U.S. Court Rules Rogue Website Didn’t Suffer Hardship When U.S. Government Seized Domain Name

by Howard Gantman 08/09/2011 08:56 (UTC-08:00) Pacific Time (US & Canada)

In an important ruling for creators, a federal judge has decided that the U.S. government does not have to return two domain names seized by Immigrations and Customs Enforcement (ICE) for facilitating massive content theft. 

Rojadirecta.com and Rojadirecta.org hosted links to live sporting events and other copyright-protected content; when those sites were seized, Spanish company Puerto 80 sued, arguing it would suffer hardship because fewer people would visit its sites, and claiming that its First Amendment rights had been violated.

Federal District Judge Paul Crotty rejected those claims.  Importantly, Judge Crotty pushed back on Puerto 80’s claims that “in seizing the domain names, the Government has suppressed the content in the ‘forums’ on its websites… The main purpose of the Rojadirecta websites, however, is to catalog links to the copyrighted athletic events — any argument to the contrary is clearly disingenuous. Although some discussion may take place in the forums, the fact that visitors must now go to other websites to partake in the same discussions is clearly not the kind of substantial hardship that Congress intended to ameliorate.”

This is important in the context of PROTECT IP, the U.S. Senate bill that would strengthen U.S. law enforcement’s power to go after foreign rogue websites that traffic in stolen American-made content. On one level, the Rojadirecta case demonstrates why we need PROTECT IP in the first place: shortly after Rojadirecta’s .com and .org domains were seized, the site popped up on domain names registered in other nations outside the reach of American law, and so remain accessible to American consumers. 

Judge Crotty’s ruling also echoes a key element of the PROTECT IP Act, which defines a rogue site as a site that “has no significant use other than engaging in, enabling, or facilitating the reproduction, distribution, or public performance of copyrighted works, in complete or substantially complete form, in a manner that constitutes copyright infringement … or is designed, operated, or marketed by its operator or persons operating in concert with the operator, and facts or circumstances suggest is used, primarily as a means for engaging in, enabling, or facilitating” infringement (emphasis ours).  Judge Crotty essentially adopts this approach when he writes that Rojadirecta’s “main purpose” is to provide links to copyrighted content, not to provide a forum for discussion.

As Constitutional law expert Floyd Abrams wrote earlier this year, entities ‘dedicated to infringing activities’ are not engaging in speech that any civilized, let alone freedom-oriented, nation protects.  … [The PROTECT IP Act] does not impair or overcome the constitutional right to engage in speech; it protects creators of speech, as Congress has since this Nation was founded, by combating its theft.”  Judge Crotty’s decision reinforces that sound conclusion.

Rojadirecta will be back in court later this fall, and we’ll keep watching. 

Creative Industries Welcome Landmark Case to Block Newzbin2

by Howard Gantman 07/28/2011 07:37 (UTC-08:00) Pacific Time (US & Canada)

Great news in London today!  A High Court judge ruled that British Telecom (BT) must block access to Newzbin2, a notorious site that links to thousands of stolen movies, television programs, games, music and books in direct violation of a previous order against it.

The ruling had been sought by the Motion Picture Association (MPA), supported by the creative industries in the United Kingdom to prevent Newzbin2 from using BT’s internet service to make money through copyright theft.  An estimated 700,000 members use the Newzbin service, generating the operators in excess of $1.6 million US dollars profit off stolen content a year.

Chris Marcich, President and Managing Director, of our sister organization’s European office, said:

“This ruling from Justice Arnold is a victory for millions of people working in the UK creative industries and demonstrates that the law of the land must apply online. This court action was never an attack on ISPs but we do need their cooperation to deal with the Newzbin site which continually tries to evade the law and judicial sanction. Newzbin is a notorious pirate website which makes hundreds of thousands of copyrighted products available without permission and with no regard for the law.”

And Christine Payne, Chair of the Creative Coalition Campaign, a partnership of trade unions representing workers in the creative industries and organizations in music, film, TV, publishing and sports in the UK, said:
“Thousands of businesses and millions of workers now know that the law of the land applies to the internet.  Online copyright theft deprives businesses of up to 20% of their revenues every year.  Finally, this little known law will help us to protect our property.”

