    [House Hearing, 112 Congress]
    [From the U.S. Government Publishing Office]

                             STOP ONLINE PIRACY ACT

    =======================================================================

                                    HEARING

                                   BEFORE THE

                           COMMITTEE ON THE JUDICIARY
                            HOUSE OF REPRESENTATIVES

                          ONE HUNDRED TWELFTH CONGRESS

                                 FIRST SESSION

                                       ON

                                   H.R. 3261

                                   __________

                               NOVEMBER 16, 2011

                                   __________

                               Serial No. 112-154

                                   __________

             Printed for the use of the Committee on the Judiciary

          Available via the World Wide Web: http://judiciary.house.gov

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                           COMMITTEE ON THE JUDICIARY

                          LAMAR SMITH, Texas, Chairman
    F. JAMES SENSENBRENNER, Jr.,         JOHN CONYERS, Jr., Michigan
        Wisconsin                        HOWARD L. BERMAN, California
    HOWARD COBLE, North Carolina         JERROLD NADLER, New York
    ELTON GALLEGLY, California           ROBERT C. ``BOBBY'' SCOTT,
    BOB GOODLATTE, Virginia                  Virginia
    DANIEL E. LUNGREN, California        MELVIN L. WATT, North Carolina
    STEVE CHABOT, Ohio                   ZOE LOFGREN, California
    DARRELL E. ISSA, California          SHEILA JACKSON LEE, Texas
    MIKE PENCE, Indiana                  MAXINE WATERS, California
    J. RANDY FORBES, Virginia            STEVE COHEN, Tennessee
    STEVE KING, Iowa                     HENRY C. ``HANK'' JOHNSON, Jr.,
    TRENT FRANKS, Arizona                  Georgia
    LOUIE GOHMERT, Texas                 PEDRO R. PIERLUISI, Puerto Rico
    JIM JORDAN, Ohio                     MIKE QUIGLEY, Illinois
    TED POE, Texas                       JUDY CHU, California
    JASON CHAFFETZ, Utah                 TED DEUTCH, Florida
    TIM GRIFFIN, Arkansas                LINDA T. SANCHEZ, California
    TOM MARINO, Pennsylvania             [Vacant]
    TREY GOWDY, South Carolina
    DENNIS ROSS, Florida
    SANDY ADAMS, Florida
    BEN QUAYLE, Arizona
    MARK AMODEI, Nevada

          Sean McLaughlin, Majority Chief of Staff and General Counsel
           Perry Apelbaum, Minority Staff Director and Chief Counsel

                                C O N T E N T S

                                  ----------

                               NOVEMBER 16, 2011

                                                                       Page

                                TEXT OF THE BILL

    H.R. 3261, the ``Stop Online Piracy Act''........................     3

                               OPENING STATEMENTS

    The Honorable Lamar Smith, a Representative in Congress from the
      State of Texas, and Chairman, Committee on the Judiciary.......     1
    The Honorable John Conyers, Jr., a Representative in Congress
      from the State of Michigan, and Ranking Member, Committee on
      the Judiciary..................................................    22
    The Honorable Bob Goodlatte, a Representative in Congress from
      the State of Virginia, and Member, Committee on the Judiciary..    37
    The Honorable Melvin L. Watt, a Representative in Congress from
      the State of North Carolina, and Member, Committee on the
      Judiciary......................................................    39

                                   WITNESSES

    The Honorable Maria Pallante, Register of Copyrights, U.S.
      Library of Congress
      Oral Testimony.................................................    47
      Prepared Statement.............................................    50
    John P. Clark, Chief Security Officer and Vice President of
      Global Security, Pfizer, Inc.
      Oral Testimony.................................................    60
      Prepared Statement.............................................    62
    Michael P. O'Leary, Senior Executive Vice President, Global
      Policy and External Affairs, Motion Picture Association of
      America (MPAA)
      Oral Testimony.................................................    68
      Prepared Statement.............................................    71
    Linda Kirkpatrick, Group Head, Customer Performance Integrity,
      Mastercard Worldwide
      Oral Testimony.................................................    80
      Prepared Statement.............................................    82
    Katherine Oyama, Copyright Counsel, Google, Inc.
      Oral Testimony.................................................    98
      Prepared Statement.............................................   101
    Paul Almeida, President, Department for Professional Employees
      (DPE), American Federation of Labor, Congress of Industrial
      Organizations (AFL-CIO)
      Oral Testimony.................................................   113
      Prepared Statement.............................................   115

              LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

    Material submitted by the Honorable John Conyers, Jr., a
      Representative in Congress from the State of Michigan, and
      Ranking Member, Committee on the Judiciary..................... 24,25
    Prepared Statement of the Honorable J. Randy Forbes, a
      Representative in Congress from the State of Virginia, and
      Member, Committee on the Judiciary.............................    41
    Prepared Statement of the Honorable Zoe Lofgren, a Representative
      in Congress from the State of California, and Member, Committee
      on the Judiciary...............................................    42
    Prepared Statement of the Honorable Henry C. ``Hank'' Johnson,
      Jr., a Representative in Congress from the State of Georgia,
      and Member, Committee on the Judiciary.........................    44
    Material submitted by the Honorable Howard L. Berman, a
      Representative in Congress from the State of California, and
      Member, Committee on the Judiciary.............................   131
    Material submitted by the Honorable Zoe Lofgren, a Representative
      in Congress from the State of California, and Member, Committee
      on the Judiciary...............................................   144
    Material submitted by the Honorable Darrell Issa, a
      Representative in Congress from the State of California, and
      Member, Committee on the Judiciary.............................   204

                                    APPENDIX
                   Material Submitted for the Hearing Record

    Prepared Statement of the Honorable Ron Wyden, a U.S. Senator
      from the State of Oregon.......................................   261
    Prepared Statement of Terry Hart, Creator of Copyhype............   263
    List of submitters contributing material in association with the
      consideration of H.R. 3261.....................................   272

                             STOP ONLINE PIRACY ACT

                                  ----------

                          WEDNESDAY, NOVEMBER 16, 2011

                              House of Representatives,
                                    Committee on the Judiciary,
                                                        Washington, DC.

