By Jamie Fugitt, the Startup Lawyer
Controversial proposed legislation in the U.S. Congress will directly impact Arkansas technology entrepreneurs. Popularly called SOPA (the “Stop Online Piracy Act”), or its Senate cousin PIPA (the “Protect IP Act”), the bills target “online piracy” by seeking to curb the pirating of U.S. copyrighted material – movies, TV shows, music, and more – through the internet.
Internet pirates are a multi-billion dollar annual problem for the U.S. However, since most pirates are foreign “rogue” websites, they are untouchable in the U.S. legal system. SOPA/PIPA creates new ways for the government and private parties to attack internet pirates where it hurts them most: access and money. So where is the controversy?
The goal of stopping internet piracy is not controversial; the proposed methods are.
Critics of SOPA/PIPA, including many high-profile technology innovators, argue that SOPA/PIPA jeopardizes their ability to innovate and build next-generation businesses. They point to two proposals in particular.
One. SOPA/PIPA supporters want to allow entire websites to be shut down on short notice for a single piece of infringing material regardless of whether the site owner participated in, or even knew about, the infringing post. This is a significant change. Under current law, websites are granted immunity for infringing content as long as they act in good faith to remove infringing content when they are notified by the rights-holder. Under SOPA/PIPA, lack of knowledge is no defense, effectively requiring site owners to police every piece of content on their site.
Two. SOPA/PIPA, as currently written, allows rights-holders to unilaterally cut off advertising and e-commerce funds to websites by filing a “notice that the site is ‘dedicated to the theft of U.S. property’ – even if no court has actually found that infringement has occurred.” What sites will be considered to be “dedicated to the theft of U.S. property?” Arguably, any site that subjectively isn’t doing enough to police its users. There are no clear standards in the legislation.
Because of the uncertain risk and liability, critics say SOPA/PIPA will “cripple startups.” They call it “American censorship,” pointing to a leading constitutional scholar who judged it an unconstitutional violation of the First Amendment. They call it ineffective, pointing to top IT security scientists who declared it a risk to cybersecurity and “internet functionality.” They call it a generational “schism,” and, my favorite, a “blunderbuss.”
SOPA/PIPA supporters simply accuse critics of hyperbole.
What is clear is that SOPA/PIPA has “exposed a growing fracture” between many traditional industries in the U.S. and the emerging internet-dependent technology industry. This fracture centers on the fact that the internet is the primary driver for the latter, but only a supplement to the former.
As such, SOPA/PIPA is low risk and low cost for many traditional industries, while high risk and potentially high cost for internet-focused entrepreneurs. An interruption in access or e-commerce will inconvenience a traditional business, but it will devastate a web-based one. Similarly, universal policing of content on a site will be a nuisance to traditional business, but it will be a barrier to entire innovation industries that exist through the active and varied posts of their users.
In Arkansas, we are gaining traction in an internet-based economy. We have established job-creating, revenue-generating companies (Doctorpreneur’s Acumen Brands) and are launching others (MyDealCompass, MobileFwd). We have nationally-recognized web-content producers (Oxford American), and programs aimed at bringing and mentoring new talent to the state (The Ark). We have businesses (Innovate Arkansas, Gravity Ventures, Vertical Studio) and co-working groups (The Iceberg) organized to optimize this growth.
The final SOPA/PIPA, whatever it looks like, will present new challenges for our growing internet-based economy and the people who support it. Take note and stay tuned. The debate is continually and quickly evolving. Catch the next formal chapter on January 18, when a group of the highest-profile critics will get their turn in front of Congress.
(Jamie Fugitt is an attorney at Williams & Anderson PLC with a focus on startup law and innovation. He is a graduate of the University of Arkansas and Harvard Law. Contact him at email@example.com)