“In the end, the Megaupload prosecution demonstrates that SOPA advocates are inevitably going to win. The content owners’ ire toward “foreign rogue websites,” combined with the administration’s willingness to break the law, if necessary, to keep content owners happy, leads to lawless outcomes like the Megaupload prosecution and ICE’s domain name seizures.”

Does that mean online piracy is harmless? Of course not. But the harm is a dynamic loss in allocative efficiency, which is much harder to quantify. That is, in the cases where a consumer would have been willing to buy an illicitly downloaded movie, album, or software program, we want the market to be accurately signalling demand for the products people value, rather than whatever less-valued use that money gets spent on instead. This is, in fact, very important! It’s a good reason to look for appropriately tailored ways to reduce piracy, so that the market devotes resources to production of new creativity and innovation valued by consumers, rather than to other, less efficient purposes. Indeed, it’s a good reason to look for ways of doing this that, unlike SOPA, might actually work.

It is not, however, a good reason to spend $47 million in taxpayer dollars—plus untold millions more in ISP compliance costs—turning the Justice Department into a pro bono litigation service for Hollywood in hopes of generating a jobs and a revenue bonanza for the U.S. economy. Any “research” suggesting we can expect that kind of result from Internet censorship is a fiction more fanciful than singing chipmunks.

“[T]he new iconic infrastructure of our age is the internet. Instead of division, it stands for connection. But even as networks spread to nations around the globe, virtual walls are cropping up in place of visible walls… . Some countries have erected electronic barriers that prevent their people from accessing portions of the world’s networks. They’ve expunged words, names, and phrases from search engine results. They have violated the privacy of citizens who engage in non-violent political speech… . With the spread of these restrictive practices, a new information curtain is descending across much of the world.”

Secretary of State Hillary Clinton. Law professors Mark Lemley, David S. Levine, and David G. Post note, however, in response:

It would be not just ironic, but tragic, were the United States to join the ranks of these repressive and restrictive regimes, erecting our own “virtual walls” to prevent people from accessing portions of the world’s networks. Passage of these bills will compromise our ability to defend the principle of the single global Internet—the Internet that looks the same to, and allows free and unfettered communication between, users located in Boston, Bucharest, and Buenos Aires, free of locally imposed censorship regimes. As such, it may represent the biggest threat to the Internet in its history.
“An injunction requiring Google to “de-list” sites is one remedy which SOPA expressly makes available, and ordering the registry to transfer domain names to GoDaddy and ordering GoDaddy to update the DNS records is in effect achieving another remedy which SOPA creates. The fight against SOPA may be a red herring in some ways, since IP plaintiffs are fashioning very similar remedies in court irrespective of the legislation. Thus, even if SOPA is defeated, it may turn out to be a Pyrrhic victory—opponents may win the battle but may not have gained much as a result.”
“Today, I’m thankful for 47 USC 230. Whenever I think about it, I am still incredulous the law is on the books. Nowadays, Congress’ agenda is bulging with proposals from rent-seeking monopolists seeking to break the Internet with the hope of goosing their short-run profits. But 15 years ago, Congress shockingly found a way to foster a new multi-billion dollar UGC industry by restricting lawyers rather than empowering them. And the benefits of the UGC industry make my life better every single day. So thank you to Congress and the foresighted members who recognized that they could do some good with a strong immunity.”

The DMCA online safe harbors have worked pretty well over the past 13 years. I don’t know that anyone loves the compromise, but everyone seems to have done OK. We’ve seen an explosion of UGC websites fueled by the safe harbor, and content owners as an industry have done pretty well for themselves financially and have developed a working relationship with most major UGC sites.