In his ruling, Justice Arnold stated:

“In my judgment it follows that BT has actual knowledge of other persons using its service to infringe copyright: it knows that the users and operators of Newbin2 infringe copyright on a large scale, and in particular infringe the copyrights of the Studios in large numbers of their films and television programmes, it knows that the users of Newzbin2 include BT subscribers, and it knows those users use its service to receive infringing copies of copyright works made available to them by Newzbin2.” 

This is a significant judgment that reflects a clear recognition that under the existing law, Courts can issue orders to prevent illegal activity online. It rejects BT arguments that they have no responsibility to act against copyright theft and states that the order is proportionate.

This comprehensive and unequivocal judgment sets a clear legal precedent which will enable content creators and distributors to secure greater cooperation from ISPs in the UK to address content theft on the internet and in particular to deal with websites that are focused on wholesale copyright theft.

In the end, to effectively fight content theft all the players in the Internet ecosystem – creators, ISPs, pay processors, advertisers, Internet users and more – need to work together to keep rogue sites from reaching and profiting from the global marketplace.  This judgment recognizes that.

Discovery Institute Defends PROTECT IP Act

by Howard Gantman 07/20/2011 13:05 (UTC-08:00) Pacific Time (US & Canada)

The Discovery Institute’s Technology & Democracy Project acknowledged the true economic cost of content theft and defended the approach taken by the PROTECT IP Act in a great article published yesterday by Senior Fellow Hance Haney.

Commenting on content theft’s drain on the U.S. economy, Haney said:

“The fake goods deprive U.S. intellectual property rights holders of billions of dollars per year, many believe. Since the income they would have earned will never be taxed, nor can it be used for investments in new capacity and to expand employment, their economic losses affect all of us.”

On the misdirected focus of Protect IP’s critics, Haney continued:

“So far, many commentators seem to be focusing not on the jobs this bill could create or save throughout the nation's economy, but on how it might impact an Internet culture that wants to believe Internet content ought to be free. Of course the Internet reduces transaction and distribution costs. The Internet places downward pressure on the prices for many products and services. But nothing is free. There are laws of economics just as there are laws of physics.”

Rebutting detractors of the bill, Haney reiterated what the bill would actually do and deflated allegations one-by-one, concluding:

“The PROTECT IP Act is not a nefarious piece of special interest legislation. The unanimous vote in the Senate Judiciary Committee last year reflects the fact that better enforcement of intellectual property rights is in the national interest, particularly during a period of high unemployment. Ultimately, the PROTECT IP Act is about protecting jobs and private investors.”

We agree, and hope to refocus the debate over PROTECT IP on the important economic issues at stake: American jobs, the future of creative investments, and the U.S. knowledge-based economy.

The PROTECT IP Act Is Good for Emerging American Enterprises

by Howard Gantman 07/15/2011 06:41 (UTC-08:00) Pacific Time (US & Canada)

In a Huffington Post piece published earlier this week, Kauffman Foundation Senior Fellow Paul Kedrosky made sweeping, erroneous accusations about the PROTECT IP Act, what it would do, and who it would affect, finally concluding that the PROTECT IP Act would somehow damage the entrepreneurial ecosystem in this country. 

Nothing could be further from the truth.  

Among the most egregious inaccuracies was Kedrosky’s characterization of the type of websites that would be targeted and how complaints would be handled under PROTECT IP:  “If a site contains a page with illegal content -- say, a link to a pirated movie -- the copyright owner can petition a U.S. court to make that site invisible to people inside the U.S.” 

This is simply not true.  The PROTECT IP Act narrowly targets only foreign sites dedicated to facilitating, enabling, or engaging in copyright infringement for financial gain. 

As Copyright Alliance pointed out in a blog posted yesterday, “This is defined narrowly as sites that ‘have no significant use’ other than infringement – a test derivative of the standard announced by the Supreme Court in the Sony Betamax case, which has long been recognized by consumer electronics and information technology companies as the appropriate standard for distinguishing infringing products from staple articles of commerce.”

