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Anti-piracy legislation tackles IP enforcement

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The notion of pirates pillaging treasures and bartering it on the high seas isn’t that far fetched for Indianapolis intellectual property attorney Jonathan Polak.

But this is the 21st century, and the version of piracy that he keeps tabs on involves the ever-expanding online universe. The crimes of counterfeiting and piracy are entrenched in the online marketplace for everything from music, movies, and books to personal creative writing.

As attorneys analyze who owns rights and what can or can’t appear online with third-party sites, the lines between free speech and contract law get cloudy as evolving intellectual property theory is sprinkled into the mix.

Jonathan Polak Polak

“The reality is that this will only get more and more complicated as technology develops more,” said Polak, a partner at Taft Stettinius & Hollister in Indianapolis. “There have always been counterfeiters and there always will be, whatever the legal framework is that exists.”

Recognizing these IP legal issues, the U.S. government has pushed forward to crack down on online piracy and counterfeiting in recent years. Last year, President Barack Obama’s IP enforcement coordinator released the nation’s first strategy to strengthen these government enforcement efforts.

Those efforts came to a head in mid-September when Congress introduced S. 3804 – known as the Combating Online Infringement and Counterfeits Act ­­– to provide even more legal tools that might disrupt the business models of online counterfeiters and pirates. The legislation is sponsored by several lawmakers including the Senate Judiciary Committee’s chairman, Sen. Patrick Leahy, D-Vt., and Indiana’s Democratic Sen. Evan Bayh. It remained before the Senate Judiciary Committee at the time the Senate left for a midterm election break.

The language of the bill, which IP attorneys expect would likely be challenged in court, says that any website that’s “primarily designed, has no demonstrable, commercially significant purpose or use other than … to offer goods or services in violation of title 17, United States Code” will face shutdown.

Under the proposed legislation, the Department of Justice would file a civil action against accused pirate domain names. If the domain name is U.S.-based, then the attorney general could ask a court to find that the domain name in question is dedicated to infringing activities. The DOJ would have the authority to serve the accused site’s registrar with an order to shut down the site. It would also have the power to prevent U.S. citizens from accessing accused sites based overseas by ordering Internet service providers to black-out those sites. The government could order Google or Visa to stop doing business with the alleged pirate sites. Site registrars receiving an injunction would have the right to appeal in federal courts, which is currently the only option in those types of cases but isn’t completely covered by the Digital Millennium Copyright Act enacted in 1998.

Supporters of the bill include the U.S. Chamber of Commerce, AFL-CIO, and most of the major entertainment industry trade groups. They contend online piracy is hurting the country’s economy to the tune of more than $100 billion a year. Some copyright owners say intellectual property is now a commodity because pirates all over the world make the content available for free, and backers of the bill say the government needs better tools to combat such sites domestically and abroad.

Polak, for example, said he has Internet service provider clients that get requests falling outside the Digital Millennium Copyright Act and its takedown provisions. What happens can be tricky, and often the attorneys or clients are not able to pursue actions abroad as they might against domestic sites. On one hand, you don’t want the client to be contributorily infringing on any IP rights. But on the other hand, you don’t want to act prematurely without authority and subject yourself to a damages lawsuit, he said.

“Our claims and damages arise out of the basic copyright acts and knowing that you’ve used copyrighted material,” Polak said. “You’ve got tremendous First Amendment pressures running through all of this because of the content you’re dealing with.”

Those IP issues came up in a case involving the O.J. Simpson murders in which the Ron Goldman family was pursuing damages against the former football player, Polak said. The litigation involved whether the book “If I did it” was an asset and could be used to collect damages. Polak said TMZ uploaded it to its website while someone anonymously uploaded the entire chapter about the murder onto the site piratebay.org for anyone to see and download, impacting the potential sales of the book that was a key to the damages aspect of the case.

Polak said the TMZ site issue was settled confidentially, but there was no legal mechanism in place to go after the piratebay.org site, which is operated from an island abroad.

“It’s not just a matter of the number of people who view it on the Internet,” he said. “That spreads and the actual damage becomes exponential. These sites don’t have any respect for law, let alone IP rights, and this really is where anarchy meets IP law. Right now, there’s not much we can do about it.”

A.J. Correale, an IP attorney at Frost Brown Todd in Indianapolis, said the proposed legislation would be a good move to help clients protect IP rights from those types of sites. Representing record labels and artists in the entertainment industry, he said he’s often hired to go after those pushing the envelope of what’s allowed to be posted online.

“We’ve been fighting these battles very regularly for a long time, and it’s what we’ve been seeing since 1995,” he said. “Every time there’s a technological advance, like the Internet or social networks, you see a lot of fallout from it and the laws have to be amended.”

But critics say the proposed legislation is nothing more than censorship and would heap the copyright-protection problems on companies that shouldn’t bear the burden. Technology trade groups launched a public relations attack on the bill after it was introduced, and a group of prominent engineers who helped create the Internet sent a joint letter to the Senate Judiciary Committee declaring their opposition to the legislation. The nonprofit Electronic Frontier Foundation also opposes the bill and describes it as censorship. Some Hoosier IP attorneys agree.

Todd Vare Vare

“This imposes on the DOJ essentially the litigation responsibility that’s been otherwise taken on by private citizens to monitor and regulate the Internet,” said Todd Vare, an IP attorney at Barnes & Thornburg in Indianapolis who deals with these types of IP issues generally.

Vare said this bill is driven by the music and entertainment industries that are facing more of a bottom-line impact from these sites, and that most businesses outside of Los Angeles and Washington, D.C., aren’t dealing with these issues. This proposed law is too broadly worded and gives too much power to the government, he said.

“This may be good in terms of efficiency, but it’s a negative in that it adds a lot of government involvement in our life as an Internet monitor,” Vare said. “All of our clients and companies support IP rights, but they would like to have some sense of judicial resolution rather than a governmental blacklisting of the sites.”•

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