Senate Judiciary Committee Addresses COICA Criticisms

WASHINGTON, February 17, 2011 ­–  The Senate Judiciary Committee conducted a hearing Wednesday to address potential criticisms of the Combating Online Infringement and Counterfeits Acts (COICA), which would target websites dedicated to stealing American intellectual property.

The bill empowers the Department of Justice to issue court orders to Internet service providers (ISPs), search engines, payment processors and online advertising networks who do not refrain from providing their services to rogue websites. The DOJ defines these “rogue” websites as those that promote either copyright infringement or the sale of counterfeit goods.

Sen. Patrick Leahy (D-VT) introduced similar legislation last year, along with twelve co-sponsors – all other members of the Senate Judiciary Committee. The Committee unanimously approved the bill in that case. Sen. Tom Coburn (R-OK) requested the hearing in order to hear criticisms of the bill by the parties directly affected.

Witnesses included representatives from Rosetta Stone Inc., Authors Guild, The Go Daddy Group, Inc., Verizon Communications, and Visa, Inc. Chairman Leahy commended both Go Daddy and Visa for spearheading their own enforcement teams and actively cancelling business with known rogue websites.

Notably absent from the witness list were representatives from the monster search engines Google and Yahoo. Both were invited to attend, but declined to send a representative.

“If a website is identified to conduct criminal activity, search engines can’t continue to do business with them,” stated witness Tom Adams, President and CEO of Rosetta Stone, Inc. “There must be serious consequences for a company like Google. It’s impossible to discipline that kind of company with that kind of market power. We need the [Department of Justice] to legislate to protect companies like Rosetta Stone.”

One criticism of the act came from Verizon’s Vice President and Deputy General Counsel Thomas Dailey, who expressed concern over the bill’s potential to heavily burden Internet providers.

“The overbroad or inappropriate exercise of the powerful tools that would be created by COICA would not only place undue burdens on service providers, but would also run counter to U.S. interests in other areas of national import, including promotion of a ‘global’ Internet,” stated Dailey.

In addition, Dailey requested that the bill be revised to apply only to servers within the U.S., both to lessen the burden put on Internet providers as well as to avoid conflict in international courts.

Christine Jones, Executive Vice-President, General Counsel, and Corporate Secretary of The Go Daddy Group, pushed for harsher punishments for companies and providers not doing their part to combat the theft of intellectual property. In addition, The Go Daddy Group pushed to place responsibilities upon additional parties.

“We would suggest that the bill’s focus be expanded to address the role of website hosting providers in combating online infringements and counterfeits,” stated Jones. “The inclusion of hosting providers in the bill would clarify the role of web hosts in disabling access to criminal websites with domain names over which the U.S. government cannot obtain jurisdiction.”

Chairman Leahy ended the proceedings, stating confidently that the legislation would pass this year.

The online sale of counterfeit goods costs the U.S. billions of dollars each year according to Envisional, a company that develops and markets Internet monitoring and copyright infringement protection software. Additionally, according to a study commissioned by NBC Universal in January, over 23 percent of all online traffic is estimated to be infringing.