The bill, "The Online Protection and Enforcement of Digital Trade" or OPEN Act, provides a narrow and sensible alternative to the Stop Online Piracy Act (SOPA) and the Protect IP Act, bills pending in the House and Senate respectively. OPEN's sponsors expect to introduce the legislation in both houses within a week. Wyden and Issa are also calling for public collaboration on the draft on a Web site launched today.
SOPA was introduced last month as a supposed corrective to Protect IP, which passed out of a Senate committee in May. Both bills were supposedly aimed at stopping "worst of the worst" foreign Web sites selling unlicensed goods protected by U.S. copyright and trademark. Critics, including much of the technology community, argued that the proposed laws strayed dangerously from that narrow goal, unnecessarily threatening the underlying engineering and openness of the Internet.
OPEN offers a much more focused alternative. The draft bill would make it easier for rights holders to stop rogue sites by filing complaints with the U.S. International Trade Commission. The ITC, created by Congress in 1916, is an independent federal agency charged with enforcing U.S. trade law. If the ITC finds that a foreign entity is importing goods into the U.S. illegally, it issues orders to stop the trade and sanction the violator.
The ITC already has authority to deal with intellectual-property violations. Under a current procedure, known as Section 337, if the ITC finds that imported goods are violating U.S. intellectual property law, an administrative judge can issue cease-and-desist orders. The judge can also direct U.S. customs and border services to block entry of the goods into the U.S. Preliminary injunctions are also available.
The OPEN Act would enhance ITC's Section 337 powers to deal with infringing goods, whether physical or virtual, being sold to U.S. consumers from foreign Web sites. For illegal goods being sold by non-U.S. sites, for example, the commission could order payment processors including credit card companies and ad networks to cut ties to the sites.
Stopping the flow of money is widely seen as the most effective remedy for copyright and trademark abusers otherwise outside the reach of U.S. law. This approach is also part of both SOPA and Protect IP, for example, but would be effected either by the Department of Justice or privately, rather than through the ITC.
To address concerns about sites that offer time-sensitive goods, including pre-release copies of books and movies, the ITC would also be authorized to expedite its normal complaint process.
The OPEN Act includes significant safeguards to assure sites being charged with infringement receive notice and an opportunity to challenge any complaints filed with the ITC. The bill goes far to preserve existing standards of liability for third parties, including Web sites that host comments, links, or user content. Current procedures for enforcing copyright and trademark against U.S. infringers would not be undermined.
Sites affected under the new law must be shown to have "limited purpose or use" other than willful infringement activities.
The earlier bills, touted as curbing foreign Web sites that sell unlicensed or counterfeit U.S. goods including movies, music, and knock-off physical products, have been widely criticized for lacking these safeguards and for going far beyond the rogue Web site issue. SOPA, for example, is nearly 80 pages long, and included new power for private rights holders to attack domestic sites. It would also make streaming content without a license a felony.
Legal scholars argued the bill would create new, lower standards of third-party liability and render obsolete the existing notice-and-takedown system in place since the 1998 Digital Millennium Copyright Act.
Internet engineers also worried about provisions in both bills that would allow the Department of Justice to order ISPs to misdirect users away from domain names that had been condemned, possibly without any notice to the registered owner. Internet security experts, including former National Security Agency general counsel Stewart Baker, fear the new provisions would unintentionally open gaping holes in DNS security technology.
OPEN has none of these defects. Instead, it treats the problem of rogue foreign Web sites as precisely what it is--a foreign trade problem. It enhances the ability of the ITC, the agency already charged with hearing trade complaints, to cut off the supply of funds to the most dangerous sites, and to do so quickly when necessary.
The new bill comes from an impressive and unlikely coalition of Republicans and Democrats concerned by the overreach of SOPA and Protect IP. Besides Wyden and Issa, the basic framework for OPEN, announced last week, was co-sponsored by Sens. Maria Cantwell (D-Wash.), Jerry Moran (R-Kansas), and Mark Warner (D-Va.) and U.S. Reps. Zoe Lofgren (D-Calif.), Jason Chaffetz (R-Utah), John Campbell (R-Calif.), Lloyd Doggett (D-Texas), Anna Eshoo (D-Calif.), and Jared Polis (D-Colo.).
Yet supporters of SOPA and Protect IP criticized the new bill even before it was released. According to an article in The Hill last week, an aide to the House Judiciary Committee criticized the OPEN framework for "transferring" enforcement to the ITC, resulting in "a dramatic and costly expansion of the federal bureaucracy." (The House Judiciary Committee introduced SOPA.)
But there is no transfer of authority here. The ITC has long had the power to enforce intellectual-property complaints and has done so independently and in accordance with due process. Nothing in the OPEN draft expands the size of the ITC.
With Republicans and Democrats on both sides of this debate, OPEN, SOPA, and Protect IP will continue to generate controversy. But one thing is now clear: Silicon Valley is paying close attention. And, it appears, at least some members of Congress are willing to fight to protect entrepreneurs and technology innovators.