We’re talking about sites whose only purpose is to profit from the stolen work of American creators.   

Furthermore, only the Attorney General – not copyright holders – would be able to seek a court order asking search engines and other intermediaries to block these sites from U.S. consumers. 

Kedrosky continued recycling previously debunked myths about the bill, saying, “There is no due process… no presumption of innocence, and no notification requirement,” and claiming that it represents an “overbroad attack on free speech.”

The PROTECT IP Act clearly and explicitly requires notice to domain name owners.  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. 

When constitutional expert Floyd Abrams weighed in, he found that “[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.” 

In the same letter, Abrams also discredited allegations that PROTECT IP would somehow violate free speech rights, stating, “Copyright violations are not protected by the First Amendment.”

Our question to Mr. Kedrosky is this: How is protecting the creative investments of American workers from foreign criminals bad for entrepreneurs?  New, legal online platforms offering movies and TV episodes are cropping up all the time, giving consumers the freedom to watch videos however, whenever, and on whatever they choose. 

Not only do these rogue sites hurt the creators whose work is stolen, they also discourage investment in these innovative startups that offer legal content.  That’s a double-edged sword that’s harming American workers, limiting our potential for economic growth, and slowing down the development of creative enterprises offering new ways for consumers to enjoy legal content. 

As Copyright Alliance put it, “These are criminal enterprises that are profiting from the work of America’s small businesses, artists, authors and entrepreneurs, and that would be subject to felony criminal proceedings (not just civil injunctive relief) if they committed these same acts in the brick and mortar world.  That sort of activity does not fall under any definition of entrepreneurship.”

The PROTECT IP Act will bolster, not harm, American entrepreneurialism by safeguarding intellectual and financial investments in exciting new ventures.

L.A. Times Defends Copyright Alert System and Editorial Endorsement

by Howard Gantman 07/12/2011 08:16 (UTC-08:00) Pacific Time (US & Canada)

Responding to negative reader feedback, The Los Angeles Times defended its editorial endorsing the Copyright Alert System, a joint venture announced last week by ISPs and content owners.

The Times’ positive review of this new partnership between studios, record labels and top ISPs to educate users about the effects of content theft and to direct them to legal content elicited vitriolic responses from some readers, which in turn sparked further commentary from the Times.

The Times indicated that remarks from readers “seemed to be saying that they have an inviolable right to download movies and songs from one another without paying for them.”

“The fact of the matter is that studios and labels are entitled to enforce their copyrights.”

Defending the Copyright Alert System as a tempered approach to content theft, the Times argued:

“This isn't a case of Big Brother watching your every move online. One of the good things about the deal is that it doesn't call on ISPs to comb through their customers' traffic for unauthorized copies of movies or albums.  Instead, it calls for copyright holders to do what their contractors are already doing, to wit, looking for copyrighted works that users of file-sharing networks are making available to the public.”

Singling out one commenter directly: “…if you're offering to share files with anyone and everyone online, you have no reason to expect to keep that offer secret.”

“The new framework avoids lawsuits and subpoenas. ISPs won't disclose to copyright holders the names of the account holders suspected of piracy; they'll simply pass along warnings to their customers about infringements being detected and offer advice about how to respond.”

The Times further maintained that sanctions imposed through the Copyright Alert System for repeated offenders “are geared toward educating Internet users about copyrights (and wrongs), not toward kicking infringers off the Net.”

We agree that this is a great educational tool that brings content and ISPs together to combat a serious problem that is jeopardizing the livelihoods of our creative workers.  The plan does not impose draconian penalties, nor is it intended to harm users.  The Copyright Alert System is meant to help people understand what is happening on their networks; how it affects the creative community; and where they can find legal, safe alternatives to illegal downloads – for a start, check out the list on our website here.

Emerging Artists Are Silenced by Content Theft

by Howard Gantman 07/08/2011 15:11 (UTC-08:00) Pacific Time (US & Canada)

Sobering op-ed today in The Oregonian by Concord Music Group President and CEO Glen A. Barros regarding the devastation wreaked on the emerging artist community by online content theft, and what’s being done to address it. 