        The Committee met, pursuant to call, at 10:06 a.m., in room
    2141, Rayburn Office Building, the Honorable Lamar Smith
    (Chairman of the Committee) presiding.
        Present: Representatives Smith, Coble, Goodlatte, Lungren,
    Chabot, Issa, Forbes, King, Franks, Gohmert, Jordan, Poe,
    Chaffetz, Griffin, Marino, Gowdy, Ross, Adams, Quayle, Amodei,
    Conyers, Berman, Nadler, Watt, Lofgren, Jackson Lee, Waters,
    Cohen, Johnson, Quigley, Chu, Deutch, and Sanchez.
        Staff present: (Majority) David Whitney, Counsel; Olivia
    Lee, Clerk; and (Minority) Jason Everett, Counsel.
        Mr. Smith. Good morning. The Judiciary Committee will come
    to order. Without objection, the Chair is authorized to declare
    recesses of the Committee at any time.
        I am going to recognize myself for an opening statement,
    then the Ranking Member, and then the Chairman and the Ranking
    Member of the appropriate Subcommittee.
        Today's hearing is on legislation that will help protect
    one of the most productive sectors of the American economy.
    While the Digital Millennium Copyright Act does provide some
    relief to copyright owners whose works are infringed, it only
    helps in limited circumstances. The DMCA provides no effective
    relief when a rogue website is foreign-based and foreign
    operated, like The Pirate Bay, the 89th most visited site in
    the U.S. It does not protect trademark owners and consumers
    from counterfeit and unsafe products, like fake prescription
    medicines and misbranded branded drugs that are often presented
    to the public by unlicensed online pharmacies. Nor does the law
    assist copyright owners when rogue websites contribute to the
    theft of intellectual property on a massive scale.
        And, finally, this does nothing to address the use of
    certain intermediaries, such as payment processors and Internet
    advertising services, that are used by criminals to fund the
    illegal activities.
        Mr. Scott. Mr. Chairman, I am having trouble hearing your
    statement.
        Mr. Smith. I would not want anyone to miss my statement, so
    I will make sure that the sound system is working and that I am
    close enough to the mic.
        Mr. Scott. Turn his mic way up.
        Mr. Smith. That is where the Stop Online Piracy Act comes
    in. This bill focuses not on technology, but on preventing
    those who engage in criminal behavior from reaching directly
    into the U.S. market to harm American consumers. We cannot
    continue a system that allows criminals to disregard our laws
    and import counterfeit and pirated goods across our physical
    borders, nor can we fail to take effective and meaningful
    action when criminals misuse the Internet.
        The problem of rogue websites is real, immediate, and wide
    spread. It harms all sectors of the economy, and its scope is
    staggering. One recent survey found that nearly one-quarter of
    global Internet traffic infringes on copyrights. A second study
    found that 43 sites classified as digital piracy, generated 53
    billion visits per year, and that 26 sites selling just
    counterfeit prescription drugs generated 51 million hits
    annually.
        Since the United States produces the most intellectual
    property, our country has the most to lose if we fail to
    address the problem of these rogue websites. Responsible
    companies and public officials have taken note of the corrosive
    and damaging effects of rogue websites. One of our witnesses
    today represents MasterCard Worldwide, a company that takes
    seriously its obligation to reduce the amount of stolen
    intellectual property on the Internet. MasterCard deserves
    thanks for its commitment to support legislation that addresses
    the problems of online piracy.
        In contrast, another one of the companies represented here
    today has sought to obstruct the Committee's consideration of
    bipartisan legislation. Perhaps this should come as no
    surprise, given that Google just settled a Federal criminal
    investigation into the company's active promotion of a rogue
    websites that pushed illegal prescription and counterfeit drugs
    on American consumers. In announcing a half billion dollar
    forfeiture of illegal profit, the U.S. Attorney, Peter Neronha,
    who led the investigation, stated, ``Suffice it to say that
    this is not two or three rogue employees of the consumer
    service level doing this. This was a corporate decision to
    engage in this conduct.''
        Over several years, Google ignored repeated warnings from
    the National Association of Boards of Pharmacy and the National
    Center on Addiction and Substance Abuse at Columbia University,
    that the company was violating Federal law. The company also
    disregarded requests to block advertisements from rogue
    pharmacies, screen such sites from searches, and provide
    warnings about buying drugs over the Internet.
        The Wall Street Journal reports Mr. Neronha characterized
    Google's efforts to appear to control unlawful advertisements
    as window dressing since ``It allowed Google to continue
    earning revenues from the allegedly illicit ad sales, even as
    it professed to be taking action against them.'' Given Google's
    record, their objection to authorizing a court to order a
    search engine to not steer consumers to foreign rogue sites is
    easily understood.
        Unfortunately, the theft of America's intellectual property
    costs the United States economy more than $100 billion annually
    and results in a loss of thousands of American jobs. Under
    current law, rogue sites that profit from selling pirated goods
    are often out of the reach of U.S. law enforcement agencies and
    operate without consequences. The Stop Online Piracy Act helps
    stop flow of revenues to rogue websites and insurers. The
    profits from American innovations go to American innovators.
        Protecting America's intellectual property will help our
    economy, create jobs, and discourage illegal websites.
        That concludes my opening statement, and the gentleman from
    Michigan, the Ranking Member of the Judiciary Committee, is
    recognized for his opening statement.
        [The text of the bill, H.R. 3261, follows:]

    HR 3261 IH  ___________________________________________________

                                                                          I
    112th CONGRESS
        1st Session

                                    H. R. 3261

    To promote prosperity, creativity, entrepreneurship, and innovation by
        combating the theft of U.S. property, and for other purposes.
                                   __________
                        IN THE HOUSE OF REPRESENTATIVES
                                October 26, 2011
    Mr. Smith of Texas (for himself and Mr. Conyers, Mr. Goodlatte, Mr.
        Berman, Mr. Griffin of Arkansas, Mr. Gallegly, Mr. Deutch, Mr.
        Chabot, Mr. Ross of Florida, Mrs. Blackburn, Mrs. Bono Mack, Mr.
        Terry, and Mr. Schiff) introduced the following bill; which was
        referred to the Committee on the Judiciary
                                   __________

                                     A BILL

    To promote prosperity, creativity, entrepreneurship, and innovation by
        combating the theft of U.S. property, and for other purposes.

