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OTN Special Update - SOPA Put on Hold (2012-02-20)
OTN Special Update - SOPA Put on Hold (2012-02-20)
OTN Special Update - SOPA Put on Hold (2012-02-20)
OTN Special Update - SOPA Put on Hold (2012-02-20)
OTN Special Update - SOPA Put on Hold (2012-02-20)
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OTN Special Update - SOPA Put on Hold (2012-02-20)

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  • 1. SPECIALOFFICE OF TRADE NEGOTIATIONS … for trade matters OTN Update February 9, 2012 SOP A Put on H ol d A congressional vote on the anti-piracy bill SOPA, the Stop SOPA was crafted to be wide in scope as it endeavours to Online Piracy Act (SOPA) was shelved on January 16. This protect US interests at home and abroad. It recognises the headed off the threats made by a number of major websites importance of Intellectual Property (IP) to the US economy such as Wikipedia, Reddit, Mozilla, WordPress and Tucows to as it relates to revenue, jobs and in particular the institute a blackout on January 18 in protest of the proposed entertainment industry. bill.1 The proponents of SOPA have decided to re-examine and possibly refine the bill’s language to ensure that it is more The bill also facilitates the possibility of preventing ‘foreign palatable for the myriad of technology companies and interest infringers’ of US Intellectual Property Rights from accessing groups that have vehemently opposed its principles. or raising US capital for business ventures whether through Opponents of the bill fear that it will negatively impact the US capital markets or through US investors. openness of the Internet which is increasingly central to innovation. On the other hand supporters of the bill believe it Section 107 of SOPA requires the Intellectual Property will protect US innovation, revenues and jobs. Enforcement Coordinator (IPEC) working in conjunction with other agencies to “identify and conduct an analysis of SOPA has its origins in Hollywood where the major film and music industry executives conceptualised the provisions of SOPA and lobbied it to Congress for its enactment. These proponents are of the view that the US loses millions through internet piracy of protected content such as music, videos and movies. Furthermore, there is a public health and safety concern regarding the trafficking of inherently dangerous goods and services such as counterfeit prescription medication and those intended for use in a military and a national security application.2 OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org
  • 2. 2notorious foreign infringers whose activities cause significant Domain Names (websites) or Domain Names Servers fromharm to holders of intellectual property rights in the United translating Domain Names to unique IP addresses, a coreStates”. In carrying out this duty, the Bill further indicates that function and the very foundation of the internet. However,the IPEC shall provide a Report to Congress that includes, there is a concern that the DNS-blocking mechanisminter alia, violates the First Amendment of the U.S. Constitution with respect to freedom of speech5. DNS-blocking prevents 1. “an examination of whether notorious foreign access to an entire domain name, not just a specific URL infringers have attempted to or succeeded in and could therefore block all content, both infringing and accessing capital markets in the United States for non-infringing. The DNS-blocking mechanism is proposed funding or public offerings”, and as a key provision of the bill in the fight against online piracy, but will be scrapped until the U.S. House Judiciary 2. “A discussion of specific policy recommendations to can further examine the issues surrounding this provision. deter the activities of notorious foreign infringers and encourage the foreign businesses to adopt industry The White House has also commented on SOPA and a norms that promotes the protection of intellectual similar bill called Preventing Real Online Threats to property globally.” Economic Creativity and Theft of Intellectual Property Act (PROTECT IP Act or PIPA). These bills have beenThe recommendations would further examine “whether receiving wide support within the US legislature and fromnotorious infringers that engage in significant infringing activity major copyright and trademark owners, particularly those inshould be prohibited by the laws of the United States from the film, music, pharmaceutical and book publishingseeking to raise capital in the United States” and would also industries. The White House has made it clear howeverexamine “whether the United States Government should that the US President could veto any bill “that reducesinitiate a process to identify and designate foreign entities from freedom of expression, increases cybersecurity risk, ora list of notorious foreign infringers that would be prohibited undermines the dynamic, innovative global Internet”. 