Who lost SOPA?

Legislation The blame-storming in Hollywood over the failure of SOPA and the Protect-IP Act has begun. MPAA chief Chris Dodd offers a half-hearted mea culpa in the New York Times, acknowledging a “perception problem” for the industry. But he pins most of the blame on “irresponsible” technology players like Wikipedia, Google and Reddit for stirring up the natives with their blackouts and black propaganda.

More darkly, many in the media industry are blaming President Barack Obama for the loss, accusing him of a stab in the back for siding publicly with Silicon Valley after Hollywood had raised millions for his campaigns. One time SOPA and PIPA supporters in Congress who went wobbly in the face of public pressure are also coming in for scorn.

Most of the problems the media companies have had over SOPA and PIPA, however, have been self-inflicted.

The origins of SOPA and PIPA can be traced back to Hollywood’s abiding frustrations with the operation of Digital Millennium Copyright Act, in particular the operation of the Section 512 safe harbors. Copyright owners have for years, in lawsuit after lawsuit after lawsuit, tried to get courts to impose liability on online service providers in cases where infringement has seemed both flagrant and widely acknowledged. And for years, courts have largely refused, reading the language of the statute to require specific notification of specific instances of infringement — not merely generalized knowledge that it is occurring — before OSPs are obligated to respond by removing the infringing material.

Though nominally aimed at off-shore web sites beyond the jurisdiction of the DMCA or U.S. courts, the design of SOPA and PIPA seemed pretty clearly aimed at laying the statutory groundwork for imposing liability on Internet intermediaries by a non-DMCA mechanism.

Under SOPA, for instance, a website can be deemed a “foreign infringing site” subject to court-ordered cut off by U.S.-based payment processors and other intermediaries if:

[T]he owner or operator of such Internet site is committing or facilitating the commission of criminal violations [involving illegal copyright infringement, counterfeiting, or theft of trade secrets] and the Internet site would . . . [therefore] be subject to seizure in the United States . . . if such site were a domestic Internet site.

Missing from that definition is any requirement of actual or constructive knowledge of particular instances of infringement as court’s have, repeatedly, insisted the DMCA requires before liability can be imposed.

Elsewhere in SOPA, a website can be deemed to be “dedicated to the theft of U.S. property” if

[The site operator] is taking, or has taken, deliberate actions to avoid confirming a high probability of the use of the . . . site to carry out acts that constitute [copyright infringement or the circumvention of copyright protection systems].

As David Sohn of the Center for Democracy & Technology has pointed out, that seems pretty much like “a backdoor way of imposing a monitoring obligation on any website that allows users to post content,” precisely what Section 512 of the DMCA expressly says online service providers are not required to do. “If any website sets itself up in a way that does not actively log or monitor user behavior, a rights holder can always allege that the site is “avoiding confirming” the use of the site for infringement.”

Both SOPA and PIPA also include provisions offering U.S.-based OSPs broad immunity from court ordered enforcement actions under the laws if they voluntarily block access to web sites where they have “credible evidence” that a site is engaging in infringement. In effect, the bills would invite service providers to acknowledge liability for monitoring web sites that they do not actually have under the DMCA.

Supporters of SOPA and PIPA, of course, dispute that anything in their language would affect the DMCA safe harbors. On the well-respected Copyrhype blog, for instance, Terry Hart argues the laws merely create new remedies for infringement that is already illegal under the DMCA, not new standards of copyright liability. But I think that misapprehends the game being played here. (It also skates over the second-order effects of the bills, such as their possible impact on free speech, but that’s a topic for another day.)

The whole point of SOPA and PIPA is to create a new statutory framework under which litigation or enforcement actions could be brought against web hosting services but which would implicate intermediaries. The goal is to create a distinct body of case law in which the obligations and incentives of Internet intermediaries are analyzed under a different standard from the growing line of DMCA cases that have broken badly for copyright owners. That obviously isn’t going to happen by bringing more DMCA cases. You need a new law.

The prize at stake is leverage, not liability per se (or enforcement tools as such). The Hollywood studios and other content owners are after a new source of leverage they can use to force Internet intermediaries to deal, on terms more favorable to the media companies than is possible under the DMCA. The goal is to get intermediaries on the hook for something — almost anything — so they will have to bargain their way off.

The DMCA took nearly a decade of negotiation and hearings to become law. With PIPA and SOPA, the studios and their supporters in Congress tried to slip through what amounted to a parallel DMCA essentially sight-unseen.

The bills were carefully drafted to be referred only to the Judiciary committee of each chamber for consideration, despite dealing with highly technical issues like DNS blocking that would normally fall under the jurisdiction of other panels, like the Commerce committees. Members of the Judiciary committees and their staffs generally have little expertise in technical and commercial matters and were less likely to grasp the true scope of what the bills would do or to raise objections. Many members also have long-standing ties to copyright interests, which are a major source of campaign cash for a committee that otherwise generally doesn’t deal with issues that attract corporate lobbying.

Sure enough, PIPA sailed through the Senate Judiciary Committee with nary a hearing or an amendment. It likely would have sailed through the full Senate as well with a comparable level of scrutiny but for a hold placed on it by Sen. Ron Wyden, a Democrat from Oregon who, not coincidentally does not sit on the Judiciary Committee.

A similar strategy was planned for SOPA in the House. It was moved directly from to markup by the Judiciary Committee without hearings and with almost no outside input. Once again, however, opposition came from outside Judiciary, in this case from Rep. Darrell Issa (R-CA), who was able to run enough interference to slow the process down. The markup became an epic showdown that forced provisions of the bill into the open. The rest, of course, is Blackout Day history and a new political alignment around the bills on Capitol Hill.

In the end, the studios paid a price for their own cheekiness. There are legitimate issues surrounding pirate websites that evade the reach of current U.S. law by locating their servers overseas. A bill aimed  at addressing those issues directly, such as by cutting of the money supply to those sites, would not have needed to be hustled through Congress under cover of darkness. It could have withstood open scrutiny. But PIPA and SOPA were not that bill.

Instead, they were an ill-conceived effort to rewrite major elements of the DMCA through the back door because the courts were blocking the front door. Once the scope of that ambition became clear, the furtiveness of the supporters’ methods only served to poison the well for any sort of constructive negotiations with those who would be impacted by the bills’ provisions.

Well played, Hollywood.