New Version of Online Counterfeiting and Infringement Bill Proposed


On Thursday, May 12, Senators Leahy (D-VT), Hatch (R-UT), Grassley (R-IA), Schumer (D-NY), Feinstein (D-CA), Whitehouse (D-RI), Graham (R-SC), Kohl (D-WI), Coons (D-DE) and Blumenthal (D-CT) introduced a new version of the COICA bill, this time called the “Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011” (or, the PROTECT IP Act of 2011). As of this writing, a copy of the bill bearing the number has not yet been posted, although I have been informed that it will be numbered S. 968. (Thomas currently only provides access to bills S. 1 through S. 943.)

According to Senator Leahy’s press release, this bill provides:

  • A narrower definition of an Internet site “dedicated to infringing activities”;
  • Authorization for the Attorney General to serve an issued court order on a search engine, in addition to payment processors, advertising networks and Internet service providers;
  • Authorization for both the Attorney General and rights holders to bring actions against online infringers operating an internet site or domain where the site is “dedicated to infringing activities,” but with remedies limited to eliminating the financial viability of the site, not blocking access;
    • [Note: this is the so-called “private right of action” but appears to try to take into account the concerns expressed about avoiding restrictions on free speech rights]
  • Requirement of plaintiffs to attempt to bring an action against the owner or registrant of the domain name used to access an Internet site “dedicated to infringing activities” before bringing an action against the domain name itself;
    • [Note: this provision in the bill may actually contain a typographical error. As written, this section states that only after a private rights holder attempts to bring a civil action against the owner, then the Attorney General may bring an action against the domain name. I think this was supposed to authorize the private rights holder to take the “in rem” action, since the Attorney General’s ability to bring an “in rem” action is codified in the preceding section.]
  • Protection for domain name registries, registrars, search engines, payment processors, and advertising networks from damages resulting from their voluntary action against an Internet site “dedicated to infringing activities,” where that site also “endangers the public health,” by offering controlled or non-controlled prescription medication. 
    • [Note: This is one so-called “Safe Harbor” that witnesses representing GoDaddy and Visa requested for those private companies involved in the Internet ecosystem who try to prevent some of the bad actors from achieving profits in the U.S. market. It may not go as far as those witnesses requested, however, in that it is limited to counterfeit pharmaceuticals and dangerous goods.]

Senator Leahy also describes the purposes of the bill and republishes his statement on the floor to introduce the bill. He summarizes the ultimate point in this legislation:

“This legislation will provide law enforcement and rights holders with an increased ability to protect American intellectual property.  This will benefit American consumers, American businesses, and American jobs.  We should not expect that enactment of the legislation will completely solve the problem of online infringement, but it will make it more difficult for foreign entities to profit off American hard work and ingenuity.   This bill targets the most egregious actors, and is an important first step to putting a stop to online piracy and sale of counterfeit goods.”
 

Senator Grassley has posted a similar press release (although it does not include the same “summary of the bill” section that Senator Leahy’s does).

It remains to be seen how the bill will be received, and whether stakeholders believe that this version adequately addresses some of the criticisms of the prior bill that were raised during a Senate Hearing in February, and two House Hearings in March and April. (More on those hearings can be found in prior posts about the COICA bill.)

As of this writing, the House has not introduced a companion bill, but given its recent hearings on the topic, such a companion bill is expected in the near future.

Revised TTAB Manual of Procedure is Now Available


The long-awaited revision of the Trademark Trial & Appeal Board’s Manual of Procedure (TBMP) is now available for download from the USPTO as a single document (large) or by individual chapters. The most-recent version prior to this one was May 2004, but the rules substantially changed in 2007, so this is a welcome publication for practitioners. (The USPTO’s summary of the 2007 rule changes remains available on the TTAB site as a quick reference.)

This new version of the TBMP is current through November 15, 2010. The Index of Changes provides a summary of what’s new.

The May 2004 version of the TBMP remains available from the TTAB’s website, but perhaps these links have not yet been updated to reflect the new version and will disappear shortly.

Department of Commerce Issued Report on Trademark Litigation Tactics


The U.S. Department of Congress issued its Report to Congress on Trademark Litigation Tactics on April 27, 2011. See also USPTO’s summary of its requests for comment. The report provided an excellent summary of trademark rights and trademark owners’ duties to enforce their rights or risk losing them. It also summarized the comments that the USPTO received during its two requests for public comment. In its formal Recommendations the Department proposed that it: 1) “engage the private sector about providing free or low-cost legal advice to small businesses via pro bono programs and IPR clinics;” 2) “engage the private sector about offering continuing legal education programs focused on trademark policing measures and tactics;” and 3) enhance Federal agency educational outreach programs by identifying resources that enable small businesses to further their understanding of trademark rights, enforcement measures, and available resources for protecting and enforcing trademarks.” Report at 26.