        Be it enacted by the Senate and House of Representatives of the
    United States of America in Congress assembled,

    SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

        (a) Short Title.--This Act may be cited as the ``Stop Online Piracy
    Act''.
        (b) Table of Contents.--The table of contents of this Act is as
    follows:

        Sec. 1. Short title; table of contents.
        Sec. 2. Savings and severability clauses.

                        TITLE I--COMBATING ONLINE PIRACY

        Sec. 101. Definitions.
        Sec. 102. Action by Attorney General to protect U.S. customers and
    prevent U.S. support of foreign infringing sites.
        Sec. 103. Market-based system to protect U.S. customers and prevent
    U.S. funding of sites dedicated to theft of U.S. property.
        Sec. 104. Immunity for taking voluntary action against sites
    dedicated to theft of U.S. property.
        Sec. 105. Immunity for taking voluntary action against sites that
    endanger public health.
        Sec. 106. Guidelines and study.
        Sec. 107. Denying U.S. capital to notorious foreign infringers.

    TITLE II--ADDITIONAL ENHANCEMENTS TO COMBAT INTELLECTUAL PROPERTY THEFT

        Sec. 201. Streaming of copyrighted works in violation of criminal
    law.
        Sec. 202. Trafficking in inherently dangerous goods or services.
        Sec. 203. Protecting U.S. businesses from foreign and economic
    espionage.
        Sec. 204. Amendments to sentencing guidelines.
        Sec. 205. Defending intellectual property rights abroad.

    SEC. 2. SAVINGS AND SEVERABILITY CLAUSES.

        (a) Savings Clauses.--
                (1) First amendment.--Nothing in this Act shall be
            construed to impose a prior restraint on free speech or the
            press protected under the 1st Amendment to the Constitution.
                (2) Title 17 liability.--Nothing in title I shall be
            construed to enlarge or diminish liability, including vicarious
            or contributory liability, for any cause of action available
            under title 17, United States Code, including any limitations
            on liability under such title.
        (b) Severability.--If any provision of this Act, or the application
    of the provision to any person or circumstance, is held to be
    unconstitutional, the other provisions or the application of the
    provision to other persons or circumstances shall not be affected
    thereby.

                        TITLE I--COMBATING ONLINE PIRACY

    SEC. 101. DEFINITIONS.

