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STOP ONLINE PIRACY ACT 

HEARING 

BEFORE THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

ON

H.R. 3261 

NOVEMBER 16, 2011 

Serial No. 112–154 

Printed for the use of the Committee on the Judiciary 

( 

Available via the World Wide Web: http://judiciary.house.gov 
(II) 

COMMITTEE ON THE JUDICIARY 

LAMAR SMITH, Texas, Chairman 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

HOWARD COBLE, North Carolina 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia 

DANIEL E. LUNGREN, California 

STEVE CHABOT, Ohio 

DARRELL E. ISSA, California 

MIKE PENCE, Indiana 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TIM GRIFFIN, Arkansas 

TOM MARINO, Pennsylvania 

TREY GOWDY, South Carolina 

DENNIS ROSS, Florida 

SANDY ADAMS, Florida 

BEN QUAYLE, Arizona 

MARK AMODEI, Nevada 

JOHN CONYERS, JR., Michigan 

HOWARD L. BERMAN, California 

JERROLD NADLER, New York 

ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia 

MELVIN L. WATT, North Carolina 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

MAXINE WATERS, California 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

PEDRO R. PIERLUISI, Puerto Rico 

MIKE QUIGLEY, Illinois 

JUDY CHU, California 

TED DEUTCH, Florida 

LINDA T. SA ́ NCHEZ, California 

[Vacant] 

SEAN MCLAUGHLIN, Majority Chief of Staff and General Counsel 

PERRY APELBAUM, Minority Staff Director and Chief Counsel 
(III) 

C O N T E N T S 

NOVEMBER 16, 2011 

Page 

TEXT OF THE BILL 

H.R. 3261, the ‘‘Stop Online Piracy Act’’ ............................................................... 3 

OPENING STATEMENTS 

The Honorable Lamar Smith, a Representative in Congress from the State 

of Texas, and Chairman, Committee on the Judiciary ..................................... 1 

The Honorable John Conyers, Jr., a Representative in Congress from the 

State of Michigan, and Ranking Member, Committee on the Judiciary ......... 22 

The Honorable Bob Goodlatte, a Representative in Congress from the State 

of Virginia, and Member, Committee on the Judiciary .................................... 37 

The Honorable Melvin L. Watt, a Representative in Congress from the State 

of North Carolina, and Member, Committee on the Judiciary ......................... 39 

WITNESSES 

The Honorable Maria Pallante, Register of Copyrights, U.S. Library of Congress 

Oral Testimony ..................................................................................................... 47 

Prepared Statement ............................................................................................. 50 

John P. Clark, Chief Security Officer and Vice President of Global Security, 

Pfizer, Inc. 

Oral Testimony ..................................................................................................... 60 

Prepared Statement ............................................................................................. 62 

Michael P. O’Leary, Senior Executive Vice President, Global Policy and External Affairs, Motion Picture Association of America (MPAA) 

Oral Testimony ..................................................................................................... 68 

Prepared Statement ............................................................................................. 71 

Linda Kirkpatrick, Group Head, Customer Performance Integrity, Mastercard 

Worldwide 

Oral Testimony ..................................................................................................... 80 

Prepared Statement ............................................................................................. 82 

Katherine Oyama, Copyright Counsel, Google, Inc. 

Oral Testimony ..................................................................................................... 98 

Prepared Statement ............................................................................................. 101 

Paul Almeida, President, Department for Professional Employees (DPE), 

American Federation of Labor, Congress of Industrial Organizations (AFLCIO) 

Oral Testimony ..................................................................................................... 113 

Prepared Statement ............................................................................................. 115 

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Material submitted by the Honorable John Conyers, Jr., a Representative 

in Congress from the State of Michigan, and Ranking Member, Committee 

on the Judiciary ................................................................................................... 24,25 

Prepared Statement of the Honorable J. Randy Forbes, a Representative 

in Congress from the State of Virginia, and Member, Committee on the 

Judiciary ............................................................................................................... 41 
Page

IV 

Prepared Statement of the Honorable Zoe Lofgren, a Representative in Congress from the State of California, and Member, Committee on the Judiciary ......................................................................................................................... 42

Prepared Statement of the Honorable Henry C. ‘‘Hank’’ Johnson, Jr., a Representative in Congress from the State of Georgia, and Member, Committee 

on the Judiciary ................................................................................................... 44 

Material submitted by the Honorable Howard L. Berman, a Representative 

in Congress from the State of California, and Member, Committee on the 

Judiciary ............................................................................................................... 131 

Material submitted by the Honorable Zoe Lofgren, a Representative in Congress from the State of California, and Member, Committee on the Judiciary ......................................................................................................................... 144 

Material submitted by the Honorable Darrell Issa, a Representative in Congress from the State of California, and Member, Committee on the Judiciary ......................................................................................................................... 204 

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Prepared Statement of the Honorable Ron Wyden, a U.S. Senator from the 

State of Oregon ..................................................................................................... 261 

Prepared Statement of Terry Hart, Creator of Copyhype .................................... 263 

List of submitters contributing material in association with the consideration 

of H.R. 3261 .......................................................................................................... 272 
(1) 

STOP ONLINE PIRACY ACT 

WEDNESDAY, NOVEMBER 16, 2011 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON THE JUDICIARY, 

Washington, DC. 

The Committee met, pursuant to call, at 10:06 a.m., in room 

2141, Rayburn Office Building, the Honorable Lamar Smith (Chairman of the Committee) presiding. 

Present: Representatives Smith, Coble, Goodlatte, Lungren, 

Chabot, Issa, Forbes, King, Franks, Gohmert, Jordan, Poe, 

Chaffetz, Griffin, Marino, Gowdy, Ross, Adams, Quayle, Amodei, 

Conyers, Berman, Nadler, Watt, Lofgren, Jackson Lee, Waters, 

Cohen, Johnson, Quigley, Chu, Deutch, and Sa ́nchez. 

Staff present: (Majority) David Whitney, Counsel; Olivia Lee, 

Clerk; and (Minority) Jason Everett, Counsel. 

Mr. SMITH. Good morning. The Judiciary Committee will come to 

order. Without objection, the Chair is authorized to declare recesses 

of the Committee at any time. 

I am going to recognize myself for an opening statement, then 

the Ranking Member, and then the Chairman and the Ranking 

Member of the appropriate Subcommittee. 

Today’s hearing is on legislation that will help protect one of the 

most productive sectors of the American economy. While the Digital 

Millennium Copyright Act does provide some relief to copyright 

owners whose works are infringed, it only helps in limited circumstances. The DMCA provides no effective relief when a rogue 

website is foreign-based and foreign operated, like The Pirate Bay, 

the 89th most visited site in the U.S. It does not protect trademark 

owners and consumers from counterfeit and unsafe products, like 

fake prescription medicines and misbranded branded drugs that 

are often presented to the public by unlicensed online pharmacies. 

Nor does the law assist copyright owners when rogue websites contribute to the theft of intellectual property on a massive scale. 

And, finally, this does nothing to address the use of certain intermediaries, such as payment processors and Internet advertising 

services, that are used by criminals to fund the illegal activities. 

Mr. SCOTT. Mr. Chairman, I am having trouble hearing your 

statement. 

Mr. SMITH. I would not want anyone to miss my statement, so 

I will make sure that the sound system is working and that I am 

close enough to the mic. 

Mr. SCOTT. Turn his mic way up. 
2 

Mr. SMITH. That is where the Stop Online Piracy Act comes in. 

This bill focuses not on technology, but on preventing those who 

engage in criminal behavior from reaching directly into the U.S. 

market to harm American consumers. We cannot continue a system 

that allows criminals to disregard our laws and import counterfeit 

and pirated goods across our physical borders, nor can we fail to 

take effective and meaningful action when criminals misuse the 

Internet. 

The problem of rogue websites is real, immediate, and wide 

spread. It harms all sectors of the economy, and its scope is staggering. One recent survey found that nearly one-quarter of global 

Internet traffic infringes on copyrights. A second study found that 

43 sites classified as digital piracy, generated 53 billion visits per 

year, and that 26 sites selling just counterfeit prescription drugs 

generated 51 million hits annually. 

Since the United States produces the most intellectual property, 

our country has the most to lose if we fail to address the problem 

of these rogue websites. Responsible companies and public officials 

have taken note of the corrosive and damaging effects of rogue 

websites. One of our witnesses today represents MasterCard 

Worldwide, a company that takes seriously its obligation to reduce 

the amount of stolen intellectual property on the Internet. 

MasterCard deserves thanks for its commitment to support legislation that addresses the problems of online piracy. 

In contrast, another one of the companies represented here today 

has sought to obstruct the Committee’s consideration of bipartisan 

legislation. Perhaps this should come as no surprise, given that 

Google just settled a Federal criminal investigation into the company’s active promotion of a rogue websites that pushed illegal prescription and counterfeit drugs on American consumers. In announcing a half billion dollar forfeiture of illegal profit, the U.S. Attorney, Peter Neronha, who led the investigation, stated, ‘‘Suffice 

it to say that this is not two or three rogue employees of the consumer service level doing this. This was a corporate decision to engage in this conduct.’’ 

Over several years, Google ignored repeated warnings from the 

National Association of Boards of Pharmacy and the National Center on Addiction and Substance Abuse at Columbia University, that 

the company was violating Federal law. The company also disregarded requests to block advertisements from rogue pharmacies, 

screen such sites from searches, and provide warnings about buying drugs over the Internet. 

The Wall Street Journal reports Mr. Neronha characterized 

Google’s efforts to appear to control unlawful advertisements as 

window dressing since ‘‘It allowed Google to continue earning revenues from the allegedly illicit ad sales, even as it professed to be 

taking action against them.’’ Given Google’s record, their objection 

to authorizing a court to order a search engine to not steer consumers to foreign rogue sites is easily understood. 

Unfortunately, the theft of America’s intellectual property costs 

the United States economy more than $100 billion annually and results in a loss of thousands of American jobs. Under current law, 

rogue sites that profit from selling pirated goods are often out of 

the reach of U.S. law enforcement agencies and operate without 
3 

consequences. The Stop Online Piracy Act helps stop flow of revenues to rogue websites and insurers. The profits from American innovations go to American innovators. 

Protecting America’s intellectual property will help our economy, 

create jobs, and discourage illegal websites. 

That concludes my opening statement, and the gentleman from 

Michigan, the Ranking Member of the Judiciary Committee, is recognized for his opening statement. 

[The text of the bill, H.R. 3261, follows:] 

I 

112TH CONGRESS 

1ST SESSION H. R. 3261 

To promote prosperity, creativity, entrepreneurship, and innovation by combating 

the theft of U.S. property, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 26, 2011 

Mr. SMITH of Texas (for himself and Mr. CONYERS, Mr. GOODLATTE, Mr. BERMAN, Mr. GRIFFIN of Arkansas, Mr. GALLEGLY, Mr. DEUTCH, Mr. CHABOT, Mr. ROSS of 

Florida, Mrs. BLACKBURN, Mrs. BONO MACK, Mr. TERRY, and Mr. SCHIFF) introduced the following bill; which was referred to the Committee on the Judiciary 

A BILL 

To promote prosperity, creativity, entrepreneurship, and innovation by combating 

the theft of U.S. property, and for other purposes. 

Be it enacted by the Senate and House of Representatives of the United States 

of America in Congress assembled, 

SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Stop Online Piracy Act’’. 

(b) TABLE OF CONTENTS.—The table of contents of this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Savings and severability clauses. 

TITLE I—COMBATING ONLINE PIRACY 

Sec. 101. Definitions. 

Sec. 102. Action by Attorney General to protect U.S. customers and prevent U.S. 

support of foreign infringing sites. 

Sec. 103. Market-based system to protect U.S. customers and prevent U.S. funding of sites dedicated to theft of U.S. property. 

Sec. 104. Immunity for taking voluntary action against sites dedicated to theft of 

U.S. property. 

Sec. 105. Immunity for taking voluntary action against sites that endanger public health. 

Sec. 106. Guidelines and study. 

Sec. 107. Denying U.S. capital to notorious foreign infringers. 

TITLE II—ADDITIONAL ENHANCEMENTS TO COMBAT INTELLECTUAL 

PROPERTY THEFT 

Sec. 201. Streaming of copyrighted works in violation of criminal law. 

Sec. 202. Trafficking in inherently dangerous goods or services. 

Sec. 203. Protecting U.S. businesses from foreign and economic espionage. 
4 

Sec. 204. Amendments to sentencing guidelines. 

Sec. 205. Defending intellectual property rights abroad. 

SEC. 2. SAVINGS AND SEVERABILITY CLAUSES. 

(a) SAVINGS CLAUSES.— 

(1) FIRST AMENDMENT.—Nothing in this Act shall be construed to impose 

a prior restraint on free speech or the press protected under the 1st Amendment 

to the Constitution. 

(2) TITLE 17 LIABILITY.—Nothing in title I shall be construed to enlarge or 

diminish liability, including vicarious or contributory liability, for any cause of 

action available under title 17, United States Code, including any limitations 

on liability under such title. 

(b) SEVERABILITY.—If any provision of this Act, or the application of the provision to any person or circumstance, is held to be unconstitutional, the other provisions or the application of the provision to other persons or circumstances shall not 

be affected thereby. 

TITLE I—COMBATING ONLINE PIRACY 

SEC. 101. DEFINITIONS. 

In this title: 

(1) DOMAIN NAME.—The term ‘‘domain name’’ has the meaning given that 

term in section 45 of the Lanham Act (15 U.S.C. 1127) and includes any subdomain designation using such domain name as part of an electronic address 

on the Internet to identify a unique online location. 

(2) DOMAIN NAME SYSTEM SERVER.—The term ‘‘domain name system server’’ 

means a server or other mechanism used to provide the Internet protocol address associated with a domain name. 

(3) DOMESTIC DOMAIN NAME.—The term ‘‘domestic domain name’’ means a 

domain name that is registered or assigned by a domain name registrar, domain name registry, or other domain name registration authority, that is located within a judicial district of the United States. 

(4) DOMESTIC INTERNET PROTOCOL ADDRESS.—The term ‘‘domestic Internet 

Protocol address’’ means an Internet Protocol address for which the corresponding Internet Protocol allocation entity is located within a judicial district 

of the United States. 

(5) DOMESTIC INTERNET SITE.—The term ‘‘domestic Internet site’’ means an 

Internet site for which the corresponding domain name or, if there is no domain 

name, the corresponding Internet Protocol address, is a domestic domain name 

or domestic Internet Protocol address. 

(6) FOREIGN DOMAIN NAME.—The term ‘‘foreign domain name’’ means a domain name that is not a domestic domain name. 

(7) FOREIGN INTERNET PROTOCOL ADDRESS.—The term ‘‘foreign Internet Protocol address’’ means an Internet Protocol address that is not a domestic Internet protocol address. 

(8) FOREIGN INTERNET SITE.—The term ‘‘foreign Internet site’’ means an 

Internet site that is not a domestic Internet site. 

(9) INCLUDING.—The term ‘‘including’’ means including, but not limited to. 

(10) INTELLECTUAL PROPERTY ENFORCEMENT COORDINATOR.—The term ‘‘Intellectual Property Enforcement Coordinator’’ means the Intellectual Property 

Enforcement Coordinator appointed under section 301 of the Prioritizing Resources and Organization for Intellectual Property Act of 2008 (15 U.S.C. 8111). 

(11) INTERNET.—The term ‘‘Internet’’ has the meaning given that term in 

section 5362(5) of title 31, United States Code. 

(12) INTERNET ADVERTISING SERVICE.—The term ‘‘Internet advertising service’’ means a service that for compensation sells, purchases, brokers, serves, inserts, verifies, clears, or otherwise facilitates the placement of an advertisement, including a paid or sponsored search result, link, or placement, that is 

rendered in viewable form for any period of time on an Internet site. 

(13) INTERNET PROTOCOL.—The term ‘‘Internet Protocol’’ means a protocol 

used for communicating data across a packet-switched internetwork using the 

Transmission Control Protocol/Internet Protocol, and includes any predecessor 

or successor protocol to such protocol. 

(14) INTERNET PROTOCOL ADDRESS.—The term ‘‘Internet Protocol address’’ 

means a numerical label that is assigned to each device that participates in a 

computer network that uses the Internet Protocol for communication. 
5 

(15) INTERNET PROTOCOL ALLOCATION ENTITY.—The term ‘‘Internet Protocol 

allocation entity’’ means, with respect to a particular Internet Protocol address, 

the entity, local internet registry, or regional internet registry to which the 

smallest applicable block of Internet Protocol addresses containing that address 

is allocated or assigned by a local internet registry, regional internet registry, 

or other Internet Protocol address allocation authority, according to the applicable publicly available database of allocations and assignments, if any. 

(16) INTERNET SEARCH ENGINE.—The term ‘‘Internet search engine’’ means 

a service made available via the Internet that searches, crawls, categorizes, or 

indexes information or Web sites available elsewhere on the Internet and on the 

basis of a user query or selection that consists of terms, concepts, categories, 

questions, or other data returns to the user a means, such as a hyperlinked list 

of Uniform Resource Locators, of locating, viewing, or downloading such information or data available on the Internet relating to such query or selection. 

(17) INTERNET SITE.—The term ‘‘Internet site’’ means the collection of digital assets, including links, indexes, or pointers to digital assets, accessible 

through the Internet that are addressed relative to a common domain name or, 

if there is no domain name, a common Internet Protocol address. 

(18) LANHAM ACT.—The term ‘‘Lanham Act’’ means the Act entitled ‘‘An Act 

to provide for the registration and protection of trademarks used in commerce, 

to carry out the provisions of certain international conventions, and for other 

purposes’’, approved July 5, 1946 (commonly referred to as the ‘‘Trademark Act 

of 1946’’ or the ‘‘Lanham Act’’). 

(19) NONAUTHORITATIVE DOMAIN NAME SERVER.—The term ‘‘nonauthoritative domain name server’’ means a server that does not contain complete copies of domains but uses a cache file that is comprised of previous domain name 

server lookups, for which the server has received an authoritative response in 

the past. 

(20) OWNER; OPERATOR.—The terms ‘‘owner’’ or ‘‘operator’’, when used in 

connection with an Internet site, includes, respectively, any owner of a majority 

interest in, or any person with authority to operate, such Internet site. 

(21) PAYMENT NETWORK PROVIDER.— 

(A) IN GENERAL.—The term ‘‘payment network provider’’ means an entity that directly or indirectly provides the proprietary services, infrastructure, and software to effect or facilitate a debit, credit, or other payment 

transaction. 

(B) RULE OF CONSTRUCTION.—For purposes of this paragraph, a depository institution (as such term is defined under section 3 of the Federal Deposit Insurance Act) or credit union that initiates a payment transaction 

shall not be construed to be a payment network provider based solely on 

the offering or provision of such service. 

(22) SERVICE PROVIDER.—The term ‘‘service provider’’ means a service provider as defined in section 512(k)(1) of title 17, United States Code, that operates a nonauthoritative domain name system server. 

(23) U.S.-DIRECTED SITE.—The term ‘‘U.S.-directed site’’ means an Internet 

site or portion thereof that is used to conduct business directed to residents of 

the United States, or that otherwise demonstrates the existence of minimum 

contacts sufficient for the exercise of personal jurisdiction over the owner or operator of the Internet site consistent with the Constitution of the United States, 

based on relevant evidence that may include whether— 

(A) the Internet site is used to provide goods or services to users located in the United States; 

(B) there is evidence that the Internet site or portion thereof is intended to offer or provide— 

(i) such goods and services, 

(ii) access to such goods and services, or 

(iii) delivery of such goods and services, 

to users located in the United States; 

(C) the Internet site or portion thereof does not contain reasonable 

measures to prevent such goods and services from being obtained in or delivered to the United States; and 

(D) any prices for goods and services are indicated or billed in the currency of the United States. 

(24) UNITED STATES.—The term ‘‘United States’’ includes any commonwealth, possession, or territory of the United States. 
6 

SEC. 102. ACTION BY ATTORNEY GENERAL TO PROTECT U.S. CUSTOMERS AND PREVENT U.S. 

SUPPORT OF FOREIGN INFRINGING SITES. 

(a) DEFINITION.—For purposes of this section, a foreign Internet site or portion 

thereof is a ‘‘foreign infringing site’’ if— 

(1) the Internet site or portion thereof is a U.S.-directed site and is used 

by users in the United States; 

(2) the owner or operator of such Internet site is committing or facilitating 

the commission of criminal violations punishable under section 2318, 2319, 

2319A, 2319B, or 2320, or chapter 90, of title 18, United States Code; and 

(3) the Internet site would, by reason of acts described in paragraph (1), be 

subject to seizure in the United States in an action brought by the Attorney 

General if such site were a domestic Internet site. 

(b) ACTION BY THE ATTORNEY GENERAL.— (1) IN PERSONAM.—The Attorney General may commence an in personam 

action against— 

(A) a registrant of a domain name used by a foreign infringing site; or 

(B) an owner or operator of a foreign infringing site. 

(2) IN REM.—If through due diligence the Attorney General is unable to find 

a person described in subparagraph (A) or (B) of paragraph (1), or no such person found has an address within a judicial district of the United States, the Attorney General may commence an in rem action against a foreign infringing site 

or the foreign domain name used by such site. 

(3) NOTICE.—Upon commencing an action under this subsection, the Attorney General shall send a notice of the alleged violation and intent to proceed 

under this section— 

(A) to the registrant of the domain name of the Internet site— 

(i) at the postal and electronic mail addresses appearing in the applicable publicly accessible database of registrations, if any, and to the 

extent such addresses are reasonably available; and 

(ii) via the postal and electronic mail addresses of the registrar, 

registry, or other domain name registration authority that registered or 

assigned the domain name of the Internet site, to the extent such addresses are reasonably available; or 

(B) to the owner or operator of the Internet site— 

(i) at the primary postal and electronic mail addresses for such 

owner or operator that is provided on the Internet site, if any, and to 

the extent such addresses are reasonably available; or 

(ii) if there is no domain name of the Internet site, via the postal 

and electronic mail addresses of the Internet Protocol allocation entity 

appearing in the applicable publicly accessible database of allocations 

and assignments, if any, and to the extent such addresses are reasonably available; or 

(C) in any other such form as the court may provide, including as may 

be required by rule 4(f) of the Federal Rules of Civil Procedure. 

(4) SERVICE OF PROCESS.—For purposes of this section, the actions described 

in this subsection shall constitute service of process. 

(5) RELIEF.—On application of the Attorney General following the commencement of an action under this section, the court may issue a temporary restraining order, a preliminary injunction, or an injunction, in accordance with 

rule 65 of the Federal Rules of Civil Procedure, against a registrant of a domain 

name used by the foreign infringing site or an owner or operator of the foreign 

infringing site or, in an action brought in rem under paragraph (2), against the 

foreign infringing site or a portion of such site, or the domain name used by 

such site, to cease and desist from undertaking any further activity as a foreign 

infringing site. 

(c) ACTIONS BASED ON COURT ORDERS.— 

(1) SERVICE.—A process server on behalf of the Attorney General, with prior 

approval of the court, may serve a copy of a court order issued pursuant to this 

section on similarly situated entities within each class described in paragraph 

(2). Proof of service shall be filed with the court. 

(2) REASONABLE MEASURES.—After being served with a copy of an order 

pursuant to this subsection, the following shall apply: 

(A) SERVICE PROVIDERS.— 

(i) IN GENERAL.—A service provider shall take technically feasible 

and reasonable measures designed to prevent access by its subscribers 

located within the United States to the foreign infringing site (or portion thereof) that is subject to the order, including measures designed 

to prevent the domain name of the foreign infringing site (or portion 
7 

thereof) from resolving to that domain name’s Internet Protocol address. Such actions shall be taken as expeditiously as possible, but in 

any case within 5 days after being served with a copy of the order, or 

within such time as the court may order. 

(ii) LIMITATIONS.—A service provider shall not be required— 

(I) other than as directed under this subparagraph, to modify 

its network, software, systems, or facilities; 

(II) to take any measures with respect to domain name resolutions not performed by its own domain name server; or 

(III) to continue to prevent access to a domain name to which 

access has been effectively disabled by other means. 

(iii) CONSTRUCTION.—Nothing in this subparagraph shall affect the 

limitation on the liability of a service provider under section 512 of title 

17, United States Code. 

(iv) TEXT OF NOTICE.—The Attorney General shall prescribe the 

text of any notice displayed to users or customers of a service provider 

taking actions pursuant to this subparagraph. Such text shall state 

that an action is being taken pursuant to a court order obtained by the 

Attorney General. 

(B) INTERNET SEARCH ENGINES.—A provider of an Internet search engine shall take technically feasible and reasonable measures, as expeditiously as possible, but in any case within 5 days after being served with 

a copy of the order, or within such time as the court may order, designed 

to prevent the foreign infringing site that is subject to the order, or a portion of such site specified in the order, from being served as a direct hypertext link. 

(C) PAYMENT NETWORK PROVIDERS.— 

(i) PREVENTING AFFILIATION.—A payment network provider shall 

take technically feasible and reasonable measures, as expeditiously as 

possible, but in any case within 5 days after being served with a copy 

of the order, or within such time as the court may order, designed to 

prevent, prohibit, or suspend its service from completing payment 

transactions involving customers located within the United States or 

subject to the jurisdiction of the United States and the payment account— 

(I) which is used by the foreign infringing site, or portion 

thereof, that is subject to the order; and 

(II) through which the payment network provider would complete such payment transactions. 

(ii) NO DUTY TO MONITOR.—A payment network provider shall be 

considered to be in compliance with clause (i) if it takes action described in that clause with respect to accounts it has as of the date on 

which a copy of the order is served, or as of the date on which the order 

is amended under subsection (e). 

(D) INTERNET ADVERTISING SERVICES.— 

(i) REQUIRED ACTIONS.—An Internet advertising service that contracts to provide advertising to or for the foreign infringing site, or portion thereof, that is subject to the order, or that knowingly serves advertising to or for such site or such portion thereof, shall take technically feasible and reasonable measures, as expeditiously as possible, 

but in any case within 5 days after being served with a copy of the 

order, or within such time as the court may order, designed to— 

(I) prevent its service from providing advertisements to or relating to the foreign infringing site that is subject to the order or 

a portion of such site specified in the order; 

(II) cease making available advertisements for the foreign infringing site or such portion thereof, or paid or sponsored search 

results, links, or other placements that provide access to such foreign infringing site or such portion thereof; and 

(III) cease providing or receiving any compensation for advertising or related services to, from, or in connection with such foreign infringing site or such portion thereof. 

(ii) NO DUTY TO MONITOR.—An internet advertising service shall be 

considered to be in compliance with clause (i) if it takes action described in that clause with respect to accounts it has as of the date on 

which a copy of the order is served, or as of the date on which the order 

is amended under subsection (e). 
8 

(3) COMMUNICATION WITH USERS.—Except as provided under paragraph 

(2)(A)(iv), an entity taking an action described in this subsection shall determine the means to communicate such action to the entity’s users or customers. 

(4) ENFORCEMENT OF ORDERS.— 

(A) IN GENERAL.—To ensure compliance with orders issued pursuant to 

this section, the Attorney General may bring an action for injunctive relief— 

(i) against any entity served under paragraph (1) that knowingly 

and willfully fails to comply with the requirements of this subsection 

to compel such entity to comply with such requirements; or 

(ii) against any entity that knowingly and willfully provides or offers to provide a product or service designed or marketed for the circumvention or bypassing of measures described in paragraph (2) and 

taken in response to a court order issued pursuant to this subsection, 

to enjoin such entity from interfering with the order by continuing to 

provide or offer to provide such product or service. 

(B) RULE OF CONSTRUCTION.—The authority granted the Attorney General under subparagraph (A)(i) shall be the sole legal remedy to enforce the 

obligations under this section of any entity described in paragraph (2). 

(C) DEFENSE.—A defendant in an action under subparagraph (A)(i) may 

establish an affirmative defense by showing that the defendant does not 

have the technical means to comply with this subsection without incurring 

an unreasonable economic burden, or that the order is not authorized by 

this subsection. Such showing shall not be presumed to be a complete defense but shall serve as a defense only for those measures for which a technical limitation on compliance is demonstrated or for such portions of the 

order as are demonstrated to be unauthorized by this subsection. 

(D) DEFINITION.—For purposes of this paragraph, a product or service 

designed or marketed for the circumvention or bypassing of measures described in paragraph (2) and taken in response to a court order issued pursuant to this subsection includes a product or service that is designed or 

marketed to enable a domain name described in such an order— 

(i) to resolve to that domain name’s Internet protocol address notwithstanding the measures taken by a service provider under paragraph (2) to prevent such resolution; or 

(ii) to resolve to a different domain name or Internet Protocol address that the provider of the product or service knows, reasonably 

should know, or reasonably believes is used by an Internet site offering 

substantially similar infringing activities as those with which the infringing foreign site, or portion thereof, subject to a court order under 

this section was associated. 

(5) IMMUNITY.— 

(A) IMMUNITY FROM SUIT.—Other than in an action pursuant to paragraph (4), no cause of action shall lie in any Federal or State court or administrative agency against any entity served with a copy of a court order 

issued under this subsection, or against any director, officer, employee, or 

agent thereof, for any act reasonably designed to comply with this subsection or reasonably arising from such order. 

(B) IMMUNITY FROM LIABILITY.—Other than in an action pursuant to 

paragraph (4)— 

(i) any entity served with a copy of an order under this subsection, 

and any director, officer, employee, or agent thereof, shall not be liable 

for any act reasonably designed to comply with this subsection or reasonably arising from such order; and 

(ii) any— 

(I) actions taken by customers of such entity to circumvent any 

restriction on access to the foreign infringing site, or portion thereof, that is subject to such order, that is instituted pursuant to this 

subsection, or 

(II) act, failure, or inability to restrict access to a foreign infringing site, or portion thereof, that is subject to such order, in 

spite of good faith efforts to comply with such order by such entity, 

shall not be used by any person in any claim or cause of action against 

such entity. 

(d) MODIFICATION OR VACATION OF ORDERS.— 

(1) IN GENERAL.—At any time after the issuance of an order under subsection (b), a motion to modify, suspend, or vacate the order may be filed by— 
9 

(A) any person, or owner or operator of property, that is subject to the 

order; 

(B) any registrant of the domain name, or the owner or operator, of the 

Internet site that is subject to the order; 

(C) any domain name registrar, registry, or other domain name registration authority that has registered or assigned the domain name of the 

Internet site that is subject to the order; or 

(D) any entity that has been served with a copy of an order pursuant 

to subsection (c) that requires such entity to take action prescribed in that 

subsection. 

(2) RELIEF.—Relief under this subsection shall be proper if the court finds 

that— 

(A) the foreign Internet site subject to the order is no longer, or never 

was, a foreign infringing site; or 

(B) the interests of justice otherwise require that the order be modified, 

suspended, or vacated. 

(3) CONSIDERATION.—In making a relief determination under paragraph (2), 

a court may consider whether the domain name of the foreign Internet site has 

expired or has been re-registered by an entity other than the entity that is subject to the order with respect to which the motion under paragraph (1) is 

brought. 

(4) INTERVENTION.—An entity required to take action pursuant to subsection (c) if an order issues under subsection (b) may intervene at any time 

in any action commenced under subsection (b) that may result in such order, 

or in any action to modify, suspend, or vacate such order under this subsection. 

(e) AMENDED ORDERS.—The Attorney General, if alleging that a foreign Internet 

site previously adjudicated in an action under this section to be a foreign infringing 

site is accessible or has been reconstituted at a different domain name or Internet 

Protocol address, may petition the court to amend the order issued under this section accordingly. 

(f) LAW ENFORCEMENT COORDINATION.— 

(1) IN GENERAL.—The Attorney General shall inform the Intellectual Property Enforcement Coordinator and the heads of appropriate law enforcement 

agencies of all court orders issued under subsection (b), and all amended orders 

issued under subsection (e), regarding foreign infringing sites. 

(2) ALTERATIONS.—The Attorney General shall, and the defendant may, inform the Intellectual Property Enforcement Coordinator of the modification, 

suspension, expiration, or vacation of a court order issued under subsection (b) 

or an amended order issued under subsection (e). 

SEC. 103. MARKET-BASED SYSTEM TO PROTECT U.S. CUSTOMERS AND PREVENT U.S. FUNDING 

OF SITES DEDICATED TO THEFT OF U.S. PROPERTY. 

(a) DEFINITIONS.—In this section: 

(1) DEDICATED TO THEFT OF U.S. PROPERTY.—An ‘‘Internet site is dedicated 

to theft of U.S. property’’ if— 

(A) it is an Internet site, or a portion thereof, that is a U.S.-directed 

site and is used by users within the United States; and 

(B) either— 

(i) the U.S.-directed site is primarily designed or operated for the 

purpose of, has only limited purpose or use other than, or is marketed 

by its operator or another acting in concert with that operator for use 

in, offering goods or services in a manner that engages in, enables, or 

facilitates— 

(I) a violation of section 501 of title 17, United States Code; 

(II) a violation of section 1201 of title 17, United States Code; 

or 

(III) the sale, distribution, or promotion of goods, services, or 

materials bearing a counterfeit mark, as that term is defined in 

section 34(d) of the Lanham Act or section 2320 of title 18, United 

States Code; or 

(ii) the operator of the U.S.-directed site— 

(I) is taking, or has taken, deliberate actions to avoid confirming a high probability of the use of the U.S.-directed site to 

carry out acts that constitute a violation of section 501 or 1201 of 

title 17, United States Code; or 

(II) operates the U.S.-directed site with the object of promoting, or has promoted, its use to carry out acts that constitute 

a violation of section 501 or 1201 of title 17, United States Code, 
10 

as shown by clear expression or other affirmative steps taken to 

foster infringement. 

(2) QUALIFYING PLAINTIFF.—The term ‘‘qualifying plaintiff’’ means, with respect to a particular Internet site or portion thereof, a holder of an intellectual 

property right harmed by the activities described in paragraph (1) occurring on 

that Internet site or portion thereof. 

(b) DENYING U.S. FINANCIAL SUPPORT OF SITES DEDICATED TO THEFT OF U.S. 

PROPERTY.— 

(1) PAYMENT NETWORK PROVIDERS.—Except in the case of an effective 

counter notification pursuant to paragraph (5), a payment network provider 

shall take technically feasible and reasonable measures, as expeditiously as possible, but in any case within 5 days after delivery of a notification under paragraph (4), that are designed to prevent, prohibit, or suspend its service from 

completing payment transactions involving customers located within the United 

States and the Internet site, or portion thereof, that is specified in the notification under paragraph (4). 

(2) INTERNET ADVERTISING SERVICES.—Except in the case of an effective 

counter notification pursuant to paragraph (5), an Internet advertising service 

that contracts with the operator of an Internet site, or portion thereof, that is 

specified in a notification delivered under paragraph (4), to provide advertising 

to or for such site or portion thereof, or that knowingly serves advertising to 

or for such site or portion thereof, shall take technically feasible and reasonable 

measures, as expeditiously as possible, but in any case within 5 days after delivery the notification under paragraph (4), that are designed to— 

(A) prevent its service from providing advertisements to or relating to 

the Internet site, or portion thereof, that is specified in the notification; 

(B) cease making available advertisements for such Internet site, or 

portion thereof, that is specified in the notification, or paid or sponsored 

search results, links, or other placements that provide access to such Internet site, or portion thereof, that is specified in the notification; and 

(C) cease providing or receiving any compensation for advertising or related services to, from, or in connection with such Internet site, or portion 

thereof, that is specified in the notification. 

(3) DESIGNATED AGENT.— 

(A) IN GENERAL.—Each payment network provider and each Internet 

advertising service shall designate an agent to receive notifications described in paragraph (4), by making available through its service, including 

on its Web site in a location accessible to the public, and by providing to 

the Copyright Office, substantially the following: 

(i) The name, address, phone number, and electronic mail address 

of the agent. 

(ii) Other contact information that the Register of Copyrights considers appropriate. 

(B) DIRECTORY OF AGENTS.—The Register of Copyrights shall maintain 

and make available to the public for inspection, including through the 

Internet, in electronic format, a current directory of agents designated 

under subparagraph (A). 

(4) NOTIFICATION REGARDING INTERNET SITES DEDICATED TO THEFT OF U.S. 

PROPERTY.— 

(A) REQUIREMENTS.—Subject to subparagraph (B), a notification under 

this paragraph is effective only if it is a written communication that is provided to the designated agent of a payment network provider or an Internet 

advertising service and includes substantially the following: 

(i) A physical or electronic signature of a person authorized to act 

on behalf of the holder of an intellectual property right harmed by the 

activities described in subsection (a)(1). 

(ii) Identification of the Internet site, or portion thereof, dedicated 

to theft of U.S. property, including either the domain name or Internet 

Protocol address of such site, or both. 

(iii) Identification of the specific facts to support the claim that the 

Internet site, or portion thereof, is dedicated to theft of U.S. property 

and to clearly show that immediate and irreparable injury, loss, or 

damage will result to the holder of the intellectual property right 

harmed by the activities described in subsection (a)(1) in the absence 

of timely action by the payment network provider or Internet advertising service. 
11 

(iv) Information reasonably sufficient to establish that the payment 

network provider or Internet advertising service is providing payment 

processing or Internet advertising services for such site. 

(v) Information reasonably sufficient to permit the payment network provider or Internet advertising service to contact the holder of 

the intellectual property right harmed by the activities described in 

subsection (a)(1). 

(vi) A statement that the holder of the intellectual property right 

has a good faith belief that the use of the owner’s works or goods in 

which the right exists, in the manner described in the notification, is 

not authorized by the holder, its agent, or law. 

(vii) A statement that the information in the notification is accurate, and, under penalty of perjury, that the signatory is authorized to 

act on behalf of the holder of the intellectual property right harmed by 

the activities described in subsection (a)(1). 

(viii) Identification of the evidence indicating that the site (or portion thereof) is a U.S.-directed site. 

(B) SERVICE IF NO AGENT DESIGNATED.—If a payment network provider 

or Internet advertising service has not designated an agent under paragraph (3), the notification under subparagraph (A) may be provided to any 

officer or legal representative of such provider or service. 

(C) NOTICE TO INTERNET SITE IDENTIFIED IN NOTIFICATION.—Upon receipt of an effective notification under this paragraph, a payment network 

provider or Internet advertising service shall take appropriate steps to ensure timely delivery of the notification to the Internet site identified in the 

notification. 

(5) COUNTER NOTIFICATION.— 

(A) REQUIREMENTS.—Subject to subparagraph (B), a counter notification is effective under this paragraph only if it is a written communication 

that is provided to the designated agent of a payment network provider or 

an Internet advertising service and includes substantially the following: 

(i) A physical or electronic signature of the owner or operator of the 

Internet site, or portion thereof, specified in a notification under paragraph (4) subject to which action is to be taken by the payment network provider or Internet advertising service under paragraph (1) or 

(2), or of the registrant of the domain name used by such site or portion 

thereof. 

(ii) In the case of an Internet site specified in the notification under 

paragraph (4) that is a foreign Internet site, a statement that the 

owner or operator, or registrant, consents to the jurisdiction of the 

courts of the United States, and will accept service of process from the 

person who provided notification under paragraph (4), or an agent of 

such person, for purposes of adjudicating whether the site is an Internet site dedicated to theft of U.S. property under this section. 

(iii) A statement under penalty of perjury that the owner or operator, or registrant, has a good faith belief that it does not meet the criteria of an Internet site dedicated to theft of U.S. property as set forth 

under this section. 

(iv) The name, address, email address, and telephone number of 

the owner, operator, or registrant. 

(B) SERVICE IF NO AGENT DESIGNATED.—If a payment network provider 

or Internet advertising service has not designated an agent under paragraph (3), the counter notification under subparagraph (A) may be provided 

to any officer or legal representative of such provider or service. 

(6) MISREPRESENTATIONS.—Any provider of a notification or counter notification who knowingly materially misrepresents under this section— 

(A) that a site is an Internet site dedicated to the theft of U.S. property, 

or 

(B) that such site does not meet the criteria of an Internet site dedicated to the theft of U.S. property, 

shall be liable for damages, including costs and attorneys’ fees, incurred by the 

person injured by such misrepresentation as a result of the misrepresentation. 

(c) LIMITED INJUNCTIVE RELIEF IN CASES OF COUNTER NOTIFICATION.— 

(1) IN PERSONAM.—If an effective counter notification is made under subsection (b)(5), or if a payment network provider fails to comply with subsection 

(b)(1), or an Internet advertising service fails to comply with subsection (b)(2), 

pursuant to a notification under subsection (b)(4) in the absence of such a 
12 

counter notification, a qualifying plaintiff may commence an in personam action 

against— 

(A) a registrant of a domain name used by the Internet site, or portion 

thereof, that is subject to the notification under subsection (b)(4); or 

(B) an owner or operator of the Internet site or portion thereof. 

(2) IN REM.—If through due diligence a qualifying plaintiff who is authorized to bring an in personam action under paragraph (1) with respect to an 

Internet site dedicated to theft of U.S. property is unable to find a person described in subparagraphs (A) or (B) of paragraph (1), or no such person found 

has an address within a judicial district of the United States, the qualifying 

plaintiff may commence an in rem action against that Internet site or the domain name used by such site. 

(3) NOTICE.—Upon commencing an action under this subsection, the qualifying plaintiff shall send a notice of the alleged activity described in subsection 

(a)(1) and intent to proceed under this subsection— 

(A) to the registrant of the domain name of the Internet site, or portion 

thereof, that is the subject to the notification under subsection (b)(4)— 

(i) at the postal and electronic mail addresses appearing in the applicable publicly accessible database of registrations, if any, and to the 

extent such addresses are reasonably available; and 

(ii) via the postal and electronic mail addresses of the registrar, 

registry, or other domain name registration authority that registered or 

assigned the domain name of the Internet site, or portion thereof, to 

the extent such addresses are reasonably available; 

(B) to the owner or operator of the Internet site, or portion thereof— 

(i) at the primary postal and electronic mail addresses for such 

owner or operator that are provided on the Internet site, or portion 

thereof, if any, and to the extent such addresses are reasonably available; or 

(ii) if there is no domain name of the Internet site or portion thereof, via the postal and electronic mail addresses of the Internet Protocol 

allocation entity appearing in the applicable publicly accessible database of allocations and assignments, if any, and to the extent such addresses are reasonably available; or 

(C) in any other such form as the court may prescribe, including as 

may be required by rule 4(f) of the Federal Rules of Civil Procedure. 

(4) SERVICE OF PROCESS.—For purposes of this section, the actions described 

in this subsection shall constitute service of process. 

(5) RELIEF.—On application of a qualifying plaintiff following the commencement of an action under this section with respect to an Internet site dedicated to theft of U.S. property, the court may issue a temporary restraining 

order, a preliminary injunction, or an injunction, in accordance with rule 65 of 

the Federal Rules of Civil Procedure, against a registrant of a domain name 

used by the Internet site, or against an owner or operator of the Internet site, 

or, in an action brought in rem under paragraph (2), against the Internet site, 

or against the domain name used by the Internet site, to cease and desist from 

undertaking any further activity as an Internet site dedicated to theft of U.S. 

property. 

(d) ACTIONS BASED ON COURT ORDERS.— 

(1) SERVICE AND RESPONSE.— 

(A) SERVICE BY QUALIFYING PLAINTIFF.—A qualifying plaintiff, with the 

prior approval of the court, may serve a copy of a court order issued under 

subsection (c) on similarly situated entities described in paragraph (2). 

Proof of service shall be filed with the court. 

(B) RESPONSE.—An entity served under subparagraph (A) shall, not 

later than 7 days after the date of such service, file with the court a certification acknowledging receipt of a copy of the order and stating that such 

entity has complied or will comply with the obligations imposed under paragraph (2), or explaining why the entity will not so comply. 

(C) VENUE FOR SERVICE.—A copy of the court order may be served in 

any judicial district where an entity resides or may be found. 

(2) REASONABLE MEASURES.—After being served with a copy of an order 

pursuant to this subsection, the following shall apply: 

(A) PAYMENT NETWORK PROVIDERS.— 

(i) PREVENTING AFFILIATION.—A payment network provider shall 

take technically feasible and reasonable measures, as expeditiously as 

possible, but in any case within 5 days after being served with a copy 

of the court order, or within such time as the court may order, that are 
13 

designed to prevent, prohibit, or suspend its service from completing 

payment transactions involving customers located within the United 

States or subject to the jurisdiction of the United States and any account— 

(I) which is used by the Internet site dedicated to theft of U.S. 

property that is subject to the order; and 

(II) through which the payment network provider would complete such payment transactions. 

(ii) NO DUTY TO MONITOR.—A payment network provider is in compliance with clause (i) if it takes action described in that clause with 

respect to accounts it has as of the date of service of the order, or as 

of the date of any subsequent notice that its service is being used to 

complete payment transactions described in clause (i). 

(B) INTERNET ADVERTISING SERVICES.— (i) REQUIRED ACTIONS.—An Internet advertising service that contracts with the Internet site dedicated to theft of U.S. property that is 

subject to the order to provide advertising to or for such Internet site, 

or that knowingly serves advertising to or for such internet site, shall 

take technically feasible and reasonable measures, as expeditiously as 

possible, but in any case within 5 days after being served with a copy 

of the order, or within such time as the court may order, that are designed to— 

(I) prevent its service from providing advertisements to or relating to the Internet site; 

(II) cease making available advertisements for the Internet 

site, or paid or sponsored search results, links, or other placements 

that provide access to the Internet site; and 

(III) cease providing or receiving any compensation for advertising or related services to, from, or in connection with the Internet site. 

(ii) NO DUTY TO MONITOR.—An internet advertising service is in 

compliance with clause (i) if it takes action described in that clause 

with respect to accounts it has as of the date on which a copy of the 

order is served, or as of the date of any subsequent notice that its service is being used for activities described in clause (i). 

(3) COMMUNICATION WITH USERS.—An entity taking an action described in 

this subsection shall determine the means to communicate such action to the 

entity’s users or customers. 

(4) ENFORCEMENT OF ORDERS.— (A) RULE OF CONSTRUCTION.—The authority under this subsection shall 

be the sole legal remedy to enforce the obligations of any entity under this 

subsection. 

(B) PROCEDURES AND RELIEF.— 

(i) SHOW CAUSE ORDER.—On a showing by the qualifying plaintiff 

of probable cause to believe that an entity served with a copy of a court 

order issued under subsection (c) has not complied with its obligations 

under this subsection by reason of such court order, the court shall require the entity to show cause why an order should not issue— 

(I) to require compliance with the obligations of this subsection; and 

(II) to impose an appropriate monetary sanction, consistent 

with the court’s exercise of its equitable authority, to enforce compliance with its lawful orders, if the entity— 

(aa) has knowingly and willfully failed to file a certification required by paragraph (1)(B); 

(bb) has filed such a certification agreeing to comply but has knowingly and 

willfully failed to do so; or 

(cc) has knowingly and willfully certified falsely that compliance with the requirements of paragraph (2) is not required by law. 

(ii) SERVICE OF PROCESS.—The order to show cause, and any other 

process, may be served in any judicial district where the entity resides 

or may be found. 

(C) DEFENSE.—An entity against whom relief is sought under subparagraph (B) may establish an affirmative defense by showing that the entity 

does not have the technical means to comply with this subsection without 

incurring an unreasonable economic burden, or that the order is not authorized by this subsection. Such showing shall not be presumed to be a complete defense but shall serve as a defense only for those measures for which 
14 

a technical limitation on compliance is demonstrated or for such portions 

of the order as are demonstrated to be unauthorized by this subsection. 

(5) IMMUNITY.— 

(A) IMMUNITY FROM SUIT.—Other than in an action pursuant to paragraph (4), no cause of action shall lie in any Federal or State court or administrative agency against any entity served with a copy of a court order 

issued under subsection (c), or against any director, officer, employee, or 

agent thereof, for any act reasonably designed to comply with this subsection or reasonably arising from such order. 

(B) IMMUNITY FROM LIABILITY.—Other than in an action pursuant to 

paragraph (4)— 

(i) any entity served with a copy of an order under this subsection, 

and any director, officer, employee, or agent thereof, shall not be liable 

for any acts reasonably designed to comply with this subsection or reasonably arising from such order; and 

(ii) any— 

(I) actions taken by customers of such entity to circumvent any 

restriction on access to the Internet site, or portion thereof that is 

subject to such order, that is instituted pursuant to this subsection, 

or 

(II) act, failure, or inability to restrict access to an Internet site 

or portion thereof that is subject to such order, despite good faith 

efforts to comply with such order by such entity, 

shall not be used by any person in any claim or cause of action against 

such entity. 

(e) MODIFICATION OR VACATION OF ORDERS.— 

(1) IN GENERAL.—At any time after the issuance of an order under subsection (c), or an amended order issued under subsection (f), with respect to an 

Internet site dedicated to theft of U.S. property, a motion to modify, suspend, 

or vacate the order may be filed by— 

(A) any person, or owner or operator of property, that is subject to the 

order; 

(B) any registrant of the domain name, or the owner or operator, of 

such Internet site; 

(C) any domain name registrar, registry, or other domain name registration authority that has registered or assigned the domain name of such 

Internet site; or 

(D) any entity that has been served with a copy of an order under subsection (d), or an amended order under subsection (f), that requires such entity to take action prescribed in that subsection. 

(2) RELIEF.—Relief under this subsection shall be proper if the court finds 

that— 

(A) the Internet site subject to the order is no longer, or never was, an 

Internet site dedicated to theft of U.S. property; or 

(B) the interests of justice otherwise require that the order be modified, 

suspended, or vacated. 

(3) CONSIDERATION.—In making a relief determination under paragraph (2), 

a court may consider whether the domain name of the Internet site has expired 

or has been re-registered by an entity other than the entity that is subject to 

the order with respect to which the motion under paragraph (1) is brought. 

(4) INTERVENTION.—An entity required to take action pursuant to subsection (d) if an order issues under subsection (c) may intervene at any time 

in any action commenced under subsection (c) that may result in such order, 

or in any action to modify, suspend, or vacate such order under this subsection. 

(f) AMENDED ORDERS.—The qualifying plaintiff, if alleging that an Internet site 

previously adjudicated in an action under this section to be an Internet site dedicated to theft of U.S. property is accessible or has been reconstituted at a different 

domain name or Internet Protocol address, may petition the court to amend the 

order issued under this section accordingly. 

(g) REPORTING OF ORDERS.— 

(1) IN GENERAL.—The qualifying plaintiff shall inform the Intellectual Property Enforcement Coordinator of any court order issued under subsection (c) or 

amended order issued under subsection (f). 

(2) ALTERATIONS.—Upon the modification, suspension, expiration, or vacation of a court order issued under subsection (c) or an amended order issued 

under subsection (f), the qualifying plaintiff shall, and the defendant may, so 

inform the Intellectual Property Enforcement Coordinator. 
15 

SEC. 104. IMMUNITY FOR TAKING VOLUNTARY ACTION AGAINST SITES DEDICATED TO THEFT 

OF U.S. PROPERTY. 

No cause of action shall lie in any Federal or State court or administrative 

agency against, no person may rely in any claim or cause of action against, and no 

liability for damages to any person shall be granted against, a service provider, payment network provider, Internet advertising service, advertiser, Internet search engine, domain name registry, or domain name registrar for taking any action described in section 102(c)(2), section 103(d)(2), or section 103(b) with respect to an 

Internet site, or otherwise voluntarily blocking access to or ending financial affiliation with an Internet site, in the reasonable belief that— 

(1) the Internet site is a foreign infringing site or is an Internet site dedicated to theft of U.S. property; and 

(2) the action is consistent with the entity’s terms of service or other contractual rights. 

SEC. 105. IMMUNITY FOR TAKING VOLUNTARY ACTION AGAINST SITES THAT ENDANGER PUBLIC HEALTH. 

(a) REFUSAL OF SERVICE.—A service provider, payment network provider, Internet advertising service, advertiser, Internet search engine, domain name registry, 

or domain name registrar, acting in good faith and based on credible evidence, may 

stop providing or refuse to provide services to an Internet site that endangers the 

public health. 

(b) IMMUNITY FROM LIABILITY.—An entity described in subsection (a), including 

its directors, officers, employees, or agents, that ceases or refuses to provide services 

under subsection (a) shall not be liable to any person under any Federal or State 

law for such action. 

(c) DEFINITIONS.—In this section: 

(1) ADULTERATED.—The term ‘‘adulterated’’ has the meaning given that 

term in section 501 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 

351). 

(2) INTERNET SITE THAT ENDANGERS THE PUBLIC HEALTH.—The term ‘‘Internet site that endangers the public health’’ means an Internet site that is primarily designed or operated for the purpose of, has only limited purpose or use 

other than, or is marketed by its operator or another acting in concert with that 

operator for use in— 

(A) offering, selling, dispensing, or distributing any prescription medication, and does so regularly without a valid prescription; or 

(B) offering, selling, dispensing, or distributing any prescription medication that is adulterated or misbranded. 

(3) MISBRANDED.—the term ‘‘misbranded’’ has the meaning given that term 

in section 502 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 352). 

(4) PRESCRIPTION MEDICATION.— 

(A) PRESCRIPTION MEDICATION.—The term ‘‘prescription medication’’ 

means a drug that is subject to section 503(b) of the Federal Food, Drug, 

and Cosmetic Act (21 U.S.C. 353(b)). 

(B) DRUG.—The term ‘‘drug’’ has the meaning given that term in section 201(g)(1) of the Federal Food Drug, and Cosmetic Act (21 U.S.C. 

321(g)(1)). 

(5) VALID PRESCRIPTION.—The term ‘‘valid prescription’’ has the meaning 

given that term in section 309(e)(2)(A) of the Controlled Substances Act (21 

U.S.C. 829(e)(2)(A)). 

SEC. 106. GUIDELINES AND STUDY. 

(a) GUIDELINES.—The Attorney General shall— 

(1) provide appropriate resources and procedures for case management and 

development to effect timely disposition of actions brought under this title; 

(2) develop a deconfliction process in consultation with appropriate law enforcement agencies, including U.S. Immigration and Customs Enforcement, to 

coordinate enforcement activities under this title; 

(3) publish procedures developed in consultation with appropriate law enforcement agencies, including U.S. Immigration and Customs Enforcement, to 

receive information from the public relevant to the enforcement of this title; and 

(4) provide guidance to intellectual property rights holders about what information such rights holders should provide to assist in initiating an investigation or to supplement an ongoing investigation pursuant to this title. 

(b) STUDY.— 

(1) NATURE OF STUDY.—The Register of Copyrights, in consultation with appropriate departments and agencies of the United States and other stakeholders, shall conduct a study on the enforcement and effectiveness of this title 
16 

and on any need to amend the provisions of this title to adapt to emerging technologies. 

(2) REPORTS TO CONGRESS.—Not later than 2 years after the date of the enactment of this Act, the Register of Copyrights shall submit to the Committees 

on the Judiciary of the House of Representatives and the Senate a report containing the results of the study conducted under this subsection and any recommendations that the Register may have as a result of the study. 

SEC. 107. DENYING U.S. CAPITAL TO NOTORIOUS FOREIGN INFRINGERS. 

(a) IDENTIFICATION AND RECOMMENDATIONS REGARDING NOTORIOUS FOREIGN IN- FRINGERS.— 

(1) IN GENERAL.—Using existing resources, the Intellectual Property Enforcement Coordinator, in consultation with the Secretaries of Treasury and 

Commerce, the United States Trade Representative, the Chairman of the Securities and Exchange Commission, and the heads of other departments and appropriate agencies, shall identify and conduct an analysis of notorious foreign 

infringers whose activities cause significant harm to holders of intellectual property rights in the United States. 

(2) PUBLIC INPUT.—In carrying out paragraph (1), the Intellectual Property 

Enforcement Coordinator shall solicit and give consideration to the views and 

recommendations of members of the public, including holders of intellectual 

property rights in the United States. 

(b) REPORT TO CONGRESS.—The Intellectual Property Enforcement Coordinator 

shall, not later than 6 months after the date of the enactment of this Act, submit 

to the Committees on the Judiciary of the House of Representatives and the Senate 

a report that includes the following: 

(1) An analysis of notorious foreign infringers and a discussion of how these 

infringers violate industry norms regarding the protection of intellectual property. 

(2) An analysis of the significant harm inflicted by notorious foreign infringers on consumers, businesses, and intellectual property industries in the United 

States and abroad. 

(3) An examination of whether notorious foreign infringers have attempted 

to or succeeded in accessing capital markets in the United States for funding 

or public offerings. 

(4) An analysis of the adequacy of relying upon foreign governments to pursue legal action against notorious foreign infringers. 

(5) A discussion of specific policy recommendations to deter the activities 

of notorious foreign infringers and encourage foreign businesses to adopt industry norms that promote the protection of intellectual property globally, including addressing— 

(A) whether notorious foreign infringers that engage in significant infringing activity should be prohibited by the laws of the United States from 

seeking to raise capital in the United States, including offering stock for 

sale to the public; and 

(B) whether the United States Government should initiate a process to 

identify and designate foreign entities from a list of notorious foreign infringers that would be prohibited from raising capital in the United States. 

TITLE II—ADDITIONAL ENHANCEMENTS TO 

COMBAT INTELLECTUAL PROPERTY THEFT 

SEC. 201. STREAMING OF COPYRIGHTED WORKS IN VIOLATION OF CRIMINAL LAW. 

(a) TITLE 17 AMENDMENTS.—Section 506(a) of title 17, United States Code, is 

amended to read as follows: 

‘‘(a) CRIMINAL INFRINGEMENT.— 

‘‘(1) IN GENERAL.—Any person who willfully infringes a copyright shall be 

punished as provided under section 2319 of title 18, if the infringement was 

committed— 

‘‘(A) for purposes of commercial advantage or private financial gain; 

‘‘(B) by the reproduction or distribution, including by electronic means, 

during any 180-day period, of 1 or more copies or phonorecords of 1 or more 

copyrighted works, or by the public performance by means of digital transmission, during any 180-day period, of 1 or more copyrighted works, when 

the total retail value of the copies or phonorecords, or of the public performances, is more than $1,000; or 
17 

‘‘(C) by the distribution or public performance of a work being prepared 

for commercial dissemination, by making it available on a computer network accessible to members of the public, if such person knew or should 

have known that the work was intended for commercial dissemination. 

‘‘(2) EVIDENCE.—For purposes of this subsection, evidence of reproduction, 

distribution, or public performance of a copyrighted work, by itself, shall not be 

sufficient to establish willful infringement of a copyright. 

‘‘(3) DEFINITION.—In this subsection, the term ‘work being prepared for 

commercial dissemination’ means— 

‘‘(A) a computer program, a musical work, a motion picture or other 

audiovisual work, or a sound recording, if, at the time of unauthorized distribution or public performance— 

‘‘(i)(I) the copyright owner has a reasonable expectation of commercial distribution; and 

‘‘(II) the copies or phonorecords of the work have not been commercially distributed in the United States by or with the authorization of 

the copyright owner; or 

‘‘(ii)(I) the copyright owner does not intend to offer copies of the 

work for commercial distribution but has a reasonable expectation of 

other forms of commercial dissemination of the work; and 

‘‘(II) the work has not been commercially disseminated to the public in the United States by or with the authorization of the copyright 

owner; 

‘‘(B) a motion picture, if, at the time of unauthorized distribution or 

public performance, the motion picture— 

‘‘(i)(I) has been made available for viewing in a motion picture exhibition facility; and 

‘‘(II) has not been made available in copies for sale to the general 

public in the United States by or with the authorization of the copyright owner in a format intended to permit viewing outside a motion 

picture exhibition facility; or 

‘‘(ii) had not been commercially disseminated to the public in the 

United States by or with the authorization of the copyright owner more 

than 24 hours before the unauthorized distribution or public performance.’’. 

(b) TITLE 18 AMENDMENTS.—Section 2319 of title 18, United States Code, is 

amended— 

(1) in subsection (b)(1), by striking ‘‘during any 180-day period’’ and all that 

follows and insert ‘‘of at least 10 copies or phonorecords, or of at least 10 public 

performances by means of digital transmission, of 1 or more copyrighted works, 

during any 180-day period, which have a total retail value of more than 

$2,500;’’; 

(2) in subsection (c)— 

(A) in paragraph (1), by striking ‘‘of 10 or more copies or phonorecords’’ 

and all that follows and inserting ‘‘including by electronic means, of at least 

10 copies or phonorecords, or of at least 10 public performances by means 

of digital transmission, of 1 or more copyrighted works, during any 180-day 

period, which have a total retail value of more than $2,500;’’; and 

(B) in paragraph (3), by striking ‘‘if the offense’’ and all that follows and 

inserting ‘‘in any other case;’’; 

(3) in subsection (d)(4), by striking ‘‘under paragraph (2)’’ and inserting 

‘‘committed for purposes of commercial advantage or private financial gain 

under subsection (a)’’; 

(4) in subsection (f)— 

(A) by amending paragraph (2) to read as follows: 

‘‘(2) the terms ‘reproduction’, ‘distribution’, and ‘public performance’ refer to 

the exclusive rights of a copyright owner under paragraphs (1), (3), (4), and (6), 

respectively, of section 106 (relating to exclusive rights in copyrighted works), 

as limited by sections 107 through 122, of title 17; and’’; 

(B) in paragraph (3), by striking ‘‘; and’’ and inserting a period; and 

(C) by striking paragraph (4); and 

(5) by adding at the end the following new subsection: 

‘‘(g) EVIDENCE OF TOTAL RETAIL VALUE.—For purposes of this section and section 506(a) of title 17, total retail value may be shown by evidence of— 

‘‘(1) the total retail price that persons receiving the reproductions, distributions, or public performances constituting the offense would have paid to receive 

such reproductions, distributions, or public performances lawfully; 
18 

‘‘(2) the total economic value of the reproductions, distributions, or public 

performances to the infringer or to the copyright owner, as shown by evidence 

of fee, advertising, or other revenue that was received by the person who commits the offense, or that the copyright owner would have been entitled to receive had such reproductions, distributions, or public performances been offered 

lawfully; or 

‘‘(3) the total fair market value of licenses to offer the type of reproductions, 

distributions, or public performances constituting the offense.’’. 

(c) RULE OF CONSTRUCTION.—Any person acting with a good faith reasonable 

basis in law to believe that the person’s conduct is lawful shall not be considered 

to have acted willfully for purposes of the amendments made by this section. Such 

person includes, but is not limited to, a person engaged in conduct forming the basis 

of a bona fide commercial dispute over the scope of existence of a contract or license 

governing such conduct where such person has a reasonable basis in law to believe 

that such conduct is noninfringing. Nothing in this subsection shall affect the application or interpretation of the willfulness requirement in any other provision of civil 

or criminal law. 

SEC. 202. TRAFFICKING IN INHERENTLY DANGEROUS GOODS OR SERVICES. 

Section 2320 of title 18, United States Code, is amended as follows: 

(1) Subsection (a) is amended to read as follows: 

‘‘(1) IN GENERAL.— 

‘‘(A) OFFENSES.—Whoever— 

‘‘(i) intentionally traffics or attempts to traffic in goods or services 

and knowingly uses a counterfeit mark on or in connection with such 

goods or services, 

‘‘(ii) intentionally traffics or attempts to traffic in labels, patches, 

stickers, wrappers, badges, emblems, medallions, charms, boxes, containers, cans, cases, hangtags, documentation, or packaging of any type 

or nature, knowing that a counterfeit mark has been applied thereto, 

the use of which is likely to cause confusion, to cause mistake, or to 

deceive, or 

‘‘(iii) intentionally imports, exports, or traffics in counterfeit drugs 

or intentionally participates in or knowingly aids drug counterfeiting, 

shall, if an individual, be fined not more than $2,000,000 or imprisoned not 

more than 10 years, or both, and, if a person other than an individual, be 

fined not more than $5,000,000. 

‘‘(B) SUBSEQUENT OFFENSES.—In the case of an offense by a person 

under this paragraph that occurs after that person is convicted of another 

offense under this paragraph, the person convicted, if an individual, shall 

be fined not more than $5,000,000 or imprisoned not more than 20 years, 

or both, and if other than an individual, shall be fined not more than 

$15,000,000. 

‘‘(2) SERIOUS BODILY HARM OR DEATH.— 

‘‘(A) SERIOUS BODILY HARM.—If the offender knowingly or recklessly 

causes or attempts to cause serious bodily injury from conduct in violation 

of paragraph (1), the penalty shall be, for an individual, a fine of not more 

than $5,000,000 or imprisonment for any term of years or for life, or both, 

and for other than an individual, a fine of not more than $15,000,000. 

‘‘(B) DEATH.—If the offender knowingly or recklessly causes or attempts 

to cause death from conduct in violation of paragraph (1), the penalty shall 

be, for an individual, a fine of not more than $5,000,000 or imprisonment 

for any term of years or for life, or both, and for other than an individual, 

a fine of not more than $15,000,000. 

‘‘(3) MILITARY GOODS OR SERVICES.— 

‘‘(A) IN GENERAL.—A person who commits an offense under paragraph 

(1) shall be punished in accordance with subparagraph (B) if— 

‘‘(i) the offense involved a good or service described in paragraph 

(1) that if it malfunctioned, failed, or was compromised, could reasonably be foreseen to cause— 

‘‘(I) serious bodily injury or death; 

‘‘(II) disclosure of classified information; 

‘‘(III) impairment of combat operations; or 

‘‘(IV) other significant harm— 

‘‘(aa) to a member— 

‘‘(AA) of the Armed Forces; or 

‘‘(BB) of a Federal, State, or local law enforcement 

agency; or 
19 

‘‘(bb) to national security or critical infrastructure; and 

‘‘(ii) the person had knowledge that the good or service is falsely 

identified as meeting military standards or is intended for use in a 

military or national security application, or a law enforcement or critical infrastructure application. 

‘‘(B) PENALTIES.— 

‘‘(i) INDIVIDUAL.—An individual who commits an offense described 

in subparagraph (A) shall be fined not more than $5,000,000, imprisoned for not more than 20 years, or both. 

‘‘(ii) PERSON OTHER THAN AN INDIVIDUAL.—A person other than an 

individual that commits an offense described in subparagraph (A) shall 

be fined not more than $15,000,000. 

‘‘(C) SUBSEQUENT OFFENSES.— 

‘‘(i) INDIVIDUAL.—An individual who commits an offense described 

in subparagraph (A) after the individual is convicted of an offense 

under subparagraph (A) shall be fined not more than $15,000,000, imprisoned not more than 30 years, or both. 

‘‘(ii) PERSON OTHER THAN AN INDIVIDUAL.—A person other than an 

individual that commits an offense described in subparagraph (A) after 

the person is convicted of an offense under subparagraph (A) shall be 

fined not more than $30,000,000.’’. 

(2) Subsection (e) is amended— 

(A) in paragraph (1), by striking the period at the end and inserting 

a semicolon; 

(B) in paragraph (3), by striking ‘‘and’’ at the end; 

(C) in paragraph (4), by striking the period at the end and inserting 

a semicolon; and 

(D) by adding at the end the following: 

‘‘(5) the term ‘counterfeit drug’ has the meaning given that term in section 

201(g)(2) of the Federal Food Drug, and Cosmetic Act (21 U.S.C. 321(g)(2)); 

‘‘(6) the term ‘critical infrastructure’ has the meaning given that term in 

section 2339D(c); 

‘‘(7) the term ‘drug counterfeiting’ means any act prohibited by section 

301(i) of the Federal Food Drug, and Cosmetic Act (21 U.S.C. 331(i)); 

‘‘(8) the term ‘final dosage form’ has the meaning given that term in section 

735(4) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379g(4)); 

‘‘(9) the term ‘falsely identified as meeting military standards’ relating to 

a good or service means there is a material misrepresentation that the good or 

service meets a standard, requirement, or specification issued by the Department of Defense, an Armed Force, or a reserve component; 

‘‘(10) the term ‘use in a military or national security application’ means the 

use of a good or service, independently, in conjunction with, or as a component 

of another good or service— 

‘‘(A) during the performance of the official duties of the Armed Forces 

of the United States or the reserve components of the Armed Forces; or 

‘‘(B) by the United States to perform or directly support— 

‘‘(i) combat operations; or 

‘‘(ii) critical national defense or national security functions; and 

‘‘(11) the term ‘use in a law enforcement or critical infrastructure application’ means the use of a good or service, independently, in conjunction with, or 

as a component of, another good or service by a person who is directly engaged 

in— 

‘‘(A) Federal, State, or local law enforcement; or 

‘‘(B) an official function pertaining to critical infrastructure.’’. 

SEC. 203. PROTECTING U.S. BUSINESSES FROM FOREIGN AND ECONOMIC ESPIONAGE. 

(a) FOR OFFENSES COMMITTED BY INDIVIDUALS.—Section 1831(a) of title 18, 

United States Code, is amended, in the matter after paragraph (5)— 

(1) by striking ‘‘15 years’’ and inserting ‘‘20 years’’; and 

(2) by striking ‘‘not more than $500,000’’ and inserting ‘‘not less than 

$1,000,000 and not more than $5,000,000’’. 

(b) FOR OFFENSES COMMITTED BY ORGANIZATIONS.—Section 1831(b) of such title 

is amended by striking ‘‘$10,000,000’’ and inserting ‘‘not more than the greater of 

$10,000,000 or 3 times the value of the stolen trade secret to the organization (including expenses for research and design or other costs of reproducing the trade secret that the organization has thereby avoided)’’. 
20 

SEC. 204. AMENDMENTS TO SENTENCING GUIDELINES. 

Not later than 180 days after the date of the enactment of this Act, pursuant 

to its authority under section 994(p) of title 28, United States Code, the United 

States Sentencing Commission shall— 

(1) review, and if appropriate, amend Federal Sentencing Guidelines and 

policy statements applicable to persons convicted of— 

(A) intellectual property offenses; 

(B) an offense under section 2320(a) of title 18, United States Code; or 

(C) an offense under section 1831 of title 18, United States Code; 

(2) in carrying out such review, consider amending such Guidelines and policy statements to— 

(A) apply an appropriate offense level enhancement for intellectual 

property offenses committed in connection with an organized criminal enterprise; 

(B) apply an appropriate offense level enhancement to the simple misappropriation of a trade secret; 

(C) apply an additional appropriate offense level enhancement if the defendant transmits or attempts to transmit the stolen trade secret outside 

of the United States and an additional appropriate enhancement if the defendant instead commits economic espionage; 

(D) provide that when a defendant transmits trade secrets outside of 

the United States or commits economic espionage, that the defendant 

should face a minimum offense level; 

(E) provide for an offense level enhancement for Guidelines relating to 

the theft of trade secrets and economic espionage, including trade secrets 

transferred or attempted to be transferred outside of the United States; 

(F) apply an appropriate offense level enhancement and minimum offense level for offenses under section 2320(a) of title 18, United States Code, 

that involve a product intended for use in a military or national security 

application, or a law enforcement or critical infrastructure application; 

(G) ensure that the Guidelines and policy statements (including section 

2B5.3 of the Federal Sentencing Guidelines (and any successor thereto)) reflect— 

(i) the serious nature of the offenses described in section 2320(a) 

of title 18, United States Code; 

(ii) the need for an effective deterrent and appropriate punishment 

to prevent offenses under section 2320(a) of title 18, United States 

Code; and 

(iii) the effectiveness of incarceration in furthering the objectives 

described in clauses (i) and (ii); and 

(H) ensure reasonable consistency with other relevant directives and 

Guidelines and Federal statutes; 

(3) submit to Congress a report detailing the Commission’s actions with respect to each potential amendment described in paragraph (2); 

(4) make such conforming amendments to the Federal Sentencing Guidelines as the Commission determines necessary to achieve consistency with other 

Guideline provisions and applicable law; and 

(5) promulgate the Guidelines, policy statements, or amendments provided 

for in this section as soon as practicable in accordance with the procedure set 

forth in section 21(a) of the Sentencing Act of 1987 (28 U.S.C. 994 note), as 

though the authority under that Act had not expired. 

SEC. 205. DEFENDING INTELLECTUAL PROPERTY RIGHTS ABROAD. 

(a) RESOURCES TO PROTECT INTELLECTUAL PROPERTY RIGHTS.— 

(1) POLICY.—The Secretary of State and the Secretary of Commerce, in consultation with the Register of Copyrights, shall ensure that the protection in 

foreign countries of the intellectual property rights of United States persons is 

a significant component of United States foreign and commercial policy in general, and in relations with individual countries in particular. 

(2) DEDICATION OF RESOURCES.—The Secretary of State and the Secretary 

of Commerce, in consultation with the Register of Copyrights, and the heads of 

other appropriate departments and agencies, shall ensure that adequate resources are available at the United States embassy or diplomatic mission (as 

the case may be) in any country that is identified under section 182(a)(1) of the 

Trade Act of 1974 (19 U.S.C. 2242(a)(1)) to ensure— 

(A) aggressive support for enforcement action against violations of the 

intellectual property rights of United States persons in such country; 
21 

(B) cooperation with and support for the host government’s efforts to 

conform its applicable laws, regulations, practices, and processes to enable 

the host government to honor its international and bilateral obligations 

with respect to the protection of intellectual property rights; 

(C) consistency with the policy and country-specific priorities set forth 

in the most recent report of USTR under such section 182(a)(1); and 

(D) support for holders of United States intellectual property rights and 

industries whose access to foreign markets is improperly restricted by intellectual property related issues. 

(b) NEW APPOINTMENTS.— (1) APPOINTMENTS AND ADMINISTRATION.—The Secretary of State and the 

Secretary of Commerce, in consultation with the Register of Copyrights, shall 

appoint at least one intellectual property attache ́ to be assigned to the United 

States embassy or diplomatic mission (as the case may be) in a country in each 

geographic region covered by a regional bureau of the Department of State. The 

Director of the Patent and Trademark Office shall maintain authority over hiring, personnel ratings, and objectives for the attache ́s, in consultation with the 

Secretary of State. Depending on experience and expertise, intellectual property 

attache ́s shall be designated as the diplomatic rank in-mission of First Secretary or Counselor. 

(2) REGIONS DEFINED.—The geographic regions referred to in paragraph (1) 

are the following: 

(A) Africa. 

(B) Europe and Eurasia. 

(C) East Asia and the Pacific. 

(D) The Near East. 

(E) South and Central Asia and the Pacific. 

(F) The Western Hemisphere. 

(3) DUTIES.—The intellectual property attache ́s appointed under this subsection shall focus primarily on intellectual property matters, including the development, protection, and enforcement of applicable law. Each intellectual 

property attache ́ shall work, in accordance with guidance from the Director, and 

in coordination with appropriate staff at the Departments of Commerce and 

State and the Copyright Office, to advance the policy goals and priorities of the 

United States Government. Those policy goals and priorities shall be consistent 

with USTR’s reports under section 182(a)(1) of the Trade Act of 1974. The intellectual property attache ́s shall work with United States holders of intellectual 

property rights and industry to address intellectual property rights violations 

in the countries where the attache ́s are assigned. 

(c) PRIORITY ASSIGNMENTS.— (1) IN GENERAL.—Subject to paragraph (2), in designating the United States 

embassies or diplomatic missions where attache ́s will be assigned under subsection (b), the Secretary of State and the Secretary of Commerce shall give priority to countries where the activities of an attache ́ are likely to achieve the 

greatest potential benefit in reducing intellectual property infringement in the 

United States market, to advance the intellectual property rights of United 

States persons and their licensees, and to advance the interests of United 

States persons who may otherwise be harmed by violations of intellectual property rights in those countries. 

(2) ASSIGNMENTS TO PRIORITY COUNTRIES.—In carrying out paragraph (1), 

the Secretary of State and the Secretary of Commerce shall consider assigning 

intellectual property attache ́s— 

(A) to the countries that have been identified under section 182(a)(1) 

of the Trade Act of 1974 (19 U.S.C. 2242(a)(1)); and 

(B) to countries of critical economic importance to the advancement of 

United States intellectual property rights and interests. 

(d) TRAINING.—The Secretary of State and the Secretary of Commerce shall ensure that each intellectual property attache ́ appointed under subsection (b) is fully 

trained for the responsibilities of the position before assuming duties at the United 

States embassy or diplomatic mission to which the attache ́ is assigned. 

(e) COORDINATION.—The activities of intellectual property attache ́s under this 

section shall be determined in consultation with the Intellectual Property Enforcement Coordinator. The Director shall assist in coordinating the policy priorities and 

activities of the intellectual property attache ́s and oversee administrative and personnel matters. 

(f) TRAINING AND TECHNICAL ASSISTANCE.— 

(1) CONSISTENCY.—Using existing resources, all training and technical assistance provided by intellectual property attache ́s appointed under subsection 
22 

(b), or under other authority, relating to intellectual property enforcement and 

protection abroad shall be designed to be consistent with the policy and countryspecific priorities set forth in the most recent report of USTR under section 

182(a) of the Trade Act of 1974. 

(2) ROLE OF IPEC.—Such training and technical assistance programs shall 

be carried out in consultation with the Intellectual Property Enforcement Coordinator. The Director shall assist in coordinating the training and technical assistance programs conducted by intellectual property attache ́s. 

(g) ACTIVITIES IN OTHER COUNTRIES.—In the case of countries that are not identified under section 182(a)(1) of the Trade Act of 1974, the activities of Federal departments and agencies with respect to intellectual property rights in those countries, intellectual property programs and outreach of the United States Government 

in those countries, and training and technical assistance programs of the United 

States Government relating to intellectual property in those countries may be conducted to the extent they are consistent with compelling commercial or foreign policy interests of the United States. 

(h) REPORTS TO CONGRESS.—The Intellectual Property Enforcement Coordinator 

shall include in the annual report submitted under section 314 of the Prioritizing 

Resources and Organization for Intellectual Property Act of 2008 (15 U.S.C. 8114) 

on the activities of the advisory committee established under section 301 of that Act 

(15 U.S.C. 8111) information on the appointment, designation for assignment, and 

activities of all intellectual property attache ́s of any Federal department or agency 

who are serving abroad. 

(i) DEFINITIONS.—In this section: 

(1) DIRECTOR.—The terms ‘‘Director of the Patent and Trademark Office’’ 

and ‘‘Director’’ mean the Under Secretary for Intellectual Property and Director 

of the Untied States Patent and Trademark Office. 

(2) INTELLECTUAL PROPERTY ENFORCEMENT.—The term ‘‘intellectual property enforcement’’ has the meaning given that term in section 302 of the 

Prioritizing Resources and Organization for Intellectual Property Act of 2008 

(15 U.S.C. 8112). 

(3) INTELLECTUAL PROPERTY ENFORCEMENT COORDINATOR.—The term ‘‘Intellectual Property Enforcement Coordinator’’ means the Intellectual Property Enforcement Coordinator appointed under section 301 of the Prioritizing Resources 

and Organization for Intellectual Property Act of 2008 (15 U.S.C. 8111). 

(4) INTELLECTUAL PROPERTY RIGHTS.—The term ‘‘intellectual property 

rights’’ means the rights of holders of copyrights, patents, trademarks, other 

forms of intellectual property, and trade secrets. 

(5) USTR.—The term ‘‘USTR’’ means the United States Trade Representative. 

(6) UNITED STATES PERSON.—The term ‘‘United States person’’ means— 

(A) any United States resident or national; 

(B) any corporation, partnership, other business entity, or other organization, that is organized under the laws of the United States; and 

(C) any foreign subsidiary or affiliate (including any permanent foreign 

establishment) of any corporation, partnership, business entity, or organization described in subparagraph (B), that is controlled in fact by such corporation, partnership, business entity, or organization. 