6from raising capital in the United States.” SOPA ProvisionsIn the US there already exists a number of copyright and IPlaws including the Digital Millennium Copyright Act of 1998 The key provisions of SOPA can be summarised as follows:(DMCA).3 The DMCA prohibits persons from gainingunauthorised access to a copyrighted work by circumventing i. It authorises the US Attorney General to seektechnological protection measures put in place by the copyright court orders against “foreign Infringing” Internetowner designed to control access to the copyrighted material. websites that conduct business in the UnitedIf it is determined that a technological device was used for States or are accessed by US residents that arecircumvention and violates the DMCA, the device can be committing or facilitating online piracy, to cease allseized and or forfeited by U.S. Customs and Border Protection activities constituting Intellectual Property (IP)(CBP).4 offences.Advocates of SOPA are adamant that the existing IP laws do ii. Internet Service Providers (ISPs) and Domainnot go far enough to protect US IP interest, in particular from Name System (DNS) providers would be requiredforeign entities, and do not have the reach to actively to apply the (DNS) blocking methods describeddiscourage or prosecute these entities. above to its subscribers attempting to access any “foreign infringing site” that is accused of copyrightThe enactment of SOPA was halted only days after it was infringement. The ISPs and DNS providers mustannounced that the controversial Domain Name System (DNS) take action within 5 days after being served with ablocking mechanism was thought to be violating U.S. court order to shut down the infringing site.Constitutional rights. iii. Online advertising networks, payment facilitators,The DNS provision in Section 102 requires US Internet Service search engines and ISPs, complying with a courtProviders (ISPs) to block their subscribers from accessing order from the US Attorney General to enforce the OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org
  • 3. 3 provisions in the bill, will have immunity from suit and “fined not more than $2,000,000 or imprisoned not liability from entities facing prosecution. Furthermore, more than 10 years or both”. A repeat offender should one of these complying businesses, of their may be “fined not more than $5,000,000 or own initiative, and without a court order, decide to imprisoned not more than 20 years or both.” cease doing business with an entity that is allegedly committing or facilitating IPR violations, it will also ix. To protect public health SOPA makes illegal the have immunity from suit. The bill also absolves online distribution of counterfeit drugs. It also service providers of any liability once they have makes illegal the trafficking of false or misleading complied with a court order to discontinue service to labels on goods or packaging of any nature. an entity which is circumventing or using by passing tactics. x. To protect US businesses from Foreign espionage the provisions in the Bill amends the US Code on iv. Provisions allow for any Internet service provider to Foreign and Economic Espionage to incur more accept “good faith” complaints by IP owners once the severe penalties for individuals and companies. necessary proof is provided as required by the Bill to The “theft of trade secrets” or “economic take action against an infringing entity before the espionage” now gets an individual 20 years issuance of a court order. instead of 15 and a fine between $1,000,000 and $5,000,000 instead of not more than $500,000. v. The bill provides for a reversal or vacation of a court Companies will now be fined “not more than the order by the accused entity once proof is presented greater of $10,000,000 or 3 times the value of the of no wrong doing. A petition must be made in the stolen trade secret, instead of $10,000,000. US court system to reverse the court order. xi. It empowers copyright owners whose IP rights vi. For websites accused of copyright infringement have been breached to sue both US and foreign through a court order, the Attorney General (AG) can websites that are in direct violation of US IP laws order payment providers such as: PayPal, Visa and and regulations. Mastercard; online advertising networks, search engines such as Google, Microsoft and Yahoo; ISPs, xii. Finally, persons can be subject to criminal and domain name registrars to stop doing business prosecution for streaming copyrighted works with those alleged offending websites. For the without permission over the Internet. For a first service providers to manage the notification process, offence of streaming 10 pieces of music or movies the bill requires that each service provider within a six-month period, can result in up to five designates an agent and register him or her with years’ imprisonment. To ensure compliance, the their