Streaming has challenged downloading as the content consumption mode of choice, and entertainment lobbyists are scrambling to keep pace with the sea of change. The
media industry mainly takes issue with “rogue sites,” (which are often hosted outside of the U.S. and unresponsive to DMCA Takedown Notices), that provide access to streaming copies of infringed works. The industry’s latest failed effort, the PROTECT IP Act (PIPA), would have once again attacked the entire streaming ecosystem:

• suspected infringing sites;
• a broad array of online actors (ISPs, domain name registries, search engines, advertising and payment networks) that point Internet users in their direction;
• users who stream content from sites in question.

The bill was a bipartisan effort that resumed the aims of earlier bills that had stalled after opponents, including Sen. Rob Wyden (D-OR), denounced the bills’ potential to “muzzle free speech, stifle innovation, and economic growth.”

With regards to copyright infringement, Protect IP in its original embodiment would have provided that:

1. Private IP rights holders or the U.S. Attorney General may take action against the registered owner and operators of a site “dedicated to theft of U.S. property,” pursuing a court-ordered preliminary injunction or temporary restraining order under FRCP 65.
2. Within five days of getting notice of a court order, ISPs and search engines must take “technically feasible and reasonable measures” to block access to the site (including DNS blocking). Ad and payment networks would also be required to block financial transactions to and from the site.
3. Online providers are granted immunity from suit if they voluntarily undertake measures to block offshore sites if they have a “reasonable belief” that the site’s main purpose is infringement.
4. Anyone who willfully streams infringing content would be subject to criminal sanctions under 18 U.S.C. § 2319.

The DNS blocking measure was removed after public outcry, but the continuing existence of search blocking and other onerous provisions only sparked more outrage from a growing contingent of concerned Web denizens. Many acknowledged the need to protect valuable intellectual property, but took issue with the ham-fisted solutions put forth by PROTECT IP. The Electronic Frontier Foundation and other critics denounced the bills’ one-sided legislation process, as well as their broad remedies that would have enabled claimants to shut down sites without affording due process to opponents. Protests mounted, culminating on January 18 in a daylong Internet blackout by Reddit, Wikipedia, and more than 7,000 other information providers. Afterwards, one-time supporters of PROTECT IP announced a change of heart – including the bills’ co-sponsors, Sen. Marco Rubio and Rep. Ben Quayle. The protests staved off a preliminary Senate vote on PIPA that had been scheduled for January 24 of this year, and the bills have since been tabled.

Despite the faltering of PROTECT IP, there is no ebb in proposed measures to curb piracy. International debate is churning over a new measure, the Anti-Counterfeiting Trade Agreement (ACTA). The U.S. has already signed onto the treaty, and the treaty will take worldwide effect after six ACTA countries have ratified it. The main ambit of the bill is to bring other countries into alignment with strict anti-counterfeiting provisions already in place in the US and the UK. As secretive negotiations continue, however, potential persists for overbroad remedies and more draconian interpretations. Countries are allowed to construe treaty provisions in accordance with their current rules of law; less permissive countries, such as Morocco, would be expected to have harsher penalties for infringement.  The ACTA is supposed to target “widespread [unlawful] distribution,” but this aim could fall prey to looser interpretations. Looser interpretations would, for example, punish hobby bloggers who make vaguely transformative uses of copywritten expressions (e.g.,LOLcats), or squash low-level file sharers who send a few file bits up into the cloud.

ACTA aside, current methods of IP enforcement have left their Internet imprint. Following the shutdown and indictment of Megaupload, other online file storage sites have curbed their services in fear of similar retribution. As a result, those who seek to reaffirm DMCA safe harbors, maintain the online status quo, or even push for additional freedoms, will need to remain vigilant for the foreseeable future.

• The working text of the Anti-Counterfeiting Trade Agreement has been released. See Wired and The Register coverage of the story, and our post on the draft treaty here.

• The Federal Circuit rules on patent dispute Applera Corp v. Illumina, Inc. on the basis of Californian employment law, writes Patent Docs.

• Holman’s Biotech IP Blog discusses the patent law implications of the Federal Circuit’s ruling in Ariad v. Eli Lilly.

• Less than two months after hacker Max Vision was sentenced to thirteen years, the sentencing record is broken again as TJX hacker gets twenty years, from Wired.

• Ephemerallaw asks whether it is worth chasing cybercrooks (see our recent post on cybercrime here).

• The European Court of Justice rules in favor of Google in a challenge to its practice of selling trademarked keywords for its adwords paid results service to competitors. The Stanford Center for Internet and Society and the E-Commerce Times report.

• The Register reports that a twenty-five-year-old Frenchman has been arrested on suspicion of hacking President Obama’s Twitter account.

• Early in 2009, a settlement between Ireland’s leading internet service provider and four record companies looked set to put in place the world’s first three-strikes-you’re-out copyright violation rule. Tech law blogger TJ McIntyre reports on the latest.

• Spicy IP discusses proposed amendments to the Copyright Act and digital rights managements in India.

• The Department of State’s annual Human Rights Report turns the spotlight on internet freedom in China and Iran, from ZDNet Government.

• The US District Court in Delaware stays the patent litigations between Apple and Nokia, pending decisions by the International Trade Commission, says The Register.