(j) AUTHORIZATION OF APPROPRIATIONS.—The Secretary of State and the Secretary of Commerce shall provide for the training and support of the intellectual 

property attache ́s appointed under subsection (b) using existing resources. 

Æ 

Mr. CONYERS. Thank you, Chairman Smith, and good morning to 

my fellow colleagues on the Committee. This is a very important 

hearing, and I want to commend you on your statement, because 

you raise some issues that I think we will have to go into quite 

carefully. 

Now, there have been attempts to deal with the problem that is 

before us today. But HR 3261, the ‘‘Stop Online Piracy Act,’’ represents a great deal of work and some experience from our attempts to deal with this subject before. 
23 

I am very pleased that this is a bipartisan bill, and I think that 

is very important. 

Now, there have been a number of attempts to stop online intellectual property theft and fraud. Some of the leading Internet service providers and right holders, and the best practices standards 

that are being developed with in the advertising network and payment processing companies, and particularly MasterCard, have all 

come to my intention. I commend them. But this private cooperation is not sufficient. Our studies have shown that upwards of onequarter of all Internet traffic is copyright infringing. And to those 

who say that a bill to stop online theft will break the Internet, I 

would like to point out that it is not likely to happen. 

Users connect to the Internet through service providers, like 

AT&T and Verizon, but by most accounts, and I have to bring up 

Google’s name again in the beginning of this discussion, Google’s 

search engine connects users to Internet content more often than 

any other, and places the most advertisements. As users surf the 

web, their computers, connect with domain name servers to resolve 

the site name that they type into their browser and its location on 

the web. 

Now, we are getting a number of reactions from this proposal. 

Some rightsholders have said that the market based process outlined in Section 103 of the bill does not go far, and too many players who profit from piracy. But on the other hand, there are some 

in the technology sector that have said this bill will break the 

Internet and strangle startups and Silicon Valley giants alike. And 

so, I reluctantly asked to put this into the record, ‘‘The attack of 

the Internet killers.’’ 

Mr. SMITH. Without objection, that will be made a part of the 

record. 

[The information referred to follows:] 
24 

Mr. CONYERS. It is very serious business. ‘‘Do not walk, run.’’ 

‘‘Tell Congress there is a better way.’’ ‘‘Threatens global Internet 

security.’’ ‘‘Kills cloud computers.’’ ‘‘An American job crushing monster.’’ That is our bill, H.R. 3261. 

Mr. SMITH. Is that not a comic? 

Mr. CONYERS. No, this is serious. [Laughter.] 

It is a terrible thing, and that we ought to know better. 

Now, on a more serious note, we have from our friends in the 

American Civil Liberties Union a caution that I have to take more 

seriously because they have some questions that I think needs to 

be examined here, and that is, the first one is that there is an At-
25 

torney General section of the bill that only the Justice Department, 

in its wisdom, can ask a court to filter or block web content. What 

the American Civil Liberties Union is telling us is that we will, 

with this legislation, inadvertently involve non-infringing operators, and that this would violate their constitutional rights. 

Now, against that, I am going to ask to put in the imminent 

First Amendment scholar, Floyd Abrams’, recommendation that 

says that the notion that this bill threatens freedom of expression 

is unsupportable. It protects creators of free speech, as Congress 

has done and the Judiciary Committee especially has been particularly sensitive to protecting. And so, I ask unanimous consent to 

put in the statement of attorney Floyd Abrams. And I yield back 

the balance of my time. Thank you. 

Mr. SMITH. Without objection. 

[The information referred to follows:] 
26 

CAHILL GORDO:S & REINDEL LLP 

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In this letter, I will Sllmllli.rriLE the provisIons of the statatc hriefly and then turn TO its 

constitutionality under the First Amendment. I think it useful, ho~ever, to begin with some observatil)ns. ahout copyright law and the Fir-;t Amendment in trle age of the Internet. 

I start ':>"'ith what ~hould not be contro\'ersj~ll The Internet is one of the 

of frecd0m in lhe history of the world, That is \vhy, as SecretJry of State Climon has 

is an "urgent nced" to protect freedom of expression on the Internet throughout the world 

same time, however, she poinled out that "all societie~ recognize that freedom Dr cxpr~-;",ioll has its 

limits," ohscrving specifically that those who us.e the Internet to "distrihure stolen intellectual propcrty Cdnnot divorce their online actiun., from their real world identities" and lhat our "safeguard billiuns of dollm-s in intellectual property [is] at swke if we cannot rely on th.' «,.'mitvnf "",. 

information nchvorks," 

It is no answer to this dHlllenge to treat loose metaphvrs--the Internet as '·tbe Wild 

\Vc')L" for cxal11plc-::ts substitutes for seriou/-, legal analysis. It i~ une thing to say that the lnternct 

must be free; it is something else to say that it must be lawless. Even the Wild \Ve/-,t had sheriffs_ 

und even those who usc the Internet rnll~t obey duly adopted laws, 

It is thus no ~urprise that libel law applie ... to material that appears on the Intnnct. A1illim y, Ballks. 642 S.E.2d 892 (Ga. Ct. App. 2007) (holding that defendant publj,hcd lioelou5 ,tatem>?nts hy posting them ~m his website) Cel t. denied (June 4, 2007), Or tbat hbd precedents regard· 

lllg printing information un paper are ~iven comparable meaning as to information posted ~)l11ine, 

,Nationwide fli- rVeekly Administration, Inc v. Belo Corp., 512 F.3d 137 (Stb Cir, 2(07) (hoJdin~ that 

the '\ingle publicaLion rule" for lhe ~tatule or lirnitati(1J1~ m libel suits aprlies to Internet pUblication), Or that principks laul arc applied to personal information online with L!JC 

same animating principlc~ apply in If,orc traditional media, Yath v, Clinics. N.P., 767 

N. \\1 ,2d 34 (wlinn, Ct Ap, 2009) (holding that posting inforl1Iati(;n from a patient' ~ medicdl file on a 

",nrial nct\.vorking \:vcl"itc cOfl<.;titnte" the- "puhlicity"' e!emr:-nt of invasion o[ pri\lac~"); Benz v. Wash~ 

ingfrm Xew."IjHlj)(!r Publi'l/Cillg Co., 2006 \VL 2R44896 (D.D.C 29,20(6) (holdin!Z lhat false 

information posted on independent wcbsi~cs provided reasonahle inYdSion of 

privacy and false light again.' .. t private r(J1 ty defendant. in addition to claims regarding publication of 

rcJatcd inforllla1icn by a nc\vspapcr). 
27 

CAHIL L GOHDON & REINDEL LLP 

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2666284 (S.D.:-\.Y . .Iunc 29, 2010) (treating domain name') hosting infringing videos as forft:itablc 

property under U1 ·C.S.c. §§ 2323(a) and ordering their seizure. locking domain names at registry 

lc\"CI, replacmg rcgi~trar information to identify the government a,s the domain narncs' owner, and 

compelling the regj')try to route Lraffic to the domain names to a government TP address notifying the 

public that the domain name was ~eized). ¥lhilc Congress has creaLed safe harhors to accommndate 

tlle invention of online ~ef\'ice proviJers, it has clearly declined to l~t\v for 

the on-line world." Copyright claims online are tilli'i "gcnt:mlly be in 

the non-online \v(lrld." FIlis:on v. RobertS(lrt, 357 F.3d 1072 (9th Cit. 

omitted) 

Copyright law has existed throughout our Nation's hi~lury. The COl1'-;titurion it::.elf 

to adopt copyright legislation (Art. 1. Sec. 8, CIauc,e R) and the fl,,,[ "Hell 

tion was 1790, a year before the Firr.;t Amendment was approved hy Congress. Ch. 

1 Stat. 124 (1790) (repealed). Froln the 5t8ft, injunctions lle·e[C one form of relicf accorded to victIms 

of copjTlght infringement. (Courts applied the l790 Act, and its later amendments. to grant injl\nctions "according to principles of equity."' Act of Feb. 3, 1831. ch. 16,4 Slat. at 43R (I Wll) (repealed 

1870) (cited in Kristina Rmettc, ·'Back to the Flllure: !-Im,,-' FederaL C()Ufts Create a flederul Common J.{JIV Copyright 177T!JUgh Permanent l!~illl1ctions Flfture V/orks;' 2 J. Intell. Prop, L 

325.340 (l994)). However, since injunctions in have frequently been held to 

he uncon';tilutional P110r restraints on speech. Near v. 283 U.S. 697 (!9'.11); ,Vnv York 

Times Co. v. United States, 403 V.S. 713 (1971), and for other reasons, the sublect ha .... arisen a~ to 

the appliC:Jti('ll, if any, ot the First Amendment to copyright principles . . ';~(;"e gCJ;eral(v, Melville B 

Nimmer & Dayjd Nimmer, Nimmer on Copyright § 19 (20l0), 

Tbe issue of whether and, if so, hmv CClillill elements of the Copyright Ac:t should be 

read to accommouLlte \'arinus Fir'lt Amendment intert'::'ls rlle law could 

clearer, hnwever, that injunctions arl; a longstanding, corISlitutioi1:11]y· sa:nctiontd w;", In ,"mo'"" 3nd 

prevent cc'pyright violations. Ir:de~:d, th~it prcmi;oc \va:~ explicit 

the Supreme Court's most farnou~ prior rcsfraint case, asse"ing publi(:ation 

\vhich noted that "no on(~ denic:s thJ.t J newspaper can owreJ'[vbr ,:ni()iu:,c1 

)'Tighted Ivork<; of another:' Nn'l-" York Times Co., 

concl1rrjng). 

obsta.cle to enjoining, pur~uant to federal 

Illark or (":opYTighl." Floyd A bram<; & 

Pr;0)' Restm;nts. 1026 PUIPat 247.261 (2010): 

[he and hyultc!ions, 38 J 

mudc, song or other ',.':;ork . 

,,;c'g"lClt;U lrade-

"'1;"'" '"1(" 2010' 

reThe Supreme emui's mmt detailed tre-l,tmC:lt of the interrelationship bctv,:ecn the 

f"ir:,t AlT~cndment and copyright, the semin2.i case of Hmpl!r & Rm·\· 

terpr., 471 T-'.S. 539, 560 (1985), slr,,>sed that far [rom cnllfii"tir,",('i,h 

Ilm'''2m .'\u<lctLJally furthers the very interests vlihich the f~,~~:\~~):'~~~~~~~~i~;:;~:~l "First Aillendrncnl pH)lc(;lions,·' the Conn noted, aIe ·'already C~TIbodied in di~tinctiol1" 
28 

CAHILL GOHOO:-' & REINDEL LLP 

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between copyright~lhle expre:-;'iiOIl and ullcopyrightahle facts ,-mu ideas." The COlnstitution,upports 

the explicit protccti()n of such expre~sion and creativity, the Comt :-.tated, \ViThil1 a Hd,,,,,,,,,,,,,,m 

defends both the right to speak alld the ahility to profit from "fTllie Frarners intcnueo cupyright itself to be the engine of free expressirlO," explained the and "lb ly estahlbhing u markctahte right to the u~e of one',,! expression. copyright :,upplies the economic incentive to create and dissemInate ideas." ld at 558. Copyright ldw thus f0rtit1cs for spcJ.kers anJ Cleatl)lS, ill a 

First Amendment context, wItile stimulating future 

The evident constitutionality of injunctive relief for copynght violations doe') nut 

mean. TO be sure, that injIJ1Jctions must he issued in response LO a cnpYlight 

violation, nor that the ~eizure powers under the Imv must be exercised \\'lthout due regard 

to Pint ;\mendment comider8tions. Indeed ItlCe ~"'rfi'me 

mak.ing a "categorical grant" of injunctive 

change, L.L.C,. 547 U.S. 388. 394 (2006), 

recel1t, cdehrated copy-nght case, S£llinger v. 

has ever denied, however, i~ that injunctions are 

violations. 

patent in frilli;emcnl v. kferf·E(-

Circuit ~p~lied in a 

607 F.3d 68 (2d Cir. 2010). Vlhat no court 

and constitutional resplm..,c to copyright 

r turn to a discu:-,:slon of the hil! itsdf. Tht: Stop Online Piracy Act is de~igned to enforce federal copyright and trademark law In the age of the Inlcrnet. Hearing'). hefnre thb Committee 

ha"ve powerfully revealed what Chairman Smith llas as the ·'destructi'lC eff':CLS of 

online 'parasites' -- wcb-ba~ed entities that :,olea} .. The Stop Online: Piracy Act 

aims to combat the theft and infringement of l\mcrica:l propeny. copyrighfs and trademarks, whether 'Inch activity originates within or beyond Lhe Ullited StCltes. 

The r1ill doe., so by strengthening the lIlCCl':.UICS \r~at the 

partie.'., may pun,ue, \vith court apprO'val, 10 Clddrl3ss 111111n:~lllg c'.JJ1l,ml 

relicf prcYiom.ly availab1c against infringing 

tors of domain name tr:okup 'iervices, pa',l11!'ntnctwork 

search engines to cease supporling or cDcper<lting 

(ienerCll 
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The Online Piracy Act aims La counter the copyright infringement of "foreign 

infringing sites, as sites that arc (1) "committing or facilitating the commission of 

crIminal violmions·' unuer cunent law,2 (2) \\"hlch \vQuld, hased on those criminal violations, "be 

suhject to seizure in the United Slates in an aClion brought by the Attorn!:), Genemi if such site v.ere 

a uomcstic hlLcrnet site." and (3) \vhich are directed at the U.S. and used \vithii11he U.S 

For theR foreign infringing sites, the bill aUlhoIlzes tht: Attornl2-Y General to commence two types of actions, The Attorney General may commence an in personam actinn agJinst 

the registrant of a domain name u~ed hy a foreign infringing S[[C, nT an uwner or operator of a foreign infringing site. If such an individual cannot be located due; diligcnc-c" hy the Attorney 

General, then an in rem action may he conunenceu Clg~inst the infringing :,ite or the foreign 

domain name uo;cd by sucll site. 

Upon commencing one of these actions, the Attorney General <;haU ~cnd a notice of 

alleged violations and intent to proceed to the regi'ltrant of the domain n3me of the site, via both 

email and postal mail addresses li.o;ted in tileilpplicahlcpub!i'registration dat3.ba')e, and via hotb 

email and po-;lal mail addresses of the regislrar, registry or other domain name: registration authorities 1hat rcgistcrcG the dumain name at jS~lIe (to the extent ,]YaiLlhlc). Likewi~,e. the Attorney General shall send thc~ same notice to the owner or opermor of the .;;itc, vi:.l both email and postal mai1. or, 

if there j" no (]ollluin I1allle. to the IV [-dIC'cation entilY, via hath email andpostulmail.as \-veU as notice to the ~itc· s owner or operator in any other form that a cmIlt "may pm\'idt'." ifJ(~ludjng as mdY he 

rcqLlir~d by Rule 4(1) of the Federal Rules of Civil Procedure, 

Under thG bill, cuurtS "may" issue a [(:rnI)UI"IIY re"tra:nirlg (mlr:r. 

tion or an. injnnction "in accordance \\'ith rule 65 

the site's ','IKratm. a reg,l'Uillli '" d LiUfI",m 

tinn" of the site, 1O dcs,istfrom lJnuert;'lkiing '""Y fur',],er[ aLlivi,,,,,; 

infringing sit ... ~." 

By incorporating Rule 65, the ~}lll a.pplies the procedural protection,;; that fcderalla\\' 

cUlTently affords ..ulliLigant<; in civil actions in the United States.. 

verse party." 

The enumcra.ted laws are <>ections 23 j R, 2:; 19. 2~ 19./\. 2,1..19B, 2320 or cliJ.pter 90 of title 18 esc (COllHt0Ifc.it lahels, ccunterfcit g:()oJ~ or ~crvic-es. 

unauthorlzeu lecording,~ of motion pi..::lure'>, sound fe-cording" and music 

videos, and lrade secrets) 
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conditions BlUst be m~t. '·[S ]pccific [acls in an affiC1ayit or verifle-d lTlfllplaint [must] clearly shU\\! 

that immediate and irreparable injury. lo~~, or damage will resldt ". before the adverse party can be 

heard in Opposiliun." AnJ "the movant's attorney lmu~t] certifry] in writing <illy efforts m~1.dc to 

give notice and the reason~ why it should not be required." Hearings for order" \vithout notice JTe to 

be held "at the carlie~t possible time, taking precedence m"cr all other matters:' under Rule 65, and 

the adverse party may move to Ji ..;soJye nr lvYO dhy~' no~icc tQ th:: moving pmiy. 

All thest: protections are incorporated into the 

Pursuant to the Act, once cmui oruers are is~ued, \Nilh "prior approval of the court." a 

process server on behalf of the Attorney General may <;erve '~~:~C::L~: ~::iL:;~r~';~; entities that may be \vith the site question. l"irst. <.( 

bv its C.S . .,ub~cribcr~ infrin2.iIH! sHe 

lI~ain namc'~ [IPI address," and may display-a ,;otice 

action pursuant to a court order. The text of thi'l notice is 

and s[Jecify that the ZlcLion is being taken pursuant to a court order. Second. <:.carch 'Ihall 

prevent the site, or a specified portion of the site. from b(:ing scrv~d as a direct hypertext link. Third, 

payment network providers s.hall prevent, prohibit or sllspend payment tran~acti(jns bct\vcen C.S. 

cu~tomt'rs, or custOlllt'fS ~ubject to the juri .... diction of the (J .S., and the site. fOUlth, lnte-met advcrLissl:rvic{2s ..,hall prevent their net\vorks from provilling adv..:'rlhcmcnls to the wc,bsite named in the 

Each of rhe':.c entitles arc 10 tClkc ·'tccbnicall), fea,ihle anet reasoTidble measures" to 

comply \vithin five days of receiving an order. In the case ~r service providers, the Stop Online Piracy Act .<;,fates such providers "shall not be rcq\'lircd" 1.0 llll'dify lheir network u: L.cilities:o 

with sllch orders: nor to take "measures \.vith to domain Tl~-:.me reso!utlPns not p,'rforrnLx! l)y 

its own domain name scn'Cr I; nor to c011[muclaklllgc pr,nenlive action', under the order once access 

to the domain name bas been "effl'ctively disabled "' The billa)s.o notes tIl."t these 

enuJ"tteJdteLl plotecti(fnS on not' dfC.:Lt' 01 WCUK.,.;U [ill' limitaliull unlid1ilily or such operaiUfS under 

section 5J 2 c:ftirle 17 U.S,C. 

The bill neithe,r c,cmocl, nUl. mohibit; 

their actions to u~cr:-. or clIstl)men 

{'he hill provides an original (h:~flUitj(jn fm lnl"mf' .'cdlcf 

O~ cO!1lt1lUnicatiop. 

cit their di("cretioJl, 

V,11h refere[ll'c to [be :-,tututurv t::r111 ··!';;ormalion Lucc,l:.or 

LH< ur:,""UHLHCHWUW Cop:righI Act (U\lC\) (s~ction 512 of title 17 U.S.c.) 

Th~ single possible cxcepliun LO thi" uc:->cription i" the bill's 

prescnbe the text of any [lDti'.:::e djo;pla) ed to llStT" or Cl,~tomcrs 

pursuant to rthc bill's rcmeulcsT 

[our entities 

,mel how to 
31 

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In the eVent of a willful and knmving failure to comply with orders under the bill, the 

Attorney General may seck injunctive relief directly against the entity in question. In such actions, 

technological inability to comply with the order "without incLlITing an unr;:asonable economic burden" shall serve as an affinnative defensc. A 5hDwing that the order in qUGstion is not authori7ed 

under the Stop Online Piracy Act shall also st:rve as an affirmative dcfcmc. Tn addition, the bill docs 

not limit or revoke current defenses 10 C0PYlight infringement that may he olfcred, induding but not 

limited to that of fair nse. Entities taking actions rca~onably designed to comply \vith court orders 

issued under bill arc granted immunity from causes of action based on such complhmce. 

Oualifying Plaintiff Actions Against Sites Dedicated to the Theft of V.S. Prorl.Q:t-y 

b_ addition to lhe Attorney General's powers to punme foreign infringing sites under 

the Stop Online Piracy Act, the biH also provides for a "market-based" ~yslem to address online infringement, including th~ establishment of a private Tight of action, in specified circumstances 

againClt sites '\ledicated to the theft of U.S. property." 

Under this approach, the above remedies may be sought by qlJalifying plaintiffs 

lhrough, first, a cLJoperative notification process, and second, in the event of noncomphance or dispute, by commencing an aCliun against infringing sites and, with court approval, serving orders Otl 

payment netwurk provl(lcrs and Internet ad\'crLising services. Thi::; private tight of action accorded 

to t!W'ie thild party entitles lS limited in scope. It dC'c,s not provide for serving orders on ')crvlcc providers or search engines. The private right of uction incllldc~ the same protections of Rule 65, tlle 

prioritizatiun of in persunam actions against U.S. ll1dividuals over in rem actions against domains. 

and the [o,ume r(:quiremt:nts regarding 1l0ticL:, service of proc~ss and domain activity \\'ithin the U.S. 

This part of the Stop Online Piracy I\(;t applies to sites, or "pt'Gific portions of sites 

that are "dedicated to tile. theft of U.S. nl"Oocrt','" and directed toward.":; the U.S .. used by DeoDle in the 

U.S., and \\0 hich are Lither (1) primarily d~sig~cd or operated for the purrose of. or ha~'eL on ty limited 

purpos(;" other than, offering goods or seIyices in vlOlation of, or facililating the yiolation nf, currellt 

copyright or trademark hnv: or (2) the site operator is taking actions to "avoid confirming a high 

probability of the use of Lhe "ite or portion thereoC' i~ in dolation 01: copYlight ,mtl trademark iaw, or 

the individual operate" the liile or a portion thereof to promote its U:'it': to carry out vjolatiol1s of copyright and trademark law, 

The qualIfying plaintiff'i are rigllts-holders Gfthe intel1ectmd 

commencing any actio11ll1 court. however, these plaintiffs must follow" {c"·,y,,,i ,,,,,tdk,,'i,m prcces'l 

regarding any alleged site:, dedicated to the theft of FS. properly. Plainliffs must proyide a wrirtcn, 

signed communication w the designated agents of lhe t\vo entities under this provision, 

financial 'ir.rvice provic:cr" and Internet adveliio;ing ser\'ic~<;. the ~ite and proyides a 

statement and specific fJcts supporting the claim (~mder penalty of perjury). with fZlcts establishing 

that the entity is ~itc. Such a notificutiDn "hall trigger privarc action remedies by the 

entIty to cea"e fur the site, un1es-" the :"ite owner OJ operator pn)\ide~ a counter 
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nutiiicCllion to th;: entities disputil!g the ciaim'\, under pL:ualty d- pl~rj!Jry< and consenting iO jurisdiction of U.S. COl.1tts. 

under these condition"l to bring an in p(,;rsonam aClinn, a 

site to .'me alkl due diligence. 1.11' no Sl1clJ person hZl" an ~H.ldress in th.c U.S., tIle bill enahles the plainh~r0 i", no lk'llLlin c,atTtf\ as wen as any oHler form erf notice 

of th~ P("d'::l"{ll Rille" of Ciyil Procedure 

aCfions ol.ltl~ncct abov~" a court may is<;tlc a res'"minilOg o[dc'''' prclimior jnjl~nction "111 accou.iancc v"'ith rule 65" l:;;aiml or ·;ite ope;"oL lind 

of the court, 'illch ;JrdCr5 may be sery~d on paj,mem netwmk Llnd <.:d-

.First Amendment Consiu('ratiuns 

Procedural Prolccfiom 

I"hc ShJp Online: Piracy Act's proceclme)l pru('cclJiGns arc ~n stre,ng, llnifonn Clnd constitutionallv nOled 

itself which g0\"cm an litigants 

For potential :;.l!ilS by both the l\ttorney General anll qlldl:lynlg I,m",,,, part)' 

(HIs, the hill incurporatc'i Rule 6S lo the proceS." 
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65, which also grants the advGtsc p3liy the option of moving to di..,solve an order with two days' notice. 

In addition to those \vell-established procedures, the bill requires several measures to 

ensure due process. First, the Attorney General or qualifying plaintiff must commence an in personam action against the registrant, owner or operator of a website dedicated to infringing activities, 

if it is possihle to locate such an indiyidual through due diligence, This approach, (wllich provides 

an addidonal step compared to the Senate's COreA legislation), may provide more warning and the 

pro~pect of alivers(l[lal hearings before injunctive relief -- at least in situations where such an individual resides in the U.S, and has provided accurate contact information. For in rem actions. the bill 

explicitly requires service of proc~ss by sending notice of the alleged violation and intent to proceed 

to the registrant, "by email and postal mail listed in a public databJse, by email {In.d postal mail of the 

registniI, as \.vell as in any form <l court finds necessary under Rule 4(f) of the PRep. Consistent 

with the objectives of Rule 65, this requirement provides an opportunity to operators of allegedly 

infringing web sites to defend themselves before an order is issued. 

In the event that opemtors choose to rc~pond later, or only learn of injunctive action 

later because they did not provide accurate contact information to their registIY, they still retain their 

rights to seek later relief from the order by disputing the allegations or appealing to the intercst~ of 

justice. 5 [t is worth noting, in addition, that federal copyright law disfavors the submission of false 

contact information to a domain name registrar, treating the knowing provision of "materially false 

contact information to a domain name registrar" as u rebuttable presumption of willful infringement 

17 U.S.C.A § 504(c); Chanel, Inc. v. Cui. 2010 WL 2835749 (S.D.N.Y. July 7, 2010) (entering default judgment for permanent injunction against product tmdclTIi.1rk infringement and finding willful 

conduct based, in part, on defendant's repeated submissions of "false information in registering domain names" used for infringement). Finally, since the bill stales that COUliS "may" is~ue prelimillary injunction~ or injunctions, the range of available remedies includes the prospect of a final·-not 

prdilllil1dIy-n.:solution of the dispute. 

Even when the Stop Online Piracy Act's required procedural protectIOns are satisfied, 

some operators of allegedly jnfringing websites may knowingly decline to participate in U.S. court 

proceedings. Such a choice, after legitimate notice and procedural safeguards arc provided, may 

lead to ex parte proceedings and default Judgments. Court, routinely enter default judgments in civil 

lawsuits, including comparable online copyright cases. After initial notice bas been served, coutis 

grant permanent injuncti ve relief for copyright violations in default judgments without additional 

attempts at notice. Disney Enlerprisc~J Inc. Y. Fanner, 427 r:.Supp. 2d 807 (B.D. Tenn. 2006) (issuEach of these protectIOns applies rcg2'.rdless (If ,,,,hethe[ the Attorney General or a qualifying plaintiff 

commences an actIOn. \\'11ile the prospec1 ofpmential actions by private plaintiffs, which was not authorized by the COrCA legislation, i~ one which raises significant policy issues, it does not fundamentally alter Fint Amendment and due process analy~is in this area. 
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ing permanent injul1c-:tion baITing infringeme,nt of copyright by wehsite dis!ributing copyrighted 

movies over pe~r-to-peer network, with default judgment entitled vvithout additional servicc of notice on defendant); Priority Records, LLC v. Bradley, 2007 WL 465754 (1O.D, Mich. Feb. 8, 2007) 

(issuing permanent injunction in default judgment against defendant using online distrihution 'iystem 

to download and distribute copyrighted recordings). 

Breadth {lnd Precedent 

It is a fundcunenlal principle of FIrst Amendment jUlispllldencc that government restrictions on speech should be nanowly tailored to avoid unnecessarily burdening protected speech. 

Courts clmely scrutinize statutes that may hinder protected speech, and give special attention to 

rules that could sweep too hroadly. As with any statute impacting speech, Congress must consider 

the potential overbreadth of the Stop Online Piracy Act's rcgulatory structure, hoth in how it is 

drafted and how it should be applied, in light of such Pirst Amendment considerations. 

Recent Senate bills in this area, COreA and the Protect IF Act, sought to address 

such First Amendment conccrns, in part, by defining a statutory definition for the type of websites so 

predominantly engaged in infringement that orders to block, thwmt or deter such activities would not 

have an excessive or unnecessary impact on protected speech.6 As a trigger, the Protect IF Act effectively required that sites had no significant use other than infringement, or were designed, oper-

:JJed or marketed primarily for infringement. COICA provided a similar trigger in its definition for 

sites dedicated to infringing activity, emd in addition, it provided an alternative definition based simply on the government's civil forfeiture powers under cun'ent law, Therefore, ap31i from any references to current law, both bills sought to define, in specific statutory language, something akin to a 

minimum threshold for triggering these new remedies to c'luDter inhinging sites. 

The Stop OuJinc Piracy Act does not articulate such a standard for actions by the Attorney Genera1.7 Instead, it cites to and is rooted in current copyright, trademark and seizure law, 

work of sites b:~~;:~:~~;~;;~: :~:i~i:lc:'~;:;~~'~::dalthoUgh it is worth noting that the framc- itt a precedent for online infringement liabil,tyin i~1etro-'Go!dw.>·n-}~fa),er ,~tl{;liUJ' lltc. v. Grok.ster, Ltd., 545 U.S. 913, 936 (21)05). 

fhe bill docs define a term for sites "uedicated to theft of U,S. prop.:'.rty" in Its SeC1IOl1 onaclions 

qlJalifymg plaintiffs, but my First Amendment analysis begins emu focuses on the 

"ions regarding actions authorized only for the Attorney General. which reflect the strongest remedies 

provided for in the legislation, 
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CAHILL (i-ORDO~ & REIXDEL LLP 

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similurly to the alternative definition in COreA, so 3.S t\) extend the Attorney General's authority to 

foreign infringing sites and provide for remedies Clgamst third party iotermcdi<::Ties.~ 

The Stop Online Piracy Aet u~cs three tests to define foreign infringing sites: First, 

the site must be cOlmnittlf'lg or facilitating criminal v~oJations of copyright or tr['~uem{trk lay,'; second. 

those violations 111mt "be subject to seizure" in the U.S. "if such a site were a domestic Internet site"; 

and third, the site (or portion tl,ereot) must be directed at the U.S. and used within the U.S. The bill 

incorporates this ";eizure stmldm-d for definition purposes only -- it docs not initiate the entire procedure of the forfeiture laws, oor does it trigger an actual forfeiture. Instead, as discussed above, the 

Stop Online Piracy Act enumerates its own set of procedures, consistcnt with Rule 65 and including 

enumerated noticc requirements, and sets forth its own remedies against foreign infringing sites. 

Those remedies include injunctive relief ordering sites to cease violating the law, and serving orders, 

wilh court approval, Oll the four enumerated intermediaries. In contrast to the civil forfeiture procedures, these remedies are weighed under the traditinnal standards for injunctive reiief. 

Tn recent cases, courts have issued seizure warrants against domain names based on a 

probable cause finding of infringement, \vhich call result jn orders on registries to lock and seize 

domain names. United States y. TVShack.net et aI., 2010 WL 2666284 (S.D.N.Y. June 29, 2010) 

(treating domain nanaes ho,ting iufringing videos as krfcitab1c property under 18 U.S.c. §§ 2323(a) 

:lnd ordering their seizure). There is a challenge to that domain name seizure process, on both statutory and Phst r\meadment grounds, currently pending in the Second Circuit. Tn Puerto 80 Projects 

\'~ Ul1ited States, the United States Southern District Court of New York rejected a challenge by operators of a Spanish web~ite to the government seizure of its domain names, finding the loss of the 

domain names at issue did not constitute a substantial hardship under the law, but the court noted 

that First Amendment issues could still be argued on a future motion to dismiss,') (The Second Circuit if' scheduled to hear argument in the case in December 2011.) lfthe Stop Online Piracy Act 

\vere adopted and courts ultimately alter, narrow or restrict the current application of the seizure 

standard to domain nUTile~, wheLltel 011 Fifst !ullendment grounds or for other rea . ..,ons, the Stup 

Online Piracy Act would incorporate th('; new standard. III other words, if the courts hold that the 

First Amendment demaIlds a higher standard than is cunently applied for seizure of domestic property implicating protected speech, the Stop Online Piracy Act would automatically impcrt such a 

slandard, given its definition trigger referencing sites "subjcct to sc1zure" in the L.S. 

Rcgardle"s of the particular standard or definition of foreign infringing sites, COUHapproved. remedies und~r the Stop Online Piracy Act lIlay result in the blockage or disruption of 

The definition refer') to sites "committing or facilitating the. corrmrission of crimir.al violations" under 

current law, which \vould, based on those criminal violations. seizure in the United 

States m an action brought by lhe Attorney General if such site 

No. 11 Civ. 4139 (S.D.N YAug. 4, 2011). 
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some pr()tect~d speech. /-\'~ c1i:.:cusscd above, Lhc bill pllJvidcs a :wailable, with a court mabng the finol determination as to whether craft relief against a website operator or owner or third party intermediaries. \Vhen injunctive relief includes blocking domain n::uncs, of non-infringing or protected conrcnt may result. The presence of some 

non-infringing speech, and of itself, generally does not provide a copyright violator \vith immu~ 

nitv from enforcement actions under cutTen! casela\v. The First Amendment allows gu\ernment 

- to prevent piracy that has an incidental impact on non-infringing speech. United States 

203 F. Supp. 2d 1111, 1129 (N.D. Cal. 2002) (noting that the First Amendment allows 

the !.wvcrnment to pursue online infringement with an "incidental res1ric::ioll" un First Amendment 

free~loms, so long as the traditional test i<; met that Ule "means chosen do not burden ~ub:::.tantially 

more speech than is necc:::.sary to further the government's legitimate interests") (internal citations 

omitted). If an order under the bill does result in bloc¥ing some non-infringing content, the bill is 

sufficiently nar1'O\I/ to accommodate the immediate publication of that content elsewhere and the future publication of the content on the same domain. First, by definition, any non-infringing content 

is not ~pecifically enjoined by the order, so it may still be legally posted anywhere else online. Second, such content may be unblocked or repasted ()H the same \vcbsite or domain name in the future, 

Once. the infringing content at issue is removed. After the infringement issue is resolved and the site 

operator is in compliance with federal law, the domain name may post its archived non-infringing 

content. 

Finally, it is worth noting that legislatiol1 in this area typically implicates linking, a 

xcy riU:t ufthc Internet's architecture, in two ways. Sites may facilitate infringement by linking 

alone, without directly hosting infringing content, and the Stop Online Piracy Act's remedies include 

potential injunctions against linking by .search engines, pursuant to a court order. These measure:::.' 

impact on linking are not overbroad, nor a break from precedent 

[n recent enforcement actions against domain names, the u.S. Department of Homela.nd Security has seize:d '''linking' ·w'cb"itcs" 'vvhich provided "rinks La fiJcs on third party \\'Ct~;it2.S 

tlIat contain illcgal copies of copyrighted contact." (Aft. 'll13) United States v. The Following Domain Names: HQ-Streams.com et al., 2011 WL 320195 (S.D.N.Y. Jan 31,2011). Targeting such 

linking is also consistent with caselaw reganling online copyright infringement, since "[l]inking to 

infringing material" can create secondary liability, 1003 PLIIPat 35 at 43. Under current law, when 

a website links to infringing content, or !inks to technology to facilitate infringement, courts look to 

whether the website operator knowingly linked to facilit!ltc vioL1lions of the Jaw. Universal City 

Studios, Inc. v. Reimerdes, III F. Supp. 2d 294 (S.D.N.Y. 2000) (holding defendant violated DMCA 

by linking to plOgram to unlock DVDs for unauthmized copying, and requiring knmving linking for 

the purpose of disseminating the program, and holding that prohihiting technology designed to circumvent protections for copyrighted \yorks did not violate the FIrst Amendment); BernsteIn v. Ie 

Penney, Inc., 50 U.S.P.Q.2d 1063 (CD. Cal. 1998) (plaintiff did not have a claim for mere linking to 

website without knovl-'ieclge of iofringing material on the site'). \Vith regard to potential injunctiuns 

Jgainst search engine linking -- a ~ituatiGn where there may be no knowledge element, dnd thus no 

secondary liability -- court:::. sliU retain the authority to issue injunctive relief specifically against 

linking, as. a means to remedy ongoing or potential copyright infringement. Universal City Studios. 
37 

Mr. SMITH. Thank you, Mr. Conyers. 

The gentleman from Virginia, Mr. Goodlatte, the Chairman of 

the Intellectual Property Subcommittee, is recognized. 

Mr. GOODLATTE. Mr. Chairman, thank you for holding this hearing, and thank you for your leadership on this issue. 

For more than two centuries, America’s economic strength has 

been built on a firm foundation. The rule of law, respect for individuals and private property, and the promotion of industry 

through policies that reward creativity and innovation are essential 

virtues that helped the fledgling Nation encourage the initiative of 

its citizens, and in time emerged the most advanced and prosperous on earth. These virtues are not universal. In an increasingly 

connected world, threats that emanate from areas where these 

principles are not shared are jeopardizing our ability to sustain the 
38 

incentives needed to foster growth and development and advance 

human progress. 

These threats create challenges for us in both the physical world 

and the virtual world where the systematic and willful violation of 

intellectual property rights now poses a clear, present, and growing 

danger to American creators and innovators, U.S. consumers, and 

our collective confidence in the Internet ecosystem. 

In order to continue to incentivize artists, authors, and inventors, 

we need to ensure that these creators have the ability to earn a return on their investments. Increasingly, foreign piracy is stripping 

creators of that ability. Within the Internet ecosystem today, there 

are legitimate commercial sites that offer consumers authorized 

goods and services. Indeed, many exciting new technologies and 

websites help content owners distribute music, movies, books, 

games, software, and other copyrighted works in ways that were 

not even imaginable 10 years ago. However, there are also rogue 

sites that steal the intellectual property of others, and traffic in 

counterfeit and pirated goods. 

In recent years, these websites have grown and evolved. They 

have become increasingly sophisticated and rival the legitimate 

sites in appearance, operation, and indicia of reliability. 

U.S. consumers are frequently led to these sites by search engines that list them among the top search results. After clicking on 

a site, they are immediately reassured by the logos of U.S. payment 

processors and the presidents of major corporate advertising supporting the site. These sites sell infringing copyrighted works, but 

they are not limited to those. Increasingly, these sites also offer 

counterfeit goods, such as counterfeit automobile parts, medicines, 

baby formula, and other products that can pose serious threats to 

the health and safety of American citizens. What is worse, these 

rogue sites often list the real customer service contact information 

for the legitimate companies, which deteriorates the reputation of 

the legitimate maker of these goods. 

For all these reasons, I have joined Chairman Smith in introducing the Stop Online Piracy Act, which creates new tools for law 

enforcement to combat these growing threats. Specifically, this legislation gives law enforcement the authority to bring an action in 

a Federal court to declare a website in violation of the law, and allows the court to issue a court order to intermediaries to block 

transactions and access to those sites found to be infringing. The 

bill also provides content owners with a limited liability to request 

a court to declare a website as violating the law. However, the content owners must first attempt to work directly with financial services and advertising intermediaries to solve the problem. Only if 

those parties cannot reach agreement are content owners allowed 

to seek a court declaration against and infringing website. 

It is my hope that this provision will allow content owners and 

intermediaries to work together to root out infringing sites quickly. 

It should be noted that there has been criticism from many in 

the online community about the scope of this bill, its effect on the 

functioning of the Internet, and that it could entangle legitimate 

websites. It is not my intention to do so, and I stand ready to work 

with the tech community to address any legitimate concerns they 

have. I have requested detailed comments from the tech community 
39 

about their concerns, and look forward to continuing to work with 

them and Chairman Smith and other Members of the Judiciary 

Committee to ensure that this legislation punishes lawbreakers 

while protecting content owners as well as legitimate online 

innovators and startups. 

Mr. Chairman, this is a good bill, but a number of issues raised 

about it need to be carefully addressed. I look forward to working 

with you on those issues as we move forward to protect content 

owners online, and I look forward to hearing from our witnesses 

today. 

Mr. SMITH. Thank you, Mr. Goodlatte. 

The gentleman from North Carolina, Mr. Watt, the Ranking 

Member of the Intellectual Property Subcommittee, is recognized. 

Mr. WATT. Thank you, Mr. Chairman. 

Mr. Chairman, in my experience, there is usually only one thing 

that is at stake when we have long lines outside a hearing, as we 

do today, and when giant companies, like those opposing this bill 

and their supporters, start throwing around rhetoric like, ‘‘This bill 

will kill the Internet,’’ or, ‘‘It is an attempt to build the great firewall of America.’’ And that one thing is usually money. 

While I appreciate that the stakeholders of Internet companies 

that have market caps in the billions of dollars care, as we all do, 

about the First Amendment and other precious rights, it seems 

clear to me that the obstinate opposition we have seen in the days 

since introduction of the Stop Online Piracy Act is really about the 

bottom line—piracy and counterfeiting, make money, and lots of it. 

This is not speculative. Sites that specialize in stolen goods attract a lot of eyeballs, which, in turn, attracts a lot of advertising, 

which in turn means, well, you got it, lots of money. 

To be fair, many of the copyright and trademark owners who 

want this bill to help enforce their rights are also businesses owners and are also motivated by money. But in my mind, stopping 

theft of your work or products is an appropriate incentive to secure 

profits. But doing nothing or next to nothing to prevent theft 

through the use of tools a company creates or controls is not an appropriate incentive to secure profits. 

So, as policymakers, our goal must be to confront the criminal 

enterprises that are flourishing on the Internet, stealing from the 

rightsholders, and visiting untold harm on consumers. Doing nothing is not an option. Not only are online piracy and counterfeiting 

drains on our economy, they expose unworried consumers to fraud, 

identity theft, confusion, and, at worst, physical harm. The penetration of hazardous product and goods into the American marketplace, including our military supply chain, poses an unacceptable 

risk of serious bodily injury or death to our citizens. Tolerance of 

online theft of music, movies, and software reinforces a culture of 

entitlement, stifles creativity, injures artist, and undermines job 

stability and growth. 

While I have never been a big advocate of current seizure laws, 

why would we not, as this bill does, give the Attorney General, at 

a minimum, the same power to block foreign thieves from access 

to the U.S. markets as the Attorney General has for domestic markets? Given the limits of government resources, why should we not 

establish a framework to enable rightsholders to engage specific 
40 

intermediaries within the Internet ecosystem to meet the challenges of online piracy and counterfeiting? 

I think one of the big problems here is that to date, the economic 

incentives for the big Internet companies to work against online piracy are just not there. To be sure, there are many intermediaries 

that are inadvertently involved with pirate sites who have come to 

the table with constructive suggestions for crafting a balanced bill 

that will work. I commend ISPs, payment processors, like 

MasterCard, who is here today, and Visa, Go Daddy, who is the 

largest registrar of domain names, and a number of software companies who have raised reasonable concerns, and are willing to 

work together to address them. But, again, when I hear overblown 

claims like, this bill is a ‘‘Give away to greedy trial lawyers,’’ or ‘‘A 

killer of innovation and entrepreneurs,’’ that the co-sponsors of this 

bill are the ‘‘Internet killers,’’ I become suspicious of the message, 

as well as the messengers. 

As is and as one who cares deeply about the constitutional guarantees of free speech and due process, it is beyond troubling to 

hear hyperbolic charges that this bill will open the floodgates to 

government censorship. That is simply not the world we live in, 

and to suggest that by establishing a means to combat theft of intellectual property online, we will somehow default into a repressive regime, belittles the circumstances under which true victims 

of tyrannical government actually live. 

I urge everyone to set aside all the hyperbole and accusations. 

I am the first to admit that I do not like or love everything about 

this bill, but it is a very strong, solid effort to begin the process of 

responsibly providing the Attorney General and rightsholders with 

necessary tools to keep pace with, and ultimately, to outpace the 

high-tech bandits roving the Internet. I believe there are still some 

things we can do in the legislation to avoid unintended consequences, maintain the integrity of the Internet, and preserve certain freedoms, including many of the specific suggestions made by 

the Ranking Member. 

Our staffs have worked closely together to identify ways to improve this bill, and we will continue to do so. And I appreciate the 

fact that crafting a bill governing the online environment requires 

attention to technological details. But I start from the premise that 

Internet freedom does not and cannot mean Internet lawlessness, 

and that the goals of freedom and lawfulness are no more incompatible in the Internet space than they are in the physical world. 

Mr. Chairman, there is an African proverb that says, when elephants fight, it is the grass that suffers. Perhaps if we refocus this 

debate on the ills that may befall innocent consumers who fall prey 

to the perils of pirated and counterfeit goods rather than on the 

balance sheet of all the big companies, we can reach a worthy compromise. 

I look forward to hearing from the witnesses, and engaging in ongoing dialogue as we move the bill forward. The stakes for America 

and American consumers are too high to get engaged in too much 

hyperbole. 

Mr. Chairman, I yield back the balance of my time. 

Mr. SMITH. Thank you, Mr. Watt. 
41 

Without objection, other Members’ opening statements will be 

made a part of the record. 

[The prepared statement of Mr. Forbes follows:] 
42 

[The prepared statement of Ms. Lofgren follows:] 

Congresswoman Zoe Lofgren 

Opening Statement for the Record 

Committee on the Judiciary 

Hearing on H.R. 3261, the Stop Online Piracy Act 

November 16, 2011 

The matter before us today is enormously important. H.R. 3261, the Stop Online Piracy Act, 

would reshape our country's legal framework for online innovation and commerce, and 

perhaps the technical structure ofthe global Internet as well. 

Unfortunately, the panel of witnesses convened for this hearing is severely inadequate. Civil 

libertarians and law professors have said this bill is inconsistent with the First Amendment to 

the United States Constitution. Network engineers and security experts have said that the bill 

could imperil cybersecurity and the technical infrastructure of the Internet. Consumer groups 

have expressed worries that the bill could raise the prices we pay for goods online. Human 

rights advocates have said that the bill could legitimize Internet censorship by repressive 

regimes around the world. Libraries and educational institutions have expressed concern that 

they could face new criminal and civil liability for innocent conduct. Venture capitalists and 

technology entrepreneurs have said that H.R. 3261 could stifle investment in legitimate 

Internet businesses and online services. 

None of these voices are represented at our hearing today. Members will not have the 

opportunity to explore any ofthese concerns in detail. In their place, a single Internet 

company-Google-was invited to testify, on a panel with five other witnesses testifying in 

defense of H.R. 3261. 

Infringing material exists on the Internet. Some websites exist that flagrantly violate copyright 

and trademark law. The question is what to do about it. No one should conflate opposition to 

this legislation with a disregard for the protection of intellectual property. Yet this is precisely 

what many of this bill's proponents are doing, in an attempt to discredit substantive criticisms. 

H.R. 3261 is deeply flawed in many ways. I will highlight just a few: 

• Section 102 creates an open-ended technical mandate on Internet service providers 

(lSPs) to block their users from accessing blacklisted websites. Unlike S. 968, the 

PROTECT IP Act, this mandate is not limited to domain filtering. Instead, the government 

may apply for a court order to impose any filtering measure upon ISPs, so long as it is 

deemed "technically feasible and reasonable." Does this include the blocking Internet 

Protocol addresses? Deep packet inspection? New filtering technologies as they are 

invented? The bill does not say. 

Section 103 overturns critical safeguards in the Digital Millennium Copyright Act for 

cloud computing and any website that provides a platform for user-generated content. 

This includes everything from photo and video sharing to social networking, blogging, 

and beyond. Under Section 103, such websites will face a new legal risk that they will be 
43 

terminated by their payment and advertising providers, based on an accusation that 

they are dedicated "to the theft of u.s. property." This charge could be based upon 

infringement committed by a website's users, and the DMCA safe harbor in 17 U.s.c. 

512{c) cannot be used as a defense. 

• Section 103 also allows a "portion of" a website to be deemed "dedicated to the theft 

of u.S. property," regardless of the culpabilityofthe website as a whole. Like many 

important terms throughout H.R. 3261, the precise meaning ofthese words is 

ambiguous, and will require years of expensive litigation to clarify. However, the plain 

meaning of the words seems to indicate that any large website could face a risk of 

termination by payment and advertising providers based solely upon infringing material 

contained in a single web page. 

• Under Section 103, any website, foreign or domestic, can be declared "dedicated to 

theft of U.S. property" if it takes "deliberate actions to avoid confirming a high 

probability of the use" of the site to carry out infringement. This appears to create a 

new basis for infringement liability in U.S. copyright law, which will take years and 

perhaps decades of difficult litigation to sort out. It also may impose a duty upon 

websites to monitor all user-generated content on their sites, in order to guard against a 

risk that their failure to do so would be construed as an act of "willful blindness." For 

many legitimate websites, active monitoring is simply not feaSible, given the enormous 

volume of content uploaded by their users during every hour of the day. 

Let me also add that the domain filtering scheme envisioned by H.R. 3261 will not be effective. 

Anyone determined to reach a blocked site may do so easily, merely by typing in the website's 

IP address into the navigation of their browser bar, instead of the site's domain name. Any ten 

year old could do it. Under this bill, the United States would construct an unprecedented 

Internet filtering scheme to block foreign websites. This is likely to have major costs and 

unintended consequences, while doing little to achieve the laudable goal of reducing online 

piracy. 

I agree with the goal of fighting online copyright infringement. Narrowly targeted legislation 

that does not ensnare legitimate websites or undermine the Internet's technical and security 

infrastructure should be pursued. In particular, I believe that new remedies could deprive 

criminal websites of the revenues that motivate and enable their very existence, without doing 

unnecessary collateral damage. I also believe that a consensus on this issue between the 

content and technology industries is achievable. Unfortunately, H.R. 3261 is a draconian and 

one-sided approach that pushes us much farther away from such a consensus, instead of 

building towards it. 
44 

[The prepared statement of Mr. Johnson follows:] 

December 11, 2011 

Congressman Henry C. "Hank" Joh1ls01l, Jr. 

Statement for the Record Re: Hearing on 

H.R. 3261, the Stop Online Piracy Act (SOPA) 

T thank Chainnan Smith for holding this hearing on H.R. 3261, the Stop Online 

Piracy Act of2011 (SOPA). I support the goal of providing the Department of 

Justice (DOJ) with additional enforcement tools to combat foreign rogue websites. 

Piracy hurts everyone, both the companies who make content and products and 

those that distribute it in new and innovative ways. We must work to stop piracy, 

but must tread cautiously as we do not want to destroy the foundation upon which 

our entrepreneurs and artists create platfonns of innovation. 

I agree that we need to protect American innovation and fight online copyright 

infringement. Intellectual property-intensive industries drive America's economy 

and piracy does not benefit our American inventors or the American public. 

Consumers should not be harmed by counterfeit goods, such as substandard 

prescription drugs or other dangerous and defective products sold on counterfeiting 

sites. 

At the hearing, the teclmology industry and payment processors identified some 

legitimate concerns with SOPA. Further, public interest and civil rights groups 

such as the American Civil Liberties Union, the Consumers Union, and the 

Consumer Federation of America, have expressed concerns about this legislation. 

Too many interested parties have concerns about SOPA that should not be 

ignored. I, however, do believe that there is a compromise that could be reached 

between the content, technology industries, and those groups representing 

consumer interests. Thus, at this time, 1 have some concerns with the legislation in 

its current form and firmly urge the Committee to consider any unintended 

consequences SOPA may cause before it marks up this legislation. 

The Digital Millelmium Copyright Act and Section 230 of the Communications 

Decency Act represent the legal underpilming of the view that intermediaries need 

not monitor or supervise the communications of users. It is a view that we have 

long touted and pushed across the world through various diplomatic channels. As 

some technology and public interest groups have pointed out, we have harshly 

criticized governments who use such virtual walls to prevent citizen access to the 

Internet. With that in mind, we must consider whether this legislation would allow 

companies to demand that search engines located inside of the United States censor 
45 

where American consumers are able to go on the Internet. We must consider how 

this legislation would be viewed by China, Iran, and other countries that have used 

some of the same actions required in SOPA to block speech. We must ensure that 

this legislation does not dampen diplomatic efforts on that front. 

I also share concerns with the Library Copyright Alliance about the willfulness 

standard under the bill. Section 506 of the Copyright Act establishes criminal 

liability for the willful infringement of a copyright. My concern is that SOP A's 

rule of construction creates a negative implication that a person is a willful 

infringer if the person did not have a good faith reasonable basis in law for 

believing that his conduct was lawful. According to the Library Copyright 

Alliance, if a court finds that the person's belief was unreasonable, the court might 

consider him a willful infringer, even if the person in good faith believed his 

actions were legal. Under current law, however, this level of intent constitutes 

ordinary infringement, not willful infringement. This should be cleared up in 

SOPA before it moves forward. 

With regards to payment processors, SOPA requires them to suspend payment 

transactions between a u.S. customer and an online merchant within 5 days after 

being served with a copy of an order or receiving notice from a private rights 

holder that a site is dedicated to the theft of U.S. property. At the hearing, 

MasterCard noted that there are many instances where a five-day window to 

suspend payment transactions may not be feasible. We should revisit this 

provision and work with the payment processors on identifying a reasonable 

amount of time before moving this legislation to the floor. 

Finally, the DOJ is charged with more responsibility because SOPA grants it new 

enforcement tools to prosecute foreign rogue websites. With the DOJ taking 

budget cuts and downsizing antitrust lmits, including in my home state of Georgia, 

we must ensure that it has the resources and attorneys it needs to adequately 

prosecute foreign rogue sites under the bill. 

As T stated earlier, piracy does not benefit our American inventors or the American 

public. T look forward to working with the Committee on these issues as T would 

support fine-tuned legislation that balances the need to combat piracy, foster 

innovation and would not entangle legitimate websites in the process. 
46 

Mr. SMITH. We welcome our distinguished panel today, and I will 

now introduce them. 

Our first witness is Marie Pallante, the Register of Copyrights. 

Ms. Pallante was appointed by the Librarian of Congress, Dr. 

James Billington, as the 12th Register on June 1st of this year. Immediately prior to that appointment, Ms. Pallante served as the 

Acting Register. 

As a Register, Ms. Pallante continues the tradition of serving as 

the principal advisor to Congress on matters of copyright policy. 

Ms. Pallante has spent much of her career in the office, where she 

previously served as the associate Register for Policy and International Affairs, Deputy General Counsel, and Policy Advisor. In 

addition, Ms. Pallante spent nearly a decade as Intellectual Property Counsel and Director of Licensing for the Guggenheim Museum in New York. 

She earned her law degree from George Washington University 

and her Bachelor’s degree from Misericordia University, where she 

was also awarded an honorary degree of humane letters. 

Our second witness is John P Clark, the Vice President of Global 

Security and Chief Security Officer for Pfizer. Since joining Pfizer 

in 2008, Mr. Clark has been recognized as the leading authority on 

the threat that counterfeit medicines pose to patient health and 

safety. 

Prior to joining Pfizer, Mr. Clark served as Deputy Assistant Secretary of the U.S. Immigration and Customs Enforcement. In that 

capacity he was responsible for overall management and coordination of the agency’s operation, and he served as the Assistant Secretary’s principal representative to the Department of Homeland 

Security and to the law enforcement and intelligence communities. 

Starting as a U.S. Border Patrol Agent in 1980, Mr. Clark spent 

more than 25 years as a law enforcement professional before retiring from public service. A New York native, Mr. Clark received his 

Bachelor of Science degree in History from the State University of 

New York at Binghamton, and a Master of science degree from National-Louis University. 

Our third witness is Michael O’Leary, the Senior Executive Vice 

President for Global Policy and External Affairs at the Motion Picture Association of America. In that position, Mr. O’Leary supervises all international, Federal, and State affairs operations around 

the world for the association. 

Before moving to MPAA, Mr. O’Leary served more than a dozen 

years at the Department of Justice, where he worked on legislative, 

intellectual property, and enforcement issues. During his tenure at 

the DoJ, he served as the Deputy Chief of the Computer Crime and 

Intellectual Property section, where he prosecuted and supervised 

some of the most significant domestic and international criminal 

and IP cases undertaken by the Department. Before joining DoJ, 

Mr. O’Leary spent 5 years serving as Counsel to the Senate Judiciary Committee. 

He grew up in Montana as a graduate of Arizona State University and the University of Arizona School of Law. 

Our fourth witness is Ms. Linda Kirkpatrick, who serves as the 

Group Head of Customer Performance Integrity at MasterCard 

Worldwide. In this role, Ms. Kirkpatrick is responsible for driving 
47 

the strategy, development, and execution of global customer compliance programs, data integrity, and dispute resolution management. 

Ms. Kirkpatrick has been with MasterCard since 1997. She 

earned her Bachelor of Arts degree in Economics with a concentration in Finance from Manhattanville College in Purchase, New 

York. 

Our fifth witness is Katherine Oyama, a Policy Counsel for 

Google, where she focuses on copyright and trademark law and policy. 

From 2009 to early 2011, she worked in the Office of the Vice 

President as Associate Counsel and Deputy Counsel to Vice President Joseph R Biden. Prior to her government service, Ms. Oyama 

was a litigation associate with Wilmer Cutler Pickering Hale & 

Dorr, where she worked on intellectual property cases, government 

regulatory, litigation, and pro bono matters. She previously worked 

in the Media and Entertainment practice of a New York-based 

strategy consulting firm, for the Silicon Valley-based Internet startup, LoudCloud, Inc., and for a Texas-based company, Electronic 

Data Systems. 

Ms. Oyama is a graduate of Smith College, where she graduated 

with honors in Government, and the University of California 

Berkeley School of Law, where she served as senior articles editor 

of the Berkeley Technology Law Journal. 

Our final witness is Paul Almeida, the President of the Department for Professional Employees of the AFL-CIO. 

Mr. Almeida has served as President of the DPE since February 

2001. Prior to his tenure with DPE, Mr. Almeida served as President of the International Federation of Professional and Technical 

Engineers for 7 years. 

Mr. Almeida earned his degree in Engineering from Franklin Institute in Boston, and he resides in Arlington, Massachusetts. 

We welcome, you all. Every member of the panel will have 5 minutes to give their testimony, and we have a light on the table to 

indicate when that time is about to expire and has expired. Again, 

we welcome you. 

And, Ms. Pallante, we will begin with you? 

TESTIMONY OF THE HONORABLE MARIA PALLANTE, 

REGISTER OF COPYRIGHTS, U.S. LIBRARY OF CONGRESS 

Ms. PALLANTE. Mr. Chairman, thank you for the opportunity to 

appear today, and I would also like to thank you, Ranking Member 

Conyers, Chairman Goodlatte, and Ranking Member Watt of the 

Subcommittee, and all of the Members of the Committee for your 

continued leadership on copyright policy. 

Congress has updated the Copyright Act many times in the past 

200 years, including the enforcement provisions, but as we all 

know, this work is never finished. Infringers today are sophisticated, and they are bold. They blatantly stream and disseminate 

books, music, films, and software through websites using the services of trusted search engines, advertising networks, and credit 

card companies. This is not a problem that we can accept. In my 

view, it is about the rule of law on the Internet. 

Much of the bill employs a strategy of follow the money. I testified in support of this approach in March, and I still agree that it 
48 

is an important part of the equation. Many sites make money by 

selling illegal access to copyrighted works or by offering related advertising. But the approach does have some limitations. Many of 

the worst sites do not sell infringing content; they offer it for free, 

and they do not run ads. 

I would like to offer an example involving Google, but I would 

first like to say that I have a great deal of respect for Google, and 

I cannot imagine the Internet without it. However, if you conduct 

a search for the phrase ‘‘download movies,’’ Google search engine 

will supply the words ‘‘for free,’’ and it will return a list of sites 

that offer illegal copies or streams at no charge and with no advertising. These cases require a different kind of strategy. Then, follow 

the money. The same is true when damages imminent, for example, when a site is streaming live sporting events or selling movies 

before. They have been released to the public. 

In the context of foreign infringing sites, the bill addresses this 

problem by giving the Department of Justice, the power to require 

search engines to dismantle direct hyperlinks, and to require service providers to block the access of subscribers within the United 

States. These actions require court approval and incorporate the 

existing legal standards of seizure and civil forfeiture law. These 

are the same standards that ICE has used effectively for operation 

in our sites. 

Mr. Chairman, I do not want to suggest that blocking websites 

is a small step; it is not. And the public interest groups that oppose 

this part of the bill are right to be concerned about unintended consequences. However, it may ultimately come down to a question of 

philosophy for Congress. If the Attorney General is chasing 21st 

century infringers, what kinds of tools does Congress want to provide? How broad and how flexible? 

The bill also gives copyright owners some tools, but these do not 

involve search engines or ISPs, and I think that this is the right 

calibration. Put another way, the bill reflects the fact that many industries contribute to the success of the Internet, and it properly 

distinguishes between the actions that law enforcement and private 

citizens can bring. 

One of the more interesting aspects of the bill is that before authors or other copyright owners can seek court orders, it requires 

them to alert payment processors and ad networks about infringing 

content, and request that they sever financial ties. This approach 

is creative and provide incentives for the parties to cooperate. It 

also allows for counter notification. However, whether the notification system is ultimately effective will largely depend upon whether it can be implemented in a manner that is clear and fair for all 

involved. The intermediaries at issue are running businesses in 

good faith, and the websites at issue are entitled to due process. 

The bill does incorporate due process where court orders are involved. The notification system would operate outside the purview 

of the court, and, therefore, it may benefit from further due process 

review. 

Finally, I do not believe it is the intent of the bill to negate the 

safe harbors of the DMCA, and I do not read it that way. Nothing 

subjects ISPs to liability for their acts or their failure to act. No 

monetary relief can be obtained, and the injunctive relief permitted 
49 

by the bill appears to be consistent with what the DMCA already 

permits. This said, the bill has many moving parts, and I note that 

a number of stakeholders with differing perspectives have offered 

productive suggestions. As the Committee works to refine the bill, 

I would encourage you to fully consider the suggestions. However, 

in closing, I would also like to state that I believe that Congress 

has the responsibility to protect the exclusive rights of copyright 

owners. And I hope that you will advance the bill with this in 

mind. 

Thank you, Mr. Chairman. 

[The prepared statement of Ms. Pallante follows:] 
50 

Statement of 

Maria A. Pallante 

Register of Copyrights 

Before the 

Committee on the Jndiciary 

United States Honse of Representatives 

112th Congress, 1st Session 

November 16,2011 

H.R. 3261, the "Stop Online Piracy Act" 
51 

H.R 3261, the "Stop Online Piracy Act" Mllrill A. Pallante 

Introduction 

Thank you Chairman Smith. Let me begin by expressing my appreciation to you 

and Ranking Member Conyers and to the many co-sponsors of the Stop Online Piracy 

Act (SOPA) for introducing this comprehensive proposal to combat copyright 

infringement on the Internet. I appreciate the opportunity to testify today. 

As we all know, the Internet harbors a category of bad faith actors whose very 

business models consist of infringing copyright in American books, software, movies, 

and music with impunity. Frequently located otIshore, these operators of rogue web sites 

target American consumers and facilitate transactions using the services of search 

engines, advertising networks, and credit card companies. I would observe, Mr. 

Chairman, that this is a dark side of the Internet. In effect, we have asked American 

authors, publishers, and producers to invest in online commerce, but in critical 

circumstances we have left them to compete with thieves. 

Mr. Chairman, I would like to be very clear at the outset. It is my view that if 

Congress does not continue to provide serious responses to online piracy, the U.S. 

copyright system will ultimately fail. The premise of copyright law is that the author of a 

creative work owns and can license to others certain exclusive rights - a premise that has 

served the nation well since 1790. Congress has repeatedly acted to improve 

enforcement provisions in copyright law over the years, including in the online 

environment. l SOP A is the next step in ensuring that our law keeps pace with infringers. 

Copyright law promotes culture and free expression in the United States and is a 

major economic incentive. Here is how it works: 

An author spends years working on a novel. As the copyright owner of that book, 

if she is fortunate, she may license some or all of her exclusive rights to a publisher. In 

editing, printing, distributing, and marketing the book, the publisher makes an investment. 

The publisher may offer the book to consumers through traditional bookstores or through 

online businesses, including those that deliver a hard copy to one's doorstep or an 

e-format to one's Kindle, Nook, or iPad. 

Perhaps the book is timeless and universal in its appeal, making the global 

marketplace a possibility. The publisher may license translations of the book into 

multiple languages and enter into sublicenses with foreign distributors. These global 

distribution agreements rely upon a strong international framework for copyright 

protection, including reciprocal protection measures in foreign countries. 

1 See No Electronio Theft (NET) Ad, Pub. 1. 105-147. 111 Slat. 2678 (1997) (providing remedies [or electronio 

infringement following reproduction or distribution inlhe absence of a commercial purpo~e or profit 111ove\ Arti~l~' 

Rights and Then Prevention Ad or2005 (ART Act), Title [ orthe Family Entertainment and Cop)'right Act 01'2005, 

Pub. I,. 109-9, 119 Stat. 218 (2005) (providing rC111cdic~ for distribution on the Internet ofprc1casc \vorks being 

prepared for commercial distribution) 
52 

H.R 3261, the "Stop Online Piracy Act" Mllrill A. Pallante 

Let us say the novel has big screen potential. An independent producer purchases 

the adaptation rights, and seeks investors to make a movie possible. If the movie gets 

made, it will lead to additional creative authorship. For example, the producer may 

commission songwriters, composers, and musicians to create original musical scores and 

sound recordings for use in the motion picture. The film will also support multiple 

secondary markets, including platforms offering movies on demand, television 

programming, DVDs, and access through online subscriptions. There may be software 

adaptations, such as Wii games or other interactive products based upon the book or film, 

or both. 

All of these licenses and business models stem from the exclusive rights that our 

Copyright Act provides to authors - and seeks to protect from infringers. To be clear, 

infringement, including at the criminal level, has been around for centuries and we will 

never be rid of it entirely, but this does not mean that Congress should fail to respond. 

Indeed, when infringers blatantly distribute, stream, and otherwise disseminate 

copyrighted works on the Internet, they often do so because they have no expectation of 

enforcement Unfortunately, the more these kinds of actions go unchecked, the less 

appealing the Internet will be for creators of and investors in legitimate content In other 

words, Internet piracy not only usurps the copyright value chain for anyone work, it also 

threatens the rule of copyright law in the 21st century. 

The response provided by SOPA is serious and comprehensive. It requires all key 

members of the online ecosystem, including service providers, search engines, payment 

processors, and advertising networks, to playa role in protecting copyright interests - an 

approach I endorse. Combating online infringement requires focus and commitment It 

should be obvious that we cannot have intennediaries working at cross-purposes. 

SOP A is also measured. It appropriately provides much broader tools and 

±1exibility to the Attorney General than it provides to copyright owners. This is a sound 

policy choice at this time. The Department of Justice has experience fighting online 

infringers, will use resources carefully, must exercise prosecutorial discretion in bringing 

actions, and must plead its case to the court and obtain a court-issued order before 

proceeding. Put another way, while the copyright industries are extremely important (and 

certainly a point of pride with respect to the U.S. economy), SOP A recognizes that many 

sectors rely on, invest in, and contribute to the success of the Internet 

It is for this reason that SOPA puts only limited tools in the hands of copyright 

owners, and provides the Attorney General with the sole authority to seek orders against 

search engines and Internet service providers. This is not to say that we should not 

continue to assess Internet piracy and the impact of SOP A or whether additional 

measures or adjustments may be needed. Indeed, SOPA assigns ongoing studies to the 

Copyright Office and the Intellectual Property Enforcement Coordinator for these very 

purposes. But I do think SOPA provides the right calibration at this time. 

As with any legislation, SOPA deserves and can only benefit from a robust 

discussion. As the Committee works to further improve and refine the bill, I know it will 

fully consider a variety of perspectives and suggestions, including from my fellow 

2 
53 

H.R 3261, the "Stop Online Piracy Act" Mllrill A. Pallante 

witnesses. This said, I believe that Congress has a responsibility to protect the exclusive 

rights of copyright owners, and I urge the Committee to move forward with this in mind. 

I have provided below my analysis of some of the major sections of the bill. 

Attorney General: Section 102 

SOPA provides 21st century tools to the Department of Justice with respect to 

foreign infringing web sites. It allows the Attorney General to stop the participation of 

service providers, search engines, payment processors, and advertising networks with 

respect to the infringers, by obtaining court orders that are not readily available under 

current law. In my view, such tools are essential to stopping the economic devastation 

caused by rogue websites. Through SOPA, the Attorney General may also request court 

approval to serve orders that would require search engines to disable direct hyperlinks 

and service providers to block access to infringing websites, both of which could 

substantially reduce the number of 1ntemet users visiting the web sites, minimizing hann 

to the legitimate copyright owners. This does not mean that those who actively seek or 

wish to purchase infringing content will not be able to obtain it if they try hard enough, 

but SOPA would properly redirect those who erroneously believe they are purchasing 

copies or streams from legitimate sites. 

I understand that some would prefer to limit SOP A to provisions that would allow 

the Attomey General to "follow the money," that is, those provisions that would starve 

rogue sites by severing relationships with advertising networks and payment processors. 

I agree that this approach is an important part of the strategy. At the same time, I note 

that it has some limitations in the context of the foreign infringing sites at issue in this 

section of the bill. Starving web sites by denying them access to American commerce 

does not allow the Attorney General to obtain immediate relief, even when the evidence 

is overwhelming and the damage is imminent - such as situations involving live sporting 

events or sales of pre-release films. Nor will it be effective against willful infringers who 

cause immense damage by allowing users to dow1lload and stream copyrighted works for 

free. 

My own view is that there will be times when blocking access to web sites may be 

the only quick and effective course of action and that providing this tool to the Attorney 

General is therefore a critical part of the equation. Likewise, I believe that search engines 

should be fully within the reach of the Attorney General and should be ordered in 

appropriate circumstances to dismantle direct hyperlinks that send unwitting consumers 

to rogue web sites. As I explained in my previous testimony, this does not mean that 

blocking should be conducted in a manner that would jeopardize the operation of the 

Internet. 2 However, in working to perfect these particular aspects of SOP A, I would 

encourage Congress to continue to consult experts who can objectively evaluate any 

2 Promoting Investment and Protecting Commerce Online: Legitimate Sites v. Parasites. Part I Before the 

Subcomm. on Intellectual Fropertv, Competition. and the Internet, 1 12th Congo (2011) (statement of Maria 

A. Pallante. Acting Register of Copyrights). available at 

http:/~iudiciary .house.gov/hearings/pdf/Pallante03l420 ll.pdf. 
54 

H.R 3261, the "Stop Online Piracy Act" Mllrill A. Pallante 

technical concerns and who appreciate the goal of providing law enforcement with 

sufficiently flexible tools. 

By way of illustration, these kinds of "irreversible" infringements have been the 

focus of the "Operation In Our Sites" initiative by which U.S. Immigration and Customs 

Enforcement (ICE) has seized domestically registered domain names using existing 

seizure and civil forfeiture laws, thereby rendering the infringing sites temporarily 

dysfunctional. Since launching the operation in June 20 10, ICE has seized 200 domain 

names and redirected users to a banner' stating that the domain names were seized and 

that willful copyright infringement and intentionally and knowingly tramcking in 

counterfeit goods are criminal offenses. Eighty-six of the 200 domain names have been 

forfeited to the US. government thus far 4 

Seizure and civil forfeiture laws have been effective for criminal infringements 

because they allow ICE to pursue the source of infringing activity. Specifically, 

18 U.S.C § 981 allows the Attorney General to seize certain property subject to 

forfeiture in the United States. Section 2323 of Title 18 allows forfeiture of, among other 

things, articles prohibited by 17 US.c. § 506 (criminal copyright infringement), 

18 US.C § 2319 (criminal copyright infringement for violations of 17 US.C § S06(a)), 

18 USC § 2319A (unauthorized fixation of and trafficking in sound recordings and 

music videos of live musical performances), and 18 USC § 2319(B) (unauthorized 

recording of motion pictures in a motion picture exhibition facility). Section 2323 also 

authorizes forfeiture of property used to commit or facilitate such infringements. 

SOPA incorporates these standards by reference: the definition of a "foreign 

infringing site" for purposes of the Attorney General action includes the requirement that 

the site would "be subject to seizure in the United States in an action brought by the 

Attorney General if such site were a domestic Internet site." The legislation essentially 

protects American consumers from the actions of bad actors who have a direct impact on 

American copyright businesses and consumers, but who are located outside the borders 

of the United States. 

Some have stressed, and I agree, that due process is important in the context of 

legislating a solution to rogue websites. Due process is a bedrock foundation of our 

nation's legal system, even for those who violate the law. Any remedy that impedes or 

obstructs access to a website must be consistent with this core American principle. The 

aiIected parties should receive notice as well as an opportunity to be heard. 

SOPA includes general principles of due process by incorporating Federal Rule of 

Civil Procedure 65. Rule 65 provides that an adverse party is entitled to notice and an 

opportunity to be heard before issuance of a temporary restraining order unless "(A) 

specific facts in an amdavit or a verified complaint clearly show that immediate and 

, See ICE armounees results of "Operation Strike Out' - Protects consumers from counterfeit sports 

paraphernalia on the Internet and on the streets, Oct 3 L 2011, available at 

http://www.iee.gov/news/re1eases/1110/111031washingtonde.htm 

4]d 

4 
55 

H.R 3261, the "Stop Online Piracy Act" Mllrill A. Pallante 

irreparable injury, loss, or damage will result to the movant before the adverse party can 

be heard in opposition; and (B) the movant's attorney certifies in writing any efforts 

made to give notice and the reasons why it should not be required" Thus, the rule limits 

ex parte orders to extraordinary circumstances. 

Stopping infringement at the borders is not a new concept of American copyright 

law. Customs and Border Protection (CBP) has long had the authority to prevent 

infringing physical goods from entering U.S. commerce, even without advance notice or 

a hearing under certain circumstances. 5 International standards are also instructive. The 

Trade-Related Aspects ofIntellectual Property Rights (TRIPS) Agreement provides that 

governments should have the ability to seize infringing hard goods at the border based on 

evidence provided by the right holder6 An importer must receive notice of the seizure 

(or suspension as it is referred to in international law), but not before the suspension takes 

place7 

It also bears repeating that injunctions are not at odds with the First Amendment. 

As noted First Amendment scholar Floyd Abrams has observed, they are "a longstanding, 

constitutionally sanctioned way to remedy and prevent copyright violations."~ In fact, 

"no court has ever denied [ ] [that] injunctions are a valuable and constitutional response 

to copyright violations.,,9 At the same time, Mr. Abrams has noted that a "zero 

tolerance" policy - "where an entire website could be blocked or seized for a single, or 

just a few, offenses - would plainly raise the most troublesome First Amendment 

concerns."l0 I share the same concerns about a "zero tolerance" approach, but that is not 

SOPA. 

Marketplace Notification (md Injunctive Relief:' Section 103 

Section 103 of SOP A would allow copyright owners who have suffered harm to 

seek relief against foreign and domestic infringing web sites, serving as a complement to 

the authority of the Attorney General. Unlike the Attorney General, however, copyright 

owners would not be able to block domain names or web sites or otherwise affect the 

underpinnings of the Internet Nor does SOPA permit monetary relief for copyright 

owners. By targeting sites dedicated to infringement and permitting injunctive relief only, 

it limits the incentive for copyright owners to overreach. 

5 See 19 U.S.c. § 1595A: 19 C.F.R. §§ IH42. 1:11.43. 

6 See TRIPS Art. 51 . 

. See id. Art. 54. 

8 Promoting Investment and Protecting Commerce Online: Legitimate Sites v. Parasites, Part 1113e(ore the 

SlIhcomm ol1fnielleclllal Properly, ('ompeiiiiol1. and Ihe fl1lernel, 112th Congo (2011) (statement of Floyd 

Abmms). 

9 1d. (cmphasis in original): see also N. Y. Times V. United States, 403 U.S. 713.731 n. 1(1971) (Whitc. J. 

concurring) ("no one denies that a newspaper can properly be el~oined from publishing the copyrighted 

works of another. "). 

10 Floyd Abrams Statement supra n. 8. 
56 

H.R 3261, the "Stop Online Piracy Act" Mllrill A. Pallante 

Under this section, SOPA defines an infringing website as one: (1) that "is 

primarily designed or operated for the purpose of, has only limited purpose or use other 

than, or is marketed by its operator or another acting in concert with that operator for use 

in, offering goods or services in a manner that engages in, enables, or facilitates" a 

violation of 17 U.S.C. §§ 501, 1201 or certain trademark law provisions; (2) where the 

operator "is taking, or has taken, deliberate actions to avoid confirming a high probability 

of the use of the [site] to carry out acts that constitute [infringement]:" or (3) where the 

site is operated "with the object of promoting, or has promoted, its use to carry out 

[infringement] as shown by clear expression or other affirmative steps to foster 

infringement" 

I would like to underscore that subsection 103(a)(l)(B)(ii)(I) in the definition 

described above sets forth a willful blindness standard. This is important because it 

would encompass situations where an infringer takes deliberate action to avoid 

knowledge of the infringement, in cases where there is a high probability of 

infringement II At the same time, it provides a blueprint for companies that build their 

businesses in good faith, by confirming that those who respect copyrighted content will 

not be put at a competitive disadvantage for doing so. 

As a procedural matter, SOP A permits copyright owners to bring in personam 

actions against the registrant of a domain name or the operator of a rogue website, or, in 

certain circumstances, an in rem action against that website or the domain name used by 

such site, and to serve copies of those orders on payment processors and advertising 

networks. They may only do so, however, if they first send notices to the payment 

processors and advertising networks pursuant to the notification system SOPA creates. 

The notices must identify the infringing Internet site and describe the specific facts 

supporting the claim that the site is infringing as well as the irreparable injury, loss, or 

damage that would result if timely action were not taken. A site owner or operator can 

immediately challenge this notification by serving a counter notification stating that the 

site is not in fact an infringing site. Upon receipt of an effective counter notification, an 

advertising network or payment processor need not take any further action unless and 

until it has been served with a court order. 12 

SOPA's notification process is innovative in spirit It empowers copyright 

owners, but potentially limits the need for litigation by providing a mechanism for them 

to work directly with payment processors and advertising networks. It also provides 

incentives for the latter to cooperate voluntarily when notified that they are dealing with a 

site dedicated to infringement, rather than being compelled to do so by court order. 

11 See Global-TeclLJppliancesv. SEB ,'U., 131 S.Ct 2060 (2011) (scttingforth willful blindncss standard 

as meeting the knowledge requirement for inducing infringement of a patent case. a doctrine closely related 

to inducing infringcmcnt of a copyright). 

12 SOP A requires advertising networks or payment processors to take action within five days of receiving 

an initial notice, but it does not require them to wait the full five days and thus there is no set time frame 

during which a payment processor or advertising network must wait to see if a counter notification is filed. 

6 
57 

H.R 3261, the "Stop Online Piracy Act" Mllrill A. Pallante 

Whether the notification process will ultimately be effective may in large part 

depend on the volume of notices received and whether payment processors and 

advertising networks will feel compelled to process and respond to them in the absence of 

a court order. If it appears likely that some may respond while others may not, I would 

encourage Congress to consider further refinements. Congress will want to ensure that 

those who are less conscientious do not emerge with a marketplace advantage over those 

who choose to work with copyright owners in good faith, and it will want to ensure that 

the businesses of the websites are not unduly affected. The goal is to achieve the 

participation of payment processers and advertising networks in shutting down infringers 

while also ensuring general due process protections for all involved. 