It’s no secret that the music industry has suffered untold losses due to online music theft, and when record labels’ bottom lines began to reflect those losses, music executives faced tough choices to keep afloat.  Investing in emerging musicians became too risky as rampant online theft put a stranglehold on the industry. 

“It’s tough to justify the resources it takes to bring a new voice to the attention of the world – especially in less commercial genres such as jazz – when you lose so much of the potential return on that investment to those who ‘share’ music for free, all the while thinking that there's no victim,” Barros wrote.  “Aspiring young artists who don't get their chance are the real victims of music piracy.”

Barros signaled his optimism regarding the PROTECT IP Act, which now shares the bipartisan support of 25 U.S. Senators:

“In a time when partisanship seems at a polarizing level, it's incredibly encouraging that these senators, from both parties, are joining together in an effort to protect our creative future.”

Barros also took issue with Oregon Senator Ron Wyden for indicating his plans to block the bill’s passage:

“I would ask why [Wyden’s] primary concern is over a theoretical threat to innovation and economic growth when there's actual damage being done to innovation and our economy by these foreign-based websites. Quite simply, thieves have stifled our creative output and cost us real jobs for some time now.”

Barros drove his point home with the case study of Esperanza Spalding – winner of this year’s Grammy for best new artist – a talented jazz musician who overcame staggering obstacles to achieve a successful music career. Raised in a single-parent home with limited financial resources, Spalding worked hard to hone her talents and landed a record deal.

“We were so moved by her artistry that we took a chance.  And in this case, it worked.  Now she's winning Grammys, performing for the president, generating commerce and inspiring communities everywhere. Hers is a rare success story.

“What if we didn't take that chance on Esperanza Spalding? What if no one did?…While Protect IP is certainly not a panacea, it sure will help. And that's a good thing for that next kid from the other side of the tracks who has the potential to become tomorrow's best new artist. In fact, that's a good thing for all of us.”

All talented creators deserve a chance to be heard.  We stand with American workers in support of the PROTECT IP Act and all other legislation aimed to protect artists’ content from online theft.

L.A. Times Editorial Supports Partnership of Creative Community and ISPs to Address Online Theft

by Howard Gantman 07/08/2011 09:45 (UTC-08:00) Pacific Time (US & Canada)

The L.A. Times was spot on in an editorial today supporting the Copyright Alert System launched yesterday by ISPs and content owners.  Calling the plan “a fair compromise” and “a sensible way for copyright owners and ISPs to team up,” the piece complimented the creative community and ISPs for joining forces to address the serious issue of online theft.

The Copyright Alert System is above all an educational effort meant to let people know that illegitimate file transfers are occurring on their network, explain how it affects creative workers, and guide users to legal alternatives to access content like movies, TV shows and music.  

The editorial maintained that this approach “has the right focus, which is to educate broadband users about what's happening on their accounts, what constitutes copyright infringement and where to find legitimate sources of movies and music online.”

We are pleased to be working with our partners in the online ecosystem to address the problem of online content theft.  Together, we can make a real difference to the millions of men and women who work hard to create the American entertainment enjoyed all around the world.

White House Commends New Collaboration to Fight Online Theft

by Howard Gantman 07/07/2011 10:40 (UTC-08:00) Pacific Time (US & Canada)

Victoria Espinel, the White House’s U.S. Intellectual Property Enforcement Coordinator, blogged today that the new partnership between Internet service providers and entertainment companies is in step with the Obama Administration’s goals of job creation, export growth, and keeping America competitive in the global economy.

She wrote that the agreement, which produced the new Center for Copyright Information, “is a positive step and consistent with our strategy of encouraging  voluntary efforts to strengthen online intellectual property enforcement and with our broader Internet policy principles, emphasizing privacy, free speech, competition and due process.  As such, we will follow the implementation and outcomes of this arrangement with great interest.”

“To win the future and succeed in the global economy, it is critical to protect the intellectual property of America’s innovators and creators,” she concluded.

To learn more about this new joint venture and ways you can avoid content theft, visit CopyrightInformation.org.

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