Column By James L Bikoff, David K Heasley, Phillip V Marano and Judd Lauter Counterfeiting perspectives

name system security protocols; and • potentially affecting the ability of Legislation targets theft of US internet users to reach non-infringing content, thereby causing collateral property by rogue websites damage by suppressing legitimate speech.

Supporters are quick to indicate the lengthy and detailed notice provisions that Over the past few years the US Congress has a number of key differences between the offer due process for both internet service fixed its attention on the severe and growing House and Senate bills, including a novel providers and users. They also praise its problem of online infringement of US notice and takedown system for rights holders. immunity provisions, which insulate internet intellectual property. However, proposed service providers in compliance with court legislation has come under fire from critics Comparing the bills orders, and the guideline and study The , unlike its Senate provisions that guard against improper According to internet analysis company counterpart, has a notice and takedown suppression of legitimate speech. Envisional, over 17% of US internet traffic and provision. Modelled loosely on a rule in the On November 16 2011 the Judiciary 24% of internet traffic worldwide is infringing. Digital Millennium Copyright Act, the notice Committee of the House of Representatives Another study, released in November 2011, and takedown provision of the Stop Online held a hearing to identify and address revealed that the top 43 digital piracy websites Piracy Act enables IP owners to serve written unresolved issues between critics and generate over 53 billion hits annually, while 26 notice on online payment processors (eg, supporters. During the hearing, members of websites that offer counterfeit prescription PayPal or Visa) and online advertising the committee expressed both a general drugs generated 51 million visits annually. services (eg, Adsense or Yahoo! frustration with critics, who they claim have Millions of doses of counterfeit drugs are Advertising Solutions). The notice must not been specific enough regarding the bill’s manufactured abroad and sold over the contain “specific facts to support the claim shortcomings, and a willingness to address Internet to US citizens through ostensibly that an Internet site, or portion thereof, is their concerns. legitimate websites that offer allegedly dedicated to theft of US property”. Google’s IP counsel Katherine Oyama approved drugs at low prices. On receiving this notice, online payment identified particular ambiguities in the Stop In order to combat such infringement, processors and advertising services must take Online Piracy Act that were absent from the Congress has considered a series of legislative “technically feasible and reasonable measures” PROTECT IP Act and may require adjustment. initiatives. to shut off services to the website and to notify The definition of a website that is ‘dedicated First was Senator ’s it of these measures. The aim of the sy stem is to theft of US property’ includes the phrase Combating Online Infringement and to remove the financial incentive for online “internet site, or portion thereof... that Counterfeits Act, a bill that would have theft of US property, without the need for engages, enables or facilitates” copyright or authorised the US attorney general to bring an government involvement. trademark infringement. Oyama testified in rem action directly against any internet Notices to online payment processors and that the phrase ‘or portion thereof’ may allow domain name that resolves to a website advertising services can be countered with for the removal of an entire website based on “designed primarily to… sell or promote notice from the owner or operator of the a single page that is dedicated to counterfeit goods or services”. The bill died at website. An effective counternotice must infringement; she also noted that the word the end of the 111th Congress on January 3 2011. contain consent to US jurisdiction and an ‘facilitates’ may create liability outside the Next came Leahy’s Preventing Real affirmation, under penalty of perjury, of a confines of existing law. The committee, Online Threats to Economic Creativity and good-faith belief that the website is not while largely unified in support of the bill, Theft of Intellectual Property Act, known as dedicated to the theft of US property. If faced was receptive to suggestions about ways to the PROTECT IP Act. The bill authorises the with an effective counternotification or a avoid such ambiguities. attorney general and IP rights holders to recalcitrant internet intermediary, an IP owner Much was made of a white paper, signed bring in personam actions against online can seek a court order for injunctive relief in by a group of online security experts, which infringers that operate websites dedicated to personam against the domain name registrant expressed concerns about the potentially infringing activities, and in rem actions or the owner or operator of the website, or in destabilising effects of the bill’s provisions on against the domain names that resolve to rem against the domain name or website. filtering; this, however, those websites. The PROTECT IP Act is on was contradicted by another white paper, indefinite legislative hold due to an Stop Online Piracy Act: from a different internet security expert. The objection voiced by Senator criticism and support bill’s sponsors were quick to offer assurances before the bill could reach the full Sena te. Like the PROTECT IP Act, the Stop Online that such issues would be addressed. Most recently, Representative Piracy Act has supporters and detractors. Representative Bob Goodlatte announced: “I introduced the Stop Online Piracy Act, a bill Some commentators argue that the bill stand ready to work with the technology that authorises the attorney general and IP constitutes a retreat from the longstanding community to address any concerns they rights holders to bring in personam actions US policy of allowing internet intermediaries may have.” Goodlatte requested detailed, against online infringers that operate websites to operate without the obligation to monitor, written comments on the bill from the “dedicated to theft of US property” and in rem supervise or otherwise play a gatekeeping or technology industry. actions directly against the domain names and policing role. It is also criticised for: The portion of the bill pertaining to websites used. • shifting litigation costs onto innocent counterfeit drugs has received comparatively Although the Stop Online Piracy Act may internet entrepreneurs; little attention. It may be that other issues appear similar to the PROTECT IP Act, there are • being inconsistent with existing domain have stolen the limelight, or it may simply 36 World Trademark Review February/March 2012 www.WorldTrademarkReview.com Government action Private action

