Pending IP Laws Could Squeeze Hyperlocal News Sites

Two new bills in Congress designed to combat rogue sites selling counterfeit goods or distributing copyright-infringing content (like movies) may put a squeeze on hyperlocal news sites, strangle innovation, impede free speech and discourage investment in start-ups, according to experts at Stanford University and the Electronic Frontier Foundation.

The two bills in question are Senate Bill S.968, (the “PROTECT IP Act”) and the House version, H.R. 3261 (the “Stop Online Piracy Act”, which is now known as the “E-PARASITE Act”).  Those that back the bills — primarily large media companies such as movie studios — contend they are designed to combat rogue, overseas Web sites that barter in counterfeits and the theft of content. However, opponents claim the “cure” offered by the bills are overreaching, because they give major content owners too much leverage to blacklist Web sites.

In summary, the PROTECT IP Act, introduced by Sen. Patrick Leahy (D-VT) last May 2011:

• Gives the Department of Justice authority to go after a foreign Internet site that the DOJ alleges infringe U.S. property rights. The DOJ can get a court order requiring ISPs to prevent access to the infringing sites, and require payment processors (like credit card companies) and online advertising networks from doing business with such sites; and
• Empower owners of copyrights (and other rights), such as movie studios, to bring actions against any “Internet sites dedicated to infringement,” whether in the U.S. or overseas, and get a court order to stop payment processors (like credit card companies) or online advertising from doing business with such sites.

The E-PARASITE Act, introduced on October 26, 2011 by Rep. Lamar Smith (R-TX), similarly would give the DOJ or owners of content the ability to bring a legal action against any site they deem to have “only limited purpose or use other than infringement.” The DOJ would be allowed to demand that search engines, social networking sites and domain name services block access to the targeted site. It would also make unauthorized web streaming of copyrighted content a felony with a possible penalty up to five years in prison.

The bills have strong support from the Motion Picture Association of America, the Recording Industry Association of America, the National Cable & Telecommunications Association, and the U.S. Chamber of Commerce.  Backers of the bills have joined forces in the new organization Creative America, which calls itself a “grassroots organization uniting the entertainment community and others against content theft.” The leading “grassroots” members include major media companies, such as CBS Corporation, the Directors Guild of America, NBC Universal, Sony Pictures Entertainment, Viacom, Walt Disney Company and Warner Bros. Entertainment.

The bill could potentially benefit hyperlocal news sites whose content is taken and used by outside entities — whether their content gets “framed” within the branding of another site, or if their content is being copied wholesale without permission. But some experts in academics believe the bills are overreaching and may impose an undue burden on hyperlocal news operators — particularly if they depend in part on curating content. These sites could be restricted in their aggregation, and may have to comply with orders to take down links to other sites.

Mark Lemley, the Director of Stanford Law School’s Program in Law, Science and Technology, told Street Fight that hyperlocal news sites are “theoretically exposed, as is anyone who links to third party content.” Professor Lemley pointed out: “In practice, it seems unlikely the government will seek to shut down such sites, but somewhat more likely that private copyright and trademark owners will seek to cut off online advertising or credit card processing for such sites, which the bill would allow them to do.  Indeed, for the credit card companies the House bill provides a ‘notice and takedown’ system, meaning that if anyone complains to a credit card company that your site is facilitating infringement they can cut you off with no court order at all.” Professor Lemley participated in a letter to members of Congress with more than 90 law professors stating the grounds for their objection to the bills.

Rebecca Jeschke, of the Electronic Frontier Foundation, told Street Fight that “Hyperlocal news sites would be as vulnerable as any other site on the internet, particularly if they incorporate user-generated content. Under this legislation, a few false moves by contributors might make the site inaccessible.”

The Electronic Frontier Foundation has been leading an effort to oppose passage of the bills.

Brian Dengler is an eMedia attorney with Vorys Legal Counsel, and a journalist who covers legal issues in eMedia. He is a former Vice President of AOL, a former newspaperman and EMMY-winning TV journalist. He teaches eMedia management as an adjunct at Kent State University.