After having received comments from stakeholders and others during the comment periods, the Department conceded that it was “unclear whether small businesses are disproportionately harmed by enforcement tactics that are based on an unreasonable interpretation of the scope of an owner’s rights,” id., which the Department had been tasked to explore. This analysis matches the conclusion of at least one of the bar associations that submitted comments – specifically, the American Bar Association’s Intellectual Property Law Section. See Feb. 4, 2011 Letter from the ABA IPL Section at 2 (“Although there is no consensus, as would be expected considering the diversity of the Section, the results reflect that trademark abuse is not limited to small businesses but can be experienced by any party defending a trademark suit.”).

The Department’s Report further concluded that “because trademark enforcement is a private property rights litigation issue, if abusive tactics are a problem, such tactics may best be addressed by the existing safeguards in the litigation system and by private sector outreach, support and education relating to these issues.” Report at 26. Again, the ABA IPL Letter made a similar point: based on a survey that the IPL Section had conducted, “The responses indicate that there is no consensus about many of these issues, lending further support to the conclusion that determining litigation misconduct – in a trademark case or otherwise – requires a fact-intensive analysis that cannot be addressed by a single, catch-all legislative solution.” Feb. 4, 2011 Letter at 4.

At the end of the Report, the Department provided several resources that small businesses could consult to assist it in its enforcement efforts. See Report at 22-25 (narrative discussion); and Appendix A (USG Resource Contact Information Sheet). The links in the Appendix are listed below for ease of reference (the descriptions of each reference below is verbatim from the report. Note that copying this information does not violate a copyright, since government works are not subject to the Copyright Law. 17 U.S.C. § 105):

  • STOP Hotline at 1-866-999-HALT.
  • “SME IP Training Tutorial” an online training tool for SMEs: http://www.StopFakes.gov/525/menu/index.htm.
  • “APEC Intellectual Property Explorer,” tool helps businesses identify their intellectual property assets, http://www.stopfakes.gov/.
  • “Experts’ Advice for Small Businesses Seeking Foreign Patents” (GAO Report), http://www.gao.gov/new.items/d03910.pdf.
  • USPTO Inventors Assistance, http://www.uspto.gov/inventors/iac/index.jsp; FAQs, http://www.uspto.gov/inventors/independent/index.jsp; and computer-based training, “From Concept to Protection,” http://www.uspto.gov/inventors/index.jsp
  • USPTO “TMIN,” the Trademark Information Network, which features broadcast-style videos that cover important topics and application filing tips, http://www.uspto.gov/trademarks/process/TMIN.jsp
  • “International IP Advisory Program”, through which U.S. small businesses can obtain one hour of free legal advice on their IP issues in various countries, http://www.stopfakes.gov/int_ipr_ap.asp
  • U.S. Copyright Office website for registration and general information (including Circular 1, “Copyright Basics”): http://www.copyright.gov,
  • USITC’s Trade Remedy Assistance Office (TRAO): online www.usitc.gov/trade_remedy/trao , by telephone at (800) 343-9822 or (202) 205-2200, or by fax at (202) 205-2139

More information about the statutes that commissioned the study as well as analysis of the ABA IPL Section’s letter can be found in prior posts within this blog.

Senate Hearing Scheduled on Mobile Privacy


On April 25, 2011, the Senate Judiciary Committee announced that its Subcommittee on Privacy, Technology and the Law will hold a hearing on “Protecting Mobile Privacy: Your Smartphones, Tablets, Cell Phones and Your Privacy” on Tuesday, May 10, 2011 beginning at 10am. Chairman Al Franken will preside over the proceedings. Prior hearings of the various subcommittees of the Senate Judiciary Committee have been simulcast over the Internet, and it appears that this one will be treated similarly. The recorded webcast should also be available after the hearing, if you miss it in real time.

The witnesses have not yet been identified, but should be posted on the Senate’s hearing site when available.

House Examines Online Infringement and Counterfeiting (2d Hearing)


The House Committee on the Judiciary, Subcommittee on Intellectual Property, Competition and the Internet held a hearing on “Promoting Investment and Protecting Commerce Online: Legitimate Sites v. Parasites, Part II” on April 6, 2011, to further examine methods of theft online – including both copyright infringement and counterfeiting. The webcast can be found on the Committee’s web site. Although a transcript of the proceedings (and any supplemental questions and answers) are not yet available, when they are published, they should appear in the Government Printing Office’s repository: House Committee on the Judiciary: Hearings – 112th Congress.