        In this title:
                (1) Domain name.--The term ``domain name'' has the meaning
            given that term in section 45 of the Lanham Act (15 U.S.C.
            1127) and includes any subdomain designation using such domain
            name as part of an electronic address on the Internet to
            identify a unique online location.
                (2) Domain name system server.--The term ``domain name
            system server'' means a server or other mechanism used to
            provide the Internet protocol address associated with a domain
            name.
                (3) Domestic domain name.--The term ``domestic domain
            name'' means a domain name that is registered or assigned by a
            domain name registrar, domain name registry, or other domain
            name registration authority, that is located within a judicial
            district of the United States.
                (4) Domestic internet protocol address.--The term
            ``domestic Internet Protocol address'' means an Internet
            Protocol address for which the corresponding Internet Protocol
            allocation entity is located within a judicial district of the
            United States.
                (5) Domestic internet site.--The term ``domestic Internet
            site'' means an Internet site for which the corresponding
            domain name or, if there is no domain name, the corresponding
            Internet Protocol address, is a domestic domain name or
            domestic Internet Protocol address.
                (6) Foreign domain name.--The term ``foreign domain name''
            means a domain name that is not a domestic domain name.
                (7) Foreign internet protocol address.--The term ``foreign
            Internet Protocol address'' means an Internet Protocol address
            that is not a domestic Internet protocol address.
                (8) Foreign internet site.--The term ``foreign Internet
            site'' means an Internet site that is not a domestic Internet
            site.
                (9) Including.--The term ``including'' means including, but
            not limited to.
                (10) Intellectual property enforcement coordinator.--The
            term ``Intellectual Property Enforcement Coordinator'' means
            the Intellectual Property Enforcement Coordinator appointed
            under section 301 of the Prioritizing Resources and
            Organization for Intellectual Property Act of 2008 (15 U.S.C.
            8111).
                (11) Internet.--The term ``Internet'' has the meaning given
            that term in section 5362(5) of title 31, United States Code.
                (12) Internet advertising service.--The term ``Internet
            advertising service'' means a service that for compensation
            sells, purchases, brokers, serves, inserts, verifies, clears,
            or otherwise facilitates the placement of an advertisement,
            including a paid or sponsored search result, link, or
            placement, that is rendered in viewable form for any period of
            time on an Internet site.
                (13) Internet protocol.--The term ``Internet Protocol''
            means a protocol used for communicating data across a packet-
            switched internetwork using the Transmission Control Protocol/
            Internet Protocol, and includes any predecessor or successor
            protocol to such protocol.
                (14) Internet protocol address.--The term ``Internet
            Protocol address'' means a numerical label that is assigned to
            each device that participates in a computer network that uses
            the Internet Protocol for communication.
                (15) Internet protocol allocation entity.--The term
            ``Internet Protocol allocation entity'' means, with respect to
            a particular Internet Protocol address, the entity, local
            internet registry, or regional internet registry to which the
            smallest applicable block of Internet Protocol addresses
            containing that address is allocated or assigned by a local
            internet registry, regional internet registry, or other
            Internet Protocol address allocation authority, according to
            the applicable publicly available database of allocations and
            assignments, if any.
                (16) Internet search engine.--The term ``Internet search
            engine'' means a service made available via the Internet that
            searches, crawls, categorizes, or indexes information or Web
            sites available elsewhere on the Internet and on the basis of a
            user query or selection that consists of terms, concepts,
            categories, questions, or other data returns to the user a
            means, such as a hyperlinked list of Uniform Resource Locators,
            of locating, viewing, or downloading such information or data
            available on the Internet relating to such query or selection.
                (17) Internet site.--The term ``Internet site'' means the
            collection of digital assets, including links, indexes, or
            pointers to digital assets, accessible through the Internet
            that are addressed relative to a common domain name or, if
            there is no domain name, a common Internet Protocol address.
                (18) Lanham act.--The term ``Lanham Act'' means the Act
            entitled ``An Act to provide for the registration and
            protection of trademarks used in commerce, to carry out the
            provisions of certain international conventions, and for other
            purposes'', approved July 5, 1946 (commonly referred to as the
            ``Trademark Act of 1946'' or the ``Lanham Act'').
                (19) Nonauthoritative domain name server.--The term
            ``nonauthoritative domain name server'' means a server that
            does not contain complete copies of domains but uses a cache
            file that is comprised of previous domain name server lookups,
            for which the server has received an authoritative response in
            the past.
                (20) Owner; operator.--The terms ``owner'' or ``operator'',
            when used in connection with an Internet site, includes,
            respectively, any owner of a majority interest in, or any
            person with authority to operate, such Internet site.
                (21) Payment network provider.--
                        (A) In general.--The term ``payment network
                    provider'' means an entity that directly or indirectly
                    provides the proprietary services, infrastructure, and
                    software to effect or facilitate a debit, credit, or
                    other payment transaction.
                        (B) Rule of construction.--For purposes of this
                    paragraph, a depository institution (as such term is
                    defined under section 3 of the Federal Deposit
                    Insurance Act) or credit union that initiates a payment
                    transaction shall not be construed to be a payment
                    network provider based solely on the offering or
                    provision of such service.
                (22) Service provider.--The term ``service provider'' means
            a service provider as defined in section 512(k)(1) of title 17,
            United States Code, that operates a nonauthoritative domain
            name system server.
                (23) U.S.-directed site.--The term ``U.S.-directed site''
            means an Internet site or portion thereof that is used to
            conduct business directed to residents of the United States, or
            that otherwise demonstrates the existence of minimum contacts
            sufficient for the exercise of personal jurisdiction over the
            owner or operator of the Internet site consistent with the
            Constitution of the United States, based on relevant evidence
            that may include whether--
                        (A) the Internet site is used to provide goods or
                    services to users located in the United States;
                        (B) there is evidence that the Internet site or
                    portion thereof is intended to offer or provide--
                                (i) such goods and services,
                                (ii) access to such goods and services, or
                                (iii) delivery of such goods and services,
                    to users located in the United States;
                        (C) the Internet site or portion thereof does not
                    contain reasonable measures to prevent such goods and
                    services from being obtained in or delivered to the
                    United States; and
                        (D) any prices for goods and services are indicated
                    or billed in the currency of the United States.
                (24) United states.--The term ``United States'' includes
            any commonwealth, possession, or territory of the United
            States.

    SEC. 102. ACTION BY ATTORNEY GENERAL TO PROTECT U.S. CUSTOMERS AND
                        PREVENT U.S. SUPPORT OF FOREIGN INFRINGING SITES.

