The PROTECT IP Act: what you need to know

In our predictions for 2012, we suggested that online piracy would be a key issue to watch this year. This prediction has been bolstered by the upcoming debate surrounding the PROTECT IP Act, which was introduced last year and should resume toward the end of this month.

For decades the US has been the hotbed of innovation across a broad spectrum of industries, particularly ICT and technology. In recent years, however, while it is still a leading innovator, the dynamics have changed. Depending on the indicator, such as the Global Innovation Index by INSEAD, the US was ranked seventh in 2011, having been surpassed by countries, such as Switzerland, Sweden, Singapore and Finland. More importantly however, a number of entities outside of the US have been illegally capitalising on US-based innovation to produce cheaper and even inferior products and services, resulting in reportedly considerable loss of revenue and jobs annually.

One of the ways the US intends to address this matter is to introduce legislation to protect its and its citizens’ intellectual property (IP). In one of our last posts for 2011, we discussed the Stop Online Piracy Act (SOPA), which was tabled in the US House of Representatives in October, and has been being roundly criticised by the tech industry and the wider community. However, even before SOPA, last May, the US Senate tabled the PROTECT IP Act. In anticipation of the debate on the PROTECT IP Act, which is scheduled to begin in the Senate on 23 January, this post highlights some of the main features and criticisms being levelled at this bill, of which we should be aware.

What is PROTECT IP Act?

The Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act, more commonly referred to as the PROTECT IP Act, is legislation intended to block both foreign and domestic websites that are infringing US copyrights. The legislation would authorise

… the Justice Department to file a civil action against the registrant or owner of a domain name that accesses a foreign infringing Internet site, or the foreign-registered domain name itself, and to seek a preliminary order from the court that the site is dedicated to infringing activities. For an order to issue, the Justice Department must also show that the Internet site is directed at U.S. consumers and harms holders of U.S. Intellectual Property… (Source: Censorship in America)

The PROTECT IP Act is a reworking of Combating Online Infringement and Counterfeits Act, which was tabled in 2010 and was rejected.  Although the current version is generally considered an improvement of its predecessor, it is still being widely condemned.

What is the difference between the PROTECT IP ACT and SOPA?

From all indications, there is little difference between the PROTECT IP Act and SOPA. Some of the areas of commonality between both pieces of legislation include:

• targeting foreign owned or hosted websites, along with domestic websites
• compelling US-based third parties, such as ISPs, payment processors, online advertisers and search engines, through court orders, to bar access to the offending Internet site or to cease doing business with it, as appropriate
• empowering copyright holders who are the victim of copyright infringements to sue
• protecting US-based third party entities that voluntarily cease doing business with allegedly infringing websites from court action, if they acted in good faith and on credible evidence.

Both sides of the PROTECT IP Act divide

The PROTECT IP Act has been receiving extensive support in the US Senate, where almost half of its 100 members co-sponsored the bill. Major copyright and trademark owners, particularly those in the film, music pharmaceutical and book publishing industries, have also endorsed the bill. However, as expected, and similar to SOPA, the opponents of the PROTECT IP Act include leading online properties, such as Google, Amazon.com, Yahoo and eBay, along with civil, human and consumer rights groups, and recognised technical experts.

Again similar to SOPA, the criticisms levelled at this bill cover a broad range of a number of issues. For example, third parties entities are expected to use Domain Name Systems (DNS) filtering to block offending websites. However, as indicated in our earlier post, this approach will compromise the smooth functioning of the Internet and would be a major setback to the enhanced security protocol, Domain Name System Security Extensions (DNSSEC) that has been introduced recently.

Another difficulty with of the PROTECT IP Act, as noted by the NetCoalition, which represents a broad cross-section of global Internet and tech companies, is the likelihood that it could open the floodgates on litigation. Hence the third party entities, which under the Act would be expected to police websites, would be placed in an untenable position:

… there are thousands and thousands of sites we’re not aware of that are engaging in illegal activity… “We’ll start receiving thousands and thousands of these requests [and it will create] a new notice and takedown regime without the due process” provided in the Digital Millennium Copyright Act (DMCA).  (Source: PC Magazine)

 Final remarks

The strong support that the PROTECT IP Act is receiving is likely to result in rejection of proposals to amend some of the perceived negative effects of the bill, as occurred when SOPA was reviewed this past December. However, this stance reinforces concerns about the limited technical competence of those guiding the legislative process, and the fear that without a more balanced approach, online innovation and business will be severely damaged, if the PROTECT IP Act passed without comprehensive revision.

However, with two virtually identical bills being debated in the US Congress, it seems likely that a piece of legislation that closely resembles one of them may be passed in the foreseeable future. As currently drafted, there are legitimate concerns that those Acts are “throwing the baby out with the bath water”, since it is attempting to solve the problem of copyright infringing websites by disregarding the right to free speech,  weakening Internet security, and disrupting technology development (Source: InfoWorld).

Stay tuned…

Image courtesy of DonkeyHotey, Flickr

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