PROTECT IP Letter from Law Professors Didn’t Do its Homework

by Michael O'Leary 07/07/2011 06:44 (UTC-08:00) Pacific Time (US & Canada)

The letter on the PROTECT IP Act from a group of law professors that has been circulating around the blogosphere in the last day or so unfortunately seems designed more to get a reaction than to get its facts right. 

Beyond repeating the disingenuous arguments that the bill would somehow break the Internet (even though the technology it would use is widely in use today with no negative impact) or that it would turn the U.S. into a China-like censorship regime (how on earth is it censorship if the government protects the products of free speech from being stolen?), the letter makes claims that range from wildly misleading to downright inaccurate:

Conveniently Overlooks PROTECT IP’s Strong Court Oversight and Due Process Protections
The letter misses the critical point that PROTECT IP mandates a court’s approval before any partner in the Internet ecosystem – search engines, ISPs, advertisers, pay processors, anyone – has to take any action to prevent access to or stop doing business with a rogue site.  Using language like “credit card companies and advertisers … must stop doing business [with] any site that a private copyright or trademark owner claims is predominantly infringing” ignores the need for court approval. 

The writers also assert that “the Act would allow courts to order any Internet service provider to stop recognizing the site even on a temporary restraining order or preliminary injunction issued the same day the complaint is filed.  Courts could issue such an order even if the owner of that domain name was never given notice that a case against it had been filed at all.”

Yet the PROTECT IP Act clearly and explicitly requires notice to domain name owners by e-mail, postal mail, and “in any other such form as the court finds necessary” under the Federal Rules of Civil Procedure.  Only “if through due diligence the Attorney General is unable to find” a website or domain name owner can an action proceed without this notice, and as in each and every case under PROTECT IP, a court’s approval would be required before ISPs or other entities would have to take any action. 

As constitutional expert Floyd Abrams wrote, “[t]he procedural protections under the Protect IP Act are so strong, uniform and constitutionally rooted that it is no exaggeration to observe that any complaints in this area are not really with the bill, but with the Federal Rules of Civil Procedure Itself, which govern all litigants in U.S. federal courts.”  Read his letter for much more detail on the bill’s strong provisions for due process.

Ignores Years of Precedent
The letter argues that the PROTECT IP Act “fails [the] Constitutional test” of prior restraint.  “It authorizes courts to take websites ‘out of circulation’ – to make them unreachable by and invisible to Internet users in the United States and abroad – immediately upon application by the Attorney General after an ex parte hearing.  No provision is made for any review of a judge’s ex parte determination, let alone for a ‘prompt and final judicial determination, after an adversary proceeding,’ that the website in question contains unlawful material.”

This is simply wrong.  Injunctive relief, which is the judicial remedy the PROTECT IP Act provides, has long been recognized as appropriate and constitutional means to stop the theft of creative works.  Floyd Abrams addresses this point directly:

From the start, injunctions were one form of relief accorded to victims of copyright infringement.  (Courts applied the 1790 Act [Ch. 15, 1 Stat. 124 (1790) (repealed)], and its later amendments, to grant injunctions “according to principles of equity.”  Act of Feb. 3, 1831, ch. 16, 4 Stat. at 438 (1831) (repealed 1870) (cited in Kristina Rosette, “Back to the Future: How Federal Courts Create a Federal Common Law Copyright Through Permanent Injunctions Protecting Future Works,” 2 J. Intell. Prop. L. 325, 340 (1994)).  However, since injunctions in non-copyright cases have frequently been held to be unconstitutional prior restraints on speech, Near v. Minnesota, 283 U.S. 697 (1931); New York Times Co. v. United States, 403 U.S. 713 (1971), and for other reasons, the subject has arisen as to the application, if any, of the First Amendment to copyright principles.  See generally, Melville B. Nimmer & David Nimmer, Nimmer on Copyright Section 19 (2010).

The issue of whether and, if so, how certain elements of the Copyright Act should be read to accommodate various First Amendment interests remains open.  The law could hardly be clearer, however, that injunctions are a longstanding, constitutionally sanctioned way to remedy and prevent copyright violations.  Indeed, that premise was explicit in the critical concurring opinion in the Supreme Court’s most famous prior restraint case, assessing publication of the Pentagon Papers, which noted that “no one denies that a newspaper can properly be enjoined from publishing the copyrighted works of another.” New York Times Co., 403 U.S. at 731 n.1 (White, J. and Stewart, J., concurring).  Current treatises reflect this judicial consensus.  

…The evident constitutionality of injunctive relief for copyright violations does not mean, to be sure, that injunctions must automatically or always be issued in response to a copyright violation.  The Supreme Court has recently held to the contrary, warning against the error of a ‘categorical grant’ of injunctive relief for patent infringement in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 394 (2006), and the Second Circuit has applied that conclusion in a recent, celebrated copyright case, Salinger v. Colting, 607 F.3d 68 (2d Cir. 2010). What no court has ever denied is that injunctions are a valuable and constitutional response to copyright violations.