        (a) Definition.--For purposes of this section, a foreign Internet
    site or portion thereof is a ``foreign infringing site'' if--
                (1) the Internet site or portion thereof is a U.S.-directed
            site and is used by users in the United States;
                (2) the owner or operator of such Internet site is
            committing or facilitating the commission of criminal
            violations punishable under section 2318, 2319, 2319A, 2319B,
            or 2320, or chapter 90, of title 18, United States Code; and
                (3) the Internet site would, by reason of acts described in
            paragraph (1), be subject to seizure in the United States in an
            action brought by the Attorney General if such site were a
            domestic Internet site.
        (b) Action by the Attorney General.--
                (1) In personam.--The Attorney General may commence an in
            personam action against--
                        (A) a registrant of a domain name used by a foreign
                    infringing site; or
                        (B) an owner or operator of a foreign infringing
                    site.
                (2) In rem.--If through due diligence the Attorney General
            is unable to find a person described in subparagraph (A) or (B)
            of paragraph (1), or no such person found has an address within
            a judicial district of the United States, the Attorney General
            may commence an in rem action against a foreign infringing site
            or the foreign domain name used by such site.
                (3) Notice.--Upon commencing an action under this
            subsection, the Attorney General shall send a notice of the
            alleged violation and intent to proceed under this section--
                        (A) to the registrant of the domain name of the
                    Internet site--
                                (i) at the postal and electronic mail
                            addresses appearing in the applicable publicly
                            accessible database of registrations, if any,
                            and to the extent such addresses are reasonably
                            available; and
                                (ii) via the postal and electronic mail
                            addresses of the registrar, registry, or other
                            domain name registration authority that
                            registered or assigned the domain name of the
                            Internet site, to the extent such addresses are
                            reasonably available; or
                        (B) to the owner or operator of the Internet site--
                                (i) at the primary postal and electronic
                            mail addresses for such owner or operator that
                            is provided on the Internet site, if any, and
                            to the extent such addresses are reasonably
                            available; or
                                (ii) if there is no domain name of the
                            Internet site, via the postal and electronic
                            mail addresses of the Internet Protocol
                            allocation entity appearing in the applicable
                            publicly accessible database of allocations and
                            assignments, if any, and to the extent such
                            addresses are reasonably available; or
                        (C) in any other such form as the court may
                    provide, including as may be required by rule 4(f) of
                    the Federal Rules of Civil Procedure.
                (4) Service of process.--For purposes of this section, the
            actions described in this subsection shall constitute service
            of process.
                (5) Relief.--On application of the Attorney General
            following the commencement of an action under this section, the
            court may issue a temporary restraining order, a preliminary
            injunction, or an injunction, in accordance with rule 65 of the
            Federal Rules of Civil Procedure, against a registrant of a
            domain name used by the foreign infringing site or an owner or
            operator of the foreign infringing site or, in an action
            brought in rem under paragraph (2), against the foreign
            infringing site or a portion of such site, or the domain name
            used by such site, to cease and desist from undertaking any
            further activity as a foreign infringing site.
        (c) Actions Based on Court Orders.--
                (1) Service.--A process server on behalf of the Attorney
            General, with prior approval of the court, may serve a copy of
            a court order issued pursuant to this section on similarly
            situated entities within each class described in paragraph (2).
            Proof of service shall be filed with the court.
                (2) Reasonable measures.--After being served with a copy of
            an order pursuant to this subsection, the following shall
            apply:
                        (A) Service providers.--
                                (i) In general.--A service provider shall
                            take technically feasible and reasonable
                            measures designed to prevent access by its
                            subscribers located within the United States to
                            the foreign infringing site (or portion
                            thereof) that is subject to the order,
                            including measures designed to prevent the
                            domain name of the foreign infringing site (or
                            portion thereof) from resolving to that domain
                            name's Internet Protocol address. Such actions
                            shall be taken as expeditiously as possible,
                            but in any case within 5 days after being
                            served with a copy of the order, or within such
                            time as the court may order.
                                (ii) Limitations.--A service provider shall
                            not be required--
                                        (I) other than as directed under
                                    this subparagraph, to modify its
                                    network, software, systems, or
                                    facilities;
                                        (II) to take any measures with
                                    respect to domain name resolutions not
                                    performed by its own domain name
                                    server; or
                                        (III) to continue to prevent access
                                    to a domain name to which access has
                                    been effectively disabled by other
                                    means.
                                (iii) Construction.--Nothing in this
                            subparagraph shall affect the limitation on the
                            liability of a service provider under section
                            512 of title 17, United States Code.
                                (iv) Text of notice.--The Attorney General
                            shall prescribe the text of any notice
                            displayed to users or customers of a service
                            provider taking actions pursuant to this
                            subparagraph. Such text shall state that an
                            action is being taken pursuant to a court order
                            obtained by the Attorney General.
                        (B) Internet search engines.--A provider of an
                    Internet search engine shall take technically feasible
                    and reasonable measures, as expeditiously as possible,
                    but in any case within 5 days after being served with a
                    copy of the order, or within such time as the court may
                    order, designed to prevent the foreign infringing site
                    that is subject to the order, or a portion of such site
                    specified in the order, from being served as a direct
                    hypertext link.
                        (C) Payment network providers.--
                                (i) Preventing affiliation.--A payment
                            network provider shall take technically
                            feasible and reasonable measures, as
                            expeditiously as possible, but in any case
                            within 5 days after being served with a copy of
                            the order, or within such time as the court may
                            order, designed to prevent, prohibit, or
                            suspend its service from completing payment
                            transactions involving customers located within
                            the United States or subject to the
                            jurisdiction of the United States and the
                            payment account--
                                        (I) which is used by the foreign
                                    infringing site, or portion thereof,
                                    that is subject to the order; and
                                        (II) through which the payment
                                    network provider would complete such
                                    payment transactions.
                                (ii) No duty to monitor.--A payment network
                            provider shall be considered to be in
                            compliance with clause (i) if it takes action
                            described in that clause with respect to
                            accounts it has as of the date on which a copy
                            of the order is served, or as of the date on
                            which the order is amended under subsection
                            (e).
                        (D) Internet advertising services.--
                                (i) Required actions.--An Internet
                            advertising service that contracts to provide
                            advertising to or for the foreign infringing
                            site, or portion thereof, that is subject to
                            the order, or that knowingly serves advertising
                            to or for such site or such portion thereof,
                            shall take technically feasible and reasonable
                            measures, as expeditiously as possible, but in
                            any case within 5 days after being served with
                            a copy of the order, or within such time as the
                            court may order, designed to--
