPA’s manager’s amendment (and still in the last-known version of PIPA), the private right of action provisions applied to domestic companies as well as foreign companies (unlike the attorney general provisions which only applied to foreign companies). So while you said in a previous post that you merely wanted Internet companies to act more like web hosts, there was a huge question as to whether the DMCA safe harbor was effectively being curtailed. (One of its cosponsors in the House, Rep Goodlatte, said that “it is unrealistic to think we’re going to continue to rely on the DMCA notice-and-takedown provision.”)

    Ultimately, any bill that makes website owners effectively responsible for proactively monitoring their user’s content (or any bill that could conceivably be read that way) will fail. There are numerous reasons why this is true. The first is primarily political; as you saw, the companies that rely on a free Internet are not about to let similar bills pass without a fight (and without significant changes, like with the DMCA before it passed).

    The second is that any bill that specifically or by implication creates an obligation to monitor others’ content will inevitably stifle significant core first amendment speech completely unrelated to piracy (in addition to clearly-not-protected piracy). Any provision that creates such a chilling effect will either be interpreted to not create a duty to proactively monitor (out of Constitutional avoidance), or will be thrown out. While Congress has the authority to create copyright enforcement laws, Congress is expressly forbidden from stifling other non-piracy protected speech incidental to their efforts to prevent piracy.

    Sometimes, that means that Congress can’t effectively go after clearly-not-protected activities like piracy. But that is ultimately the content creators’ problem; not everyone else’s. That is the point of the first amendment (as interpreted by the Supreme Court) — when in doubt, more speech wins.

    The DMCA safe harbor provisions do not have this problem; they specifically target pirated content. A web host is only incentivized (through immunity) to take down actual infringing content, and only if there is no counter-notification. They do not have to actively monitor their users’ content (as the recent case against Youtube shows). The responsibility rests with content creators, to find the content and send the notices.

    Moving the duty away from content creators (to file the notifications) to website operators (to essentially monitor their users’ content), is not going to happen. If your goal is to actually help content creators, you should aim for an approach that actually targets pirates (and no one else). Because any bill that ends up targetting everyone, solely to add to the effectiveness of the targeting of pirates, will not pass in the first place (and will be thrown out in the unlikely event that it does pass).

  5. Jon-

    I am familiar with the actual text of the legislation, and have read it.

    Why do you think Google shouldn’t have an obligation to block copyright infringing material? They make money off the copyrighted works of others.

    -Gene

  6. Right, the OPEN Act may not be that effective. What’s important however, is that the discussion remains open and that all side contribute to finding an effective solution. I think SOPA could have been that solution but there were too many misconceptions about the actual bill and too powerful of a backlash (that perpetuated those misconceptions) to have gotten through. Nonetheless, we still need to address the core issue of stolen content and its mass distribution by sites that are clearly devoted to online piracy.

  7. a centralized body created at an international level can prevent this coupled with all these domestic legislations.. recently india has proposed the creation of a body with in the UN for controlling internet traffic. whcih is in my view an apt way to regulate these mishaps..

  8. “Why do you think Google shouldn’t have an obligation to block copyright infringing material?”

    What do you specifically mean by that sentence? Nearly 50 hours of video is uploaded to Youtube every minute of the day. There is no conceivable way they could proactively monitor it all. They already take down videos (and do so quickly) when notified.

    There is no way Google, let alone the vast majority of website operators (individuals and small businesses) could even begin to start monitoring all their user’s data. At the very least, huge numbers of small website operators could have to close up shop (or ban user content). That is precisely the chill on speech that the first amendment prohibits. It doesn’t matter that some might prefer this chilled-environment outcome to an outcome with more piracy; that option is not open to them.

    There is a fundamental asymmetry between those attempting to fight piracy (including website operators) and pirates. The cost of (proactively) stopping even some pirates on a single site can be large. Yet the cost to a pirate of simply switching to another site is tiny.

    This is not some unique development that can be stopped. It is inherrent in the very nature of the Internet. An Internet where all content must be preapproved is an Internet that is orders of magnitude smaller than the Internet of today.

    Some people (such as the RIAA/MPAA) would be fine with this. They hate the Internet; they do not really understand it, and they just want it (or at least the problems it has caused them) to go away. In their ideal world, they would like to resolve the negative consequences of a free-speech environment by killing that environment, even though the vast majority of the affected activities would have nothing to do with piracy.

    But fortunately for us, that option is not available to them (or the government). When speech conflicts with an otherwise laudable goal, speech wins at the expense of that laudable goal. That’s the point of the First amendment. Content creators are going to have to adapt to the Internet — not the other way around.

    This doesn’t mean Congress has no role. Acts actually targeted at piracy (that don’t stifle or chill completely legal speech, or effectively prevent small businesses or individuals from operating websites with user content) are fine. But given the fundamental asymmetry mentioned above, that is not going to solve the problem; it will at best help somewhat (in some cases).

    The problem with your piece is that you start from the premise that this problem must be solved (and will eventually be solved). From there, you see SOPA/PIPA or variants as reasonable ways of moving in the direction of a solution. But in this case, your premise is falwed. There are tons of fundamental problems (that everyone agrees are problems) that simply never get solved. That is the price we pay for living in a free society. Unless and until technology changes significantly (in a way that makes it easy for a garage website operator to immediately and automatically remove copyrighted material), piracy is unfortunately not going away.

  9. Jon,

    While not neccesarily agreeing with you, I found your piece well written.

  10. (Comment 7) Sooraj,

    The controversial ACTA agreement – “a plurilateral treaty that seeks to improve the global enforcement of intellectual property rights through the creation of common enforcement standards and practices and more effective international cooperation” , proposes such a central body however, it is outside of WIPO, WTO and the UN…

    As the EU finally signed this treaty in January, the final text is now available for democratic and public scrutiny, and hence informed assessment.

    Without international agreements such as ACTA, practically the only remedy available under US domestic legisation (eg. SOPA/PIPA and OPEN) is a cease and desist request to relevant parties in foreign juridications.

  11. “Why do you think Google shouldn’t have an obligation to block copyright infringing material?”

    I’m not sure what form the obligation should take, other than to respect valid content removal requests.

    What is obvious is that a third-party when presented with say three complete and identical copies of a web published article will in most cases be unable to determine: which is the original, which is an authorised copy and which is the unauthorised copy. In the case of work that hasn’t previously been published on the web then there is practically no way of knowing whether any of the web versions are infringing a third-parties copyright.

    It would seem that the current system of take-down-notices which rely on the copyright holder to assert their ownership and identify infringers is the only viable keep it simple solution.