As introduced, SOP A provides a good start in this regard. For example, the 

copyright owner must include a statement that the notification is made in good faith, is 

accurate, and the signatory to the notification is authorized to act on behalf of the holder 

of the intellectual property right Indeed, copyright owners are often in a good position to 

ascertain useful and reasonably detailed information about infringing web sites and it is 

my view that they should share as much information as reasonably possible with the 

intermediaries whose help is sought. SOPA also provides significant penalties for 

misrepresentations contained in a notification, including damages, costs, and attorneys 

fees. As stated above, SOPA also provides for a counter notification, and at this stage of 

the process does not create consequences if the intermediary fails to act. 

Once the copyright owner commences an action with the court, Rule 65 of the 

Federal Rules of Civil Procedure applies. As noted above, that Rule generally requires 

notice and an opportunity to be heard, unless the movant satisfies the stringent 

requirements for an ex parte order. In addition, the plaintiff cannot serve copies of the 

orders on payment processors or advertising networks without court approval. Again the 

consequences are limited, even at this stage of the process. If the intermediary fails to 

sever ties with the website, there is no infringement liability, only an order from the court 

to comply and possible penalties if they refuse and are held in contempt 

Nor, contrary to the assertions of some critics of SOPA, does this notification 

affect the safe harbors that Internet service providers enjoy under the Digital Millennium 

Copyright Act (DMCA) Section 512 of Title 17 provides safe harbors from liability for 

damages and limits the scope of injunctive relief for service providers who comply with 

its requirements. Nothing in SOPA subjects service providers to liability for their acts or 

their failures to act No monetary relief may be obtained against a service provider 

pursuant to SOPA, apart perhaps for sanctions for contempt of court if a service provider 

does not comply with a court order. The injunctive relief permitted by SOPA is within 

the scope of the limitations in section 5120), which provides, in the case of "transitory 

digital network communications," that a service provider may be restrained "from 

providing access, by taking reasonable steps specified in the order to block access, to a 

specific, identified, online location outside the United States" (compare to Section 

l02(c)(2)(A)(i) of SOPA), and that an Internet search engine may be subject to such 

injunctive "relief as the court may consider necessary to prevent or restrain infringement 

of copyrighted material specified in the order of the court at a particular online location, 

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58 

H.R 3261, the "Stop Online Piracy Act" Mllrill A. Pallante 

if such relief is the least burdensome to the service provider among the forms of relief 

comparably effective for that purpose." (Compare to Section 102(c)(2)(B) of SOPA) 

Streaming 

Mr. Chainnan, I would also like to say how pleased I am that SOPA would 

harmonize the options available to prosecutors in cases of willful, criminal infringement, 

as between the exclusive rights of reproduction, distribution, and public performance. As 

I have previously testified, the right of public performance is of growing importance in 

the marketplace, because the streaming of copyrighted works is an increasingly important 

means by which copyright owners provide access. 

Unfortunately, prosecutors are placed at a disadvantage and have a disincentive to 

pursue cases of willful, criminal streaming because (unlike instances of willful 

reproduction or distribution) the maximum possible penalty is a misdemeanor. This lack 

of parity neither ret1ects nor serves the marketplace. Video streaming tratlic is among 

the fastest growing areas of the Tnternet and now accounts for more than one quarter of 

all Internet traffic. Consumers now have numerous ways to enjoy streamed content 

legally through legitimate video streaming websites like Hulu or Netflix, user generated 

content sites like You Tube, and streaming music services. Streamed content, including 

sports programming, is also often provided legally by content owners through their own 

web sites and Internet portals such as ABC.com and HBO GO. And today users can even 

stream content through applications on their smart phones or their video game consoles. 

Indeed, in a very real sense, the innovative technolob'Y companies that contract with 

creators in good faith and pay licensing fees as a cost of doing business are as victimized 

by piracy as those who create the content in the first instance. 

I am particularly pleased that SOPA would update the provisions that govern prerelease scenarios (scenarios where infringers offer a television program, sporting event, 

movie, or other copyrighted work prior to the date of public release, causing especially 

egregious hann). SOP A recognizes that streaming is a major means of pre-release 

infringement and provides prosecutors with a clear basis to take action. 

While it should be clear from my statements here that the streaming provisions of 

SOPA are based on longstanding legal principles, I would like to address some of the 

concerns and misunderstandings these proposals have generated. First, not all streaming 

is at issue. The provisions at issue are criminal provisions. They are not applicable to 

innocent activity or activity that might legitimately be categorized as fair use. Criminal 

copyright infringement requires a finding that the offender acted "willfully," which courts 

generally interpret as meaning a "voluntary intentional violation of a known legal 

duty.,,13 SOP A does not alter that standard. Similarly, it would not negate the innocent 

infringement doctrine in civil actions nor subject a party to any liability that it does not 

already have with respect to reproducing or distributing a copyrighted work. T believe 

I, See 4 Melville B. Nimmer and David Nimmer, Nimmer onCopyrighl 4 § 15.01[A][2] (Matthew Bender, 

Rev. Ed.) ClTlhe better view construes the 'willfuhless' required for criminal copyright infringement as a 

'vohllltary, intentional violation of a known legal duty. "'). 

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59 

H.R 3261, the "Stop Online Piracy Act" Mllrill A. Pallante 

this is clear in SOPA, but if necessary, the distinction between criminal and innocent 

infringement could be clarified. 

Copyright Office 

Finally, I note that SOPA would bestow a number of important responsibilities on 

the Copyright Ot1ice, including a study of the legislation once implemented and an 

ongoing obligation to work with the Secretary of State and Secretary of Commerce to 

ensure that the protection in foreign countries of US. persons' intellectual property rights 

is a significant component of US. foreign and commercial policy. We will of course be 

very pleased to undertake these responsibilities and more, so that creators and 

intermediaries alike can flourish in the online environment 

Thank you Mr. Chairman. 

9 
60 

Mr. SMITH. Thank you, Ms. Pallante. 

Mr. Clark? 

TESTIMONY OF JOHN P. CLARK, CHIEF SECURITY OFFICER 

AND VICE PRESIDENT OF GLOBAL SECURITY, PFIZER, INC. 

Mr. CLARK. Chairman Smith, Ranking Member Conyers, distinguished Members of the Committee—— 

Mr. WATT. Could you pull your mic a little bit closer, please, or 

cut it on? 

Mr. CLARK. It is a pleasure to appear before you today to discuss 

the threat that counterfeit medicines posed to the health and safety 

of patients in the United States and around the world. It is a closer 

global issue. 

As Vice President of Global Security for Pfizer, I work to mitigate 

the threat that counterfeit medicines posed to the health and safety 

of patients who rely on Pfizer medicines to live healthier and 

longer lives. I commend the Chairman and the Ranking Member of 

on the Committee for co-sponsoring the Stop Online Piracy Act for 

their legislative effort. It is a positive step forward in our fight 

against counterfeit medicines. 

Counterfeit medicines pose a threat because of the conditions 

under which they are manufactured, on unlicensed, unregulated 

sites, frequently under unsanitary conditions. In many instances, 

they contain none of the active pharmaceutical ingredients found in 

authentic medicines or in incorrect dosages, depriving patients, depriving patients of the therapeutic benefit of the medicine prescribed by their put physicians. And others, they may contain toxic 

ingredients, such as heavy metals, arsenic, pesticides, rat poison, 

brick dust, floor wax, leaded highway paint, and even sheet rock 

or wallboard. 

Counterfeit medicines are a global problem, and I am pleased to 

share our experience in combating them, and how the Stop Online 

Piracy Act aims to strengthen the U.S. arsenal. 

Pfizer has implemented an aggressive anti-counterfeiting campaign that attacks counterfeits at their source. Since 2004, we have 

prevented more than 138 million dosages of counterfeit Pfizer 

medicines alone, more than 68 million finished dosages, and 

enough active pharmaceutical ingredients to manufacture another 

70 million from reaching global patients. Additional raid by law enforcement, based on evidence we have provided have also resulted 

in seizures of millions of dosages of counterfeits marketed by other 

major pharmaceutical companies. 

In the United States, we work closely with ICE, the FBI, and 

FDA on their investigations, and with Customs and Border Protection to improve their ability to prevent counterfeit Pfizer medicines 

from reaching U.S. patients. While the true scope of the counterfeit 

problems is hard to estimate, we have confirmed that counterfeit 

Pfizer medicines have been found and seized and at least 101 countries, and have reached the supply chains and 53 countries. 

Technology has created a new front in this battle. Today the 

major threat to patients in the U.S. are the many professional looking websites that promise safe, FDA approved, branded medicines 

from Canada or the UK, and for that reason, we appreciate the 

Chairman and Ranking Member’s focus on the threat in Title I of 
61 

the bill, giving the Attorney General new tools and incentivizing 

private stakeholders to act against rogue websites, with immunity 

in place for every stakeholders’ action would be an important step 

forward. 

Patients do not realize that many of the websites do not disclose 

the true source of the products they dispense, or even where their 

alleged dispensing online pharmacy is located. In such instances, 

the World Health Organization has estimated that patients have 

more than a 50 percent chance of receiving a counterfeit medicine. 

I happen to believe that is a very low estimate. 

I would like to share two short case studies. The first is Rx 

North. Patients who visited Rx North’s website thought they were 

ordering from a Canadian pharmacy and would receive authentic 

FDA approved medicines. In reality, the medicines dispensed from 

our Rx North were traced from China, where they were manufactured, through Hong Kong, on to Dubai, into the UK where they 

were intercepted. Among the medicines seized by UK customs were 

Lipitor, found to contain only 82 to 86 percent of the active pharmaceutical ingredient, which is an incredibly high number for most 

counterfeit, as well as counterfeit versions of medicines from four 

other companies, including one found to contain traces of metal. 

The second is the case of Kevin Xu, convicted of misbranding 

drugs and trafficking in counterfeit goods. It demonstrates how attractive a target the U.S. supply chain is who account for those 

who counterfeit our medicines, and how weak our current penalties 

for counterfeiting medicine are. 

During meetings with our undercover consultant, Xu boasted of 

the global scope of his criminal enterprise. He offered a list of 

branded counterfeit medicines that he could provide, including five 

Pfizer medicines. The evidence we gathered was shared with an ongoing ICE investigation of Xu. An order placed by an ICE undercover agent was filled with the counterfeit. When the tablets were 

tested, they were found to contain only insignificant levels of the 

active pharmaceutical ingredient found in the authentic medicine. 

Xu was sentenced to just 78 months in Federal prison without 

parole, the maximum sentence under the applicable U.S. sentencing commission guideline range. This punishment does not reflect the seriousness of the crime. The Stop Online Piracy Act takes 

a positive step toward making these penalties even tougher. 

Pharmaceutical counterfeiting is a low risk, high profit criminal 

activity that has attracted drug traffickers, fire arms smugglers, 

and terrorists. One of the principal players in the 2003 Lipitor 

breach here in the U.S. was a convicted cocaine trafficker. In 2006, 

the U.S. attorney for the Eastern District of Michigan announced 

the indictment of 19 people who gave a portion of their profits from 

the sale of counterfeit Viagra to Hezbollah. 

Those who counterfeit medicines are confident that even if 

caught, they will get just a slap on the wrist. Even here in the 

U.S., the maximum sentence imposed under the Food and Drug 

and Cosmetics Act is just 3 years. Recognizing the inherent risk 

that any counterfeit medicine poses to patients, we must enhance 

the penalties for pharmaceutical counterfeiting to provide a greater 

deterrent. Expedited procedures must be in place to shut down 

rogue websites dispensing counterfeit medicines to the U.S. 
62 

The Stop Online Piracy Act is a significant step forward in those 

efforts, and I thank the Chairman and Ranking Member for introducing this important piece of legislation. I would like to work with 

you so that our laws recognize the grave health and safety risk 

posed by counterfeit medicines and serve as a deterrent. 

I work with foreign government representatives in the global 

fight against counterfeiting. It is hypocritical for us to speak with 

foreign government representatives, as I often do, about their lack 

of effective legislation, when U.S. laws are still lacking. This bill, 

if enacted, with strong penalties and mechanism to shut down 

rogue websites will be highly effective in our global argument for 

all governments to fully appreciate the serious health and safety 

aspects of this problem, and encourage similar efforts around the 

world. 

Thank you again for this opportunity to express my views. For 

Pfizer, pharmaceutical counterfeiting is first and foremost an issue 

of patient health and safety. We look forward to working with you 

on the global fight against counterfeit medicines. 

[The prepared statement of Mr. Clark follows:] 

Prepared Statement of John P. Clark, Chief Security Officer, 

Pfizer, Inc. 

and Vice President, Global Security 

Chairman Smith, Ranking Member Conyers, distinguished Members of the Committee. It is indeed a pleasure to appear before you today to discuss an issue of 

great importance—the threat that counterfeit medicines pose to the health and safety of patients in the United States and around the world. 

My name is John Clark, and I am the Chief Security Officer for Pfizer Inc, and 

Vice President of its Global Security Team. In those positions I am responsible for 

ensuring that programs are in place to protect Pfizer’s personnel, real and intellectual property, reputation, and the integrity of its medicines. 

Prior to joining Pfizer in 2008, I served as Immigration and Customs Enforcement 

(ICE) Deputy Assistant Secretary, responsible for the overall management and coordination of the agency’s operation, as well as the Assistant Secretary’s principal 

representative to the Department of Homeland Security and to the law enforcement 

and intelligence communities. During my more than 25 years in ICE and its predecessor agency, U.S. Customs, I held a variety of investigative, management and executive positions. 

Pfizer is a diversified, global health care company and the world’s largest biopharmaceutical company. Our core business is the discovery, development, and marketing of innovative pharmaceuticals for human and animal health, and we are committed to ensuring the integrity of those products when they reach the market. 

THREAT TO PATIENT HEALTH AND SAFETY

A significant aspect of my job is to mitigate the threat that counterfeit medicines 

pose to the health and safety of patients who rely on Pfizer medicines to live 

healthier, longer lives. For that reason, I commend the Chairman and Ranking 

Member and the many members who are co-sponsors of the Stop Online Piracy Act 

for their legislative effort. It is a positive step forward in our fight against counterfeit medicines. 

Counterfeit medicines pose a threat because of the conditions under which they 

are manufactured—in unlicensed and unregulated sites, frequently under unsanitary conditions—and the lack of regulation of their contents. In many instances, 

they contain none of the active pharmaceutical ingredient (API) found in the authentic medicine, or an incorrect dosage, depriving patients of the therapeutic benefit of the medicines prescribed by their physicians. In others, they may contain 

toxic ingredients such as heavy metals, arsenic, pesticides, rat poison, brick dust, 

floor wax, leaded highway paint and even sheetrock or wallboard. 

Counterfeit medicines are a global problem, one from which no region, country, 

therapeutic area is immune. And, while my comments today focus on Pfizer’s experience in combating counterfeit medicines and the positive impact the Stop Online Pi-
63 

racy Act can make in that effort, it is a threat to the entire pharmaceutical industry. 

PFIZER’S PROGRAM TO MITIGATE THAT THREAT

We have implemented an aggressive anti-counterfeiting campaign to detect and 

disrupt major manufacturers and distributors of counterfeit Pfizer medicines. By attacking counterfeits at or near their source, we protect the global market. Through 

our efforts we have, since 2004, prevented more than 138 million doses of counterfeit Pfizer medicines—more than 68 million finished doses and enough active pharmaceutical ingredient to manufacture another 70 million—from reaching patients 

around the world. And, because those who counterfeit our medicines have no ‘‘brand 

loyalty’’, raids by law enforcement authorities based on evidence we have provided 

have also resulted in seizures of millions of doses of counterfeits marketed by other 

major pharmaceutical companies. 

I attribute the success of our program to our talent—colleagues placed strategically around the world with extensive law enforcement experience who know how 

to initiate and develop cases—and the effective partnerships we have forged with 

enforcement authorities around the world. As part of those partnerships, we not 

only refer the results of our investigations, but also provide support as required in 

investigations and test—free of charge—suspected counterfeit Pfizer medicines to 

determine their authenticity. 

We also provide training to enforcement authorities to raise awareness to the 

counterfeiting problem and enhance their ability to distinguish counterfeit from authentic Pfizer medicines. As of September 30, 2011, we have provided training to 

authorities in 117 countries, often in conjunction with programs sponsored by the 

US Patent and Trade Office (USPTO) and the World Customs Organization (WCO). 

In some instances, we have sponsored regional conferences to facilitate collaboration 

between authorities in the regions, and work with them to develop actionable plans 

of action to address the problem. 

These training efforts have produced tangible results in increased enforcement activity in Egypt, Jordan, Lebanon, the UAE and Poland, and the passage of strong 

anti-counterfeiting legislation in Jordan and Kenya. 

In the U.S., we work closely with ICE, the FBI and FDA on their investigations, 

and with CBP to improve their ability to prevent counterfeit Pfizer medicines from 

reaching U.S. patients. 

One example of our collaboration with CBP is the use of our ‘‘mobile labs’’, which 

we have used in pilot programs with CBP at International Mail Facilities in San 

Francisco, Los Angeles, New York, Miami and Chicago. 

While the true scope of the counterfeit problem is hard to estimate, we can provide some metrics based on the seizures reported to us by enforcement authorities 

and confirmed by our labs. Based on that data, we have confirmed counterfeit Pfizer 

medicines in at least 101 countries, and having breached the legitimate supply 

chains of 53. 
64 

While Viagra is our most counterfeited medicine, counterfeiters have targeted 

more than 50 of our products, including Aricept (Alzheimers), Celebrex (anti-inflammatory), Genotropin (human growth hormone), Lipitor (high cholesterol), Metakelfin 

(anti-malarial), Norvasc (high blood pressure), Prevnar (vaccine to prevent infection 

caused by pneumococcal bacteria), Sutent (for treatment of treatment of rare cancer 

of the stomach, bowel or esophagus (GIST), advanced kidney cancer (RCC, and a 

type of pancreatic cancer (pNET), Viagra (erectile dysfunction), Xanax (anxiety disorders), Zithromax (anti-infective) and Zoloft (depression). 

And counterfeit versions of 23 of those medicines, including Celebrex, Genotropin, 

Lipitor, Metakelfin, Norvasc, Prevnar, Sutent, Viagra, Xanax and Zithromax, have 

breached supply chains around the world. 

THE ONLINE THREAT

The major threat to patients in the U.S., however, is the Internet and the many 

professional looking websites that promise safe, FDA-approved, branded medicines 

from countries such as Canada or the UK. And, for that reason, we appreciate the 

Chairman and Ranking Member’s focus on that threat in Title I of the bill. Giving 

the Attorney General new tools and incentivizing private stakeholders to act against 

rogue websites if immunity is in place for every stakeholder’s actions would be an 

important step forward. 

Patients are lured by the ease with which they can order their medicines online, 

often without the need to consult a doctor or provide a valid prescription. They do 

not realize that many of those sites have failed to disclose the true source of the 

products they dispense or even where they—the ‘‘dispensing’’ online pharmacy are 

located. In such instances, the WHO has estimated that patients have more than 

a 50% chance of receiving a counterfeit medicine. 

It is possible for U.S. patients to buy their medicines safely online through pharmacies that have been accredited by the National Association of Boards of Pharmacies (NABP). To be accredited, a pharmacy must comply with the licensing and 

inspection requirements of their state and each state to which they dispense pharmaceuticals. If they meet these criteria they are designated VIPPS sites—Verified 

Internet Pharmacy Practice Sites. Pharmacies displaying the VIPPS seal have demonstrated to NABP compliance with VIPPS criteria including patient rights to privacy, authentication and security of prescription orders, adherence to a recognized 

quality assurance policy, and provision of meaningful consultation between patients 

and pharmacists. VIPPS pharmacies represent only a small percentage of online 

pharmacies. In a recent survey of more than 8000 websites selling medicines, the 

NABP found that 96% were not operating in accordance with pharmacy laws and 

standards. 

CASE STUDY: RXNORTH

The case of RxNorth is an excellent example of how easily patients can be deceived, and the risks to which they expose themselves when ordering online from 

a rogue website, which the Stop Online Piracy Act aims to shutdown. 

Patients, who visited the RxNorth website, thought they were ordering from a Canadian Pharmacy and would receive authentic FDA-approved medicines. 
65 

In reality, however, the medicines dispensed from RxNorth were traced from 

China, where they were manufactured, through Hong Kong, Dubai, to the UK where 

they were intercepted. Among the medicines seized by UK Customs were Lipitor— 

found to contain only 82 to 86% of the claimed dosage of active pharmaceutical ingredient—as well as counterfeit versions of medicines from four other companies, including one found to contain traces of metal. 

Subsequent investigation revealed that had they not been intercepted, those medicines would have been sent to a fulfillment center in the Bahamas, where they 

would have been split from their pallets and placed in individual packages corresponding to customer order. To gain ‘‘credibility’’, the packages would then have 

been shipped to the UK, from where they would have been sent to the U.S. patients 

who had placed their orders with RxNorth, believing it to be a ‘‘safe’’ pharmacy in 

Canada. 

As a result of this investigation, the FDA warned consumers not to place orders 

with RxNorth and not to take the medicines they had received. But, more needs to 

be done to combat these rogue websites. 

CASE STUDY: OPERATION CROSS OCEAN

Operation Cross Ocean also demonstrates the threat to unsuspecting U.S. patients 

who order their medicines online. Chinese and U.S. authorities worked together to 

dismantle an operation that manufactured counterfeit versions of Viagra and other 

medicines in China, then dispensed them via the Internet through a network of brokers, largely in the U.S. and Europe. 

When they raided the manufacturing site (pictured below), authorities seized 10 

lines of manufacturing equipment and counterfeit medicines, including 570,000 finished pills and enough active pharmaceutical ingredient to manufacture 1.82 million 

more. 
66 

CASE STUDY: KEVIN XU

The case of Kevin Xu, convicted of misbranding drugs and trafficking in counterfeit goods, demonstrates how attractive a target the U.S. supply is for those who 

counterfeit our medicines and how weak our current penalties for counterfeiting 

medicines are. 

An investigation initiated in our Asia-Pacific region identified Xu and his company, Orient Pacific International, as a major manufacturer and distributor of counterfeit medicines, including several Pfizer products. During meetings with our ‘‘undercover’’ consultant, Xu boasted of the global scope of his criminal enterprise, including his responsibility to oversee the quality of counterfeits produced in China, 

and provided a list of branded medicines that he could provide, which included 

Pfizer’s Alzheimer’s drug, Aricept, ulcer drug, Cytotec, cholesterol lowering drug, 

Lipitor, kidney cancer drug, Sutent and erectile dysfunction drug, Viagra. 

The evidence we gathered was shared with ICE, which had already begun an investigation of Xu. An order placed by an ICE undercover was filled with counterfeit 

Aricept, Pfizer’s Alzheimer’s drug, packaged for the French market. When the tablets were tested, they were found to contain only insignificant levels of the active 

pharmaceutical ingredient found in authentic Aricept. 

Xu was arrested in July 2007 and charged with manufacturing counterfeit 

versions of medicines intended to treat prostate cancer (Casodex, Astra Zeneca), 

blood clots (Plavix, Bristol Myers Squibb), schizophrenia (Zyprexa, Lilly), and Alzheimers (Aricept, Pfizer), mislabeling them as chemicals, and smuggling them into 

the U.S. where they were to be introduced into our supply chain. 
67 

The likelihood of Xu’s success was high. European authorities have identified Xu 

as the source of counterfeit versions of non-Pfizer products—Zyprexa (Lilly, anti-psychotic), Plavix (Bristol Myers Squibb, blood thinner), and Casodex (Astra Zeneca, 

prostate cancer) –recalled from the legitimate supply chain in the UK, a supply 

chain as tightly regulated as ours, in May 2007. 

As reported in a press release by the U.S. Attorney’s Office for the Southern District of Texas, Xu was ‘‘sentenced to 78 months in federal prison without parole, the 

maximum sentence under the applicable U.S. Sentencing Commission guideline 

range for conspiring with others in the Peoples Republic of China to traffic in counterfeit pharmaceutical drugs and causing the introduction of counterfeit and misbranded drugs into interstate commerce.’’ http://www.cybercrime.gov/XuSent.pdf, 

accessed on November 10, 2011 

This is a good example of the punishment not rising to the level of the seriousness 

of the crime and why we need stronger penalties. The Stop Online Piracy Act takes 

a positive step forward and we would welcome the opportunity to work with you to 

perfect the penalty section. 

CASE STUDY: ARAB CHINA NETWORK

Based upon information provided by Global Security, more than 300 Chinese law 

enforcement officers, from both the Public Service Bureau (PSB) and State Food and 

Drug Administration (SFDA), initiated enforcement actions that dismantled one of 

the most prolific counterfeiting organizations ever uncovered in China. The network, 

comprised of males of Middle East descent living in the southern provinces of China, 

was responsible for distributing large quantities of counterfeit medicines, manufactured in China, throughout the Gulf States and U.S.. 

In two separate but related enforcement operations, authorities raided two manufacturing sites and 26 storage facilities, making 26 arrests. They seized vast 

amounts of finished products—a mix of counterfeits and generics—including counterfeit Pfizer’s ulcer drug, Cytotec, Viagra and Pfizer’s anti-anxiety drug, Xanax. Initial estimates by authorities placed the pill count as high as 200 million, including 

counterfeits of Pfizer medicines as well as those of four other pharma companies. 

Also seized were large quantities of active pharmaceutical ingredient, including barrels of sildenafil, the active pharmaceutical ingredient in Viagra, which may be beyond the capability of the authorities to accurately weigh. The seizures included 

equipment—54 machines and 1230 moulds, tools and dies, at least 200 of which are 

for Pfizer medicines—with which to manufacture the counterfeits. 

In a subsequent release to Chinese Media, authorities stated that they had seized 

approximately 7 million counterfeit Viagra in those raids. 

CASE STUDY: OPERATION EAGLE EYE

Based on information provided by Pfizer, China’s Ministry of Public Security 

(MPS) raided sites in Eagle Eye Action in Henan, Zhezjang, Guangdong provinces, 

making 36 arrests. They seized more than 5.6 million counterfeit tablets including 

medicines from Pfizer (Aricept, Lincocin, Lipitor, Viagra, Xanax) and two other 

major pharmaceutical companies, as well as 45 machines. 

The head of the operation was sentenced to life imprisonment. Other members of 

the criminal network received sentences ranging from 2 to 15 years in jail. 

WHAT MORE CAN WE DO?

We have seen progress in the fight against counterfeit medicines, but much more 

needs to be done. In some countries, pharmaceutical counterfeiting is not a crime; 

in others it has only minimal sanctions. Lax enforcement of laws that do exist is 

yet another problem. 

Pharmaceutical counterfeiting is a low risk, high profit criminal activity that has 

attracted drug traffickers, firearm smugglers, and, even terrorists. One of the principal players in the 2003 Lipitor breach here in the U.S. was a convicted cocaine 

trafficker. In 2006, the U.S. Attorney for the Eastern District of Michigan announced the indictment of 19 people who gave a portion of their profits from the 

sale of counterfeit Viagra to Hezbollah. 

Those who counterfeit medicines are confident that even if they get caught, they 

will get a mere slap on the wrist. Even here in the U.S., the maximum sentence 

imposed under the Food Drug and Cosmetics Act is 3 years. Recognizing the inherent risk that any counterfeit medicine poses to patients, we must enhance the penalties for pharmaceutical counterfeiting to provide a greater deterrent. Expedited 

procedures must be put in place to shutdown ‘‘rogue’’ websites dispensing counterfeit medicines to U.S. patients. 
68 

The Stop Online Piracy Act is a significant step forward in those efforts and I 

thank the Chairman and Ranking Member for introducing this important piece of 

legislation. I would like to work with you so that our laws recognize the grave 

health and safety risks posed by counterfeit medicines and serve as a deterrent. 

I work with foreign government representatives in the global fight against counterfeiting. It is hypocritical for us to speak with foreign government representatives, 

as I do, about their lack of effective legislation when U.S. law is still lacking. This 

bill, if enacted with strong penalties and mechanisms to shut down rogue websites, 

will be highly effective in our global argument for all governments to fully appreciate the serious health and safety aspects of this problem and encourage similar 

efforts. 

CONCLUSION

Thank you again for this opportunity to express my views. For Pfizer, pharmaceutical counterfeiting is first and foremost an issue of patient health and safety. 

We look forward to working with you on the global fight against counterfeit medicines. 

Mr. SMITH. Thank you, Mr. Clark. 

Mr. O’Leary? 

TESTIMONY OF MICHAEL P. O’LEARY, SENIOR EXECUTIVE 

VICE PRESIDENT, GLOBAL POLICY AND EXTERNAL AFFAIRS, 

MOTION PICTURE ASSOCIATION OF AMERICA (MPAA) 

Mr. O’LEARY. Thank you. Mr. Chairman, Ranking Member Conyers, Chairman Goodlatte, and Ranking Member Watt, distinguished Members of the Committee, I am honored to be here today 

and, and thank you for holding this important hearing. I also want 

to thank you for introducing this legislation, which will help protect American creativity and American jobs from thieves who hide 

overseas and seek to profit off the hard work of people in this country. 

I also want to acknowledge my fellow panelists. I am pleased to 

be here with all of them today, and look forward to working with 

them throughout this process. I want to particularly acknowledge 

the contributions of Ms. Kirkpatrick and MasterCard. As the 

Chairman alluded to earlier, they are truly a fine example of a corporation trying to make the Internet a safe marketplace for people 

all over the world. And frankly, their example is one to be followed. 

Critics would have you, as Mr. Watt alluded to, believe that this 

is a battle between two giant corporations, and there is certainly 

a lot of truth to that. But I am also very proud to be part of a wide 

ranging coalition that includes the AFL-CIO, who we will hear 

from shortly, members of the Chamber of Commerce, big business, 

small business, individual creators, and entrepreneurs. So, I think 

critics would have you believe that this bill is really about supporting Hollywood and things like that, but the truth of the matter, 

when you look behind the rhetoric and the hyperbole, is that intellectual property is something which affects every facet of the American economy, and it affects people all over the country. 

In the case of the industry that I represent, the American motion 

picture and television industry, we believe that these jobs are 

worth protecting. They are more fully detailed in my written testimony, but I would just mention a few. There are people like Dan 

Lemieux, who is a stunt coordinator from Michigan. He has worked 

on numerous films and television shows like Nip Tuck and The 
69 

Shield. The industry includes over 95,000 small businesses. They 

employ 10 people or less. Businesses like Fletcher Camera, which 

is in Chicago. They have 25 employees in that small business, and 

they provide movie equipment for productions that occur all over 

the Midwest. There are hundreds of thousands of businesses that 

provide services to production. There is a small paint and decorating firm in Baltimore, Maryland. It is a fifth generation family 

run operation, and it has applied paint for virtually every major 

production, which has occurred in the mid-Atlantic region over the 

past few years. 

I want to be very clear with this Committee that hard work, innovation, and creativity are not solely the province of people who 

live in northern California. There are people all over this country 

who contribute to the economy every day, who contribute to our 

culture, who contribute to what we make creatively. And their jobs 

are just as important and just as worth protecting as anyone else’s. 

And that is why we think this bill is so important, because it is 

a positive step in that direction. 

In this economic climate, we simply cannot afford to turn our 

back on any industry, which is coming forward and producing 

things that we can take all over the world and be successful with. 

Our industry competes. When we are given an opportunity to compete globally, we succeed. Where we have trouble, frankly, Mr. 

Chairman, is where we do not have an opportunity to compete fairly. And one of the problems we have is competing with people who 

are trying to steal our stuff. We are not before the Congress looking 

for a handout or a bail out. We are simply asking for an opportunity to stop from stealing the products that we make. 

In recent weeks, you have heard a lot of spurious arguments 

about this legislation. They have been chronicled in a number of 

the opening remarks, that it violates the First Amendment, that it 

undermines existing protection laws, that it somehow stifles innovation, and that it will, yes, break the Internet. The irony, of 

course, of that argument is that I believe it was first raised by 

those opposing the DMCA many years ago, as the Chairman will 

recall. And I believe some of those same people are here today opposing this bill because they think it will undermine the DMCA. 

So, there is a bit of irony there, which seems to be lost inside the 

Beltway, but I suspect that, outside the Beltway people see it for 

what it is. 

These allegations that you are hearing are simply taken from the 

playbook of those people who have consistently opposed every effort 

that the Congress has come forward with in the past few years to 

protect intellectual property. The good news is that every time Congress protects intellectual property, the Internet flourishes. Every 

time the United States stands for legitimacy over illegitimacy, the 

Internet gets bigger and stronger. More things are available to consumers. More products are available to consumers. We make more 

movies. They see more television. Protecting legitimacy is a positive 

thing for the economy and for innovation, and people that tell you 

otherwise are wrong. They have been wrong when they have been 

raising these arguments for the past two decades, and they are 

wrong in the context of this bill. 
70 

What you understand so clearly, Mr. Chairman, and the Stop 

Online Piracy Act reflects this, is that there is a very great difference between legitimate marketplace and the illicit sites and 

services that we are talking about. When the legitimate market is 

protected against the threat of online theft, the only people who 

lose are those who do not work, take no risk, make no investment. 

Instead, those are the people that simply try to profit off the hard 

work of others. 

We have also heard arguments that Congress should limit its approach to the threat of rogue sites to ‘‘following the money.’’ It is 

worth noting that whoever usually makes that argument is really 

saying you should follow someone else’s money. If we are, in fact, 

going to follow the money, which is something we should do, we 

should follow all of the money, not just some of it. 

Piracy is a complex problem that cannot be fixed in piecemeal solutions, but this bill is an important first step in trying to deal with 

what is a very real and growing threat. This is fundamentally 

about jobs and about protecting the jobs that Americans have, creating products that are enjoyed all over the world. 

Ultimately, someone once said that to lead is to choose, and the 

bill, Mr. Chairman, that you put before the Congress in this debate 

is one which provides a number of choices. It is a choice between 

illegal and legitimate. It is a choice between a safe, vibrant Internet for everyone and all black-market Internet. It is a choice between protecting American creativity and jobs or protecting 

thieves. These are simple choices from our perspective, and with 

the leadership that has been provided by this Committee, we look 

forward to this process, debating this bill, putting something on the 

President’s desk that both Republicans and Democrats can support, 

and at the end of the day, will allow these hard-working Americans 

to keep their jobs and keep creating the products that the world 

enjoys. Thank you. 

[The prepared statement of Mr. O’Leary follows:] 
71 

MenaN PlmlllASSOCIATIIJIj OF AMEIUCA 

STATEMENT OF MICHAEL P. O'LEARY, 

SENIOR EXECUTIVE VICE PRESIDENT, 

GLOBAL POLICY AND EXTERNAL AFFAIRS, 

ON BEHALF OF 

THE MOTION PICTURE ASSOCIATION OF AMERICA, INC. 

BEFORE THE HOUSE JUDICIARY COMMITTEE 

HEARING REGARDING 

H.R. 3261, THE "STOP ONLINE PIRACY ACT" 

RAYBURN HOUSE OFFICE BUILDING, ROOM 2141 

WASHINGTON, D.C. 

WEDNESDAY, NOVEMBER 16,2011 

10 A.M. 

The Film and Television Industry and Its Contribution to the U.S. Economy 

Chairman Smith, Ranking Member Conyers, and members of the Committee, 

thank you for holding this hearing regarding H.R. 3261, the Stop Online Piracy 

Act, an important new bill to protect jobs and the economy by taking action against 

foreign rogue websites and illegal cyberlockers that traffic in stolen creative works. 

I appreciate the opportunity to testify on behalf of the Motion Picture Association 

of America, Inc.} and its member companies regarding the impact of this illicit 

activity on our business and the livelihoods of those who work in our industry, and 

how H.R. 3261 will help address this challenge. 

1 The MotIOn Picture AssociatIOn of America and its international counterpart, the Motion Picture Association (MPA). serv~ as the voice and 

.advocate ofth~ American motion picture, home video and teleyision industrie~, domestically through the MPAA and internationally through the 

MPA MPAA memben. are Paramount Pictures Corporation, Sony Pictures Entertammenl Tnc" Twentieth Century Fox film Corporation, 

Universal City Studios LLC, Walt Disney Studios Motion Pictures, and W<lmCT Bros. Entertainment Inc 
72 

Fundamentally, this is about jobs. The motion picture and television industry 

supports more than two million American jobs in all 50 states. The 20 states and 

Puerto Rico represented by this Committee are home to 1.7 million American jobs 

supported by the motion picture and television industry, including more than 

525,000 direct motion picture and television industry jobs. About 12 percent of 

those are directly employed in motion picture and television production and 

distribution, jobs paying an average annual salary of nearly $79,000. Those are not 

just the people whose names you see on the marquee in front of the theaterthey're the hard-working people behind the scenes, from the carpenter who built 

the set, to the costumer and make-up artist who helped bring each character to life, 

to the Foley artist who created the sound effects. They are people like Dan 

Lemieux, a stunt coordinator in Michigan, who depends on the residual payments 

he earns to help support his wife and three children between productions. Dan was 

the stunt coordinator for the "Ides of March" and has done stunts for television 

programs like "Charmed", "Nip/Tuck" and "the Shield. 

Our industry also includes more than 95,000 small businesses across the country 

that are involved in the production and distribution of movies and television, the 

vast majority of which employ fewer than 1 0 people. These are businesses like 

Fletcher Camera & Lenses in Chicago, whose full-time staff of 25 employees 

works to provide equipment for film, television, and commercial productions in the 

Midwest. 

And beyond even these are the hundreds of thousands of other businesses that 

every year provide services to productions, like the local drycleaner that served the 

cast and crew on location or the local hardware store that supplied paint and 

lumber. For example, Budecke's Paints & Decorating of Baltimore, Maryland, a 

fifth-generation family-owned and-operated retailer, which has supplied paint for 

virtually every major production filmed in the area in recent years. The motion 

picture and television industry made $38.9 billion in payments to more than 

208,000 such businesses in 2009. On average, a major motion picture shooting on 

location contributes $225,000 every day to the local economy. 

Every day, these people go to work to create a product - one of our country's most 

creative, most innovative, most widely-recognized and most beloved products. 

And every day, over and over, that product is stolen, sometimes with nothing more 

than the click of a mouse. To these men, women, and their families, online content 

theft means declining incomes, reduced health and retirement benefits, and lost 

jobs. This rampant theft cannot continue, and the Stop Online Piracy Act will help 

accomplish that goal. 
73 

Websites Trafficking in Stolen Digital Content Create Consumer Confusion, 

Harm the Legitimate Marketplace and Damage Our Industry 

Let me make one thing very clear at the outset. In recent weeks, Mr. Chairman, 

you and your colleagues have heard a great deal from those who suggest this bill, 

and our efforts to fight online theft, will "break the Internet" or harm legitimate 

online social media platforms and Internet services. Nothing could be farther from 

the truth. 

When someone turns on a cell phone or a computer or a gaming system, often their 

purpose is to watch a movie or a TV show. The Internet and related digital 

distribution systems are a critically important avenue for growth for our industry, 

and every day, we are pursuing even more new and innovative ways to deliver our 

content to our consumers. Compromising those opportunities would hurt us, our 

partners, and our customers. What you have understood so clearly, Mr. Chairman, 

and what the Stop Online Piracy Act reflects, is the very great difference between 

that legitimate marketplace and the illicit sites and services that are dedicated to the 

theft of copyrighted works. 

Currently, the most pernicious forms of digital theft occur through the use of socalled "rogue" websites or cyberlockers. These platforms - I will refer to them 

today as "rogue sites" for simplicity - facilitate the illegal distribution of 

copyrighted works through many different forms, including streaming, 

downloading, or linking to another site or service offering unauthorized content. 

These rogue sites, whose content is hosted and whose operators hide around the 

world, are increasingly sophisticated in appearance and take on many attributes of 

legitimate content delivery sites, creating additional enforcement challenges and 

feeding consumer confusion. Many rogue sites accept credit cards or "e-wallet" 

alternatives to facilitate payments, display advertising for mainstream, blue-chip 

U.S. companies, and offer rewards programs for frequent purchasers. In addition, 

these often legitimate-looking websites expose consumers to criminals, who 

routinely collect personal and financial information from unsuspecting targets, 

subjecting those consumers not only to fraud and deceit, but also to identity theft 

and other harms. 

The proliferation of these rogue sites undercuts the legitimate market for filmed 

entertainment and thus the financial support for future film and television 
74 

production, threatening earnings and jobs throughout the U.S. Even major motion 

pictures newly in theaters appear on these rogue sites just days, if not hours, after 

their theatrical release - exploited for profits by thieves who did not work, took no 

risk, and invested no resources in the production of those films. 

Furthermore, legitimate companies that want to invest in and develop new and 

innovative business models centered around high-quality online content and 

greater consumer choice have a limited potential for growth when they are forced 

to compete with entities that are distributing the exact same content through illicit 

means. That is not innovation - it is theft. 

Some who oppose this bill claim that the Digital Millennium Copyright Act 

(DMCA) is sufficient to combat online theft. As you know, Mr. Chairman, the 

DMCA created a model whereby rights holders may notify a website containing 

infringing content and ask that it be removed. And where these sites are legitimate 

and make good faith efforts to respond to our requests this model works with 

varying degrees of effectiveness. It does not, however, always work quickly, and it 

is not perfect, but it works. 

But the rogue websites and cyberlockers I have just described are not legitimate. 

They do not act in good faith. They do not comply with DMCA requests, because 

their purpose is to traffic in stolen content. And when they are based overseas, 

they can simply thumb their noses at U.S. law. 

Criminals are not standing still, and if our efforts to protect American creativity are 

to succeed, the law cannot stand still either. That is why we need this bill. 

The Stop Online Piracy Act is a Smart, Reasonable Approach to Combat the 

Threat of Rogue Sites 

The Stop Online Piracy Act recognizes that to effectively stop online theft, every 

member ofthe Internet ecosystem needs to playa role, including the rights holders 

who created the content, the Internet Service Providers and search engines that 

connect consumers to rogue sites, and the advertising networks and payment 

processors that provide those sites with financial support. There are three specific 

elements of this bill Mr. Chairman, that I want to address this morning. 
75 

Narrowly Defined to Target Only Rogue Sites 

First, it is clear from the language ofH.R. 3261 that it is meant to apply only to 

rogue websites, and not to legitimate platforms. The definitions in the bill are very 

narrow and rooted in longstanding Supreme Court precedent with which US. 

based sites must already comply. For the bill to apply, a site must be "otherwise 

subject to seizure if it were a U.S. site" or primarily designed or operated for the 

purpose of copyright infringement, or deliberately turning a blind eye to violations 

of U.S. law, or taking "affirmative steps" to "foster infringement" such as rewards 

programs and prizes for uploading stolen content. These narrow definitions would 

not apply to legitimate businesses, like Twitter or Facebook. Legitimate sites are 

not covered by this legislation. 

Provides Rogue Sites with Robust Due Process 

Second, the Stop Online Piracy Act provides very strong due process protections to 

alleged rogue sites - in fact, it provides foreign-based sites with exactly the same 

procedural protections afforded U.S. citizens under the Federal Rules of Civil 

Procedure. This includes requiring prosecutors to notify the site and its registrants 

or owners of their intent to act under the bill, and to notify any intennediary that 

may be ordered by the court to discontinue providing services to that site. As such, 

domain name owners or site operators would have every right to defend 

themselves in court should they choose to do so. 

Equally strict standards would apply in cases where a content owner seeks to act to 

prevent online theft by a rogue site. Contrary to wild assertions bandied about by 

those who oppose this legislation, H.R. 3261 does not give content owners the 

power to shut down websites. The bill sets out a new voluntary notification 

process that encourages private, out-of-court solutions as the preferred means to 

efficiently and effectively protect against the enonnous losses that result from 

content theft. Indeed, the bill contains provisions that will provide immunity for 

voluntary action against sites dedicated to the theft of US. property or sites that 

endanger public health. 

At the same time, the bill preserves the ability of rights holders to seek limited 

injunctive relief in the courts against a rogue website if intermediaries choose not 

to take action against a website. Rights holders must clearly show, as they would 

under Federal Rule of Civil Procedure 65, that immediate and irreparable injury, 

loss, or damage will result in the absence of timely action. Content owners that file 

frivolous or unsupported claims could face damages, including costs and attorneys' 

fees. 
76 

Takes a Comprehensive Approach that Closes a Loophole in Current Law 

Third and finally, the Stop Online Piracy Act also includes other enhancements to 

current copyright law to prevent online content theft. One of these applies to the 

treatment of infringing content that is delivered using streaming technology. 

While existing law makes an infringement of any of the copyright owner's 

exclusive rights a criminal act when done willfully and for commercial advantage 

or private financial gain, felony penalties only apply to defendants engaged in the 

illegal reproduction or distribution of copies of one or more copyrighted works 

meeting specified numerical and monetary value thresholds. 

As technology has advanced since enactment of these provisions, however, so too 

have the means of willful and commercially destructive infringement. 

Increasingly, copyrighted content is not only made available for unauthorized 

downloading, but now is frequently streamed illegally as well. But our laws have 

not caught up with the thieves, and as a result, uncertainty remains whether 

unauthorized Internet streaming of copyrighted works can be prosecuted as a 

felony, as other forms of piracy are. H.R. 3261 closes that loophole in our nation's 

intellectual property laws. In so doing, it eliminates an unjustified, technologyspecific disparity between forms of infringement that have increasingly similar 

commercially-destructive impacts. 

To be clear: making available and profiting from an illegal, unauthorized stream of 

copyrighted content is already a crime. Content thieves should not be able to 

escape tougher penalties simply by choosing a different technology to perpetrate 

their crime. 

Critics' Arguments Ignore History of Copyright Legislation, Misread H.R. 

3261 

In recent weeks, as you know Mr. Chairman, there has been no shortage of critics 

attacking this legislation. Often, unfortunately, these are many of the same voices 

that claim to support the protection of intellectual property yet seem reflexively to 

oppose every effort to actually enact effective protections. I'd like to conclude my 

testimony by addressing the three main arguments on which these objections rest. 

H.R. 3261 Will Not "Break the Internet" 

Critics claim that requiring Internet intermediaries to take steps that would prevent 

links to rogue sites from functioning would "break the Internet" and jeopardize the 
77 

online security protocol known as Secure DNS, or DNSSEC. We see three 

problems with this claim. 

First, technology like site blocking and filtering, is employed around the world 

today to deal with spam, mal ware, viruses and all manner of bad behavior, 

including for copyright protection with no adverse impact on the Internet. There is 

no reason to suggest that the use ofthis technology by intermediaries in the U.S. 

would lead to a different result. 

Second, some have suggested the Internet would "break" because, they claim, huge 

numbers of U.S. consumers will rush to employ non-U.S. Internet services in order 

to access infringing content, driving traffic offshore and undermining Internet 

security. Yet, this is all based on one erroneous assumption: that all consumers 

who may now find themselves using rogue sites will keep doing so even in the face 

of a court order deeming those sites to be illegal. Consumers do not look for rogue 

sites when they search, they look for content - and the Stop Online Piracy Act will 

help ensure that the content they find is legitimate. The only people encouraging 

the use of an alternate domain system are thieves seeking to keep their lucrative 

black market alive and avoid detection. 

Third, opponents point to the DNSSEC code and claim that it is not compatible 

with the site blocking or filtering technology envisioned by H.R. 3261. This 

argument conveniently ignores not only the history of the creation ofDNSSEC but 

also the very nature of Internet protocols, which is simply this: when new 

developments or circumstances require changes to these codes, the codes change. 

Any software engineer will tell you that no development process stops at version 

1.0. Today is no different. As Daniel Castro of the Information Technology and 

Innovation Foundation wrote earlier this year, the issue with DNSSEC "appears to 

be the result of a deficiency in the current DNS protocol (perhaps a result of the 

ideological stance of its authors) rather than any true technical limitation. 2 

H.R. 3261 Does Not Undermine Free Expression - It Protects It 

Critics also claim that the Stop Online Piracy Act would violate the First 

Amendment or threaten the freedom of expression. This, too, is inaccurate. The 

motion picture and television industry depends on the First Amendment to protect 

our ability to freely create the very content that rogue sites are stealing. As noted 

First Amendment scholar Floyd Abrams wrote just last week regarding H.R. 3261: 

"Copyright violations have never been protected by the First Amendment and have 

2 Dantel Castro, "No, COIeA Wilt Not Break the Internet, Innovation Policy Blog, 1/1 XIII 
78 

been routinely punished wherever they occur, including the Internet. This 

proposed legislation is not inconsistent with the First Amendment; it would protect 

creators of speech, as Congress has done since this Nation was founded, by 

combating its theft." The Stop Online Piracy Act imposes no prior restraint on 

speech and its underlying principle is well established in U.S. law. 

Further, it is absurd to suggest that passing legislation to take action against rogue 

sites would provide shelter to repressive regimes that wish to censor political 

speech. There is a key distinction between protecting property versus restricting 

speech. That distinction is enshrined in the U.S. Constitution and in the 

International Declaration of Human Rights. Indeed, the enactment of the Stop 

Online Piracy Act would instead be a strong signal to other nations of America's 

commitment to protecting speech and preventing theft. 

H.R.3261 Will in No Way "Stifle Innovation" and Investment in Technology 

Lastly, opponents of this legislation threaten that passing H.R. 3261 will lead to the 

curtailment of investment in new technology ventures and will even "stifle 

innovation" online. We have heard this argument before. Many of the loudest 

voices opposing rogue sites legislation are the same critics who predicted disaster 

in the wake ofthe DMCA, the Net Act and the unanimous Supreme Court decision 

in Grokster. Yet, since those events occurred, the Internet has grown by leaps and 

bounds, innovation is off the charts and access to technology is at an all time high. 

Take a look at venture capital. In 2005, the National Venture Capital Association 

warned that a Supreme Court ruling holding Grokster liable would "have a chilling 

effect on innovation." They could not have been more wrong. Since that decision, 

venture capital investment in media and entertainment has been one of the fastest 

growing sectors of the venture capital market. Contrary to naysayers' claims, 

strong copyright law promotes innovation. The MP AA studios are engaged in 

multiple new on-line businesses, there are more than 350 legal online services 

around the world that provide high-quality video on demand, including more than 

60 services in the United States. Disney announced Disney Studio All Access in 

February which provides consumers with easier access to Disney content, Time 

Warner announced a partnership with Facebook in March to distribute film and 

television shows through Warner Brothers Entertainment's Facebook fan page, and 

the list goes on. Additionally, many of these services are free unlike rogue 

websites. Those who say otherwise have been wrong again and again, and are 

wrong today. 

* * * 
79 

Mr. SMITH. Thank you, Mr. O’Leary. 

Ms. Kirkpatrick? 
80 

TESTIMONY OF LINDA KIRKPATRICK, GROUP HEAD, CUSTOMER PERFORMANCE INTEGRITY, MASTERCARD WORLDWIDE 

Ms. KIRKPATRICK. Thank you. Good morning, Chairman Smith, 

Ranking Member Conyers, and Members of the Committee. My 

name is Linda Kirkpatrick, and I am group head, franchise development and customer performance and integrity at MasterCard 

Worldwide in Purchase, New York. 

MasterCard commends the Committee on its attention to the 

issue of Internet-based infringement, including the work that went 

into H.R. 3261, the ‘‘Stop Online Piracy Act.’’ We greatly appreciate 

the opportunity to be here today, and look forward to working with 

you to combat this critical issue. 

MasterCard’s rules and requirements prohibit the use of its system for any illegal purposes, including for the sale of products or 

services that infringe on intellectual property rights. MasterCard 

recognizes the important role it plays in combatting this issue, and 

has taken a number of steps that demonstrate its commitment to 

this important cause. 

These efforts, which are discussed in my written testimony, include: publishing the MasterCard anti-piracy policy, which sets out 

the specific process by which MasterCard and rightsholders can 

work together to identify and prevent the sale of infringing products or services; working with the White House’s Office of U.S. Intellectual Property Enforcement coordinator in the development of 

industry best practices to address online infringement; and the implementation and maintenance of MasterCard’s business risk assessment and mitigation program, otherwise known as our BRAMA 

program. 

By way of background, MasterCard operates a global payment 

system that connects over 1 billion cardholders and millions of merchants worldwide to complete MasterCard branded payment transactions. MasterCard neither issues payment cards to cardholders, 

nor does it contract with merchants to accept payment cards. Rather, MasterCard’s financial institution customers issue payment 

cards to cardholders, and contract with birches to accept the cards. 

The card issuing customers are known as issuers; those customers that contract with merchants for card accepted are commonly called acquirers. Each cardholder’s account relationship is 

with the issuer that issued the card to the cardholder, and each 

merchant’s acceptance relationship is with its acquirer. 

MasterCard has a long history of working with law enforcement, 

private stakeholders, its customers, and others, to address illegal 

or otherwise BRAM damaging activities that may involve the 

MasterCard payment system or the unauthorized use of our widely 

recognized family of payment brands. Our commitment to working 

with rightsholders to prevent the MasterCard system from being 

used to facilitate online infringement is evidenced by our industry 

leading anti-piracy policy, which is publicly available on our Internet site. 

In accordance with that policy, MasterCard has established procedures that apply when a law enforcement entity or rightsholder 

brings to MasterCard’s attention evidence of alleged infringement. 

We have established an e-mail address for the submission of such 
81 

requests and a set of information requirements for such requests, 

which are largely similar to the information required of 

rightsholders in H.R. 3261. 

The process we implemented was developed collaboratively 

through strong working relationships with rightsholders and their 

trade associations, and has led to the investigation of thousands of 

Internet sites, and the termination of hundreds of rogue merchants. 

MasterCard has also worked closely with the White House’s Office of U.S. Intellectual Property Enforcement coordinator in the 

development of a best practices document to address online infringement. Development of the best practices document involved 

input from a wide variety of stakeholders, including numerous representatives from the rightsholder community, payment networks, 

and other parties involved in online commerce. The best practices 

are designed to assist rightsholders in protecting their intellectual 

property through a voluntary system, and in no way diminish the 

ability of rightsholders to take independent action to enforce their 

intellectual property rights. 

Our business risk assessment and mitigation program, or BRAM 

program, is another key component of MasterCard’s corporate effort to preserve the integrity of the MasterCard payment systems 

and protect against illegal and BRAM damaging transactions. More 

specifically, the Bram program serves to restrict access to the 

MasterCard system by merchants whose products and services may 

pose significant fraud, regulatory, or legal risks. 

The BRAM program was created to enforce MasterCard rules, 

prohibiting acquirers from engaging in or supporting any merchant 

activity that is illegal, or that may damage the good will of 

MasterCard, or reflect negatively on the MasterCard brand. Merchant activities that infringe upon the intellectual property rights 

of another are expressly covered under the protocols of the BRAM 

program. 

MasterCard is fully committed to continuing to address this important issue. As the Committee moves forward with legislation, 

MasterCard believes it is essential to ensure that any obligations 

imposed on payment systems are capable of being readily implemented through reasonable policies and procedures, and that payment systems be shielded from litigation and liability when acting 

in accordance with the bill’s requirements. Thank you. In my written testimony, we have offered a few general comments on the bill 

along those lines that we believe are consistent with the Committee’s objectives. 

I look forward to answering any questions that you may have. 

[The prepared statement of Ms. Kirkpatrick follows:] 
82 

HEARING ONH.R. 3261, THE "STOP ONLINE PIRACY ACT" 

TESTIMONY OF LINDA KIRKPATRICK 

GROUP HEAD, FRANCHISE DEVELOPMENT / CUSTOMER PERFORMANCE INTEGRITY 

MASTERCARD WORLDWIDE 

BEFORE THE COMMITTEE ON THE J UDlCIAR Y 

U.S. HOUSE OF REPRESENTATIVES 

NOVEMBER 16,2011 

Good morning, Chairman Smith, Ranking Member Conyers, and Members of the 

Committee. My name is Linda Kirkpatrick, and T am Group Head, Franchise 

Development/Customer Perfonnance Integrity, at MasterCard Worldwide ("MasterCard") in 

Purchase, New York It is my pleasure to appear before you today to discuss the important issue 

of combating the sale of infringing goods over the Internet. We commend the Committee on its 

attention to this issue, including the hard work that has gone into drafting H.R. 3261, the Stop 

Online Piracy Act. We greatly appreciate the opportunity to be here today and we look forward 

to working with you to combat this critical issue going forward 

MasterCard's rules and requirements prohibit the use of its system for any illegal 

purposes, including for the sale of products or services that infringe on intellectual property 

rights, and we are vigilant in our efforts to prohibit the sale of infringing products or services and 

other illegal or reputation-damaging products or services through the MasterCard system. 

MasterCard recognizes the important role it plays in combating this issue and has taken a number 

of steps that demonstrate its commitment to this important cause. These efforts, which are 

discussed in greater detail below, include: (i) publishing the MasterCard Anti-Piracy Policy, 

which sets out the specific process by which MasterCard and rights holders can work together to 

identify and prevent the sale of infringing products or services; (ii) working with the White 

House's Otnce of the U.S. Intellectual Property Enforcement Coordinator in the development of 
83 

industry best practices to address copyright infringement and the sale of counterfeit products 

over the Internet; (iii) the implementation and maintenance of MasterCard's Business Risk 

Assessment and Mitigation ("BRAM") Program to protect MasterCard against efforts to use the 

MasterCard system for illegal or brand-damaging activities; and (iv) the development of 

programs to combat the illicit online sale of pharmaceuticals and the use of the Internet for the 

sale of child pornography. 

Background on MasterCard 

MasterCard advances global commerce by providing a critical link among more than 

21,000 ti nanci al instituti ons and mill ions of busi nesses, cardhol ders and merchants wor! d wi de 

who use MasterCard's global payment system to complete MasterCard-branded payment card 

transactions. MasterCard licenses its customers around the world to use the MasterCard service 

marks in connection with those payment card transactions. Importantly, MasterCard neither 

issues payment cards to cardholders, nor does it contract with merchants to accept payment 

cards. Rather, MasterCard's financial institution customers issue payment cards to cardholders 

and/or contract with merchants to accept the cards. The card-issuing customers are known as 

"issuers." Those customers that contract with merchants for card acceptance are commonly 

called "acquirers." Each cardholder's account relationship is with the issuer that issued the card 

to the cardholder, and each merchant's acceptance relationship is with its acquirer. 

Typical Transaction 

When a MasterCard-branded credit card is used to make a purchase at a brick-and-mortar 

merchant, the card typically is swiped through a tenninal which reads basic information about 

the card (e.g., card number and expiration date) from the magnetic stripe on the back of the card 

2 
84 

For Internet-based transactions, this infonnation typically is captured by the merchant by 

prompting the cardholder to enter the basic infonnation in an electronic fonn. This infonnation 

is linked together with the dollar amount and date of the transaction, as well as basic infonnation 

about the merchant. A message containing the information is then transmitted to the acquirer 

that signed up the merchant to accept the card. This is known as the "authorization message." 

The acquirer routes the authorization message to MasterCard and MasterCard then routes 

the authorization message to the issuer. The issuer checks to make sure that there is sufficient 

credit associated with the cardholder's account to cover the transaction and that the card has not 

been reported as lost or stolen, and then sends to MasterCard a message authorizing the 

transaction. MasterCard then routes the message to the acquirer, which transmits the message 

back to the merchant to authorize the transaction. In the MasterCard system, an authorization 

request and response is completed, on average, in 120 milliseconds. A second message, called 

the "clearing message," generally is sent later in the day to confirm that the transaction has been 

completed and to initiate the movement of funds. The clearing message follows the same route 

from the acquirer to MasterCard, and then back to the issuer. The issuer uses that record to post 

the transaction to the cardholder's account. Once clearing is completed, a daily reconciliation is 

provided to each customer to facilitate the exchange of funds between issuers and acquirers. The 

process of moving funds from issuers to acquirers is known as the "settlement" process. 

MasterCard's Efforts to Prevent Infringing Online Sales and Other Illicit Online Activities 

In General 

At MasterCard, we take our responsibility as a corporate citizen very seriously. 

MasterCard has a long history of working with law enforcement, private stakeholders, its 
85 

customers, and others to address illegal or otherwise brand-damaging activities that may involve 

the MasterCard payment system or the unauthorized use of our widely recognized family of 

payment brands. 

A fundamental rule of our system is that each customer must conduct its MasterCard 

programs and activities in accordance with all applicable laws. This includes, for example, the 

obligation of an acquirer to ensure that any transaction the acquirer submits into the MasterCard 

system pertains only to legal activity MasterCard also has a series of rules that require acquirers 

to ensure that the merchants with whom they contract to accept MasterCard-branded cards are 

legitimate and engage only in legal activities. These rules mandate, among other things, that an 

acquirer perform due diligence on a merchant before enabling the merchant to accept 

MasterCard-branded cards. These rules also require acquirers to monitor merchants for 

compliance with these rules. Customers that fail to comply with these rules may be required to 

absorb the cost of any illegal transactions, and may be subj ect to assessments, suspension or 

tennination. MasterCard has forged strong working relationships with rights holders and their 

trade associations. This collaboration has led to the investigation of thousands of Internet sites 

and the tennination of hundreds of rogue merchants 

MasterCard also works extensively with law enforcement otIicials to address situations 

where the legality of activities related to MasterCard-branded payment card transactions is in 

question. For example, in the U.S, MasterCard works with a variety of federal and state law 

enforcement agencies on these issues generally, including state Attorneys General, the Drug 

Enforcement Administration, the Food and Drug Administration, the U.S. Secret Service, the 

Federal Bureau ofTnvestigation, and other branches of the Department of Justice. A major 

objective of these efforts is to ensure that MasterCard provides appropriate support to law 

4 
86 

enforcement in their efforts to address illegal activity. We recognize that our efforts to enforce 

the MasterCard rules have the potential to unintentionally hinder ongoing law enforcement 

investigations. For example, when an acquirer shuts off MasterCard acceptance with a merchant 

because the merchant violated MasterCard's rules, law enforcement's ability to gather evidence 

through MasterCard's system can be impeded. Further, the merchant may suspect that it is the 

subject of an ongoing investigation. Accordingly, we work closely with law enforcement and 

will act in accordance with instructions from law enforcement officials, including by not taking 

action that could compromise an investigation. 

MasterCard's Anti-Piracy Policy 

MasterCard's commitment to preventing the use of MasterCard-branded payment cards 

in connection with the online purchase of goods or services that violate intellectual property 

rights is evidenced by our industry leading Anti-Piracy Policy, which is publicly available at 

htlp:!/www.mastercard.com/us/wce/PDFl.vlaslerCard .. Anti-Piracy Policy.pdf and a copy of 

which is attached as ApPENDIX A. Tn accordance with that policy, MasterCard has established 

procedures that apply when a law enforcement entity or rights holder brings to MasterCard's 

attention the online sale of a product or service that allegedly infringes copyright or trademark 

rights of a party. 

These procedures are complex, as they involve multiple constituents in the payments 

value chain, each of which has a role to play in an investigation. When a law enforcement entity 

is involved in the investigation and provides MasterCard with evidence of illegal activity, 

MasterCard will first endeavor to identify the acquirer that has the relationship with the alleged 

infringing merchant. MasterCard perfon11S a test to deternline whether the Internet site in 
87 

question actually accepts MasterCard-branded payments and, if so, to identify the acquirer for 

the Internet site. The timing for completion of this process depends in part on the speed at which 

a merchant submits payment transactions into the system. Many times after conducting a test of 

payment acceptance, we determine that an Internet site that purports to accept MasterCardbranded payments, in fact, does not. If MasterCard believes that its brand is being used in 

connection with alleged illegal activity, it will require the relevant acquirer to conduct its own 

investigation and, within two business days, provide a written report to MasterCard setting forth 

the results of the investigation and any steps taken to address those results 

If the acquirer determines that the merchant was engaging in the sale of an infringing 

product or service, the acquirer must take the actions necessary to ensure that the merchant has 

ceased accepting MasterCard-branded cards as payment for an infringing product or service. If 

the acquirer determines that the merchant was not engaging in the sale of an infringing product 

or service, the acquirer must provide to MasterCard compelling evidence of this conclusion. If 

the acquirer decides to tenninate the merchant, MasterCard will require that the acquirer add the 

merchant to a MasterCard database for terminated merchants, if applicable, and thereby afford 

other acquirers notice that the merchant has been terminated and of the reason code used by the 

acquirer for the termination. 

When a law enforcement entity is not involved, a rights holder may notify MasterCard of 

its belief that the online sale ofa product or service violates its intellectual property rights and 

request that MasterCard take action on such belief. MasterCard generally will also accept such 

notices from a rights holder's trade association. Significant collaboration with the rights holder 

community has led to the development of this notitlcation process, and MasterCard is committed 

to maintaining an open dialogue with rights holders. 

6 
88 

To facilitate a notification from a rights holder, MasterCard has established an email 

address for the submission of such requests and a set of information requirements for such 

requests. The information requests must include a description of the alleged infringement, 

evidence that a MasterCard-branded payment card can be used to purchase the allegedly 

infringing product, a copy of the rights holder's cease and desist letter or Digital Millennium 

Copyright Act notice or an appropriate attestation from the rights holder, and evidence that the 

rights holder owns the intellectual property in question. 

Upon receipt of a notice that meets the information requirements, MasterCard will 

endeavor to identify the acquirer that has the relationship with the merchant. As noted above, the 

timet'rame within which the acquirer is identified varies based on factors that may be beyond 

MasterCard's control. MasterCard will require an identified acquirer to investigate the alleged 

illegal activity and, within five business days, provide a written report to MasterCard setting 

forth the results of the investigation and any steps taken to address those results. The measures 

required of an acquirer upon a determination that the merchant is, or is not, engaged in the sale of 

an infringing product or service are the same for both rights holder and law enforcement 

notifications to MasterCard. Because rights holder notices do not carry the certainty that comes 

with a law enforcement notice, these investigations often require more time to complete. In 

some cases, it may be necessary to afford an acquirer additional time to complete its 

investigation and other obligations before an accurate assessment of the merchant's activities can 

be made. Following receipt of the results of an acquirer's investigation, MasterCard will inform 

the rights holder (or trade association) of those results. 

7 
89 

Collaboration with the U. S. Intellectual Property Enforcement Coordinator 

In addition to the development and implementation of the MasterCard Anti-Piracy Policy, 

MasterCard worked closely with the White House's Office of the us. Intellectual Property 

Enforcement Coordinator in the development of a "best practices" document to address 

copyright infringement and the sale of counterfeit products over the Internet. Development of 

the best practices document involved input from a wide variety of stakeholders, including 

numerous representatives from the rights holder community, payment networks, and other 

parties involved in online commerce. The best practices document prescribes clear and 

transparent procedures for payment networks to address sales of infringing products and 

counterfeit trademark products over the Internet. The best practices are designed to assist rights 

holders in protecting their intellectual property through a voluntary system and in no way 

diminish the ability of rights holders to take independent action to enforce their intellectual 

property rights. The MasterCard Anti-Piracy Policy incorporates the best practices and, indeed, 

exceeds the standards established in the best practices document. 

MasterCard Efforts to Address Other Illegal or Brand-Damaging Internet-based Activities 

BRAM Program. MasterCard is dedicated to preserving the strength and value of the 

MasterCard family of brands and strives to ensure that the MasterCard marks are not in any way 

associated with illegal or brand-damaging activities. The BRAM Program is a key component of 

these corporate efforts and is designed to preserve the integrity of the MasterCard payment 

system and protect against illegal and brand-damaging transactions. More specifically, the 

BRAM Program serves to restrict access to the MasterCard system by merchants whose products 

and services may pose significant fraud, regulatory, or legal risks. The BRAM Program was 

8 
90 

created to enforce MasterCard rules prohibiting acquirers from engaging in or supporting any 

merchant activity that is illegal or that may damage the goodwill of MasterCard or retlect 

negatively on the MasterCard brand. Merchant activities that infringe upon the intellectual 

property rights of another are expressly covered under the protocols of the BRAM Program. 

Other acti vities addressed by the BRAM Program include the sale or offer of sale of a 

product or service other than those in full compliance with applicable law, and the sale of a 

product or service, including an image, which is patently offensive and lacks serious artistic 

value. As part of the BRAM Program, MasterCard uses a sophisticated Internet monitoring 

service designed to ensure that MasterCard has robust and current profiles of high-risk merchants 

doing business in the MasterCard system. This enables MasterCard to monitor its system for 

illegal and brand-damaging merchant activities and proactively pursue remedial actions with 

acquirers that may unknowingly be facilitating transactions for merchants engaged in infringing 

or other illicit activities. 

Com hating Child Pornography. MasterCard has partnered with the National Center for 

Missing and Exploited Children ("NCMEC") in the US., and its international counterpart, the 

International Centre for Missing & Exploited Children, to form the Financial Coalition Against 

Child Pornography ("Coalition"). The Coalition represents a partnership of companies and 

governmental entities that have come together to combat perpetrators of child pornography, 

including criminals who traffic in child pornography on the Internet. It includes a broad range of 

fmancial institutions, Internet service providers, and technology companies committed to 

working with NCMEC and governmental agencies to develop a coordinated approach to 

detecting and combating child pornography and to provide a critical mechanism for assisting law 

9 
91 

enforcement in developing the information needed to apprehend and prosecute persons who 

perpetrate child pornography crimes. 

I11icit Interner Sales of Pharmaceuticals. MasterCard has partnered with a number of 

private-sector companies involved in the online payments, advertisement, and shipping industries 

to establish the Center for Safe Internet Pharmacies CCSIP") in an etIort to prevent illicit 

Internet sales of pharmaceuticals. The chief goals of the CSTP are to educate consumers about 

the dangers of the illegal sale of prescription pharmaceuticals and to provide a forum for working 

with law enforcement to take legal action against merchants involved in this process. The C SIP 

also provides a forum for the sharing of information by and among private-sector entities and 

global governmental agencies regarding the illicit online advertisement and distribution of 

prescription phaf111aceuticals. 

H.R, 3261, the Stop Online Piracy Act 

MasterCard supports the Committee's efforts to address the issue ofTnternet sales of 

infringing products or services. As noted above, MasterCard is fully committed to continuing to 

do our part to address this important issue. As the Committee moves forward with legislation 

to address the sale of infringing products or services over the Internet, MasterCard believes it is 

essential to ensure that any obligations imposed on payment systems are capable of being readily 

implemented through reasonable policies and procedures, and that payment systems be shielded 

from litigation and liability when acting in accordance with the bill's requirements. 

Accordingly, we wish to identify a number of key areas where we believe that changes to the bill 

would ensure that MasterCard can continue to play an appropriate and effective role. We are 

committed to working with the Committee as the bill moves forward to help improve the bill in a 

10 
92 

manner that is consistent with its objectives, and we appreciate the opportunity to offer specific 

comments and suggestions on the bill to the Committee. 

Five-Day Timeft·ame. The bill provides that payment network providers must take 

certain measures within five days after being served with a copy of an order or receiving a notice 

from a rights holder. Upon recei ving a copy of an order or recei ving notice from a rights holder, 

there are many circumstances that may arise which make a five-day window to complete the 

required actions not workable for a four-party payment network, such as MasterCard. For 

example, simply identifying the acquirer for an Internet site may take several days depending 

upon how long it takes for the alleged infringer to submit payments to its acquirer. The process 

becomes even more complex if the acquirer does not respond or asks for an extension because of 

local jurisdiction or other issues. Additionally, providing the merchant an opportunity to respond 

(in the case of a notice from a rights holder) also requires time. Moreover, confirming that a 

merchant may no longer accept payment from our brand for an infringing product may also take 

time. MasterCard is committed to begin this process within t1ve days. However, MasterCard 

urges the Committee not to set an artitlcial deadline for the performance of a specitlc action as it 

may present impossible compliance challenges in some circumstances. 

Certifimtion Requirement. Under the bill, service of a copy of a court order by a rights 

holder on a payment network provider would trigger an obligation of the payment network 

provider to file with the court a certification of receipt not later than seven days after service. In 

MasterCard's view, this obligation would impose material costs on payment network providers 

without a commensurate benefit. The process would require additional employee resourcing, the 

retention of qualitled local counsel, and the payment of any applicable court fees. Moreover, the 

bill provides a rights holder the ability to seek the imposition of monetary sanctions on a 

11 
93 

payment network provider that does not comply with the court certification process, even though 

rights holders also have a remedy if a payment network provider does not take the required 

measures in response to a court order. The certification and sanctions approach is at odds with 

the cooperative approach that MasterCard and others have taken in their efforts to work together 

against online intellectual property piracy through the best practices and, in the case of 

MasterCard, our Anti-Piracy Policy. 

Liability. We are grateful to the Committee for incorporating into the bill several 

essential protections against liability for payment network providers. However, it is important 

that the bill be clarified regarding the liability protection for payment network providers that 

receive notice from a rights holder of an allegedly infringing Internet site. While the bill 

contemplates that a rights holder may pursue a court order against such a site if a payment 

network provider does not complete certain required actions within the five-day window of time, 

the bill does not provide that the pursuit of such a court order is a rights holder's sole remedy in 

that context. It is vitally important to MasterCard that it not face a claim from a rights holder for 

failing to take action on a rights holder's notice when the rights holder has an ability to seek a 

court order against the allegedly infringing site and has the ability to enforce the bill against a 

payment network provider that has received a copy of the court order and not fulfilled its 

obligations under the bill related to the court order. 

Duty to Monitor. The bill requires a payment network provider to take action based on 

court orders obtained by the Attorney General and modifications to those court orders. However, 

the bill currently provides no explicit mechanism for payment network providers to receive 

notification of modified orders. This gap in the process should be remedied. Also, the bill 

requires a payment network provider that has acted on a court order obtained by a rights holder 

12 
94 

to also take actions based on any subsequent notice from a rights holder that its service is being 

used to complete payment transactions with an allegedly infringing merchant that was the subject 

of the order. MasterCard believes that modification ofa court order should be a condition to 

further payment network provider action in the case of a rights holder, as it is in the case of the 

Attorney General. 

/)esignaled Agenllr!/iJrmalioll. The bill contemplates that payment network providers 

would designate an agent to receive notifications from rights holders, and that the agent's contact 

information must be posted on the publicly accessible portion of the provider's Internet site. The 

requirement to post the name and other identifying information of a designated agent creates 

unnecessary personal risk for individuals designated as agents. The purpose of this requirement 

could be accomplished through a requirement to have a designated but non-personally 

identifiable e-mail address that is monitored by the payment network provider. A designated but 

non-personally identifiable e-mail address is consistent with current industry practice, reduces 

the potential for process disruption following personnel changes, and eliminates the risk of 

disruptive or threatening actions being taken against a named agent. 

Coverage; Description ofRelathmship Among the Parties. Other areas of concern 

include ensuring that the "payment network provider" definition in the bill is sutl'iciently broad 

to cover all payment networks. We are confident that this is the intention of the Committee. 

Also, the bill obligates payment network providers to prevent their systems from being used at 

infringing Internet sites by persons located in the U.S. and persons subject to the jurisdiction of 

the U.S. MasterCard is concerned that the latter phrase may require it to determine whether a 

cardholder located outside of the U.S. is subject to U.S. jurisdiction. Lastly, the framework of 

the bill contemplates that infringing Internet sites (or merchants more generally) have an account 

13 
95 

with a payment network provider. While this may be true of three-party payment networks, it 

does not accurately describe the relationship of the parties in a four-party payment network, such 

as MasterCard. We believe that all of these concerns can be addressed in a manner consistent 

with the intent of the bill. 

Conclusion 

MasterCard is proud of the role we play and the successes we continue to achieve in 

combating Internet-related intellectual property infringement With the collective efforts and 

commitment of all commercial participants in this fight, we believe that we can forcefully tackle 

the problem of online piracy of U.S. intellectual property. The Committee's efforts represent an 

important step in developing a comprehensive framework for addressing this issue and we 

commend the Committee for its efforts and attention to this matter 

I appreciate the opportunity to appear before you today and I will be glad to answer any 

questions you may have. 

14 
96 

APP£."DIX A 

~1".l tC.l C!1 Anli_I'ies •• P" li"" 

MasterCard 

Wofldwld .. 

Tho 1'1''''''"' .. rlh .. """"""'"' ISl0 ... 1 fonh M>sIC1'C"".f. p<>1"l' Ii>< oddre.u."R II>.: oolone .. 1t b1 , Morch:>n. of OO!') rii'J1.-infnnSI"fl prod"e"" ond OO<Inltrlbl Ind ..... rk prodllCl!l (doc "An".P'"",) 

Po!><]") Tho A01>'P,,,,,,) Pohc)" ... ppot1. "'"' " CQlISod<n.'d '" oon1(111<11"" ,,,110 MOSIc1'CaO<!', 

8us n~ .. Rut As>c .. m, ... , ond MI"gOIionCDRAM-J P.n>gJ">Itl The DRAM PJOI!.IlIIII. """"'A OIhoe 

IhonSJ_ pr<lIoibiu a M.re ..... , from ... bm,WIlg for II"l mom. 0Ild "" Acq"irc. ftorn . ""q..inS f""" a 

Molt""" Ill. 5llbrni .... "" fOl" 1")"'."'. to !he M .... crCarri .. "',,'" on)' ""'''''''',,''' tMt i. Itl<g>1, '" 

.. <i«omo.-d 10\-M,,«:J{;;W I" "",,>i,' dioctUOfI. 1<1 darn.lgc P' ha,'c tho IK'I<nllall<l d;ornagc Iho 

g<>odl,,11 of M",,,,rl':onI or ",11«. ""!I'II,'d) OIl Ibr: M3<t<'rCard I>r.Ind Th-r: foll<l\l InS """.i,.,. arc 

"",h,b",'" onde, Ike DRAM progrnm; Ih. sale 0' o(k, of oaI< 0/"0 prod"", O",CI\" OC otlr, .. 1Iui, 'n 

full """,ph.""" ",t!> all ~, "1'PI,o." .... '0 ,he Ao""'''''. 1""",,_ ~l<ltb ."I . C..-dlloldcr, Coni •. or 

M:a<Ii:,c.rd (..-u.e.: !,:nM are dolin«! In dI.: M~,,«:ard Ruk<1 

M>SI.rl':ard .1ddJt>~ 'mol It", ... PJO!>L"'" ~~ aJ full""",, 

Whe" " I." <of.,..""n",,' .'ollty II ,"",I,,'Il in It..: on\ ~>1~,", of "'" <lnlin.:: .aJ~of " prodUo:l .,.. 

,e" I"" Ih.>! alkg<dl) ,"f,,'II!" C<IP) nsh' ""<:ide'''all riShls of >11011>:, (Uny Clllcg,u,n.,. 