                                        (I) prevent its service from
                                    providing advertisements to or relating
                                    to the foreign infringing site that is
                                    subject to the order or a portion of
                                    such site specified in the order;
                                        (II) cease making available
                                    advertisements for the foreign
                                    infringing site or such portion
                                    thereof, or paid or sponsored search
                                    results, links, or other placements
                                    that provide access to such foreign
                                    infringing site or such portion
                                    thereof; and
                                        (III) cease providing or receiving
                                    any compensation for advertising or
                                    related services to, from, or in
                                    connection with such foreign infringing
                                    site or such portion thereof.
                                (ii) No duty to monitor.--An internet
                            advertising service shall be considered to be
                            in compliance with clause (i) if it takes
                            action described in that clause with respect to
                            accounts it has as of the date on which a copy
                            of the order is served, or as of the date on
                            which the order is amended under subsection
                            (e).
                (3) Communication with users.--Except as provided under
            paragraph (2)(A)(iv), an entity taking an action described in
            this subsection shall determine the means to communicate such
            action to the entity's users or customers.
                (4) Enforcement of orders.--
                        (A) In general.--To ensure compliance with orders
                    issued pursuant to this section, the Attorney General
                    may bring an action for injunctive relief--
                                (i) against any entity served under
                            paragraph (1) that knowingly and willfully
                            fails to comply with the requirements of this
                            subsection to compel such entity to comply with
                            such requirements; or
                                (ii) against any entity that knowingly and
                            willfully provides or offers to provide a
                            product or service designed or marketed for the
                            circumvention or bypassing of measures
                            described in paragraph (2) and taken in
                            response to a court order issued pursuant to
                            this subsection, to enjoin such entity from
                            interfering with the order by continuing to
                            provide or offer to provide such product or
                            service.
                        (B) Rule of construction.--The authority granted
                    the Attorney General under subparagraph (A)(i) shall be
                    the sole legal remedy to enforce the obligations under
                    this section of any entity described in paragraph (2).
                        (C) Defense.--A defendant in an action under
                    subparagraph (A)(i) may establish an affirmative
                    defense by showing that the defendant does not have the
                    technical means to comply with this subsection without
                    incurring an unreasonable economic burden, or that the
                    order is not authorized by this subsection. Such
                    showing shall not be presumed to be a complete defense
                    but shall serve as a defense only for those measures
                    for which a technical limitation on compliance is
                    demonstrated or for such portions of the order as are
                    demonstrated to be unauthorized by this subsection.
                        (D) Definition.--For purposes of this paragraph, a
                    product or service designed or marketed for the
                    circumvention or bypassing of measures described in
                    paragraph (2) and taken in response to a court order
                    issued pursuant to this subsection includes a product
                    or service that is designed or marketed to enable a
                    domain name described in such an order--
                                (i) to resolve to that domain name's
                            Internet protocol address notwithstanding the
                            measures taken by a service provider under
                            paragraph (2) to prevent such resolution; or
                                (ii) to resolve to a different domain name
                            or Internet Protocol address that the provider
                            of the product or service knows, reasonably
                            should know, or reasonably believes is used by
                            an Internet site offering substantially similar
                            infringing activities as those with which the
                            infringing foreign site, or portion thereof,
                            subject to a court order under this section was
                            associated.
                (5) Immunity.--
                        (A) Immunity from suit.--Other than in an action
                    pursuant to paragraph (4), no cause of action shall lie
                    in any Federal or State court or administrative agency
                    against any entity served with a copy of a court order
                    issued under this subsection, or against any director,
                    officer, employee, or agent thereof, for any act
                    reasonably designed to comply with this subsection or
                    reasonably arising from such order.
                        (B) Immunity from liability.--Other than in an
                    action pursuant to paragraph (4)--
                                (i) any entity served with a copy of an
                            order under this subsection, and any director,
                            officer, employee, or agent thereof, shall not
                            be liable for any act reasonably designed to
                            comply with this subsection or reasonably
                            arising from such order; and
                                (ii) any--
                                        (I) actions taken by customers of
                                    such entity to circumvent any
                                    restriction on access to the foreign
                                    infringing site, or portion thereof,
                                    that is subject to such order, that is
                                    instituted pursuant to this subsection,
                                    or
                                        (II) act, failure, or inability to
                                    restrict access to a foreign infringing
                                    site, or portion thereof, that is
                                    subject to such order, in spite of good
                                    faith efforts to comply with such order
                                    by such entity,
                            shall not be used by any person in any claim or
                            cause of action against such entity.
        (d) Modification or Vacation of Orders.--
                (1) In general.--At any time after the issuance of an order
            under subsection (b), a motion to modify, suspend, or vacate
            the order may be filed by--
                        (A) any person, or owner or operator of property,
                    that is subject to the order;
                        (B) any registrant of the domain name, or the owner
                    or operator, of the Internet site that is subject to
                    the order;
                        (C) any domain name registrar, registry, or other
                    domain name registration authority that has registered
                    or assigned the domain name of the Internet site that
                    is subject to the order; or
                        (D) any entity that has been served with a copy of
                    an order pursuant to subsection (c) that requires such
                    entity to take action prescribed in that subsection.
                (2) Relief.--Relief under this subsection shall be proper
            if the court finds that--
                        (A) the foreign Internet site subject to the order
                    is no longer, or never was, a foreign infringing site;
                    or
                        (B) the interests of justice otherwise require that
                    the order be modified, suspended, or vacated.
                (3) Consideration.--In making a relief determination under
            paragraph (2), a court may consider whether the domain name of
            the foreign Internet site has expired or has been re-registered
            by an entity other than the entity that is subject to the order
            with respect to which the motion under paragraph (1) is
            brought.
                (4) Intervention.--An entity required to take action
            pursuant to subsection (c) if an order issues under subsection
            (b) may intervene at any time in any action commenced under
            subsection (b) that may result in such order, or in any action
            to modify, suspend, or vacate such order under this subsection.
        (e) Amended Orders.--The Attorney General, if alleging that a
    foreign Internet site previously adjudicated in an action under this
    section to be a foreign infringing site is accessible or has been
    reconstituted at a different domain name or Internet Protocol address,
    may petition the court to amend the order issued under this section
    accordingly.
        (f) Law Enforcement Coordination.--
                (1) In general.--The Attorney General shall inform the
            Intellectual Property Enforcement Coordinator and the heads of
            appropriate law enforcement agencies of all court orders issued
            under subsection (b), and all amended orders issued under
            subsection (e), regarding foreign infringing sites.
                (2) Alterations.--The Attorney General shall, and the
            defendant may, inform the Intellectual Property Enforcement
            Coordinator of the modification, suspension, expiration, or
            vacation of a court order issued under subsection (b) or an
            amended order issued under subsection (e).