The Stop Online Piracy Act, with its ridiculously named subpart the “E-PARASITE Act,” doesn’t expressly modify 17 USC 512. Nevertheless, it is a full-fledged assault on the safe harbor’s scheme. It employs the same basic notice-and-takedown structure of 512, but it applies the cutoff obligations to payment processors and ad networks (thus effectively reversing Perfect 10 v. ccBill and Perfect 10 v. Visa), expands—for the first time—the takedown obligations to trademarks (thus embracing and expanding Gucci v. Frontline), expands the takedown obligations to cover anti-circumvention in addition to the 17 USC 106 rights, expands the reasons why a rightsowner can complain, and does not give the governed intermediaries any business incentive to stand up for user content. On the latter point, because SOPA is designed to cut off the cash, each and every UGC item potentially jeopardizes its entire economic enterprise of a website hosting it. In other words, if the website goes offline because of cash flow problems caused by the cutoff attributable to a single UGC content item, all of the UGC on that website goes dark because of a single content item. Talk about collateral damage.

Thus, among other adverse consequences, if SOPA passed, it effectively repeals 17 USC 512 by shifting most of the action to the notice-and-takedown process in SOPA. In doing so, SOPA radically changes the balance between content owners and UGC websites. Despite the FUD from the content industry and other bill supporters about the supposedly serious problems caused by “rogue” websites and the supposedly fine-grained targeting of this bill, make no mistake—this law mortally threatens the entire UGC community.

Digital rights groups were barely visible in the messages the government provided to Soghoian, an issue that was not lost on Espinel. In a December 2010 e-mail to Cary Sherman, the RIAA’s president, the copyright czar asks, “How are things going on putting together a rollout plan?”

She adds: “I was at Brookings this morning and CDT came up to ask me to please not have the graduated response announcement be a complete surprise but to have some outreach to stakeholders in advance,” the e-mail to Sherman said.

It’s obvious why Viacom and its copyright lawyers want this change in the law: It would make their lives easier to pass the burden of enforcing their copyrights onto someone else. But innovators — and end users — wouldn’t be so lucky. It would be impossible for an Internet company to know when it had spent “enough” on copyright policing without taking its chances in court. And in the process of trying to satisfy this impossible burden, it would end up shutting down many of the transformative user-generated works like parodies that the law is designed to protect.

True, Google today can afford to do these things. But the YouTube of 2005 could never have afforded those kinds of costs. And neither could the Google of 1998, or the eBay of 1995, or the Facebook of 2004. If Viacom prevails, it will be a crushing blow for small startups — the YouTubes, Facebooks and Googles of tomorrow. The message will be that you can’t play in today’s Internet unless you’re a big fish. And that would be a disaster for innovation.

“Top-ranking Obama administration officials, including the U.S. copyright czar, played an active role in secret negotiations between Hollywood, the recording industry and ISPs to disrupt internet access for users suspected of violating copyright law, according to internal White House e-mails. The e-mails, obtained via the Freedom of Information Act, (.pdf) show the administration’s cozy relationship with Hollywood and the music industry’s lobbying arms and its early support for the copyright-violation crackdown system publicly announced in July.”

U.S. Copyright Czar Cozied Up to Content Industry, E-Mails Show | Threat Level |

Rafer sez:
The problem is that she really was doing her job as it is defined by Obama and Congress. #occupycopyright

(via rafer)

United States signs Anti-Counterfeiting Trade Agreement 

The deal, more than three years in the making and open for signing until May 2013, exports on participating nations an intellectual-property enforcement regime resembling the one in the United States.

Rashmi Rangnath, a staff attorney with Public Knowledge in Washington, DC, said the deal “clearly, is an attempt to foist US law on other countries.”

The accord, which the United States says does not require Congressional approval, also calls on participating nations to maintain extensive seizure and forfeiture laws when it comes to counterfeited goods that are trademarked or copyrighted. Most important, countries must carry out a legal system where victims of intellectual property theft may be awarded an undefined amount of monetary damages.

A US-backed footnote removed from the document more than a year ago provided for “the termination" of Internet accounts for repeat online infringers. US internet service providers and content providers, however, have brokered such a deal toward that goal.

Until European Union authorities began leaking the document’s text, the Obama administration was claiming the accord was a “national security" secret.