I'mdoc!-) b:- • Mo",""", and p",..!dco MUlC,cW ",.h <I .dcnce of ,Ilegal oct''''Y "" 

M:uI<rl':ard', \IX ,I) tal<11IS ",,'ioo und",- Ihi, Poho}. Mastcr<:atd ,,,II cndoa"H '" ,d<n"f~ !Ioc 

A"'lu"", 110" Iw lloc rrul"""JIlp "il~ (hoI Morrb~I~. If M"""rCa(d doltn"l"", 11I.I!ho ,no,clI,n! 

is acc.pt"'~ M:t<IO:r("ard =<I< lI1m..llb or, "'SU"S ~u"':r ",Iolioruhip, M .. ",rCrud will ""fU'l'<: 

110:11 (I>;: A.'G"'rcr ", .... "l\:oIC lilt ollol'Sd illeg>l ""nnl) and. ,,,,k'n 1M' I"",OC"" 01:1)" , "",,',<Ie a 

""'l1On."po<! loMOSI<<<:.,J ..,rulti ronh (I>c ", ... II<oflho-, n'O>1!p("'" """on) OlCps t».cn I~ 

:Ii:kl ..... 111...., "" "It<_ Ifll1. A"'lw"", <I;.~om""", \lI;I the. Mo",hoJll """ ong:osrng ,n the ~< of an 

lIIog", ,,,", ~ Prt>dlloCI, (be A"'I"""r In,"1 <:ok" tile X II .... C<",u.~' 10 tl" '' ~ .h31 ,I>: I<rchan, Iw 

~ac«pling M .. ,,«:ord =do .. po)""'nl fur ~ IIl<silinlOlC !'rod",,(, fllo~A"q",,,,, 

d<1.,"",,,,,.I\I01 tile ~krehanl w,," "'" <""@!ISing ,n tbc .ale o f ... lIIeg","'''e p,.odu<~ !he AequI"" 

,n .. , pro,',d< '" MOSI<<<:.N """l><lh",.",don"" U""""'Il".lI'IIlI,k" (,1101,"8. M3MC.c...u ""'} 

",.'c,,,,, dJo,m.1ion .0 offord !he Aequ",,, :rddlllO'u! ""'" to oompI"'" tbc Aequ ,,,,,, \>blogol>fu' ... 1 

forth h,rn,,, If.ke A"'lU'no, ICrminoles.1>;: rch.,,,. Mall.re.rd \\,11 "'qu"e ,hal \he A"'lw"" 

I", the M"",h.:Im ,n tbcM .... orCard MATCH ~pI,,,,,,,,, $) · ... nt of •• rml!l;l1"d rII''''I\:uI~ ..-1>1:", 

"""I""hio . • nd ""'fOb)' .ITord 011 A«!",,,,n "' ,be- Ma.weard n<1"urk n<>t>ct 111>1 ,10< Moreh .. ,,, h .. 

Oc..;, ",m""otN IIIUI l>fll>: <,a!oOr1 Cod.: ""'" ~ "'" Acquire, "" tho l<"n","ariOOI 
97 

2 - No Law Enforcement Involvement 

When there is no 1m\' enforcement involvement, an intellectual property right holder may notify 

MasterCard of its belief that the online sale of a product(s) \ iolates its intellectual property rights 

and request that MasterCard take action upon such belief MasterCard maintains the following 

email addressforthispurpose:u;mlq.ll)fi~_:o.j?;.m:U;J~r9<-l-cd.Q_mn. The notification and request (the 

"Request'') must include 

(a) a description of the alleged infringement. including the specific identit~ of the site allegedly 

engaged in the sale of the alleged Illegitimate Product and compelling e\lidence substantiating the 

allegation. The notification must specifically identify any products alleged to be an Illegitimate 

Product and the location of the alleged Illegitimate Prodnct(s) on the website: 

(b) evidence that the allegedly Illegitimate Products can be purchased using a MasterCard-branded 

payment card. for example. by providing a screenshot of the MasterCard logo appearing on the 

Merchant ,vebsite. Test transactions are helpful. but not required to submit a complete notification: 

(c) a copy of the right holder's cease and desist letter or Digit.1-1 Millennium Copyright Act 

(DMCA) notice notif~ing the website operator or Merchant that it is engaging in infringing acti"it~, 

or an attestation that. to the best of the right holder-s knmdedge. the site is not licensed or 

othen:\"ise authorized to sell the alleged Illegitimate Products in question: and 

(d) evidence demonstrating that the right holder owns the cop~:right(s) or trademark(s) in question. 

MasterCard will accept a Request from, illld othen'i'ise coordinate with, a trade association 'with 

legal authority to act on behalf of an intellectual property right holder. By the submission of the 

Request. the submitter certifies that (i) the infonnation set forth in the Request is true and accurate 

to the best of the submitter-s knowledge. (ii) MasterCard may disclose the identity of the snbmitter 

and the contents of the Request to any person MasterCard deems appropriate, and (iii) the submitter 

will cooperate in any jndicial or other process conceming MasterCard-s receipt illld nse of the 

information set forth in the Request 

When Ma<;terCard recei,'es a Reqnest MasterCard ",ill endeavor to identify the Acquirer that has 

the relationship \\-ith that Merchant. If MasterCard determines that the merchant is accepting 

MasterCard cards through an existing Acquirer relationship, MasterCard \\ill send the Request to 

the Acquirer and require that the Acquirer investigate the alleged illegal activity and_ within five 

business days, proyide a v.'ritten report to MasterCard setting forth the results of the im.estigation 

and any steps taken to address those rcsnlts. If the Acquirer determines that the Merchant was 

engaging in the sale of an Illegitimate Product_ the Acquirer must t.c1.ke the actions necessary to 

ensure that the Merchant has ceased accepting MasterCard cards as pa~ ment for the Illegitimate 

Product. If the Acquirer detemlines that the Merchilllt was not engaging in the sale of illl 

Illegitimate Product. the Acquirer must provide MasterCard compelling e\idence demonstrating 

that finding. MasterCard may excrcise discretion to afford the Acqnirer additional time to complete 

the Acquirer's obligations set forth herein. Following receipt of the results of the Acquirer's 

ilwestigation, MasterCard \:\'ill inform the right holder or trade association of those results. If the 

Acquircr tcnninates the Merchant. MasterCard will require that the Aequirer list the Merchant in 

the MasterCard MATCH compliance system ofterminated merchants, where applicable. and 

thereby afford all Acquirers in the MasterCard network notice that the Merchant has been 

terminated and of the Reason Code used by the Aequirer for the termination. 

21l)-J.K55 
98 

Mr. SMITH. Thank you, Ms. Kirkpatrick. 

And, Ms. Oyama? 

TESTIMONY OF KATHERINE OYAMA, 

COPYRIGHT COUNSEL, GOOGLE, INC. 

Ms. OYAMA. Thank you. Chairman Smith, Ranking Member Conyers, Members of the Committee, thank you so much for the opportunity to testify today, not just on behalf of Google, but also on behalf of the Consumer Electronics System Association, CCIA, Net 
99 

Coalition, TechNet, and Tech America, which together represents 

thousands of companies. 

Google takes the problem of online piracy and counterfeiting very 

seriously. We devote our best engineering talent and tens of millions of dollars every year to fight it. In the last year alone, we 

have spent more than $60 million to weed out bad actors from our 

ad services. We have shut down nearly 150,000 adware accounts, 

mostly based on our own detection efforts. And so far, this year, we 

have processed 5 million DMCA takedown requests, targeting nearly 5,000,000 items. 

We are as motivated as anyone to get this right, but the Stop 

Online Piracy Act is not the right approach. SOPA undermines the 

legal, commercial, and cultural architecture that has propelled the 

extraordinary growth of Internet over the past decade, a sector that 

has grown to $2 trillion in annual U.S. GDP, including $300 billion 

from online advertising. 

Virtually every major Internet company from Twitter to 

Facebook, Yahoo and eBay, as well as a diverse array of other 

groups from venture capitalists, to librarians, to musicians, have 

expressed serious concerns about this bill. Unfortunately, this legislation is overbroad. It undermines the Digital Millennium Copyright Act, which has, for more than a decade, struck a balance. The 

DMCA provides copyright owners with immediate recourse when 

they discover infringement online, while also giving service providers the certainty that they need to investigate in the products 

on which America, millions of Americans rely. 

The bill sweeps in and it will send websites that have violated 

no law. It imposes harsh and arbitrary sanctions without due process. 

The following example shows how the bill, as currently written, 

would work. Imagine a website—let us call it Dave’s Online Emporium, which enables small businesses to sell clothing and accessories. More than 99 percent of the sellers on Dave’s Emporium are 

entirely legitimate, but unbeknownst to Dave, one seller has started selling counterfeit bags and T-shirts that parity a copyrighted 

design. Dave’s Emporium takes great care to comply with copyright 

laws, including takedown procedures, including repeat infringement provisions of the DMCA. But, under the Stop Online Piracy 

Act, the entire site could be deemed ‘‘dedicated to theft.’’ Based on 

the violations of this single seller, the whole business effectively 

shut down. Just about any private party—a corporation, the copyright troll, someone with an ax to grind—could send a notice to 

payment and advertising companies to terminate services to the 

site without first involving law enforcement were triggering any judicial process. The complaining party has no duty to contact Dave’s 

Emporium directly to resolve the issue before going straight to ads 

and payment services to terminate his service. If the emporium 

fails to respond with a counter notice, within 5 days, Dave’s site 

could effectively be put out of business. 

Facing these potential risks, Dave might think twice about establishing his online Emporium in the first place. Countless websites 

of all kinds, commercial, social, personal, could be shuttered or put 

out of business, based on allegations that may or may not be valid, 

and the resulting cloud of legal uncertainty would threaten new in-
100 

vestment, entrepreneurship, and innovation. In a new study of venture capitalists, released today, more than 80 percent said that the 

safe harbor provisions of digital copyright laws are essential. Weakening those safe harbor provisions would have a recession like impact on new investment. And at the same time, this proposal imposes new and unclear obligations on Internet service providers to 

take ‘‘technically feasible and reasonable measures to block access 

to sites, to remove them from search results, turning these providers into de facto web censors.’’ 

This will not work. As long as there is money to be made pushing 

pirated and counterfeit products, tech savvy criminals around the 

world will find ways to sell these products online, and ordering 

ISPs and search engines to disappear websites from the Internet 

will not change this fundamental reality. We urge you, instead, to 

target the problem at the source. Shut down illegal foreign sites by 

cutting off their revenue. We support legislation that builds on the 

DMCA. Our proposal would empower the Justice Department to 

target foreign sites that violate current law, and the court could 

send out order, advertisers and payment services in which our 

services would be included, to cut off ads and payments to those 

sites. Google has been working with the Committee on such a solution for over 6 months, and we will continue to do so. 

When all is said and done, we must address online piracy effectively in ways that continue to allow the Internet to drive this 

economy and this country forward. Thank you. 

[The prepared statement of Ms. Oyama follows:] 
101 

Tc5,;mony of .... 'heriinc O)-;un~ , Copyright Counsel, Google Inc, 

Before lh~ HollSc of R~p ~""'nI:a ,i 'e, Co mmi!l~e on ~ Judiciary 

"Iu ring on f- I.R. 3261, the S' op Online Piracy Ac. 

November 16, 2011 

Clr,llmlllt] Smtth, Ranking .\lembu Co,~,....~, ~nd m~mbc", I)f t!r cu"",,ttt, ..... 

Th,,,,k l"u for tht: IJppo nwn,y ru " '!!lif)' un lh~ "",end)' "uruJun~! S~'P Onl" .... I~""T k, ( '50 1''''), 

H,R, 316 1 

l)u.mg ,I .. .., difficult <"0)00"'0:: ",nell., "'C ~r~ proud '" '''Present dnd b,· pan o f o ne of tr., fJifCSI 

grv",ing~ n .. of the U.s. l'CQ"V"'Y, w.h ~ _'Itt"lI f'-'t:Ow IIf job·cre,,,,,,, ~nd ""IO '' tlO'~ Th .. """f1.'~ 

J< r ,e,m.," n~ of th" few bnght h," of OUr ocuflOmy 

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njlr....,,,,s ' Sporee", of L'.s. GfQSI\l)omestll: 1'roduc. ("G OI~1 gru\\',h "' ,h" lUI r",. )""''''' .\,..:(>,d"1; 

ru (he "1'(><1. ,f !ntl'rnl't <."O,u\lmptio"",,oJ C>'p" ,wJilltte \\'ele ~ $:'1(,>', n. <.'ljot";b ulJo)n IV GOP "'ol'ki be 

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.dn'fTis",& .Ion(' Ii rC'ixlnlihlc for $~~) b,lIlOn of cc"""mic """,-u), ,n ,ha l'nit ~-d S""~,, "1'r cscn~'l; 

2.1 ren: ent af U$. DI'.~ 

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ct" "p~'UC1< (,\OL, (lilY, F<OCclH)"'i;, G'-" 'r;!c, 1.,,,ke<J !n, ,\1",.11,. T"'''I<:'. \'.IIO<}I. n" Zynp) !lent. Ie,,"r 

Iu the (Clmm,nC<', ~h("ng CU ''''''r .... '"OtCN by i,lduSlry~<$QI;uno'~, cn'r'l1re,wut j. Sln.U bU-'HW!O< 

own/'.., Iibr., ... " .. I~w I,rofeuol'l, ,"'nln re (';tpinl~SI" hutn~" right5~d'·Odlt ... cybctS«lJril)' ""p~n .. 

plJbk ,nt=" STOUp,;, ~"d tCIl. Qf\hou;;lnoJ,; of I'ri\<lte ",,~, t;_ Th:u letter os ~tr ch .... j ro this !eJ.ttmOt1j, 

wJ my prqta,c<l n'Stwn o "y h •• It"''' "",luf:loo by .IIC "~nu Eicclt .. """. ~s<x:i: MJ '~ ,he Cu.n!,,, ... , 

& Lommun,ell' lo'" ! "dust,), )\ <llQCoafl.)tl, f ""h..,<.,t, .nd :o.:-.tCa-.U,oon ------IISSOC;' DQ '" ,I~L! >ought ru 

,,",ufy d""c,~' ro<h )' n" "-T" """'" ~ div,)t! "! o f eonrcrn~ wtrlt kg'JLr . oo n ,Iu( \lld .npact the 

'''Il''''Iiu " ~"d SfV\\'m uf '!lI: 1" \<.·rt\C' l 

We .uppNtSO PA·s ~~ t<d SQIII 01 pr()vt d,,'6 ~dd,tlO,,;&1 e"fOrC<'llWlll I; to co",!)", (<.Om.g" f(>S~<' 

'WbSlN" t.h:n ~I<' droJH:u<d IV '''PyrW'' ;nf.~en'~<lt ~,,oJ roumerf.ni ng, Unfum."mclj', w~ t::illll()t 

9.ljlPOn .11<' b~! ~~ "'nn,", ~ II. wvuld "",pose bw .auioJ ",!; U.s I'lt"',,,,, ~nd (,..: hnrJkJgy c,,,,,!,an.!-'S '0 

.11"0\.' "nCl:n-~'" ~oL"~, i",,. pr""'~ .;gIllS of",,,,, ,,, • noJ ... chnoklID· nta, .. bn:a thot could re<Ju .... ", "~ ,, "g 

of ,,...1> ...... :tn" wci:r.! ",OOi>., Mo rllOv,'r, "'e Rt( C<iflc~r"t<l ,h~, 'he bill .. is ~ pr~cdcn' 'n fi,'Vf of 

Inmlwr em.., .... ", ~"d could j"'p.rd,w Ollr IIam n'. C}"bttS.a,o'T. In .hon, we I)cli~,.., II", b~ ,~, 

',\!<K·",><),Ck>l>.t !"""", •. H! ",..."" M .. ,.r. .. " (.\l .. ), :lUll), ,., .. fM 11/.' 

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'John Dmgh."" ... dJohn Qu.td., "E<D<tom'c\'.I,'.',f' ... . \d\ "'.u,g -s..r I' "., ~od I",.."., ",. )"" ""_~(J "n<2U'}1 

.... I.JI>Ir.-l'httrr/I ... "".."/,,.0/,1< ft '<gW f"W"'/&· •• ...,,'hW 
102 

introduced, poses a serious threat to our industry"'s continued track record of innovation and jobcreation. 

\X11ile we have serious concerns with S()PA as written, \ve look fOf\vard to working with tlle C:ollunittee 

to ftnd focused tnechanisms that effectively target foreign rogue sites. _Already, Google and other 

cOIllpanies arc engaged in voluntary, industry-led efforts to attack the problerll. As detailed bclo\v, \ve 

believe that legislation guided by comnlon sense principles and focused on eliminating the financial 

incentives for rOSTlle sites - \vhile avoiding collateral d;ll11age - \vould receive \vide support frotTI the 

technology sector. 

The Problem of Foreign Rogue Sites 

The probletll of rogue foreign sites is a real one, and not just in the context of copyright infringetllent 

and distribution of counterfeit goods. In considering "vhat Congress can do about thenl, ho\vever, it is 

ilTlportant to keep nvo things in lTlind. 

b'irst, though foreign rogue sites are a real probletn, they represent a vety tiny portion of \vhat the 

Internet is all about. Overall, Internet technologies have delivered unprecedented benefits to citizens and 

businesses (including copyright and tradeIllark owners) in the C .S. and around the \vorld. 

Second, the Internet rerllains a very dynaIllic enviromllent, and tho se who operate foreign rogue sites arc 

beconling increasingly sophisticated about evading detection and enforcenlent. Coogle itself battles 

every day against bad actors w 110 tlrget C;tllaU for account hijackings, Search for webspanl lllanipulation, 

and Ad\,,\lords for fraud. Stopping foreign rogues is a serious technical undertaking, and we have 

hundred s of enlployees focused on the problenl. 

Tn light of these t\vo facts about rogue sites, any legislation in this field should be carefully crafted, 

narrowly focused, and clearly targeted at the foreign rogue sites. C:asting the net too broadly threatens 

collateral dan1age to legitimate businesses and activities online, while letting the rogues wriggle free. 

The good news here is tha~ working with Intellectual Property Enforcement Coordinator ("IPEC") 

Victoria Pspinel, U.S. companies have been \vorking hard on voluntary, industry-led solutions to these 

problems. While these efti)rts arc not the primary !i)cus of these hearings, we wOLJd be happy to provide 

you with more details about those efforts, which focus on Internet Service Providers ("lSPs"), payment 

processing, and advertising serv-ices 

Our Concerns about SOPA 

Turning to SO PA, let tl1e begin \vith a concrete exan1ple of ho\v the billn1ight \vork in practice. lmag-ine 

you are a snl;JI business that has estAblished a ne\v \vebsite that "enables or facilit:ltes'~ (to use the 

language of Section 103) other sn1a11 businesses to sell clothing and accessories. Let's further in1ag-ine 

that 99 percent of your sellers are entirely legitilTlate, but that, unbekno\vnst to you, one seller has 

recently begun selling counterfeit handbags and T-silirts tilat parody f.UllouS copyrigilted logos. Finally, 

let's imagine that you fully comply with all the la\VS that govern Internet intelmediaries, including the 

';;notice-and-takedo\vn,~' "repeat infringer," and otller requireIllents of tlle Digit·al J\:fillenniwll C:opYl'igllt 

Act's ("DMeN') safe harbors. 

This is the kind of con1pany that is the tl10del of an innovative ~\.1l1erican startup, and can hardly be 

called a foreign rogue site. Yet, under SO p/\, your entire site could be deetlled to be ""dedicated to theft" 

because, unbeknownst to you, a "portion~' of your site is being "primarily operated foe' unLl\vful activity 

2 
103 

by one of y(mr sellers. Any()ne \vho believes they have been harnled by this single bad seller (not just the 

o"\vners of the specific copyrights or traden1arks being infringed) can send a "tenninationnotice" to the 

payment processors that you and your other sub scribers rely on. The cOlTlplaining party need never have 

111ade anv effort to contact vou to resolve the issue or to avail the111sclves of vour D.i\IC:A "notice-andtakedo"\v~l" procedures. ' , 

The first you \vould hear about this is "\.vhen your advertising and paynlent sen,-ices fOf\vard the allegation 

of infringement You \v<mld be in the difficult position of having to judge \vhether the handbags are 

counterfeit and whether the T-shirts arc protected by hir usc. You would have to hire lawyers and 

investigators. If you fail to send a counternotice \vithin five days, you could find your site effectively out 

of business, and the s111all businesses that rely on your services could find theInselves cut off frorn tlIeir 

custonlers. 

~\ll of this could happen to your business \vithout any prior due process or court involvenlent. Even if 

you do provide a counternotice to your payment and advertising serv-ices, those providers remain free 

under Section 10""'- of tlle bill to ignore it. And even if tlley do accept your counternotice, the 

c01nplainant can still bring a court action directly against you. Given the breadth of the definition of "site 

dedicated to theft," you rnay find yourself hard-pressed to defend yoursel( nonvithstanding your good 

f.lith efforts. Facing these potential risks, perhaps you would think nvice about establishing your business 

in the first place. 

'I'his exanlple is nleant to highlight a nunlber of concerns that\ve have \vith SO PA as introduced 'I'hese 

concerns can be organiL:ed into six categories: (1) SOPA \XTould Conflict with and Cnden11ine the 

DJ\!cA; (2) SOPA Puts Law-Abiding U.S. Companies injeopardy; (3) SOPA Imposes New, Uncertain 

Technology i\'fandates on U.s. Companies; (4) SOPA P.xposes U.S. Paynlent ~et\vork Providers and 

Internet Advertising Services to Private Lega] Action; (.'i) SOPA \Vill Create Security Risks to Critical 

U.S. TnfrastnlCture; and (6) SOPA Violates the Pirst A1TlendlTlent and Authorizes Gover111Tlent 

C:ensorship of the Internet. 

SOPA Would Conflict with and Undermine the DMCA 

The Di\'fCA~s safe harbor provisions are a critical part of the legal foundation that has nlade the U.S. 

Internet industry the 1110st successful in the world. Since its enactment in 1998, the D~fCA has served as 

the ""rules of the road" \vhere copyright is concerned for virtually every major Internet conlpany, 

including Coogle, Yahoo!, Ama7.on, eBay, Pacebook, and T\vitter. The safe harbor approach has abo 

served as a nlodel for our trading partners abroad, helping to create an international legal environment 

that allo\vs copyright holders to enforce their rights and C.S. Tnternet innovators to thrive in our 

increasingly globallnarkets. 

The DMCA carefully balances the competing interests of different stakeholders. It protects the privacy 

of Internet users by making clear that Internet cOlnpanies do no t need to nlonitor their activities in order 

to qualify for the safe harbor. Ttprotects copyright o\vners by providing them a quick and efficient 

111ClIIS to re1110ve infringing rnaterial frorn the Internet by notifying Internet c0111panies. It protects 

\vebsite operators and others posting content on the Internet by targeting the relief at the infringing 

content (rather than against entire sites) and by providing a rnechanisrn for counter-notification. 

SOPA undennines the DJ\ifCA safe harbors in three important ways. 

b'irst, the bill crea tes uncertainty about whether court orders issued against "foreign infringing sites'~ and 

"sites dedicated to theff' Inight disqualify an online sef\:ice provider frDIn tlle D.i\fCA safe harbors. Any 
104 

uncertlinty on thi~ que~tion repre~ent~ a serious threat to vittually every Internet C01TIpany, reaching far 

beyond the intermediaries identified in the bill. 

For exarnple, if cornpanies like Googlc, Facebook, and Twitter were to lose their safe harbor protections 

for the links shared by their users, each "\vould have little choice but to affin11atively nlonitor all user 

activities looking for "bad links." The burden and invasion of user privacy that tllis \vOLud represent is 

precisely what Section 512(m) of the DMCA sought to avoid. The very practice of linking on which the 

\,\,'eb ha~ been built cOLud be ullperiled. Thi~ concern led the Senate to include a savings clause Ul the 

Preventing Real Online Threats to Econotnic Creativity and Theft of Intellectual Property Act 

("PROTHCT 11"'), S. 968, that attempts to clarify that service providers that receive and act on court 

orders should not be punished by having their DtvfCA safe harbors placed in jeopardy. A provision of 

cllis sort is crucial to preserving the business certainty created by the DMCA 

Second, SOPA defines "'foreign infringing site" and a site "dedicated to theft of U.S. property" in a 

tTunner that ~'veep s in sites (foreign and donle~tic) that conlply fully ,vith the I)M CA' s safe harbor 

provisions. The definitions rnake no tnention of DJ\:fC:A cotnpliance as a defen:;;e, and rightsholders arc 

likely to argue that because the Drv1CA safe harbors are merely li111itations onre111edies, sites that comply 

with their requiretnents arc nevertheless infringers \vithin the Ineaning of SOPA's definitions. 

Accordingly, despite "playing by the rules," DJ\:fCA-cornpliant sites \vould face the extraordinary 

remedies created by SOPA. These risks could force Tntenlet c0111panie~ to take a conlpletely different 

approach to hosting and linking to third-party content. 

Third, a site can also be dechred to be "dedicated to theft of C.S. property" if it fails to contlnn "a lligh 

probability" that the site has been used for infringing activities. Tllis is true whether or not the "failure to 

act" ,vould it~elf violate existing lmv. A nd because S0111e rightsho lders ,villlikely contend that there i~ a 

"lligh probability" that 'all social nenvorking ,uld user-generated content sites are used for infringeInent 

by ~0111e user~, thi~ provision could effectively force those ~ite operators to actively 111onitor their users~ 

activities, contrary to Section 512(rn) of the DJ\:fCA. 

Tn ~hort, SOPA as vl1itten cannot peacefully coexist "\vith the D\fCA ~afe harbor~. By creating neVl legal 

uncertainty for Internet conlpanies, S()PA "\vill significantly deter current and future Internet businesses 

from investing in nB,V ventures. Tf SOPA \vere the la"\v in 2005, it nlay vlell have been that YouTube~~ 

founders and initial venture capital investors wOLJd have opted to do something else, discouraged by cl,e 

new quagmire of legal uncertainty created by the conflicts between SO PA and the DMCA Had that 

happened, \ve vlould never have conle to realize ,vhat a powerful platfoft11 You Tube could be for 

COl11merce and del11ocracy. 

SOPA Puts Law-Abiding US, Companies inJeopardy 

Po reign rObTlle site~ flout C.S. la\v~ by operatulg offshore, beyond the reach of U.S. courts. The 

deftnitions in SO PA, ho"\vever, target not only foreign rogue sites, but also lmv-abiding L:.S. conlpanies. 

There i~ no reason that U.S. c01l1panies that are playing by the rules and subject to the iuri~diction of 

U.S. courts should be targeted hy legislation aimed at foreign rogue sites. 

The definition of "site dedicated to theft" puts lmv-abiding U.S. cornpanies in jeopardy in four \vays. 

First, by reacllil1g sites that '"enable or facilitate" unlawful activity, the definition needlessly reaches 

beyond existing law, wllich already incorporates appropriate concepts of secondary liability, such as 

lnducelnent, contributory lnfringelnent, and vicarious liability. Second, the "'unit of alla1ysis~~ for 

purposes of the definition focuses not on the site as a "\vhole, but rather any "portion thereof." 111 other 

words, the legislation app cars to target sites even where only a sInall portion (or even a single page) is 

4 
105 

u~ed for un!;1\vful pUlpo~es. Third, as noted above, the definition can be read to ~\veep in sites that are 

completely compliant with their obligations under the DMCA And finally, cl,e definition includes sites 

that fail to confinn a "high probability?-' that the ~ite is being used for unla"\vful activity, - a standard that 

has never, by itselt~ created liability for a site operator. 

As rnentioned at the outset~ Section 103's "notice-and-tenninate" regirne also exposes la\v-abiding U.S. 

cOl11panies to substantial risks by offering anonynlous "ttolls" a sinlple avenue for cutting off legitimate 

cOll1panies fron1 payment processing and adverti~ing sef\Tice~. A~ those falTIiliar with the antics of 

anonyrnous Internet pranksters and copyright trolls will appreciate, individuals pursuing rmuicious 

agendas can fabricate "telminationno tices" that intenllediaries are required to comply \vith unless they 

receive a counternotice within five days. Legitirnate sites, both foreign and dOInestic, trying to defend 

thel11selves against a barrage of illegitil11ate termination notices \vill have little recourse against 

anonyrnous trolls who rnay thernsclves be "foreign rogues," irnpossiblc to identify and too irnpecunious 

to pay any judglnents. Advertising and paytllent net\\Torks, l1loreover, are not in a position to sort tlle 

valid fron1 invalid notice~, since the statute ~tipulates that they '''~ha1F' tenninate sen,.-ices \vithin five days, 

or else face the possibility of leg a! action thernselves. 

SOPA Imposes New, Uncertain Technology Mandates on U.S. Companies 

SOPA could expo~e U.S. Internet cotnpanies and financial services firms to technolof:,ry n1andate~ The 

Attorney General or private parties can call upon fedeGu judges to second-guess technological rneasures 

u~ed to block acce~s or teftninate ~erlrices to Internet ~ites. 

Under Section 102, a service provider (which under the bill's definition can include university nenvorks, 

librarie~, and private busines~es, a~ \vell as large con1n1ercial ISP~) is required to take "technically fea~ib le 

and reasonable rneasures designed to prevent access" to illegal sites, including, i)fit flot limited to, rneasures 

designed to prevent the dotnain nan1e of the infringing site frotn resolving to that dotnain nan1e'~ 

Internet Protocol address ("IP address~'). It is not clear \v hat other steps a service provider rnust take, 

and presumably the Attorney General and a iudge can require a ser"vice provider to create ne\v 

technolog}' solutions to block acce~s to illegal site~. The bill fails to specify "\vhat these step~ n1ight entail 

The bill's caveat that a service provider does no t have to "l11odify its neti.vork, soft\\Tare, systel11S, or 

facilitie~~~ does not clarify the issue, as it is preceded by the "\vorch "other than a~ directed under this 

subparagraph." 

Similarly, an Internet "~earch engine~' is required to take "technically fea~ible and reasonable measures~' 

to prevent an illegal site frol11 being served as a direct hypertext link. In an era \vhere search results are 

evolving rapidly beyond "ten blue links," it is not clear \vhat this obligation n1ight require. f'or exatnple, 

search engines today routinely offer "previE"i.vs" of \veb pages as part of their search results. Does a 

search engine have to parse every link on a "\veb page to determine \vhether the page includes a link to a 

"foreign infringing site~' before di~playing it a~ a previe\v? Search engines preslllTIably\vill have to a\vait 

tlle outcome of litigation \vith the Attorney General in order to find out the atlS'V,rer to this and other 

que~tions as ~earch results continue to evolve This is a recipe for legal uncertainty that "\vill chill and slo\v 

legitimate innovations in searcll. 

Payrnent net\vorks and Internet advertising services are also required to tAke "technically feasible and 

reasonable l11easures" to tenllinate providing their services to sites targeted by the bilL These law-abiding 

U.s. service providers will also be left to \vonder what their obligations rnight be, until they arc hauled 

into court and tlleir efforts second-guessed by federal iudges. Under Sectlonl03, these court actions are 

not linlited to the Attorney General -- private "qualifying plaintiffs" can ask the court to impose 

additional technology rnandates on payrnent processors and ad net\vorks. 
106 

SOPA Exposes U.S. Payment Network Providers and Internet Advertising Sencices to Private 

Legal Action 

Section 103 of SO I'A threatens U.S. payment and advertising networks, which have themselves violated 

no la\vs, \vith expensive civil litigation at the hands of a broad array of private entities. If a private 

"qualifying plaintiff' believes that a payment or advertising network has not complied with its 

obligations under SOP~I\ it can obt:lin a default judb

Tl11ent against the site in question and initiate a '\;ho\1,7 

cause" proceeding against the payrllcnt nct\vork provider O[ advertising service. In addition to requiring 

additional technical measures, the court can in1pose tll0netary sanctions. 

The "'qualifying plaintiff' entitled to initiate the Section 103 process is 110 t lunited to the owner of a 

copyright or tradcrnark infringed by or through a site "dedicated to the tllett of U.s. property." Instead, 

the tern1 "'qualifying plaintiff' appears to n1ean any holder of an intellectual property right, so long as the 

holder (not the right) i~ ""harrned" by the activitie~ that cau~e the 'veb~ite to fall "\'lithin the definition of a 

site dedicated to theft of C.S. property. Thus, under tllls broad dctinition, it is conccivable that a 

celebrity could rely on a right of publicity or o,vnership of unrelated copyrights to target a site "\vith a 

"tennination not.ice~' and subsequent legal action. TIlls is not Inerdy a hypothetical conccrn - Pcrfect 10, 

a litigious pornograpllY vcndor, lIaS asserted copyrigllts and rigllts of publicity that it dfieJ' I/ot fiRm in 

law~uit~ against Internet cotTlpanies. SOPA~~ broad and in1prec-1se definition of ''\ .Jualified plaintiff' is an 

invitation to sunilar litig,ults in the future. 

The only affinnativc defense spccifIcd for tllc "shc)\v cause" procecdulg is tllat the payrncnt net\vork 

provider or advertising service lacks "the technical Ineans to c01llply with this subsection \vithout 

incurring an unrea~onable econotTlic burden,~' a highly an1bit:,TlIOUS standard. A payn1ent or advettising 

service would preswnably be rcquircd to provide expert test.i.rnony, sub jcct to cross-exaInination, to 

e~tablish that it had tTlet its burden und er this standard. The expense of defending these action~ "\villlead 

sorllC paYlnent and ad net\vorks to "over-tcnninate" \vllen receiving not.iccs frolll qualifying plaint.iffs. 

Others tllay be forced into n10netalY settlen1ents in order to avoid the exp ense of defending these 

actions, even ,vhere they are confid ent of prevailing on the tTlerib 

SOPA Will Create Security Risks to Critical U.S. Infrastructure 

SOI'A requires lSI's to take "technically feasible and reasonable measures designed to prevent access by 

it~ ~ubscriber~ .. to the foreign inft-1nging site .. ,including ll1easures designed to prevent the dotTlain 

nan1e of the ... site ... fro tIl resolving to the domainnatlle's Internet Protocol address." 

Leading Internet security engineers agree that the proposed tlleasure to block the don1ainname fron1 

resolving to the 11' address has several deficiencies: (1) It is easily circumvented by the user or foreign 

\ve}, site; (2) it th"\varts a iO-year effort to roll out ne"\v securit~r protocols in the Donlain ~all1e Systenl 

("0"5"), called the Domain "ame System Security Extensions ("DNSSEC"), which are designed to 

prevent an ISP (or anyone ehe) fron1 interfering "\vith a secure connection bet\veen the user and a de~ired 

website (this sccurity SYStClll \vas unplcIncnted to rnake sure that \v hen a user seeks to go to 

wellsfargo.cotll, the user can be assured that he or she "\vill go to the real \X/ells Fargo "\vebsite, rather than 

a phisillng site); and (3) it introduces a critical new vulnerability to our Internct infrastructurc as uscrs 

inevitably turn to offshore, unttust',vorthy D~S providers as an alternative to the censored DNS services 

offered by their ISPs. 

SOP/\'s provisions ain1ed at technologies that circun1vent 111easures taken by service providers to block 

"forcign infringing sites~' do not solve thesc problerlls. Evcry rnodern cOInputer operating systcIn 
107 

include~ sUllple nlechalli~nl~ that allo\v user~ to redirect their bro\vser to use different servers for DNS 

resolution. ~\ccordingly, SOPA's provisions in this regard are notlikely to prevent users frolnlearnu1g 

ho'\v to evade DKS blockades inlposed by their TSPs, and thereby potentially cOlllpromise the security of 

their cornputers and our Internet infrastructure. 

SOPA Raises Serious First Amendment Concerns 

In the face ()f eff()lts l)y the U.S. t() ensure that the Internet renlain~ a vibrant platf()f1TI f()r del11()cratic 

free expression, SOPA sets a troubling contrary precedent. The bill envisions agents of the federal 

gover111nents ordering ISPs and search engines to ""disappear" foreign '\veb sites fronl the Internet. 

_\tany rightsholders have complained that China's leading search engine, Baidu, does no t do enough to 

cornbat piracy. 1111agine what China's response would be if U.S. ISPs were to block Baidu at the behest 

of the federal goven1111ent - doubtless Chula \vould point to this action to justify their u\vn censorship 

regime. 'l'he bill's proposed D\JS retlledy\vill encourage other countries to use DNS manipulation and 

site blocking to enforce a range of dorllestic policies, potentially fraglnenting the global Internet. The 

bill's requiretnent on search engines to censor search results also sets a dangerous precedent. b'or years, 

search engines have been pushulg back agaulst foreign governrnents that have sought to lirnit the 

universe of infonnation retrieved through Internet searches. SOPA as \vritten would undercut the efforts 

of search engines to resist those foreign censorship demands. 

SOPA raises serious I iirst Amendment concerns for U.s. citizens, as \vell. The prospect of ISPs and 

search engines "disappearing" entire sites when they have violated no U.S. law O-)Llt only "facilitated" 

unla\vful acts of tllird parties) raises serious concerns. Tllose concerns are exacerbated because SOPA 

pen-nits these sanctions against sites \vhen unla\vful activities are linlited only to a portion of the site. 

On April 6, 2011, this Conlmittee heard testinlony from Ployd Abra111s \vith regard to the Pint 

~f\..rnendrnent unplications of action in this area. Although nornina11y supporting the notion that action 

nlight be pennissible in certaul circunlstances, he made it abundantly clear that the constitutionality of a 

bill depended on very- tight drafting of the definition of an infringing \vebsite: '';Pirst, any legislation has 

to be narro\vly drafted, really narru\l,.T!y drafted, so it only ullpacts '\vebsites, don1ains, that are all but 

totally infringing." 

In response to a question from Representative Conyers, NiL Abranls responded: "'lnlean, if you have a 

court and the court says IhlJ· j}'hole Jile, at this nlonlent, as it is todav, thiJ j}'hole and 

you get a court order to that effect and you selve it onlSPs, it Se~lTIS to nle perfectly constitutional. 

(emphasis added) \"'\lhether or not one agrees that this standard '\vcmld be constihrtional, SOPA does not 

meet this standard. 

Earlier this lTIOnt~ j\ilr. Abrall1s sent a follo\v-up letter to nlell1ben; of the COll11TIittee. In it, he adll1its 

that ""I\vlhenuljunctive relief includes blocking domainnanles, the blockage of non-ulfril1g-ing or 

protected content may result.~~ \\/hile Ivlr. Abra111s is of the viB.v that the censorship of S0111e legitinlate 

speech can be squared \\;ith the First .. A.lnendInent, it is \vortll noting his adrnission that protected speech 

is necessarily caught by the approach contained in Section 102. Otller First Anlendnlent scholars are not 

as sanguine about the bill as 11r. Abrarlls. 

Toward a Consensus Approach to Fighting Foreign Rogue Sites 

In raising these rese1vations about SO PA as introduced, \ve do not 111ean to suggest that there is nothing 

Inore tllilt can be done to cornbat copyright infringel11ent, counterfeiting, and other unla\vful activ ity 
108 

online. In fact, the technolob7 and paY1TIent processing C01TIlllunity have long engaged in efforts above 

and beyond the requirel11ents of the la"\v to combat copyright infringel11ent and counterfeiting online. 

Google's Efforts to Batde Copyriglu Infringement and Counterfeiting 

Speaking for Google, we have been actively tackling these problerlls, both on a LUlilateral basis, and in 

conjunction with collaborative efforts led by IPEC Victoria Espine!. 

First, and Illost Ullportantly, Google works closely \vith rightsholders to tllake authorized content Illore 

accessible on the internet. The only 10 ng -tertl1 "\vay to beat piracy online is to offer conSU111ers nlore 

corllpelling legitirllate alternatives. \\/e arc corllrllitted to being part of that solution. For exarllple, 

You'rube is no\v l110netizing for content o"\vners over three billion video vie-vs per "\veek. YouTube 

creates revenue opportunities for rllorc than 20,000 partners, and record labels arc now tllaking rllill.ions 

of dollars a l110nth on the site. Hundreds of YouTube users nlake SLX flgures a year. Today over 2,000 

1Tledia cOll1panie~ - including every 1Tlaior U.S. ne1:\.vork broadcaster, movie studio, and record label - use 

the copyright protection and Illonetization tools that YouTube offers, and a Illajority of therll choose to 

nlonetize rather than block their content online. \X/e also help content creators make nloney in a variety 

of others \vays - by helping thetll Illakc their content easier to find; by providing advertising tools like 

Ad\Vords and AdSensc; and by providing other platforms to sell and make their works available, like 

Coogle eBooks. 

Coogle has also been an industry leader in developing innovative n1easure~ to protect copyright and help 

rightsholders control their content online. For exaIllple, Google has dedicated tllOre than 50,000 

enguleering hours and rllore than $30 rni11ion to develop Content ID, our cuttulg-edge copyright 

protection tool that helps right~holder~ control their content and n1ake n1cmey on YouTube. This 

powerful technology scans the Illore than ""'-8 hours of video uploaded to YouTube every tllinutc and, 

\vithin second s, compares it against 1Tlure than ~ix n1illion reference tiles provided by participating 

rightsholders. Content ID has proven to be an enOrtllOus success and is being used by a long list of 

content O'ivners \vorld"\vide to nlake their o\vn choices about ho\v, "\vhere, 'ivhen, or whether they "\vant 

their content to appear on YouTube. Content TD is a "\vin-\vin solution for YouTube and content o\vners 

alike: l110re than one- third of all revenues generated on YouTub e are the result of l11onetization decisions 

1Tlade possib Ie by Content TD 

The DtvlCA notice-and-takedo"\vn process continues to be a cornerstone of our content protection 

effort~. During ~010, we proces~ed Di\.fCA "tJkedo'ivn notices for approxin1ately three n1illion item~ 

across all of our products. j\lready in 2011 \ve have processed takedownnotices for nearly five million 

items, and we have done so more quickly and efficiently than ever before. 

Last December, "\ve announced that \ve "\vere building ne-v tools and procedures to enable us to act on 

reliable DMCA takedown requests within 24 hours. \,,'e are happy to report that we lnve met and 

exceeded that goal. ror \Veb Search, more Ulan 75 percent of DMCi\. takedowllllotices are coming in 

using our ne"\v tools, and our average turnaround tin1e for those notices i~ no'iV less than six hours. On 

Blogger, \\/e arc tcstUlg tools that enable nearly instantaneous retllovals for trusted content partners. 

\XTe also etllploy a wide array of procedures and expend considerable financial resources to prevent our 

advertising products fronl being used to monetize l11aterial that ulfringe copyright. For exal11ple, our 

AdSense prograrll enables website publishers to display ads alongside their content. Our policies prohibit 

the use of this progral11 for ulfringing sites, and \ve use autol11ated and manual revie\v to weed out abuse. 

In 2010, we took action on our own i1l1tiative against nearly 12,000 sites for viola ting this policy. "\It'eady 

u12011, \ve have t.aken action against 12,000 Iuore. \\/e also respond swiftly \vhen notified by 
109 

rightsholders, and \ve recently agreed to ullprove our AdSense anti-piracy· revie\v procedures and are 

working together with rightsholders on better ways to identify websites that violate our policies. 

\XTe are also helping to lead industry-\vide solutions through our \vork with the Interactive Advertising 

Ilureau ("IAIl"), comprised of more d1an 460 leading media and technology companies. '1he IAIl has 

established quality-assurance guidelules through \vhich participating advertising c()1llpanies \vill take 

standardized steps to enhance buyer control over the placenlent and context of advertising and build 

brand safety. Coogle \vas ;uTIong the first conlpanies to certify our c01TIpliance \vith these bTllidelines. 

Google also expends great effort to nleet the challenge of counterfeit goods. SUlce June 2010, \ve have 

shut down nearly 150,000 accounts for atterllpting to use sponsored links to advertise counterfeit goods. 

_\lost of these ,vere proactive removals~ done on our o"\vn initiative -"\ve received legitilTIate conlplaUltS 

about less than one quarter of one per cent of our advertisers. Even lllore ads were blocked on suspicion 

of policy violations. Our automated tools analyze thousands of s1g11als to help prevent bad ads from 

belng sho,vn in sponsored links. ].a st year alone ,ve invested $60 111i11io11 i11 effotts to prevent vio lations 

of our ad policies. 

Nevertheless, despite the best efforts of the online advertising industry, Illore can be done. SOllle 

publishers deliberately take steps to evade detection systeills, IlleaI1ing SOllle bad sites will inevitAbly slip 

through. Technolog1cally sophisticated players use tactics like "cloaking~' (shtnving one version of their 

site to the public and a different version to Google) to evade the protections that Google and other 

cotl1panies put in place. \Ve ,vill need the cooperation of rightsholders to identify and tenninate our 

services to the sites that rllanage to evade our procedures. \~Tlllie the industry is aggressively going after 

this abuse, it is a cat-and-Illouse gaille to stay ahead of the bad actors. Google is C01llIllitted to being an 

industry leader in eradicating this behavior 

Principles for a Consensus Solution 

..''\s "\ve "\vork together to develop appropriately targeted measures to counter foreign rogue sites, "\ve urge 

you to consider the six principles that Coogle~s General Counsel, Kent \\/alker, offered before this 

COll1mittee sevenll10nths ago: 

(1) PolicYlllakers should atlll squarely at the "worst of the worst" foreign websites \vithout ensnaring 

legitimate technologies and businesses. At a nlininlll1TI, this nleans tailoring the definitions to capture 

only sites that are violating the lmv and operating outside the Di\'fCA safe harbors. 

(~) Ne\v legislation should not alter C01Tl1110n la\V secondary liability principles or undem1ine the DiVrCA. 

(3) The DMCi\. strikes the right balance for search engines. 

(4) Legislation should not interfere with the health and stability of d,e Internet, particularly with regard 

to the D'lS. 

(5) PolicytTIakers should foredo se private rights of ac cion and tailor internlediary requirements 

appropriately. 

(6) PolicYlllakers should disillantle barriers to encourage greater proliferation of cOIllpelling, legal 

offelings for copyrighted works online. 
110 

Reiterating the st,ltenlents of I-\.:.ent \\/al},;;:er before this C01Tl1TIittee, \ve believe that an approach that 

focuses on advertising and paytTIent services (both of \vhich Google offers) is the most promising path 

to\vard an effecrive solution. So long a~ there is tTloney to be 111ade by rObTtle site~ offering pirated 

content and counterfeit goods, efforts to nuke sites "disappear'~ frDIll the Internet \vi11 be fruitless. Just 

like a hydra, every effort to behead one site ,vill likely give rise to l1Tultiple ne\v rogue sites . 

.oy creating neVl rel11edies focused on rel110ving the financial incentive for foreign rogue sites, this 

(o111nlittee cannlake a valuable contributio11 to the battle against piracy and counterfeiting. Ho,vever, 

these rerlledies should be reserved for foreign sites that operate beyond the reach of u.s. courts, should 

not undermine the D_\lCA safe harbors for other activities, and should be administered by courts in 

order to preserve the due process rights of those accused. \\/e look forward to \vorking with rlleIllbcrs of 

cile Committee on legislative language that would develop this alternative approach. 

Conclusion 

In SWll, (~ooglc has grave concerns about SOPA in it:; current fonll, and we arc not alone. The 

technology com1TIunity, venture capitalists, acade111ia, human rights groups, C0111puter security experts, 

and others have all expressed their concerns. \",\le trust that the C:onullittee will take these concerns to 

heart~ and \ve stand ready to \vork \vith you to find solutions, including lcgishtion which can successfully 

protect intellectual property,vhile safeguarding the legirill1ate activities online that are fueling economic 

growth and free expression around the world. Thank you. 

10 
111 

November 15, 2011 

The Honorable Pat Leahy 

Chairman 

Attaclunent: Internet Companies Letter on SOPA 

Committee on the Judiciary 

United States Senate 

Washington, DC 20510 

The Honorable Chuck Grassley 

Ranking Member 

Committee on the Judiciary 

United States Senate 

Washington, DC 20510 

The Honorable Lamar Smith 

Chairman 

Committee on the Judiciary 

Hous e of Repres entatives 

Washington, DC 20515 

The Honorable John Conyers, Jr. 

Ranking Member 

Committee on the Judiciary 

Hous e of Repres entatives 

Washington, DC 20515 

Dear Chairman Leahy, Ranking Member Grassley, Chairman Smith and Ranking Member Conyers 

The undersigned Internet and technology companies write to express our concern with legislative 

measures that have been introduced in the United States Senate and United States House of 

Representatives, S. 968 (the "PR01ECT IP Act") and H. R. 3261 (the "Stop Online Piracy Act'). 

We support the bills' stated goals -- providing additional enforcement tools to combat foreign "rogue" 

websites that are dedicated to copyright infiingement or counterfeiting. Unfortunately, the bills as drafted 

would expose law-abiding U.S. Intemet and technology companies to new uncertain liabilities, private 

rights of action, and technology mandates that would require monitoring of web sites. We are concemed 

that these measures pose a serious risk to our industry's continued track record of innovation and jobcreation, as well as to our Nation's cybersecurity. We cannot support these bills as written and ask that 

you consider more targeted ways to combat foreign "rogue" websites dedicated to copyright infiingement 

and trademark counterfeiting, while preserving the innovation and dynamism that has made the Intemet 

such an important driver of economic growth and job creation. 

One issue merits special attention. We are very concerned that the bills as written would seriously 

undermi ne the effective mechanism Congress enacted in the Digital Millennium Copyright Act (DMCA) to 
112 

Mr. SMITH. Thank you, Ms. Oyama. 

Mr. Almeida? 

proVIde 8 sale hamor IOf Internel comparias thai act In good !aim 10 rernoVi! lnrrinling COI1Ient from Ihelr 

sitn. Since t/leir enac1ment In 1998. thE, CMCA's safe harbor p'o~sions br oni ne sefVice prolOde-rs 

have been a cornerstone of the U.S. lmemet and technolo9'1lndustry'l growth and SllCCasS. While we 

work together to Ind addil'Qfl81 way!! to tatllel b reign "fO!Ioo " ~tI!iI . we st.)uld not jooopltl"di~ ... a 

bundatiooel SlrllClUre Iha! has .....,rl<.ed b content owners and Int&mel companies alike and prOlide!l 

cerlainly 10 innoV8Ionr wilh new ideas lor how peo~e create. Ind. aiscuss. and Share Informallon IawluiIV 

onine. 

We are prood 10 be pari 01 on industry tha! has been crucial 10 U.S. economc growth and job Cleation. A 

rec:en\ McKinsey Global Institute repOO1 10000 that the Inlemet accounts lor 3 4 pereanl of GOP in the 13 

counlrteslhat Mcl<insey sl udiad. and. in lhe U.S .. the Internet·s conhilUion 10 GOP Is eVM larger. It 

Internet consumption and e~pendilure w,.ra I sector. Its corlrilUion to GOP would be grNl ef Ihan 

ene'llY, agricutt<e, communication, mining, or utlilles. ln adlltlon, lhe Intefnellndl.lSlry h9s increased 

produr:ti~ty lor slTJ8l1 and rTlIrl'um.."l~ed businesses by" ' '"'. We urge you not to ris~ .. the! llis Success 

or the Immendo"" beneils lhelntemet ti8$ brought 10 hurIlreds 01 mil i ons 01 ArnericHIl!; IWld people 

around lhe world. 

We itand ready 10 worl<. with the Coog""'s to deyelop IlIIgeted solutions 10 addrBSS the probl&m of 

Ioreign ·rogUII" websites. 

Than;; yoo in advanca lor yoor consider< ~on. 

AOL Inc. 

e-8ay Inc. 

Focebook Inc, 

Googie Inc. 

Unkedln Corpomtlon 

Mozilia Corp. 

TWin&!, Inc. 

Yahoo! Inc 

l'ynga Garno Networi( 

Go gle- Linked 1m 

facebook 

mozilla' 

jfzynga' 
113 

TESTIMONY OF PAUL ALMEIDA, PRESIDENT, DEPARTMENT 

FOR PROFESSIONAL EMPLOYEES (DPE), AMERICAN FEDERATION OF LABOR, CONGRESS OF INDUSTRIAL ORGANIZATIONS (AFL-CIO) 

Mr. ALMEIDA. Good morning Chairman Smith, Ranking Member 

Conyers, and distinguished Members of the Committee. My name 

is Paul Almeida. I’m the President of the Department for Professional Employees (DPE), a coalition of 22 national unions affiliated 

with the AFL-CIO. I am honored to speak today on behalf of the 

4 million professional and technical people whom our affiliated 

unions represent. Those people include creators, performers, and 

crafts people in arts and entertainment and media, professional 

and technical people in education, health care, and public administration, in aerospace, and other manufacturing, and pharmaceuticals, science, engineering, information, and in professional 

sports. 

The people I represent work in a wide range of occupations and 

industries. They share a wide range of interests as workers and 

consumers, as well as ardent defenders of the First Amendment. 

On their behalf, permit me to commit you and thank you. Their 

unions unanimously support the Stop Online Piracy Act, as does 

the entire AFL-CIO. 

My message is simple. It has three parts. First, strengthening 

protections for U.S. intellectual property helps American workers, 

jobs, incomes, and benefits. Second, counterfeit goods endanger 

danger, workers, both as workers and consumers. Third, there is no 

inconsistency between protecting free speech and an open Internet 

and safeguarding intellectual property. If the United States allows 

attacks on intellectual property to get an answer, it puts good livelihoods at risk. 

Online access continues to accelerate and expand. It increasingly 

displaces traditional models for distributing content and, thus, 

heightens the potential for digital theft. Estimates of the number 

of jobs lost to digital theft in arts, entertainment, and media sector 

alone run in the hundreds of thousands. Losses of income arise because entertainment professionals depend on compensation at two 

points—first, when the professionals do the work, and later with 

the reuse of the intellectual property. Royalties and residuals from 

downstream revenues enable entertainment professionals to survive between projects. 

In manufacturing, the estimates of losses from counterfeits also 

run in the billions. Again, the victims include workers who face lost 

jobs and income. We should not allow rogue websites to facilitate 

the distribution of counterfeit goods. 

My second point, counterfeits endanger workers as workers and 

as consumers. Only last week, the Senate Committee on Armed 

Services heard about an astonishing extent of counterfeit electronic 

parts in the military supply chain. Counterfeits kill. When protective vests are fake, soldiers and police officers can die. When prescription drugs are fake, patients can die. And when smoke detectors are fake, home owners and firefighters can die. 

In May, the Atlanta, Georgia, Fire and Rescue Department recalled roughly 18,500 smoke detectors that it distributed for a free 

Atlanta smoke alarm program. The smoke detectors were counter-
114 

feit, and so were the underwriter laboratory seals. An alert from 

the U.S. Consumer Product Safety Commission noted, ‘‘The unreliable, counterfeit alarms pose a life safety hazard to the occupants 

in the event of a fire.’’ 

Counterfeit smoke detectors pose a life safety hazard, not just 

home owners, but to firefighters. Harold Schaitberger, General 

President of the International Association of Firefighters, another 

union affiliated with DPE, wrote to Chairman Smith and Ranking 

Member Conyers to support the Stop Online Piracy Act. President 

Schaitberger noted that, ‘‘The preparedness and safety of our members depends on reliable equipment.’’ A blog called TechKnit.com 

posted a defamatory response. ‘‘Who does the MPAA actually think 

it is fooling? Is Congress so stupid that it cannot figure out for 

itself that firefighters have no clue what the debate is about?’’ The 

blog accused firefighters of supporting censorship. It implied the 

only reason the firefighters spoke up was because the MPAA was 

paying off the union. Firefighters know the consequences of counterfeit equipment. 

My third point, freedom of speech is not the same as lawlessness 

on the Internet. Protecting intellectual property is not the same as 

censorship. The First Amendment does not protect stealing goods 

off trucks. I mentioned earlier that the people whom I represent 

today include ardent defenders of the First Amendment, newspaper 

and broadcast journalists, radio broadcasters, news writers, script 

writers, and many others in the arts and entertainment and media. 

When they oppose wage theft, there is no inconsistency with the 

First Amendment. 

Digital theft and rogue websites diminishes incentives to invest, 

and leads to a downward spiral for U.S. workers in our economy. 

That is the bad news. The good news is that you are taking action. 

The professional and technical workers and their unions whom I 

represent look forward to your passing the Stop Online Piracy Act. 

Thank you. 

[The prepared statement of Mr. Almeida follows:] 
115 

WRITTEN ST ATEMENT OF 

PAUL E. ALMEIDA, 

PRESIDENT, 

DEPARTMENT FOR PROFESSIONAL EMPLOYEES, AFL-CIO 

BEFORE THE 

COMMITTEE ON THE JUDICIARY 

UNITED STATES HOUSE OF REPRESENTATIVES 

on 

H.R. 3261, THE "STOP ONLINE PIRACY ACT" 

November 16, 2011 
116 

Before the U.S. House of Representatives Committee on the Judiciary, November 16,2011 

H.R. 3261. the "Stop Online Piracy Act" 

Written Statement of Paul E. Almeida, President, De]lartment for Professional Em]lloyees, AFL-CIO 

Page 2 of 13 

Good morning, Chairman Smith, Ranking Member Conyers, and distinguished 

Members of the Committee. My name is Paul Almeida. T am the President of the 

Department for Professional Employees (DPE), a coalition of 22 national unions 

affiliated with the AFL-CTO. T have listed those unions at the end of this written 

statement. I am honored to speak today on behalf of the more than four million 

professional and technical people whom our affiliated unions represent. 

Those people include creators, performers, and craftspeople in the arts, 

entertainment, and media: writers, broadcast journalists, singers and musicians, stage 

employees, actors, and many more. They include professional and technical people in 

education, health care, and public administration; in aerospace and other manufacturing 

sectors; in pharmaceuticals, science, engineering, and information technology; and in 

professional sports. In these times of high unemployment and economic crisis, their 

occupations range across several of the most vibrant sectors of the U.S. economy. These 

are sectors where professional and technical people - seeking the ability to do their jobs 

right - have organized into unions in large numbers; where creativity and ingenuity 

propel success; and where, unlike other segments of the economy, industries like 

aerospace and entertainment enj oy a trade surplus. 

Just as the people T represent work in a wide range of occupations and industries, 

they bring to the Stop Online Piracy Act a wide range of interests: as workers and 

consumers as well as ardent defenders of the First Amendment. On their behalf, permit 

me to commend and thank you. Many of you have worked on a bipartisan basis with 

business and labor over many years to combat digital theft, piracy of intellectual 

property, and counterfeiting. T am pleased to acknowledge your expertise and 
117 

Before the U.S. House of Representatives Committee on the Judiciary, November 16,2011 

H.R. 3261. the "Stop Online Piracy Act" 

Written Statement of Paul E. Almeida, President, De]lartment for Professional Em]lloyees, AFL-CIO 

Page 3 of 13 

e±Iectiveness. The unions that the professional and technical people whom I represent 

have organized unanimously support the Stop Online Piracy Act. 

Their strong support has brought the support of the entire AFL-CIO, 12.2 million 

workers in 57 national and international unions. In May, AFL-CIO President Richard 

Trumka applauded the introduction of the PROTECT lP Act, S. 968, in the Senate. His 

words apply equally to the Stop Online Piracy Act: "The economic well-being of 

workers in the United States - jobs, income, and benefits - turns more and more on our 

protecting the creativity and innovation that yield world-class entertainment, cutting-edge 

and sustainable manufacturing and construction, and disease-ending phannaceuticals. In 

a tough economic time, [this legislation] will help to protect U.S. workers and consumers 

against digital thieves and counterfeit scammers." President Trumka's statement 

followed a unanimous AFL-CIO Executive Council statement in March 2010, "Piracy is 

a Danger to Entertainment Professionals," that is attached to my written testimony below. 

My message is simple. It has three parts. First, strengthening protections for U.S. 

intellectual property helps American workers, jobs, incomes, and benefits. Theft of 

intellectual property raises unemployment and cuts income. 

Second, counterfeit goods endanger workers, both as workers and as consumers. 

Third, freedom of speech is not the same as lawlessness on the Internet. There is 

no inconsistency between protecting an open Internet and safeguarding intellectual 

property. 

Start with American workers, jobs, incomes, and benefits. A May 2011 report 

from the U.S. International Trade Commission focused on China, its infringement on 

U.S. intellectual property rights, and American jobs. The report estimated conservatively 
118 

Before the U.S. House of Representatives Committee on the Judiciary, November 16,2011 

H.R. 3261. the "Stop Online Piracy Act" 

Written Statement of Paul E. Almeida, President, De]lartment for Professional Em]lloyees, AFL-CIO 

Page 4 of 13 

that if China enforced intellectual property rights as the United States does, U.S. finns 

operating in China would add "approximately 923,000 new jobs" in the United States. A 

second, less conservative forecast foretold an increase of 2.1 million jobs - and please 

remember, this report focused on China alone. 

For too many workers in the United States today, jobs, income, and benefits are 

hard to come by. If the United States allows attacks on intellectual property to go 

unanswered, it puts good livelihoods at risk. 

Online access continues to accelerate and expand. It increasingly displaces 

traditional models for distributing content and thus heightens the potential for digital 

theft. High-speed broadband has, for example, enabled illegal online streaming of 

television shows, films, and sports events. 

Among the unions affiliated with the Department for Professional Employees are 

nine representing creators, perfonning artists, and craft workers. Those unions include 

the Actors' Equity Association, the American Federation of Musicians, the American 

Federation of Television and Radio Artists, the American Guild of Musical Artists; the 

International Alliance of Theatrical Stage Employees, Moving Picture Technicians, 

Artists and Allied Crafts; the International Brotherhood of Electrical Workers, the Otlice 

and Professional Employees International Union, the Screen Actors Guild, and the 

Writers Guild of America, East. 

As I testified before the Senate Judiciary Committee last year, estimates of the 

number of jobs lost to digital theft illihe arls, enlerlainmenl, and media seclor alone run 

to the hundreds of thousands. While exact numbers are ditlicult to find, there can be no 
119 

Before the U.S. House of Representatives Committee on the Judiciary, November 16,2011 

H.R. 3261. the "Stop Online Piracy Act" 

Written Statement of Paul E. Almeida, President, De]lartment for Professional Em]lloyees, AFL-CIO 

Page 5 of 13 

question about the magnitude of the problem for the entire United States: billions of 

dollars in lost revenues for U.S. industries and millions oflost U.S. jobs. 

Losses of income arise because entertainment professionals depend on 

compensation at two points: first when the professionals do the work, and later when 

others use and reuse the intellectual property that the professionals created. Royalties and 

residuals from downstream revenues enable entertainment professionals to survive 

between proj ects. 

A second example is manufacturing. Among the unions aUiliated with the 

Department for Professional Employees are the International Association of Machinists 

and Aerospace Workers, the International Brotherhood of Electrical Workers, the 

International Federation of Professional and Technical Engineers, and the United 

Steelworkers. Again, the estimates oflosses from counterfeiting run to billions of 

dollars. Again, the victims include workers, who face lost jobs and income. From auto 

parts to circuit breakers, counterfeiting endangers all of us with unreliable products. We 

should not allow rogue web sites to facilitate the distribution of counterfeit goods. 

Only last week the Senate Committee on Armed Services heard about the 

astonishing extent of counterfeit electronic parts in the military supply chain. 

Counterfeits taint the original products with their inferior quality. More important, 

counterfeits kill When brakes are fake, drivers die. When prescription drugs are fake, 

patients die. When protective vests are fake, soldiers and police oUicers die. And when 

smoke detectors are fake, homeowners and firefighters die. 

This is my second point. Counterfeits endanger workers, as workers and as 

consumers. 
120 

Before the U.S. House of Representatives Committee on the Judiciary, November 16,2011 

H.R. 3261. the "Stop Online Piracy Act" 

Written Statement of Paul E. Almeida, President, De]lartment for Professional Em]lloyees, AFL-CIO 

Page G of 13 

Permit me to share one example of many. In May, the Atlanta, Georgia Fire 

Rescue Department recalled roughly 18,500 smoke detectors that it distributed for free 

since 2006 as a part of the Atlanta Smoke Alarm Program. The smoke detectors were 

counterfeit. So too were the Underwriters Laboratories seals on the smoke detectors. 

The vendors of the counterfeit smoke detectors had attributed initial delays in 

delivering the counterfeits to the Chinese New Year. Investigation by a local broadcast 

journalist revealed that the vendors served prison time for selling counterfeit smoke 

detectors to the federal government and were banned from doing business with it. 

An alert about the smoke detector recall from the U.S. Consumer Product Safety 

Commission on May 27 noted: "Some alarms did not respond within an adequate time 

for life safety and other alarms did not respond at al1." It concluded that the alarms "pose 

a life safety hazard to the occupants in the event of a fire." 

Counterfeit smoke detectors pose "a life safety hazard" not just to homeowners, 

but to firefighters. Delays when a fire begins mean the fire may rage out of control. In 

September, Harold A. Schaitberger, General President of the International Association of 

Fire Fighters, another union affiliated with the Department for Professional Employees, 

wrote to Chairman Smith, Ranking Member Conyers; Subcommittee on Intellectual 

Property, Competition, and the Internet Chairman Goodlatte and Ranking Member Watt; 

as well as Senators Leahy and Grassley, to support the PROTECT lP Act and companion 

legislation in the House. In President Schaitberger's words, "The preparedness and 

safety of our members depend on sound, reliable equipment." 

President Schaitberger also observed that rogue web sites deprive local 

governments of much needed taxes: "lost tax revenue means fewer police officers and 
121 

Before the U.S. House of Representatives Committee on the Judiciary, November 16,2011 

H.R. 3261. the "Stop Online Piracy Act" 

Written Statement of Paul E. Almeida, President, De]lartment for Professional Em]lloyees, AFL-CIO 

Page 7 of 13 

firefighters." I would like to underscore that point. Criminal syndicates in Russia are 

unlikely to pay federal, state, or local taxes. They generally prefer the AI Capone modeL 

Unfortunately, this story does not end with President Schaitberger's letter. A blog 

titled techdirt.com this month attacked the International Association of Fire Fighters for 

striving to keep consumers and firefighters safe. Pennit me to quote directly from the 

post: 

What are the chances that the International Association of Fire Fighters has 

received large checks from those associated with the movie business? But, more 

seriously, who does the MPAA actually think it's fooling? Is Congress so stupid 

that it can't figure out for itself that firefighters have no clue what this debate is 

about? Otherwise, why would they be supporting censorship in America? 

This defamatory blast brings me to my third point: Freedom of speech is not the 

same as lawlessness on the Internet. There is no inconsistency between protecting an 

open Internet and safeguarding intellectual property. Protecting intellectual property is 

not the same as censorship; the First Amendment does not protect stealing goods otT 

trucks. In the words of First Amendment advocate and expert Floyd Abrams, "It is one 

thing to say that the Internet must be free; it is something else to say that it must be 

lawless." 

Those words come from an analysis that three unions affiliated with the 

Department for Professional Employees - the American Federation of Television and 

Radio Artists, the International Alliance of Theatrical Stage Employees, and the Screen 

Actors Guild - in combination with the Directors Guild of America and the Motion 

Picture Association asked Mr. Abrams to undertake. Noting that the Internet is subject to 
122 

Before the U.S. House of Representatives Committee on the Judiciary, November 16,2011 

H.R. 3261. the "Stop Online Piracy Act" 

Written Statement of Paul E. Almeida, President, De]lartment for Professional Em]lloyees, AFL-CIO 

Page 8 of 13 

the same principles oflibel, privacy, and copyright that govern other media, Mr. Abrams 

concluded that the Stop Online Privacy Act "is consistent with the First Amendment" 

As the Supreme Court declared, "copyright supplies the economic incentive to create and 

disseminate ideas." H.R. 3261, Mr. Abrams wrote, "would protect creators of speech, as 

Congress has done since this Nation was founded, by combating its theft." (Letter of 

November 7, 20 II to Chairman Smith and Ranking Member Conyers from Floyd 

Abrams, Esquire.) 

I mentioned earlier that the people whom I have the honor to represent today 

include ardent defenders of the First Amendment They work as newspaper journalists, 

broadcast journalists, radio broadcasters, news writers, scriptwriters, and in many other 

aspects of the arts, entertainment, and media. When they oppose wage theft, they see no 

inconsistency with the First Amendment. 

In June, the Writers Guild of America East hosted a briefing in the U.S. Senate 

Committee on the Judiciary hearing room, "The Internet from the Creators' Perspective." 

The Writers Guild message had two parts: Keep the Internet open, and fight digital theft. 

None of the presenters saw the two parts as inconsistent Nor do 1. Nor does Secretary of 

State Hillary Rodham Clinton. In an October 25, 20 II letter to Representative Howard 

L. Berman, she declared that the State Department "is strongly committed to advancing 

both Internet freedom and the protection and enforcement of intellectual property rights 

on the Internet" - priorities that are not contradictory, but consistent. 

In April, the Department for Professional Employees highlighted this same 

consistency at a White House meeting about Internet policy in the Organisation for 

Economic Co-operation and Development: 
123 

Before the U.S. House of Representatives Committee on the Judiciary, November 16,2011 

H.R. 3261. the "Stop Online Piracy Act" 

Written Statement of Paul E. Almeida, President, De]lartment for Professional Em]lloyees, AFL-CIO 

Page 9 of 13 

We view our support for the unfettered flow of infonnation as distinct from 

suggesting that all content on the Internet should be available without cost to the 

consumer. Pennitting digital theft and other violations of intellectual property 

rights wi 11 lead to less rather than more economic growth, and to a poorer, less 

creative rather than more vibrant Internet. 

The consequences from digital theft and rogue web sites include a diminished 

incentive to invest and a downward spiral for U.S. workers and our economy. That's the 

bad news. The good news is that you are taking action. On behalf of the professional 

and technical workers and their unions whom I have the honor to represent, I look 

forward to your passing the Stop Online Piracy Act into law. 

Thank you for inviting me to participate in this hearing. I would be happy to 

answer any questions you may have. 
124 

Before the U.S. House of Representatives Committee on the Judiciary, November 16,2011 

H.R. 3261. the "Stop Online Piracy Act" 

Written Statement of Paul E. Almeida, President, De]lartment for Professional Em]lloyees, AFL-CIO 

Page 10 of 13 

Unions Affiliated with the Department for Professional Employees, AFL-CTO 

Actors' Equity Association (AEA) 

American Federation of Government Employees (AFGE) 

American Federation of Musicians (AFM) 

American Federation of School Administrators (AFSA) 

American Federation of Teachers (AFT) 

American Federation of Television and Radio Artists (AFTRA) 

American Guild of Musical Artists (AGMA) 

Federation of Professional Athletes (FPA) 

International Alliance of Theatrical Stage Employees, Moving Picture Technicians, 

Artists and Allied Crafts (IAISE) 

International Association of Fire Fighters (IAFF) 

International Association of Machinists and Aerospace Workers (lAM) 

International Brotherhood of Electrical Workers (IBEW) 

International Federation of Professional and Technical Engineers (IFPTE) 

International Plate Printers, Die Stampers and Engravers Union of North America 

International Union of Painters and Allied Trades (TUPAT) 

Ot1ice and Professional Employees International Union (OPEIU) 

Retail, Wholesale and Department Store Union (R WDSU) 

Screen Actors Guild (SAG) 

Seafarers International Union of North America (SIU) 

United Steelworkers (USW) 

Utility Workers Union of America (UWUA) 

Writers Guild of America, East (WGAE) 
125 

Before the U.S. House of Representatives Committee on the Judiciary, November 16,2011 

H.R. 3261. the "Stop Online Piracy Act" 

Written Statement of Paul E. Almeida, President, De]lartment for Professional Em]lloyees, AFL-CIO 

Page II of 13 

AFL-CIO Executive Council Statement 

Orlando, Florida 

March 2, 2010 

PIRACY IS A DANGER TO ENTERTAINMENT PROFESSIONALS 

Suhmitted hy the Departmentfor Professional J\mployees, AFl-CJO (DPJ\) 

for the Arts, Entertahlment and Media Industries Unions Affiliated w ith DPE 

Motion pictures, television, sound recordings and other entertainment are a 

vibrant part of the U.S. economy. They yield one of its few remaining trade surpluses. 

The online theft of copyrighted works and the sale of illegal CDs and DVDs threaten the 

vitality of U.S. entertainment and thus its working people. 

The equation is simple and ominous. Piracy costs the U.S. entertainment industry 

billions of dollars in revenue each year. That loss of revenue hits directly at bottom-line 

profits. When profits are diminished, the incentive to invest in new films, television 

programs, sound recordings and other entertainment drops. With less investment in 

future works comes less industry activity that directly benefits workers: fewer jobs, less 

compensation for entertainment professionals and a reduction in health and pension 

benefits. 

Combating online theft and the sale of illegal CDs and DVDs is nothing short of 

defending U.S. jobs and benefits. In the case of music, experts estimate that the digital 

theft of sound recordings costs the U.S. economy $12.5 billion in total output and costs 

U.S. workers 71,060 jobs.! In the motion picture industry, piracy results in an estimated 

$5.5 billion in lost wages annually, and the loss of an estimated 141,030 jobs that would 

otherwise have been created2 

megal CDs and DVDs have at11icted even live theatre. Web sites sell illegal 

DVDs of Broadway shows, which reduces sales of tickets and authorized CDs and 

DVDs. Selling illegal CDs or DVDs of plays, musicals and other shows not only steals 

the work of the entertainment professionals, but makes quality control impossible. 

Most of the revenue that supports entertainment professionals' jobs and benefits 

comes from the sale of entertainment works including sales in secondary markets-that 

is, DVD and CD sales, legitimate downloads, royalties and, in the case of TV shows or 

films, repeated airings on free cable or premium pay television. Roughly 75 percent of a 

1 Siwek. Stephen. (g/21107). The True Cost a/Sound Recording I'iracy to the liS Fconomy. Retrieved 

from: 

httpllwv.;w.ipi.org/lP1/1P1Publications.nsflPublicationLookupFullTextlSC2EE3D2107 A4C22X62S733EOOS 

3AIF4 

2 Siwek. Stephen. (9120/06). The True Cost o/Sollnd Recording Piracy to the Us. &onollly. Retrieved 

from: 

hllp·llwww.ipi.org/IPI/IPIPubliealions.nsflPublieaLionLookupFullTex[JE274F77 ADF58BD08862571F8001 

BA6BF 
126 

Before the U.S. House of Representatives Committee on the Judiciary, November 16,2011 

H.R. 3261. the "Stop Online Piracy Act" 

Written Statement of Paul E. Almeida, President, De]lartment for Professional Em]lloyees, AFL-CIO 

Page 12 of 13 

motion picture's revenues comes after the initial theatrical release, and more than 50 

percent of scripted television production revenues are generated after the tirst run. 

Tn most work arrangements, a worker receives payment for his or her effort at the 

completion of a project or at set intervals. The entertainment industry, however, operates 

on a longstanding unique business model in which compensation to workers-pay and 

benefit contributions-comes in two stages. Film, television and recording artists, as 

well as mm and television writers, receive an initial payment for their work and then 

residuals or royalties for its subsequent use. Those payments also generate funds for their 

health and pension plans. The below-the-line workers, the craft and technical people who 

manage equipment, props, costumes, makeup, special efJects and other elements of a 

production, also receive compensation for their work, while payment for subsequent use 

goes directly into their health and pension plans. 

Motion picture production is a prime example. The professionals involved with 

the initial production of a mm-the actors who perform, the craftspeople behind the 

scenes, the musicians who create the soundtrack and the writers who craft the storyeach receive an initial payment for their work. When that work is resold in the form of 

DVDs or CDs, or to cable networks or to airlines or in foreign sales, a portion of these 

"downstream revenues" are direct compensation to the mm talent or recording artists 

who were involved in those productions or recordings. 

These residuals help keep entertainment professionals afloat between projects. 

Entertainment professionals may work for multiple employers on multiple projects and 

face gaps in their employment. Payment for the work they have completed helps sustain 

them and their families through underemployment and unemployment. For AFTRA 

recording artists in 2008, 90 percent of income derived from sound recordings was 

directly linked to royalties from physical CD sales and paid digital downloads. SAG 

members working under the feature mm and TV contract that same year derived 43 

percent of their total compensation from residuals. Residuals derived from sales to 

secondary markets funded 65 percent of the TATSE MPT Health Plan and 36 percent of 

the SAG Health and Pension Plan. WGAE-represented writers often depend on residual 

checks to pay their bills between jobs; in some cases, the residual amounts can be as 

much as initial compensation. Online theft robs hard-earned income and benetits from 

the professionals who created the works. 

There are tools that can be used to tight digital piracy. Internet service providers 

(lSPs) have the ability to tind illegal content and remove or limit access to it. To be truly 

efJective, these sanctions must depart from the costly and inefJective legal remedies 

traditionally employed to counter theft of copyrighted material. The European Union is 

developing and implementing model policies for which the trade union movement is 

providing strong and critical support. These policies illustrate that there are answers that 

make sense in a digital age. 
127 

Before the U.S. House of Representatives Committee on the Judiciary, November 16,2011 

H.R. 3261. the "Stop Online Piracy Act" 

Written Statement of Paul E. Almeida, President, De]lartment for Professional Em]lloyees, AFL-CIO 

Page 13 of 13 

At the core of any effort to combat digital theft is reasonable network 

management, which should allow ISPs to use available tools to detect and prevent the 

illegal downloading of copyrighted works. With respect to lawfully distributed content, 

TSPs should not be allowed to block or degrade service so that both consumers and 

copyright would be protected. 

The unions of the AFL-CTO that represent professionals in the Arts, 

Entertainment and Media Industries (AEMI) include Actors' Equity Association (AEA), 

the American Federation of Musicians (AFM), the American Federation of Television 

and Radio Artists (AFTRA), the American Guild of Musical Artists (AGMA), the 

International Alliance of Theatrical Stage Employes, Moving Picture Technicians, Artists 

and Allied Crafts (IATSE), the International Brotherhood of Electrical Workers (mEW), 

the Office and Professional Employees International Union (OPEIU), the Screen Actors 

Guild (SAG) and the Writers Guild of America, East (WGAE). The AEMT unions are 

wholly in support of the widest possible access to content on the Internet and the 

principles of net neutrality, so long as intellectual property rights-and the hundreds of 

thousands of jobs that are at stake-are respected. 

Some would like to portray the debate over Internet theft as one in which a few 

wealthy artists, creators and powerful corporations are concerned about "giving away" 

their "product" because they are greedy and cannot change with the times to create new 

business models. The hundreds of thousands of people represented by the AEMI unions 

of the AFL-CIO are a testament to the falsity of that proposition. 

Online theft and the sale of illegal CDs and DVDs are not "victimless crimes." 

Digital theft costs jobs and benefits. It is critical, at this important moment in the 

evolution of the Internet and potentiallnternet policy, for union members and leaders to 

publicly and visibly engage in a sustained effort to protect members' livelihoods, the 

creation and innovation that are the hallmark of their work and the economic health and 

viability of the creative industries in this country. The AEMI unions and other unions in 

U. S. entertainment stress that pirated content is devastating to the entertainment 

professionals who create the underlying works. 

The AFL-ClO strongly supports the efforts of the AEMI unions and the 

Department for Professional Employees, AFL-CIO, to combat piracy. Tt commends their 

work with government and industry to develop workable solutions to protect the interests 

of their members. The AFL-CIO urges its affiliate unions to educate their members 

about the adverse impact of piracy; to support efforts to ensure that government officials 

and lawmakers are aware of, and support the protection of, entertainment industry jobs 

that will be lost to online theft; to encourage their members to respect copyright law; and 

to urge their members, as a matter of union solidarity, to never illegally download or 

stream pirated content or purchase illegal CDs and DVDs. 

### 
128 

Mr. SMITH. Thank you, Mr. Almeida. 

I will recognize myself for questions. And, Ms. Pallante, let me 

direct a couple of questions to you. 

In your prepared a written statement, you said, ‘‘If Congress does 

nothing to provide serious responses to online piracy, the U.S. copyright system will ultimately fail.’’ What did you mean by that? 

Ms. PALLANTE. Thank you, Mr. Chairman. Yes, I do not think 

that is an overstatement. The system that we have for copyright 

and have had since 1790, is based on a system of exclusive rights 

with which authors can license and which publishers and producers 

can invest in, and then distribute and otherwise bring to life for 

consumers, not only here, but through reciprocal agreements with 

foreign countries. 