    SEC. 103. MARKET-BASED SYSTEM TO PROTECT U.S. CUSTOMERS AND PREVENT
                        U.S. FUNDING OF SITES DEDICATED TO THEFT OF U.S.
                        PROPERTY.

        (a) Definitions.--In this section:
                (1) Dedicated to theft of u.s. property.--An ``Internet
            site is dedicated to theft of U.S. property'' if--
                        (A) it is an Internet site, or a portion thereof,
                    that is a U.S.-directed site and is used by users
                    within the United States; and
                        (B) either--
                                (i) the U.S.-directed site is primarily
                            designed or operated for the purpose of, has
                            only limited purpose or use other than, or is
                            marketed by its operator or another acting in
                            concert with that operator for use in, offering
                            goods or services in a manner that engages in,
                            enables, or facilitates--
                                        (I) a violation of section 501 of
                                    title 17, United States Code;
                                        (II) a violation of section 1201 of
                                    title 17, United States Code; or
                                        (III) the sale, distribution, or
                                    promotion of goods, services, or
                                    materials bearing a counterfeit mark,
                                    as that term is defined in section
                                    34(d) of the Lanham Act or section 2320
                                    of title 18, United States Code; or
                                (ii) the operator of the U.S.-directed
                            site--
                                        (I) is taking, or has taken,
                                    deliberate actions to avoid confirming
                                    a high probability of the use of the
                                    U.S.-directed site to carry out acts
                                    that constitute a violation of section
                                    501 or 1201 of title 17, United States
                                    Code; or
                                        (II) operates the U.S.-directed
                                    site with the object of promoting, or
                                    has promoted, its use to carry out acts
                                    that constitute a violation of section
                                    501 or 1201 of title 17, United States
                                    Code, as shown by clear expression or
                                    other affirmative steps taken to foster
                                    infringement.
                (2) Qualifying plaintiff.--The term ``qualifying
            plaintiff'' means, with respect to a particular Internet site
            or portion thereof, a holder of an intellectual property right
            harmed by the activities described in paragraph (1) occurring
            on that Internet site or portion thereof.
        (b) Denying U.S. Financial Support of Sites Dedicated to Theft of
    U.S. Property.--
                (1) Payment network providers.--Except in the case of an
            effective counter notification pursuant to paragraph (5), a
            payment network provider shall take technically feasible and
            reasonable measures, as expeditiously as possible, but in any
            case within 5 days after delivery of a notification under
            paragraph (4), that are designed to prevent, prohibit, or
            suspend its service from completing payment transactions
            involving customers located within the United States and the
            Internet site, or portion thereof, that is specified in the
            notification under paragraph (4).
                (2) Internet advertising services.--Except in the case of
            an effective counter notification pursuant to paragraph (5), an
            Internet advertising service that contracts with the operator
            of an Internet site, or portion thereof, that is specified in a
            notification delivered under paragraph (4), to provide
            advertising to or for such site or portion thereof, or that
            knowingly serves advertising to or for such site or portion
            thereof, shall take technically feasible and reasonable
            measures, as expeditiously as possible, but in any case within
            5 days after delivery the notification under paragraph (4),
            that are designed to--
                        (A) prevent its service from providing
                    advertisements to or relating to the Internet site, or
                    portion thereof, that is specified in the notification;
                        (B) cease making available advertisements for such
                    Internet site, or portion thereof, that is specified in
                    the notification, or paid or sponsored search results,
                    links, or other placements that provide access to such
                    Internet site, or portion thereof, that is specified in
                    the notification; and
                        (C) cease providing or receiving any compensation
                    for advertising or related services to, from, or in
                    connection with such Internet site, or portion thereof,
                    that is specified in the notification.
                (3) Designated agent.--
                        (A) In general.--Each payment network provider and
                    each Internet advertising service shall designate an
                    agent to receive notifications described in paragraph
                    (4), by making available through its service, including
                    on its Web site in a location accessible to the public,
                    and by providing to the Copyright Office, substantially
                    the following:
                                (i) The name, address, phone number, and
                            electronic mail address of the agent.
                                (ii) Other contact information that the
                            Register of Copyrights considers appropriate.
                        (B) Directory of agents.--The Register of
                    Copyrights shall maintain and make available to the
                    public for inspection, including through the Internet,
                    in electronic format, a current directory of agents
                    designated under subparagraph (A).
                (4) Notification regarding internet sites dedicated to
            theft of u.s. property.--
                        (A) Requirements.--Subject to subparagraph (B), a
                    notification under this paragraph is effective only if
                    it is a written communication that is provided to the
                    designated agent of a payment network provider or an
                    Internet advertising service and includes substantially
                    the following:
                                (i) A physical or electronic signature of a
                            person authorized to act on behalf of the
                            holder of an intellectual property right harmed
                            by the activities described in subsection
                            (a)(1).
                                (ii) Identification of the Internet site,
                            or portion thereof, dedicated to theft of U.S.
                            property, including either the domain name or
                            Internet Protocol address of such site, or
                            both.
                                (iii) Identification of the specific facts
                            to support the claim that the Internet site, or
                            portion thereof, is dedicated to theft of U.S.
                            property and to clearly show that immediate and
                            irreparable injury, loss, or damage will result
                            to the holder of the intellectual property
                            right harmed by the activities described in
                            subsection (a)(1) in the absence of timely
                            action by the payment network provider or
                            Internet advertising service.
                                (iv) Information reasonably sufficient to
                            establish that the payment network provider or
                            Internet advertising service is providing
                            payment processing or Internet advertising
                            services for such site.
                                (v) Information reasonably sufficient to
                            permit the payment network provider or Internet
                            advertising service to contact the holder of
                            the intellectual property right harmed by the
                            activities described in subsection (a)(1).
                                (vi) A statement that the holder of the
                            intellectual property right has a good faith
                            belief that the use of the owner's works or
                            goods in which the right exists, in the manner
                            described in the notification, is not
                            authorized by the holder, its agent, or law.
                                (vii) A statement that the information in
                            the notification is accurate, and, under
                            penalty of perjury, that the signatory is