• A California appeals court rules that cyberbullying threats are not protected free speech, reports Wired.

• Also from Wired, the Supreme Court agrees to review a Ninth Circuit decision on privacy rights in the context of background checks on government workers.

• The FCC announces that it will recommend the sale of 500 megahertz of spectrum to meet the needs of mobile broadband users, from the Washington Post.

• Programmers in trouble over financial misdeeds: two programmers who developed code for Madoff are charged with fraud (The New York Times, The Register) and the Securities Exchange Commission files a complaint against a one-man Russian investment company for hacking into online portfolios to “pump and dump” stocks (Switched, Wired).

• From E-Commerce Times: TiVo wins its long running patent infringement case against digital video recorder rivals.

• Spicy IP reports that Brazil seems set to invoke WTO intellectual property cross-retaliation provisions for the first time, against the US.

• The European Parliament threatens to bring a legal challenge against the European Commission if it fails to disclose details of the Anti-Counterfeiting Trade Agreement (ACTA), writes Outlaw (see our post on the controversial treaty here).

• Also from Outlaw: Net Neutrality in the UK: Ofcom to probe broadband providers’ management of web traffic.

The Anti-Counterfeiting Trade Agreement

ACTA is a proposed agreement between the United States, the European Union, Australia, Canada, Japan, Singapore, Morocco, Mexico, the Republic of Korea, New Zealand, and Switzerland. The purpose of the agreement is to combat the spread of counterfeit goods, including software and information technology.

All states that have been party to the negotiations know the details of its provisions. Additionally, ACTA proponents in the recording industry, critics at Public Knowledge (home page), as well as some internet providers and electronics companies have been given the text of the agreement. Yet despite this information-sharing among the key players, the actual text of ACTA is still a “properly classified” secret—a state of affairs that has sparked ire and curiosity among those watching its progress.

The Obama administration claims to be keeping the text a secret for reasons of national security.  The White House denied a Freedom of Information Act request for the text of ACTA by Knowledge Ecology International in March 2009. This follows the Bush administration’s decision to deny a similar FOIA request by the Electronic Frontier Foundation and Public Knowledge in early January 2009. EFF and Public knowledge later dropped their suit, finding it futile.

As the MPAA memo shows, proponents argue that ACTA is a reasonable—indeed, a necessary and overdue—response to increased global piracy. They argue that the entertainment and recording industries will suffer tremendously if this piracy is allowed to continue, and that ACTA is a win-win solution for creators, copyright owners, and consumers. The Office of the United States Trade Representative (USTR) ACTA Fact Sheet (pdf) also points to physical threats to health and safety from counterfeit medical supplies, as well as alleging the economic dangers of Internet piracy.

Controversial Aspects

ACTA opponents point to public comments and leaked documents that suggest problematic aspects of the proposed agreement. Although the secrecy of ACTA negotiations prevents any precise legal analysis of its terms, particular concerns have emerged among ACTA critics.

Leaked documents suggest ACTA proponents want the agreement to “encourage” ISPs to “cooperate” with copyright holders in removing infringing materials. There are no specifics on what this cooperation means or how it will be encouraged. However, the Electronic Frontier Foundation notes that ACTA-supporting copyright holders are the same people who want Internet providers to terminate customers’ Internet access after repeated allegations of copyright infringement. These ACTA supporters also want to make network-level filtering mandatory for Internet providers, which would involve deep packet inspection (looking at the data of Internet transmissions) of customers’ communications. These measures have serious privacy implications because Internet providers would have to look closely at the actual content of their users’ communications. There are also due process issues. Would a copyright-holder have to prove infringement in court to get an Internet provider to cut off service to an alleged repeat offender? Or would a complaint from a copyright-holder be enough?

ACTA might also create greater border search power, which has inspired fears of inspectors seizing travelers’ iPods filled with downloaded songs.  Participants in ACTA negotiations have sought to allay these fears by saying that ACTA will not target personal use of iPods and computers. The ACTA Fact Sheet contains a statement that ACTA’s focus is on large-scale infringement and does not require searching personal iPods or laptops.

ACTA critics also have more generalized concerns. First and foremost, as Public Knowledge argues, is the secrecy of the ACTA proceedings.  The USTR denies any secrecy in the fact sheet linked above, pointing out that preliminary negotiations were announced and that the USTR asked for comments from the public. However, it is undeniable that proposed provisions have been kept secret and even been declared classified. Another concern is that ACTA will not actually be a treaty. Instead, it will be an “executive agreement,” which means it will not require Congressional approval. Finally, critics fear ACTA will be used as leverage to pass expansive domestic copyright legislation.

While ACTA may be controversial and scary to many, its supporters show little sign of slowing.

ACTA Timeline

The 6th round of ACTA negotiations took place November 4-6, 2009. Representatives from the various countries agreed to meet again for another round in January 2010. They aim to conclude the agreement “as soon as possible” in 2010.

For More Information

• ACTA Summary of Key Elements Under Discussion, from the Swedish Presidency of the European Union (document link at top of right sidebar)
• Comments filed with USTR by various organizations of differing views on ACTA
• EFF’s ACTA page
• The Free Software Foundation’s ACTA campaign (ACTA critics)

By Anjali Bhat and Paul Sullivan.