If those exclusive rights cannot be meaningfully enforced and can 

be usurped in a lawless environment, they will become meaningless. And if Congress does not update the piracy laws, as it has 

done consistently for many, many years, many decades, hundreds 

of years—— 

Mr. SMITH. I think you just anticipated my next question, which 

was going to be, do you think the legal system has all the tools it 

needs now to combat the infringing websites? 

Ms. PALLANTE. I do not. I think that this is a timely hearing. I 

think Congress has done an excellent job of intervening when technology outpaces the law. It did that in the Net Act. It did that in 

the Art Act. And I think that this is similar legislation. We are 

looking at a situation where very sophisticated and very smart and 

very blatant infringers will leap to offshore locations so that they 

can direct infringing goods, which often belong to our companies, 

back to American consumers. They are outside the jurisdiction of 

our courts. We are not suggesting that we would intervene in domestic courts in foreign countries. What we are saying is that we 

should have some response to allowing them to do that with impunity. 

Mr. SMITH. Okay. Thank you, Ms. Pallante. 

Ms. Oyama, let me direct a couple of questions to you. And, first, 

let me say that you spoke a lot of the right words today. We have 

heard those words before, and I only hope that your company and 

other similar companies will practice what you preached. And that 

we will wait to see. 

Let me ask you a couple of questions. You do acknowledge that 

there is a severe problem, I gather, with the theft of intellectual 

property by foreign criminals? 

Ms. OYAMA. That is a problem that we take extremely seriously. 

We have hundreds of employees that work on it. 

Mr. SMITH. And I believe you agreed that if we cut off access to 

American consumers and U.S. dollars, that that will decrease the 

amount of intellectual property theft as well. 

Ms. OYAMA. We think cutting off the money is a very effective 

solution. 

Mr. SMITH. Okay. 

Ms. OYAMA. The sites are in business because they profit. 

Mr. SMITH. Now, particularly with regard to Google, do you think 

Google should stop returning search results for foreign sites that 

are breaking U.S. law? 
129 

Ms. OYAMA. Under the Digital Millennium Copyright Act, a 

rightsholder could come directly to Google. It would not need to go 

to court, and they could alert us of the foreign infringement. And 

we remove that. 

Mr. SMITH. Well, a lot of people do not think the DMCA is sufficient, including the Register of Copyrights. Do you think we should 

go beyond that to try to stop returning search results for foreign 

sites? 

Ms. OYAMA. Thank you for the question. I think there is a lot of 

misperception about what is and what is not—— 

Mr. SMITH. No, no. I was asking you a specific question here. 

Should Google stop returning search results for foreign sites that 

are breaking U.S. law? 

Ms. OYAMA. We do when notified by rightsholders. We have done 

that more than 5 million times. 

Mr. SMITH. The answer is yes, then? 

Ms. OYAMA. Yes. 

Mr. SMITH. Okay, thank you. Another question is this. Should 

Google stop placing ads on illegal sites that are stealing American 

intellectual property? 

Ms. OYAMA. Our policies prohibit that. We have proactively ejected more than 12,000 sites this year. 

Mr. SMITH. Okay. And so, you would agree not to either facilitate 

or place ads on illegal sites that are stealing U.S. property? 

Ms. OYAMA. If a site is violating the law, we would eject them 

from our system, and we do that. 

Mr. SMITH. Again, I hope you can practice what you preach 

today. That would be a major breakthrough. 

It seems to me, and let me just conclude in this way, that Google 

and other companies really have a decision to make. And I hope 

they will make the right decision. I hope they will decide to help 

other American companies. It is not necessarily going to benefit 

Google or some of your allies, but I hope you will decide to help 

American companies protect their intellectual property from being 

infringed by foreign criminals. And that is, I know a decision that 

you all are having to make and weigh. 

I acknowledge and regret to a large extent that if you make the 

right decision, that is going to mean you are going to have to give 

up some of the revenue you might get from some of those ads that 

are actually on the infringing websites themselves. That is a decision for you all to make, but I think you can make the right one 

there. 

I simply hope that you and others will decide to do what is good 

for other American companies, do what is good for American jobs, 

and do what is good for the American economy as well. But thank 

you for your testimony. 

The gentleman from California, Mr. Berman, is recognized for 5 

minutes. 

Mr. BERMAN. Well, thank you very much, Mr. Chairman and 

Ranking Member Conyers. And I would like to thank the Chairman 

for responding to my letter inviting Google to testify. I think it is 

extremely important to understand what legitimate issues the opposition may have, so they can be addressed. I have not heard contrary changes they would recommend. I have not received a Google 
130 

proposal or suggested proposal on focusing on foreign rogue 

websites, and would love to see it since it has apparently been discussed with the Committee. 

Opponents of the legislation say we support the bill’s stated 

goals, and asked that sponsors consider more targeted ways to combat foreign rogue websites. That is the response to every idea put 

forward to stop that. Why is this not the time for the tech community to put forward concrete and specific proposals that will effectively combat the theft that take place on the Internet? 

The rhetoric around this bill is over the top. None of the sponsors 

of this bill are against the First Amendment. None of the sponsors 

of this bill want to shut down the Internet. And none of the sponsors want to stymie technology. Perhaps the first example that I 

will focus on is opponents claiming that the legislation will undermine U.S. foreign policy, and encourage repression by foreign governments. I wrote to Secretary Clinton and asked her opinion. She 

clearly and forcefully said there is no contradiction between intellectual property rights protection and enforcement ensuring freedom of expression on the Internet. In other words, we can adopt 

legislation like H.R. 3261. To better protect U.S. intellectual property online, at the same time demand that foreign governments respect Internet freedom. And I would like to submit those letters for 

the record. 

Mr. SMITH. Without objection. 

[The information referred to follows:] 
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132 

The Honorable Hillary Clinton 

Page Two 

September 8, 20 II 

InterDet censorship for which you and the Administration have rightly condemned China, Iran 

and other nations. 

I know that law enforcement, and the rule of law, is 11 piliai' orD.s. foreign policy, and is 

fully consistent with our prOlTIotion of lnternet freedom. Indeed, your "'Remarks on Internet 

Freedom" made clear that free expression does not protect "those who use the internet 

to ... distribute stolen intellectual property,,3 - a fact conveniently overlooked by those who 

mischaraelerizc that speech. Your view is supported by the noted First Amendment scholar, 

Floyd Abrams, in his analysis offhe legislation.' He said that, "as a matter ofbofh constitutional 

law and public policy, the U.S. must remain committed to defending both the right to spcak and 

the ability to prolect ol1e's intellectual creations." 

The Internet and recent history, underscore fhe complexity offhe challenge. When 

despots shut down the Internet to suppress dissent, the V.S. must condemn it. But that does not 

mean that governments arc defenseless against crime and fraud when it is can-ied out online. 

You spoke afthc urgent need to protect online speech - but abo said that "all societies recognize 

iliat freedom of expression has its Ihnitst and that those who u.se the internet to "distribute stolen 

intellectual property camlOt divorce their online actions fcom their real world 

identities.;' President Obama}s lntc111utiona1 Strategy for Cyberspace targeted ~'the persistent 

thcCt ofintcllcciual propelty" as a key threat to competitiveness and innovation, and vowed that 

our country "will take measures to identify and respond to such actions, and hold such actors 

accountable. " 

I believe that if we call provide an open and transpm'ent judicial process~ consistent with 

due process, that responds to online theft swiilly, surgically and fairly, we set a posilivc 

precedent for others to follow. Copyright theft and trademark cOlll1terfeiting arc illcgal in 

vit1ually every country of the world. Ifthe US leads the way, it strengthens us when We ob.iect to 

arbitrary acHons that shut down a country's communications networks. To pretend fha! 

authoritarian regimes wi!! be less likely to abuse their power if the U.S. refrains from adopting 

new laws against onlitle theft is a fantasy, not a policy. 

Law enforcement actions over the past year shows that a civil society need not sllnender 

to lawlessness. In "Operation ill Our Sites," Justice and Homeland Security oft1cials 'IDted to cut 

off websites engaged in counterfeiting and theft, and deny them access to the businesses that 

3 See .lillQ;LL'!Yww.§t~,e:ov!secretElrvlrmJ2010LQlD35512.JltD.!, "Now, at! socictiC'!) rccognizc that free expressionlms its 

IimitL,1 hose who use the internet to recruit terfOrists or distribute stolen intellectual pro~crty cannot -divorce their onlirre actions 

trom their rea! world identities, But these challenges must not become an cxcu:o-...' [or govl:l!uncni.s to sys(elllfltfcally viola!c lhe 

rights and pdvacy of those who llse the inlemet for peaceful political purvo~e$." 

4 See http;llwww.dga.org/enlNew~IPJ~$~Jif!.kases/2011/0524~F]Qyd~Ab@lllli:Letter.aspJi 
133 

The Honorable Hillary Clinton 

Page Three 

September 8, 2011 

facilitated their unlawful online business models. Agents conducted thorough investigations, 

presented evidence to US Attorneys, ,md together the federal officers went before a U.S. District 

Court. With a COUlt order in hand, they have seized some 130 different rogue domain names and 

in not one case took action against a business with even a colorable claim of legitimacy under 

U.S. law. In one non-copyright case, a seizure of child sexual abuse sites inadvertently swept in 

some legitimate online activities. ICE quicldy fixed the mistake, and presumably learned f;'om 

the experience. I am hoping that tech companies - those who understand our goals - help law 

enforcement ensure that implcmcntalion is nan-owly tailored and effective. 

Assertions that protection ofintellectnal property on the internet is inconsistent with 

suppOlting internet freedom, jf continuously repeated and unanswered, have a way of becoming 

fixed as tmth in the minds of many. Therefore, I believe it imperative for the State Department 

to publicly clarify the misstatements referenced above, and to publicly affilm that our SUppOlt for 

Internet freedom does not extend to the freedom to steal intellectual property. 

Thank you lor your prompt consideration of tills request. 

Ce: Undersecretary of State Robett Harmats 

Intellectual Property Enforcement Coordinator Victoria Espinel 
134 

THE SECRETARY OF STATE 

WASHINGTON 

Ootober 25, 2011 

The fIonorabie Howard L. Berman 

Committee on Foreign Affairs 

House of Representatives 

~ Thank you for your letter of September 8 regarding Internet freedom and the 

relationship between Internet freedom and the protection of intellectual property 

rights on the Internet 

The State Department is strongly committed to advancing both Internet 

freedom and the protection and enforcement of intellectual property rights on 

the Internet. Indeed, these two priorities are consistent. The protection and 

enforcement of intellectual property rights on the Internet is critical for the United 

States, for its creators and inventors, and for the jobs it promotes and the economic 

promise it provides. There is no contradiction between intellectual property rights 

protection and enforcement and ensuring freedom ·of expression on the Internet 

We must hold governments accountable to the international commitments 

and obligations they have undertaken with respect to freedom of expression, which 

apply equally to online activity. Given the volume of communication over the 

Internet today, we have f'Oc.used our efforts on ensuring that the Internet is a 

medium through which people can safely and effec.tively express their opinions. 

The Arab Spring shows the promise onhe Internet as a mediwn by which peaceful 

demonstrators can mobilize citizens in the face of government oppression. The 

Internet also offers tremendous opportunity for creators and inventors, but that 

promise will not be met unless the rules of copyright and trademark are protected 

and enforced. The rule of law is essential to both Internet freedom and protection 

of intellectual property rights, which are both fIrmly embedded in US. law and 

policy. 
135 

Mr. BERMAN. Based on your answers to Mr. Smith’s question, I 

would like to follow up. I thought I heard you say in response to 

the Chairman’s question that Google does not legal to pirate 

websites? 

Ms. OYAMA. Under the DMCA procedures that Congress set out, 

a rightsholder can notify Google about foreign infringement, and 

we would remove that site. 
136 

Mr. BERMAN. All right. Well, explain to me this one. The Pirate 

Bay is a notorious pirate site, a fact that its founders proudly proclaim in the name of the site itself. In fact, the site’s operators 

have been criminally convicted in Europe. One has apparently fled 

to Cambodia. It is being blocked by court order in at least Italy, 

Denmark, Belgium, Ireland, and Finland. And yet, Google continues to send U.S. customers, or at least I do not know what you 

are doing this morning, but before this morning, because maybe 

you could read my mind. U.S.-Google continues to send U.S. consumers to the site by linking to the site in your search results. Why 

do you do this, requiring copyright owners to send thousands upon 

thousands of notices for individual Torrent Links Pirate Bay, only 

to have those same files reappear on the system, when Google calls 

The Pirate Bay again? And we all know that this is a notoriously 

egregious pirate site. Why does Google refuse to de-index the site 

in your search results? 

Ms. OYAMA. Copyright infringement, counterfeiting, these are 

issues that we take incredibly seriously. We invest tens of millions 

of dollars into the problem. We have hundreds of people around the 

world that work on it. 

When it comes to copyright—— 

Mr. BERMAN. Why does Google refuse to de-index the site in your 

search results? 

Ms. OYAMA. We will immediately, if we are notified by a 

rightsholder, we would remove the link from our search results to 

The Pirate Bay. We have done that over 5 million times this year. 

When it comes to copyright—— 

Mr. BERMAN. You remove the link to a particular item. 

Ms. OYAMA. Right. 

Mr. BERMAN. Why do you not refuse to de-index the site in your 

search results?. 

Ms. OYAMA. The procedures that Congress set out under the 

DMCA ensure that today with websites—— 

Mr. BERMAN. Would it make sense to have a law that allowed 

you, if the DMCA does not go far enough, a law that essentially 

told you that is what you should do in response to dealing with a 

clearly established rogue website that flaunts it in every possible 

way? 

Ms. OYAMA. So, we have no idea of knowing if a given search result is infringing or is authorized. We do need the cooperation of 

the rightsholder to let us know. And today we are removing links. 

We think in terms of a legislative approach something that goes 

after the real incentive for those sites to be in business makes 

sense. So enhancing the DMCA and going after advertising, which 

is our services, and payment providers, we think makes sense. We 

think it is that—— 

Mr. BERMAN. Could you draft some proposals that reflect that position, so we could look at them? I mean, I would love it if you and 

the Consumer Electronics Association, and Public Knowledge, and 

these groups would give us something specific. You think it goes 

too far, it is too excessive. Give us something specific. Infuse herself with the notion that you want to stop digital theft. What 

works? And use your brilliant mind that you have into organiza-
137 

tions to give us some specifics, because the DMCA is not doing the 

job. That is so obvious. 

Ms. OYAMA. We are very interested in working with your staff, 

with the Chairman, and other Members of the Committee. I do believe through NetCoalition, we have provided that language, and 

would be happy to follow up. 

We do think, in terms of search results, that Congress got it 

right under the DMCA. It leaves up legitimate content. It takes 

down infringing content. We want to make sure that when we are 

dealing with speech, that we use a scalpel. 

Mr. BERMAN. Well, my time has expired, but you cannot look at 

what is going on since the passage of the DMCA and say Congress 

got it just right. Maintain the status quo. 

Ms. OYAMA. We certainly believe more tools would be useful. 

Mr. SMITH. The gentleman’s time has expired. Thank you, Mr. 

Berman. 

The gentleman from North Carolina, Mr. Coble, is recognized? 

Mr. COBLE. Thank you, Mr. Chairman. Good to have you. I have 

had to miss some of the hearing, Mr. Chairman, because of other 

meetings, but it is good to be here. I was going to examine Ms. 

Pallante, but the Chairman beat me to it. I was going to examine 

Ms. Oyama, but Mr. Berman beat me to it. But I will still try to 

recover. 

Ms. Oyama, let me ask you this. What relief does the DMCA 

offer to a trademark owner who is trying to prevent counterfeiters 

from selling fakes? 

Ms. OYAMA. So, for counterfeit, it is dealt with a little bit differently. For counterfeit at Google, we will act through our advertising. We had eject it, so, for example, for ad words, we have ejected over 100,000 accounts in the last year. There is a very kind of 

stark difference between copyright and trademark. Congress so far 

has not enacted by DMCA for trademark. Copyright laws are exclusive rights. Trademarks—it depends on what geography you are in, 

right, what product you can use. There is a given name specifically 

that can be used on lots of different products. And so, I know there 

has been kind of a long-standing conversation about that issue. 

Certainly, if we ever were to receive a court order about counterfeit and related to search, well, well of course, we would comply 

with that court order. 

Mr. COBLE. I thank you. 

Mr. Clark, how involved are our organized criminal networks in 

the manufacture and distribution of counterfeit medicines? 

Mr. CLARK. From my estimation and experience, it is a problem 

that is growing. I do not think we have reached the level yet where 

we are seeing global cartels, per se, as we do in narcotics, but as 

the notoriety of the crime gets around, the profit margins are so 

phenomenal and the abilities on a global scale are so low, that it 

is a no-brainer for organized crime to look at this as a way to go. 

So, it is growing. 

We have seen instances of it, not systemic instances, but we have 

seen, as I just cited, the Detroit instance, where money was going 

to Hezbollah. We have seen drug traffickers. But I think it is growing in that capacity. 
138 

Mr. COBLE. Mr. Clark, what aspects of SOPA do you believe are 

particularly important to combating the problem of counterfeiting 

medicines? 

Mr. CLARK. I apologize, Congressman. I missed the first part of 

that? 

Mr. COBLE. What aspects of SOPA, the bill before us, do you believe are particularly important to combating the problem of counterfeiting medicines? 

Mr. CLARK. I think all aspects. My biggest worry, Congressman, 

is that counterfeit medicines are still not perceived by the public, 

by law enforcement, by judiciary, our judges, and prosecutors as a 

serious crime yet. When you see somebody like Kevin Xu, who has 

a global reputation for supplying counterfeits—it was my understanding during his undercover discussions, he offered a list of 

counterfeit medicines, and he said if anything is on that list, anything else off that list that you want, I can have it for you. Give 

me 2 weeks. We are talking cancer medicines. We are talking blood 

pressure medicines. We are talking Alzheimer’s medicines. 

And I think when we see a few tablets here or there, we have 

a tendency not to think of the consequences those tablets bring. A 

lot of people in the United States, I think, look at it and say, there 

are no bodies in the street. Nobody seems to be dying from counterfeits, so it cannot be that serious of a crime. 

Mr. COBLE. I got you. 

Mr. CLARK. But when you look at people, at best. If they are getting 20 percent of the active pharmaceutical ingredient in the medicine that they are taking, such as this Alzheimer’s medicine that 

was manufactured in Turkey, manufactured in facilities such as 

this where there are no conditions that in terms of licensing. Regulatory, environmental, are applied. Even with just 20 percent of the 

active ingredient in it, what is the other 80 percent? And if there 

is nothing but benign chemicals in that 80 percent, they are still 

not going to get relieved of their disease, and they eventually die. 

So, my biggest worry, Congressman, people are dying from these 

counterfeits. We just have not figured out a way to correlate the 

deaths from counterfeits with the problem yet. 

Mr. COBLE. I thank you. I want to beat that red light that will 

illuminate imminently, and say to Ms. Kirkpatrick, I am advised 

that MasterCard has been instrumental in combating piracy. And, 

Mr. Chairman, I think it should be noted, for those of you who 

have combated, particularly flagrant, that that should be noted. 

And I thank you all for being with us. 

And I yield back, Mr. Chairman. 

Mr. SMITH. Thank you, Mr. Coble. 

The gentleman from North Carolina, Mr. Watt, is recognized? 

Mr. WATT. Thank you, Mr. Chairman. And let me start by thanking all of the witnesses for being here today. This is a difficult 

issue. This legislation rages some interesting new challenges, but 

circumstances are raising difficult new challenges. 

Ms. Oyama, let me start with you because I want to be sure I 

understood your testimony. I got the impression that you do not object strenuously to the provisions of Section 102, because they require a court order; that your primary objections are with respect 

to the provision in 103, where market based system to protect cus-
139 

tomers are involved because it does not require giving notice to the 

site owner or whoever has put up the site. Am I misstating where 

you are on that? 

Ms. OYAMA. We would certainly agree that concerns about 103 

are the greatest, one, because of the scope of what is the definition—— 

Mr. WATT. Well, let me separate the question. Do you have concerns with Section 102? 

Ms. OYAMA. The legislation. We support—— 

Mr. WATT. The question is, do you have concerns with section 

102? 

Ms. OYAMA. With some of the remedies, yes. 

Mr. WATT. Some of the remedies? Okay. And you will give us 

that in writing so that we can evaluate those concerns. 

Ms. OYAMA. The ads—— 

Mr. WATT. But your primary concerns are with section 103. Am 

I misstating that? 

Ms. OYAMA. I think the remedies in 102 focused on ads and payments, the way that these sites are making money—— 

Mr. WATT. I am not trying to get you to resolve that issue about 

102 today. I would rather have that in writing. 

Ms. OYAMA. It is much more workable, yes. 

Mr. WATT. Right. But your concerns about 103 have to do with 

the lack of notice to the site owner, right? 

Ms. OYAMA. It has, in part. I think—— 

Mr. WATT. Okay. So, is there some effective way that we could 

give notice to the site owner, that you are aware of? And if you 

could give me those suggestions in writing, because I have those 

concerns, too. The problem is we do not currently have an effective 

way, access to those information to give them notice. And you do, 

I think, in your system because you put up the site. Okay. 

Now, if you could help me with those two things, we will be far 

down the road. I am not adverse to addressing your concerns. I 

have indicated that to you both in private and I am saying it publicly today. 

Let me talk about this constitutional standard, and make sure 

that I understand where you are on that because you appear to be 

advocating a constitutional standard that would prohibit the enforcement of any laws online. In your written testimony, you disagree with Professor Abrams’ conclusion that it is constitutional to 

block access to a website that is primarily infringing, even though 

such blocking may incidentally impact protected speech. 

Your written testimony will not concede that blocking a website 

that is almost entirely infringing would be constitutional. And you 

have confirmed that in what you just said verbally here. Does that 

mean that you consider it unconstitutional for law enforcement to 

seize a child pornography site if the site also contains one copy of 

the King James Bible? 

Ms. OYAMA. So, the speech concerns that have been raised—— 

Mr. WATT. Just answer that question for me, and then I will go 

forward from there. 

Ms. OYAMA. There are certainly legitimate problems—— 
140 

Mr. WATT. What about if it contains 20 copies of the King James 

Bible, but it is still 90 percent child pornography? Are you saying 

First Amendment rights will not allow us to do that? 

Ms. OYAMA. I think we agree with Floyd Abrams that you need 

to look at the whole site. You need to make sure that it is really 

dedicated to infringement—and we need legitimacy. 

Mr. WATT. Okay. Well, and probable cause would require the Attorney General’s office to do that. I mean, he is not going to go and 

cite you unless or stop this process unless he has gone through that 

analysis. 

The question is, do you think that there is something unconstitutional about taking down a site that is overwhelmingly, primarily 

devoted to two stolen products? And I’ve, you know, if that is your 

position, I think we are going to have a real problem with that. 

Ms. OYAMA. No. I think if there was a site out there that was 

100 percent terrible, that is a separate issue. The definition—— 

Mr. WATT. No, I am saying 90 percent terrible. It’s him, saying 

98 percent terrible. Is 2 percent going to save the site from being 

taken down? 

Ms. OYAMA. I do not think there is an exact number. I think 

when you are sweeping in mast majorities of legitimate speech 

without notice, that raises significant questions—— 

Mr. WATT. Is that 51 percent, or is it 60 percent? I mean, how 

are we going to do this? You are telling me I cannot violate somebody’s constitutional rights if it incidentally adversely impacts their 

protected rights. That is what you are saying. 

Ms. OYAMA. No. I think if a site was primarily dedicated to infringement, there is a lot of tools that—— 

Mr. WATT. Okay. Well, that is what the bill says, does it not? 

Ms. OYAMA. Well, we would not agree that the scope of the definition captures totally infringing sites. We have a lot of concerns 

that it sweeps in legitimate—— 

Mr. WATT. No, I did not say totally infringing. That is not what 

you said either. That is not what you said. You said primarily infringing. And then, all of a sudden you shifted over to totally infringing. Is this a question about whether something is totally infringing or primarily infringing, or do you think that both of them, 

that one should be protected and one should not be protected? 

Ms. OYAMA. I think a definition that was, you know, narrowly 

drawn that had something like primarily would be helpful. 

Mr. WATT. Okay. So you are going to give us some language on 

that. My time is up. 

Ms. OYAMA. We have a definition. 

Mr. SMITH. The gentleman’s time has expired. Thank you, Mr. 

Watt. 

The gentleman from Virginia, Mr. Goodlatte, is recognized? 

Mr. GOODLATTE. Thank you, Mr. Chairman. 

Ms. Oyama, I want to pursue that line of questioning. Years ago, 

a former Chairman, Henry Hyde, put me in a room with about 30 

government representatives from the content industry, from the online industry, Internet service providers, and a few that had a foot 

in both camps. And we worked for months in a hot room, and came 

to agreement on the Digital Millennium Copyright Act, and, in particular, the notice and takedown provisions, which you have spoken 
141 

highly of. And I agree with you that those provisions still have a 

role in protecting online copyright. 

But the Internet has changed dramatically since then. The 

speeds have accelerated. The technology is more sophisticated. 

Search engines are more sophisticated. And the criminals who use 

all of that to rip off legitimate businesses of all kinds are more sophisticated. 

So, as you know, and, as I have said, I am interested in making 

sure this legislation gives effective tools to combat lawbreakers, but 

to also ensure it does not entangle legitimate online businesses or 

the ability of entrepreneurs to continue to bring exciting new products and services to the Internet. 

Can you tell the Committee the top concerns the tech community 

has about the bill and your specific recommendations on how to fix 

those concerns within the bill? 

Ms. OYAMA. Sure, thank you. I think when the conversation 

started, the idea was to target foreign rogue sites, sites that were 

clearly breaking the law, build on the DMCA, and introduce new 

harsh remedies. That is definitely an approach that we would get 

behind, that we would support. I think when the tech community 

now is looking at is this language. There are serious concerns that 

the definition of a site that is dedicated to the theft of U.S. property, you know, probably purely unintentionally, it sweeps in a 

great amount of lawful websites, so, for example, the unit of analysis for what the site is. There is some language in there that says 

an Internet site or a portion thereof. So there is some concern 

about whether we are looking at the whole site or are we just looking at one blog, one tweet, one comment, one page on a site. So, 

getting the definition right would be really important. 

There are other words within the definition that seem to introduce notions like ‘‘facilitate.’’ That is one of the reasons why the 

Consumer Electronics Association, who I mentioned, they have serious concerns because they manufacture so many different devices. 

Somebody could say that the Internet itself facilitates infringement. So, we need to make sure that we are really staying within 

the existing confines of copyright law. 

I would also mention in the definition there is some language, 

you can be dedicated to fast if you have. No one understands, sir, 

what this means. If you have taken deliberate actions to avoid confirming a high probability of the use of your site for infringement. 

Right now, small business owners, when they are starting a 

website, they know if they comply with the DMCA, that they are 

lawful companies. They can seek investment, they can go forward. 

If they have to somehow subscribe to that kind of definition, the 

folks that we are hearing from, they just have no idea how they 

would even possibly build their sites to build to fit that definition. 

So I think getting the scope of what is a site dedicated to infringement would be critical. 

And from there, we are certainly more than happy to work on 

remedies. The two that we think are really smart, if you look at 

Wikileaks, I think this is a good example of the fact that this is 

a strong remedy, is choking these sites off at their revenue source. 

They are in business because they can either sell advertising or because they can profit from subscribers. If you could get the entire 
142 

industry together and you could choke off advertising, and you 

could choke off payments to those sites, you would be incredibly effective without introducing the collateral damage that we had discussed to free speech or to Internet architecture, things like that. 

So, ensuring that we had the right remedies and the right scope, 

I think there is plenty of opportunity for all players out for a crosssection of industry to come together. 

Mr. GOODLATTE. Let me just follow up on that. The more detailed 

information you give us, the better our ability to address legitimate 

concerns. So, will you commit to working with me to identify the 

specific problems that the tech community has with the bill, and 

working to address those specific problems to improve the bill as 

we move forward? 

Ms. OYAMA. Absolutely. 

Mr. GOODLATTE. And some of have argued that this legislation 

would break the Internet. As the co-chair of the Congressional 

Internet Caucus, that is the last thing I want to do. Can you explain exactly how this legislation would impact the functioning of 

the Internet? 

Ms. OYAMA. So, I think the major concerns that have been raised 

really kind of in a cybersecurity field. So, so there is a white paper 

by a group of engineers who designed DNS-SEC. There are some 

other leading cyber security folks who have spoken out about it. I 

think Stewart Baker has been on record. He is a former Senior Official at DHS, and the formal General Counsel of the NSA. 

One of the provisions in the bill would require ISPs to perform 

DNS blocking. There is kind of a twofold concern there. One is that 

the methods proposed here are not compatible with a more than 

10-year long effort into cybersecurity field to implement DNS-SEC 

in a way that would prevent cyber security attacks. So, I am not 

the cyber security expert, but the folks that wrote that code are 

saying that this will really harm the U.S. in the global effort to 

make deacons as more secure. 

I think the second piece is, we know that users unfortunately, 

are seeking this material. We can predict that there are going to 

be circumvention efforts. And so, there is a big concern that if we 

play certain obligations on you as DNS providers, that users are 

going to reroute their traffic to offshore rogue providers. And the 

vulnerabilities that an offshore rogue provider could introduce into 

the network, not just for the kids that are looking for the movie, 

or for some bad actor, but for anyone who is on the network that 

they are on is really significant. It could introduce spyware, 

malware, privacy concerns. 

Mr. SMITH. The gentleman’s—— 

Ms. OYAMA. I know this is, you know, something that really the 

folks who are the experts in this field have raised, but, you know, 

that has been kind of a critical concern about—— 

Mr. GOODLATTE. Ms. Oyama, I hate to interrupt. I do believe 

that Mr. Clark, if the Chairman will permit Mr. Clark from his 

past experience with the Department of Justice might also be able 

to comment on this issue, if the Chairman allows. 

Mr. SMITH. Mr. Clark, could you give a very brief response? 

Mr. CLARK. Very briefly, unfortunately I do not have the cyber 

experience. It was not one of the areas I actually worked myself. 
143 

I have managed it. I do not know the intricacies about it. So in all 

honesty, so I apologize for not having an answer for that. 

Mr. GOODLATTE. I apologize, Mr. Chairman. I thought there was 

an opportunity there, but perhaps not. Ms. Oyama, thank you. We 

look forward to working with you. 

Mr. SMITH. Thank you, Mr. Goodlatte. 

The gentlewoman from California, Ms. Lofgren, is recognized? 

Ms. LOFGREN. Before my questions, I would like to ask unanimous consent to introduce a number of items into the record, opposition to the provisions of the bill. The letters are from the Consumer Union and other consumer groups; TechNet; Tech America; 

the American Library Association; the Competitive Enterprise Institute; Human Rights Watch and other public interest groups; dozens of human rights groups around the world; a written statement 

from the ACLU; a paper from the Brookings Institute explaining 

how the bill would undermine security and stability of the Internet; 

a white paper by five leading DNS engineers and Internet security 

experts, a letter from the Anti-Phishing Working Group; an article 

from Stewart Baker, the former General Counsel of the NSA and 

Policy Chief for DHS under the Bush Administration entitled 

‘‘Copyright Bills Could Kill Hopes for Securenet;’’ a letter signed by 

AOL, eBay, Facebook, Twitter, Yahoo, LinkedIn, Google, Mozilla, 

and Zynga; and a Harvard Business Review article entitled ‘‘Great 

Firewall of America.’’ 

Mr. SMITH. Without objection. 

[The information referred to follows:] 
144 

November 15, 2011 

The Honorable Lamar Smith 

Chairman 

Committee on the Judiciary 

House of Representatives 

Washington, DC 20515 

The Honorable Bob Goodlatte 

Chairman 

Subcommittee on Intellectual Property, 

Competition, and the Internet 

Committee on the Judiciary 

House of Representatives 

Washington, DC 20515 

The Honorable John Conyers, Jf. 

Ranking Member 

Committee on the Judiciary 

House of Representatives 

Washington, DC 20515 

The Honorable Mel Watt 

Ranking Member 

Subcommittee on Intellectual Property, 

Competition, and the Internet 

Committee on the Judiciary 

House of Representatives 

Washington, DC 20515 

Dear Chairman Smith and Representatives Conyers, Goodlatte, and Watt: 

We write to express our concerns with HR. 3261, the Stop Online Piracy Act. As consumer 

groups, we agree that consumers should not be harmed by substandard or counterfeit goods. 

However, we are concerned that some of the measures proposed by this bill and the breadth of its 

scope could make it more likely to harm consumers' interests. In particular, we are worried the 

bill could close off online exchanges that provide lower prices for consumers; reduce online 

security; and allow for anti-consumer practices by online service providers 

Consumer access to online exchanges 

Consumers benefit greatly from being able to use the Internet to connect with a wide variety of 

buyers, sellers, and with each other. Online forums and marketplaces allow consumers to 

exchange information about products and exchange products themselves in thriving secondary 

markets. However, the broad language of the bill threatens these activities. 

The bill would allow rights holders to send notices to payment processors and advertising 

networks, ordering them to cut otr funding to sites the rights holders believe are "dedicated to the 

theft of US property." However, this definition is extremely broad. Section 103(a)(1)(B)(ii) 

detines a "site dedicated to the theft of U.S. property" as including any site whose owner "takes 

active steps to avoid confirming a high probability" that it is being used (even by others) for 

infringement. This means that an entirely legitimate site can be defunded, and even enjoined 

entirely, merely because a few of its users may have infringed. Consequently, overzealous rights 

holders could shut down lawful exchange sites like craigslist, eBay, swap. com, or BookCrossing, 

closing off valuable outlets for small-scale buying and selling. For instance, a legitimate studentto-student textbook exchange site could be hampered or shut down by a publisher for the actions 

of just a few infringing users, raising the costs of an already-expensive education. 
145 

Online Security 

Secure online communication and commerce is also of critical importance to consumers Yet, 

the bill could undermine the security of consumers. Section I02(c)(2)(A) allows for court orders 

that would block domain name system (DNS) operators from providing access to the Internet 

Protocol (IP) addresses of targeted sites In other words, a consumer attempting to access an 

allegedly infringing site would get an error message or be redirected to another page. However, 

redirecting DNS queries (to phishing sites and other fraudulent web sites) is also a common tactic 

used by malicious hackers to steal millions of dollars from consumers. 

To prevent these tactics, DNSSEC, an important voluntary security standard, is being 

implemented to ensure that any given DNS query will only return the correct, IP address. 

However, DNSSEC cannot tell the ditl'erence between DNS errors caused by these tactics or by 

court orders. This means that an ISP cannot simultaneously implement the consumer protections 

of end-to-end DNSSEC and obey court orders issued under SOPA. ISPs faced with this dilemma 

may well choose not to implement DNSSEC fully, leaving consumers more vulnerable online. 

Furthennore, even under the bill's provision, users could still get to allegedly infringing sites. 

The simple steps infringers can take to do this, like downloading certain browser plugins or using 

questionable alternate DNS servers, exposes not only them, but all other consumers, to hann. 

These considerations mean that DNS blocking is not only largely ineffective, but risks seriously 

hanning consumers' security. 

Anti-consumer actions by online service providers 

Finally, the bill grants complete immunity to a very large class of actors, including Internet 

service providers, advertising networks, advertisers, search engines, and payment networks, for 

cutting off access to a targeted site as long as they can claim their actions were taken in the 

reasonable belief that the site was suspected of encouraging infringement. This blanket immunity 

from all federal and state laws and regulations could allow the above actors to act in ways that 

would hann consumers. For example, Internet service providers could block access to online 

services that compete with their own telephone or video offerings under a justification of curbing 

alleged infringement, depriving consumers oflegitimate alternatives to high-priced services. The 

broad immunity of the statute would prevent consumers or consumer protection agencies from 

policing or addressing such anti-consumer or anticompetitive. 

As drafted, the Stop Online Piracy Act has the potential to do more hann to consumers than 

good. We urge you to reconsider these provisions as you continue to work on the important issue 

of protecting consumers online. 

Respectfully submitted, 

Consumer Federation of America 

Consumers Union 

U.S. PIRG: The Federation of State PIRGs 
146 

Techl\Jet 

N0II8mDer 15, 201\ 

Chai.man lama. Smith 

House CommiUee 00 Judiciary 

2426 Rayburn House 00100 Building 

Washington DC 20515 

Deer Chairman Smith and Ranklng Mamber Conyers: 

, .. ........ ,", .. " .. ,.,._. 

$O! 1~ St, ~I'I'. SI<'\t 104! W'""'~ DC l'OOOf 

,t".:OUSUI'JII ! """ .... «~ ... ,.., 

Ranking Membef John Conyers 

House Commi1lee 00 Judldary 

2426 Rayburn House Offk;e Building 

Washington DC 20515 

Thank ~ou lor you, continued leadelship on issues affecting the lnoo~a~on economy. Your 

commitment 10 promoting a strong American econom~ is greatly appreciated, and TechNet. the 

policy alld political netwo.k 01 CEOS that PlOmotes the growth of technotogy and the inno~ation 

economy, is eager to hetp you achieve thase important goats. 

We are "",iring to express OUI views at)(lut H.R. 3261, the 'Stop On~ne Piracy Act" or SOPA. As 

an 8Ssoeia~on whose companies coJlectively touch nearly the entire bloadband eC~lem, 

TechNel is sel1Sitive 10 thll need 10 stop piracy 01 on~ne conten\. The lobust flow of digital content 

101 lawful uses is at the core ofwhal m,akes the intemet so imponant \0 OUt econo~ and society, 

When the Cleato.s of tllis content ale nol compel1SatBd because their work is stolen, this 

undermines key leatures of the Internet - the rich store of digital products and commerdany 

relevant information that creates value fOfconsumers and jobS lor inllOYatoJ$. 

Although H.R 326l tBkes aim at the problem of onijne piracy, ils regulatory 8P11lOach dOllS so iTt 

such a way that could thre8ten many features that make the Intemet IUflCtion well and which 

alloW users 10 access. create. Share, and pay for online oonllmt. We have a lange of concems 

alxlul 1I0w SOPA's approaCh may impact Ihll interneL For lIJCample. k may undermine tho 

secu~ty ollhe internet by impOSIng heavy-handed technOlogy mandates that lire also i kely to 

undelmine innovation. Addi~onally. S':)PA would Inhibit businesses that rely on afJ(l facilitale 

on~ne advenislng. as well as Ulose wlticn po-ocess P8yments In electronic commerce, 

More specifically. we have coneerflS atout the foHowing provislo",,: 

Tile po-oposal creates a new "private right of action" against lawful U.S. companies. 

SOPA aTiows copyright and trademark owners to take action against ~w·a~d ng payment 

po-ocessors and advenising COI'llp3flies to compelthern to take action agaInst activity on 

Ine basts of bare allegaUons. 
147 

............. (0 ..... , .,._. 

• SOPA may subject U.S. '"Iemll! companies and financial firms 10 technology mandates, 

as courts may require companies Ie tOke certain actions b.a5ed on lawsuits brOught -about 

by lhe new plNale right of acticln. 

Tile propo!;al exposes !awful U.S, firms 10 slgnlftcant commercial harm witllout due 

process, as r .. ms may have ~ong incentWes undar SOPA to stop do;ng buslnass wil h 

sites that are targeted by un~H"oven aUellalions before dua plocess has played out to 

prINe Inflinging activity. 

The propose<! legislation creates naw statutory sl anclar(!s of Infringement, which COuld 

eJpo!;a exislirlg and start-up firms in araas SUch es social mediQ and oloud computing to 

new ~tig ali on and ~abiitles. 

• SOPA undermines efforts 10 keep cybllrspace secule by ruquiling technological 

approaches to block access to sites engaging In unlawful acts thaI fadlitete piracy. Wegal 

siles registered i n Ihe U.S. would be blOCkad under SOPA, bul this would encouilige 

such sites 10 Iocaie overseas _. wllere our natlon'li recent efforts 10 Implove web secu~ y 

da flilt apply. Tll8 end rssuK ~ a prakferation of less S9CUfO webSitas registered abload -

siles that faci~tale piracy out 01 reaCh 01 U.S. lawenlo,cemanl. 

SOPA also strikes at the heart of tile Digital Millennium Copyright Act (DMCA). a 199a law that 

established a structure faf Ihe anforcernent of copyright on Ihe Internat. wT\11e eslablishing a "safe 

halOOr'" from Inhingement liability for Inlernel servica providels lhal act In acco,dance wilh the 

Act's requirements , including tnrough ~I "notice lind tako down' process for rlll1"l(Mng contllnt that 

Infringes copyright. 

TechNel members remilin committed to fighting online piftlC'1. We feel thllt Ihe DMCA has 

es\ilbllslled II solid frameworlt!of that SInd additional measures 10 address !he problem should nol 

un!lermina Ihal valuaDle foundation. We are concarne<! thai the framewarlt Pfoposed lly SOPA 

threatens to inhibil inllOvation In tho bloadlland ecosystem. impose burdensome regulatory 

requirements on Ihe leOh sector, whilE' not effectively lack.i)1g the Ploblem of OI\ ne Piracy, We 

too k. forwa,d to future dialogue with yOOi on this issue. 

BasI Regards. 

Rey Ramsey 

President and CEO 
148 

o TechAmenca 

NovemCet 1~ . 2011 

Tile ....",OI IM lol,,,,,, S""~. 

House 01 RePl""en' aINes 

Chllirman, JudicIO,,! ComfrifteA 

21:).8 Rayburn Ho .... e Office 9ul~ng 

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On behd 01 Tecl\.6.rMrlC9. 111e U.S . lectonolo\jy IndLlOW. Ia'9os1 """""''''''/ ~njlottjon 

,_ ...... otifl\l over 1,000 , ... cling 1n"""_"',, oomp.'lno.s. I ~m wnting 10 '''PI'''''' t>lir """c.,," IPKilically 8bo1,\ the 5101' Oo ne Pitacy Ad (SOPl\l. 1M alsu".... .. !IO...".!Iv 8bolJlltw 

P,evenff"ll RaAI Onine ThIS"'" 1<1 ECO<\O",c Crealivlly 8M Theil '" Inle~edu81 P'''Pllrty Act 

(PROTECT IP Act) 

fine..., yurs ago COO!l,ess beg.n whal would boo " klogthy bill c.iHcall) ,mponMI prOC8Sli or 

upDating copvri!lhtlaw for tile new mi~ """ . T"" " nd , ... uft 01 that ellon ... ;rs !tie DIg~. 1 

Millonnlum Copyngm AI! (DMCA), ... I'Men wa. ulIimal9ly [nk"med t>y hUM,ed. "'~lakf!llOkl<l'S 

from the nev.1y emo'ging Inl.,ne1 indue!..,.. \0 Imemelt"",," PfOYide". 10 m~c.rod rrmle 

C<>mPllniM, 10 ~b",riM. 10 civll.berta'IIo .... , al)(\ many """t. T~nArn.<ice played. proud 80d 

pr",n nelll ' .. e . 

T~'lI<>" lS Illen. ItS tl>/ly .. lrould be now. w/tl. \0 earefu ly Datance tl>/l riglr" 91 prOperty Iro!d~ 

wiItl 1M """,ration.1 ' .... tiesol "lMfeo::t\lOduits; .. 1)(\ to di~y ,each _ wlro ,nlri"ll" 01 &luI 

Oihel"S Pf<lperty. In olhe, worlll, Itre IJO'II was to m8t<e.th~ ruM of lIIe loa<! oleo, k>1 lilose who 

own Inl.iIe<;lual propert'l Bnd In ..... who " "",a t. n f'l"", proVIde", '" oII'ItrJWISe pra-.idl nf'l;:es 

II>al may Inte'.I:! wilh PI"'''CIi!d Intelil!-C!u"1 pr"ll""y on "" _ to pr"".,e a 'I"III,,"UI"" and 

~wropri~te apprDOcI1lO ;nWmodia'Y l abtity. 

TechAmer"lc.l and <><II mernbI!r comparries h8"8 been q<ile distU,bed by the rl5a o!rogue 

web&<l "" """",~"11 olisno<e, """Ir ItS Tire Ph la Bay. n,,,,,,, ..... bsiIn d"',scll,om lire oigni~canl 

lecI1nolog<cal llnr:! commI!fQallnno"aUon ""going today 10 ~p OOI1S11"'''''' enJoy ega~y-obUrine<! 

co"""'l on .,h"''''''''_ and '" whateV8floolllion 1tr"Y wallt 10 CO"""",,, thai """'a,,, Tools 

ohoukj ifl(lee<! be proyided to cI1.lIrtrrge ttle ~fe'~tI<>n of $uch silK I"al e~"1 to OJ/,il"Q8 "OI)tenl 

01 10 pedd" COIlrrterleit goods olIen 10 lIIe. dI",,,, del""",nt 01 U.S. companies and OU, KlMomy. 

In an attempt 10 P«l ""eh leg ollOOls. bo(h IIIf U.S . S emite ."" Hous. 01 Rtpre:lentlrtiv" h"". produced ",leYanr legisl9!ion. 

ProlecMg intellectual pro""rty must be a oorn"""""e "r U.S po cy .... both glob81 trade and e · 

commNCQ glOW. Tecl"rl\rrlOOca members a,e amoro tlrQ mosl lnn""..we com""nIes "' , .... 

United S"lu . prOducing c"~ ng !l<lgt elecl,onic ~nta. oo,,"~, elo-cl,OIlics snd In(luSlri. 1 

sysle""',;.t.ngin .... NI e<!"",,~g .... 1 sollwa,e, !o, .'3"'1*. T .... "",,_»sOng ".e a! ~.c:omn"' '''''. 
149 

TechAmerica Comment Letter 

Stop Online Piracy Act (H.R. 3261) 

November 15, 2011 

Page 12 

or sale of products over the Internet, has allowed the proliferation of "rogue" websites, sites that 

are set up outside of the United States to sell counterfeit products that violate the trademarked 

brands of their rightful owners, and deceive buyers as to the quality and origin of the goods. 

These counterfeit products are making their way into the supply chain at a loss to the IP owner, 

but also at a risk to the end user of a wide range of consumer, industrial and defense related 

products. These rogue sites are exploitive and dangerous to the public and U.S. 

competitiveness, and policy makers should seek to shut them down. 

Sadly, neither chamber of Congress has produced thoroughly acceptable legislation, but SOPA in 

particular marks a clear retreat from a history of Congressional support of the digital revolution. 

That support has often come in the form of not imposing regulation on the industry, and certainly 

never before has such a wholesale shifting of costs and responsibilities of property owners onto 

technology companies been contemplated -- a shift away from a careful balance and toward 

legislation that favors one industry over another. 

Put another way, the approach taken in SOPA leads one to wonder why the DMCA would even 

be used in the future. Using SOPA's proposed broad new inducement provision, one could 

simply ignore the current DMCA safe harbors and use intermediaries to accomplish the end goal, 

and if damages were warranted, merely later sue for infringement. Moreover, important 

measures to make sure that the proposals keep pace with technology, such as the DMCA 

requires with the triennial rulemaking on exceptions to the prohibition on circumvention of access 

and use controls, are non-existent. Along those same lines we are also dismayed that the 

proposed legislation relies on "simple" technical measures to address complex international 

issues that are likely better handled through diplomacy, negotiation, constructive dialog and 

coordinated action. The proposed "solutions" carry risk, perhaps significant, and are likely to be 

easily circumvented. 

That said, while the DMCA provides a relevant and informative model, it does not cover key 

challenges such as counterfeiters selling their physical products on the Internet. The potential 

damage that counterfeit products bring to a company's or industry's reputation and to the integrity 

of systems dependent on those products is serious and does deserve attention. 

Massive cost shift 

SOPA merely shifts costs from content owners, the rightful protector of their content, to various 

other parties, rather than making sure that costs are appropriately placed. 

This is a philosophical issue that runs to the heart of both proposals. Do we really want 

government forcing one industry to subsidize another, to be required by force of law to assist 

another industry in being successful? More typically we expect industries to operate within a 

market framework and with the freedom of contract to solve such challenges. In this case, 

Congress seems determined to step in and force one industry to provide subsistence to another. 

However, as evidenced by the measured Memorandum of Understanding reached between the 

content industry and ISPs earlier this year, interested parties can and will work together to 

combat intellectual property infringement in lieu of government intervention. 
150 

TechAmerica Comment Letter 

Stop Online Piracy Act (H.R. 3261) 

November 15, 2011 

Page 13 

So what are the costs? Simply put, they are the costs of stopping bad guys from doing bad 

things to other people's property - the cost of compliance, liability and distraction from 

improvement from the products of the technology industry. 

Safe Harbor No More 

One key factor that allows the economics of many legislative models to work is the inclusion of a 

clear and dependable safe harbor. This inclusion should make clear to intermediaries that if they 

are engaged in any wrong doing then they will find no solace in the law, but if intermediaries are 

acting in good faith then they could step out of the way of the costs and allow the rights holder to 

bring their claim directly against the alleged infringer. 

Under SOPA, a "service provider" will be required by a court order to take, at the instruction of the 

Attorney General, "technically feasible and reasonable measures ... including" DNS redirects. 

What are those limits? Are there any? And to the extent there may be some, then how many 

court cases will it take to discover them? 

Expansive Definitions 

In general, the definitions are sweeping and unclear in nature, sweeping in more than less. For 

example, in SOPA the definition of "service provider" includes both ISPs and online service 

providers, which means it could include anyone with a website. In other places, definitions of "ad 

networks" and "payment processor" are not well defined. 

Another example is the definition of a dedicated infringer or sites that were claimed to be 

"dedicated to the theft of U.S. property." Again, while the thought is right, the definition is 

sweeping. No one supports those who would steal or attack the very heart of U.S. innovation, 

but the definition is so broad, going beyond sites that are primarily designed or are marketed for 

infringing purposes, that many cloud-based services could be implicated even when they would 

not be recognized as a dedicated infringer under any reasonable definition. The new proposed 

language also includes sites whose operators "avoid confirming a high probability" that they will 

be used to infringe or who had at any previous time promoted infringements. 

The context set out in the proposals is equally broad as it focuses on "sites" that can be one page 

of a broader, as they are colloquially known, website. Hundreds, thousands, and even millions of 

Web "sites," as contemplated in SOPA, make up what might more aptly be called a domain. 

Likewise, the proposal to impose felony criminal charges for the illegal streaming of copyrighted 

works potentially captures a number of parties who offer services or products that primarily are 

intended to allow consumers to consume legally-obtained content in a variety of different settings. 

The "rule of construction" proposed in SOPA attempts to rectify this problem, but appears to focus 

on contract disputes between video distributors and content producers. Unless this carve out is 

expanded to include companies making a good faith effort to innovate and develop new products 

and services that give consumers a means to consume content they have obtained legally, 

Congress runs the risk of hampering innovation, investment, and job creation in this incredibly 

dynamic space. 
151 

TechAmerica Comment Letter 

Stop Online Piracy Act (H.R. 3261) 

November 15, 2011 

Pagel4 

Due Process Ignored 

One of the more egregious aspects of SOPA is the overbroad standard for secondary liability, the 

end result of which treats sites as guilty until proven innocent. Under this proposed law, no court 

would be involved in the process until and unless a site operator filed counter-notice asserting 

that the site did not fit the broad definition of dedicated infringer. One is hard pressed to think of 

another place where lawmakers would be comfortable designing a system that allows a mere 

accusation without any court review to lead to potentially damaging actions against another. 

Courts do serve a role in our legal system, as a neutral arbiter to balance concerns, rights and 

responsibilities of several interests. 

In this case, one obviously biased party can cause harm without any such review. Network 

advertisers (which are now largely technology-based and technology-driven companies), credit 

card companies and other payment processors such as PayPal would be required to stop 

providing ads or payment services to any site that a copyright or trademark holder claimed was 

"dedicated to the theft of U.S. property." Again, all without court review. The damage to the 

business of the wrongly accused would be stifling. 

Private Right of Action Difficulty 

The PROTECT IP Act also raises concerns regarding the authority vested in rights holders to 

bring injunctions against sites they accuse of participating in infringing activities. But worse, the 

private right of action provisions in SOPA go well beyond those in the Senate bill. 

As mentioned above, the private right of action is particularly troubling because of the ability of an 

accuser to wreak havoc outside of the court system. Some will argue that the newly created 

DMCA-style notice-and-takedown process for ad networks and payment processors is a system 

that can work; however, the proposed system stands the original notice-and-takedown system on 

its head by changing up the reason for its being. In the DMCA such a system was designed at 

the request of all parties to lower costs by moving away from a cease and desist letter tradition. 

Generating a notice has proved less expensive and removes the intermediary from the 

conversation, allowing the rights holder to directly engage with the accused wrong doer. Here the 

system is designed to place intermediaries squarely in the middle of the action, leaving 

intermediaries holding the cost, liability and compliance bag. 

Extra-territorial Problems 

The extra-territorial reach of the bill is problematic both for U.S. foreign policy and for those 

engaged in Internet Governance in the international arena. One of the significant issues is the 

balkanization of the Internet; an unhealthy fragmentation that could result from blunt technological 

implementation of well-intentioned policy imperatives. To date, the U.S. has largely avoided extraterritorial reach, and consequently the U.S. can speak authoritatively and forcefully against any 

such measures. Enacting SOPA or even the Protect IP Act will signal that the United States not 

only supports these measures, but more importantly, supports imposing restrictions through 

technical means at the most basic levels of the Internet. 
152 

TechAmerica Comment Letter 

Stop Online Piracy Act (H.R. 3261) 

November 15, 2011 

Page 15 

Technology and Security Concerns 

While we have many remaining concerns, we are compelled to address the proposal's quick 

assertion of specific technological fixes. For example, the requirement that ISPs block their 

customers from reaching an accused infringer site (i.e. DNS filtering), particularly in the voluntary 

immunity provisions that contain no court review, causes concern. Notably, this approach would 

undermine important security measures and be technically infeasible with DNS Security 

Extensions (DNSSEC), which allows secure authentication of Internet assets, is critical for 

combating the distribution of malware and other problematic behavior, and has high-level US 

Government support and investment. Further, such filtering requirements would encourage 

consumers to use alternate servers, which would promote the development of techniques and 

software that circumvent the use of the DNS and, therefore, undermine the value, security, and 

resiliency of a Single, unified, global communications network. 

In the end there is great support for stopping bad actors. The question is how they might be 

effectively stopped without burdening one industry with the costs more correctly borne by the 

rights holders. TechAmerica would very happily bring to bear its historical and current 

intermediary liability expertise in assisting both the House and Senate in moving forward to meet 

the goals of providing needed tools to stop bad actors, while finding a way to avoid forcing the 

technology industry into an untenable economic situation. 

Only carefully crafted solutions that seek to correctly assign burdens based on who most correctly 

should bear them, like the owners of property, and that protect the innocent while allowing for 

pursuit of malcontents will allow the Internet to flourish full of robust content well protected and 

appropriately used. Unfortunately, SOPA does not meet this threshold and hence TechAmerica 

cannot support this bill as introduced, but stands ready and willing to work with both chambers of 

Congress to improve the legislation. 

Sincerely, 

Dan Varroney 

Acting President and CEO 

TechAmerica 

cc: Members of Congress 
153 

November 8,2011 

Chairman Lamar Smith 

House Committee on the Judi ci~ry 

2 138 Rayburn Hou.>C Ollie/:: Building 

W~shington, D_C. 20515 

Ranking Member John Conyen; 

House Committee on the Judiciary 

B~3S I Raybl!m House Olliee Building 

Washington, D.C_ 2051 5 

Re' Stop Oilline Piracy Act, H,R. 3261 

,\;0000; ...... ... 

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Dear Chaiml8n Smith and Ranking Member Conyrrs; 

-

I write on behalf the Librnry Copyright Alliance (LeA). consisting of three major 

library associations~the American Library Association. the Association of College and 

ReseafGh Libraries. and the Association of Research Libraries th8t collectively 

represent over 139.000 libraries in the United States employing over 350.000 librarians 

and other personnel. I write to express OlIT serious concerns with the Stop Online Piracy 

Act (SOI' A). While we agree with many of the criticisllls raised by othen; with respect to 

Title L this letter will focus on problems section 201 could CRuse for libraries and their 

users. 

Two provisions of section 201 the definjtion of willfulness in section 20 1(c) and 

the expansion of criminal penalties to public perfoffilanccs in section 20 I (a)---are 

troubling, While each provision is problematic in its own right. the two together could 

threaten imponantlibrnry and educational activities. 

I. Definition ofWillflllness 

Section 20 I(c) cuntains a rule of construction concerning the term "willful" that 

could substantially e.'>pand the range of activity considered criminal copyright 

infringemcnl. 

The Copyright Act recognizes three different levels of intent for infringemenl: 

innocent infringement. ordinary infringement. and willf,,1 infringement The Copyright 

Act defllles an innocel11 infringer as an infringer that "was not aware and had no reasoll to 

believe that his or her acts constituted an infringemelJt of copyright ."." 17 U.S C. ~ 

504(c}(2). Willful infringement is not delined in the statute, but has bet'n understood by 

courts 10 mean a "vol untary, intentional violatiOIl of a known legal duty:' Regular 

infringement falls between lhese two extremes. e,g .. when a person believed that his 

action were noninfrillging but this belief was unreasonable. Different statutory damages 
154 

attach to these different levels of intent. The range of statutory damages for ordinary 

infringement is $750 to $30,000 per work infringed. 17 U.S.c. § 504( c)(l). In cases of 

willful infringement, the court can increase the statutory damages to $150,000; in cases 

of innocent infringement, the court can reduce the statutory damages to $200. 1 

Additionally, willful infringement is subject to criminal sanctions. This is where 

section 201(c) of SOPA comes into play. Section 201(c) provides that a person "acting 

with a good faith reasonable basis in law to believe that that the person's conduct is 

lawful shall not be considered to have acted willfully" for criminal copyright purposes. 

This rule of construction creates a negative implication that a person is a willful infringer 

if the person did not have a good faith reasonable basis in law for believing that his 

conduct was lawful. Thus, if a court finds that the person's belief was unreasonable, the 

court might consider him a willful infringer, even if the person in good faith believed his 

actions were legal. Under current law, however, this level of intent constitutes ordinary 

infringement, not willful infringement. Tn other words, the rule of construction could 

have the effect of collapsing the three levels of intent into two: willful infringement and 

innocent infringement. The willful infringement level would swallow the ordinary 

infringement level, thereby significantly broadening the range of activities subject to 

criminal sanctions. 

II. Criminal Sanctions for Public Performances 

Section 201 extends criminal sanctions for public performances such as 

streaming, but does so in a manner far broader than similar legislation in the Senate, S. 

978. 

Under current law, infringing public perfonnances are subject to lower criminal 

penalties than infringing reproductions or distributions. A willful infringer of the public 

performance right can only be subject to misdemeanor (as opposed to felony) sanctions, 

and only if the infringement was for purposes of commercial advantage or private 

financial gain. See 18 U.S.c. § 2319(b)(3). S. 978 would allow felony penalties for a 

public perfonnance for commercial advantage or private financial gain. However, S. 978 

would leave the status quo of no criminal penalties for public perfonnances without 

purpose of commercial advantage or private financial gain. 

Section 201 of SOPA makes the same amendment as S. 978 for commercial 

performances. But, SOPA also imposes criminal penalties for public performances by 

means of digital networks with a retail value of more than $1,000. See proposed section 

506(a)(I)(B). Felony penalties would be available if the retail value is more than $2,500. 

See section 201(b)(2). Thus, section 201 of SOPA for the first time authorizes both 

misdemeanor and felony penalties for non-commercial public perfonnances. 

1 When the infringer is a nonprofil educalional inslilulion,library, archives, or public 

broadcasting entity, the court can remit statutory damages altogether. 

2 
155 

ITT. Impact of Amendments on Libraries 

There are three pending copyright infringement lawsuits against universities and 

their libraries relating to their use of digital technology. 2 One of these cases, AiM}; v. 

UCLA, concerns the streaming of films to students as part of their course assignments. 

These lawsuits reflect a growing tension between rights holders and libraries, and some 

rights holders' increasingly belligerent enforcement mentality. Moreover, legislation 

such as SOPA and the PRO-IP Act passed in the IIO'h Congress, and the activities of the 

Intellectual Property Enforcement Coordinator (a position created by the PRO-lP Act), 

encourage federal prosecutors to enforce copyrights law more aggressively. 

Tn this environment, the criminal prosecution of a library for copyright 

infringement is no longer beyond the realm of possibility. For this reason, we strongly 

oppose the amendments described above, which would increase the exposure of libraries 

to prosecution. The broadening of the definition of willful infringement could result in a 

criminal prosecution if an Assistant U.S. Attorney believes that a library's assertion of 

fair use or one of the Copyright Act's other privileges is unreasonable. This risk is 

compounded with streaming, which SOPA would subject to felony penalties even if 

conducted without purpose of commercial advantage or private financial gain. 

To be sure, section 201(c) states that a person is not acting willfully ifhe is 

"engaged in conduct fonning the basis of a bona fide commercial dispute over the scope 

[or] existence of a contract or license governing such conduct .... " But this would provide 

little comfort to libraries in disputes relating to streaming because of the second clause of 

the sentence: "where such person has a reasonable basis in law to believe that such 

conduct is noninfringing." So long as the prosecutor believes that the library's 

interpretation of the license is not reasonable, the existence of the license will not protect 

the library from the claim that it acted willfully. 

Accordingly, the rule of construction in section 20 I (c) should be amended to 

eliminate any possible negative implication that broadens the scope of willfulness. 

Additionally, section 201(a) and (b) should be amended so that they do not apply to 

streaming and other public performances for non-commercial purposes. 

We would be happy to answer any questions you may have. We look forward to working 

with you and your statT as the legislation moves forward 

Respectfully, 

Brandon Butler 

ARL Director of Public Policy Initiati ves, on behalf of LCA 

2 C'amhridge University Press v. Patton (three publishers sued Georgia State University 

concerning its electronic reserve system); Association jor information Media and Hqipmenl v. 

Regents of the University o(Cali(omia (film distributor sued UCLA concerning its streaming of 

films to students): and Authors Guild v. HathiTrust (authors associations sued a consortium of 

libraries concerning the assembly and use of a digital repositorv of books). 
156 

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Congress Should Amend SOPA to Address Cybersecurity, Due Process Concerns 

Source URL.: http.llcel.orglnevvs-release:>/congress-should-amend-sopa-address-cybersecunty-due-process-concerns 

Links 

[1]hltp/lceiorglslafflnicole-clandella 

[2] htlp/lJudlclary housegovlhearingslhear_11162011 hlml 

[3]http://cel.org/expertiryan-radia 

http://cei.org/print/127363 

Page 2 of2 

2/112013 
158 

November 15, 2011 

The Honorable Lamar Smith 

Chairman 

CommittcC' on the JlldicialV 

2138 Rayburn House Offi~e Building 

Washington, DC 20515 

The Honorable John Conyers, Jr. 

Ranking Memher 

Committce' on the JlldicialV 

21:lR Rayhurn House Orfi~e Building 

Washington, DC 20515 

Re: H.R. 3261, the Stop Online Piracy Act 

Dear Chairman Smilh and Ranking Memher Conyers, 

The undersigned advocates and organizations write to express our deep concern with H.R. 3261, the "Stop Online 

Piracy Act" (SOPA). While we Sllpp0l1 appropriate copyright enforcement and want to ensure that creators around 

the world have the opportunity to be compensated for their works, SOP A as constructed would come at too high a 

cosl LO Tnlernel communicalion and noninfringing online eXf1ression. The hill v-mulcl sel an irreversihle precedem 

lhaL encourages lhe fracluring of Lhe Tnlernel, undermines freedom of expression worldwide, and has numerous mher 

uninlencled and harmful consequences. 

We do not dispute that there arc hubs of onlinc infringement. But the definitions of the sites that would be subject to 

SOPA's remedies are so hroad that they would encompass far more than those had actors profiting from 

infringemenL By including all siles LhaL may - even inadverlenlly - "facililale" infringemenl, lhe hill raises serious 

concerns ahoul overhreadlh. Under seclion 102 of Lhe hill, a nondomeSLic slarlu[1 video-sharing sile v.'ilh lhousands 

of innocenl users sharing their own noninfringing videos, hUl a small minorily who usc lhe sile LO criminally 

inflinge, could find its domain blocked by U.S. DNS operators. Countless non-infringing videos from the likes of 

aspiring artists, proud parents, citizen joumaiists, illld human rights activists would be unduly swept up by such an 

action. Furthermore, overreach resulring from bill is more likely to impact the operators of smaller websites and 

services that do not have the legal capacity to fight false claims of infringement. 

Relying on an even broader definition of "site dedicated to theft of US propeI1y," section 103 of SOPA crcates a 

private light of action of breathtaking scope. Any rightsholder could cut off the financial lifeblood of services such 

as search engines, user-generated content platfmIDs, social media, and cloud-based storage unless those services 

actively monitor and police user activity to the rightsholder's satisfacrion. A mere accusation by any rightsholder 

would be sufficient to require payment systems and ad networks to tenninate doing business with the service; the 

accused service's only recourse would be to send a counter-notice, at which point it would be at the nen.vorks' 

discreLion v.'helher lo reinslale lhe service's access lo [1aymems and adverlising. This would hy[1ass and effeclively 

ovel1ulTI the basic framework of the Digital Millennium Copyright Act (DMCA), by pushing user-dliven sites like 

Tv...itter, YouTube, and Facebook to implement evcr-more elaborate monitoring systems to "confirm," to the 

satisfaction of the most aggressive and litigious rightsholder, whether individual users are exchanging infringing 

content. TIlese and other sites have flourished under the DMCA safe harbor, which provides certainty concerning 

the legal res[1onsihilities of online service [1roviders and eX[1ressly rejects a de facto legal ohligation to actively track 

and [1olice userhehavior. C::realing such an ohligalion v·muld he hugely damaging lO TmerneL innovalion, [1anicularly 

for smaller, emerging siles and individuals. TL would also carry major consequences for users' legilimaLe [1rivacy 

inleresLs. 

We also have serious concerns about the inclusion the provisions in section 102 to require ISPs to filter Domain 

Name Syslem (DNS) requesls or mherwise lry lo "[1revenL access" lo largeled wehsiles. 1 DNS-fillering is lrivial lo 

1 TIlese concerns also apply to the DNS Fiiteling provisions included S. 968, the Preventing Real Online Theats to 

Economic Creativity 'Uld Theft ofIntellectual Property Act of201l. also lmownas the PROTECT IP Act, which 
159 

circumvent and will be ineffective at stopping inn"ingement. Where it does have an impact, that effect is likely to be 

overbroad, sweeping in legitimate online content. We have witnessed tlns already in the case of mooo.com, the 

seizure of which led to upwards of 84,000 innocent subdomains being blocked,' 

In addition, mandated filtering would undermine the U.S. government's commitment to advancing a single, global 

Internet. Its inclusion risks setting a precedent for other counnies, even democratic ones, to use the same 

mechanisms to enforce a range of domestic policies, effectively balkanizing the global medium of the Internet. 

Simply declaring that filtering aimed at copyright and trademark infringement is different from filtering with more 

sinister motives does not change the message this would send to the world - that the United States is legitimizing 

methods of online censorship to enforce its domestic laws. Non-democratic regimes could seize on the precedent to 

justify mcaSlU"es that would hinder online freedom of expression and association. 

DNS-filtering also raises very real cybersecurity concems.o It conflicts with Secure DNS (DNSSEC), and 

circumventing the filters ,vill risk making domestic netvmrks and users more vulnerable to cybersecurity attacks and 

identity theft as users migrate to offshore DNS providers not subject to filtering orders. Given the ease with which 

DNS fillers can he circumvemed, lhere is sLmng reason LO douhllhal iLS henefils are worlh lhese cosls. 

The undersigned organizalions recognize lhe imporlance of addressing Lruly illicil hehavior online. We share lhe 

overall goals of many of SOPA's supporters - preventing large-scale commercial infringement and ensuring that 

creativity and expression thrive. Intellectuill propel1y infringement breaks the law online or off, but SOP A is not the 

right ".,ray to stop it. Current enforcement mechanisms ".,rere designed to avoid the countervailing harms of 

conscripLing inlermediaries imo heing rminls of comml on lhe Jnlernel and deciding whal is and whal is nOl 

copyrighl-infringing expression. As drafled, SOPA radically allers digilal copyrighl policy in ways lhal will he 

delrimenlal lo online expression, innovalion, and securily. 

Sincerely, 

l\merican Library Associalion 

Association of Research Libraries 

Center for Democracy & Technology 

Competitive Enterprise Institute 

Demand Progress 

Eleclronic Fmnlier Foundalion 

Freedom House 

Human Rights First 

Human Rights Watch 

Internews 

New America Foundation's Open Technology Initiative 

Public Knowledge 

TechFreedom 

nllmy of these orgmrizations Illive also publicly opposed http://www.publicknowledge.orgjPublic-Interest-LetterPROTECT -IP-Act. 

2 See Thomas (:lahurn, ICE Confirms Inadverlenl Weh Sile Seizures, Information Week, Fehruary 1 S, 2011. 

http://,..-ww.informationweek.com/news/security/vuhlerabilities1229218959?cid~RSSfeed_IWK_All. 

3 See Steve Crocker, David Dagon, Dan Kaminsky, Danny McPherson, and Paul Vixie, Security and Other 

Technical Concerns Raised by the DNS Filtering Requirements in the PROTECT IF Bill, May 2011 

hllp:llwww.circleid.com/pdf/PROTECT-IP-Technical-Whilepaper-Final.pdf. 
160 

November 15,2011 

Chairman Lamar Smith 

Committee on the Judiciary 

2138 Rayburn House Office Building 

Washington, DC 20515 

The Honorable John Conyers, Jr 

Chairman 

Committee on the Judiciary 

2138 Rayburn House Office Building 

Washington, DC 20515The Honorable Lamar Smith 

Re: H.R. 3261, the Stop Online Piracy Act 

Dear Chairman Smith and Ranking Member Conyers, 

As press freedom and human rights advocates, we write to express our deep concern with 

H.R. 3261, the Stop Online Piracy Act (SOPA). While this is a domestic bill, there are several 

provisions within SOPA that would have serious implications for international civil and 

human rights which raise concerns about how the United States is approaching global internet 

governance. The United States has long been a strong advocate for the protection and promotion 

of an open Internet. However, by institutionalizing the use of internet censorship tools to enforce 

domestic law in the United States creates a paradox that undermines its moral authority to 

criticize repressive regimes. 1 We urge the United States to uphold its proclaimed responsibility 

as a leader in internet freedom and reject bills that will censor or fragment the web. 

Through SOPA, the United States is attempting to dominate a shared global resource. Building a 

nationwide firewall and creating barriers for international website and service operators makes a 

powerful statement that the United States is not interested in participating in a global information 

infrastructure. Instead, the United States would be creating the very barriers that restrict the free 

flow of information that it has vigorously challenged abroad. By imposing technical changes to 

the open internet while eroding due process, SOPA introduces a deeply concerning degree of 

legal uncertainty into the internet economy, particularly for businesses and users internationally. 

Business cannot be conducted online when international users and businesses do not have faith 

that their access to payments, domain names, and advertising will be available, raising challenges 

to economic development and innovation. This is as unacceptable to the international 

community as it would be if a foreign country were to impose similar measures on the 

United States. 

The provisions in SOPA on DNS filtering in particular will have severe consequences 

1htLp:/lblogs.1s~.at:.LLkJm~diapolicypTl~j~CL/2nll/ll/02/1re~do11l-abroad-repr~ssion-aL-hom~-Lh~-dillton-no"v-ca11leron-parado xl 
161 

worldwide. In China, DNS filtering contributes to the Great Firewall that prevents citizens 

from accessing websites or services that have been censored by the Chinese government2 By 

instituting this practice in the United States, SOP A sends an unequivocal message to other 

nations that it is acceptable to censor speech on the global Internet. Additionally, Internet 

engineers have argued in response to the Protect IP Act, DNS filtering would break the internet 

into separate regional networks 3 Worse still, the circumvention technology that can be used to 

access infornlation under repressive Internet regimes would be outlawed under SOPA, the very 

same technology whose development is funded by the State Department 

SOPA puts the interests of rightsholders ahead of the rights of society. SOPA would require 

that web services, in order to avoid complaints and lawsuits, take "deliberate actions" to prevent 

the possibility of infringement from taking place on their site, pressuring private companies 

to monitor the actions of innocent users. Not only will this effectively negate the safe harbor 

protection provided in the Digital Millennium Copyright Act (DMCA), but the proposed 

legislation would disproportionally affect small online communities who lack the capacity to 

represent their users in legal battles. Wrongly accused websites would suffer immediate losses as 

payment systems and ad networks would be required to comply with a demand to block or cease 

doing business with the site pending receipt of a legal counter-notice. Even then, it would still 

be at the discretion of these entities to reinstate service to the website regardless of the merits of 

an alleged rightsholder's claim, robbing online companies of a stable business environment and 

creating a climate where free speech is subject to the whims of private actors. 

Censoring the internet is the wrong approach to protecting any sectoral interest in business. By 

adopting SOPA, the United States would lose its position as a global leader in supporting a free 

and open Internet for public good. 

The international civil and human rights community urges Congress to reject the Stop Online 

Piracy Act 

Best regards, 

Access 

AGEIA DENSI (Argentina) 

ahumanrightorg 

Association for Progressive Communications (APC) 

Bits of Freedom (The Netherlands) 

Center for Media Justice 

Center for Rural Strategies 

Centre for Internet and Society (India) 

2 http://npennet.netlresearch/pmfiles/china 

3 Security and Other Tcclmical Conccms Raised by the DNS Filtering Requirements in the PROTECT IP Bill domainillcitc.com/ 

docslPROTECT -IP-T cchnical-\Vhitcpapcr -Final. ¢f 
162 

Church of Sweden 

Communication Is Your Right I 

Computer Professionals for Social Responsibility 

Consumers International 

Derechos Digitales (Chile) 

Digitale Gesellschaft e.v. (Germany) 

Digital Rights Ireland 

Electronic Frontier Finland (Effi) 

European Digital Rights (EDRi) (Association of 27 digital rights groups from around Europe) 

Center for Technology and Society (CTSIFGV) (Brazil) 

Forum Informatikerinnen fOr Frieden und gesellschaftliche Verantwortung e.V. (FItF) 

(Germany) 

Free Network Foundation 

Free Press 

Free Software Foundation 

Global Partners & Associates 

GreenNet (England) 

The Julia Group (Sweden) 

Instituto Nupef (Brazil) 

Index on Censorship 

Internet Democracy Proj ect (India) 

Karisma (Colombia) 

La Quadrature du Net (France) 

May First/People Link 

MobileActive.org 

Net Users' Rights Protection Association (NURPA) (Belgium) 

Open Rights Group (ORG) (UK) 

Open Spectrum Alliance 

Pal ante Technology Cooperative 

The Public Sphere Project 

Reporters Without Borders / Reporters sans Frontieres 

Virtual Activism 

wlan slovenija (Slovenia) 

(Ocom (European Union) 
163 

ACLU 

Wriuen SUlltmenl of Ihe AmHica n Civil liberties Union 

LftlOrH W. Murph)' 

UlteClor, WAs hington u-gisl~li. e Offirr 

Michael w. J\bd eo 1l 

Chi ef or S.aff/First A tlIf udmetl' Coullsd 

Submitted 10 lilt lI ou~e of Rfllresenl alj" e5 

COl1lllliUtr on Ibe Judici~I')' 

NOI't mbr r 15, 2011 
164 

Chairman Smith, Ranking Member Conyers, and Members of the Committee: 

We offer this statement for the record in connection with the hearing on H.R. 3261, the "Stop 

Online Piracy Act" (SOP A). The bill is a well intentioned effort to reduce the infringement of 

copyrighted material online. We share the sponsors' goal in that regard. As introduced, 

however, the bill is severely flawed and will result in the takedown oflarge amounts of noninfringing content from the internet in contravention of the First Amendment of the U. S. 

Constitution. Accordingly, we urge the Committee to set aside this bill in its entirety or, 

alternatively, to refonnulate tbe bill so it is narrowly focused on providing an effective and 

adequate remedy to those content producers whose copyright interests are infringed by the 

activities of others, without impacting non-infringing content. 

The American Civil Liberties Union (ACLU) is a non-partisan advocacy organization having 

more than a half million members, countless additional activists and supporters, and 53 atliliates 

nationwide. We are dedicated to the principles of individual rights, equality, and justice as set 

forth in the U. S. Constitution. For more than 90 years since its founding, the ACLU has been 

America's leading defender of First Amendment free speech principles. Most relevant to the 

current hearing, we led the way in landmark federal litigation establishing the principle that 

online speech deserves the very same protections as omine speech. 1 

By tbeir very nature, laws protecting copyrights constrain free speech and access to information. 

Unlike other speech restrictions, however, copyright laws may also advance the generation of 

information and ideas. A robust copyright system encourages free speech by giving speakers 

incentives to create and disseminate works of authorship. Such laws add to the marketplace of 

ideas by encouraging the creation of more content through the assurance that content producers 

will receive the fruits of their labor. But access to information of all kinds - even disfavored 

information - is a fundamental right that must be protected. Even more to the point, the mere 

existence of infringing content online does not justify the removal of non-infringing content in 

the course of attempting to rid tbe internet of the former. These established principles should not 

change or be treated differently just because technology has changed. 

Background 

Copyright protection in theory only impacts the speech rights of those who would steal the rights 

in works entitled to protection. But the implementation of such a system can have an etTect that 

goes far beyond the copyright pirate and restrict perfectly lawful non-infringing content. Such is 

our concern with SOPA and such was our concern with two preceding bills in the legislative 

process. The Senate Judiciary Committee considered S. 3804, the Combating Online 

Infringement and Counterfeits Act (COlCA) near the end of the III th Congress. Despite 

significant changes incorporated into the bill, the bill would have impacted online content that 

had no infringing qualities. Further, the bill was insutliciently narrowly tailored to minimize its 

impact on such protected content. In the current Congress, S. 968, the Preventing Real Online 

Threats to Economic Creativity and Theft ofTnteliectual Property Act of 2011 (PROTECT lP) 

1 Reno v. ACLU, 521 U.S. 2329, 2344 (1997). 
165 

received approval of the Senate Judiciary Committee but remains stalled short of the Senate 

floor PROTECT LP is a significant improvement over COrCA in that it uses a narrower 

definition for the term "dedicated to infringing activity". By narrowing the definition, the 

drafters thereby limited the number of online sites that would become subject to restrictive court 

orders. While the new definition did not eliminate impact on non-infringing content and while 

we were unable to support the bill for that reason, it clearly was an improvement over COrCA. 

SOPA, unfortunately, is substantially worse than PROTECT W. By eliminating the concept of 

sites 'dedicated to infringing activity', SOPA enables law enforcement to target all sites that 

contain some infringing content - no matter how trivial - and those who 'facilitate' infringing 

content. The potential for impact on non-infringing content is exponentially greater under SOPA 

than under other versions of this bill. As such, despite our support for the protection of the 

legitimate copyright interests of online content producers, we cannot support SOPA, and in fact 

we oppose it in its current form, given its broad sweep and its heavy hand that will land largely 

upon innocent content producers. We urge Committee members to focus not just on the goal of 

protecting copyright owners, but also protecting the speech rights of consumers and providers 

who are reading and producing wholly non-infringing content and to eliminate the collateral 

damage to such protected content. Only in that way will the Committee truly achieve its goal of 

protecting authors and allow the legislation to survive constitutional challenge. 