local copy right office. This person will act as Attorney General can bring action against any the liaison and company representative between the entity that knowingly and wilfully provides or offers US AG office, IP owners, its customers and their to provide a product or services designed or company. marketed for the circumvention or bypassing of measures used to prevent access by USvii. The Bill also facilitates the possibility of ensuring that subscribers to foreign infringing sites. ‘foreign infringers’ of US Intellectual Property Rights don’t succeed in accessing US capital for business Dangers of SOPA venture whether through the US capital markets or US investors. Although SOPA is designed to combat online piracy its detractors emphasize that inherent in its provisions areviii. The Bill in Sec. 202 seeks to amend Section 2320 of various forms of online censorship and the openness of the title 18, United States Code by criminalising the Internet must be safeguarded for innovation to thrive. trafficking, import, export, distribution and production Freedom of expression and innovation are closely linked of counterfeit drugs such that the offender may be and it is argued that SOPA threatens to introduce legislation that would severely affect both. OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org
  • 4. 4 to seek, as a first resort, some sort of diplomatic solution rather than pursue prosecution. As an example, Google continues to be forced by the Chinese Government to adhere to its censorship laws particularly on filtering search results for certain subject matter despite the company’s principles on freedom of expression and the free flow of information. Caribbean businesses which utilise website hosting services in the US would be subject to SOPA if the Bill is passed into Getty Image law and could result in loss of web presence and proprietary information and data resident on US servers. The only recourse for Caribbean firms would be to challenge the action in the US courts which has major financial implications as itDetractors of SOPA are further convinced that the bill raises relates to legal fees, loss of use and lack of access toserious concerns regarding Internet security especially as it important company information.relates to Domain Name Systems (DNS) filtering. They believethat DNS filtering will be ineffective for that purpose and will Caribbean content providers and users would be severelyinterfere with cross-border exchanges of data and services constrained by SOPA in accessing and distributing USwhich is a critical element for innovation and social content and ideas, which can aid in generating new innovativedevelopment in an information society. Opponents of SOPA ideas in the Caribbean. Sadly, in the region there is a culturefurther state that technology start-ups and online companies of online piracy and a general lack of respect for IPR. Bootlegmay seek greener pastures and relocate outside the US as copies of the latest movies and music are displayed publiclySOPA could create a more onerous environment for them to for sale in almost every Caribbean capital. Our countries areoperate. already compelled like other developed counterparts to enforce International IPR agreements. SOPA would serve to increase the legislative requirements with which the regionPossible Impact on the Caribbean has to comply. There will have to be a paradigm shift in the Caribbean’s attitude towards IPR to avoid the negativeTo the extent that there is validity in the arguments presented repercussions of not respecting the IPR of others.by SOPA detractors, SOPA could have a similar effectregarding the stifling of innovation and social development in Caribbean firms with an existing business model that isthe Caribbean as in the US. It could also negatively impact heavily dependent on US content would now have to acquiretrade in cross-border data and services as argued in Google’s it legitimately, which could result in increased operating cost.May 2008 Congressional testimony on freedom of expression.7 SOPA attempts to protect the creator of the content andIn its testimony, Google stated that “digital barriers to the free determines how that content can be used to create additionalflow of information are equivalent to traditional trade barriers content, and therefore impacts how foreign entities can profit.which are illegal under WTO rules”. When the flow ofinformation is blocked innovation suffers. OpportunitiesCaribbean firms operating internet sites or portions of internetsites which provide online business services to residents of the The passing of SOPA into law could benefit the CaribbeanUS that commit offences as defined under SOPA could face and its firms as it may result in an exodus of US onlinethe threat of prosecution by the US. Given the Caribbean’s companies to the Caribbean due to the Caribbean’s similarheavy dependence on US goods and services, and the time zone, similar language requirements and satisfactory ITsignificance of the US’s geo-political influence on the infrastructure. This could lead to technology, skills andCaribbean, the threat of prosecution for Caribbean firms could knowledge transfer while providing business opportunities forbe comparatively higher than for Chinese businesses guilty of Caribbean firms and ICT professionals.the same offences. China’s status and importance in the worldeconomy could compel the US government or US companies Caribbean firms, such as Lime and Fujitsu, which have OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org