PROTECT IP Stop Online Piracy Act PROTECT IP Stop Online Piracy Act

Standing

May be brought only by the May be brought only by the May be brought by owners of IP May be brought by holders of IP attorney general. attorney general. rights “harmed by infringing rights “harmed by an Internet site activities of an Internet site”. dedicated to theft of US property”.

Subject matter

Must concern a “non-domestic Must concern a “foreign infringing Concerns both domestic and non- Must concern a website domain name”, used by “an site” which: domestic domain names that are “dedicated to theft of US property” Internet site dedicated to • is directed at the United used by “an Internet site that is directed at the United infringing activities”, which: States; dedicated to infringing activities”, States and that: • has “no significant use • has owners or operators which has the same definition as • “[is] primarily designed or other than engaging in, which are committing criminal in the act’s provision relating to operated for the purpose of, enabling or facilitating” infringement of copyrights, the attorney general’s cause of [has] only limited purpose copyright infringement; trafficking in counterfeit goods action. other than, or [is] marketed... • permits circumvention of or services or stealing trade for use in, offering goods or technological copyright secrets in violation of the services in a manner that protection measures; Economic Espionage Act; and engages in, enables, or • is engaged in the “sale, • would be subject to seizure if facilitates” copyright distribution, or promotion of the website were in the United infringement, circumvention of goods, services, or States. copyright protection systems materials bearing a or the sale, distribution or counterfeit mark”; or promotion of goods, services • is “designed, operated… or materials bearing a marketed [or] used, counterfeit mark; or primarily as a means for • has an operator which either engaging in, enabling, or is wilfully blind to such facilitating” such infringement or is inducing it. infringement.

Internet intermediaries

Court orders may be served on: Court orders may be served on: Court orders may be served on With prior approval of the court, • operators; • service providers; financial transaction providers and orders may be served on payment • financial transaction • internet search engines; internet advertising services. network providers and internet providers; • payment network providers; advertising services. • internet advertising and services; and • internet advertising services. • information location tools. have few detractors, with good reason. John P generated more intense criticism than the safety and livelihood of US citizens and the Clark, the chief security officer at Pfizer PROTECT IP Act. This criticism has been free and efficient operation of the Internet. It Pharmaceuticals, testified that drug countered by equally vigorous support from is clear that stakeholders and legislators must counterfeiting is an inherent public health rights holders, labour unions and consumer work together to refine the Stop Online hazard with disproportionately weak criminal advocacy groups. Even MasterCard, a notable Piracy Act and the PROTECT IP Act in the penalties in the United States. Clark stated payment provider, and GoDaddy.Com, the coming months, rather than letting these that the Stop Online Piracy Act will protect world’s number-one domain name registrar efforts wither on the vine. WTR US citizens by establishing heavier penalties and web host by volume, support the Stop and more effective mechanisms to shut Online Piracy Act subject to certain clarifying James L Bikoff and David K Heasley are down websites that sell counterfeit amendments. The legislators have responded partners, Phillip V Marano is an associate, pharmaceuticals. to both criticism and support with a sincere and Judd Lauter is an intern at Silverberg, willingness to work through any perceived Goldman & Bikoff LLP in Washington DC. Comment problems. [email protected] Although introduced a little over one month Much is at stake: the vitality of IP-driven [email protected] ago, the Stop Online Piracy Act has already industries in the United States, the health, [email protected] www.WorldTrademarkReview.com February/March 2012 World Trademark Review 37