Misunderstands the Point of the Bill
The letter includes a couple of claims about the PROTECT IP Act that are puzzling when compared with what the bill actually does. 

“Remarkably,” the authors write, “the bill applies to domain names outside the United States, even if they are registered not in the .com but, say, the .uk or .fr domains. ”  It’s correct that the PROTECT IP Act would ask U.S. companies to prevent access to or stop doing business with domain names outside the United States.  In fact, that’s the point of the bill.  When content thieves and counterfeiters set up websites that are based overseas, U.S. law enforcement officers and prosecutors can’t pursue the sites themselves because of limits on their jurisdiction.  But often these rogue sites rely on U.S.-based Internet service providers, search engines, and financial services firms to target American consumers.  If these companies stop providing access to and support for rogue sites, it will make it much, much harder for the thieves to stay in business. 

This sentence from the letter, however, is wrong: “[The PROTECT IP Act] even applies to sites that have no connection with the United States at all, so long as they allegedly ‘harm holders’ of US intellectual property rights.”  The sites to which the bill applies do have a connection with the United States – they use services provided by U.S. companies to stay in business and they target U.S. consumers.  That’s a pretty strong connection.

And finally, the letter claims that “even China doesn’t demand that search engines outside China refuse to index or link to other Web sites outside China.  The Act does just that.”  No, it doesn’t.  PROTECT IP applies to American search engines, American ISPs, American payment processors, and so on. 

Here’s a couple of facts we won’t misstate:  stealing creative content and profiting from it is wrong.  It hurts real people all across the country who work hard to make the movies and TV shows that rogue sites casually rip off.  And it jeopardizes future investment in the productions that will give those people their next job tomorrow or next year. 

The authors are right that the Internet is a powerful tool to bring people together and help us communicate in ways we’ve never been able to do before.  That doesn’t mean it should also be a powerful tool for theft. 

COPYHYPE Counters Misconceptions about Senate Streaming Bill

by Howard Gantman 07/06/2011 12:20 (UTC-08:00) Pacific Time (US & Canada)

Great piece by COPYHYPE’s Terry Hart today clearing up some misconceptions that have been floating around about S.978, the Commercial Felony Streaming Act, a narrowly targeted bill aimed at criminals who steal and disseminate American-made movies, television shows, live sporting events, and other creative works.

Hart illustrates how the Commercial Felony Streaming Act will affect criminals engaged in massive copyright theft, and why fears that the bill will target users who post videos of lip-synching online are wrong.  “The bill is addressed toward only large-scale, commercial piracy, and the bill is drafted accordingly,” writes Hart. 

As Hart notes in his article, streaming copyrighted content is actually already illegal, but it’s classified as a misdemeanor, not a felony.  The Commercial Felony Streaming Act toughens the penalty for this behavior to close a loophole in current law that imposes weaker penalties for streaming illegal content than for downloading illegal content via peer-to-peer transfers.  Streaming and downloading are different technologies, but criminals are using them for the same purpose—stealing movies and TV shows made by the millions of men and women whose work in the entertainment industry helps support them and their families. 

Arguing the narrow scope of the bill, Hart asserts, “The language of the statute sets forth several bars to arbitrary and unreasonable application of the law, including its requirement of willfulness and the value necessary to trigger it.” 

Detailing the criteria used to determine “willfulness” and “value” in a criminal court, Hart concludes that only criminals will feel the impact of S. 978:

“To sum up, Bill S.978 can’t be used to prosecute the uses that many fear it applies to. It doesn’t change what conduct is legal and what conduct is illegal. It is designed to apply only to outright pirates who profit off the streaming of unauthorized copyrighted works, and the language reflects this design.”

America’s Creators Join Together in New Partnership to Fight Content Theft

by Senator Chris Dodd 07/06/2011 08:50 (UTC-08:00) Pacific Time (US & Canada)

