Congress Wants To Shut Down ‘Rogue’ Websites, But Verizon Wants Limits

Just about every member of the the Senate Judiciary Committee seems amped up to pass some version of a controversial anti-piracy bill, the Combatting Online Infringements and Counterfeits Act (COICA). The bill would allow the government to quickly shut down websites that are accused of copyright infringement or the sale of counterfeit goods. At a hearing today, the senators heard testimony from two corporations-Verizon and Visa-whose assistance is seen as vital towards making such a system work. Lawyers from both companies said they’re willing to cooperate, but have concerns about a law that might go too far.

Verizon: We’ll help out, but there have to be some limits. Government sanctioned website blocking would represent “a major shift in U.S. policy,” noted Verizon lawyer Thomas Dailey. Dailey said that some limits need to be place on the new bill, including-

US-only enforcement. The bill should clarify that ISPs are only required to take action against U.S.-based domain name services.

No private right of action. Private parties that want to get websites shut down because of constant copyright violations should have to do it the old-fashioned way, through a lengthy lawsuit in civil court. The web-blocking short-cut should only be available to the Department of Justice, and only used when “truly necessary.” (This view was directly opposed by another witness, Scott Turow of the Authors’ Guild, who said that a private right of action should be allowed.)

Proper notification. ISPs need to be told exactly what’s expected of them in terms of restricting access to a website, and they need to be notified when the restriction period has ended, as well.

Limit the cost. Verizon is only willing to block so many domains until it needs to get reimbursed for the costs of the blocking system.

Visa: There’s only so much a payment processor can do. Denise Yee, Visa’s chief trademark lawyer, also spoke to the committee, telling them that intellectual property disputes put a payment provider like Visa in difficult positions. Back in 2006, Visa responded to copyright complaints about by kicking the website out of its payment system. “That decision backfired,” Yee told the committee. The website ended up suing the bank that was providing Visa services, and to Visa’s surprise, won, when a Russian court found that it did not infringe copyright law. The court ordered Visa to start accepting orders from Russian customers of again.

Congress should be careful not to create a web-blocking system that could cause other countries to retaliate, said Yee. And such as system “may set an unrealistic expectation that payment systems can singlehandedly prevent online infringement.”

She added that in the past six months, Visa has received IP complaints from 30 different rights-holders.

Both Yee and Dailey said it’s vital for their companies need to be protected from litigation by “safe harbors” if they comply with the proposed web-blocking laws.

But overall, these service providers seem aware that politicians seem determined to pass an anti-piracy bill, and made it clear that they’ll be ready to comply with government plans to block websites. Sen. Patrick Leahy (D-Vermont), chairman of the Senate Judiciary Committee, opened the hearing by reciting statistics from an MPAA-sponsored anti-piracy study that came out last month.

In a sense, part of COICA’s mission-shutting down websites-has already been taken up by ICE, which has seized more than 100 websites in the past several months, claiming they violate intellectual property law. Those seizures have now been challenged by Sen. Ron Wyden (D-Oregon), who may also end up an opponent of the COICA bill.

Rosetta Stone: Someone’s got to do something about this “Google” thing. Google (NSDQ: GOOG) was invited to the hearing today but didn’t show up. In their absence, they were slammed by another witness, Rosetta Stone CEO Tom Adams, who said the search engine should be forced to review URLs for intellectual property violations before indexing them. Rosetta Stone has been an opponent of Google for some years now, and sued the search giant for trademark infringement but lost; that case is now on appeal. “The fact they’re not here to answer to their actions in this field of intellectual property, I think is very disappointing,” said Adams.

Adams found a willing listener in Sen. Tom Coburn, (R-Okla.), who said he would subpoena Google for a future hearing if they won’t show up willingly.