NOVEMBER 2011 ADVERTISING, MARKETING & PROMOTIONS >> ALERT STOP ONLINE PIRACY ACT: THE DETAILS House Judiciary Committee Chairman (R-Tex.), Ranking Member (D-Mich.), IP Subcommittee Chairman (R-Va.), and former Subcommittee Chairman (D-Calif.), together with a number of other Republican and Democratic House Members, have introduced H. R. 3261, the “Stop Online Piracy Act,” to “promote prosperity, creativity, entrepreneurship, and innovation by combating the theft of U.S. property.”

The bill empowers the U.S. Attorney >> there is evidence that the site or General to take court action “to protect portion thereof is intended to (i) offer THE BOTTOM LINE U.S. customers and prevent U.S. or provide, (ii) allow access to, or (iii) If the “Stop Online Piracy Act” were support of foreign infringing sites” and deliver these goods and services to creates a “[m]arket-based system to users located in the United States; to become law, service providers, protect U.S. customers and prevent payment network providers, Internet >> the site or portion thereof does not U.S. funding of sites dedicated to theft contain “reasonable measures” to advertising services, Internet search of U.S. property.” The bill also imposes prevent these goods and services important obligations on service engines, registries from being obtained in or delivered providers, Internet search engines, and domain name registrars would to the United States; and payment network providers, Internet see their role in the fight against advertising services, and other parties. >> any prices for goods and services online piracy change from virtual are indicated or billed in the If this bill were to become law, it would currency of the United States. bystanders to soldiers on the front impose new obligations on these line with real responsibilities. parties, where virtually none existed in Factors that are to be considered when the past, to assist in the fight against analyzing if an Internet site is a foreign online piracy. infringing site include whether: performances; (iv) unauthorized >> the site “is a U.S.-directed site” U.S. vs. FOREIGN INFRINGING SITES recording of motion pictures in a and “is used by users in the motion picture exhibition facility; The bill seeks to address piracy on United States;” (v) trafficking in counterfeit goods both U.S.-directed sites and foreign or services; and (vi) economic infringing websites. Factors that are >> the site’s owner or operator espionage and theft of trade to be considered when analyzing if “is committing or facilitating” secrets; and an Internet site is a “U.S.-directed (i) trafficking in counterfeit labels, site” include whether: illicit labels, or counterfeit >> the Internet site would be subject documentation or packaging; (ii) to seizure in the United States in >> the site is used to provide goods criminal infringement of a ; an action brought by the Attorney or services to users located in the (iii) unauthorized fixation of and General if the site were a domestic United States; trafficking in sound recordings Internet site. and music videos of live musical >> continues on next page

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ACTIONS BY THE ATTORNEY GENERAL contain complete copies of domains case within 5 days, “technically The bill grants authority to the Attorney but uses a cache file that is comprised feasible and reasonable measures” General to commence an in personam of previous domain name server that are “designed to prevent, prohibit, action against a registrant of a domain lookups, for which the server has or suspend its service from completing name used by a foreign infringing site received an authoritative response in payment transactions involving or an owner or operator of a foreign the past) must take, as expeditiously customers located within the United infringing site. The bill also provides as possible, but in any case within States or subject to the jurisdiction that where an in personam action is 5 days, “technically feasible and of the United States and the payment not possible, the Attorney General may reasonable measures designed to account that is used by the foreign commence an in rem action against a prevent access by its subscribers infringing site, or portion thereof, that foreign infringing site or the foreign located within the United States to is subject to the order and through domain name used by the site. the foreign infringing site (or portion which the payment network provider thereof) that is subject to the order.” would complete payment After sending a notice of the alleged A service provider generally is not transactions.” violation and intent to proceed to the required to modify its network, Internet Advertising Services registrant of the domain name of the software, systems, or facilities; take “Internet advertising services” are Internet site or to the owner or operator any measures with respect to domain broadly defined as a service that of the site, the Attorney General may name resolutions not performed by its for compensation sells, purchases, make an application for an injunction own domain name server; or continue brokers, serves, inserts, verifies, clears against the registrant or owner, or to prevent access to a domain name or otherwise facilitates the placement against the site itself or the site’s to which access has been effectively of an advertisement, including a paid domain name, “to cease and desist disabled by other means. from undertaking any further activity or sponsored search result, link or as a foreign infringing site.” Internet Search Engines placement, that is rendered in a An Internet must take, viewable form for any period of time as expeditiously as possible, but in on an Internet site. An Internet OBLIGATIONS OF OTHER ENTITIES any case within 5 days, “technically advertising service that contracts to This section of the bill also provides feasible and reasonable measures” provide advertising to or for the foreign that, with prior approval of the court, that are “designed to prevent the infringing site, or portion thereof, that the Attorney General may serve a foreign infringing site that is subject is subject to the order, or that knowingly copy of a court order on a wide range to the order, or a portion of such site serves advertising to or for the site of other entities: service providers, specified in the order, from being or a portion thereof, must take, as Internet search engines, payment served as a direct hypertext link.” expeditiously as possible, but in any network providers, and Internet case within 5 days, “technically feasible Payment Network Providers advertising services. After being and reasonable measures” that are A payment network provider, defined served with a copy of a court order, designed to: these entities must take the actions as “an entity that directly or indirectly described below. provides the proprietary services, >> prevent its service from providing infrastructure, and software to effect advertisements to or relating to the Service Providers or facilitate a debit, credit, or other foreign infringing site that is subject A service provider that operates a payment transaction,” must take, as to the order or a portion of the site nonauthoritative expeditiously as possible, but in any specified in the order; server (which is a server that does not >> continues on next page