Making a great movie or TV show takes the work of hundreds of dedicated people.  From the actors onscreen to the artists and technicians behind the camera, it’s truly amazing what we can do –and where our imaginations can take us – when we work together.
That’s why I’m so excited today to see the launch of a revolutionary new organization that will unite America’s creative community as we take on our biggest threat: the massive theft of our creations. 
Most of the over 2  million Americans whose jobs are supported by the motion picture industry aren’t marquee stars or studio executives.  They’re the people whose names you see in the closing credits, with titles like makeup artist, set dresser, prop maker, sound effects editor, visual effects artist, rigging electrician, costumer, and driver.  They’re the teenagers working their first job taking tickets at the local movie theatre or theme park.   And they’re the people who work for local retailers, caterers, dry cleaners, florists, hardware and lumber suppliers, transportation companies, and thousands of other small businesses that support our industry. 
When someone steals a movie and profits from that theft, these are the people they’re robbing from.  These are the people who will have less to feed their families, to care for their parents, to save for retirement, to put their kids through school.  And now, these are the people whose voices you’re about to hear.
Creative America, a new and unprecedented partnership among studios, networks, unions, and guilds,  will give the men and women of our community a new way to speak out in the fight against content theft.  This grassroots campaign will help everyone across this country understand that content theft isn’t a victimless crime – it hurts all of us. 
If you are among the millions whose hard work helps make filmed entertainment, if you love the movies and want to stand with us against theft, please take a minute to visit and sign up today.
Just a few days ago, our country celebrated Independence Day.  For more than two centuries, America has celebrated the power of creativity and innovation – and over and over again, Americans have fought to protect our right and ability to express ourselves freely. 
Our battle against content theft is another step forward in that long fight – and now, with Creative America, that battle has truly begun.  Join us.

Washington, DC Gets Transformers 3 Love, Too

by Kate Spence 07/05/2011 15:09 (UTC-08:00) Pacific Time (US & Canada)

The Nation’s Capital also got some screen time in Paramount Pictures’ Transformers 3: Dark of the Moon, from landmarks like the Lincoln Memorial and Memorial Bridge to huge explosions near the National Mall.
“Movies are one of the things we’re still making in this country, and every U.S. city would like a piece of that industry,” the Washington Post’s Reliable Source wrote last week on Transformers’s contribution to Washington, D.C.’s economy. 
The production spent three days in D.C. last October, spending close to $2.5 million and employing 180 local residents in jobs ranging from production assistant to extras.  As the D.C. Film Office reported: “The production booked hundreds of room nights in District hotels, contracted with many DC-based vendors for a variety of goods and services, dined in local restaurants, shopped in neighborhood stores, and hired residents as cast and crew.”

Of course, the effect of the motion picture and television industry on the local economy in the District of Columbia extends further.  The industry is responsible for 4,215 direct jobs and $427 million in wages in the District, including both production and distribution-related jobs. Over 1,100 of the jobs are production-related.  In just the last couple of years, a number of televisions shows and movies have filmed in Washington, from How Do You Know? and Salt to Meet the Press and Situation Room.
Just goes to show you don’t always have to blow something up to make a real impact.

Categories: Job Production


Cities concerned about the grave impact of content theft on jobs and the economy

by Vans Stevenson 07/05/2011 13:47 (UTC-08:00) Pacific Time (US & Canada)

One place where job loss always hits especially hard is in America’s cities.  When it comes to protecting and creating jobs and strengthening our economy, our mayors and city officials are the boots on the ground: the first line of defense for vulnerable citizens and businesses.  With films and television shows now being made in cities and towns in all 50 states, supporting more than 2.4 million jobs and over $140 billion in total wages, who better to understand movie theft’s risk to jobs and local economies than city officials?

Now, the National League of Cities (NLC), which advocates for more than 19,000 cities, villages and towns across America, is calling attention to the urgent need to fight online content theft.  In an article in its weekly publication, Nation’s Cities Weekly, NLC’s Mitchel Herckis updated its members on the status of the PROTECT IP Act and other legislation related to cybersecurity, noting that “NLC’s National Municipal Policy supports federal efforts to address cyberspace crimes such as Web piracy, which has a detrimental impact on jobs and the economy.” 

NLC also announced that its Public Safety and Crime Prevention (PSCP) Committee “intends to propose a resolution on cybersecurity and online criminal activity at the 2011 Congress of Cities,” and we applaud NLC for its efforts to address this grave threat to local economies.

NLC’s strong statement comes not long after last month’s resolution by the U.S. Conference of Mayors in support of the PROTECT IP Act at its Annual Meeting in Baltimore.  The resolution expressed the Conference’s support for efforts to fight content theft and said its members would work with Congress and other stakeholders to pass the PROTECT IP Act and related legislation.  

America’s cities get that content theft costs jobs.  Their support will be invaluable in this fight.

Rogue Sites Host More than Stolen Movies

by Paul Brigner 07/01/2011 07:22 (UTC-08:00) Pacific Time (US & Canada)

Internet users who go looking for stolen movies online may end up getting more than they bargained for – a practically “indestructible” form of malicious software designed to give cyber criminals remote control over users’ computers. 