SOPA Will Restrict Non-Infringing Online Content 

o Attorney General Actions 

Under SOPA, the Attorney General would identify an internet site that is 'committing or 

facilitating the commission' of an online copyright infringement. 2 Once established, the 

Attorney General would have authority to serve the court order affirming the infringement upon 

any internet service provider (ISP), search engine, payment network provider, or internet 

advertising service. The TSP would be obliged to prevent access by its subscribers to the 

infringing site. The search engine would be compelled to prevent the infringing site from 'being 

served as a direct hypertext link' The payment network provider would have to suspend 

payment transactions involving the infringing site. The internet advertising service would be 

barred from providing ads for the infringing site' Such orders might be acceptable if they only 

affected infringing content. But a site with infringing content almost always has a wealth of noninfringing content as well. By contemplating an order that effectively bars others from gaining 

access to both infringing and non-infringing content, the proposed statute goes beyond 

appropriate First Amendment free speech protections. 

A speech restriction will fail unless it is designed to achieve a compelling public purpose and 

does so by being narrowly tailored to achieve its stated purpose." Courts have held a very strict 

line in determining if a statute's scheme is narrowly tailored - striking down laws banning 

'S. 3261, Section 102 (a) 

3 Id. at Section 102 (c). 

4 Sable Comm'ns of Calif. v. FCC 492 U.S. 115, 126 (1989). 
166 

animal crush videos, violent video games, and indecent online material. 5 A court may very well 

find that stopping online piracy is a legitimate public purpose, perhaps even a compelling one. 

But the scheme presented in SOPA is far from narrowly targeted at infringing content Just 

compare it to the other pending bill-PROTECT lP. That is only one example of how to protect 

online copyrights with a lesser impact on non-infringing content While we think even 

PROTECT W falls short of adequately protecting non-infringing content from removal, the bill 

nonetheless serves as Exhibit A in establishing that SOP A falls short of the constitutional 

requirement As long as SOPA's statutory scheme seeks to impact sites that are something other 

than pervasively and grossly infringing, we will continue to have very grave concerns for the 

statute's constitutionality. 

o Tnternet Advertising Services 

As a separate matter, the section barring internet advertising services from providing ads relating 

to the infringing site or from making ads for the infringing site is far too broad. While a payment 

interdiction order would avoid impact on the First Amendment protection offree speech, an 

order barring the creation or delivery of ads which may not have anything whatsoever to do with 

infringing content violates the speech right of the advertising service. The section relating to 

internet advertising services should be eliminated from the bill or, at the very least, limited in 

scope to a payment interdiction scheme for those services that are directly tied to infringing 

content 

o Market-Based Actions 

SOPA also contains another remedy for those who are the victims of online infringement - one 

that allows the victim to take action independently. Copyright infringements at their core are 

private commercial disputes. One person holding a copyright is damaged by another's infringing 

use of that protected content The remedy should in most cases be one that compensates the 

content producer with the profits gained by the infringer or the protits lost due to the 

infringement Accordingly, market-based actions make sense - and such a remedial scheme has 

the advantage of minimizing a direct government role in restricting speech. A real danger of 

overreach andlor conflict exists if the federal executive branch plays a major role in deciding 

what content stays up on the internet and what content comes down. 

But the market-based system proposed in SOPA is as flawed as the Attorney General system. 

The sites that a copyright holder can target include sites that often contain non-infringing content 

in addition to the allegedly infringing content6 The SOPA scheme is especially egregious 

because there is no obligation to seek court approval and the copyright holder has no incentive to 

narrow the scope of the proposed takedown to minimize impact on non-infringing material. A 

5 U.S. v. Stevens 130 S. Ct. 1577 (2010) (animal cruelty); Brown v. Entertainment Merchants Ass'n, 131 S. Ct. 2729 

(2011) (violent video games); Reno v. ACLU, 521 U.s. 2329, 2344 (1997) (Communications Decency Act). 

G S. 3261 at Section 103 (a). See a/50 Kathy Gill, Congress Bows to HolJywood~ IntroduCEs Bill to Fundamentally Alter 

Internet Infrastructure, The Moderate Voice (Oct. 27, 1022) (takedown of infringing material will also result in 

takedown of non-infringing material) available at .ilt;!Q:/lthemod..§L~~volce.cQIn.LL4668~bows-tohollywood introduccs-bill-to-fLJr~damentaJ.!Y-Bltcr intemE;'.!iDi!E..struc::Ylli. 
167 

copyright holder may provide a notice to a payment network provider or an internet advertising 

service, which must then take the same steps it would have to take under the court order 

described above. While there is no provision in the bill for issuing orders to search engines or 

ISPs, the authorization of an outright ban of advertising content is of questionable constitutional 

propriety and the absence of court oversight of such a process makes a flawed system even 

worse. 

Other issues 

o 'Facilitatim( the commission ofillfi'inRement. SOPA's threshold for action rests on 

the existence of a site that contains infringing material or 'facilitates' such 

infringement. Yet the statute fails to define the activities that would comprise 

'facilitation'. Could the mere unintentional provision of a link to an infringing site 

that contains predominantly non-infringing content be construed as 'facilitating' if the 

target site also has infringing content? Some who support this bill argue that is not 

the intention. At the very least, the bill should define 'facilitation' so as to 

incorporate an intent requirement and to ensure that facilitation benefitting a site that 

is not pervasively infringing does not warrant the harsh remedies set forth in the bill. 

o Adeq1lale Nolice and Gpporll/nilv /0 be Heard. Service of process provisions for 

actions under SOPA fail to assure that those having interests in the content to be 

removed from the Internet have an opportunity to receive notice and an opportunity to 

be heard before the seizure order is issued. SOPA only requires the government to 

send a notice of alleged violation and intent to proceed to a domain name's registrant 

or the owner or operator of the internet site, and only if the email and postal address 

are available. Such a standard is substantially less than required in most federal 

proceedings, where the standard calls for personal delivery upon the party or an 

officially designated agent 7 Service by publication is authorized in certain limited 

circumstances, but typically only as a last resort upon showing that a party cannot be 

served by other means'" While most people agree that online infringement continues 

to impact copyright holders and content producers, no justification exists to sidestep 

tried and true procedural protections available to all others who are called to account 

before the federal courts. Especially because of the implications for non-infringing 

First Amendment protected materials, the Committee must not pennit such weakened 

notice provisions to control. Instead, the Committee should require true advance 

notice of proceedings before issuance and enforcement of a seizure order. This is 

especially true since in many case there is a possible financial remedy available 

through the payment interdiction remedy. 

o Altert/a/ire enforcement and remedies. A pursuit of the proceeds of infringement 

poses fewer constitutional risks than the proposed seizure regimen and we urge you to 

focus and perhaps expand upon that alternative approach. Even if the Committee 

decides to retain the seizure format, it should encourage alternative enforcement 

mechanisms. When the non-infringing content that would be taken down is 

7 Fed. R. Civ. Proc. 4. 

8 See, e.g., id. at 71A. 
168 

substantial in volume, or when there is a real question whether the content provider 

has received actual notice, deferral to such an alternative remedy seems especially 

appropriate. First Amendment risks are especially acute when a government actor is 

in the position of deciding whether to prosecute such cases. When the courts are in 

the position of properly frami ng the seizure order that effectively removes content 

from the internet, the court must minimize or eliminate the impact on non-infringing 

content. SOPA does not contemplate the issuance of such narrowing court orders, 

however. Instead, such orders - when the court is involved - merely provide the 

moving party the authority to demand that third parties cooperate in the process of 

removing online content. Such a system can only be saved by setting aside the 

emphasis on taking down content and substituting a system that emphasizes 

interdicting the tlow of money to infringing sites. 

Setting an Example for the World 

We are concerned with the example that an overly broad online inffingement takedown scheme 

would set for other countries with fewer free speech protections. Even established democracies 

- Great Britain, France, Germany - have lesser speech protections than the United States. And 

as events of the ongoing' Arab Spring' demonstrate, other more totalitarian nations have abused 

and will continue to abuse their technological capacity to take down content they find 

objectionable or threatening. Secretary of State Clinton has voiced strong support for 

international open internet principles and standards, even while affirming that there is no 

inconsistency between free speech principles and strong online copyright protections.' Such 

considerations make it all that much more important to ensure that any internet content 

restriction be confined strictly and solely to infringing content so that America can continue to 

advocate vigorously for truly open mternet standards on the international stage. 

9 Indira A. R. Lakslnnanan, Clinlon io S'lipporl Pacehoo/t Preedom, Fight Censorship, Bloomberg BusinessWeek 

16, 2011) available at l1UJ~j/}DY!-~::t)1]~1g~s§yr~gJi.QQn1f~n9w?i2Q J i -:Q2_-JQ!~J!pJ9JttQ=S1WINIt-J~Gd~9Q15=fr(;~dQm= 

see also Letter from Sccrctar~y Clinton to Rep Howard L Berman (Oct 25,2011) 
169 

A strong system of copyright protection for online content is critical to the continued success of 

the flourishing intemet marketplace of ideas. But Congress must not provide that protection at 

the expense of taking down non-infringing content. We urge the Committee to reject SOPA in 

its present fonn and to set an example for the world by protecting ALL online content even as it 

attempts to provide remedies to those who are the victims of online piracy. 

Sincerely, 

Laura W. Murphy 

Director, Washington Legislati ve Office 

Michael W. Macleod-Ball 

Chief of StafflFirst Amendment Counsel 
170 

BROOKINGS 

Paper I November 15, 2011 

Cybersecurity in the Balance: Weighing the Risks ofthe 

PROTECT IP Act and the Stop Online Piracy Act 

By: Allan A Friedman 

Executive Summary 

Cybersecurity has dominated headlines and the attention of American policymakers. The 

challenge is not in recognizing the problem, but in understanding how to balance cybersecurity 

efforts with other policy priorities and scarce resources. Two new bills designed to combat 

foreign websites that infringe on American intellectual property present one of the first such 

decisions to Congress: how can we balance the defense of cyberspace and defense against 

online piracy when the two conflict? 

The Senate bill 5.968, or the PROTECT IP Act, and the House bill H.R. 3261, the Stop Online Piracy 

Act, have raised a great deal of controversy. This paper does not deal with the questions of 

economic value, free expression or other issues raised by advocates on both sides. Instead, I 

highlight the very real threats to cybersecurity in a small section of both bills in their attempts to 

execute policy through the Internet architecture. While these bills will not "break the Internet," 

they further burden cyberspace with three new risks. First, the added complexity makes the goals 

of stability and security more difficult. Second, the expected reaction of Internet users will lead to 

demonstrably less secure behavior, exposing many American Internet users, their computers and 

even their employers to known risks. Finally, and most importantl}! these bills will set back other 

efforts to secure cyberspace, both domestically and internationally. As such, policymakers are 

encouraged to analyze the net benefits of these bills in light of the increased cybersecurity risks. 

Risks of Tampering with the Network 

The Domain Name System (DNS) is a critical part of the Internet infrastructure, not just for the user seeking 

to access web pages, but for almost any operation, research question or network maintenance tool used to 

cross between organizational and network boundaries. Some interference with the DNS is not unheard of, 

but it should be done only after careful consideration, and with the full participation of Internet stakeholders. 

The bills call for operators of DNS resolvers to "prevent the domain name described in the order from 

resolving." This is, in effect, lying. As we shall see below, this may sometimes be acceptable, but again must 

be done with care so as not to interfere with other aspects of network operation. 

The broader Internet community has had the chance to judge the appropriateness of other attempts to return 

misleading results. Some network operators take advantage of imperfectly typed URLs to direct users to a 
171 

landing page, rather than return the expected error message Non-Existent Domain (NXDOMAIN). A browser 

receiving the result NXDOMAIN might return an error "server not found." With a DNS redirect, however, the 

user is taken to a search page that may assist her, but may also display advertisements. One vendor who 

enables this capacity claims that a service provider can earn $1-3 per subscriber with this service.[i] While 

DNS redirect for this purpose is not uncommon, many Internet experts do not view it favorably. Internet 

Corporation for Assigned Names and Numbers' (ICANN) Security and Stability Advisory Committee (SSAC) 

cautioned that interfering in DNS responses "can create unpredictable responses,"[ii] and another ICANN 

advisory group concluded that the practice "create[s] a reasonable risk of a meaningful adverse effect on 

security and stability."[iii] The SSAC has recommended that new top level domains be prohibited from using 

redirection.[iv] Clearly, this practice is viewed with apprehension by the body governing the domain name 

system. 

Part of the threat of redirects is the potential for malicious misuse. The DNS system is based on trust 

between resolution servers. If an intermediary between the client and the authoritative server is 

untrustworthy, they can inject an incorrect record, diverting the client to a server other than the intended 

Internet resource. To make this system more trustworthy, the Internet Engineering Task Force (IETF) 

developed the Domain Name System Security Extensions (DNSSEC), which uses a set of chained 

cryptographic signatures to establish trust between the authoritative name server (such as the .com servers) 

and the recursive resolving servers used to translate from a desired URL to the IP address. This protocol 

allows correct responses to be provably valid, and incorrect responses to be identified as false. DNSSEC is 

seen as a needed security improvement for the Internet by both technical experts and the U.S. government. 

U.S. officials have viewed DNSSEC as important for its own systems, as well as the commercial Internet, 

since at least 2003. Deployment is proceeding slowly, but with the coordination and support of public and 

private efforts. 

Because DNSSEC is designed to prevent malicious redirection of DNS traffic by verifying that DNS 

responses have not been tampered with, other forms of redirection will break the assurances from this 

security tool. Engineers from Comcast, in a circulated IETF working paper, clearly state, "It is critically 

important that service providers understand that adoption of DNSSEC is technically incompatible with DNS 

redirect."[v]If the client is configured to recognize DNSSEC responses, any intercept will trigger the 

responses of an attempted man-in-the-middle attack. For the purposes of the bills in this paper, this 

response may be thought to have little policy impact since the goal is to prevent access in the first place. 

There are two adverse consequences, however. The first is that, without a reliable and standardized warning 

mechanism, the user may be unable to distinguish between malicious and illegal resources. The second is 

that one acceptable response to a DNSSEC failure is to query other recursive resolvers to confirm that the 

resource is not valid and available. This could violate the goals of the bills since these servers may be 

outside the jurisdiction of the United States. 

It is important to acknoVlAedge that DNS redirection may not always be bad for cybersecurity. Indeed, some 

domains are known to be security risks, hosting malware or serving as a critical link in the communication 

and coordination of botnets. As researchers identify which domains pose risks, DNS administrators may 

want to block them. A new tool called Response Policy Zones (RPZ) allows administrators to select lists of 

domains with bad reputations (assembled by anyone they might trust) and block their users.[vi] RPZ, 
172 

designed to counter malicious behavior online, essentially creates the functionality called for in the bills to 

block domains specified by a trusted third party, with the potential to redirect the browser to an arbitrary 

notice page. However, there are key differences between RPZ and the bills' proposals. 

First, RPZ engineers acknowiedge that, as it exists, there is no easy way to make RPZ work well with 

DNSSEC. This will ultimately require some modification to DNSSEC to incorporate the error messages 

following an intercepted query. But because DNSSEC will take some time to fully deploy at the user level, 

there will be time to explore the most efficient means to implement this change. And because these protocols 

are implemented in voluntarily by network administrators trying to maximize the security of their networks, an 

appropriate balance can be found by each administrator. 

Second, the legal mandate for the bills' block-list increases the complexity of the DNS network administration. 

PROTECT IP applies to every "operator of a non-authoritative domain name system server," including local 

ISPs and even small businesses that run their own networks. Each network must have the capacity to easily 

alter what can be accessed on their network, regardless of the preferences of the network administrator and 

her resources and capacities. Security expert Susan Landau observes that adding pOints of insertion or 

observation can dramatically alter the security of a system.[vii] Perhaps the largest difference, of course, is 

that RPZ is vOluntary-and ideally in the interest of the user. In a competitive market, users who find one 

service provider's implementation too broad or narrow can go to another. If the users do not believe that a 

black list is in their interest, they will find ways around it, as explored below. 

Tinkering with DNS by mandating false responses may not break the Internet, but it certainly bends it, and 

introduces new complexities. The security community understands that these risks must be carefully studied 

before there is widespread deviation from the accepted standards. 

Unintended Consequences Introduce New Risks 

By preventing American users from accessing foreign websites, the bills' clear aim, insofar as they deter 

Americans from supporting behavior that infringes on intellectual property, is to stop piracy. Past efforts to 

halt piracy do sometimes have limited success, but they also succeed in changing the behavior of millions of 

Americans to find other means of accessing this content. Any analysis of these bills must therefore explore 

the consequences of these new behaviors. The DNS blocking of foreign websites is not only trivial to defeat, 

but many work-arounds will definitely have dangerous unintended consequences. 

The bills seek to block access to foreign infringing websites by preventing American domain name servers 

from translating the infringing domain name into its Internet address. This is trivial to defeat on many levels, 

as has already been chronicled widely.[viii] One of the easiest and most direct methods is simply to use a 

DNS server that is located outside of the bills' jurisdiction in another country. This requires minimal computer 

expertise.[ix] 

Before exploring the harms of using a non-trusted DNS server, is there any reason to expect users to 

change their behavior en masse? The data says yes. Those seeking infringing content have always 

respcnded to legal and technical countermeasures by shifting their habits. From Napster to Kazaa to 

LimeWire to BitTorrent to illegal streaming websites, users adapt by the millions. When the RIM succeeded 

in shutting down the peer-to-peer client LimeWire in 2010, use of a similar client FrostWire more than 
173 

doubled within 3 months.[x] When Sweden passed a law requiring service providers to turn over identity 

information on infringers, demand for both paid and unpaid anonymity services skyrocketed "beyond all 

expectations."[xi]It would be incredibly na'fve to expect anything other than attempts to evade DNS blocking, 

and using DNS servers outside the U.S. is the easiest path. 

This introduces huge risks to American Internet users. These DNS servers can sit as the "man-inthe-middle" on all Internet transactions, allowing the possible compromise of almost any Internet transaction. 

The attacker can pass along the legitimate website during the attack, preventing the user from realizing that 

an attack is ongoing. Even the use of encryption (such as SSL or https) will not help. The attacker can not 

only compromise web traffic, but email as well. There already exists malware that forces victims to use 

remote, rogue DNS servers to maliciously redirect traffic to key financial websites.[xii] The operators behind 

these attacks will undoubtedly seek to gain further traffic to these servers. 

The risks of malware, financial fraud and espionage will not fall exclusively on the users guilty of infringement. 

Rather, they will be shared by anyone who shares a network with these users. It is easy to imagine a 

teenager altering the family PC to access a foreign infringing domain, but leaving the computer compromised 

for the family's other uses, including banking, accessing government websites and even work. 

Even if the foreign DNS servers are benign and supervised by an open source community, there is still a 

destabilizing effect. Content Deliver Networks (CDNs), such as Akamai, that make it easier and cheaper to 

send large files over the Internet by replicating it many times across the Internet. Some CDNs use the DNS 

request to determine the closest and most efficient content server.[xiii] Foreign domain requests will confuse 

this system, leading to greater inefficiencies and instability. Interestingly enough, this can lead to slower 

content deliver from paying, legitimate sites, further increasing the incentives for infringement. ISPs also use 

local DNS information to better manage their networks; the less complete this data is, the less informed 

decisions will be. 

Cybersecurity Policy 

Many cybersecurity issues require international coordination. The GAO has identified 19 international 

organizations relevant to Internet governance, each with a different set of stakeholders and counterparties. [xiv] In each forum, the United States must be seen as a good faith actor, seeking to promote global 

security in cyberspace without advancing alternate agendas. The policies must not be perceived as 

conflicting with other values, such as openness and limited governance. While many would agree that any 

measure is acceptable to prevent intellectual property infringement, some might see this as a signal of what 

values the U.S. will emphasize-and what it will implicitly devalue. As the Council on Foreign Relations' Rob 

Knake notes, " If the United States fails to provide the leadership necessary to address the security 

problems, other states will step in." 

It is important to remember that the United States occupies a unique position in Internet governance. The 

Internet was invented here, and many of its key institutions remain affiliated with the federal government. U.S. 

companies support much of the Internet architecture. This dominant position has not gone unnoticed from 

those who would prefer a more globally representative governing structure. This would necessarily involve 

reducing U.S. influence in key security-relevant bodies. 
174 

American representatives across the government have worked hard to focus the international dialogue on 

"cybersecurity," without permitting discussion to be reframed as "information security," which can include 

policing of content instead of just actions. This position is undermined by domestic bills that focus on content 

at the expense of cybersecurity. It will be hard to argue with other nations that discussions should focus on 

preventing malicious behavior, rather than stamping out illegal content-a category into which many other 

nations put political speech. Indeed, other observers have pOinted out the challenges in reconciling these 

anti-infringement bills with America's stated agenda of Internet Freedom, particularly SOP.A:s 

anti-circumvention prescriptions. 

Lastly on the international front, it is important to remember the difficulties in perfectly mapping the Internet to 

national boundaries. It is highly likely that DNS blocking will spill over into other countries. In 201 0, China's 

internal attempts to block certain websites via DNS spilled over to the broader Internet.[xv] The U.S.-China 

Economic and Security Review Commission's Annual Report to Congress noted, "The implications of 

China's effort to impose 'localized' restrictions to something as inherently global in scope as the 

Internet."[xvi] Since the United States' networks are so centrally positioned in the global information 

infrastructure, there is a good chance that foreign DNS queries will pass through U.S. resolvers. Other 

countries may object to our unilateral enforcement without adequate international normalization or even 

discussion. 

Domestically, the bills pose three principle risks, based on expectations and trust. First, by mandating an 

unpopular enforcement mechanism to the ISP, users may grow to trust their ISPs less, even as service 

providers play an increasingly large role in American cybersecurity policy. If the user is treated as an enemy, 

it makes winning consumer acceptance for other efforts all the more difficult. A recent proposal from the 

National Institute of Standards and Technology would have ISPs detect botnets on customers' machines and 

work with them for remediation. This requires user trust and a belief that user security is a higher priority for 

the service provider than other business interests. The ISPs also depend on user trust to make the entire 

network better off. By studying pooled DNS lookups across a large set of users, security researchers can 

learn a great deal about attacks based on data referred to as Passive DNS. This data will be incomplete if 

users evade the DNS blocks en masse, as discussed above. 

Expectations also drive investment, and new investment can happen under the jurisdiction of these bills, or 

outside the country. Without engaging in the larger debate of how this bill will impact long-term economic 

growth, there is a security issue in jurisdiction. If the provisions in the bills that allow rights holders to go after 

domestic assets drive these assets offshore, they can make the fight against other illegal digital activities 

harder to pursue. As new Top Level Domains are issued by ICANN, their supporters may push for offshore 

control. Similarly, if attacks against website monetization tools, including ad networks and payment networks 

become too aggressive, offshore alternatives will emerge. American law enforcement and intelligence will 

have less leverage over these. If one acknowiedges that there are cybercrime issues other than intellectual 

property infringement, such as child pornography or financial fraud, then a long-term enforcement tradeoff 

will be made. Making it more efficient to drive potential wrongdoing away from America's jurisdiction may 

ultimately hinder law enforcement. 

Finally, and perhaps most importantly, the bills set a certain expectation with respect to the relative 

importance of cybersecurity versus industry profitability. There is always a tradeoff between economic 
175 

efficiency and security. As technology evolves. each sector of the economy discovers new risks. just as they 

discover new benefits. These bills offer an explicit tradeoff: protecting the economic value of intellectual 

property from a narrow type of infringement against a larger and more diffuse set of security priorities. 

Cybersecurity policymakers will only encounter this tradeoff more frequently. The costs of the status quo 

must be measured against the security risks of mandating a change in the Internet architecture. 

Unfortunately. it is always easier to estimate actual business models than uncertain security risks. This is 

why market solutions for cybersecurity are particularly challenging.[xvii]If securing the power grid harms the 

business model of energy companies. will Congress still act to ensure our critical infrastructure is less 

vulnerable to attack? 

Will Cybersecurity Be a Priority? 

Threats from cyberspace present serious challenges. yet no one suggests that we turn off the Internet to 

protect ourselves. Similarly, while digital entertainment is a key part of the economy, few argue that we lock 

down all networks and devices for perfect enforcement of intellectual property. The question is where the 

balance will be struck. 

The risks from the proposed policies are diffuse, and the harms of a perturbed ecosystem, exposed 

Americans and a more difficult cybersecurity agenda lie in the future. Yet they are rea~nd will have 

concrete, negative impacts on our nation's ability to defend itself, endangering everyone from the average 

user to shapers of international policy. This will be the first legislation that pits our cybersecurity priorities 

against entrenched economic interests, highlighting a very real social choice. Congress' actions on 

PROTECT IP and SOPA will offer some insight into whether policymakers are genuinely prepared to take 

cybersecurity seriously. 

[i] Xerocole Solutions. http://www.xerocole.com/solutions/ 

[ii] "SAC 032 Preliminary Report on DNS Response Modification," ICANN Security and Stability Advisory 

Committee. June 2008; www.icann.org/en/committees/security/sac032.pdf. 

[iii]ICANN Registry Services Technical Evaluation Panel Report on Internet Security and Stability 

Implications of the Tralliance Corporation search. travel Wildcard Proposal (2006) 

[iv] "SAC041: Recommendation to Prohibit Use of Redirection and Synthesized Responses by New TLDs," 

ICANN Security and Stability Advisory Committee (2009) www.icann.orgien/committees/security/sac041.pdf. 

[v] Creighton, T., Griffiths, C., Livingwood, J., and Weber, R. "DNS Redirect Use by Service Providers. 

Internet Draft draft-livingood-dns-redirect-03." (201 0) http://tools.ietf.org/html/draft-livingood-dns-redirect-03 

[vi]ISC. BIND 9 Administrators Reference Manual, 2011. See 6.2.16.19 and 6.2.16.20 

[vii] Landau, Susan. Surveillance or Security? The Risks Posed by New Wiretapping Technologies. MIT 

Press, 2011 
176 

[viii] See, e.g., Wilson, Drew. "8 Technical Methods That Make the PROTECT IP Act Useless." 

WNW.zeropaid.comlnews/95013/8-technical-methods-that-make-the-protect-ip-act-uselessl 

[ix] See, e.g., hUp:llwindows.microsoft.com/en-USlwindows7/Change-TCP-IP-seUings. 

[x] Sandoval, Greg. "Study: LimeWire demise slows music piracy" hUp:llWNW.news.cnet.com 

18301-31001_3-20046136-261.html 

[xi] Simpson, Peter Vinthagen. New law increases demand for anonymous web surfing 

WNW. thelocal.se/18658/200904031# 

[xii] David Dagon, Chris Lee, Wenke Lee, Niels Provos "Corrupted DNS Resolution Paths: The Rise of a 

Malicious Resolution Authority", , Proc. 15th Network and Distributed System Security Symposium (NDSS), 

2008. 

[xiii] Vixie, Paul. What DNS is Not. ACM Queue, 2009. http://queue.acm.org/detail.cfm?id=1647302. 

[xiv] Cyberspace: United States Faces Challenges in Addressing Global Cybersecurity and Governance. 

GAO-10-606 July 2,2010 

[xv] Zmijewski, Earl. "DNS: When Governments Lie." http://WNW.renesys.comlblog/2010/11/dnswhen-governments-lie-1 . shtml 

[xvi] USCC. 2010 Annual Report to Congress. http://WNW.USCc.gov/annuaLreport 

1201 0/Chapter5_ Section_2(page236). pdf 

[xvii] Friedman, Allan. Economic and Policy Frameworks for Cybersecurity Risks. (2011) 

WNW. brookings. edu/pa pers/20 11/0721_ cybersecuritLfriedman. aspx 

Author 

Allan A. Friedman 

Fellow, Governance Studies 

Research Director, Center for Technology Innovation 

@allanfriedman 
177 

Security and Other Technical Concerns Raised by the 

DNS Filtering Reqnirements in the PROTECT IP Bill 

Authors: 

EXECUTIVE SUMMARY ... 

May 2011 

Steve Crocker, Shinkuro, Inc. 

David Dagon, Georgia Tech 

Dan Kaminsky, DKH 

Danny McPherson, Verisign, Inc. 

Paul Vixie, Internet Systems Consortium 

Affiliations provided for identification only 

Bricfbiographies of authors available bel",; .. 

TABLE OF CONTENTS 

......... 2 

I. Introduction ............................................................................................................................. 3 

II. DNS Background .................................................................................................................... 3 

lIl. Tcchnical Challcngcs Raiscd By Mandatory DNS Filtering .................................................. 5 

A. DNS Filtering in Tcnsion with DNSSEC ........................................................................... 5 

B. The Proposed DNS Filters Would Be Circumvented Easily..... .. 7 

C. Circumvention Poses Pelformance and Security Risks 

I. Users Will Face Increased Cybersecmity Risk ....... 

2. ISPs Will Lose Visibility into Network Security Threats .. 

3. CDNs Would Likely Face Degraded Performance. 

D. DNS Interdependencies Will Lead to Collateral Damage 

I V. Conclusion 

APPENDIX A .. . 

APPENDIX B .. . 

10 

10 

12 

12 

13 

14 

15 

16 

ABOUT THE AUTHORS ............................................................................................................ 17 
178 

EXECUTIVE SUMMARY 

This paper describes technical problems raised by the DNS filtering requirements in S. 968, the 

Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 

2011 ("PROTECT IP Act"). lts authors come from the technical, operational, academic, and 

research communities. We are leading domain name syslem (DNS) designers, operators, and 

researchers, who have created numerous "RFCs" (technical design documents) for DNS, 

published many peer-reviewed academic studies relating to architecture and security of the DNS, 

and operate important DNS infrastructure on the Internet. 

The author" of this paper take no issue with strong enforcement of intellectual property rights 

generally. The DNS filtering requirements in the PROTECT IP Act, however, raise serious 

technical concems, inc! uding: 

Thc U.S. Government and private industry have identificd Internet security and stability as a 

key part of a wider cyber security strategy, and if implemented, the DNS related provisions 

of PROTECT IP would weaken this important commitment. 

DNS filters would be evaded easily, and would likely prove ineffective at reducing online 

inflingement. Further, widespread circumvention would threaten the security and stability of 

the global DNS. 

The DNS provisions would undemline the universality of domain names, which has been one 

of the key enablers of thc innovation, economic growth, and improvements in 

communications and information access unleashed by the global Internet. 

Migration away from ISP-provided DNS servers would hann efforts that rely on DNS data to 

detect and mitigate security threats and improve network performance. 

Dependencies within the DNS would pose significant risk of collateral damage, with filtering 

of one domain potentially affecting users' ability to reach non-infringing Internet content. 

The site redirection envisioned in Section3(d)(II)(A)(ii) is inconsistent with security 

exten"ions to the DNS that are known as DNSSEC. The U.S. Government and private 

industry have identified DNSSEC as a key part of a wider eyber security strategy, and many 

private, military, and governmental networks have invested in DNSSEC technologies. 

If implemented, this section of the PROTECT IP Act would weaken this important dfOIt to 

improve Internet security. It would enshrinc and institutionaliLe the vcry network 

manipUlation that DNSSEC must fight in order to prevent cyberattacks and other malevolent 

behavior on the global Internet, thereby exposing networks and users to increased security 

and pri vacy risks. 

We believe the goals of PROTECT IP arc impol1ant, and can be accomplished without reducing 

DNS security and stability through strategies such as the non-DNS remedies contained in 

PROTECT IP and international cooperation. 

2 
179 

I. Introduction 

The recently introduced PROTECT IP Act of 2011,' the successor to last year's COICA 

legislation,' includes a range of proposed new enforcement mechanisms to combat the online 

infringement of intellectual property. Of keen interest to the community of engineers working on 

issues related to the domain-name system (DNS) is the DNS filtering provision that would 

require ISPs and other operators of "non-authoritative DNS servers" to take steps to filler and 

redirect requests for domains found by courts to point to sites that are dedicated to infringement. 

This paper seeks to cxplain a set of technical conccrns with mandatcd DNS filtering and to urge 

lawmakcrs to rcconsidcr cnacting such a mandatc into law. 

Combating online infringement of intellectual propelty is without question an important 

objective. The authors of this paper take no issue with the lawful removal of infringing content 

from Internet hosts with due process. But while we support the goals of the bill, we believe that 

the use of mandated DNS filteling to combat online infringement raises seriom technical and 

securi ty concerns. 

Mandated DNS filtering would be minimally effective and would present technical challenges 

that could frustrate important security initiatives. Additionally, it would promote development of 

techniques and software that circumvent use of the DNS. These actions would threaten the 

DNS's ability to provide universal naming, a primary source of the Internet's value as a single, 

unified, global communications network. 

II. DNS Background 

The domain-mmle system, or DNS, is a system that makes the Intemet more accessible to 

humans. When computers on the Intemet communicate with each other, they use a series of 

numbers called "IP addresses" (such as 156.33.195.33) to direct their messages to the correct 

recipient. These numbers, howev'Cl', are hard to remember, so the DNS system allows humans to 

use easier-to-remember words (such as "senate.gov") to access websites or send e-mail. Such 

names reso!l'e to the proper IP numbers through the use of domain name selvers. These servers 

are set up in a distributed fashion, often globally, such that resolution of names connected to IP 

addresses may pass through many servers during Internet data !low3 To make the DNS faster 

and less eApensive to operate, over ten million so-called "recursive servers" exist as accelerators 

of convenience, to store and retransmit DNS data to nearby users. The PROTECT IP Act 

proposes legal remedies for infringement that would affect the operators of these "recursive 

I Preyenting Real Online TllTcats to Economic Crcali\"ity and Theft of Intellectual Property Ad of 2011, S. 968, 

1 12th Congress 

::: Combatting Online Illhingcmcnts and Counterfeits Ar.::l, S. 3480, 111111 Congress 

.:l See P,1\Iockapetris, RTC 1034, "DOlTh11n Names - Concepts and [iacilities:' Internet Ungineering Task r:orce, 

November 1987, http:i,'\-v\\,\\,.ictLorgirfcirfcl03 ...... txt. 

3 
180 

servers," which are the type of DNS servers used by the computers of end users to resolve DNS 

names in order to access content on the Intemet." 

The DNS is central to the operation, usability, and scalability of the Internet; almost every other 

protocol relies on DNS resolution to operate correctly. It is among a handful of protocols that 

that arc the core upon which the Internet is built. Readers interested in finding out more about the 

DNS are directed to Paul Vi"ie's article, "DNS Complexity.'" See also Appendix A for a 

pictorial view of the DNS and DNS filtering. 

The DNS is a crucial element of Internet communication in part because it aUm's for "universal 

naming" of Intemet resources. Domain names have in almost all cases been universal, such that a 

given domain name means the same thing, and is uniformly accessible, no maller from which 

network or country it is looked up or from which type of device it is accessed. 

This universality is assumed by many Internet applications. The domain name given to an 

Intemct device or service is frequently stored and reused, or forwarded to other Internet devices 

that may not be customers of the same service provider or residents in the same country. For 

example, web URLs are frequently sent inside electronic mail messages where they are expected 

to mean the same thing (i.e., to reach the same content) to the recipient of the e-mail that they 

meant to the sender. Universality of domain names has been one of the key enablers of the 

innovation, economic growth, and improvements in communications and information access 

unleashed by the global Internet. The importance of universal naming is underscored in tlle U.S. 

International Smltegy for Cyberspace: "The United States supports an Internet with end-to-end 

interoperability, which allows people worldwide to connect to knowledge, ideas, and one another 

through technology that meets their needs."o 

Mandated DNS filtering by nameservers threatens universal naming by requiring that some 

namescrvers return different results than others for certain domains. While this type of mandated 

DNS manipulation is reportedly used in some Middle Eastern countries and in the so-called 

Great Firewall of China, the mandated DNS filtering proposed by PROTECT IP would be 

unprecedented in the United States and poses some serious concems as described below. 

4 The other type of D::-.J"S "ener i~ telmed "authmitative." The"e sY'ltems are the DNS servers that are usually under 

control of the content provider, and that provide the "authoritative" ans"ver as to "",here on the Internet a given 

'wehsite or service is located. E~selltia11y, "recursive" servers are the D\JS servers that help ll~ers locate where things 

are on the Internet, ami "authoritative" ..,erver~ are the D~S sen en, are the sources of the an'l\\'ers to those querie~. 

Because the focll'; of the PROTECT IP Act is on recursive DNS servers (and not authoritative servers), the tenns 

'\;en"Cl"," and "D::-.J"S sen er," and "re~olver" in the remainder of this paper ~hall mean recursive ~elTer~ that help 

lIscrs 1<x:atc content amI sen"ices on the Internet. 

5 Paul Vi.xie, "DNS Complexity," ACA1 Queue 5, no. 3, Apli12007. 

Co United St~1tes Office of the President, Internnliona! Strategy./or Cyberspace, :\Iay 2011, 

llL1n~:'~'!J"--,J:'i1'~Lb.;llQ!L:C;~~L'--'iili:'i~'dd·'-!llitlik'i'I~igtf:.x,jnt!'?n:wJitllLal_\trDJ~10-Lill~c" bCJ:t:ip~J.'---,-pd[, at page 8. 

4 
181 

III. Technical Challenges Raised By Mandatory DNS Filtering 

A. DNS Filtering in Tension with DNSSEC 

PROTECT IP would empower the Depaltment of Justice, with a court order, to require operators 

of DNS servers to take steps to filter resolution of queries for certain names. Further, the bill 

directs the Attorney General to develop a textual notice to which users who attempt to navigate 

to these names will be redireeted7 Redirecting users to a resource that does not match what they 

requested, however, is incompatible with end-to-end implementations of DNS Security 

Extensions (DNSSEC), a critical set of security updates. Implementing both end-to-end 

DNSSEC and PROTECT lP redirection orders simply would not work. Moreover, any filtering 

by nameservers, even without redirection, will pose security challenges, as there will be no 

mechanism to distinguish court-ordered lookup failure from temporary system failure, or even 

from failure caused by attackers or hostile networks. 

Security problems with the DNS were identified m'er twenty years ago, and the DNSSEC 

approach to correcting mlncrabilities has been under development since the mid-1990s 8 In 

short, DNSSEC allows for DNS records to be cryptographically signed, thereby providing a 

secure authentication of Internct assets. When implemented end-to-cnd betwecn authoritative 

nameservers and requesting applications, DNSSEC prevents man-in-the-middle attacks on DNS 

queries by allowing for provable authenticity of DNS records and provable inauthenticity of 

forged data. This secure authentication is critical for combatting the distribution of malware and 

other problematic Internet behavior. Authentication flaws, including in the DNS, expose personal 

infonnation, credit card data, e-mails, documents, stock data, and other sensitive information, 

and represent one of the primary techniques by which hackers break into and harm American 

assets. 

DNSSEC has been promoted and suppolted by the highest levels of the U.S. government. 

Development and rollout has involved a major bipartisan political effort, undertaken at great 

expense as a public/private paltnership dating back to the Clinton administration. President 

George W. Bush included securing the DNS among national cybersecurity priorities as early as 

2003. 9 When the root zone trust anchor was published just under a year ago, enabling use of 

DNSSEC within the global DNS, the Obmna administration hailed it as a "major milestone for 

Intemet seeurity."l0 The seem;ty of the Internet and the success of DNSSEC have been, and 

remain, a vital policy goal of the United States. 11 

Section 3(d)(2)(A)(ii), "Text of "olice." 

8 See hHrr;~\~~\\:i\.dtt:,;s~(';.J]t:l. 

9llnited State~ Office of the President, The National Strategy to ,)'enlre Cyhenpace, Fehruary 2003, 

laJJD~~'~-"\ "lh~.~n' ~,ilibE!D_~_m,,~_~_t'i'~lJi()jJ1JLC:ibs_p~-Ikt~~_SjmL~cil(U: 

10 Andre,,, .\itel ,allgh1in, "A .\i1ajor l\/lilestone for Intemet Security," 'I"he White HOll\e hlog, .Iuly 22, 2010, 

ht.ll~:~~~~:J~LriJdlQQ~~rQJ_Q.'i~DJi!~Q'Z~~~L-:JmJi(21~-11JjJS~Ql1~in!m.Jr.~:l_~~J!1iD:-. 

11 See lTnited States Office of the President, Nmional Strategy for Trusted Identities in C~vberspace, April 2011, 

http:i,',n\·\-y"\-yhitchousc"~ovisitcs:dcfaultifi[c<;/r~'" Yicwcr'~<~S !'lC~,tratcgy 04IS11.pJf; Se~ a/so llnited Statcs Office 

of the President, International Strategy/or Cyberspace, ~Jay 2011, supra, note 6, 

lillp";~_}Y~\'-Jl--,-~~l!il~hQUH_C~o2L~ilQ.~~'JsJ~JJl.LJik~'-:'I~_~li~_~ cr,jl]icl)wi_Qu,iLf>JruJ~'kO-t(H=-n1tIT'iPQg:--,ud[ 

5 
182 

The fundamental architectural concept behind DNSSEC is that any information associated with a 

name must verifiably come from the owner of that name. For example, DNSSEC is designed to 

ensure that if a user request;; the mail server for the U.S. Senate, the response is actually the 

legitimate server to communicate with to send e-mail to addresses within the senate.gov domain. 

The power of DNSSEC is that it provides a widely deployed and well managed infrastructure 

that allows only the Senate IT staff to manipulate the authoritative senate.gov name server, while 

only the House of Representative's IT staff can manipulatc thc authoritativc housc.gov 

namcscrver. 

By mlmdating redirection, PROTECT IP would require ,md legitimi7.e the very behavior 

DNSSEC is designed to detect and suppress. Replacing responses with pointers to other 

resources, as PROTECT IP would require, is fundamentally incompatible with end-to-end 

DNSSEC. Quite simply, a DNSSEC-enabled browser or other application cannot accept an 

unsigned response; doing so would defeat the purpme of secure DNS. Consistent with DNSSEC, 

thc namcscrvcr chargcd with rctricving rcsponscs to a uscr's DNSSEC queries cannot sign any 

alternate response in any manner that would enable it to validate a query. 

Allhough DNSSEC-enabled applications are not yet in widespread use, the need for such 

applications has been a key factor driving DNSSEC's development. Today, applications and 

services that require security (e.g. online banking) rely on other fonns of authentication to work 

around a potentially insecure DNS, but a secure DNS would be more effective and efficient. 

End-to-end deployment of DNSSEC is required to bettcr secure the sensitive applications we 

have today and allow for new sensitive applications. A legal mandate to operate DNS servers in 

a manner inconsistent with end-to-end DNSSEC would therefore interfere with the rollout of this 

critical security technology and stine this emerging platfonn for innovation. 

Even DNS filtering that did not contemplate redirection would pose security challenges. The 

only possible DNSSEC-compliant response to a query for a domain that has been ordered to be 

filtered is for the lookup to fail. It cannot provide a falsc response pointing to another resource or 

indicate that the domain docs not exist. From an operational standpoint, a resolution failure from 

a nameserver subject to a court order and from a hacked nameserver would be indistinguishable. 

Users running secure applications have a need to distinguish between policy-based failures and 

failures caused, for example, by the presence of an attack or a hostile network, or else downgrade 

attacks would likely bc prolific12 

DNSSEC is being implemented to allow systems to demand verification of what they get from 

the DNS. PROTECT IP would not only require DNS responses that cannot deliver such proof, 

but it would enshrine and institutionaliLe the very network manipulation DNSSEC must fight in 

order to prevent cyberattacks and other miscreant behavior on the global Internet. 

I:::! If two or more 1c\ds of scnllity exist in a system, an attacker ,,\'ill ha\"C the ahility to force a "downgrade" move 

from a more secure system function or capability to a less secure function by malting it appear <l'l thongh some party 

in the tran~actioll docsll't support the higher level of ~CCllrity. Forcing failure of ])NSSI-.C rcquc~ts is one way to 

effect this exploit, if the attacked system \\'ill then accept forged insecure DNS responses. To prevent dO\\'ngrade 

attempts, sy~tcm~ must be able to distinglLi~h betwcen legitimate failurc and malicious failure. 

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B. The Proposed DNS Filters Would Be Circumvented Easily 

As described above, the DNS was adopted to achieve univ'ersal naming for Internet resources, 

The fact that host names resolve consistently regardless of which network performs the request is 

a key factor in the Internet's success as a global communications network, Anybody who has 

sUifed to a site in a public place, an office, or someone else's house, and gone to a site different 

from what he or she is used to at home, will understand frustrations that can come from filtering, 

To the extent that the naming system becomes less universal or consistent, the economic and 

social value of the network will suffer, 

DNS filtering docs not remove or prevent access to Internet content. It simply prevents 

resolution by a particular DNS server of a filtered domain to its associated IP address. The 

offending site remains available and accessible through non-filLered nameseners or numerous 

other means, including direct accessibility from the client to the server if they have the 

corresponding information. Circumvention is possible, with increasing ease, and is quite likely in 

thc case of attempts to filter infringement via the DNS. All of the methods that we discuss in this 

section pose risks to the security and stability 0]" the DNS, and to bmader societal concerns. 

Evidence from the recent domain seizures by U.S. Immigrations and Customs Enforcement 

demonstrates how likely circumvention is to occur. Data captured by Arbor Networks regarding 

the seizure of TVShack.net, showed what appeared to be only a short ternl impact on actual 

traffic to the pirates' servers13 The content simply was moved to a different domain, with little 

long-term impact likcly. Similarly, Alexa traffic rankings indicate that traffic to rojadirceta.cs, 

the replacement for the seized rojadirecta.com, quickly reached levels comparable to that of the 

fonner domain. 14 This occurred due to ilie fact that users and inhinging websites do not simply 

"give up" in response to implementation of a filtering mechanism. They go online, find new 

(non-American) domains or direct IP numbers, and connect as they m,ually would. 

In the case of DNS filtering, users need not navigate to new domains, but can instead simply use 

non-filtered DNS servers. To understand this approach, it is hclpful to understand what normally 

occurs for most residential broadband customer installations. Normally, as part of the initial 

settings provided by ISPs to their customers, the ISPs select the users' DNS server (commonly as 

part of dynamic addressing lease negotiation or in setting up a user's equipment), In general, the 

operator-,elected DNS server is local to the user, providing fast, efficient resolution. Thus, for 

example, Comcast customers generally usc Comcast's DNS servers allowing for an 

"accelerated," and topologically optimal, DNS e'i.perience. 

However, users may change their DNS server settings, either by running a local resolver or by 

updating a single OS configuration parameter. Moreover, applications and even websites can 

also change a users' DNS settings automatically. A 2008 survey using data from Google found 

that hundreds of malware websites automatically change the DNS settings of users who simply 

U Craig Labm-liz, "TakcdO\\'ll," Arbor Nct\vork~ blog, July 2, 2010, 

http://asert,arboruetworks,COlIL.'2010/07/takedowlli 

14 Compare 11ltI1-:~~~~ !L1!.lc~l:LfQI).Jl hlJ~inlflLL<.>.j!tJiI£~,;L<-L~QJnE and Itt1p-~_.ii,{~ ~\' -<lh:_M\.J,:QULc'5Jkiuf~m1Hlin.~g.a ,C\/L. 

7 
184 

visit a malicious web site. ls It is likely, if not inevitable, that infringement sites would use the 

same stmtegy, allowing a single site to instantly, silently, and pennanently change a user's DNS 

path and evade DNS filtration and filtering. 

How easily could software make such a change? Just a single line of code is needed to change 

one registry key in Microsoft Windows. As documented widely by Microsoft itself, software 

merely needs to edit one system registry parameter: 

\\HKLM\SYSTEM\CurrentControlSet\Services\DnsCache\Parameters16 

Such behavior is common. In a survey of 100,000 mal ware samples, pulled at random from the 

Georgia Institute of Technology's mal ware repository, over 98% were found to read Windows 

registry settings, and some 68% were found to change the registry. Indeed, the anti-malware 

industry evcn has a term for viruses that specifically manipulate resolution via registry keys: 

"DNS-changers", or "DNS-changing mal ware," and such tcchniques have bcen cmployed by 

miscreants for nearly a decade. 17 

The choice of alternative DNS servers is effectively unlimited. In the same study, a survey of socalled "open-recursive" DNS resolvers revealed a dramatic increase in the number of public 

DNS servers. At present, there are tens of millions or open, public DNS servers, many outside the 

U.S. Sitcs offcring or promoting thc downloading of copyright-infringing contcnt could usc 

almost any of these resol vcrs to cvade domestic DNS filtcring. 

An obvious possibility would be for the opemtors of the infringement sites themselves to opemte 

alternative DNS servers for their users. It has been suggested that perhaps pirate sites would not 

wish to operate such a service because it would be difficult or expensive. However, DNS 

resolvers are lightweight and do not expose the same network engineering profile or carry the 

same costs as other circumvention technologies such as full-traffic encryption. In pmctice, a 

$1,000 server can respond to over 100,000 DNS rcquests per second. It is substantially easier to 

provide the handful of bits required for a DNS response than to expose a complex searchable 

web interface to pirated content. Realistically, the DNS accelerating service could be provided at 

no additional cost, using spare capacity on existing servers. Thus, those entities large enough to 

attract the attention of PROTECT IP likely will be large enough to handle the DNS load of their 

user basco 

Suggestions havc been made that U.S. uscrs will not use servers located outside of thc United 

States because the nameservers arc foreign and untrusted. 18 The user who is seeking pirated 

content, however, will often be more concerned about gelling the content than with how 

reputable a particular DNS provider might be. More importantly, in many cases, the user will 

15 I), Dagon, :--.I. Provo<.;, C. P. J ,ce, and W. I.ce, "ColTuplcu ])NS resolution paths: "' he rise or a malidous resolution 

authOlity," Tn Pr()('eedings afNetwork and Distrihuted Se(,urity Sympnsiwn (I\l)SS 'OR), 200K 1\olc: TIle 200R 

study and this report share an author. 

1(, t..1icrosoft, Inc. DI"S Registry J::ntries. http://techlletmicrosoft.colll/en-lls/library/dd19741g<:i,2H\\.iS.l0\129.aspx, 

2011. 

I"' Dagon et. aL, "Corrupted DKS resolution paths," supra, note 15; see a/s() Symantec, Description of TrojmLQhosts 

\"irns, lillI~~~}~~~t., 'i)Jlliul~~~_Qln'--'i~~mil).J~_i;i[l(J!i_~~LY~BklU1.o..i;iIi·~~}5}~ii,t::2QQ1: l00JJ.G:..,520J_2~. 

III Daniel Castro, "~o, COreA \Vill Not Break the Internet," I1l1lovation Policy blog, Janll-<'10' 1H, 2011, 

hJm:~-,---\n~utm~~ <ltiQ11f)ill1i;-J:."---ox,,-i.!jlQ.:.~_lJi~~1·ill-=nDl::J;!I~li~~l! ~jn!~l1~~'1. 

8 
185 

likely have no idea that they are changing DNS servers. Those promoting pirate sites will simply 

create websites and postings that ask: "Frustrated by getting filtered when you try to watch 

movies? Click here to fix the problem." Long experience shows that high numbers of users will 

simply do just that; they will "dick here" and thereby quickly circumvent the intended roadblock 

through automated processes such as DNS changers. 

Would users care about perronnance? One theory states that users would avoid these non-U.S 

nameservers because they would be slower, if for no other reason that they are offshore and thus 

may take up to a substantial fraction of a second to retulll answers. There is f,ome data that 

slower sites are slightly less popular, but it is unlikely that foreign DNS would slow things down 

enough, for a number of reasons. 

First, the likely delay for a site would only be a few tenths of a second. Second, only the initial 

query to a domain is impacted. Third, most modern browsers implement something called DNS 

prefetching, performing the DNS lookup before the user even browses to a site. Consequently, 

users will likely not even experience the delay when nm'igating to a given site. Finally, from the 

perspective of a user seeking pirated content, a slightly slower site is much better than not being 

able to access the site and its infringing content at all. 

However, even if one supposed that all malicious sites changing DNS scttings were filtercd, and 

even if one supposed that 100% of users leave their ISPs' DNS settings unchanged, mandatory 

DNS filtering still could be trivially evaded by indi viduals and even applications. 

The IP number for the website of The Pirate Bay, a well-known peer-to-peer (P2P) organiLation 

that has often been connected to infringement allegations, is 194.71.107.15. Simply typing this 

number instead of v"W'I<"cpJmld:'-'!;LQ[g into a browser's address line will take a user to the site. To 

avoid having to remcmber thc number each time, PCs can casily bc configurcd to bypass DNS 

filters. 

Effectively, all systems have within them something called a hosts file, which is in text format. 

After simple editing of a hosts file with the additional line "WW\\ .Ihepiralebm.org 

194.7l.107.15'', the DNS will no longer be consulted. 

Many us en; will not have the expertise necessary to rewrite a host file. On the other hand, 

indi viduals who are skeptical of this potential for evasion should consider that software 

developers already are working on software to evade DNS filtration. A group calling itself 

"MafiaaFire" has developed a Fircfox browser plugin that automatically redirects users 

requesting a seized domain to the desired site's new domain or server IP address. 19 (A screen 

image that shows the ease with which Intemet users can implement such tools is in Appendix B). 

Infringers are almost certain to develop similar plugins that skip the DNS entirely, perhaps 

simply by putting links on thcir pages which offcr to makc necessary system changes with a click 

or the mouse. 

This reality leads to one conclusion: PROTECT IP's DNS filtering will be evaded through trivial 

and often automated changes through easily accessible and installed software plugins. Giv'en this 

I') http:/,'mafiaafirc.cmui 

9 
186 

strong potential for evasion, the long-term benefits of using mandated DNS filtering to combat 

infringement seem modest at best. 

In addition, if the U.S. mandates and thereby legitimizes DNS filtering, more countties may 

impose their own flavor of DNS filtering. As this practice becomes more widespread, the extent 

to which a particular name is reachable will become a function of on which network and in 

which country a user sits, compromising the universality of DNS naming and thereby the 

"oneness" of the Intemel. This situation will in tum increase the cost and challenge of 

developing new technologies, and reduce the reliability of the Intemet as a whole. If the Internet 

moves towards a world in which every country is picking and choosing which domains to 

resolve and which to filler, the ability of American technology innovators to offer products and 

services around the world will decrease. 

Moreover, circumvention poses risb to the security and stability of the DNS, which are explored 

in the following sections. 

C. Circumvention Poses Performance and Security Risks 

The likely circumvcntion techniques described abovc will cxposc uscrs to ncw potcntial sccurity 

threats. These security risks will not be limitcd to individuals. Banks, credit card issucD;, hcalth 

caTe providers, and others who have pmtieular interests in security protections for data also will 

be affected. At the same time, a migration away from U.S.-based ,md ISP-pnwided DNS will 

harm U.S. network opcrators' ability to investigatc and evaluate sccurity thrcats. lntclligenee and 

law enforcement officials who rely on high-quality network usage data afforded by ccntralized 

DNS resolution will face a similar reduction in the usefulness of DNS. 20 

1. Users WiU Face Increased Cybersecuriiy Risk 

As noted above, both users ,md operators of infringement sites will likely respond to DNS 

filtering by redirecting users' DNS settings to point out,ide of the United States. One cannot 

predict which DNS services they will usc instead, but one can anticipate that some if not many of 

the new DNS resolvers will be \\ell outside U.S. jurisdiction, possibly run by the same criminals 

running the infringement sites, mld perhaps even on the same systems mld hm·dware. This 

concem is not mere speculation: the use of non-U.S. DNS is already favored by malicious 

websites, viruses, and criminal gangs to evade U.S. law enforcement. 

As a consequence of redirecting their DNS settings, users will face significantly increased 

security risks, as detailed below. Those risks, how eyer, will not be obvious or well known to 

most users, and they will simply be unaware of the risks (and indeed, as noted above, the users 

may not eyen know that their DNS settings have been chaIlged). Moreover, in households with 

shared computers, one user (say, a teenage music sharer) may redirect the DNS settings, but then 

thosc scttings would carry ovcr to whcn thc parcnt later did onlinc banking on thc samc 

computer. The teenager's redirection also could redirect banking information and put it in 

jeopm·dy. The effects of increased security vulnerability will be felt not just by users, but by U.S. 

:0 A full discussion of the impar.::t on la\v cnl"on::cmcnt is outside the ~copc of 111i~ paper. 

10 
187 

networks and bnsinesses, including banks and credit card companies, which will internalize the 

costs of botnet disruptions, identity theft, and financial fraud. 

Users on computers with redirected DNS settings will have a number of increased risks. First, 

operators of rogue DNS servers are less likely than major U.S. operators to SUppOlt DNSSEC. 

Thus users who switch or are switched to such nameservers will not benefit from the security and 

trust DNSSEC is being implemented to provide. And the absence of support for DNSSEC may 

expose these users to greater risk from malicious nanleserver operators. 

Second, and critically, when traffic is pushed to pOlentially rogue servers, how will those servers 

handle the resolution of web and mail sen'er lookups for military networks, U.S. blmks, or social 

network sites used by U.S. citizens to communicate and share personal information and ideas'? 

Circumvention has real consequences beyond evading the results of cOUlt-ordered filters. An 

infringement site that simply gains enough consent and cooperation from a user to shift his or her 

DNS resolution to the pirate site is not only insulated from the filters of PROTECT IP. The 

operator also gains access to all DNS traffic from that user: 

Every time the user seeks his blmk, the pirate site has the opportunity to hijack it. 

Every time the user seeks an e-commerce site, the pirate site has the opportunity to 

impersonate it. 

Every email, every game, evelY Internet application that someone might use to be 

productive would potentially be exposed to manipulation. 

Although some pirate operators may decide to run "honest" DNS servers in an effort to gain the 

trust of users, at least some of the overseas DNS servers arc likely to act on their economic 

incentive to exploit their access to the sensitive communications of some Americans. 

In the millions of DNS lookups expO/ted from U.S. networks, many may prove innocuous, but 

some will fall in these sensitive calegories, which will be attractive avenues for phishing and 

other cybercrime. In control of all of a user's DNS traffic, a rogue resolver could easily return 

spurious results for sensitive queries. For example, a user could be sent an identical-looking but 

false and criminal website pretending to be Citibank.com, allowing the operator to gain access to 

and empty the user's bank accounts. 

If users of government or militmy networks violate sound security practices and redirect their 

DNS traffic to a non-U.S. DNS server, they could create national security risks given the 

sensitivity of those networks 2 ! Redirection on such networks would risk providing non-U.S. 

networks a foothold in the DNS conversation, and the ability to monitor and manipulate 

resolution for potentially sensitive websites and mail servers, through denial-of-service attacks, 

disclosure attacks,22 and an array of other avenues. 

:::1 ~filitary in1"onnation has been lost through P2P in the past; See, e.g., Tim \Vil'mn, "Army IIospital Breach lvfay Be 

Result of P2P Leak," Dark Reading, June 3, 200):0), 

hHU;L}£\J:_!t.,-ilm:1L~,t~liI4~QuJ~L<t~()JillJ;J.Jj:imi~\&W~I1if,,·1J.:J!rl1~rlli:I~JD=-2jJ~[lttQ(i. 

22 "Discloswoe attack" refers to the ability of an attacker to collect target intelligence information by analyzing client 

behavioral and query d<lta. 

11 
188 

2. ISPs Will Lose Visibility into Network Security Threats 

ONS data currently provides ISPs an important and accurate picture of both traffic patterns and 

security threats on their network, which in turn is vital for both business planning and network 

protection. Data gleaned from their customers' access to their DNS servers can be useful for a 

number of purposes. First, it can allow an ISP to identify increases and shifts in traffic, which 

can inform infrastructure investment, network optimizations, interconnection strategies, and 

peering relationships. Even more critically, monitOling DNS data is a vital part of maintaining 

network security. By analyzing name lookups, [SPs are able to diagnose denial-or-service 

attacks, identify hosts that may be part of a botnet, and identify compromised domains serving as 

command-and-control servers or identify subscribers who may be at risk. These analyses in turn 

enable network administrators to combat these problems, both by addressing malicious traflic 

and by providing targeted assistance to the users of infected computers. 

As users increasingly turn to other ONS servers to avoid the DNS filtering, [SPs have less and 

less ability to manage security threats and maintain effective network operations. By losing 

visibility into network security threats, ISPs will be less able to identify customer computers that 

have been infected by a virus and come under the control of a criminal botnet. At the same time 

that [SPs will be less able to identify infected computers, their security oflices will be less able to 

assist law enforcement in investigating network security attacks or data loss and exfiltration. 

The reduction of customer use of 8n enterprise, local network operator, or ISP's DNS service 

will mean that more compromised computers will go unidentified and uncorrected. Furthermore, 

the set of attributes that need to be evaluated when a customer calls an operator help desk for 

support will be much more extensive, and will increase both cost and debugging complexity. 

3. CDNs Would Likely Face Degraded Perfonnance 

Routing DNS traffic to offshore seners will also affect network performance within the United 

States, and will increase costs for [SPs. For ONS queries themselves, any delay will be minimal. 

However, for content deliv'ered from Content Distribution Networh (CONs) the impact will be 

more severe. 

CONs 10cali7.e content delivery by distributing the same content across a number of sen'ers on a 

wide range of networks. This 10cali7.ation reduces network congestion and decreases the load that 

would otherwise be put on a single server. Many CONs use the IP address of the ONS resolver to 

estimate a user's location and route the user to the fastest available server. To such networks, 

U.S. users who hav'e changed their DNS resolvers for all lookups will appear to the CONs to be 

browsing from abroad. As a result, these users could be routed to offshore servers 110t just for 

ONS queries, but also for content, undermining precisely the benefits CONs provide by 

optimi7.ing traffic distribution to account for proximity of e1ient and sen'er. 

InetTicient server selection would cause small delays for users, but high costs for commercial 

actors who must pay higher costs of latency and added network resources in order to provide the 

same level of service. The higher costs willncgativcly impact the business of both the providers 

of high-valuc, high-bandwidth (and non-infringing) contcnt that ovcrwhelmingly makc up the 

customer base of CONs, as well as the CON operators themselves. To the extent that poor server 

12 
189 

selection re~ults in increased traffic over international links, as is likely, it will also increase the 

traffic load and network congestion experienced by a wider range of network operators. 

D. DNS Interdependencies Will Lead to Collateral Damage 

Two likely situations ways can be identified in which DNS filtering could lead to non-targeted 

and perfectiy innocent domains being filtered. The likelihood of such collateral damage means 

that mandatory DNS filtering could hal'e far more than the desired effects, affecting the stability 

of large portions of the DNS. 

First, it is common for different services offered by a domain to themselves have names in some 

other domain, so that example.com's DNS service might be provided by isp.net and its e-mail 

service might be provided by asp.info. This means that variation in the meaning or accessibility 

of asp.info or isp.net could indirectly but quite powerfully affect the usefulness of example.com. 

If a legitimate site points to a filtered domain for its authoritative DNS server, lookups from 

filtering nameservers for the legitimate domain will also fail. These dependencies are 

unpredictable and fluid, and extremely difficullto enumerate. When evaluating a targeted 

domain, it will not be apparent what other domains might point to it in their DNS records. 

In addition, onc IP addrcss may support multiple domain names and websites; this practice is 

called "virtual hosting" and is I'ery common. Under PROTECT IP, implementation choices are 

(properly) left up to DNS server operators, but unintended consequences will inevitably result. If 

an operator or filters the DNS traffic to and from one IP address or host, it will bring down all of 

the websitcs supported by that IP number or host. The bottom line is that the filtering of one 

domain name or hostname can pull down unrelated sites down across the globe. 

Second, some domain names use "subdomains" to identify spccific customcrs. For examplc, 

blog~pot.com uses subdomains to support its thousands of users; blogspot.com may have 

customers named LatTY and Sergey whose blog services are at larry.blogspot.com and 

sergey.blogspot.eom. If L'ury is an e-criminal and the subject of an action under PROTECT IP, 

it is possible that blogspot.com could be filtcred, in which case Scrgcy would also be affectcd, 

although he may well have had no knowledge of Larry's misdealings. This type or collateral 

datl1age was demonstrated vividly by the ICE seizure of mooo.com, in which over 84,000 

subdomains were mistakenly filtered. 2

' 

The authors of the paper understand that sites offering such subdomain hosting are not the target 

or PROTECT IP, but the possibility for such unintended filtering remains. Despite sharing a 

parent domain, subdomains, as well as their content, often have little or nothing to do with one 

another. The existence of additional subdomains may not be readily apparcnt upon reviewing 

whatever content is served at a pal1icular subdomain, just as visiting googlc.com gives no 

indication of the existence of yahoo. com, despite the fact that the two domains shat'e the .com 

top-lel'el domain. Thus it is possible for an eXllllination of one subdomain to conelude WitilOut 

ever revealing the existence of others that would be affected by a filtering order instituted in the 

DNS. 

2:l Thoma~ Clabnm, "ICE Confirms Inadveltent ""eb Site Seizures," lnjonnalion ·Week, rebmary 18,2011, 

ItlW:/,'\,!~~~,itJJ~Qru)miplll'L~~k,cOln~ll~y~~~~qmh,--"Jlhl~riibjlili~~~;;':;22J~-i2. 

13 
190 

IV. Conclusion 

As slated above, we strongly believe that the goals of PROTECT IP arc compelling, and that 

intellectual property laws should be enforced against those who violate them. But as discussed in 

this paper, the mandated DNS hltering provisions found in the PROTECT IP Act raise very 

serious security and technical conccrns. Wc believc that thc goals of PROTECT IP can be 

accomplishcd without reducing DNS security and stability, through stratcgics such as bettcr 

international cooperation on prosccutions and the other remcdies contained in PROTECT IP 

other than DNS-related provisions. We urge Congress to reject the DNS filtering portions of the 

Act. 

14 
191 

A.I'I'ENI>IX A 

Tile (igllll' below may be- helpful ill uncJer.;I:lI1din1; Ihe DNS IiIlcrill1; me(llud !ipcdllecJ ill 

PRQTEcrlP 

/''''..L.J -""'''''' ..... 

COMTLO 

The Internet 

I'<IJI'I' toOT COVERED 61 PROTECT IP 

" Eilcl ........ I1 .... '" F _ "'1II,..,.~,tIlve DNS ....... t (oft-oJ ItI:I/.) 

G - p.ov'~ 110&1109 con/err\. 11-lnl<!fnd ... .,.,... '0''''' comem 

is 

-, S1l:PSEVEN 

• l.Is<o 00I"<l<IC1'> to 

....... exam$.com 
192 

API'END IX B 

Some brQwser pillgin~ arc easily inslall<'d. and" oulJ allow USl:1'S to a,-oid the DNS filtering 

cuntcmplalC\l by PROTECT-IP. The MafiaaFire rOOireclOl". shown belo\\,. was created in direct 

response 10 domai n-seizures and Ihe introductton orCOICA in 2010, 

........ _ c::=- ~ ... r ....... __ ., .. _ .. · _ 

---_ .... 

Sc • ..,n-ca plu •• d "" 05l2.51 1t 81 IO:~ 5 a.m. 

" 

16 
193 

ABOUT THE AUTHORS 

Steve Crocker is CEO of Shinkuro, Inc., a security-oriented consulting and development company, 

and has been leading Shinkuro's work on deployment of DNSSEC, the security extension to DNS. 

He currently serves as vice chair of the board of ICANN and served as chair of ICANN's Security 

and Stability Advisory Committee from its inception in 2002 until 2010. He has been active in the 

Internet community since 1968 when he helped define the original set of protocols for the Arpanet, 

founded the RFC series of publications and organized the Network Working Group, the forerunner of 

today's Internet Engineering Task Force (IETF). He later served as the first Area Director for 

Security in the IETF. Over his forty-plus years in network research, development, and management, 

he has been an R&D Program Manager at DARPA, senior researcher at University of Southern 

California's Information Sciences Institute, Director of Aerospace Corp's Computer Science 

Laboratory, vice president of Trusted Information Systems, co-founder, senior vice president and 

CTO of CyberCash, Inc. and co-founder and CEO of Longitude Systems, Inc. 

David Dagon is a post-doctoral researcher at Georgia Institute of Technology studying DNS security 

and the malicious usc of the domain resolution system. He is a co-founder of Damballa, an Internet 

security company providing DNS-based defense technologies. He has authored numerous peerre"iewed studies of DNS security, created patent-pending DNS security technologies, and proposed 

anti-poisoning protocol changes to DNS. 

Dan Kaminsky has been a noted security researcher for over a decade, and has spent his career 

advising Forlune 500 companies such as Cisco, A ,'aya, and Microsofl. Dan spent three years" orking 

with Microsoft on their Vista, Server 2008, and Windows 7 releases. Dan is best known for his work 

rinding a critical flaw in the Internet's Domain Name System (DNS), amI for leading what became 

the largest synchronized fi" to the Internet's infrastructure of all time. Of the seven Recovery Key 

Shareholders who possess the ability to rcstore the DNS root keys, Dan is the American 

represenlalive. Dan is presenlly ueveloping systems to reullce the cost anu complexity of securing 

critical infrastnlcture, 

Danny McPherson is Chief Security Officer for Verisign, Inc., where he is responsible for strategic 

direction, research, and innovation in infrastnlcture, and information security. He currently serves on 

the Intemet Architecture Board (lAB), ICANN's Security and Stability Advisory Council, the FCC's 

Network Reliability and Interopembility Council (NRIC), and several other industry fomms. He has 

been active within the Internet operations, security, research, and standards communities for nearly 

20 years, and has authored a number of books and other publications related to these topics. 

Previously, he was CSO of Arbor Networks, and prior to that held technical leadership positions with 

Amber Networks, Qwest Communications, Genuity, MCI Communications, and the U.S. Army 

Signal Corp. 

Paul Vixie founded Internet Systems Consortium in 1996 and served as ISC's President from 1996 

to 2011 when he was named Chairman and Chief Scientist. Vixie was the principal author of BIND 

versions 4.9 to R,2, which is the leading DNS server software in use today. He was also a principal 

author of RFC 1996 (DNS NOTIFY), RFC 2136 (DNS UPDATE), and RFC 2671 (EDNS), coauthor 

of RFC 1876 (DNS LOC), RFC 2317 (DNS for ClDR), and RFC 2845 (DNS TSIG) Vi"ie's other 

interests are Intenlet governance and policy, and distributed system security. 

17 
194 

November is, 2011 

Commentary on S.968, the Preventing Real Online Threats to Economic Creativity 

and Theft ofIntellectual Property Act of 2011; and H.R.3261, the Stop Online Piracy 

Act. 

The Anti-Phishing Working Group CAPWG.org) is an industry association focused on 

eliminating identity theft and fraud on the Internet. The APWG has over 1,500 

member companies and agencies representing financial institutions, security 

companies, ISPs, e-commerce companies and law enforcement agencies. 

Since 2003, the APWG and its members have been fighting fraud, theft and 

impersonation on the Internet, which has cost US companies billions of dollars in 

direct and indirect financial losses. 

As an industry group of over 1,500 companies, we support the rights of copyright 

holders to protect their works. However, in our examination, the PROTECT IP bill in 

the Senate, and it's House counterpart, the "Stop Online Piracy Act," propose 

technological regulations that would not only impede security on the Internet, but 

that would potentially result in new kinds of financial fraud against consumers and 

businesses in the United States. 

Requiring U.S.-based DNS providers to re-route the Internet traffic of consumers of 

infringing content will have the unintended consequences of driving consumers to 

non-U.S.-based DNS providers. These providers can easily reroute requests to 

online banking and e-commerce sites to criminal websites located outside ofthe 

United States. This will create a new cyber crime fraud economy that will threaten 

e-commerce and banking in the United States. Additionally, the proposed technical 

measures requiring DNS providers to reroute traffic will break the improved 

Internet security measures that the Department of Homeland Security has been 

working towards for many years CONS-SEC), in conjunction with the Internet and 

Security industries. 

Therefore the APWG Board of Directors and Steering Committee expresses our 

disagreement with the proposed PROTECT IP bill and the Stop Online Piracy Act. 

Again, we support the rights of copyright holders, but we believe that this proposed 

legislation will create technological problems on the Internet that will result in new 

kinds of cyber crime and a reduction in the security of the Internet. We recommend 

that this bill not be approved, and that a more carefully considered approach be 

taken that will consider the after-effects of such legislation. It is in the best interests 

of everyone in the United States that we protect the security not only of our 

copyrighted materials, but also of our banking and e-commerce systems. 

David Jevans 

Chairman, Anti-Phishing Working Group 

Cambridge, MA 

USA 02140 
195 

Opinion: Copyright bills could kill hopes for 

secure Net 

By STEWART BAKER 111116111 536 AM EST 

Everyone knows that Internet security is bad and getting worse. Recognizing the problem, Congress is 

hard at work on cybersecurity, with a number of bills on the table. Ironically, at the very same time, 

Congress is getting ready to pass a copyright enforcement bill that could kill our best hope for actually 

securing the Internet. 

How did that happen? Let's start with the Internet, where fake web sites cost users millions of dollars in 

fraud losses every year Unless we lind a better system for locking down website identities, this and 

other forms of online crime will continue to skyrocket. 

It turns out that Internet engineers have already designed a system to solve this problem - a set of 

technical rules that go by the unlovely name ofDNSSEC Under these rules, an Internet website will be 

given identification credentials by the same company that registers its Internet name. Thus, when 

Citibank claims the domain name Citibank.com, the registry who issues the name will at the same time 

lock that name to a particular Internet address. From then on, anyone who types "Citibank.com" into his 

browser will be sent to one and only one Internet address. Under the new system, the browser simply 

will not take the user to a site that isn't verified by Citibank's unique credentials. 

That's protection that the people who bank online need today. 

Why don't they have it? Two reasons. The first is friction. Moving to the new rules won't be free. It will 

require a lot of work by browser companies, Internet service providers, domain registries and others -

many of whom may never get any direct benefit from the change. Naturally, these companies are a little 

slow to spend money that just makes the Internet overall safer; that's the tragedy of the commons. But as 

the need for security becomes obvious to all, we're slowly overcoming that friction, thanks in part to the 

leadership of my old agency, the Department of Homeland Security, in getting government to adopt the 

new procedures. 

The second problem is new. It is Hollywood's desperate desire to keep foreign web sites from delivering 

pirated movies and music to American computers. To do that, the movie industry wants a law that will 

require Internet service providers block their customers from going to those sites. Instead, the users are 

supposed to be sent to a site that warns them against copyright infringement. 

Hollywood has sold that idea to Congress, and bills are now moving through both houses to impose this 

"block and redirect" obligation on Intemet service providers. And they're moving fast. The Senate bill is 

out of committee, while the House Judiciary Committee is holding hearings on a similar bill 

Wednesday. 

This is far faster than Congress's cybersecurity effort, and it runs directly counter to that effort. Because 

"block and redirect" is exactly what crooks are doing today to bank customers. If the bills become law, 

the security system won't be able to tell the difference between sites that have been blocked by law and 

those that have been sabotaged by hackers. Indeed, it isn't hard to imagine crooks redirecting users to 

sites that say, "You were redirected here because the site you asked for has violated copyright," while at 

the same time planting malware on the user's computer 
196 

What's more, the bill will likely break the fragile consensus that my former agency, the Department of 

Homeland Security, has spent years helping to build around the switch to DNSSEC. If the bill passes, 

practically everyone who needs to make changes to implement DNSSEC will instead be on the phone to 

their lawyers asking whether they could be sued for adopting a security technology that will make the 

mandated "block and redirect" system even more ditlicult. 

Tf"block and redirect" could stop Hollywood's bleeding, perhaps a case could be made for undermining 

everyone's security in order to protect the studios' intellectual property. But it won't stop the bleeding. 

Even today, if someone is blocked and redirected away from his favorite pirate website, he can find 

many simple ways to defeat the block. He can paste his favorite pirate website's number (rather than its 

name) into the address box on his browser. Or he can simply tell his computer to look up the site's 

address on a Canadian server instead of an American one. There are many more. 

Passing this bill will make Hollywood feel better and richer. For about a minute. It will leave the rest of 

us hurting and poorer for years. 

Stewart Baker, former DHS Assistant Secretcllyfor Policy clildformer NSA General Counsel, is 

currently (f parlner at Steptoe & .lohmon in DC. His 2010 book, Skating 011 Stilts, examined privacy 

issues as they relate to homeland security. 
197 

November 15, 2011 

The Honorable Pat Leahy 

(h~irman 

Corlmittee on the judiciary 

United States Senate 

Washington, DC 20510 

The Honorable Chuck Grassley 

Ranking Member 

Committee on the judiciary 

United States Senate 

Washington, DC 20510 

The Honorable Lamar Smith 

Chairman 

Committee on the judiciary 

House of Representatives 

Washington, DC 20515 

The Honorablejohn Conyers,jr. 

Ranking Member 

Committee on the judiciary 

House of Representatives 

Washington, DC 20515 

Dear Chairman Leahy, Ranking Member Grassley, Chairman Smith and Ranking Member Conyers: 

The undersigned Internet and technology companies write to express our concern with legislative 

measures that hilve been introduced in the United States Senate and United States House of 

Representatives, S. 968 (the "PROTECT IP Art") and H.R. 3261 (the "Stop Online Piracy Act"). 

We support the bills' stated goals -- providing additional enforcement tools to combat foreign "rogue" 

websites chat are dedicated to copyright infringement or counterfeiting. Unfortunately, the bills as 

drafted would expose law-abiding U.s. Internet and technology companies to new uncertain liabilities, 

private rights of action, and technology mandates that wOLdd require monitoring of web sites. We 

are concerned that these measures pose a serious risk to our industry's continued track record of 

innovation and job-creation, as well as to our Nation's cybersecurity. We cannot support these bills as 

written and ask that you consider more targeted ways to combat foreign "rogue" websites dedicated 

to copyright infringement and trademark counterfeiting, while preserving the innovation and 

dynamism that has made the Internet such an important driver of economic growth and job creation. 

One issue merits special attention. We are very concerned that the bills as written would seriously 

undermine the effective mechanism Congress enacted in the Digital Millenium Copyright Act (DMCA) 

to provide a safe harbor for Internet companies that act in good faith to remove infringing content 

from their sites. Since their enactment in 1998. the DMCA's safe harbor provisions for online service 

providers have been a cornerstone of the u.s. Inrernet and ,echnology industry's growth and 

success. While we work together to find additional ways to target foreign "rogue" sites. we should not 
198 

Jeopardll~ a foundational S(fll((Ur~ (hilt has worhd for <om~n( owne", and Internet mmpanie5 alik~ 

and provides certainty to lnno\Iators with new Ideas for how people create, find, discus~ aoo share 

information law/uD)' onli~. 

We are prO/,Jd 10 be part of an Industry thaI h.:is been crudal (0 U.s. economitgroWlh and Job 

creallon.A recent Mcl(in~y Global n51:~Ule report fO~llCf tmu Ihe Iflltme! accouflts fo. 3.4 perc:eflt of 

GOP In the 13 mum .. ", that McKinsey studied, and, In th~ U.S., the Internet's contribution f<l GOP IS 

~n larger. If Internet consump~oo and e~perK1f1ure _,e astOnOl". Its con\nbullon 10 GOP would II!! 

gr~aler than energy. agriculture. Com!Tlllnl<ation. mining. or utilill",. In add~lon, t~ Internet Industry 

has IflGreased prodllClivlly for small and me-dIUm·slzed businesses by 1~. We urge you not to risk 

ell"'" this ~u«( S'i Of the {remendo-us benefits (he Interne! has b<oughllo hundreds of millions of 

Americans lind people around the world. 