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>> cease making available “to prevent, prohibit, or suspend its A notification that an Internet site is advertisements for the foreign service from completing payment dedicated to theft of U.S. property infringing site or a portion thereof, transactions involving customers is effective only if it is a written or paid or sponsored search results, located within the United States and communication that is provided to links, or other placements that the Internet site, or portion thereof, the designated agent of a payment provide access to the foreign that is specified in the notification.” network provider or an Internet infringing site or a portion thereof; advertising service and only if it In addition, except in the case of and includes the specifically enumerated an effective counter notification points set forth in the bill. >> cease providing or receiving any (as discussed below), an Internet compensation for advertising or advertising service that contracts with Counter Notification related services to, from, or in the operator of an Internet site, or The bill also provides for what it calls connection with a foreign infringing portion thereof, that is specified in a a “counter notification.” A counter site or a portion thereof. notification, to provide advertising to notification is effective only if it is a or for the site or portion thereof, or written communication that is provided The bill provides that the Attorney that knowingly serves advertising to to the designated agent of a payment General can bring an action against an or for the site or portion thereof, network provider or an Internet entity that fails to meet the obligations must take “technically feasible and advertising service and only if it discussed above, but the bill otherwise reasonable measures,” as expeditiously includes its own set of specific points provides these entities with immunity as possible, but in any case within 5 set forth in the bill. against claims arising from any acts days, that are designed to: they take that are “reasonably designed If an effective counter notification is to comply” with the court order. >> prevent its service from providing made, or if a payment network provider advertisements to or relating to the or an Internet advertising service fails THE “MARKET-BASED” SYSTEM Internet site, or portion thereof, that to meet their obligations following is specified in the notification; receipt of a notification, a qualifying The bill further explains how it intends plaintiff may file anin personam or in to deny U.S. financial support of sites >> cease making available rem action for a temporary restraining “dedicated to theft of U.S. property.” advertisements for the Internet order, a preliminary injunction, or an One of its primary methods is imposing site, or portion thereof, that is injunction against a registrant of a obligations on payment network specified in the notification, or paid domain name used by the Internet site, providers and Internet advertising or sponsored search results, links, or against an owner or operator of the services following their receipt of or other placements that provide Internet site, or, in an in rem action, notification that an Internet site is access to the Internet site, or against the Internet site or against the “dedicated to theft of U.S. property.” portion thereof, that is specified domain name used by the Internet site, in the notification; and Except in the case of an effective to “cease and desist from undertaking counter notification (as discussed >> cease providing or receiving any any further activity as an Internet site below), a payment network provider compensation for advertising or dedicated to theft of U.S. property.” must take “technically feasible related services to, from, or in >> continues on next page and reasonable measures,” as connection with the Internet site, expeditiously as possible, but in any or portion thereof, that is specified case within 5 days, that are designed in the notification.

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IMMUNITY CONCLUSION The bill contains a provision providing The bill has many similarities to the FOR MORE INFORMATION immunity for a service provider, payment current Digital Millennium Copyright Ronald R. Urbach network provider, Internet advertising Act (the DMCA) which imposes Chairman service, advertiser, Internet search obligations on service providers to 212.468.4824 engine, domain name registry, or respond to notifications of claimed [email protected] domain name registrar that takes in order to be Richard S. Eisert voluntary action against sites “dedicated relieved from infringement liability for Partner to theft of U.S. property.” It also contains content provided by a third party. 212.468.4863 a provision providing immunity to a [email protected] Like those subject to the DMCA, service provider, payment network those subject to this bill would have to Gary A. Kibel provider, Internet advertising service, put procedures in place to ensure that Partner advertiser, Internet search engine, 212.468.4918 they could properly receive, analyze domain name registry, or domain name [email protected] and respond to notifications of piracy registrar, that, acting in good faith and under the bill. These procedures, or the D&G attorney with whom based on credible evidence, stops particularly for advertisers, likely do you have regular contact. providing or refuses to provide services not exist at this time. to an Internet site “that endangers the public health.” Davis & Gilbert LLP T: 212.468.4800 1740 Broadway, New York, NY 10019 www.dglaw.com © 2011 Davis & Gilbert LLP

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