  • 5. 5 The influence of the US online businesses will likely continue to influence the debate on SOPA. Hopefully, what will emerge will safeguard against any perceived or real negative implications whilst preserving the valid interest of intellectual property protection. Analysis done by Derek E. Browne, IT Specialist, Office of Trade Negotiations (OTN), CARICOM Secretariat. ENDNOTES:recently launched their Cloud services operations with server 1 . On January 18, 2011 Wikipedia did however move its English-farms located in the region, stand to benefit tremendously as language content offline in protest of SOPA for a 24 hour period.they can offer web, data and other online services to US firms 2looking to escape the onerous environment of the US. Some . Section 202 of the SOPA bill seeks to address internet traffickingUS firms have already started moving their Cloud services, of dangerous goods and services through the amendment of Section 2320 of title 18, United States Code.particularly their data centre services off shore, or seekingforeign companies that provide like services. Currently, there 3 . The Digital Millennium Copyright Act, 1998:are two major reasons for this exodus – the US PATRIOT Act, http://www.copyright.gov/legislation/dmca.pdfand data privacy laws which are less protective of consumer 4and company data than legislation found in other jurisdictions.8 . US Customs and Border Protection, (2009, October, p 12, para.5, 1-10). What Every Member of the Trade Community Should Know About: CBP Enforcement of Intellectual Property Rights. RetrievedThe US PATRIOT Act empowers US Home land security February 12, 2012, from: http://www.cbp.govagencies by “dramatically reducing restrictions on lawenforcement agencies ability to search telephone, e-mail 5 . Mack, Lauren. 2011. ‘DNS Filtering to fight Internet Piracycommunications, medical, financial, and other records” which violates the First Amendment’, JURIST.is a major concern for companies that provide online services. http://jurist.org/dateline/2012/01/lauren-mack-DNS-filtering.phpThese companies would like to avoid facing legal issues Retrieved on January 13, 2011regarding the sovereignty of data retained in data centres for 6 . U.S. White House response on SOPA. Retrieved February 15,example when information is created in one jurisdiction and 2012, from: https://wwws.whitehouse.gov/petition-stored in another. SOPA, if passed, can be the third reason for tool/response/combating-online-piracy-while-protecting-open-the continued exodus of US companies seeking Cloud and-innovative-internetservices off shore, which can provide new opportunities for 7Caribbean firms. . Googles May 2008 Congressional testimony on Promoting Free Expression on the Internet. Retrieved February 15, 2012, from:SOPA can be an opportunity for the Caribbean to focus on http://googlepublicpolicy.blogspot.com/2008/05/promoting-free- expression-on-internet.htmldeveloping and using its own original content or even usingcontent originating from outside of the US. The Caribbean 8 . United States Patriot Act. Retrieved February 15, 2012, from:Cultural industries can be an immediate beneficiary of such a http://www.fincen.gov/statutes_regs/patriot/index.htmlthrust which could provide the impetus for the much neededinvestment in the Caribbean Cultural industries.The Caribbean can become a major player in the world as asupplier of meaningful knowledge by contributing valued localcontent online. The Caribbean’s knowledge of various plantsand their medicinal properties, as well as herbal remediesimmediately comes to mind. OTN UPDATE is the flagship electronic trade newsletter of the Office of Trade Negotiations (OTN), formerly the Caribbean Regional Negotiating Machinery (CRNM). Published in English, it is a rich source of probing research on and detailed analyses of international trade policy issues and developments germane to the Caribbean. Prepared by the Information Unit of the OTN, the newsletter focuses on the OTN, trade negotiation issues within its mandate and related activities. Its intention is to provide impetus for feedback by and awareness amongst a variety of stakeholders, as regards trade policy developments of currency and importance to the Caribbean. http://www.crnm.org

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