RIAA chief: Copyright bills won't kill the Internet

guest column Cary Sherman argues that legislation targeting "rogue Web sites" would make the Web safer for content creators, without wide-ranging ripple effects or collateral damage.

Editor's note: This is a guest column. It is a rebuttal to an October 31 column written by Molly Wood, a CNET editor.

Let's all take a deep breath.

That's what we do every time we read another headline about how initiatives designed to protect intellectual property are going to kill the Internet.

There is a place for passionate, vigorous debate over rogue-Web-sites legislation pending in the House (the Stop Online Piracy Act) and Senate (Protect IP Act). We welcome it. Facts are always useful, and especially in this instance.

RIAA CEO Cary Sherman RIAA

We obviously support the proposed legislation. There may be different ways to craft a sensible bill. Regardless, it should be unacceptable to any of us involved in legitimate commerce online that a rogue Web site based outside of the United States -- but hawking U.S. products or copyrighted works -- can currently escape U.S. laws. That's not an issue that a better business model could alleviate. It's Web sites brazenly posing as legitimate commercial entities for the sole purpose of duping consumers, often in countries with lax copyright regimes like the Ukraine or China.

Let's start with that premise, which I hope we could all agree on.

Secondly, the answer simply can't be to "do nothing." Throwing up our hands or saying "we care about copyright theft but will offer no constructive ideas" is not an acceptable outcome or answer. Rogue Web sites are a legitimate, well-documented problem. Just ask LA filmmaker Ellen Seidler or Illinois songwriter Marc Beeson. Or John Cranfield, a sound engineer in Los Angeles, or Colleen Doran, a comic book author and illustrator. Or any one of the thousands of regular, working-class folks from the entertainment community who have pleaded with Congress to act.

We've had success shutting down domestic sources of mass copyright theft such as LimeWire and Kazaa, but new threats in the form of unauthorized overseas downloading hubs are growing in their place, serving as thenew go-to destinations for stealing content. These sites may not be the only reason, but there's no doubt they are among the major culprits behind the music industry's $7 billion decline in revenues during the last decade, resulting in 15,000 layoffs and fewer resources to invest in new bands.

It is ironic sometimes that we are faulted for protecting our rights. Yet technology companies like Apple are among the most litigious defenders of their intellectual property.

Both the House and Senate have proposed bipartisan bills to help address this growing form of digital theft. All of us -- allies, critics, would-be allies -- should take the time to read the bills. Understand the provisions and author's intent. No bill is perfect and, no doubt, improvements can be made. We stand ready to work with anyone who wants to improve the bill.

Calling creators of content "evil," which CNET's Molly Wood did last week -- see "U.S. government also a villain in piracy act story" -- does not advance any meaningful conversation or understanding of legislative proposals before the Congress. Wood chooses to believe what she wants to believe but it does not comport with the facts. Here are just a few examples:

"...content owners [could] bypass cops, courts, and any semblance of due process."

The truth is the bill affords even more legal safeguards to overseas-based sites than the constitutional process in place under current law for domestic sites. It places considerable burdens on potential enforcement, and includes specific parameters to determine whether a site qualifies as one "dedicated to the theft of U.S. property" and stipulates necessary steps to be undertaken before any taking action to block access or funding. Further, in adding an additional notice and counter-notice step before any private action court filing, the bill goes out of its way to provide extra due process protections that are modeled on the DMCA and the federal rules of civil procedure. Rights-holder can require a payment processor or ad network to "stop doing business with the accused site" with "zero legal proof of infringement...or legal recourse."

Our response to that is the House bill requires stakeholder victims to follow a strict set of rules when notifying payment processors or ad networks that are funding the rogue site. The property owner must identify the specific facts to support the claim that the site is "dedicated to the theft of U.S. property" as defined in the bill. These definitions are based word-for-word on Supreme Court holdings and the DMCA. The property owner must clearly show, as they would under existing federal civil procedure rules, that immediate and irreparable injury, loss or damage will result in the absence of timely action. Finally, misrepresentation of these claims can result in damages, including costs and attorneys' fees.

Entire domains can be blocked based on "a single link on a single page of a site."

Actually, it's quite the opposite. By focusing on specific sites rather than entire domains, action can be targeted against only the illegal subdomain or Internet protocol address rather than taking action against the entire domain. Importantly, the bill allows ISPs to determine the best way to target foreign rogue sites. It does not mandate a particular technology and is flexible to assure ISPs can maintain security and the integrity of their systems. Cutting off funding or access to only the illegal part of the site while leaving the rest of the site intact promotes legitimate expression.

The irony here is that the House bill was an attempt to respond to issues raised so far by the technology and venture capital community. The House Judiciary IP Subcommittee Chairman said as much last week. At some point, this begins to feel like a game of continually moving goalposts, with the real objective simply obstructionism. Want further proof? Consider these damning accusations:

"...would have a devastating impact on the development of legitimate and valuable new products and services for consumers."

"...would compound the technical, financial, and legal risks that emerging technology companies already face, thus stifling innovation, causing disastrous consequences for those companies, and ultimately damaging the public interest."

"...will reduce innovation and investment in the Internet and, perversely, hamper the most robust forum for the dissemination of copyrighted works."

Is this more hyperbole about the House or Senate legislation on rogue Web sites? Nope. These are the predictions made by venture capitalists in 2005, in advance of the Supreme Court's unanimous decision in the MGM v. Grokster case. Sounds ominous: a favorable decision for copyright owners would end the Internet as we know it. But look at what actually happened?

• Venture capital investment grew for "Media and Entertainment" to 7.1% of total VC dollars (from just 4.6% in the four years prior to Grokster). Nearly $440 million has reportedly been invested in music companies in 2011 so far.
•  Licensed music services grew to more than 400 in 2009, from less than 50 in 2003
•  Legal digital music market grew from less than $200 million in 2004 to more than $3 billion in 2010

To state the obvious: we think the robust activity in the digital music space is a great thing. We want venture capital to invest in new digital music start-ups. For the first time ever, by the time the books close on 2011, the music business will earn more than half of its revenues from online sources. Music companies have fully embraced a digital future and are partnering with a breathtaking array of different technology companies to distribute music to the public in countless ways. This is not only our future; it is our present. Why would we want to undermine that? Rather, we want to stimulate further legitimate online growth by making sure that thieves operating offshore can't tilt the playing field against legal services.

It is ironic sometimes that we are faulted for protecting our rights. Yet technology companies like Apple are among the most litigious defenders of their intellectual property patent rights. I suspect that regardless of what we do, some critics, like Ms. Wood, will attack us.

But surely there is a place for reasoned conversation, for rational discourse, for genuine efforts to understand each other. I've spent most of my career in this business trying to find and forge a consensus on challenging issues. I've never been more confident that the future of the technology and entertainment industries is intertwined. Our successes depend on each other.

Accordingly, we should all strive to understand the plight and standing of each other: from the brilliant fresh-out-of-school engineer with a vision of a cool, new start-up, to the aspiring songwriter who labors mightily to find just the right lyrics that will someday inspire us all. Both are worthy endeavors, both deserve to be protected. Both deserve a debate that befits equally important communities.

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