We stand ready to work wilh the Congress 10 develop targeted solutions 10 address the p!"oblem of 

loreign ·rogue" websIte •. 

AOllnc. 

eBay Inc. 

Facebook Inc. 

Google I/\C. 

iJ<1kedln CorporatIOn 

Mozliia Corp. 

Twiner, Inc. 

Yahoo! Inc.. 

lynga Game Network 

• Go gle o 

t:wil:l:er ~ 

facebook 

L.inkedlm mozilla· 

~zynga· 
199 

HBR Blog Network 

The Great Firewall of America byJamesAllworth I 931AMOctober28,2011 

The Senate's PROTECT IP Bill, designed to stop piracy, now has a matching bllim the House E-PARASITE. It would have 

been tough to top PROTECT IP, but they've managed to do it. It contains provisions that will chill innovation. It contains 

provisions that will tinker with the fundamental fabric of the internet. It gives private corporations the power to censor And best 

of all, it bypasses due legal process to do much of it 

The timing could not be more exquisite In the midst of protests emerging all around the US complaining about the power that 

corporations have Inside our political system, big content is quite literally trying to foist its own version of the Great Firewall of 

China on to the American public 

So what's in the bill? 

First, the US Government Will set up a blacklist of International sites that It says are infringing IP nghts Regardless of whether 

the ISP believes the Government has it right or not - and the Government has already got It seriously wrong 

(http /ltorrentfreak.comlu-s-government-shuts-down-84000-websltes-by-mistake-110216/) before -ISPs must comply with all 

sites that the US Morney General lists. If they don't, they lose their safe harbor provIsions. That IS the eqUivalent of making 

phone carriers liable for conversations that are being made on their phone lines But more broadly, this blacklist concept may 

sound familiar to you: it's been borrowed from China. The Government deCides what you can and can't see on the web. ISPs 

have to comply With It, or they're liable 

Second, the technical way this is to be achieved is by tinkenng With Domain Name Servers, the technology that translates 

"http//vvw'oN.hbr.org (http://hbr.orgl)'' into the unique IP address where a server is stored. Given the DNS is at the heart of the 

Internet, pulling at thiS fabriC Will have some dramatic consequences If Internet users In the US don't get the results they're 

looking for using American DNS servers, they're Simply going to go overseas instead Amongst many other issues, Dan 

Kaminsky, chief scientist at security vendor DKH points out (http://\NVv'W.clo com/artlcle/686212 

/Englneers_PROTECT _IP _Act_Would_Break_DNS) : "It's not Just that lookups to the Pirate Bay go overseas, lookups to Bank 

of America go overseas ThiS is handing over American Internet access to entities we explicitly do not trust, entities that are 

unambiguously bad guys" 

Third, the Digital Millennium Copynght Act (http://en.wlklpedia.orgfwlkl/Dlgltal_Mlllennlum_CopYrlght_Act) (DMCA), Introduced 

over a decade ago and designed to balance IP rights with the technology innovation that has boomed In the US, IS being 

modified to the pOint of being lopSided. Previously, If a rights holder believed a site was Infnnglng content, they could send a 

take down notice and the content would be removed or the takedown could be contested But the E-PARASITE update is 

outrageous Payment providers (Paypal, Visa, Mastercard) and ad netvvorks would be required to terminate services to any site 

upon receipt of a letter merely alleging that the site IS "dedicated to the theft of US property." In short, nghts holders can turn the 

funds off something they don't like, and the funds won't turn back on until after it has gone through the courts In the meantime 

no income. Imagine that every time somebody was sued, they stopped receiving paychecks. That would make it kind of difficult 

to find the money to pay their lawyer, right? That IS what thiS bill would do 

Supporters of the bill say that It won't target legitimate sites. Let's look at the language. ASlte IS "dedicated to the theft of US 

property" if it is a US-directed site (i e can be accessed in the US) that" "is taking, or has taken deliberate actions to aVOid 

confirming a high probability of the use of the U.S.-directed site to carry out acts that constitute a Violation of section 501 or 

1201 of title 17, United States Code" Now I'm not a laVIIYer, and this language seems to have been crafted to defeat reading by 

a regular human being. But the short version is If the site can be used to infringe, and doesn't take steps to prevent against the 
200 

Ms. LOFGREN. You know, I think some today have sort of written 

off, I think, serious criticisms of this bill as hyperbole, and that the 

only objection is about money and hyperbole, and I just do not 

think that is the case. The big tech companies were not the ones 

who said this bill would cause the U.S. to lose its position as a 

global leader in supporting a free and open Internet. That is from 

dozens of human rights groups around the world. The big tech companies were not the ones that wrote that the bill has the potential 
201 

to do consumers more harm than good. That is from the Consumer 

Union and other nonprofit consumer groups. 

The big tech companies did not write that the bill is in conflict 

with the First Amendment. That is from the ACLU and over 100 

law professors. It was not the big tech companies who said the bill 

would kill our best hope for securing Internet. No, that is from 

Stewart Baker, the former Assistant Secretary for DHS and the 

former General Counsel of the National Security Agency. Dozens of 

venture capitalists, not big tech companies, wrote that the bill will 

stifle investment and Internet services, throttle innovation, and 

hurt American competitiveness. And it has not generally been the 

policy of this Committee to dismiss the views of those in industries 

that we are going to regulate, and these are just a few of the examples. 

Now, I understand why co-sponsors of the legislation are not 

happy about widespread criticism of the bill, but I think impugning 

the motives of the critics rather than engaging in the substance is 

a mistake. 

I have a number of questions, and I note that, yeah, we have got 

six witnesses here. Five are in favor and only one is against, and 

that troubles me. I will just say that. You know, I do not think it 

is a balanced effort, and I am sorry that we do not have any technical expertise on this panel in terms of engineering talent, because 

I think that is an important issue as to the DNS blocking portions 

of the bill. 

So, let me ask a question of Mr. O’Leary. Do you believe that 

software programs should be illegal if they allow a user to circumvent Internet filtering ordered by the government? 

Mr. O’LEARY. I do not believe that software programs should be 

per se illegal. I think if people misuse them, then they should be. 

If they misuse any product in violation of a law, they should suffer 

the consequences. 

Ms. LOFGREN. So, the ability to just simply circumvent the takedown order as a software add-on to a browser should continue to 

be illegal? 

Mr. O’LEARY. Well, no. If you are saying you are building something and specifically to avoid an order of the court not to do something, I do have a problem with that. 

Ms. LOFGREN. So, you think that software ought to be illegal. 

Mr. O’LEARY. Well, that is not what I said, no. 

Ms. LOFGREN. Well, it is one or the other. Either you should be 

able to do that, or you should not be able to do it. Which is it? 

Mr. O’LEARY. Does the software have a legitimate purpose, or is 

it simply to circumvent a court order? 

Ms. LOFGREN. Well, circumventing software can be a multiplicity 

of views. For example—— 

Mr. O’LEARY. Right, but in your question, you said the software 

would be created to allow circumvention. 

Ms. LOFGREN. There is an add-on to Firefox that will allow—— 

Mr. O’LEARY. I think that most legitimate companies in the 

United States, including Firefox, should abide by court orders and 

follow the law. 
202 

Ms. LOFGREN. So, well, you are not really answering the question. I will take from here you think that that ought to be regulated at least. 

Mr. O’LEARY. Regulated in much the same way as we regulate 

people driving drunk and stealing things, yeah, I think that—I 

know that the word ‘‘regulation’’ has—— 

Ms. LOFGREN. Let me ask you this, because I do not have a long 

time, and I assume that you were directing your comments that 

people did not—that Northern California people did not care about 

jobs in the rest of America, either to myself or Mr. Lungren since 

we are the only Members of the Committee from Northern California. I will say I do care about jobs all over America. And, in fact, 

eBay, which is headquartered in San Jose, has enabled thousands 

of Americans all over the country to form small businesses, and to 

use the Internet to sell products. 

I would like to know, your concept—do you think that this is a 

big problem? I think it is a problem. I think that Internet piracy 

is something that is troubling. It is illegal. And I think we need to 

do something about it. So, let me just put that out there. 

How many sites do you think need to be shut down in order to 

say we have succeeded in the fight against Internet high receipt? 

Is it a dozen? Is it hundreds? Is it thousands? Do you have any 

idea the scope of the number of sites that need to be removed? 

Mr. O’LEARY. Well, I think, first of all, you’ve mischaracterized 

my comment about Northern California, and I would like to correct 

the record on that. I was simply—— 

Ms. LOFGREN. Well, do it later, because I do not have that much 

time. Answer my question, please. 

Mr. SMITH. Actually, the gentlewoman’s time has expired, but 

you are free to answer the question. 

Mr. O’LEARY. Thank you. The comment about Northern California was in the context of this debate. The perception has been 

created by opponents of this bill that all of the innovation and all 

of the creative thinking comes out of Silicon Valley. I was not taking umbrage with anyone in Silicon Valley. We have great relationships with a lot of people in Silicon Valley. Pixar, which makes 

wonderful movies, is in Silicon Valley. Apple, which is a legitimate 

online retailer, is in Silicon Valley. I was also making the simple 

point, Congresswoman, that there are people all over this country 

in places like Detroit, Baltimore, Texas, North Carolina—— 

Ms. LOFGREN. Mr. Chairman, I wonder since—— 

Mr. SMITH. The gentlewoman—— 

Mr. O’LEARY. I would be happy to answer your question. 

Ms. LOFGREN. May I have an additional 30 seconds? 

Mr. SMITH. Well, the gentleman—answer the question very briefly. 

Ms. LOFGREN. How many sites? 

Mr. O’LEARY. Well, I know for a fact that we could start with Pirate Bay, which was mentioned earlier. I do not know how 

many—— 

Ms. LOFGREN. So, is it just Pirate Bay, do you think, or do you 

think it is a dozen? Is it 100? Is it 1,000? What do you think? 

Mr. O’LEARY. It would be easier to answer the question if I was 

allowed to. There are multiple sites out there. This is a legitimate 
203 

problem. We have been very clear, and we will continue to be clear, 

that there is no silver bullet. The problem is evolving and changing. I cannot sit here right now and tell you in good faith that I 

know what that number is, but what I do know is that there are 

literally hundreds of sites out there that are engaging in this activity. And all you need to know that—— 

Ms. LOFGREN. Do you think it is in the neighborhood of—— 

Mr. SMITH. The gentlewoman’s time—— 

Mr. O’LEARY [continuing]. Know that is to go to Google and type 

in J. Edgar, and you will get a list of page after page after 

page—— 

Ms. LOFGREN. Or Baidu, or Bing, or any of them. 

Mr. O’LEARY [continuing]. Of sites that are engaging in this illegal activity. 

Ms. LOFGREN. So, it is hundreds of thousands. 

Mr. SMITH. The gentlewoman’s time has expired, but let me remind Members that they are welcome to submit written questions 

to any of the panelists, and we will try to get those answers to the 

Members quickly as we can. 

The gentleman from California, Mr. Issa, is recognized? 

Mr. ISSA. Thank you, Mr. Chairman. And the gentlelady from the 

North, while I am deep in the Confederacy of California, went 

through quite a litany of good opponents to the bill. I would like 

to add to that, by unanimous consent, the following: a joint letter 

by 160 entrepreneurs, founders, and CEOs, and executives; a letter 

expressing concern about SOPA from the Digital Media Association; a statement by the Consumer Electronics Association, which 

was denied an opportunity to be here as a witness; a letter signed 

by 53 venture capitalists expressing concern regarding the Protect 

Act; and a transcript of recent remarks made by Vice President Joe 

Biden that he gave at the London Cybersecurity Conference germane to his concerns about this bill. 

Mr. SMITH. Without objection. 

[The information referred to follows:] 
204 

To Members of the United States Congress: 

The undersigned are 160 entrepreneurs, founders, CEOs and executives who have been 

involved in 349 technology start-ups, and who have created over 65,000 jobs directly through 

our companies and hundreds of thousands, if not millions, more through the technologies we 

invented, funded, brought to market and made mainstream. We write today urging you to 

reject S.968, the PROTECT IP Act also kno\vTI as --PIP A" We appreciate the stated purpose 

of the bill, but we fear that if PIP A is allowed to become law in its present form, it will hurt 

economic growth and chill innovation in legitimate services that help people create, 

communicate. and make money online. 

It is a truism that small businesses create significant economic growih and jobs, but it is more 

accurate to say that new businesses, including tech start-ups, are most important.IIl The 

Internet is a key engine of today's economy,ill and much of its economic contribution is 

attributable to companies that did not even exist 10 or even 5 years ago. The Internet has also 

created new opportunities for artists and other content creators -- today, there is more content 

being created by more people on more platforms (including some of our businesses) than 

ever before. 

We are not opposed to copyright or the bill's intent. but we do not think this bill will actually 

fulfill copyright's purpose of encouraging innovation and creativity. While the bill will create 

uncertainty for many legitimate businesses and in turn undermine innovation and creativity 

on those services, the dedicated pirates who use and operate ""rogue" sites will simply migrate 

to platforms that conceal their activities. 

Our concerns include the following: 

The notion of sites "dedicated to infl;nging activities" is vague aud ripe for 

abuse, particula"'y wheu combiued with a private J'ight of actiou for 

rightsholders: Legitimate sites with legitimate uses can also in many cases be used 

for piracy. Historically, overzealous rightsholders have tried to stop many legitimate 

technologies that disrupted their existing business models and facilitated some 

unauthorized activity. The following technologies were condenmed at one point or 

another - the gramophone (record player), the player piano, radio, television, the 

photocopier, cable TV, the VCR, the DVR, the rnp3 player and video hosting 

platforms. Even though these technologies obviously survived, many individual 

businesses like DVR-maker ReplayTV and video platform Veoh were not so 

fortunate - those companies went bankrupt due to litigation costs, and sold their 

remaining assets to foreign companies. 

PIP A provides a new weapon against legitimate businesses and '"rogue" sites alike, 

and the concern in this context is not merely historical or theoretical. Recent press 

reports noted that advertising giant WPP's GroupM subsidiary had put together a list 

of 2,000 sites that were declared to be '"supporting piracy," on which none of its 

advertising would be allowed to appear. That list - which was put together with 

suggestions from GroupM clients - includes Vibe.com the online version of the 

famed Vibe Magazine, founded by Quincy Jones, and a leading publication for the 

hip hop and R&B community. It also included the Internet Archive's Wayback 
205 

Machine, which preserves copies of Web pages in order to fill a similar function as 

libraries. 

When a famous magazine and a library get lumped in with "rogue pirate sites" in this 

way, it's not hard to see how an overzealous copyright holder might seek to shut 

legitimate businesses down through PIP A. 

The bill would create significant bUt'dens for smaller tech companies: One of the 

l.ey reasons why startups and innovative small businesses became the success stories 

we know of today was protection from misguided lawsuits under the safe harbors of 

Section 512 of the Digital Millennium Copyright Act (DMCA). By properly putting 

the legal liability on the actual actors o[ infringement rather than third-parties, 

Congress wisely ensured that service providers, such as many of the companies 

represented in this letter. could tlourish. 

PIP A would put new burdens and possible liability on independent third parties, 

including payment processors, advertising firms, infornlation location tools and 

others. The definitions here are incredibly vague, and many companies signed below 

could fall under the broad definitions of "information location tools," meaning costly 

changes to their infrastructure, including how we remain in compliance with blocking 

orders on an ever-changing Internet. 

Separately, including a private right of action means that any rightsholder can tie up a 

service provider in costly legal action, even if it eventually turns out to not be 

valid. GiYen the broad definitions used above for sites "supporting piracy," it's not 

dilTicult to predict that plenty oflegitimate startups may end up having to spend time, 

money and resources to deal with such actions. 

These burdens will be particularly intense [or small businesses who can't easily 

afford the legal fees, infrastructure costs or staff required to remain in compliance 

with broadly worded laws in a rapidly changing ecosystem. 

Legitimate services already do their part by following the notice-and-takedown 

system of the DMCA. While we take these types of legal responsibilities seriously 

and already take on costs to do so, that's no reason to pile on additional regulations. 

Breaking DNS will hal'm our ability to build new, safe, and secure services, As 

detailed in a recent whitepaper by some of the foremost experts in Internet 

architecture and security, PIP A will fragment parts of key Internet infrastructure, and 

disrupt key security tools in use today J-'linter[ering in the basic technological 

underpinnings o[ the Internet that we all rely on today would be a huge anchor on 

innovation in many of our companies. 

As Web entrepreneurs and Web users, we want to ensure that artists and great creative 

content can thrive online. But this isn't the right way to address the underlying 

issue. Introducing this new regulatory weapon into the piracy arms race won't stop the arms 

race, but it will ensure there will be more collateral damage along the way. There are 

certainly challenges to succeeding as a content creator online, but the opportunities are far 
206 

greater than the challenges, and the best way to address the latter is to create more of the 

fonner. 

Tn other words, innovation in the form of more content tools, platforms and services is the 

right way to address piracy -- while also creating new jobs and fueling economic growth. 

Entrepreneurs like us can help do that: PIP A can't. 

Sincerely, 

(In alphabetical order by name. followed by companies eitherfounded or where one was in a 

job-creating executive role) 

Jonathan Abrams 

NuzzeL Founders Den, SocializL FriendsteL HotLinks 

Asheesh Advani 

Covestor, Virgin Money USA, CircleLending 

David Albert 

Hackruiter 

Will Aldrich 

SurveyMonkey, TripI!, Yahoo 

Courtland Allen 

Syphir, Tyrant 

Lloyd Armbrust 

OwnLocal.com 

Jean Aw 

NOTCOT Inc. 

Joshua Baer 

Capital Factory, Otherinbox, UnsubCentral, SKYLIST 

Andy Baio 

Upcoming, Kickstarter 

Edward Baker 

Friendly 

David Barrett 

Expensity 

Jonathan Baudanza 

beatlab.com, Rupture 
207 

Katia Beauchamp 

Birchbox 

Idan Beck 

Incident Technologies 

Matthew Bellows 

Yesware Inc., WGR Media 

David Berger 

XL Marketing, Caridian Marketing Labs 

Nicholas Bergson-Shilcock 

Hackruiter 

Ted Blackman 

Course Zero Automation, Motion Arcade 

Matthew Blumberg 

MovieFone, RetumPath 

Nic Borg 

Edmodo 

Bruce Bower 

Plastic Jungle, Blackhawk Network, Reactrix, Soliloquy Leaming, ZapMel Corporation, 

YESI Entertainment 

Josh Buckley 

MinoMonsters 

John Buckman 

Lyris, Magnatune, BookMooch 

Justin Cannon 

Lingt Language, Every Art 

Teck Chia 

OpenAppMkt, Omigosh LLC, Gabbly.com 

Michael Clouser 

iLoding, Market Diligence, CEO Research, New Era Strategies 

Zach Coelius 

Triggit, Votes For Students, Coelius Enterprises 

John Collison 

Stripe 
208 

Ben Congleton 

OIark, N ethernet 

Dave Copps 

PureDiscovery, Engenium 

Jon Crawi'ord 

Storenvy 

Dennis Crowley 

Foursquare, Dodgeball 

Angus Davis 

Swipely, Tellme 

Eric DeMenthon 

PadMapper.com 

Steve DeWald 

Proper Suit Data Marketplace, Maggwire 

Chad Dickerson 

Etsy 

Suhail Doshi 

Mixpauel 

Natalie Downe 

Lauyrd Inc. 

Nick Ducoff 

Tnfochimps 

Derek Dukes 

*Stealth Startup*, Dipity, Yahool 

Jennifer Dulski 

The Dealmap 

Rod Ebrahimi 

Ready F orZero. Di reetH ost 

Chas Edwards 

Luminate, Digg, Federated Media, MySimon 

Dale Emmons 

Vidmakr 
209 

David Federlein 

Fowlsound Productions, Soapbox Coffee, Tnc. 

Mark Fletcher 

ONElisL Bloglines 

Andrew Fong 

Kirkland North 

Tom Frangione 

Simply Continuous, Telphia 

Brian Frank 

Live Colony 

Ken Fromm 

Vivid Studios, Loomia Iron.io 

Nasser Gaemi 

BigDates, ASAM International 

Matt Galligan 

SimpleGeo, SocialThing 

Zachary Garbow 

Funeral Innovations 

Jud Gardner 

Comprehend Systems 

David Gibbs 

High Speed Access Corp, Darwin Networks, Nomad Innovations 

Christopher Golda 

BackType 

Eyal Goldwerger 

TargetSpot, XMPie, WhenU, GoCargo 

Jude Gomila 

Heyzap 

Jeremy Gordon 

Department of Behavior and Logic, Secret LeveL MagicArts 

Steve Greenwood 

drop.io 
210 

James Gross 

Percolate, Federated Media 

Sean Grove 

Bushido. Inc. 

Anupam Gupta 

Mixpo 

Mike Hagan 

LifeShield, Verlicalnel, N ulrisyslem 

Tony Haile 

Charlbeal, Chi.mp 

Jared Hansen 

BreeLY 

Scott Heiferman 

Meelup, Fololog 

Jack Herbeck Jr. 

Elroynel, Blu Zone 

EvaHo 

Factual, Navigating Cancer, Applied Semantics 

Reid Hoffman 

LinkedIn, Paypal, Socialnel, Inveslor in many more, including Facebook, Zynga & GroupOn 

Jason Huggins 

BluZone 

Ben Ifeld 

Macer Media 

Joichi Ito 

Neoteny, Digital Garage, Investor in many more including Twitter, Flickr, Kickstarter, Six 

Apart. Technorati and over 20 other US companies 

Jason Jacobs 

FitnessKeeper 

Daniel James 

Three Rings Design 

David Jilk 

Standing Cloud, eCortex, Xaffire 
211 

Noah Kagan 

Appsumo, GetGambit 

Bill Kallman 

Scay I, Varolii 

Jon Karl 

iovation, ieLogic 

Michael Karnjanaprakom 

S1.illshare 

Bryan Kennedy 

Sincerely.com, AppNinjas, Xobni, Pairwise 

Derek Kerton 

Kerton Group, Telecom Council of Silicon Valley 

Drew Kese 

EcounL Orocasl 

David Kidder 

Clickable, SmartRay Network. THINK New Ideas, Net-X 

Eric Koger 

ModCloth 

Kitty Kolding 

elicit, House Party, Jupiter 

Pete Koomen 

OplimiLely, CarrolStic1.s 

Brian Krausz 

GaLeHaw1. 

Amit Kumar 

Socialscope 

Ryan Lackey 

HavenCo, Blue Iraq, Cryptoseal 

Jeff Lawson 

Twilio, Nine Star, Slubhub, Versity 

Peter Lehrman 

AxialMarket, Gerson Lehrman Group 

Michael Levit 

BluelighLcom, Redbooth, Spigot, Founders Den 
212 

Michael Lewis 

Stellar Semiconductor, Cryptic Studios 

Thede Loder 

Boxbe, Leverage Information Systems 

Marissa Louie 

Ness Computing, HeroEX, AD-Village 

Eric Marcoullier 

OneTrueFan, Gnip, MyBlogLog, IGN 

Michael Masnick 

Floor64 

Jordan Mendelson 

SeatMe, Heavy Electrons, SNOCAP, Web Services Inc 

Dwight Merriman 

DoubleClick, BusinessInsider, Gilt Groupe, lOgen 

Scott Milliken 

MixRank.com 

Michael Montano 

BackType 

Dave Morgan 

Simulmedia, TACODA, Real Media 

Zac Morris 

Caffeinated Mind Tnc. 

Rick Morrison 

Comprehend Systems 

Amy Muller 

GetSatisfaction, Rubyred Labs 

Darren Nix 

Silver Financial 

Jeff Nolan 

GetSatisfaction, NewsGator, Teqlo, Investor in many more 

Craig Ogg 

ThisNext, Stamps. com. TrueCar 
213 

Alexis Ohanian 

Breadpig, Hipmunk, Reddit 

Casey Oppenheim 

Disconnect, Oppenheim Law 

Tim O'Reilly 

O'Reilly Media, Safari Books Online, Collabnet, Investor in many more 

Michael Ossareh 

Hevsan 

Gagan Palrecha 

Chirply, ZaUoo, Sennari 

Scott Petry 

Authentic8. Postini 

Mark Pincus 

Zynga, Tribe Networks, SupportSoft, FreeLoader 

Chris Poole 

4chan, Canvas 

Jon Pospischil 

PowerS ports Store, AppMentor, FoodTrux, Custora 

Jet I Powers 

Occipital 

Jeff Pulver 

140Con( Pulver. com, Vonage, Free World Dialup, VON Coalition, Vivox 

Scott Rafer 

Omniar, Lookery, MyBlogLog, Feedster, Fresher, Fotonation, Torque Systems 

John Ramey 

Buy Ads.com, isocket, Maven Ventures, Lythargic Media, electronicfood.com 

Vikas Reddy 

Occipital 

Michael Robertson 

DAR.fm, mp3tunes.com, GizmoS, Linspire, mp3.com 

Ian Rogers 

TopSpin, MediaCode, FISTFULAYEN, NullSoftiAOL, Yahoo I Music 
214 

Avner Ronen 

Boxee, Odigo 

Zack Rosen 

ChaplerThree, MissionBicycle, GelPanlheon 

Oliver Roup 

VigLink 

SlavaRubin 

IndieGoGo 

David Rusenko 

Weebly 

Arram Sabeti 

ZeroCaler 

Peter Schmidt 

Midnighl Nelworks, NorthSlar Inlernetworking, Burning Blue Avialion, New England Free 

Skies Association, Lifting Mind, Analog Devices, Teradyne, Ipanema Technologies, Linear 

Air 

Geoff Schmidt 

Tuneprinl, MixApp, Honeycomb Guide 

Sam Shank 

HotelTonight, DealBase, SideStep. TravelPost 

Upendra Shardanand 

Daylife, The Acceleralor Group, Fireny Nelwork 

Emmett Shear 

Juslin.lv 

Pete Sheinbaum 

LinkSmart, DailyCandy, Alexblake.com Shop.Eonline.com 

Chris Shipley 

Guidewire Group 

Adi Sideman 

Oddcasl, Ksolo Karaoke, TargelSpol, YouNow 

Chris Sims 

Agile Learning Labs 

Dan Siroker 

Optimizely, CarrolSticks 
215 

Rich Skrenta 

Blekko, Topix, NewHoo 

Bostjan Spetic 

Zemanta 

Joel Spolsky 

StackExchange, Fog Creek Software 

Josh Stansfied 

Incident Technologies 

Mike Tatum 

Whiskey Media ListencomJRhapsody, CNET 

Brad Templeton 

ClariNet Communications, Looking Glass Software, Caller App Inc. 

Jack Templin 

Lockify, ARC eConsultancy 

Craig Tumblison 

Bitcove 

Khoi Vinh 

Lascaux, NYTimes.com, Behavior Design 

Joseph Walla 

HelloFa" 

Brian Walsh 

C astfi re, Three Deep 

David Weekly 

PBWorks 

Jack Weide 

Smartling, eMusic, RunTime Technologies, Trio Development 

Evan Williams 

Blogger, Twitter, Obvious 

Holmes Wilson 

Worcester LLC, Participatory Culture Foundation 

Pierre-R Wolff 

DataWorks, E-coSearch, AdPassage, Impulse! Buy Network Kinecta, Impermium, First 

Virtual Holdings, Revere Data Tribe Networks 
216 

Dennis Yang 

Tnfochimps, FloorM, CNET, mySimon 

Chris Yeh 

PBWorks, Ustream, Symphoniq 

Kevin Zettler 

Bushido, Tnc. 
217 

November 16,2011 

Chairman Lamar Smith 

House Committee Oflthe Judiciary 

2138 Rayburn 1·louse OlTice Building 

Washinb'lOIl, D.C_ 20S15 

Ranking Membt:r John Conyers Jr. 

House Committee on the Judiciary 

B-3S1 Rayburn House Office Building 

Washinb'101l. D.C. 2051S 

Re. StOp Online PirQCY Act, H R.. 3261 

Dear Chairnlan Smith and Ranking Member Conyers: 

As the leading naLional trade association dedicated to representing the inlerests of 

legitimate online distributors of digital music, movies and books, the Digital Media 

Association (nDiMA') remains deeply committed LO eliminating acts ofonlinc copyright 

infrillgemcnt. DiMA members collectively SllClld more than a billion dollars annually to 

license the right to perform. distribute. and reproduce various rOrnl ~ of digital media: and 

the value of those licenses nre greatly diminished. 10 the extent that such works are made 

available illegally online. 

With this in mind, DiMA was ini tially very pleased to learn orlhe committee's plan 10 

focus its attelllion this year on foreign 'rogUe' websites that are committed to massive 

online infringement. TIle congr~ssional rl'Cord is replelC with ample evidence. indicating 

that such sites pose a substantial problem for the entertainment industry, as well as 

software developers, apparel manufacturers and other U. S.-based []' industries_ 

Unfortunately, H,R. )261 does not specifically address these easily-identifiable bad 

actofll in a ml;"aningfu[ way. 

Instead the legislation seeks to advance an overly broad definition oran nlnternet site tbat 

is dedicated to thell of US property", a dctinitiOll that is filled with more than half a 

dozen vague new terms. The inherent problems associated with this approach have been 
218 

widely discussed by several critics of H.R. 3261, so we will not take the time to revisit 

those arguments in the following set of comments. However, we will focus the 

remainder of our remarks on one especially troubling aspect of the bill's new definition. 

Section I 03(a)(1 )(B)(ii)(I) of the legislation, in particular, seeks to rewrite a bedrock 

principle of U.S. copyright law by attempting to impose secondary liability on a domestic 

website operator based solely on their 'constructive knowledge' of infringing behavior 

carried out by one or more of its users.l Imposing liability based on this one element, 

without also requiring a greater showing of more direct involvement with the specific act 

of infringement, represents a dramatic change in existing copyright law and many 

subsequent judicial af1irmations of the principle. This proposed change not only 

threatens to stine innovation, but will likely harm consumers, unduly burden website 

operators and lead to an actual increase in the online infringement of digital music, 

movies and books. 

In Sony Corp. of America v. Universal Cily Siudios, [flC. 2, a seminal case in this area, the 

Supreme Court cautioned against placing too great of an emphasis on the element of 

'constructive knowledge' when attempting to impose secondary liability on product 

manufacturers or service providers for infringing behavior carried out by one of their 

third-party users3 Indeed, while assessing Sony's level ofliability with regard to their 

introduction of the Betamax videotape recorder, the Supreme Court embraced the district 

court's findings which assumed that Sony had constructive knowledge of the probability 

that the Betamax machine would be used by third-parties to engage in some minor 

amount of infringing activity.4 However, relying on the staple article of commerce 

doctrine, the Court went on to note that holding manufacturers secondarily liable under 

such circumstances would unduly hamper commerce in unrelated areas and essentially 

deprive the American public of their ability to use the Betamax recorder to carry-out their 

non-infringing purposes. 5 The Supreme Court deemed such a remedy to be "extremely 

harsh".G 

In addition to hanning consumers, imposing secondary liability on domestic website 

operators under these circumstances would essentially shift the burden of policing the 

Internet for acts of copyright infringement from copyright owners and place the 

responsibility on website operators. In theory, such a restructuring may appear attractive. 

In practice, the policy is filled with several shortcomings. 

1 Section103(a)(l)(B)(ii)(I). as currently drafted. does not include the 'primary design' requirement as 

outlined in section 103 (a)( 1 )(B)(i) of the legislation. Thereforc, undcr this provision, a domcstic websitc 

operator could be held secondarily liable for 'constructive knowledge' of as few as two acts of online 

infringement carried out by one of its users. 

2464 US. 417 (1984). 

3 The Supreme Coun's decision in Sony only addressed product manufacturers. bUl the Court's reasoning 

has been extended to cover service providers, as well. See. In re: Aimster Copyright Litigation. 334 F. 3d 

643. 64g-650 (2003). 

4 Td at 426-428. 

, Id. 

6 Id at 444. 

21 
219 

First and foremost, copyright owners are better positioned than website operators to make 

initial determinations as to whether a particular use of a copyrighted work constitutes a 

fair use. As the 'original creator' or 'contractual owner' of a particular work in question, 

private rightsholders will have great knowledge of the breadth of the work in its entirety; 

and will be able to quickly evaluate the 'portion of the [used] work in relation to the 

copyrighted work as a whole' and the' effect of [its] use upon the potential market for' 

the copyrighted work. As you know, these are two key elements in evaluating plausible 

claims of fair use. 

In addition, copyright owners are better positioned to determine what licensing 

arrangements, if any, have been made with respect to a particular copyrighted work; and 

whether use of a particular work has been authorized through a third-party representative 

for promotional purposes. Over the course of the past few years, several news stories 

have been reported revealing the frequent authorized leaking of sound recordings by 

record companies, artist managers - and in some instances the artist himself - with the 

hopes of generating pre-release album 'buzz'. In light of such activities, it seems 

particularly inefficient to task domestic website operators with the responsibility of 

detecting the "unauthorized' release or use of such materials. (emphasis added) 

Finally, it's worth noting that requiring legitimate online distributors of digital media to 

implement new monitoring and filtering technologies comes at a real cost. Not only in 

terms of the costs associated with the implementation of new protocols and systems, but 

also costs in terms of imposing additional expenses on an industry that already operates 

under rather small transactional profit margins. Ultimately, the result of this new policy 

will only discourage future entrepreneurs from entering into the industry and lead to a 

likely decrease in the utilization of the types of services offered by DiMA members 

which have been shown to reduce online infringement? 

In closing, DiMA, and its member companies, stand ready and committed to support a 

targeted approach to ending online copyright infringement. Unfortunately, H.R 3261, 

the Stop Online Piracy Act, in its effort to rewrite a substantial portion of copyright law, 

fails to satisfy this standard. It is for this reason that we write to oppose the legislation, as 

it is present! y drafted. 

We welcome, of course, the opportunity to discuss our concerns regarding the legislation 

with committee members and staff, with a view towards crafting a new bill that more 

appropriately addresses the issues that face content owners and legitimate online content 

providers, alike. 

7 See, Alexandra Topping. Collapse in illef?a! sharinf? and boom in strealllinf? brinp IIIl1sic to executives' 

ears. luI. 12,2009, available at http://www.guardian.co.ukllllusic/2009~iuI112/111usic-industry-illegaldownloading-strcaming. See, gcncrally Chaptcr 4 ofthc Hargrcavcs Rcport - Copyright Liccnsing: A 

Moment of Opportunity, available at 

http://www.ipo.gov.ukliprcvicw.htlll"intclllP=239. Also. see. The State o/lvIusic Online: Ten Years .1/ter 

Napster. Pew Internet & American Life Project. p. 4, (June 2009). 

31 
220 

Before the 

Committee On The Judiciary 

U.S. House of Representatives 

Hearing on H.R. 3261, the "Stop Online Piracy Act" 

Statement of the 

Consumer Electronics Association 

November 16,2011 

Chairman Smith, Ranking Member Conyers and Members of the Committee, on behalf of 

the Consumer Electronics Association (CEA), thank you for the opportunity to submit written 

testimony concerning H.R. 3261, the "Stop Online Piracy Act." 

CEA is the preeminent trade association promoting growth in the consumer electronics 

industry. CEA members include product and component manufacturers, internet providers and 

both small and large retailers. Our industry accounts for more than $165 billion in annual 

domestic sales and directly employs approximately 1.9 million United States workers. 

There is no doubt: CEA supports strong intellectual property enforcement. Our 

members' businesses rely on robust and balanced intellectual property law that protects the rights 

of authors and inventors while preserving and encouraging innovation, free expression and 

competition. As such, CEA supports this Committee's intention and determination to stop online 

piracy and counterfeiting. But our member companies have expressed profound concerns about 

the scope, sweep and etlicacy of H.R. 3261, the "Stop Online Piracy Act." CEA also shares the 

concerns regarding this legislation expressed by innovators,! entrepreneurs,2 artists,3 and experts 

in law and international relations 4 

CEA and its members are eager to support legislation that is directed to foreign "rogue 

sites" - the "worst of the worst" - whose infringing activities lie beyond the reach of existing 

U.S. authority, and have no conceivable justification under U.S. law. But as written, H.R. 3261 

will do little to stop piracy and instead will undermine both bona fIde online U.S businesses, 

create new private causes of action and weaken the open Internet that encourages tree 

expression. 

H.R. 3261 Will Terminate Vital Financial Resources To Legitimate U.S. Businesses 

Despite claims to the contrary, Section 103 ofH.R. 3261 empowers private parties to 

require payment processors and Internet advertising services to suspend all services to entire web 

sites of legitimate U.S. businesses and not just foreign rogue websites. This death sentence to an 

entire legitimate U.S. business can be triggered by a single complaint from another company 

simply claiming that a copyright infringement or a violation of Section 1201 of the DMCA is 

e.g., letter to this Conmnttee from Intemet en6>ineers, October 12, 2011. 

e.g., open letter to Chris Dodd from Masnick et al. Silicon Valley entrepreneurs, October 31,2011. 

3 See, e.g, letter 10 Members of Congress from 9613w professors. July 5, 2011. 

, See. e.g, open letter from arlisls 10 Members of Congress from Fighl For nle Fulure. Oelober 14, 2011. 
221 

being "enabled" or "facilitated" or that the business failed to take advance measures to cleanse 

itself of evety product against which some complaint might be brought. 

H.R. 3261 's extremely overbroad detlnition in Section 103 of "dedicated to theft of U.S. 

property" endangers innovation and legitimate commerce. Despite the use of terms such as 

"U.S.-directed," this section is not limited to overseas sites. It targets and atfects all U.S. sites 

and all U.S. businesses. Businesses said to be only "enabling or facilitating" infringing conduct 

by other domestic or foreign companies will face a risk of being shut down that is equal to those 

actually "engaging" in it. Applying this broad standard to copyright infringement and to Section 

1201 of the DMCA, and allowing anyolle to demand that access to payment providers and 

Internet advertising be denied, opens the door for mischief on a scale not seen in even the most 

dubious copyright and patent litigation. For example: 

• A website offering a legitimate but controversial product could be shut down entirely by 

a notice from a private plaintiff to a financial transaction provider, or to an advertising 

service. The law would require not just a "take down" of the controversial product, but a 

shutdown of all online purchasing and advertising for any other product on the site. The 

plaintiff need only complain that the business is "marketing" a product for a "use" that 

would be copyright infringement. 

o This sort of claim has been commonly, and often unsuccessfully, made against 

innovative and legitimate consumer electronics products. In 2000, such a claim 

was made by several motion picture studios against Replay TV, an early 

competitor ofTiVo and a forerunner of the DVR products now routinely 

distributed by cable and satellite companies to their subscribers - based ollly on 

the product's ability to search, record, index, and retrieve content.' 

Such a "market-based" private action under Section 103 ofH.R. 3261 would be a chilling 

alternative to tiling a copyright suit for contributoty infringement or inducement - the sort of suit 

that Sony won in the Supreme Court when the first VCR was challenged. It would be necessaty 

only to persuade credit card issuers that a complaint of contributoty infringement or inducement 

is "reasonable" - instead of prevailing in an adversarial court proceeding. Due process is dealt 

another blow in the legislation since Section 103(d)(5)(B) immunizes credit card issuers from 

liability for acts relating to or "reasonably designed" to comply with a private request to shut 

down all payment processing for all the challenged company's online products. 

Because Section 103 also covers "enabling or facilitating" a violation of Section 1201 of 

the DMCA, private actors could also ask credit card issuers to shut ofl' payments to any site that 

offers a product that they accuse of "circumvention" under the DMCA. But companies have 

suffered losses from preliminaty injunctions based on improper "circumvention" claims, as the 

courts have struggled with the open-ended language of Section 1201 of the DMCA. By 

broadening the scope further to include acts of "facilitation" under a law in which marketing and 

~ While competing .md successor products offering the same capacities have thrived, Replay sold off its assets in 

bankruptcy because it could not fund its defense of tbe lawsuits. Some of the complaints filed against Replay 

claimed that the ability to search ror. record. and inde, content rrom cable TV, taken alonc. constituted dircct. 

contributory, and inducing infringement or copyright. 

2 
222 

facilitation are already punishable and immunizing banks that shut off funds to those accused 

can only further chill technical innovation and legitimate commerce. 

Per Section 103(a)(I)(B)(ii)(T), companies accused by private sector rivals or other 

private actors of "enabling or facilitating" violations of copyright law or DMCA 1201 are also 

vulnerable to a charge of having taken "deliberate actions to avoid confirming a high probability 

of the use of the U.S.-directed site to carry out acts that constitute a violation .... ,,6 Tn plainer 

language, this would seem to suggest that domestic online merchants offering thousands or tens 

of thousands of products in their online stores will now be required to police their listings in 

advance for possible claims of copyright "inducement" or direct infringement This provision 

would also seem to eviscerate the protections for online services, search engines, and consumer 

participation Internet sites offered by DMCA Section 5127 CEA believes that legitimate U.S. 

merchants and Internet companies should not be responsible for advance economic cleansing of 

their sites to avoid lawsuits. If this provision is enacted, innovators and other legitimate business 

could not even rely on the discretion of federal prosecutors. Instead, they would be at the mercy 

oflitigation-happy companies that want to preserve aging business models or shut down 

competitors. 

H,R. 3261 Would Shut Down Legitimate U.S. Web sites Without Due Process or Recourse 

for the Wrongfully Targeted Website 

Under Section 104, the legislation provides complete immunity for a service provider, 

payment network provider, Internet advertising service, advertiser, Internet search engine, 

domain name registry, or domain name register from blocking access or financial services to a 

website so long as there is a "reasonable" belief that the site is "dedicated to the theft of U.S. 

property." 

There is no due process for the innocent website owner to defend themselves before the 

action is taken or seek restitution after their website has been removed and business negatively 

impacted. 

With the threat of being sued for contributory infringement coupled with the broad 

definition of "dedicated to the theft of U.S. property, a service provider will have a strong 

incentive to shut down the accused website. To put it simply, the legislation favors the copyright 

owner's intellectual property rights and, based on unfounded claims of infringement, strips the 

accused website owners from their property right. 

6 Section IOJ(a)(l)(B)(ii)(I), emphasis supplied. As is noted above, despite llse of terms --U.S.-directed," etc .. the 

businesses targeted and affected by Section 1 tB include all U.S. TnteTIlet sites and all U.S. businesses. 

i Counsel for content providers have criticized court implementation of this "safe harbor provision" '''hich \:ras 

painstakingly negotiated with congressional leaders and the tech industry as a core part of the DMCA. See Greg 

Sando\'aL RIAA hnvycr says DMCA may need overhaul, Nov. 6, 201 L ilHM'1];v,s.cncLcom/XlilJ-3 Hill .. LJ: 

)l"U.934-l-26 }lIilln-lmlliI:2.ID-s-dmcn-mm -11~cQ-ovcr1uml!'lill.g::.nTI~?921§. 

3 
223 

H.R. 3261 Creates Security Risks that Outweigh Poteutial Blockiug of Illegal Sites 

HR. 3261 also includes a "DNS" blocking provision that is more dangerous to legitimate 

business than it is to pirates. The DNS blocking provision also invites similar action by nations 

that are not as scrupulous about free speech and an open Internet as is the United States. 

It is easier for a "pirate" site to circumvent DNS blocking than it is for a legitimate 

business. A "pirate" expects to be pursued and is ready to use other names that can easily be 

found by those accustomed to actively searching for such sites. Legitimate businesses, however, 

invest in their brands and attract customers who look for the brand. Thus, improvident or 

mistaken use of the name blocking technique - shown already to be inevitable by those operating 

in the best of faith - will hurt innovative and legitimate businesses more than it will pirates. 

When foreign governments point to this law in order to rationalize new uses of DNS 

blocking to suppress internal speech or the competition from US and other legitimate 

businesses, our innovation, as well as our society's interest in free speech and an open Internet, 

will suffer 

*** 

CEA concurs with the other issues with HR. 3261 raised by NetCoalition, Public 

Knowledge, the library and educational associations, and the many innovative technology 

companies that have expressed concern over its potential impact on their legitimate business 

practices. Their concerns and ours, along with those voiced by experts in several other tlelds, 

should lead to a deliberate examination and a narrowed focus of this legislation. On behalf of 

our members, CEA pledges its cooperation and its assistance in this process. 

4 
224 

Thursday, June 23, 2011 

Memhers of the U.S. Congress, 

We write to express our concern with S. 968, the PROTECT lP Act ("P1PA"). As investors in 

technology companies, we agree with the goal of fostering a thriving digital content market 

online. Unfortunately, the cunent bill will not only fail to achieve that goal, it will stifle 

investment in Internet services, throttle innovation, and hurt American competitiveness. 

Online innovation has floUlished, in part, because the Digital Millennium Copyright Act (DMCA), 

though flawed, created clear, defined safe harbors for online internlediaries. The DMCA creates 

legal certainty and predictability for online services -- so long as they meet the conditions of the 

safe harbors, including an appropriate notice-and- takedown policy, they have no liability for the 

acts of their users. At the same time, 

the DMCA gives rights-holders a way to take down specific infringing content, and it is 

working well. 

We appreciate P1PA's goal of combating sites truly dedicated to infringing activity, but it would 

undermine the delicate balance of the DMCA and threaten legitimate innovation. The bill is ripe 

for abuse, as it allows rights-holders to require third-parties to block access to and take away 

revenues sources for online services, with limited oversight and due process. 

In particular: 

1. I3y requiring "information location tools" -- potentially encompassing 

any "directorlies], indexlesJ, referencels], pointer[sj, or hypertext linklsj" -- to 

remove access to entire domains, the bill puts burdens on countless J mernet 

services. 

2. By requiring access to sites to be blocked by Domain Name Systcm 

providers, it endangers the security and integrity of the Internet. 

3. The bill's private right of action will no doubt be used by many rights-holders in 

ways that create significant burdens on legitimate online commerce services. The 

scope of orders and cost oflitigation could be signiJieant, 

even for companies acting in good faith. Rights-holders have stated their interest in 

this private right of action becausc they worry that the Department of Justice will not 

have enough resources to initiate actions against all of 

the infringing sites. Yet, why should costs be shifted to innocent Internet 

entrepreneurs, most of whom have budgets smaller than the Department of 

Justice's? 
225 

While we understand PLPA was originally intended to deal with "rogue" foreign sites, we think 

PIPA will ultimately put American innovators and investors at a clear disadvantage in the global 

economy. For one, services dedicated to infringement will simply make 

their sites easy to find and access in olher ways, and detemlined users who want to find blocked 

content will simply shit! to services outside the reach of U.S. law, in tW"n giving a leg up to 

foreign search engines, DNS providers, social networks, and others. Second, PIP A creates a 

dangerous precedent and a convenient excuse for countries to engage in protectionism and 

censorship against U.S. services. These countries 

will point to PIPA as precedent for taking action against U.S. technology and lntemet 

companies. 

Thc entire set of issues surrounding copyright in an incrcasingly digital world arc cxtremcly 

complex, and there are no simple solutions. These challenges are best addressed by imagining, 

inventing, and financing new models and new services that will allow creative activities to thrive 

in the digital world. There is a new model for financing, distributing, and profiting from 

copyrighted material and it is working -- just look at services like iTLmes, Neti1ix, Pandora, 

Kickstarter, and more. Pirate web sites will always exist, but if rights holders make it easy to get 

their works through innovative Internet models, they can and will have bright futures. 

Congress should not chill investment and reduce incentives to work on private sector solutions. 

Instead, we encourage Congress to focus on making it easier to license works and bring new, 

innovative services to market. 

Sincerely, 

Marc Andreessen, Andreessen Horowitz 

Brady Bohrrnann, Avalon Ventures 

.T ohn B0l1hwick, Betaworks 

Mike Brown, Jr., AOL Ventures 

Brad Burnham, Union Square Ventnres 

Jeffrey Bussgang, Flybridge Capital Partners 

John Buttrick, Union Square Ventures 

Randy Castleman, Court Square Ventures 

Tony Conrad, True Ventures 

Ron Conway, SV Angel 

Chris Dixon. Founder Collective 

Bill Draper, Draper Richards 

Esther Dyson, EDvcntnrc Holdings 

Roger Ehrenberg, IA Ventures 

Brad Fcld, Foundry Group 

Peter Fenton, Benchmark Capital 
226 

Ron Fisher, Softbank Capital 

Chris Fralic, First Round Capital 

David Frankel, Founder Collective 

Ric Fulop, North Bridge 

Brad Gillespie, IA Ventures 

Allen "Pete" Grum, Rand Capilal 

Chip Hazard, Flybridge Capilal Partners 

Rick Heitzmann, FirstMark Capital Eric 

11 ippeau, Lere!' Ventures 

Reid Hoffman, Greyloek Partners 

Ben Horowitz, Andreessen Horowitz 

Mark Jacobsen, OA TV 

Amish Jani, First Mark Capital 

Brian Kempner, First Mark Capital 

Vinod Khosla, Khosla Ventures 

Josh Kopelman, First Round Capital 

David Lee, SV Angel 

La\\Tence Lenihan, FirstMark Capital 

Kenneth Lerer, Lerer Ventures 

Jordan Levy, Softbank Capital 

Jason Mendelson, Foundry Group 

R. Ann Miura-Ko, Floodgate 

Howard Morgan, First Round Capital 

John O'Farrell, Andreessen Horowitz 

Tim O'Reilly, OA TV 

DavidPakman, Venroek 

Eric Paley, Founder Collective 

Alan Patrieof, Greyeroft Partners 

Danny Rimer, Index Ventures 

Neil Rimer, Index Ventures 

Bryce Roberts, OA TV 

Bijan Sabel, Spark Capital 

David Sze, Greylock Pattners 

Andrew Weissman, Bela\\orks 

Albert Wenger, Union Square Ventures 

Eric Wiesen, RRE Venlures 

Fred Wilson, Union Square Ventures 
227 

The White House 

Otllce of the Vice President 

For Immediate Release 

November 01,2011 

VP's Remarks to London Cyberspace 

Conference 

Via Video Teleconference 

1042 AM. EDT 

THE VICE PRESIDENT: Well, thank you very much, Foreign Secretary Hague, and my best to 

Prime Minister Cameron. I agree with everything that he said today. 

But I'm very glad to be able to join you all on behalf of our administration to talk about the issue 

that will have enormous, enonnous consequences for each of our countries and, quite trankly, 

consequences for the whole world: the future of cyberspace. 

And 1 do bring greetings from Secretary Clinton who does send her regrets that she's not able to 

be with you in person today. 

As you all know, nearly one-third of humankind is online today, something we would have never 

thought possible 20 years ago, more than 2 billion people and counting. The Internet has become 

the public space of the 21 st century, a sphere of activity for all kinds of activities, open to all 

people of all backgrounds and all beliefs. 

And as vibrant, as dynamic as the Internet already is what we've seen so far, I believe and we 

believe, is just an opening act. More than 5 billion people will connect to the Internet in the next 

20 years -- 5 billion. And most of them will live in countries and regions that are now underrepresented online. And the next generation of Internet users has the potential to transfonn 

cyberspace in ways we can only imagine. And cyberspace, in turn, has the potential to transform 

thei r li ves, as well. 

But the extent of both the contributions they will make to the Internet and the benefits they'll 

derive from it are going to depend in large degree on the choices all of us in the room today 

make. The Internet itself is not inherently -- to state the obvious -- is not inherently a force for 

democracy or oppression, for war or for peace. Like any public square or any platfonn for 

commerce, the Internet is neutral. But what we do there isn't neutral. It's up to us to decide 

whether and how we will protect it against the dangers that can occur in cyberspace while 

maintaining the conditions that give rise to its many benefits. That's what Prime Minister 

Cameron just spoke about. 
228 

Mr. ISSA. Thank you, Mr. Chairman. I have been the victim of 

piracy, so you are not going to have a problem with me agreeing 

with the problem. Hardware/software, got it all. But, Mr. Clark, I 

am going to hope that you can stretch for this part of it, even 

though it is not in your title. You are familiar with the ITC, are 

you not? 

Mr. CLARK. Yes, I am. 

Mr. ISSA. Pfizer regularly for patent infringement on imported 

products would go to the ITC and get relatively quick justice using 
229 

administrative law judges available to them, injunctive relief 

against a patent violator, correct? 

Mr. CLARK. Outside of my field, but I would believe that would 

be the case. 

Mr. ISSA. So, when we deal with rogue elements outside the jurisdiction of the United States that are importing in the United 

States, we have a history of an organization that is quick, administrative, and can have continued jurisdiction against non-U.S. entities who are, in fact, trying to take what they have stolen and sell 

it into America. Is that correct to your understanding? 

Mr. CLARK. Generally speaking, yes. 

Mr. ISSA. Okay. Have any of you—just raise your hand—worked 

with the ITC in your background or are familiar with them? One 

or the other. 

Well, let me just run through quickly, because time will be very 

limited and the answers seem to be long. We have a court of jurisdiction. Now, they do not specifically have the mandate to follow 

the money and provide injunctive relief against Google, eBay, or 

anybody else after they find an offshore infringer and seek remedies, but they have their own counsels. They have administrative 

law judges. They have a procedure. 

Mr. Chairman, I object to this bill in its current form, mostly because I believe it fails to use tools that are generally better than 

the tools that we have at our disposal in this bill. And I believe 

that if the real remedies sought is, in fact, a court of continued jurisdiction specializing in intellectual property and designed to it, in 

fact, reach a quick solution to a question of whether there is wrongdoing, and then follow the money through injunction, not through 

fines, and obviously a criminal referral. 

My intention is to offer legislation on a bipartisan basis that will, 

in fact, look at the legitimate concerns, take a great deal of these 

80 pages; however, and this is where it is tough, Mr. Chairman and 

Ranking Member, suggest that a jurisdiction not within this Committee get a substantial portion of this bill, because I believe that 

that is as appropriate as it is for the Federal courts to consider domestic entities who are violating it. 

And so, with that, Ms. Oyama, if I am pronouncing it right. 

Ms. OYAMA. Yes. 

Mr. ISSA. In your experience, has Google worked with the ITC or 

any other administrative law judges and executing on other people’s judgments? 

Ms. OYAMA. I would imagine in the patent context, yes. It is not 

my field, so I cannot speak to it. 

Mr. ISSA. Okay. But do you agree that having a court of continued jurisdiction that, in fact, can work for injunctive relief as technology is available is generally something that Google and the 

other search engines would see as reasonable once there is a judgment entered against an offender somewhere? 

Ms. OYAMA. Yeah, I think we would be happy to work on that 

type of solution. 

Mr. ISSA. And I am going to get to the others, but, Mr. Clark, 

if you had that, and you had a judgment against party A who had 

an Internet site, and then 25 other similar parties show up from 

the same country and have all the identities that tell you it is basi-
230 

cally the same group of you already have a judgment against, 

would you not benefit from a court that we specifically gave jurisdiction to to determine quickly that those are alter egos and execute upon them so that you would not go through this wackomo 

again and again, trying to prove to somebody that it is basically the 

same people doing it again? 

Mr. CLARK. My working relationship with the ITC has been very, 

very limited. I am not quite certain what their capabilities are. If 

you are saying you are going to empower them to do certain work 

like that, it would make some sense. 

Mr. ISSA. Currently they are, and the others would probably 

know this, it is a place that plaintiffs go to if there is any importation and they have a patent because they can administer a decision 

faster than the fastest rocket docket. And unlike the eBay decision, 

they have injunctive relief, not only as a tool, but as their one and 

only tool, and they use it without discretion because, in fact, that 

is the mandate of Congress. 

Mr. CLARK. But you are still talking of a referral process. I think 

the DoJ then for a criminal follow-up and for asset—— 

Mr. ISSA. And I recognize at some point the administrative law 

judges look and say we have a domestic entity that is not compliant with our injunctions, or a site that is just as broke in the U.S. 

So, I am very aware that there are elements here that if you are 

cooperating or facilitating with a foreign entity, that there would 

have to be a referral. That is not going to be Yahoo, or Google, or 

eBay. It is going to be, as you know, the rogue sites you fight every 

day. 

Mr. CLARK. Right. And I would just be worried about the bifurcation of activity in the referral process and the elongation of the end 

result is something like that were arranged. 

Mr. ISSA. Well, I look forward to showing both our witnesses and 

the Committee that, in fact, the ITC’s time to judgment and their 

execution is actually much shorter than our Federal courts, and 

less discretionary than the Justice Department’s generally. And I 

thank the Chairman for his indulgence, and yield back. 

Mr. SMITH. Thank you, Mr. Issa. 

The gentlewoman from Texas, Ms. Jackson Lee, is recognized? 

Ms. JACKSON LEE. Let me thank the Chairman very much, and 

the Ranking Member, and let me call the roll, for the record, and 

say that I want the U.S. Library of Congress, I want Pfizer, the 

Motion Picture Association of America, MasterCard, Google, and 

our good friends in the technical aspect of our moviemaking business, and all supporters to be made whole. I think we have a consensus that online piracy is a both devastating and destructive element of the Nation’s economy. In fact, I have said, I think, I believe 

often that it steals the genius of this country. 

We are very proud of the motion picture industry, and I am, if 

you will, a cup runneth over. I may be your physical armor when 

I see the massive thievery that goes on, and certainly in some of 

our international friends. 

So, I start off with that, and I want to find a common ground. 

And as I have looked at the legislation, I hope the Chairman and 

Ranking Member will give us the time to really study the legislation. Several things come to mind. One, this legislation has no re-
231 

ferral. I am a Member of the Homeland Security Committee, and 

our Committee spent years helping to build the switch to the DNSSEC. And if this bill would pass, we would have a challenge with 

that format. 

And the question is, would everyone who needs to make changes 

to the DNS-SEC would instead be on the phone to their lawyers, 

asking whether they would be sued for adopting security technology that will make the mandated block and redirect system even 

more difficult. We have to look at all of these issues. 

So, I want to ask the Library of Congress first if she has any 

comments regarding that conflict. We are supposed to be collaborative. You are the only government witness. I am not sure if you 

have thought of that, but let me give you a second question quickly 

since our time is going quickly. I am concerned about what effect 

it will have on small businesses, particularly those that could not 

afford to go to court should a rightsholder come forward and demand that their access to revenue be shut off. If a rightsholder accuses a small business website of facilitating infringement and a 

payment processor shuts off payments to that business, is the payment processor immune from suit under section 104, and what 

rights do they have? 

So, first, is there any collaboration or recognition about the system that the DHS has formulated? 

Ms. PALLANTE. I am sorry, I do not know the answer. 

Ms. JACKSON LEE. You do not have that question. Mr. Chairman, 

I think we have to have that answer from whatever resources we 

can get. 

Next, if you can have any insight on how it impacts small businesses—— 

Ms. PALLANTE. Yes. 

Ms. JACKSON LEE [continuing]. This particular legislation. 

Ms. PALLANTE. That section of the bill, I believe, was actually intended to make it easier and quicker, and to avoid the court process and the cost. That is the goal. There is no liability for the intermediaries under that section. There is an obligation if it goes to the 

next stage and there is a court order. There is an obligation. 

Ms. JACKSON LEE. Right. So, there is still a process that is small 

business might have to be engaged in. There is still a process 

which makes it easier—— 

Ms. PALLANTE. There is, and they are good faith intermediaries, 

and they have not themselves broken the law, and the bill tries to 

take that into account. If we can refine that, we should. 

Ms. JACKSON LEE. Yes, because they still have an obstacle to 

climb, if you might. 

Let me go to Ms. Oyama. Forgive us all for not reading the name 

correctly. I do not have it in front of me. But let me quickly give 

you a series of questions. 

Ms. Oyama, is that correct? 

Ms. OYAMA. Yes. 

Ms. JACKSON LEE. All right, thank you. One of the kinds of 

groups that I have been engaged in over the last couple of months 

is the generation of youth that are excited about startups. They are 

everywhere. They are job creators, and I see them as the next nucleus of job creation in America. They are obviously functioning 
232 

now. They are all trying to emulate all of the stars of social networks. We know that will not be the case, but they are trying to 

create jobs. 

So, let me raise these concerns with you. I think immediately 

what comes to mind is that this legislation may be overly broad, 

that it too easily circumvents Internet users, and it is inherently 

incompatible with the way the Internet actually works. Would you 

comment on the overbroad, these circumventing Internet users, 

and incompatible with the way the Internet works? Could you do 

that quickly for me? And then, I would like to go back to—if you 

could be listening to this question about the—Ms. Pallante, if you 

have any idea about the problematic aspect of this, again, for 

smaller minority businesses. But, Ms. Oyama? 

Ms. OYAMA. Sure. On the over breadth concern—— 

Ms. JACKSON LEE. Over broad. 

Ms. OYAMA. Over broad, a huge concern is the scope of the definition of what is a site dedicated to the theft. So, that is a concern 

that has been raised amongst small businesses, larger tech companies. If we are going to go after rogue sites, we have to make sure 

that they are rogue sights and they are breaking the law. There 

is a lot of concern that right now. The definition would cover new 

ground. It would cover sites that today are complying with the 

DMCA, so they are taking down infringement when they are notified by rightsholders. It would be sites that today under existing 

laws if they were hauled into court, they would be found not guilty 

under existing copyright laws. So, I think there is the scope concerns there. 

Ms. JACKSON LEE. Circumvented by Internet users? It could be 

too easily circumvented by Internet users? 

Ms. OYAMA. Yeah. So, one of the concerns is that on the notice 

and terminate provision, that peace does not go through the courts, 

and so somebody could just notify a service provider. You could go 

away for Thanksgiving if you are a website owner, and your ads 

and payment providing services under the bill should be could be 

shut off in 5 days. So, there is a lot of concern that, you know, that 

does not really provide adequate due process in terms of the way 

current businesses work. 

I will say in terms of the incompatibility with the Internet, in the 

Internet sphere, Internet traffic is going to route around blockages, 

and so kind of working with a grain of the Internet we think is 

really smart, is really effective. It is why we support the legislation. We have discussed before about cutting of the funding 

sources. It is an incredibly sophisticated site. Much of international 

law enforcement was going after Wikileaks, and if you go to 

Wikileaks home page, it says that they are going down because 

payment providers shut them off. 

Mr. SMITH. The gentlewoman’s time has expired. 

The gentleman from Florida, Mr. Ross, is recognized? 

Mr. ROSS. Thank you, Mr. Chairman. 

Ms. Oyama, do you feel that this bill is an infringement of the 

First Amendment right of free speech? 

Ms. OYAMA. You know, I think short of the constitutionality; it 

certainly raises free speech concerns. 

Mr. ROSS. Is it censorship that you are concerned about? 
233 

Ms. OYAMA. Yeah. So, the U.S. has had a good platform globally 

to speak out for free expression, and I think a lot like this, which 

would for the first time empower the government—— 

Mr. ROSS. It would empower the government to require you to 

do something that you do not want to do, which would be to shut 

down a site. Is that correct? 

Ms. OYAMA. We are happy to disable links, when we are notified 

by rightsholders. We think that—— 

Mr. ROSS. And as long as you do it without a third party, such 

as the government, it is not an infringement of First Amendment 

rights of free speech, nor is it a censorship, is it? 

Ms. OYAMA. We do not do full site blockages; we do page by page 

for a—— 

Mr. ROSS. But you do takedowns. 

Ms. OYAMA. Under DMCA, yes. 

Mr. ROSS. Yes, which is the same thing. I am just having a hard 

time distinguishing when you do it. It is okay, but when you have 

the third party, such as the Federal Government, requiring you to 

do it, then it becomes censorship and an infringement of First 

Amendment rights. 

Ms. OYAMA. I see. I think the government approach is much 

broader in this bill. 

Mr. ROSS. Let me go a little further here because I want to go 

your example of Dave’s Emporium, which I think is a great example for people, such as me, that think simply to understand a small 

business. But I want to look at it from a consumer rights perspective. 

Let us say that Dave’s Emporium, because of that 1 percent vendor that he uses on the Internet that is found through your Google 

search, results in the purchase of a product that causes death or 

personal injury. Now, in that chain of commerce, Google would be 

brought into action, especially where there is joint and several liability as a deep pocket, to defend that suit and probably pay damages. All of that could have been prevented had there been an investigation, had there been the appropriate execution under this 

Act. 

In fact, not only would it have been prevented, but also under 

this bill, is there not an affirmative defense that Dave’s Emporium 

could have asserted in the sense that I do not have the resources 

to hire a lawyer that would mitigate my responsibility to now have 

to defend the order to take down. 

So, what I am getting is that, even further you have immunities 

under this Act that would prevent a third party suit against you 

if you shut it down. But you do not have immunities if, in fact, you 

allow for the sale and purchase of products that are not only counterfeit, but they also result in death or personal injury. 

Ms. OYAMA. So, on counterfeit, it is definitely something that we 

agree with you. Counterfeit is a big problem. It is something that 

we invest tons of engineering hours, millions of dollars, into going 

after. For example, for ad words, we ejected 95 percent—— 

Mr. ROSS. But it would seem to me that you would want to have 

the immunities. You would want to have some protection, some 

safe harbors to prevent lawsuits against you in the execution of 

your business. 
234 

Ms. OYAMA. I think if a court is instructing intermediaries to 

take action, there is probably some plays for its immunities. But 

the concern here is that Dave could be shut off for 5 days, not pursuant to his terms of service. Certainly no one has an absolute—— 

Mr. ROSS. But he could be put out of business being sued because 

of the harmful product that could have been prevented had Google 

investigated the site. 

Ms. OYAMA. So, certainly, no one has an absolute right to ad payment services. We think that there should be—— 

Mr. ROSS. Well, Dave is in a bad situation either way, and I 

think that he needs to have some protections, and I think that this 

bill will offer some of that. 

But let me shift to another thing, and let me tell you, I appreciate what Google has done with regard to child pornography. I 

mean, you guys have stepped up to the plate tremendously. And I 

think that is a wonderful example; you need to be congratulated for 

that. You do it because it is the right thing to do. And it would 

seem to me that following the letter of the law, you could do the 

same thing in this regard in an effort to hold down or at least 

eliminate the use of pirated sites by way of the search engine, 

Google. 

Ms. OYAMA. So, child pornography certainly is a huge problem. 

It is something we take very seriously. Technically, going after 

child pornography in a search engine is completely different from 

copyright because a machine can detect tapped child pornography, 

and a machine can look for flesh tones. Human, if you look at it, 

would know what it is and could ejected, and with a copyright—— 

Mr. ROSS. But it is still the right thing to do. 

Ms. OYAMA [continuing]. You cannot just look at the video and 

know whether it is infringing or licensed, right? It needs to be in 

collaboration with the rights owner. 

Mr. ROSS. Real quickly, Ms. Kirkpatrick, not a question, just a 

thank you on behalf of MasterCard for what you are doing because 

you are cutting off the source of the problem. And that is very important. 

Ms. KIRKPATRICK. Thank you. 

Mr. ROSS. Mr. Almeida, I had a chance to meet a couple of days 

ago with one of your members, a gentleman, a lifelong songwriter. 

He is in this room. And he met with me, and he said, you know, 

the problem is not that it is a fight between the movie houses and 

the producers; it is the small people, the people who have followed 

their passion, the people who have the artistic ability to do something they have always wanted to do that now, after 30 years of 

being a songwriter has to look at whether he can keep his house, 

what his future is going to hold. And I wish you would do for me, 

and explain to the Members up here, is how this adversely impacts 

not the giants in Hollywood, and not the giants in Nashville, but 

those that participate, those whose creativity and innovation will 

be stifled unless there are some protections. 

Mr. ALMEIDA. Well, I think there does need to be protections, and 

I think that is what this bill hopes to do. And this is not to protect 

the big dogs in Hollywood. 

Mr. ROSS. Right. 
235 

Mr. ALMEIDA. Our members who are behind the scenes, who are 

stage hands—— 

Mr. ROSS. The foundation. 

Mr. ALMEIDA [continuing]. The people who build the sets, the 

back end payments for those workers support their health and pension fund, and that is being cut off. They are adversely being impacted by these rogue site sand by the piracy of their videos. A 

video being released today will be available by the weekend on the 

web. And so, we are hoping that this legislation will help to take 

a step forward in that area. 

Mr. ROSS. Thank you. I see my time has expired. I yield back. 

Mr. SMITH. Thank you, Mr. Ross. 

The gentlewoman from California, Ms. Waters, is recognized? 

Ms. WATERS. Thank you very much, Mr. Chairman. 

Let me just say that I find the discussion on H.R. 3261 extremely 

interesting and engaging. I think Mr. Watt framed this issue somewhat in his opening statement when he talked about the giants, 

and competition, and the profits and the money that is involved 

being at the basis of all of it. And let me just say that I view any 

proposed changes in IP and copyright law as an opportunity to examine whether changes will expand opportunities for women and 

minority entrepreneurs, both in Hollywood and Silicon Valley. 

And I come to this discussion just having witnessed a CNN presentation called ‘‘Black in America’’ by Soledad O’Brien this past 

weekend, which I found very, very interesting. 

Having said that, I would like to direct my first question to 

Maria Pallante, U.S. Copyright Registrar. User generated content, 

websites like Facebook and YouTube, are extremely popular. Individuals and groups use these platforms to share videos that range 

from fraternity and sorority step shows and high school talent 

shows, to videos of kids performing a new dance or imitating a new 

music video. Many of the common artists who do not have record 

deals also use UGC sites to showcase their talents, covering popular songs. 

Now, to the extent many uploaded video clips feature the use of 

copyrighted music and other type of content that is not for profit 

or commercial gain, do you think that this bill would include a safe 

harbor, their use exception or other explicit provision that would 

ensure we are not trying to subject parity and leisurely activities 

to felony penalties? Are you at all concerned that some of the section’s broader language could have unintended consequences that 

may chill the use of UGC sites and digital platforms that have 

served an important source of social utility? 

Ms. PALLANTE. Thank you for the question. I am not concerned 

as it is written. We are talking about two different levels of activity. This bill would go after sites dedicated to infringement. I think 

what is on the table in this room is a position that one can be compliant with the DMCA through notice and takedown of very specific 

sites when notified, and, therefore, not have an obligation to participate in a solution that is about fraud, willful, criminal, egregious, dedicated activity. These two things will operate at the same 

time, and the notice and takedown system will remain intact. 

Ms. WATERS. Also I would like to ask about another issue that 

I am very concerned with, and I would like to direct this to Ms. 
236 

Katherine Oyama, to Google. I am very concerned about the voluntary authority and legal immunity the bill gives Internet service 

providers to block access to sites they reasonably believe are infringing sites. This provision would seem to run counter to the 

FCC’s recently issued open Internet net neutrality rules. 

I can foresee cases in which an Internet service provider that 

owns online content may use this section as pretext to unfairly 

block access to a competing website that is not really dedicated to 

infringement. This section does not require credible claims, merely 

a reasonable belief that does not exclude commercial disputes or 

anti-competitive conduct. It is my understanding that the Senate 

does not have ISP involuntary blocking authority in its bill. 

Can you foresee any unintended consequences with the voluntary 

blocking provisions? Is there a way that this bill could be refined 

to ensure that voluntary actions are based on credible evidence and 

certain thresholds? 

Ms. OYAMA. Sure, thank you. So we do see today, the Internet 

used by countless small businesses to facilitate communication to 

facilitate e-commerce. It is truly people’s daily livelihood, and so we 

do think there should be due process built-in if something essential 

to your site, like your services, is going to be taken away. 

I think the provision you are mentioning is Section 104 in the 

bill. I think the broader technology community shares those concerns. You know, want, if you look at the scope of sites that could 

be captured by a service provider’s reasonable belief that they were 

dedicated to theft within the bill, that is a very broad group. And 

then, two, the number of service providers that receive complete 

immunity for terminating service without going through a court, 

without going through due process. It is not just the providers that 

are required to take action under this bill; it is much broader. So, 

it would include advertisers, search engines, payment providers, 

but also domain name registers, ISPs, you know, a much broader 

group of folks. 

If you were to lose your domain name and you are a small and 

independent business, that is everything. And so, making sure that 

you are at least protected by the terms of service when you sign 

up for the contract would, you know, probably makes sense to us. 

Ms. WATERS. Thank you very much, Mr. Chairman. I yield back 

the balance. 

Mr. SMITH. Thank you, Ms. Waters. 

The gentleman from Iowa, Mr. King, is recognized? 

Mr. KING. Thank you, Mr. Chairman. I appreciate being recognized, and I appreciate the testimony of the witnesses. 

I wanted just to take a bit of a different tack here, if I could, and 

looking at the fraudulent Internet sites and the peace of this that 

is a direct focus of this hearing. And I am just looking through 

some of the background material, the problem of illegal pirating of 

copyrighted intellectual property. And I would think that it is all 

trademarks, and copyrights, and patents all together that I think 

about, not just websites and things that we can look at. 

And so, there is a pattern across this country or across the world 

of certain countries that are pretty effective with this. And I just 

ask if there is anybody on the panel, just raise your hand, or answer. Do you have a list of countries that are the most egregious 
237 

violators of intellectual property rights from an American perspective? Yes, sir. I cannot read your names, I am sorry. 

Mr. O’LEARY. Thank you, Congressman. It is Michael O’Leary. 

The content industries contribute to something through the State 

Department. There are a number of different ways. There is a notorious markets filing, which chronicles the areas of the world where 

this is the most problematic, and then there is a special 301 process whereby the United States puts forward a list and kind of categorizes where countries fall in terms of their protection of intellectual property. 

And the reason for that, frankly, very simply, is that intellectual 

property is not just an American problem; it is a global problem. 

And what you are seeing around the world is that other countries 

are starting to recognize the benefit of not just protecting American 

intellectual property, but protecting their own. 

I would note, for example, that there are at least 16 countries in 

the world that engage in sight blocking now, which has been the 

focus of some of the debate here. The Internet seems to be working 

fine in those countries. It seems to be having an impact in terms 

of taking sites, like the Pirate Bay, which is blocked in many other 

countries, but not in the United States, offline. 

So, in many ways, the United States has historically been a 

world leader, but the truth of the matter, Congressman, from our 

perspective is, if we do not step up and deal with the problems we 

have today, we are going to cede that ground, and we are not going 

to be the world leader. And that is unfortunate for our country, because we do lead the world in the production of intellectual property, and we ought to be leading the world in protecting it. 

Mr. KING. Mr. O’Leary, do you have an opinion then? You have 

given me a couple of sources I might look at. Do you have a recollection on from which countries originate the greatest theft of intellectual property? 

Mr. O’LEARY. Off the top of my head, I would hesitate to list 

them and any type of specific order. I mean, there are different 

problems in different parts of the world. There are hard goods 

problems, which is kind of more the traditional disk type piracy 

that that occurs in places like Russia. There are problems with online; a country like Spain has a significant online piracy problem. 

There are other places in Europe. 

We would be happy to provide you and the Committee with a 

complete list. I am hesitant to speculate because I do not trust my 

memory well enough to get them in the right order. 

Mr. KING. Is China on your list? 

Mr. O’LEARY. China is on the list, yes. There is definitely a piracy problem in China, yes. 

Mr. KING. And do you have any recollection of what the loss 

might be to American property rightsholder from China? 

Mr. O’LEARY. I do not off the top of my head. I am not sure, 

frankly, that there is a way to measure it given the realities of 

China. 

Mr. KING. Would anyone on the panel be aware of any studies, 

U.S. Trade Representative? It seems to me that three or 4 years 

ago at least, a U.S. Trade Representative has a study done that 

calculates that loss to U.S. intellectual property rightsholders to 
238 

different nations, China and Russia come to mind. Anyone care to 

answer that? I saw a nod on the end of the line. 

Ms. PALLANTE. Maria Pallante from the Copyright Office. I do 

not have the dollar amount for you, but I would just echo what Michael said, which is that the special 301 process identifies problematic standards in our trading partners when it comes to IP, as well 

as notorious markets and websites. 

Mr. KING. Does anyone have more of a comprehensive solution? 

We are talking about shutting down some websites. But it is billions in theft of intellectual property rights globally. And here we 

are in the United States of America with some of the strongest 

laws and the strongest traditions and respect for intellectual property. And I do not see a broader comprehensive solution to this. 

It seems to me that they can move faster than we can adjust to 

them, and that we are dealing with a component rather than the 

big picture. Yes, sir, Mr. O’Leary, and then—— 

Mr. O’LEARY. Congressman, I would argue that you are correct 

in the sense that this is a global problem. It is multi-faceted. There 

is not a single approach that fits. But it is critically important that 

the United States maintain the high ground and the leadership in 

this because if we do not do it, other countries will not. 

I would also note that the problem you are highlighting about 

the criminals moving faster, that is true regardless of what the 

crime is. You ask anyone in law enforcement that and they will tell 

you, you catch the ones who keep doing the same thing, and the 

people who adapt and change, you have to keep changing that. 

Mr. KING. Are you aware of any State-sponsored intellectual 

property right theft? 

Mr. O’LEARY. Are we worried about it? 

Mr. KING. Are you aware of State-sponsored? 

Mr. O’LEARY. We believe that that occurs, yes. 

Mr. KING. And I want to say, I believe that happens from China 

as probably the lead globally to do that. Does anyone disagree with 

that on the panel? I did not hear any disagreement. 

I think I have gone far enough with this since my red light came 

on. But I do appreciate all your testimony, and I hope we can bring 

some peaceful solution to this. And I hope at some point we can 

bring a whole solution to it. 

Thank you very much, and I yield back the balance of my time. 

Mr. SMITH. Thank you, Mr. King. 

The gentleman from Tennessee, Mr. Cohen, is recognized? 

Mr. COHEN. Thank you, Mr. Chairman. This is indeed an important issue for us to work out, and the theft of intellectual property 

is of great concern. But nevertheless, First Amendment issues are 

important, too. 

And my first thought is, it does not seem like that there should 

be that much difference from what the Google folks and the techie 

folks are wanting and what the MPAA and the RIA and the other 

AAs want. 

Let me ask maybe the gentleman from motion pictures, who apparently has a Rick Perry problem with not being able to count to 

something, Mr. O’Leary. Have you all not gotten together and tried 

to work this out in some way and fine tune this to where there are 

not these issues of people being penalized that are not guilty and 
239 

sites being shut down where there is just a small infringement, but 

not a total infringement? 

Mr. O’LEARY. Well, we do not believe that this legislation will result in either of those things happening. But our studios work with 

Google on a regular basis in terms of trying to get stuff taken down 

off the Internet. There are ongoing relationships. 

On this piece of legislation there have not, to my knowledge, 

been specific discussions about this. But I want to be very clear. 

We have said from the beginning that if people are willing to come 

forward with constructive suggestions on how to do things that are 

not a pretext for maintaining the status quo, that we would listen 

to those things. 

Mr. COHEN. Wonderful. 

Ms. Oyama, do you have some positive, you know, not under a 

pretense type, pretext type of discussions that you would like to 

come forth with? 

Ms. OYAMA. Yes. So, I think just in the broader context of figuring out how to go after piracy, it is really important to keep in 

mind the number one most effective tool for going after piracy 

would be to increase the amount of legitimate, lawful services that 

are available on the Internet, right? So, if we can cut off the funding, we would decrease the supply of these pirate sites. If we could 

have more legitimate services for music and movies and everything 

else, which I know the studios are working very hard to do, that 

would also decrease the consumer demand for this type of—— 

Mr. COHEN. Without itemizing each of them now, have you had 

the opportunity—— 

Ms. OYAMA. Sure. 

Mr. COHEN [continuing]. Have you had the opportunity to pose 

these to other team? 

Ms. OYAMA. Yeah. So, although we are here in D.C. today, I 

would assure you that all of our businesses partners, you know, on 

the West Coast are working very collaboratively, very, you know, 

much together to get to those solutions. And we are always more 

than happy to continue to work with Mr. O’Leary and others. 

