Foundry Law Group Blog

SOPA and PIPA: Breaking Down the Bills and Possible Affects on Internet Piracy

With the recent Internet-based blackout by big names in protest of the two bills, it’s worth going over the proposed law and its potential impact on online piracy.


Targeting Piracy With Digital Millennium Copyright Act (DMCA)

The current mechanism for addressing internet piracy utilizes takedown notices through the Digital Millennium Copyright Act (DMCA). This allows rights holders to ask for the removal of specific infringing content. Generally, this approach narrows itself to specified content and it recognizes that online service providers may not be culpable for the actions of their users.

Most notably, under § 512 of the DMCA service providers hosting the infringing content may be exempt from liability upon meeting certain requirements. This safe harbor applies if the content host:

  • Lacks actual knowledge of infringing use; or
  • Lacks awareness of facts or circumstances that make infringing use apparent; or
  • Removes or disables access to infringing material upon knowledge or awareness; and
  • Informs users of its copyright infringement policy; and
  • Complies in good faith with the takedown notice; and
  • Does not receive a direct financial benefit from infringing use if it has the right and ability to control such activity.


Targeting Piracy Through Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA)

SOPA is the House bill and PIPA is the Senate version. Both seek to address Internet piracy differently from the DMCA approach. Instead of content removal and focusing on users, the bills propose targeting websites. This will widen the net beyond safe harbor such that content hosts must be more vigilant and self-police.

In relevant portion, under SOPA the Attorney General may take action against a website if at least a portion of it is directed to the U.S. and is used by users within the United States; offering goods or services in a manner that engages in, enables, or facilitates copyright infringement; or takes steps to avoid confirming a high probability of infringing use. Besides, SOPA also targets foreign websites or portion of such sites availing themselves to the U.S. that commit or facilitate infringing use or trafficking of counterfeit goods or services.

Upon a website allegedly falling under the aforementioned criteria, notified payment network providers (like credit card companies and PayPal) and internet advertising services would have 5 days within the delivery of the notification to suspend any services providing financial support to the website. Furthermore under SOPA, notified internet search engines have 5 days within the delivery of the notification to remove direct links to an allegedly infringing foreign website or a portion of such a site.

As of January 18, due to mounting pressure, legislators scrapped SOPA’s requirements for ISPs to block the domains for websites allegedly found in violation. Similarly, legislators are reconsidering this issue in regards to PIPA, which is quite similar to SOPA in its aim and enforcement measures. It specifically acts as a tool for rights holders to target foreign “rogue” websites. Like SOPA, measures include sending notices to suspend Internet financial services and transactions, and removal of direct links.

The Division Amongst Companies

Some of the biggest support for the bills comes from U.S. entertainment content providers who would be able to seek enforcement against piracy by foreign websites, which generally remain outside U.S. jurisdiction.  The proposed bills would offer rights holders more options in terms of enforcement measures. Also, extending beyond the removal of specific content, the measures would ostensibly throttle foreign “rogue” websites dedicated overall to piracy.

Part of the opposition is comprised of U.S. tech and social media companies because Internet-based businesses will have to increase policing of suspected infringing use, and also comply with enforcement measures against alleged violating websites. Additionally, investors of Internet startups (such as these 55 venture capitalists in this letter) have expressed concern that enacting such measures will stymy innovation and growth, and be cost-prohibitive for legitimate ventures.

See below for links to the text


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