Testifying before the Subcommittee were Hon. John Morton, Director of the U.S. Immigration and Customs Enforcement; Floyd Abrams, a First Amendment expert who testified on his own behalf; Kent Walker, Senior Vice President and General Counsel for Google; and Christine Jones, Executive Vice President and General Counsel for the GoDaddy Group. (Their prepared remarks can be found by following the links associated with each of their names.)

At the opening of the hearing, Rep. Goodlatte (Va.) explained the basic purpose of the hearing (to examine methods of theft online) and clarified a misunderstanding that had arisen after the last hearing on March 14. He explained that although ICE (U.S. Immigration and Customs Enforcement) had seized domain names in the recent few months, those seizures were based on existing law – particularly the Pro-IP Act enacted several years ago.

In contrast, this hearing and any proposed legislation resulting from it was intended to find new tools to address theft online — existing laws did not provide enough enforcement tools. Many of the websites being discussed as “rogue” websites in these hearings are foreign-based and/or -operated. Thus, there is no property in the U.S. at issue, and the sites could not simply be “seized” by ICE. He concluded, “any efforts to pass new legislation will not be based on seizure laws and process because there is no property in the U.S. to be seized. Thus, new tools are needed to address theft online.” (All of the quotes taken from the hearing for this blog post are paraphrased, not exact transcriptions, as a transcript is not yet available. But, they’re close.)

Rep. Watt (N.C.) put the discussion into a neat container: we need to deter “theft of products online as we protected against theft of property on the ground. What might romantically be referred to as ‘piracy,’ we refer in my neighborhood as ‘theft’ or simply, ‘stealing.'”

Rep. Conyers (Mich.) asked simply: “Why don’t we just cut off all the money? Why don’t we eliminate some of the financial incentives by cutting off the funding from customer through the payment processing system, or cut off the funding from some of the advertising networks?” He also suggested considering a private right of action, noting that the suggestion was “almost unheard of.” Finally, he admonished that “[w]e need to use this hearing as another opportunity to come up with some legislation we can be proud of.”

Following these introductions, each of the witnesses was given five minutes to summarize the testimony that they had prepared, and proceeded to answer questions posed to them by the participating representatives of the House. The hearing lasted about 3½ hours, and it’s impossible to do it complete justice here. The questions and answers, and the various speeches made by some participants, were detailed and enthusiastic. I’d encourage you to watch the whole thing.

In the meantime, some highlights:

ICE Director John Morton expressed great concern that all of American industry is “under assault” right now and repeatedly argued that government enforcement should only be one “tool in the toolbox,” but simply could not address effectively every act of infringement or counterfeiting. Industry has to be involved. In essence, he said, “[w]hat you’ve heard, though, is that industry can do a lot more, on a greater scale than the government ever can. We are part of the solution, we are not THE solution, not by a long shot.” He further explained the context in which the ICE domain seizures had occurred, noting that they were made under existing legislation, but are ineffective against a foreign website with foreign operators, because of jurisdictional limits.

Floyd Abrams, Esquire, addressed applicable First Amendment principles and recommended that any legislation must be narrowly drafted so that it’s addressing only those sites that are “all but totally infringing. . . . if the entity is nothing but a transmitter of infringing products, you are permitted to deal with it as long as the remedy is not overbroad.” He recommended that the Committee use existing regimes such as Rule 65 (of the Federal Rules of Civil Procedure) governing injunctions and temporary restraining orders and the Copyright Law’s enforcement mechanisms, and not to “start from scratch.”

Kent Walker, Esquire, explained Google’s point of view, and responded to numerous questions throughout the hearing. Specifically, he testified:

  • That the DMCA process was sufficient because it “strikes right balance between free speech and rightsholders.”
  • That creating a private right of action should be discouraged because it would allow individuals to “shake-down companies that are making legitimate efforts to comply.”
  • That Google’s efforts have already been successful and Google was already doing what it could.
  • That Google does not want to be in the position of being “judge, jury or executioner” in deciding what content was infringing or pirated. Instead, he advocated for significant cooperation with the content industry, so that the content industry could identify which web sites contained infringing works or counterfeit products.
  • He discouraged the imposition of any new burdens and explained that each method of combating infringement (whether through AdWords/AdSense campaigns on the advertising side or Google’s AutoComplete function and display of results on the searching side) that had been proposed during the hearing was overbroad.
  • He denied that Google had benefited from “illicit websites” through advertising revenue: “These sites cost us money, sir. They cost us money to get rid of them, they cost us money when we find them and we have to refund money to advertisers. They cost us money when they use fake credit cards or stolen credit cards to pay for what they’re doing. We have no interest in having advertising on these sites. We have no interest in having advertising leading to these sites.”
  • Discussing some practical differences between infringers and counterfeiters, which necessitate different enforcement efforts, he explained:
    • The infringers (generally) had no trouble drawing traffic to their sites because they were offering content for free – their way of making money on these sites was through advertising, which could only be profitable if more people were drawn to their sites.
    • The counterfeiters (generally) were selling products and making money, but they needed to drive traffic so that more sales could be made.
  • He recommended “cutting off the money to these guys, cutting off the advertising . . . [and] the financial services. When you talk about cutting off the pure search side of it, the risk is that you are both overbroad and ultimately ineffective in” eliminating the bad conduct.
  • He proposed a limited definition of “rogue website” be used to define sites that were subject to takedown or other sanctions under this legislation. He suggested: “1) that the site is knowingly violating copyright law; 2) that it contains complete copies of works or counterfeit goods; 3) that it has a commercial purpose; and 4) it refuses to respond when notified by rightsholders. Within that construct, we’re comfortable with the notion that the site is dedicated to infringement.”

Ms. Jones agreed that input from the content industry was critical, but argued that it did not end the analysis:

  • “Like Google and others, we do rely on the content industry to let us know when they find things that are inappropriate.”
  • She argued that it was necessary to go further, and achieve cooperation from the other participants in the “broader Internet ecosystem” to make it very difficult for infringers and counterfeiters to achieve profits in the US market.
  • Continued assistance from law enforcement was critical to the success of any multi-pronged attack.
  • Made some concrete recommendations to combat these rogue sites: 1) “follow the money”; 2) “shut down all chokepoints in the system because we have to disincentivize the bad actors”; and 3) “take away ability to search for, pay for, and ship counterfeit goods.”
  • Recommended that any new legislation in this area should not be limited to a specific technology or a specific means of infringing, but instead focus on “top-level concepts.” In other words, there will be technologies in the future that we cannot contemplate now – any legislation should be careful to address the conduct, and not the method of infringing or delivering the counterfeits.
  • Suggested that a safe harbor be provided to protect industry participants from liability if they complied with the new statute’s requirements.
  • Also advocated in favor of penalties that should be assessed against those who do not comply: “Unless and until we provide a consequence for businesses who facilitate criminals, there will always be criminals who can find a safe harbor [I think she meant “safe haven” here].”

Reaction by various members of the Committee was mixed, and they had their own suggestions of how an enforcement tool could be fashioned and provided observations of some of the challenges to be faced. Among them:

  • Rep. Lofgren (Cal.): She explained that she was reminded “how useful it might be to have some of the big tech presences engaged in deep conversations with content holders who are understandably concerned about what’s happening to them. That might yield a successful result that might be far superior than what the non-engineers in the Congress might craft.”
  • Rep. Berman (Cal.): Responding to Mr. Walker’s suggestion that the DMCA was adequate to address these concerns, he explained, “if that legislation were really working, I don’t think we’d be having this hearing. I don’t think there’d be a Senate Bill. I don’t think Customs would be undertaking the initiatives it’s undertaking.” At base, however, “billions of dollars and thousands of jobs were being lost because of digital theft and we’re focused on trying to do something about it.”
  • Rep. Wasserman-Schultz (Fla.): Expressed concern about the length of time over which Google continues to allow web sites to remain (for instance on its Blogger site) even after receiving a takedown notice. She asked that Rep. Goodlatte include in his investigation an analysis of the amount of time it reasonably takes to act on takedown notices under the DMCA.
  • Rep. Sanchez (Cal.): Suggested that ICE direct its symposiums in public education to a younger audience, the ones who might be participating in the infringement, instead of focusing on industry leaders, government officials and congressional staff, as these would already be on board with the concept that this conduct must stop.
  • Rep. Jackson Lee (Tx): Asked whether Google has a team or department that deals with implementing the takedowns under the DMCA, as they could give input into crafting the legislation. [Mr. Walker responded that they had such a group of people and they’d be happy to work with the Committee.]

Many more thoughtful comments and suggestions were made by other members of the Committee and the witnesses, and I again encourage you to watch the webcast.

Finally, while it is not clear what the Subcommittee will do with all of this information and these suggestions, Mr. Adams had the right approach when he suggested, “all we can do is everything we can to drain the actions of this sort of the profits that have been building up over the years, and increasing more and more as time passes.” As Director Morton opined, ” We have to do something. My perspective is, do nothing and you fail.”

Prior posts in this blog on other hearings on a potential, new COICA bill (Combating Online Infringement and Counterfeits Act) can be found under the label COICA.