Mr. COHEN. So, are you all working now trying to come up with 

some language that the Chairman might put in a manager’s 

amendment that would make all people happy? 

Ms. OYAMA. You know, there has been some conversations, but 

I think there would need to be a lot more. 

Mr. COHEN. I would hope there would be a lot more, and I think 

that is something that should take place. 

Let me ask you a question since you are on the microphone. 

There are a couple of search engines in China and Russia, and 

Yandex I think is one of them, and Baidu. And some consider these 

rogue sites, and whether they are or not, I do not know. They could 

be. 

If they were considered such and they were blocked because they 

had some pirate type folks among their constituency, how do you 

think the Chinese and Russians would respond toward your company and toward the United States’ companies? 

Ms. OYAMA. That is an excellent question. So, I think we should 

realize that even though we would do something for a really good 

reason here, it could potentially have international ramifications. If 
240 

the U.S. government is ordering U.S. companies to disappear foreign search engines from our results, it should be expected that 

there is going to be some form of retaliation internationally. 

Mr. COHEN. And those sites are the leading Chinese and Russian 

search engines, is that correct? 

Ms. OYAMA. The sites that you mentioned? 

Mr. COHEN. Yes, ma’am. 

Ms. OYAMA. Yeah. 

Mr. COHEN. Yeah. So, is it possible under this legislation, they 

would be totally cut off entirely? 

Ms. OYAMA. If they were deemed rogue sites—— 

Mr. COHEN. Right. 

Ms. OYAMA [continuing]. Under Section 102, search engines could 

receive an order to disappear the whole site. 

Mr. COHEN. Right. 

Ms. OYAMA. It is really tough in a search engine because although you can remove the direct link from a search, you know, as 

long as a rogue site exists, people are still going to talk about it. 

They are still going to blog about it. They are still going to post 

about it. And so, it is really not possible to remove all worldwide 

discussion of a link. And that is why we support the follow the 

money type legislation because that is really going after the source 

of the problem by choking off their financial reason to exist. 

Mr. COHEN. Let me ask you another question, or maybe to the 

panel. I cannot lose my constituent services. We do great constituent services in Tennessee 9. And this week on 11/14, Ryan 

Turner wrote me an e-mail, and he says, ‘‘I am writing as your constituent. As a constituent, I oppose this Stop Online Piracy. I am 

a student studying management of information systems. Should 

this pass, I believe my future IT would be crippled. Having a government hand in DNS service scares me, especially with the government suing website owners with 1(i)’’—I think that was a misprint, but links, ‘‘as a content. As a college student who owns over 

30 domain names, most of these places for third parties to post text 

responses, should one of those include a link to material that infringe copyrights, now I would be held responsible. I have no funding available. I handle these claims, and I am lucky enough to be 

trained on how to handle lawsuits, but many other entrepreneurs 

without formal training have no idea how to handle it.’’ 

If he had this and there was one text that came back that was 

maybe linked to an illegal site, would he be cut off, and what he 

then have to go to hire a lawyer and possibly go to court? 

Ms. OYAMA. I think so. I think there are two ways that could 

happen. So, one of the concerns, you know, not just Google, but the 

other technology companies who endorse the testimony, the other 

trade associations, are concerned about is that the definition 103 

of what is a site dedicated to fast is very broad. There is some language in there that also refers to a site or a portion of the site. So, 

people have a lot of serious questions about what does that really 

mean. Are we looking at a full site? 

And today’s Internet, the way most websites work, there is real 

time communication, and so you have read lots of real time comments. You have lots of real time posts. If one comment or post is 

infringing, does that, you know, impugn the entire site, or are we 
241 

looking at it holistically? There are some other words in the definition that give people concerned that it is overbroad. 

So, either being swept in that way, or under the very broad immunities that are being given to service providers, pretty much 

anyone who qualifies under the definition of a qualifying plaintiff, 

which is very broad. They could go to a payment or advertising 

service provider. They could allege that the person that you mentioned is dedicated to theft, and then those providers have complete 

immunity to shut him off. So, there is a concern that there is a 

strong incentive in the bill that if you wanted to immunize yourself 

the easy thing to do would be to comply with that notice and shut 

them off. 

Mr. SMITH. The gentleman’s time has expired. And I do not mean 

to cut you off, but if you could bring your answer to a quick conclusion. Have you finished? 

Ms. OYAMA. I think that is good. 

Mr. SMITH. Okay. 

Mr. KING. I think she could go longer. 

Mr. SMITH. The gentleman from Arizona, Mr. Quayle, is recognized? 

Mr. QUAYLE. Thank you, Mr. Chairman. And I want to thank all 

the witnesses for being here. 

Ms. Oyama, I want to go back to what you were just talking 

about earlier about how long-term we can address the piracy issues 

via more legitimate websites that provide legitimate content on the 

Internet. And I want to go to your testimony that you indicated. 

The only long-term way to beat piracy online is to offer consumers 

more compelling legitimate alternatives. And you cited YouTube’s 

free ad-based model for Monarch ties in content. 

I mean, there could be some disagreement. I do not know what 

is the best way to monetize content, whether it is fee-based or free 

ad-based. And if you look over the course of history, except for 

broadcast, it seems like most quality content has not been given 

away for free. 

So one thing that I want to ask you is, would you agree that the 

piracy issues that we are dealing with and the pirate websites that 

we are dealing with actually makes it more difficult for a company 

to start a fee-based site that offers legitimate content, and, thus, 

it forces content providers to look for ways that are going toward 

web and ad-based content to give it away for free? 

Ms. OYAMA. I think there are so many different models in the 

ecosystem model right now. Certainly the problem of piracy is of 

tremendous importance and great concern to any content provider, 

right? You want to have control over the distribution of your content. Some people choose to release it for free because they want 

to participate with their friends and that way. Others want to license it, and others want to have an advertising model. 

I think the kind of beauty, of all the new services that we are 

seeing is that there is no one-size-fits-all. I do think we would approach YouTube as a really great example of how kind of technology and copyright can work together. There is a tool on 

YouTube called Content ID. Because YouTube is a hosted platform, 

we host all the content, so it is on our servers. 
242 

So through Content ID, we are able immediately; a rightsholder 

would give us their file. If a user uploads a piece of content, we 

would immediately scanned 6 million reference files, and we could 

capture, if their song or their movie was being uploaded, and then 

the rightsholder would have control whether to monetize it. 

Mr. QUAYLE. But I think might more direct question is that if we 

are not able to crack down and have the tools and the ability to 

crack down on the pirate websites, then you are actually forcing 

content providers into a narrow avenue of ad-based, providing only 

content via ad-based and free markets. Not free market, but free 

content. 

Ms. OYAMA. So, both would be tremendously important, right, increasing license and piracy. 

Mr. QUAYLE. Exactly. But, I mean, when you are looking at that 

and how we need to crack down on the piracy and ad-based, which 

is the model that Google uses, and that seems to be one of the reasons you would be pushing for that, because that is the way that 

Google makes their money, right? 

Ms. OYAMA. There are different ways, but that is the primary 

way for sure. 

Mr. QUAYLE. And I think that is just my biggest concern, is that 

if you are looking at just ad-based, you are cutting down one significant avenue for people to provide content. And if we do not shut 

down these pirate websites, then we are going to actually lose out 

on different types of business models, different types of content providers. And that was the point I wanted to make. 

Ms. Pallante, I want to go to you. Earlier you stated in your 

opening testimony that you do not believe that the safe harbors 

under the DMCA are actually weakened by SOPA. Could you 

explant on that a little bit? 

Ms. PALLANTE. Yes. First of all, the bill says that as a savings 

clause. And, secondly, there is no monetary relief. The injunctions 

that are allowed are already permitted under the DMCA. There 

are, contrary to popular belief, ways to enjoin certain action for certain action for search engines and ISPs. And really, this bill is really designed to sit next to the DMCA. The DMCA is related to particular files on a website, and does not require the participation of 

those who are really in a good position to help stem the tide of piracy. 

So, I would object to a couple of things. I just heard from my fellow witness. One is that I am pretty sure that Google just said that 

it is the fault of content owners that we have a rogue websites. 

That just cannot be the truth. Secondly, although follow the money 

could be effective, it does not bring in everybody in the ecosystem. 

It does not bring in ISPs. It does not bring in search engines. It 

does not account for the vast number of websites that offer content 

purposely for free. And it does not really address the broader role 

of law issue that we have on the Internet right now. 

Mr. QUAYLE. And under the DMCA, are there actually instances 

where a service provider can take down all content on a webpage 

or a website if there is infringing content on that website? 

Ms. PALLANTE. The only way I see that happening is if every single rightsholder comes together at the same time, and approaches 

the website, and every file is infringing. 
243 

Mr. QUAYLE. So, it could be possible under the DMCA. 

Ms. PALLANTE. It is highly unlikely. 

Mr. QUAYLE. Okay. But the one thing I wanted to just get your 

final thoughts on, because opponents of the bill actually say that 

it is going to endanger the security and integrity of the Internet. 

One of the things that the Internet has been very good at is in commerce. And would it not also be fair to say that without shutting 

down these pirate websites, then we are also endangering the security and integrity of the Internet because they are putting out often 

counterfeit goods, and also infringed copyright materials? 

Ms. PALLANTE. Right. So, there are three underlying purposes. 

One is to protect content owners about their own property. The second is to allow those who want to invest a place where there is 

sunshine and oxygen and a good environment for that. And the 

third is to protect consumers, absolutely. 

Mr. QUAYLE. Thank you. I yield back. 

Ms. OYAMA. Can I just clarify one point? I just wanted to make 

sure that nothing was mischaracterized, because I do not think 

that it is the fault of the rightsholders. Certainly, rightsholders 

have the right to protect their content however they want, and we 

are completely committed to going after piracy. My only point was 

that the success and the consumer appetite for services like Netflix 

and iTunes shows that there’s are a lot of different licensing models out there. 

Mr. O’LEARY. May I follow up on that, on one point, which I 

think is a practical point, which is being missed, to Mr. Quayle’s 

question. There are legitimate services out there now, there are 

more of them than there have been before. There will be more of 

them tomorrow. The problem is that when you go to Google and 

you punch in the name of the movie, those legitimate sites are buried on page 8 of the search results. There is a better than average 

chance that Pirate Bay is going to end up ahead of Netflix. That 

is a fundamental problem, no matter how many legitimate sites are 

out there, that we cannot overcome, and we cannot do anything 

about. 

If we could get Google to reach index of those sites in a way that 

favored legitimacy, to your question, Congressman Quayle, then 

consumers would be getting to those first. But when Netflix is buried way down in the search results, it does not matter how good 

Netflix is going to be, and that is just a practical problem that 

could be addressed today. 

Mr. SMITH. Okay. Thank you, Mr. Quayle. 

The gentlewoman from California, Ms. Chu, is recognized? 

Ms. CHU. Thank you, Mr. Chair. I would like to ask about the 

savings clause, and I would like to ask both Ms. Oyama and Mr. 

O’Leary about your opinion on this. I am aware that concerns have 

been raised by Internet companies and many others that the language of the bill may have unintended consequences. And even 

though everybody agrees that the problem of foreign rogue sites is 

critical and that we need to cut revenue to these sites, there may 

be disagreement on the language as drafted. And I think it is really 

important that we try to reach some common ground, that we work 

through language that is balanced and effective, and make sure 

that we do not have unintended consequences. 
244 

One of the areas of disagreement on the Stop Online Piracy Act 

is on this question of the savings clause, and whether there is the 

immunity that is provided under the Digital Millennium Copyright 

Act for search engines and Internet service providers. And so, I 

would like to have your different opinions, because some have represented to me that the Senate bill has a savings clause. That 

seems to address this, but SOPA does not. And is that true? I 

would like to have your different opinions on this, Ms. Oyama and 

Mr. O’Leary. 

Ms. OYAMA. Sure. So this is actually, it sounds technical, the savings clause, but it is of critical importance to the technology industry. Businesses today really build their business models under the 

safe harbors that they know they have under the DMCA. So, if a 

technology company receives notice of infringement, they are required to expeditiously remove that infringement, but they do not 

have kind of a general monitoring obligation. 

So, the balance that we are trying to strike in any legislation 

would be if there are intermediaries who are required to do new 

things. Under this bill, that would be really clear—advertisers shut 

off your services, payments shut off your services. And that would 

be clear, and we would take those obligations. We want to make 

sure that this bill that is going after rogue sites does not strip us 

of those important safe harbors and kind of a related litigation and, 

you know, open the possibility that those types of orders could be 

used to establish red flag knowledge. 

And so, there is some language that we propose that would kind 

of allienate that concern and keep this bill as effective as it needs 

to be to go after rogue sites. But a savings clause to make sure that 

we are not opening ourselves up to liability in a way that we would 

somehow be to proactively monitor all user generated content in 

real time is really important to us. 

Ms. CHU. Mr. O’Leary? 

Mr. O’LEARY. Congresswoman, I would just associate myself with 

the comments and the testimony provided by the Register of Copyrights. This legislation is a complement to the DMCA. It does not 

impute those rights or the safe harbor in any way, shape or form. 

DMCA deals with good actors, legitimate services that are trying 

to take steps to get infringing stuff off of their sites. Rogue sites 

deal with a group of people that under no definition would fit underneath the DMCA. They are bad actors. They are dedicated to infringement. These actually fit together. They complement each 

other. In no sense does this undermine the DMCA. 

Ms. OYAMA. I think if that is the case, a one sentence clarifying 

that in any legislation would be tremendously helpful. 

Ms. CHU. Ms. Pallante, what is your opinion on this, on the savings clause, and whether there are enough protections, and DMCA 

is not—— 

Ms. PALLANTE. Right. Thank you for the question. The question, 

again, is just—well, the problem is, just because somebody may be 

compliant under the DMCA does not mean that they should not 

take action if the Attorney General finds that there is a foreign infringing site run by criminals who are engaged in piracy. That is 

just an unfair comparison. And if that is the argument, this bill 

does allow for that, and it is my view that it should. 
245 

Ms. CHU. Okay. Well, I would like to ask a different question, 

and that is about job creation. There are some that are saying 

SOPA would stifle innovation and job growth, and that with an 

opinion, which was a finding by the U.S. Supreme Court that it 

contributed to infringement, that venture capital would try up. 

But, Mr. Almeida, in your testimony, you noted that you represent over 4 million U.S. workers, and on their behalf that you actually support the Stop Online Piracy Act as an important jobs bill. 

How do you respond to these claims that this legislation would stifle innovation and job growth? 

Mr. ALMEIDA. I think innovation is alive and well in the U.S., 

and I do not see this as stifling this in the least. Our members 

work in the United States. They are taxpayers. They go to work. 

They make products that we view as entertainment. That is what 

we see this online piracy infringing on. And you cannot hit a price 

point when someone is giving it away for free to make a business 

model to compete with free. 

It also has to do with constructive innovation, and we believe in 

constructive innovation, like Netflix, as opposed to TV shack.bz, 

which is an infringing site that should be taken down. 

Ms. CHU. Thank you. I yield back. 

Mr. SMITH. Did you yield back? 

Ms. CHU. Yes, I yield back. 

Mr. SMITH. Thank you, Ms. Chu. 

The gentleman from Texas, Mr. Poe, is recognized? 

Mr. POE. Thank you, Mr. Chairman. Thank all of you for being 

here. This panel or this Committee is made up of former prosecutors, defense lawyers, and there are even two former judges here. 

And back in my experience on the bench down at the courthouse 

or the palace of perjury, as I referred to it in those days, I saw a 

lot of thieves. Stealing is stealing, and thieves are people we are 

to deal with. I disagree with you, Mr. O’Leary. They are not bad 

actors, they are thieves. And this legislation is trying to get a grip 

on this. 

We have got really three groups that are here. We have the credit card companies, we have the search engine folks, and the content 

providers. If I had my way, I would lock all three of you in a room 

and do not come out until you all agree, then we could solve it, I 

would think. 

If you pull up, as I did, if you pull up on the Google search engine ‘‘The Grinch Who Stole Christmas,’’ or ‘‘Harry Potter,’’ ‘‘free 

Harry Potter movies’’ or ‘‘free the Grinch Who Stole Christmas,’’ 

you get a lot of free sites on there. And as a consumer, I cannot 

tell who is a thief and who is not a thief. And I know Google is 

doing a lot, millions of sites and all of that. I have heard the testimony. But at the point we are now, what can Google offer to this 

bill that Google would sign on to the bill, specifically? 

Ms. OYAMA. Sure. So, to your point about the search results, one 

of the major commitments that we made this year was to improve 

the tools to make sure that when rightsholders notify us those 

search results will be disabled in the search. And so, the commitment that we had made at the beginning of the year was to reduce 

the turnaround times to under 24 hours. And so, we are happy to 

say right now it is 6 hours or less is the average turnaround. 
246 

In terms of what we could do affirmatively—— 

Mr. POE. Yes, from this day forward. You pull up ‘‘The Grinch 

Who Stole Christmas,’’ and you keep going page after page for free 

Grinches. 

Ms. OYAMA. So long as those sites are there, they are going to 

show up on the Internet. And so, we think that legislation that 

would target the source of those sides is necessary. What we would 

do is we would support legislation that would go through the Department of Justice, so you would have law enforcement on that. 

You would have a court determined that a site is dedicated to infringement, and you could serve those orders on U.S.-based payment providers and advertising. 

We have Google Checkout for payment. We have AdSense, 

AdWords, a lot of different advertising products that would directly 

regulate and impact our business. But we think that if we can 

break the financial ties for those sites, then, that really is smart, 

targeted, and effective, and would avoid some of the collateral damage that we have discussed earlier this morning. 

Mr. POE. So, your answer is just go after the finances. 

Ms. OYAMA. Cut off the funding. 

Mr. POE. Yeah, cut off the money. So, if that were something 

that we added to the bill that would cut off the money, then Google 

may support it. Is that what you are telling me? 

Ms. OYAMA. Yes. There are certainly concepts in the bill that reflect that. But we think if you look at Wikileaks, that is how they 

have been taken out is by cutting off the money. It is an approach 

that U.S. law enforcement uses for many in different international 

problems, you know, narcotics, terrorism. I mean, it has been a 

proven way. If you cut off someone’s financial incentive, they are 

not going to want to pay for the servers, and the bandwidth, and 

the infrastructure to run these websites. 

Mr. POE. Okay. Let me be a little more specific. What can Google 

do, not what the financial providers can do, what can Google do to 

move this legislation forward? 

Ms. OYAMA. So, there is a lot we are doing in the private sector, 

but in terms of the legislation, we would publicly support legislation like what I described, follow the money approach. We would 

be happy to do that. We would be happy to work with your staffs 

on legislation in that way, if it can avoid the collateral damage that 

we have discussed, and if we got a good definition of what is a 

rogue site, that did not sweep in legitimate U.S. businesses. 

Mr. POE. But you cannot tell when you pull it up, ‘‘The Grinch 

Who Stole Christmas,’’ who is the real grinch is and who is not. 

You get page after page of free Grinches. 

Ms. OYAMA. That is why is court adjudication or a collaboration 

with rightsholders is really important. There are lots of legitimate 

free movies. There are lots of heat, you know, content that just the 

middleman would not really know if that was licensed or infringing. 

Mr. POE. You want in on that, Mr. O’Leary, and then Ms. 

Pallante. 

Mr. O’LEARY. I think, to use the example of the Grinch, there is 

a movie right now, as I mentioned earlier, called J. Edgar. The only 

lawful place you can see that movie is in a theater. If you go back 
247 

to your office and put ‘‘J. Edgar’’ into Google, you are going to get 

the same list of eight pages of sites where it is free. That movie 

is not available for free anywhere. If you want to see it, you have 

to go to a theater right now. 

So, I understand the complexity when you are talking about 

something that is perhaps not in the theater, but this is actually 

in the theater right now, and there is no reason for it to be online 

in any fashion frankly. I also think that what is being proposed, 

what was being suggested is, as I said earlier, we should follow 

everybody’s money. 

And isolating one or two things, that does not solve the search 

engine problem that we have been talking about, and we think that 

should be a part of the discussion to. We think it requires all of 

the people who are involved in this to work together to get it done, 

kind of to your theory of throw everybody in a room and sort it out. 

If everybody does not go into the room at the beginning, you are 

not going to get it sorted out. 

Mr. POE. Maybe we need a court order to get you all three in a 

room. 

Thank you, Mr. Chairman. I will yield back. 

Mr. LUNGREN [presiding]. Thank you. Maybe get the FBI to help 

you on that J. Edgar Hoover stuff. 

Mr. Deutch, you are recognized for the next 5 minutes? 

Mr. DEUTCH. Thank you, Mr. Chair. First of all, it is not just J. 

Edgar. I have teenaged daughters who are awfully excited about 

the new Breaking Dawn movie, which is coming out. You can 

watch that right now online for free. 

What troubles me about this a whole exchange, quite frankly, is 

on the one hand, there is this great technology, Ms. Oyama, that 

you have so proudly trumpeted, understandably, about YouTube 

and what YouTube does in order to prevent illegal content from 

being posted. Yet when you enter ‘‘watch Breaking Dawn for free,’’ 

and you can do it online now, there you throw your arms up in the 

air. Well, there is nothing we can do. 

Ms. OYAMA. Sorry, I can understand how that would feel frustrating. Technologically there is a distinction. So, on YouTube, the 

content that is posted on YouTube is hosted on our servers, so we 

are able to match files. If someone tries to upload something on 

YouTube, we have a reference file we can match against. We do not 

control the World Wide Web. 

Mr. DEUTCH. I understand that is a technology issue. We could 

talk more about that. I have another question for you. This has 

been a fruitful exchange, different than I might have expected from 

the way, as a number of us have read referenced already. The way 

this debate has played out in the local press in particular, I do not 

know whether Google shares the position publicly that this bill will 

kill the Internet and all of the advertisements that have resulted, 

and all the phone calls that we have received in our office. But I 

do wonder if there is any base level here that you would agree 

needs to be tackled. 

And so, if the issue is the language that says a ‘‘portion thereof,’’ 

let us assume the bill did not have that language in there. So you 

cannot argue that Twitter would have to be taken down, which, by 

the way, is an argument, there is no basis for that argument. 
248 

Under this bill. You cannot argue under this bill, that Facebook 

would have to be taken down. There is no basis for that under this 

proposed bill. And I think that you understand that, notwithstanding the reference to individual tweets that might lead a whole 

site to be taken down. 

My question is, if that language were not in there, are there any 

of these websites that you believe should be taken down and that 

Google ought to play a role in helping us accomplish that? 

Ms. OYAMA. Yes. We would be happy to work with the Chairman, 

with your office, on a follow the money legislation. 

Mr. DEUTCH. Okay. Well, I understand. So, you do not like the 

way the bill is written. Let me ask about that because you have 

many references to day to following the money. Yesterday, your 

Chairman recommended regulations based on tracing payments at 

websites offering illegal materials as a replacement for this bill, 

consistent with what you said today. Many of the offshore sites 

clearly engaging in that are driven by, as you point out, are driven 

by ad revenue, not just credit card transactions. And if we follow 

the money, we cannot just focus on the credit cards obviously. We 

have to focus on the ads. 

Google, at least from the statistics I have been told, retains over 

75 percent of all search advertising revenue in the U.S., therefore, 

following the money leads us to you. So, tell me the steps that 

Google has taken already, understanding that you are concerned 

about this intellectual property theft, understanding the impact 

that it is going to have every day on our economy, tell me the steps 

that Google has taken to combat it using the following the money 

approach that you favor. 

Ms. OYAMA. Okay. So, just to confirm, legislation that would go 

after ads is a big part of our business. 

Mr. DEUTCH. I understand, but given—— 

Ms. OYAMA. And we are happy to support that. 

Mr. DEUTCH. I understand that, but tell me what you have 

done—— 

Ms. OYAMA. Okay. 

Mr. DEUTCH [continuing]. Now, because we all acknowledge this 

is an important issue. And if a 75—— 

Ms. OYAMA. And one should not prevent the other, right. 

Mr. DEUTCH. Right. You can play a significant role today. So, if 

you could just speak to what I have already done. 

Ms. OYAMA. Okay. So, there was some major commitments that 

our General Counsel, Kent Walker, made at the beginning of the 

year. I will just try to tick off the major ones, but we should probably follow up with your office on more specifics. 

For DMCA, we have removed more than 5 million infringing 

files. This year, when rightsholders notified us. One of the concerns 

we have heard is that there were some grit in the system, and that 

there was frustration that it was taking too long. So, we invested 

significant engineering hours and money to improve the tool. 

Mr. DEUTCH. Ms. Oyama, I hate to cut you off. I do not have a 

lot of time here, but I would ask that you would follow up. I remember Mr. Walker’s testimony. I followed up with a letter after 

that hearing requesting all sorts of information. I have not received 
249 

a response. So, I hope that a response will be forthcoming to that 

letter and to the request that I have made here today. 

I would like to finish with this. This notion that we are going to 

break the Internet, that somehow we are going to stifle innovation, 

the fact that the kid serving me coffee at Starbucks told me, ‘‘hey, 

I hear you are taking up legislation that is going to make it impossible for me to download music.’’ The fact is what we are worried 

about is, and the reason we are having this discussion, what we 

are worried about is not stifling that innovation in the future. That 

is a concern that we all have. And I do not believe that the legislation does that. But we know right now if we do nothing, that the 

film industry and those young directors who are starting out, are 

not going to be able to do their craft, and we are not going to have 

the next Dell, or we are not going to have the next Drake, because 

they are not going to be compensated for their work. 

And I hope that as we go forward in this that you provide those 

answers, that we can have an honest discussion about what is really at stake here, and let us move past this. These attacks on those 

of us who believe this, and suggest that somehow we are going to 

mean an end to the Internet, it is not accurate. I think you understand that it is not accurate, and it does not do the American economy any great service at all. 

And with that, I yield back. 

Mr. LUNGREN. The gentleman yields back, and the other gentleman from Texas, Mr. Gohmert, is recognized for 5 minutes? 

Mr. GOHMERT. Mr. Chairman, again, also appreciate your being 

here. It is a tough subject, and we are dealing with intellectual 

property here. And, I, like my friend, Judge Poe, was a District 

Judge and also a Chief Justice. And we dealt with, it was not 

called bad actors, you know. You dealt with that, and that is really 

what we are talking about here. It is a crime. It is theft. We do 

not want thieves working their way through an honest, legitimate, 

wonderful means of, in this case, the Internet. 

In the past, some have used the example of the pawn shop cannot intentionally and knowingly assist in that effort. And so, there 

were laws made. Most States have them where law enforcement 

can go in and get information. And I know, and I have been resistant to some of the pushes to force Internet providers, search engines, into doing things that we do not even require pawn shops 

to do. And I thought some were going overboard in trying to make 

demands on search engines that we do not even demand of pawn 

shops. 

But, on the other hand, there is this aspect of our criminal law, 

and every State has it, the Federal Government has it. Anyone who 

aids, abets, encourages, in any way assists someone in committing 

a crime, the law is very clear in every State and the Federal Code, 

you are just as guilty as if you committed the crime yourself. 

The question is, do you intentionally or knowingly aid. Well, it 

has been brought up often enough. There are thieves using the 

Internet. And I keep hearing from people who say, look, if it were 

illegal for me to use that free website, then how come I get access 

so easily? They are expecting us to do something. And I think most 

of us were hoping that there would be something worked out between the interests here. 
250 

But I can give you an example. I know what the law is, and I 

had an eight track ‘‘Warm Shade of Ivory, Henry Mancinci’’ back 

in college, and it got me through some all-nighters, that and ‘‘Jonathan Livingston Seagull’’ soundtrack. So, anyway, Sleepless in Seattle has this song in the wee, small hours of the morning. And I 

wanted to get that. I wanted to download it. I would pay for two 

bucks for it, not just 99 cents. Nobody has it except some free 

websites I knew not to go use those and download it free because 

it is illegal. Most people do not. 

So, when we talk about follow the money, we are talking about 

something terribly difficult in going to China, going to Russia and 

trying to follow the money over there. We are not getting help from 

those folks. Marsha Blackburn and I met with their folks in China 

that handle this stuff, and it seemed pretty clear to me we were 

not going to get a whole lot of help out of them. 

So, what should we do to keep from hurting the innovation of the 

Internet, and Google, and Bing, and these folks that come up with 

great ideas, but at the same time balance the interests in this 

being a law abiding society. And I am gratified to hear people on 

both sides of the aisle have similar concerns. 

So, it just does not seem to me to be that onerous to say if someone goes to court, for heaven’s sakes, and proves with probable 

cause standard that somebody is committing a crime of theft, and 

then that is presented to an Internet provider or search engine, 

these people are committing a crime. There is probable cause to believe that is justification for a warrant, why that is too onerous to 

say do not make them accessible. And I am still having trouble understanding that, and I would welcome comments in that regard 

from whoever wishes to. Thank you. 

Ms. OYAMA. Thanks. I think we completely agree about the importance of having a Federal judge play the role of an arbiter so 

that folks’ services are not being terminated just by a 5-day notice 

to their provider without the ability to appear and defend themselves. 

I think to your point about what we can do, it is probably three 

things. So, one would be building on the DMCA. Under the DMCA 

today, search results can be line edited out if a rightsholder tells 

us, a search engine, to remove a piece of content. We have worked 

incredibly hard over the last year to improve our tools. The average 

turnaround time today is 6 hours if we receive notice. 

So, we are working really hard on improving that. It is not perfect. It is not done. It is something we will continue to work on. 

The second piece, though, would be to build on that and to come 

together and support legislation that would impose new obligations 

on other providers. So, we are also an advertising provider, largely 

an advertising provider, a payment provider. 

A judicial process where a court determined that a site was dedicated to infringement, and then instructed U.S. based intermediaries to shut off financial ties to that website, that is the most 

important and effective thing we could. If we can knock them off 

at their knees and we can cut off their financial ties, they will not 

have a reason to be in business anymore. They will not be making 

money. That is the effective way to go. 
251 

And then the third piece would be to get rid of ineffective and 

harmful pieces. So, I realize reasonable people can disagree about 

this, but there a tremendous concern in the technology industry 

about some of the remedies that are being proposed and some of 

the unintended consequences that would have, you know, potentially very severe repercussions for the Internet network, for people’s security, and for free speech concerns. 

So, getting the balance right is something we think is important. 

We certainly think that there is a way forward and a way that we 

could agree on going after these sites. 

Ms. LOFGREN. Would the gentleman yield? 

Mr. GOHMERT. Well, I would ask unanimous consent to allow 

others to finish answering because there are a couple of hands. And 

I certainly—— 

Mr. LUNGREN. The gentleman is extended another minute. 

Mr. GOHMERT. You had requested to comment. 

Mr. CLARK. I would just add that in regard to your comments 

about thievery and Congressman Poe’s, from our industry’s perspective, it is more than thievery. It is murder. We do feel, I particularly feel, and I have 28 years of Federal law enforcement, I 

know crime when I see it, and I see counterfeit medicines as actually attempted murder. I mean, it is not quick, it is not immediate. 

But when you are only giving a patient 20 percent of the medicine 

they need to cure their cancer or their heart problems or their high 

blood pressure, you are, in fact, killing them slowly. But that is the 

issue here. 

Mr. GOHMERT. As a prosecutor, you know that may be not be 

murder, it may be negligent homicide or some other type of homicide. 

Mr. CLARK. Along those lines. And it is frustrating. If we are not 

immediately making progress in cutting that down. I have worked 

with CDP and pilot programs, and I am seeing counterfeits flooding 

in because of the purchases over the Internet from the rogue 

websites that are selling counterfeit medicines. And it is incredulous to me how much is coming into the United States. 

So, I would say, you know, this bill is going forward with demonstrating that we need to change the status quo. We cannot accept what is existing right now. And I agree very much that we 

have to demonstrate to people that there are consequences, and 

this is a serious crime. When you look at 6 months, 4 months, 3 

years. You say your cost of doing business, it cannot be that bad 

if that is all they are going to give. 

So, I also see the Title II in this as very, very significant as well. 

Mr. GOHMERT. Was there anybody else that wanted to comment? 

All right. Thank you. 

Ms. LOFGREN. Would the gentleman yield? 

Mr. GOHMERT. Yes. 

Ms. LOFGREN. I just wanted to briefly, I think it was Mr. O’Leary 

suggested that if you type in ‘‘J. Edgar movie’’ you get all these infringing sites. And I just did that, and what you get is the show 

times in Washington, a review, the Wikipedia article, the trailer 

from Warner Brothers, several reviews of the movie, the iTunes 

trailer. There is not a single infringing site that comes up. So, I 

just thought we—— 
252 

Mr. GOHMERT. Reclaiming my time—— 

Mr. MARINO. Would the gentlewoman or the gentleman yield? 

Mr. GOHMERT.—I think if you use the word ‘‘free’’ in there, that 

is where those things come up. But, yes, I will yield. 

Mr. MARINO. Would you yield? Well, I just did the same thing, 

and on—— 

Ms. LOFGREN. Did you use Google? 

Mr. MARINO. I just Googled it, ‘‘watch J. Edgar Hoover free online,’’ on YouTube, full versions. It shows you how to download it, 

no cost. Right here. There is a list of—— 

Ms. LOFGREN. Well, I did a different search engine. But the point 

I am trying to make going back—— 

Mr. GOHMERT. Well, reclaiming my time, I do not know what—— 

Mr. LUNGREN. The gentleman’s time has expired. 

Ms. LOFGREN. I would ask that the gentleman be granted 15 seconds and so I might say just in answer to—the point is the search 

engines are not capable of actually censoring the entire World Wide 

Web. That is the problem. You cannot do that. And so, we need to 

go after the people who are committing crimes in a way that is 

going to work. I think we can do that, but this bill is not it. And 

I thank the gentleman. 

Mr. GOHMERT. Reclaiming my time—— 

Mr. LUNGREN. The gentleman’s time has expired. 

Mr. GOHMERT. I agree, but also need to cut off the getaway. And 

with that, and I am not sure what the gentlelady has against 

Google, but I respect her using Bing, and yield back my time. 

Mr. LUNGREN. The gentleman yields back time he does not have. 

[Laughter.] 

I am going to accuse you of being a liberal here in a minute. 

Mr. Johnson is recognized for 5 minutes? 

Mr. JOHNSON. Thank you, Mr. Chairman. Mr. O’Leary, SOPA requires payment networks, like MasterCard, to suspend payment 

transactions between a U.S. customer and an online merchant 

within 5 days. According to Ms. Kirkpatrick’s testimony, there are 

very legitimate challenges that payment networks have in meeting 

such a short deadline, especially considering the multiple players 

involved in an online transaction. 

The Senate version requires payment networks to take action as 

expeditiously as reasonable. Earlier this year, the White House negotiated a best practices document with the payment industry that 

has a reasonable period of time standard. 

Which of these standards is acceptable to you that within 5 days 

under SOPA the ‘‘expeditiously as reasonable’’ under the Senate 

version, and a reasonable period of time as negotiated between the 

White House and the payment industry? 

Mr. O’LEARY. Yes, sir. I think it is a legitimate question, and one 

that we believe can be resolved favorably to everyone. 

Mr. JOHNSON. Which one do you think is most acceptable to you? 

Mr. O’LEARY. As I sit here right now, I am not prepared to pick 

between the three, quite honestly. I certainly understand the point 

that was made by our colleagues at MasterCard if it is not possibly 

done within 5 days. We certainly do not want to create a time limit 

which forces them into an impossible standard. 

Mr. JOHNSON. All right. 
253 

Mr. O’LEARY. At the same time, we would like the legislation to 

recognize that if someone is trying to run the clock out, they do not 

do it. 

Mr. JOHNSON. If I open up the tent for you to stick your nose in, 

boy, you are going to get all the way up in there. I am just appreciating your gift of gab. 

If I might ask Mr. Clark the same question. 

Mr. CLARK. I feel the same way. 

Mr. JOHNSON. Okay. All right. 

Mr. CLARK. Sorry. I feel the same way. 

Mr. JOHNSON. All right. Ms. Pallante, Section 506 of the Copyright Act establishes criminal liability for the willful infringement 

of a copyright. Recently, there has been confusion as to the definition of that term, ‘‘willful.’’ Do you think that willfulness is the 

same as intentional? Tell me about the difference between those 

two standards. 

Ms. PALLANTE. Right. So, that is a great question, and the point 

of SOPA is to capture those that knowingly engage in a known 

legal duty. And that is the standard that most courts have accepted. There are some exceptions to that. I think that is something 

that could be clarified in the bill, in legislative history perhaps. 

Mr. JOHNSON. All right. Ms. Oyama, the DMCA in Section 230 

of the Communications Decency Act represent the legal 

underpinnings of the view that intermediaries need not monitor or 

supervise the communications of users. It is a view that we have 

long touted and pushed across the world through various diplomatic channels. We have harshly criticized governments who use 

such virtual walls to prevent citizen access to the Internet. China 

is a great example. With that in mind, would this legislation allow 

companies to demand that search engines located inside the U.S. 

censor where American consumers are able to go on the Internet? 

And how would this legislation likely be viewed by China, and 

Iran, and other countries that put these roadblocks in terms of content to their citizens on the Internet? And how would that affect 

our diplomacy? 

Ms. OYAMA. Thanks. So, for the DMCA piece that you mentioned, 

I think we would certainly agree that DMCA has proved to be a 

foundation for American innovation, and has struck a balance. So, 

if you are a new company or starting up, you know what the laws 

are. You have certainty. And it also helps rightsholders. If a 

rightsholder is aware that there is infringing content on the service 

provider, they just need to let us know. Web hosting companies 

search and engines. We will remove access to that content. It 

strikes the right balance. It takes care of infringing speech. It 

leaves up legitimate speech. And it reflects a careful balance. And 

also, because of the way web services are used today, we see all 

over the place when there are real time events, it is important that 

a web platform enables that type of real time communication, of 

real time e-commerce. 

If you did not have the DMCA and an intermediary platform was 

required or potentially liable for what its users were posting in real 

time, you would have to implement some type of proactive monitoring system. It could really change the dynamics of the Web 

today. 
254 

I think the second piece—— 

Mr. JOHNSON. That would stifle the small entrepreneur that is 

just getting started, more than it would hamper the larger providers of content. 

Ms. OYAMA. I think it is both, but it certainly—— 

Mr. JOHNSON. It would be a burden on both. 

Ms. OYAMA. Yeah. If you are a new company starting up, you will 

have less money to invest in that type of monitoring. So, certainly, 

it would have an impact on small businesses. 

To your question about, you know, kind of the speech aspect, you 

know, if we impose a law here, which would have court orders requiring of domestic search engines to make entire full websites disappear, and especially if there is some type of overbroad definition 

which would capture also legitimate speech, you know, unfortunately, what we do here would have other ramifications. And we 

may think that this is a good reason, we do think this is a good 

reason here. But we see all the time for Google DMCA requests. 

Competitors tried to take each other down. Pro-democracy speech 

tries to be quelled. We have seen in Libya and the recent activities 

there, different politicians tried to take each other’s YouTube channels out because they disagree with their views. We see copyright 

use all the time as an excuse to quell speech. 

If we mandate this type of approach here, we really need to think 

carefully about what types of international ramifications that will 

have on free expression globally. 

Mr. LUNGREN. The gentleman’s time has expired. 

Mr. JOHNSON. If I might get just one more question. 

Mr. LUNGREN. All right. The gentleman has already had extra 

time, but so has everybody else, so go ahead. 

Mr. JOHNSON. Thank you. Thus, Justice Department has responsibilities under the SOPA act. While at the same time, we have 

been talking about downsizing government, and, in fact, the Justice 

Department has lost about 30 percent of their attorneys. How does 

this affect the effort to criminally go after these pirates, and also 

from a civil standpoint? I will ask that to Mr. O’Leary. 

Mr. O’LEARY. Well, I think that, you know, this bill actually 

speaks directly to that point. That is part of the reason there is the 

ability for individual plaintiffs to move so that the burden does not 

fall solely on the Justice Department. 

The content industry, Pfizer—— 

Mr. JOHNSON. What about the criminal part, though, because we 

get people being prosecuted for shoplifting and stealing little small 

petty items. But this is multi-billion white collar fraud, which only 

the Justice Department has or should have the, really had the resources and the breadth of law enforcement ability to address. How 

does the downsizing of the Justice Department impact criminal 

prosecution? 

Mr. O’LEARY. Well, I think as a general premise, would you 

downsize the Justice Department, obviously it has an impact. But 

let us be very clear. The Justice Department does pursue criminal 

cases internationally. 

Mr. JOHNSON. Well, how can it do so—— 

Mr. LUNGREN. The gentleman’s time has expired. 

Mr. JOHNSON. Thank you, Mr. Chairman. 
255 

Mr. LUNGREN. Some time ago. Recognize myself for 5 minutes. 

Mr. JOHNSON. Well, I am a liberal. [Laughter.] 

Mr. LUNGREN. Well, I would not accuse you of being anything 

else. [Laughter.] 

Mr. JOHNSON. Well, I bear that shame with great honor. [Laughter.] 

Mr. LUNGREN. This is sort of a reverse to the old story that I 

went to a fight and a hockey game broke out. I came here as one 

who has not made up his mind on this bill, hoping to receive information on this. And I think everybody on this panel is committed 

to fighting piracy. I mean, maybe I am the only Member of this 

Committee who has got a gold record. I got it from the recording 

industry for my work on anti-counterfeiting. When I was attorney 

general of California. So I very much believe there is an important 

role for us to play, law enforcement, in civil law in this regard. 

But my concern is something that was brought to my attention 

as the Chairman of the Cybersecurity Subcommittee on Homeland 

Security, and that is the existence of a system that has been going 

on for some years, called DNS security or DNS-SEC. And I have 

heard from some of the engineers who have been working on this 

in the Internet area that we of applied this law in this way, it 

would undo what we have been doing it to try and secure the Internet by way of DNS-SEC or DNS security. So, I would like to ask 

the panelists if any of you feel you can speak to this point, because 

it is one that was raised with me. I am not a technical expert on 

this, but there was some real alarm by Internet engineers, I would 

call them, who really do not have a dog in this fight and in terms 

of the disputes between the various special interests here. And I 

mean that in the proper way, special interests. 

And so, what I ask Mr. Clark, for instance, are you aware of this 

criticism, and does this legislation, would it incentivize Internet 

service providers from using the DNS security extensions because 

it mandates the redirection of customers to another website? 

Mr. CLARK. No, I am afraid I do not. I am not familiar with that. 

Mr. LUNGREN. Okay. Mr. O’Leary? 

Mr. O’LEARY. Well, I am certainly aware of the argument, and 

the people that we have talked to, it is a concern, which is, frankly, 

overstated. As I mentioned earlier in response to another question, 

there are numerous countries around the world that engage in this 

type of activity. The Internet has worked without a problem in regard to that. And I think also, you know, they are overlooking and 

looking at this debate. There is an existing security problem with 

the current state of play, and that is these rogue sites taking private information from consumers and spreading malware and 

spyware and things like that. 

The final thing I would say is that in regard to other things, like 

dealing with malware, dealing with spyware, dealing with child 

pornography, this type of activity occurs all the time, and the Internet seems to function just fine. 

I tend to agree with the comments of Mr. Deutch that if the 

Internet is going to be all things to all people, it should also be in 

terms of trying to help us stop people from stealing our stuff. The 

problem, frankly, is that the Internet seems to be for trade—— 
256 

Mr. LUNGREN. Well, that is not my point. My point is whether 

or not you can respond to the specific question raised by Stewart 

Baker, former DHS Assistant Secretary of Policy and former NSA 

General Counsel, to the effect that if this approach to respond to 

a legitimate problem were put into effect, it would undercut an effort that has been going on for nearly a decade to secure the Internet by way of this program that I referred to. 

Mr. O’LEARY. We disagree with that position. 

Mr. LUNGREN. Okay. Can you submit in writing for us specifically how you disagree with that approach? 

Mr. O’LEARY. Certainly, I would be happy to. 

Mr. LUNGREN. Ms. Kirkpatrick? 

Ms. KIRKPATRICK. I am unfamiliar with that element. I am unaware of it. I do not have the technical expertise to comment on 

it. 

Mr. LUNGREN. Does anybody with your organization have the expertise? 

Ms. KIRKPATRICK. I certainly can follow up and get back to you. 

Mr. LUNGREN. Would you please respond to that specific question, because to me it is an underlying question that is extremely 

important, having worked on the problem of cybersecurity. If what 

we are doing here has the unintended consequence of upsetting 

what is, at least in the opinion of a number of experts, and they 

may be wrong. I am trying to ferret this out, undercut a real effort 

that would practically help us secure the Internet, that is bothersome to me. 

Ms. Oyama? 

Ms. OYAMA. Sure. So, I think the concerns that you mentioned 

are the ones that we have heard as well, from many cyber security 

experts. I knows Stewart Baker has written about this. The designers of DNS-SEC themselves have published a white paper. I am 

not—yeah. 

Mr. LUNGREN. Do you have anybody that has expertise with your 

association and can respond to that specifically, because this is not 

part of this hearing, and I am very concerned that evidently this 

bill is not being referred to my Subcommittee. And I am not parochial about this, but if we are going to do it, we ought to at least 

talk about it and to have people come in here and say, well, our 

organization—either we do not take a position or we are not experts on this is upsetting. 

Ms. OYAMA. I think that there is great concern within our company. 

Mr. LUNGREN. Well, could you please respond in writing on that? 

Ms. OYAMA. Sure, happy to. 

Mr. LUNGREN. Could you, please? 

Ms. OYAMA. Yes. 

Mr. LUNGREN. And, Mr. Almeida? 

Mr. ALMEIDA. No, no expertise. 

Mr. LUNGREN. Okay. Ms. Pallante, do you have any? 

Ms. PALLANTE. I think that Congress should absolutely consult 

objective technical experts. But I will add is that ICE, through operation on our sites, has been using the existing seizure and civil 

forfeiture laws to essentially disappear website in the United 
257 

States. So, this bill would take that criminal standard and apply 

it to foreign sites. 

Mr. LUNGREN. Thank you very much. Let us see, who is next? 

Mr. Marino is next for 5 minutes? 

Mr. MARINO. Thank you, Chairman. Thank you, ladies and gentlemen, for being here. I think my colleague and friend, Ms. 

Lofgren, and I pointed out a very good example of how easy it is. 

This is on some sides and not others. I think so. Zoe went to Bing 

and got the trailers, and I went to Google, typing in ‘‘free,’’ who 

sent me to YouTube for the free movie. So, you know, there is a 

lot of work to be done here. 

Ms. Oyama, I want to compliment you on your decorum and your 

professionalism and your loyalty to your company, for being here 

and answering the tough questions that you have been answering. 

You are certainly an asset to your corporation. 

Ms. OYAMA. Thank you. 

Mr. MARINO. Nevertheless, I think it is reprehensible that the 

chairman, that the CEO, that the president, that the counsel, none 

of them thought it was responsible enough for them to be here, and 

they sent you into the lion’s den. And you certainly deserve a large 

portion of their bonus at the end of the year. 

Ms. OYAMA. Can I just add one thing to your question on our 

general counsel, he was here in the spring. He cares very much 

about this problem and doing it the right way. 

Mr. LUNGREN. Good. 

Ms. OYAMA. He, I think, sent a letter saying he had a long standing personal commitment for today, any other day, he would be 

here, and he looks forward to continuing—— 

Mr. MARINO. All right, I give that to him, and I remove his name 

from that list, and he can keep his bonus, all right? 

Let me ask you a question here. I want to thank Google for what 

it did for child pornography, getting it off the website. I was a prosecutor for 18 years, and I find it commendable. And I put those 

people away. So if you can do that with child pornography, why can 

you not do it with these rogue websites? And let me follow that up 

with, why not hire some whiz kids out of college to come in and 

monitor this and work for the company to take these off? 

My daughter, who is 16, and my son, who is 12, we would love 

to get on the Internet, and we download music, and we pay for it. 

And I get to a site, and I say, this is a new one, this is good, we 

can get some music here. My daughter says, ‘‘Dad, do not go near 

that one, it is illegal, it is free, and given the fact that you are on 

the Judiciary, I do not think you should be doing that.’’ So, maybe 

we need to hire her. But why not? 

Ms. OYAMA. So, the two problems are similar in that they are 

both very serious problems. They are both things that we all should 

be working to fight against. But they are very different in how you 

go about combating it. So, for child porn, we are able to design a 

machine that can detect child porn. You can detect certain colors 

that would show up in pornography. You can detect flesh tones. 

You can have a manual reviewer. Someone would look at the content and they would say this is child porn, and it should not appear. 
258 

We cannot do that for copyright just on our own because any 

video, any clip of contact, it is going to appear to the user, to be 

the same thing. And so, you need to know from the rightsholder, 

the owner of the right, how have you licensed it, have you authorized it, or is this infringement. 

Mr. MARINO. I only have a limited amount of time here, and I 

appreciate your answer. But we have the technology. Google has 

the technology. We have the brainpower in this country. We certainly can figure it out. 

Let me move on here. First of all, Mr. Clark and Mr. O’Leary, 

I want to thank you for your dedication to law enforcement. I have 

been down there for 18 years, and thank you so much. And, Mr. 

Almeida, my father was a fireman for 30 years, so I know exactly 

what you are talking about. So, I want to pose this question to anyone. 

It is my understanding that taking down a portion of the site is 

much more difficult than taking down the entire site, so I am hearing from the testimony here. So, is there a more balanced approach 

that we can assist you in letting you take the lead on it in defusing 

of this problem and stopping this infringement on these materials, 

this illegal stealing of our materials that is costing us jobs and is 

costing this country a lot of money? If you understand my question, 

please jump in, anyone. I do not think anyone understands my 

question. [Laughter.] 

Ms. Pallante? 

Ms. PALLANTE. Well, no, I appreciate the question. I do not know 

the answer. Certainly, when law enforcement goes before a judge 

and tries to get a court order that would allow it to seek relief from 

the website, and then engage the search engines, the ISPs, the payment processors et cetera, to help, they would like to stop the infringing material and not be non-infringing material. I do not know 

if it is a technical solution, or if it is just a question of each 

website, having different pages where they can easily find the infringing content. 

Mr. MARINO. Do any of you agree with me that we do have the 

brainpower and the technology available to figure this out, if we 

want to spend the money? 

All right, thank you, and I yield back my time. 

Mr. LUNGREN. Great. The gentleman’s time is up. 

Mr. Amodei, you are recognized for the last 5 minutes of this 

hearing. 

Mr. AMODEI. Thank you for that strategic timing of my recognition, Mr. Chairman. I appreciate that. And so, in honor of your discretion, I will not use the whole time. 

I would like to, first of all, associate myself with the comments 

of my colleague from California at the of the dais, Mr. Deutch. I 

think he has hit the nail on the head. When you are the last guy, 

you do not want to try to see if you can prolong things any more 

than usual. 

I would like to ask the Chair, however, since there is written responses to this security thing, and I tried to write the guy’s name 

down. I am new; I do not know. Maybe it was Stewart Baker? 

Maybe we could have Stewart Baker’s concerns written so we can 
259 

have something to compare those with. And if that is out of order, 

then I will shut up on that and move right along. 

Mr. LUNGREN. Mr. Baker’s article was made part of the record. 

[Laughter. 

And the gentlelady from California is giving it to you right now. 

Mr. AMODEI. Okay, good. Thank you. 

Mr. LUNGREN. And if I were Chair, I would have him here, but 

I am only temporary Chair. [Laughter.] 

Mr. AMODEI. Thank you for your compassion for someone who 

has been here for 61 days. 

Finally, so that I have something to yield back, I appreciate the 

concerns. This strikes as one of those deals where the pursuit of 

the perfect is going to get in the way of the good. One thing, and 

I apologize for missing the part that I missed, but there was an opportunity to talk with some folks in another Committee that was 

kind of important. But I did not hear anything that said, ‘‘no, this 

is not an issue; no, this is not taking place; no, those jobs, or this 

gentleman on the end, are not being threatened; no, it is not real 

time impacts when Mr. Marino can dial in and be watching it right 

now.’’ 

Quite frankly, I think there is an issue—I do not how you address it because nobody should leave the room thinking I am technically savvy. But I do not have anything to type on, as a matter 

of fact. They even took my iPhone away today. 

But I will tell you this. The impacts are instantaneous. Once it 

is downloaded, it is gone. That horse is out of the barn, and it is 

never coming back. And when you have a broken leg, you need to 

go to the hospital. 

And I agree with Mr. Marino’s comments. Way to go. Whatever 

they are paying you, it is not enough. And so, if those pansies want 

to come by someday and say hi, tell them they are welcome. 

[Laughter.] 

So, anyhow, when your leg is broken, you got to go to the hospital, and unfortunately you are in the medical business on this 

stuff, and so I can just say that my concern is this. You are a major 

operational piece of this. The criminal activities are uncontroverted 

that are happening, and to do nothing is wrong. Nothing happens 

quick in this process. I believe from my vast amount of experience, 

and so it is time to try something. 

And so, while I appreciate the concerns, when I hear the recurring think of follow the money, there is plenty of money around to 

follow. And that is a good thing. I am a Republican; it is a good 

thing to make money. 

So, I will just tell you from my perspective, it is time to move. 

If there was a perfect bill that ever came out of here, it will sure 

be neat for me to be here while it happens, but I am guessing it 

is not going to happen when I do. So, I would appreciate best recommendations so that we can get moving on in terms of stopping 

something that is taken 7 years just to get to this point. I am not 

picking on you. 

And so, with that, Mr. Chairman, I see the light is where it is. 

I yield back the most time that anybody has yielded back today. 

Mr. LUNGREN. Very good. The gentleman will be commended. 
260 

I would like to thank our witnesses for the testimonies today. 

Without objection, all Members will have 5 legislative days to submit additional written questions for the witnesses or additional materials for the record. 

We thank you all. We appreciate your testimony on a very difficult subject. 

This hearing is adjourned. 

[Whereupon, at 1:29 p.m., the Committee adjourned.] 
(261) 

A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Prepared Statement of the Honorable Ron Wyden, 

a U.S. Senator from the State of Oregon 

I would like to take this opportunity to commend Chairman Smith and Ranking 

Member Conyers for holding this hearing. While I would have liked to see a more 

diverse range of voices included at today’s table, I appreciate the opportunity to 

share my views on this important subject. 

While some would like to paint this issue as a simple matter of being for or 

against intellectual property, that would be a mistake. 

Believing that a free and open Internet is worth fighting to protect does not mean 

that we aren’t concerned about copyright infringement or that we are somehow oblivious to the fact that unscrupulous foreign suppliers are using the net to traffic 

counterfeit and illegal goods. They are and Congress and this committee are right 

to be considering remedies to stop them and to protect the hard work of our creative 

industries. 

Rather, those of us who value the Internet’s growing role in our society recognize 

that any government intervention in the online ecosystem that is the Internet can 

and will have a ripple effect on more than just its bad actors. Interfering in the Domain Name System (DNS) for example would undermine the net’s structure and 

harm cybersecurity efforts. Authorizing a private right of action, for example, 

wouldn’t just allow rights holders to use the courts to protect their intellectual property. Companies could also abuse such authority to protect out-dated business models by quashing new innovations in their infancy and discouraging less than complimentary speech. 

In other words, the wrong approach to combating infringement could fundamentally change the Internet as we know it, moving us towards a world where transactions are less secure, ideas are less accessible and starting a website wouldn’t be 

an option for anyone who couldn’t afford a lawyer. 

The Internet has become an integral part of our everyday lives precisely because 

it has been an open-to-all land of opportunity where entrepreneurs, thinkers and 

innovators are free to try and fail. The Internet has changed the way we communicate with each other, learn about the world and conduct business, because instead 

of picking winners and losers, we created a world where every idea has an opportunity to be heard regardless of where it originates. 

As Members of Congress we can now engage with our constituents via online innovations in social media, while a small business in rural Oregon can use the Internet to find customers around the world. And the Internet isn’t just becoming the 

global marketplace for goods and services, it is the marketplace of ideas challenging 

tyranny and championing democracy. It has made lies harder to sustain, information harder to repress and injustice harder to ignore. 

But while the Internet has become a dependable part of our lives, it is essential 

that we not take it for granted or make assumptions about a medium that is still 

taking shape and that few in Congress fully understand. 

Moreover, it is important to remember that the Internet we know did not happen 

by accident. Rather, it grew from a set of principles that we deliberately put into 

law during a situation not unlike the one before the committee today. 
262 

Over 15 years ago, when Congress first started thinking about Internet regulation 

the concern was protecting children from pornography. There were competing ideas 

and some argued that Congress should simply censor the Internet and use the government to cut off access to objectionable material. 

But a few of us saw value in letting the Internet develop free from corporate or 

government control. Instead of having government censor the web, we developed an 

approach that would empower users and technology to address content concerns on 

their own. And we took the opportunity to pass a law that said that neutral parties 

on the net are not liable for the actions of bad actors. 

That fundamental principle enshrined in Section 230 of the Communications Decency Act both addressed the problem and freed innovators to develop new ideas 

like YouTube, Facebook, Wikipedia and Twitter. So now, as we again debate web 

censorship, let’s ask ourselves: What next generation of innovations won’t be realized if we backtrack on that principal now? 

Yes, the Internet needs reasonable laws and bad actors need to be pursued, but 

the freedoms of billions of individual Internet users should not be sacrificed in the 

interest of easing that pursuit. The decisions we make to police the Internet today 

will also govern how this relatively new medium will continue to develop and shape 

our world. And yes, giving moneyed interests a louder voice and a greater ability 

to determine what that online world will look like would fundamentally alter the 

Internet which currently treats all voices as equal. 

As I have said before, this is not an issue where we should use a bunker-buster 

bomb when a laser beam would do. And that is not just my opinion, venture capitalists who fund Internet start-ups, the biggest and smallest actors in the tech community, law professors concerned with speech, Internet technologists, security experts 

and mainstream and new media have all expressed concerns about the legislation 

advancing in Congress. 

In writing laws to police the Internet, we need to consider more than how effective 

a proposed remedy would be at combating infringement, we must also consider the 

impact proposed remedies will have on everything else online. This means keeping 

the following in mind: 

1. Be deliberate. While rights holders and law enforcement are understandably 

eager to go after bad actors, we must be mindful of the precedents we set 

here at home, and around the world. 

2. Get the scope right. Narrowly focus law enforcement’s authority on those 

who are willfully and deliberately breaking the law or infringing on others’ 

property rights for commercial gain. 

3. Avoid collateral damage. Rather than frustrating the architecture of the 

Internet or establishing a censoring regime, consider instead promoting approaches that empower users and do no harm to the ’Net. More simply, fish 

for tuna without catching dolphins. 

4. Promote innovation over litigation. Our efforts should be to protect copyrights and trademarks, not outdated business models. 

Again, I thank the committee for its consideration of my views. 

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Prepared Statement of Terry Hart, Creator of Copyhype 

Statement ofIerry Hart on H.R. 3261, the "Stop Online Piracy Act" 

House Judiciary Committee 

November 11,2011 

My name is Terry Hart, and I am the creator of Copyhype, a blog devoted to rcasoned 

analysis of copyright issues in a digital age. Since August of 20 10, I have written over 200,000 

words on the subject, receiving positive attention from many within the copyright community. I 

am writing today in support of the recently introduced Stop Online Piracy Act (H.R. 3261). 

I am passionate about the framework provided by copyright law because I am passionate 

about the expressive works that have been created in the US over the past 200 plus years because 

of this franlcwork. From the 8illy [0 the sublime, to those that educatc and those that entertain, 

thesc works have advanced our socicty, our culture, and our economy. As a media and cultural 

consumer, 1 am excited by the increasingly irulOvative new ways I can access the news, movies, 

television shows, music, and other works I love online, and I strongly hope that those who create 

them can continue to create. 

I am pleased the House Judiciary Committee has recently introduced the Stop Online Piracy 

Act. I believe this legislation is both necessary and carefully crafted to ensure creators have 

effective recourse against sites that profit ofTmisappropriation of their work. 

Thc bill features many important provisions, provi~ions concerning the denial of US capital 

to notorious foreign infringers and trafficking in in11erently dangerous goods and services, for 

example, but I willlirnit my remarks to Sections 102 and 103, which specifically address the 

problem of online, commercial piracy. 

Effective copyright protection, on a fundamental level, is a significant governmental 

interest, and one of the few enumerated powers of the federal government in the Constitution. In 

1832, the Supreme COUlt said "To promotc the pl'Ogress oflbe USei1.11 arts is the interest and 

policy of every enlightened government." Grant v. Raymond. 31 US 218. Only two years later, 
264 

Supreme Court Justice Thompson said in his dissent to the seminal opinion in Wheaton v. Peters, 

"In my judgment, every principle of justice, equity, morality, fitness and sound policy concurs, 

in protecting the literary labours of men, to the same extent that property acquired by manual 

labour is protected." 33 US 591 (1834). 

The history of copyright law prescnts a common theme of tedmological advancement 

hringing challenges to creators. In thc past, we've sccn these ~hallengcs with the introduction of 

new forms of media that allowed the recording of sound, images, and motion pictures; 

broadcasting in the form of radio and television; and even advancements in transportation that 

have made our world smaller and more connected. Today, creators face challenges to adapt to 

digital technologies and the Internet, which allows global communication on an unprecedented 

scale. 

But no matter how rapidly technology advances, wc should not lose sight of the fi.l11damcntal 

minciplcs of "justice, equity, morality, fitness and sound policy" that thc protection of expression 

is built on. 

In the words of James Madison, "The public good fully coincides" with "the claims of 

individuals" under copyright la\v. Federalist papers, No. 43. The introduction of new expressive 

works, whether in the form of books, music, films, television, photographs, do much to advance 

this public good. They teach, entertain, and shed light on the human condition. So it is vitally 

impOitant that those works are protected just as much online as they are offline. 

Thc Internet today looks va,tly diffcrent today than it did in 1998, when the Digital 

Millennium Copyright Act was enacted. There was no Google, no YouTube, and no Facebook. 

The technologies that make rich, fully-interactive sites like these possible simply didn't exist at 

the time. It would be hard to imagine a world wide web like this today. Today's web allows a 

myriad of ways for people to engage in communication, commerce, social networking, 

entertainment, and learning. This is possible because the technology behind the web continued to 

progress, rather than bcing fnnen in place. The samc should be true of copyright law. 

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The consensus is that the DMCA has generally worked well for c{)pyright holders and 

service providers. Its safe harbors shield service providers from liability for material uploaded by 

users where the service provider doesn't have knowledge that the material is infringing, doesn't 

receive a direct financial benefit from the infringing activity where the provider has the right and 

abilily lo control the activily, and acts cxpcditiously to di~ah!e acccss to uploaded material when 

it Teeeives a notification of claimed infringemenl. Thesc notice-and-takedown provi~ions can be 

more effective and efficient for removing infringing material than litigation. They work well, in 

other words, for good faith, legitimate service providers who cooperate with copyright holders to 

detect and deal with online infringement. 

They should not, however, provide cover for service providers who deliberately set out to 

build sites based on infringement -- where, for example, the site ,vas primarily designed to have 

no other purpose than to engage in or facilitate infringing acts, the site operator has taken 

deliberate action to rcmain una\vure or a high probability that the ~ite is ILsed for infringement, or 

the site operator has laken ah'irmative steps to promote the usc of the site for infringing acts. 

The DMCA safe harbors were crafted to provide legal certainty in the new online world and 

protect service providers from the risk of liability for inadvertent or incidental infringement that 

they aren't aware of or can't monitor or control. They certainly \veren't crafted to protect against 

those who actively and deliberately design and operate their sites to profit off piracy. 

In practice, the DMCA notice-and-takcdown provisions are ineffective against sites like this. 

Many creators would find it a full time job lo send notices against these lypes of sitcs. And the 

provisions are especially ineffective against sites that are directed at and easily accessible by US 

residents but located outside the US and dismissive of US law. 

Sections 102 and 103 of the Stop Online Piracy Act fill this gap by giving the Attorney 

General and copyright holders new 100is that directly target rogue sites. The goal of this 

legislation is not to completely eradicate online piracy, or allO\v copyright owners to "go back to 

the way things were." Piracy is inherently part ofthe copyright landscape, and it will always 

exist in some fom) or another. 

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The goal is rather to allow creators and legitimate intermediaries to continue to develop 

sustainable business models that allow both widespread dissemination of content and the ability 

to be remunerated for investing time and money creating that content. Obviously, one of the big 

challenges facing creators is figuring out these business models, but that doesn't mean the law 

shouldn '( also playa role. 

Nearly forty years ago, fOIDler Register of Copyrighb Barbara Ringer deliverec.l an essay at a 

time when Congress was in the midst of reforming the Copyright Act to ensure it would remain 

relevant in the information age. Like today, it was a time of rapid technological change, with 

new stakeholders emerging and contentious debate. But though the technologies and players 

'were different, Ringer's words remain just as relevant today: 

"If the copyright law is to continue to function on the side of light against 

darkness, good against evil, truth against newspeak it must broaden its base and 

its goals, Freedom of specch and freedom or the press arc meaningless unless 

authors arc able to create independently from control by anyone, and to finc.l a 

way to put tlleir works before the public, Economic ac.lvantage and the shibboleth 

of "convenience" distort the copyright law into a weapon against authors. Anyone 

who cares about freedom and authorship mnst insure that, in the process of 

improving the efficiency of our law, we do not throw it all the way back to its 

repressive origins in the Middle Ages." (Barbara Ringer, Demonology of 

Copyright (1974).) 

Critics of the Stop Online Piracy Act have raised concerns about the First Amendment and 

due process implications of the bill, which I will look at in more detail. 

Copyright Law and Fl'eedom of Expression 

The introduction of the Stop Online Piracy Act has raised free speech concerns from various 

parties. It's absolutely vital that the proposed bill -- any bill for that matter -- conforms with the 

First Amendment, which, I believe, it does. Noted First Amendment expert Floyd Abrams 

believes the bill is fully compatible with First Amendment proteetions as well, as he explained in 

a recent letter sent to this Committee. 

But it's also important to keep in mind that copyright law itself serves un important role in 

furthering the goals of lreedom of expression. This role has been recognized since the founding 

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of the United States. As the Supreme Court said in Eldred v, Ashcroft, "the Framers intended 

copyright itself to be the engine of free expression." 

Founding Father and second president John Adams once \Vfote, "Property must be secured, 

or liberty cannot exi~l." Our third president, and the Father of the Constitution, James Madison 

added, "The advancement and diffusion of knowledge is the only guardian of true liberty." 

The Copyright Clause in the Constitution incorporates these ideas, thus serving as a critical 

component in the protection ofliberty. It gives Congress the power to secure to authors the 

exclusive rights in their writings in order to promote the progress of the useful arts and sciences. 

The importance of this power cannot be understated, and neither can the importance that these 

exclusive rights be truly secure in order to promote progress and spur diffusion of new 

expression. 

That copyright law complements rather than conflicts wilh freedom of expression has been 

neC{lgnized many times since then. In an 1844 article appearing in '11w Reasoner magazine, the 

author \Vfites: "If the public desire a really free press, they must not look to it as a source of 

taxation; and if they are anxious for truth, for elevated and elevating sentiments, for ideas 

matured by study and reflection, and an honest exposition of grievanc.es, they must recognise 

original articles as property, and secure them against a plundering appropriation by a copyright." 

And in an 1880 treatise on the liberty of the press, the author c.haraeterizes the "valuable property 

in the hands of the author who composes and publishes his thoughts" as one of the forms "which 

thc right of fi'ee speech and thought assumes." 

Perhaps the best examination of the complementary relationship between copyright and 

freedom of expression comes from former Register of Copyrights Barbara Ringer, who noted: 

"[Ilt is important to recognize that the Statute of Anne of 1710, the ftrst 

copyright statnte anywhere and the Mother of us all, was enacted precisely 

because the whole autocratic censorship/monopoly/ licensing apparatus had 

broken down completely. As a result of the bloodless revolution taking place in 

the English constitutional systcm, basic individual freedoms, notably frcedom of 

speech and lreedom orthe press, were becoming established under common law 

principles. The Statute of Anne marked the end of autucracy in English copyright 

and established a set of democratic principles: recognition of the individual 

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author as the ultimate beneficiary and fountainhead of protection and a guarantee 

of legal protection against unauthorized use for limited times, without any 

elements of prior restraint of censorship by government or its agents." 

She later observes, "It is striking that the second and third copyright statutes in the world -

those orihe United States of America and of France - were adopted immediately following the 

revolutions in those countries that overthrew autocratic government and were based on ideals of 

personalliherty and individnal freedom." 

Prior restraint and censorship are antithetical to the First Amendment, but doing nothing in 

the face of rampant online piracy disgraces the goals of freedom of expression as well. The Stop 

Online Piracy Act helps secure creators' rights online. Rogue sites jeopardize the ability of 

creators and finns to invest time and resources into creating new expression that advances 

society and culture. Current law is insufficient to address this harm; this bill would help restore 

the security of copyrights online. 

Thc Procedure of Sections 102 and 103 oCthe Stop Online Piracy Act 

The rule of law is one of the most central and vital aspects of a free society. The US 

Constitution guarantees fair and impartial proceedings, protects citizens from arbitrary and 

unequal applications of law, and limits what the govermnent can do before depriving someone of 

life, liberty, or property. 

But like freedom of speech, the concept oCdue process encompasses more than just 

Constitutional limits. Due prucess requires that rights have effective remedies available. Doing 

nothing violates the spirit of the ndc of law. 

The Stop Online Piracy Act strikes the correct balance between giving copyright holders an 

effective process for addressing sites whose only purpose is profiting off of the misappropriation 

of their works and ensuring that legitimate site operators are not punished. A eloser look at the 

procedures laid out in Sections 102 and 103 of the bill shows this balance. 

Section 102 of the bill pruvides Cor an action by the Attomey General ag"inst foreign 

infringing sites. Like any other civil suit, such an action would begin with a complaint filed in 

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federal court and notice given to the defendant, who may then defend against the suit as any civil 

defendant may. 

The Attorney General is then directed to move for an injunction against the site operator "to 

cease and desistlrom underlaking any further adivity as a foreign infringing site." These 

injunctions are governed by the same Federal Rules of Civil Procedure as any civil injunction, 

and would not issue until a court dctcrmination made aftcr both sides arc heard. I 

From there, the Attorney General can seek court orders against service providers that 

provide access to the foreign infiinging site, Internet search engines that provide links to the site 

based on a user query or selection, payment network providers that process or complete 

financial transactions for the site, and Internet advertising services that contract to provide 

advertising to or for the site. These four service providers are only required to take "technically 

feasible and reasonable measurcs" to comply with these orders. 

The bill limits whallhe Attorney General can do to ensure eompliance witb these orders to 

injunctive relief against a service provider that "knowingly and willingly" fails to comply with 

the order. The bill provides an affIrmative defense for a service provider in the event it "does not 

have the technical means to comply with this subsection without incurring an unreasonable 

eCDnomic burden." 

In addition, at any time after a CDurt order is issued under this section, the foreign infringing 

site Or any serviee proyideT .~erved with an order may petition to modify, suspend, or vacate the 

order if the "foreign Internet site subject to the order is no longer, or never was, a forcign 

infringing site" or, more broadly, if"the interests of justice othem'ise require" modifying, 

suspending, or vacating the order. It should also be noted that under this portion of the bill, any 

service provider subject to a court order may intervene at any time in any action. 

Taken together, these provisicms provide for robust procedural protections that fully comport 

",·ith due process of law under the Constitution. It would not be likely or easy to abuse the 

provisions of Section 102 of the Stop Online Piracy Act. 

Except in the case ora temporary restraining order, which may be made e.:r. parte. 

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Section 103 of the Stop Online Piracy Act provides for a notice procedure similar to the one 

found in the OMCA. A copyright owner may serve notice on a payment network provider or 

Internet advertising provider that provides services to a site "dedicated to theft of U.S. property." 

The bill defines such a site as one that, in part, "is primarily designed or operated for the 

purpose of, has only limited purpose or use other than, or is marketed by its operator or another 

acting in concert with that opemtor for (lse in, olTeriog goods or services in a marmer that 

engages in, enables, or facilitates" copyright infringement; the operator "is taking, or has taken, 

deliberate actions to avoid confirming a high probability of the use of' the site to carry out 

infringing acts; or the site is operated "with the object of promoting ... its use to carry out acts 

that constitute" copyright infringement, "as shown by clear expression or other affirmative steps 

taken to foster infringement." 

These definitions arc drawn directly from existing Supreme COurl precedeot that establishes 

secondary liability for copyright infringemenl and would not diminish or upend existing DMCA 

safe harbors for good failh, legitimate service providcrs. 

Should a service provider fail to comply with a notice, or should a site serve a counternotification under the bill, nothing happens unless and until a copyright owner files a suit in 

court. This action mirrors the one available to the Attorney General in Section 102 in the bill, 

except the court orders are limited to only payment network and Internet advertising providers. 

As in that action, the procedural protections available to all parties involved are robust. 

Finally, Scction 103 provides penalties to protect against copyright owocrs using the notice 

procedure in bad faith. These penalties are the same as those available under the DMCA, which 

holds that a content owner who "knowingly materially misrepresents" that content is infringing 

is liable for any damages, attorney fees, and costs incurred by the user as a result of the content 

being taken down. But while the language of the Stop Online Piracy Act mirrors that in the 

DMCA, there are two practical realities that make it different. 

First, a good faith cffort to determine that an entire site is "dedicatcd to theft of US 

pTOperty" uoder the definition of the bill requires considerahly more effort than determining 

whether a single file is infringing. The notification ilsel r requires suhstantially more investigation 

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271 

f 

than a DMCA notice. Under the DMCA, a copyright owner need only identifY what work is 

being infringed and the content that is infringing; Under the Stop Online Piracy Act, the 

copyright owner must show, among other things, "specific facts to support the claim that the 

Internet site, or portion thereof, is dedicated to theft of U.S. property" and "clearly show that 

immediatc and irrcparable injury, loss, or damage will rcsult" to the copyright owner in the 

abscnce of timely action; "Information rcasonably sufficicnt to establish that thc paymcnt 

network provider or Internet advertising service is providing payment processing or Internet 

advertising services for such site"; and identification of evidence that indicates the site is USdirected. 

Second, the risk of making a material misrepresentation is much higher. The operator of a 

site whose sources of income have been threatened is far likelier to pnsh back than a user whose 

vidco was taken down. And unlike the nominal damagcs present in a DMCA takcdown, the loss 

of ad revenues and credit card transactions because of a bad fai lh lakedown could add up. 

Conclusion 

Sections 102 and 103 of the Stop Online Piracy Act represent a good start for creators who 

have long noted the injustice of others profiting from online piracy and escaping liability. Web 

services who are acting legitimately and legally should welcome rogue sites legislation because 

effective protection of creative labor is vital to a functioning online marketplace, and a 

functioning online marketplace beneJlls uS all. With this bill Congress can truly secure the 

exclusive rights of creators. Doing so not only protects creators but also ensures that the 

developmenl of inn ova live and sustainable services for consumers 10 access and enjoy media and 

content can continue. 

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*The material received by the Subcommittee from the submitters whose names appear in this 

list, is not printed in this hearing record but is on file with the Subcommittee. 

List of submitters contributing material in association with the 

consideration of H.R. 3261* 

60 plus 

ABC 

AFL-CIO 

Alliance for Safe Online Pharmacies 

American Bankers Association 

American Civil Liberties Union 

American Consumer Institute Center for Citizen Research 

American Society of Composers, Authors and Publishers 

Americans for Tax Reform 

Association of American Publishers 

Association of State Criminal Investigative Agencies 

Association of Talent Agents 

Beachbody, LLC 

BMG Chrysalis 

Broadcast Music Incorporated 

Building and Construction Trades Department (AFL-CIO) 

Capitol Records Nashville 

CBS (including subsidiary Simon & Schuster) 

Cengage Learning 

Center for Indicvidual Freedom 

Christian Music Trade Association 

Church Music Publishers’ Association 

Coalition Against Online Video Piracy 

Comcast/NBCUniversal 

Computer & Communications Industry Association 

Concerned Women for America 

Congressional Fire Services Institute 

Copyright Alliance 

Coty, Inc. 

Council of Better Business Bureaus 

Council of State Governments 

Country Music Association 

Country Music Television 

Creative Community 

Deluxe Entertainment Services Group, Inc. 

Disney Publishing Worldwide, Inc. 

Educause 

Electronic Transactions Association 

Elsevier 

EMI Christian Music Group 

EMI Music Publishing 

Entertainment Software Association 

ESPN 

GoDaddy 

Gospel Music Association 

Graphic Artists Guild 

Hachette Book Group 

HarperCollins Publishers Worldwide, Inc. 

Hyperion 

Independent Film & Television Alliance 

International Anti-Counterfeiting Coalition 

International Brotherhood of Electrical Workers 

International Brotherhood of Teamsters 

International Trademark Association 
273 

International Union of Police Associations 

Internet Society 

Joint letter of support from AFM, AFTRA, DGA, IATSE, IBT, and SAG 

Joint letter of opposition from ALA, ARL, CDT, CEI, DP,EFF, FH,HRF, HRW, 

Internews, NAFOTI, PK and TF 

Joint letter of opposition from educational interests 

Joint letter of support from First Amendment & Intellectual Property Counsels 

Let Freedom Ring 

Library Copyright Alliance 

Lilly 

L’Oreal 

Lost Highway Records 

Macmilian 

Major City Chiefs 

Major County Sheriffs 

Major League Baseball 

Marvel Entertainment, LLC 

Mastercard Worldwide 

MCA Records 

McGraw-Hill Education 

Mercury Nashville 

Minor League Baseball 

Minority Media & Telecom Council 

Motion Picture Association of America 

Moving Picture Technicians 

MPA—The Association of Magazine Media 

National Association of Fusion Center Directors 

National Association of Manufacturers 

National Association of Prosecutor Coordinators 

National Association of Theater Owners 

National Association of State Chief Information Officers 

National Cable & Telecommunications Association 

National Center for Victims of Crime 

National Criminal Justice Association 

National District Attorneys Association 

National Domestic Preparedness Coalition 

National Football League 

National Governors Association 

National League of Cities 

National Narcotics Officers’ Association Coalition 

National Sheriffs Association 

National Songwriters Association 

National Troopers Coalition 

Net Coalition 

News Corporation 

Pearson Education 

Penguin Group (USA), Inc. 

Pfizer, Inc. 

Pharmaceutical Research and Manufacturers of America 

Professors’ Letter In Opposition to PROTECT-IP 

Provident Music Group 

Random House 

Raulet Property Partners 

Republic Nashville 

Revlon 

Sandia National Laboratories 

Scholastic, Inc. 

Showdog Universal Music 

Sony Music Entertainment 

Sony Music Nashville 
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Sony/ATV Music Publishing 

State International Development Organizations 

The Estee Lauder Companies 

The Honorable Ron Wyden 

The Perseus Books Group 

Tiffany and Co. 

Time Warner 

True Religion 

U.S. Chamber of Commerce 

U.S. Conference of Mayors 

U.S. Olympic Committee 

Ultimate Fighting Championship 

UMG Publishing Group Nashville 

United States Tennis Association 

Universal Music 

Universal Music Publishing Group 

Viacom 

Visa Inc. 

W.W. Norton & Company 

Wallace Bajjali Development Partners LP 

Warner Music Group 

Warner Music Nashville 

Wolters Kluewer Health 

Word Entertainment 

Zumba Fitness