This week, researchers at security firm Kaspersky Labs wrote that TDL, a new form of malicious software or malware that they describe as “the most sophisticated threat today,” is spread by paying “affiliates” in exchange for placing an installation package online someplace where users will accidentally pick it up.  Kaspersky’s researchers noted that rogue websites are prime vehicles for this kind of abuse: 

The way in which the new version of TDL works hasn’t changed so much as how it is spread - via affiliates. As before, affiliate programs offer a TDL distribution client that checks the version of the operating system on a victim machine and then downloads TDL-4 to the computer.

Affiliates receive between $20 to $200 for every 1,000 installations of TDL, depending on the location of the victim computer. Affiliates can use any installation method they choose. Most often, TDL is planted on adult content sites, bootleg websites, and video and file storage services.

TDL is designed to transform machines it infects into a network of “zombies” that can be controlled from afar.  In just three months this year, TDL infected 4.5 million computers worldwide, with over a third of those in the U.S.  The U.K.’s The Telegraph reports:

"The owners of TDL are essentially trying to create an 'indestructible' botnet that is protected against attacks, competitors, and anti-virus companies," said Sergey Golovanov and Igor Soumenkov, reseachers at Kaspersky Labs.

"The [TDL-4] botnet, with more than 4.5 million infected computers, is used by cyber criminals to manipulate adware and search engines, provide anonymous internet access, and acts as a launch pad for other malware."

All the more reason to keep rogue sites from reaching U.S. consumers.  Stealing movies isn’t worth the risk to American jobs – or the risk to Internet security.

Transformers 3 Injects $24M into Illinois Economy

by Jordan Aluise 06/30/2011 12:25 (UTC-08:00) Pacific Time (US & Canada)

Not only is Paramount Pictures’ Transformers 3: Dark of the Moon a huge hit at the box office, grossing $13.5 million on opening night; it is also a big money-maker for the state in which it was filmed: Illinois.

The filming of Transformers 3 brought Illinois a whopping $24 million in spending to the state and created upwards of 400 jobs during production, noted the Associated Press in an article today.  This significantly contributed to the record-breaking $161 million in spending and the 8,000 jobs the film industry brought to the state in 2010.

In order to further spark their local economy and generate new job opportunities, the state of Illinois offers great production incentives to filmmakers, making it a popular destination to shoot movies.

As Director Warren Ribley from the Illinois Department of Commerce and Economic Opportunity put it, “The impact of Transformers 3 extends far beyond its 30 days of production in Illinois by providing millions of dollars in economic activity in the state, creating additional employment for Illinois crew, and, once-again, putting Illinois on the map.  As we continue our economic recovery, the film industry will continue to be an important part of our efforts to create jobs and spur economic growth.”

It is great to see what a big part the film industry has in continuously creating new job opportunities and supporting local economies around the United States.

Louisiana Film Industry Invests in Communities across the State

by Kate Spence 06/30/2011 07:56 (UTC-08:00) Pacific Time (US & Canada)

Great piece yesterday out of The News-Star (Movies Bring New Hope to Monroe) on Louisiana’s booming film industry that is spurring local economic development all over the state.  Fueled by a tax incentive that has been in place since 2002, filming has increased exponentially in Louisiana, putting people to work, invigorating local small businesses, and stimulating long-term investment in the state’s infrastructure and burgeoning creative community.

Small towns like Monroe are feeling the direct impact of the film industry’s growth in their home state, and of the economic benefits that on-location filming generates.  According to the article, R2 Productions’ New Hope is one project coming to Monroe, and founder Rodney Ray wants to turn the town into a new filming hot spot. 

Filmmakers who invest over $300,000 on in-state investments in Louisiana qualify for a 30 percent transferable tax credit, with an additional 5 percent transferable employment tax credit available on for those who hire in-state residents.  In 2010 alone, 69 movies and 18 TV series filmed in Louisiana, including Battleship, The Green Lantern and Memphis Beat.

Now third in line behind California and New York for the number of productions produced, Louisiana’s motion picture and television industry is responsible for 16,483 jobs in Louisiana, and $709.6 million in total wages, including indirect jobs and wages.  Over 7,600 are direct film and television industry employees, including more than 2,000 direct production employees.  Over 1,000 movie and TV-related businesses are now located in Louisiana, including more than 450 production-related companies. The state now has 15 soundstages and enough workers to handle 10 film crews at once.  The boom in filming, encouraged by the tax credit, has laid the foundation for a permanent motion picture industry in Louisiana.  

The film industry itself is not the only economic sector that is driven by increased production.  On-location filming has a unique economic ripple effect; when production crews come to town, they rely on local businesses for goods and services essential for their work, including equipment rentals, caterers, hardware stores, and construction companies.  Since 2007, MPAA member studios have paid an average of $101.3 million per year to local vendors, injecting capital directly into local economies.

It’s great to see that towns like Monroe are taking advantage of the opportunities presented by the state tax incentive, and we look forward to seeing more of Louisiana on the big screen. 

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