                            authorized to act on behalf of the holder of
                            the intellectual property right harmed by the
                            activities described in subsection (a)(1).
                                (viii) Identification of the evidence
                            indicating that the site (or portion thereof)
                            is a U.S.-directed site.
                        (B) Service if no agent designated.--If a payment
                    network provider or Internet advertising service has
                    not designated an agent under paragraph (3), the
                    notification under subparagraph (A) may be provided to
                    any officer or legal representative of such provider or
                    service.
                        (C) Notice to internet site identified in
                    notification.--Upon receipt of an effective
                    notification under this paragraph, a payment network
                    provider or Internet advertising service shall take
                    appropriate steps to ensure timely delivery of the
                    notification to the Internet site identified in the
                    notification.
                (5) Counter notification.--
                        (A) Requirements.--Subject to subparagraph (B), a
                    counter notification is effective under this paragraph
                    only if it is a written communication that is provided
                    to the designated agent of a payment network provider
                    or an Internet advertising service and includes
                    substantially the following:
                                (i) A physical or electronic signature of
                            the owner or operator of the Internet site, or
                            portion thereof, specified in a notification
                            under paragraph (4) subject to which action is
                            to be taken by the payment network provider or
                            Internet advertising service under paragraph
                            (1) or (2), or of the registrant of the domain
                            name used by such site or portion thereof.
                                (ii) In the case of an Internet site
                            specified in the notification under paragraph
                            (4) that is a foreign Internet site, a
                            statement that the owner or operator, or
                            registrant, consents to the jurisdiction of the
                            courts of the United States, and will accept
                            service of process from the person who provided
                            notification under paragraph (4), or an agent
                            of such person, for purposes of adjudicating
                            whether the site is an Internet site dedicated
                            to theft of U.S. property under this section.
                                (iii) A statement under penalty of perjury
                            that the owner or operator, or registrant, has
                            a good faith belief that it does not meet the
                            criteria of an Internet site dedicated to theft
                            of U.S. property as set forth under this
                            section.
                                (iv) The name, address, email address, and
                            telephone number of the owner, operator, or
                            registrant.
                        (B) Service if no agent designated.--If a payment
                    network provider or Internet advertising service has
                    not designated an agent under paragraph (3), the
                    counter notification under subparagraph (A) may be
                    provided to any officer or legal representative of such
                    provider or service.
                (6) Misrepresentations.--Any provider of a notification or
            counter notification who knowingly materially misrepresents
            under this section--
                        (A) that a site is an Internet site dedicated to
                    the theft of U.S. property, or
                        (B) that such site does not meet the criteria of an
                    Internet site dedicated to the theft of U.S. property,
            shall be liable for damages, including costs and attorneys'
            fees, incurred by the person injured by such misrepresentation
            as a result of the misrepresentation.
        (c) Limited Injunctive Relief in Cases of Counter Notification.--
                (1) In personam.--If an effective counter notification is
            made under subsection (b)(5), or if a payment network provider
            fails to comply with subsection (b)(1), or an Internet
            advertising service fails to comply with subsection (b)(2),
            pursuant to a notification under subsection (b)(4) in the
            absence of such a counter notification, a qualifying plaintiff
            may commence an in personam action against--
                        (A) a registrant of a domain name used by the
                    Internet site, or portion thereof, that is subject to
                    the notification under subsection (b)(4); or
                        (B) an owner or operator of the Internet site or
                    portion thereof.
                (2) In rem.--If through due diligence a qualifying
            plaintiff who is authorized to bring an in personam action
            under paragraph (1) with respect to an Internet site dedicated
            to theft of U.S. property is unable to find a person described
            in subparagraphs (A) or (B) of paragraph (1), or no such person
            found has an address within a judicial district of the United
            States, the qualifying plaintiff may commence an in rem action
            against that Internet site or the domain name used by such
            site.
                (3) Notice.--Upon commencing an action under this
            subsection, the qualifying plaintiff shall send a notice of the
            alleged activity described in subsection (a)(1) and intent to
            proceed under this subsection--
                        (A) to the registrant of the domain name of the
                    Internet site, or portion thereof, that is the subject
                    to the notification under subsection (b)(4)--
                                (i) at the postal and electronic mail
                            addresses appearing in the applicable publicly
                            accessible database of registrations, if any,
                            and to the extent such addresses are reasonably
                            available; and
                                (ii) via the postal and electronic mail
                            addresses of the registrar, registry, or other
                            domain name registration authority that
                            registered or assigned the domain name of the
                            Internet site, or portion thereof, to the
                            extent such addresses are reasonably available;
                        (B) to the owner or operator of the Internet site,
                    or portion thereof--
                                (i) at the primary postal and electronic
                            mail addresses for such owner or operator that
                            are provided on the Internet site, or portion
                            thereof, if any, and to the extent such
                            addresses are reasonably available; or
                                (ii) if there is no domain name of the
                            Internet site or portion thereof, via the
                            postal and electronic mail addresses of the
                            Internet Protocol allocation entity appearing
                            in the applicable publicly accessible database
                            of allocations and assignments, if any, and to
                            the extent such addresses are reasonably
                            available; or
                        (C) in any other such form as the court may
                    prescribe, including as may be required by rule 4(f) of
                    the Federal Rules of Civil Procedure.
                (4) Service of process.--For purposes of this section, the
            actions described in this subsection shall constitute service
            of process.
                (5) Relief.--On application of a qualifying plaintiff
            following the commencement of an action under this section with
            respect to an Internet site dedicated to theft of U.S.
            property, the court may issue a temporary restraining order, a
            preliminary injunction, or an injunction, in accordance with
            rule 65 of the Federal Rules of Civil Procedure, against a
            registrant of a domain name used by the Internet site, or
            against an owner or operator of the Internet site, or, in an
            action brought in rem under paragraph (2), against the Internet
            site, or against the domain name used by the Internet site, to
            cease and desist from undertaking any further activity as an
            Internet site dedicated to theft of U.S. property.
        (d) Actions Based on Court Orders.--
                (1) Service and response.--
                        (A) Service by qualifying plaintiff.--A qualifying
                    plaintiff, with the prior approval of the court, may
                    serve a copy of a court order issued under subsection
                    (c) on similarly situated entities described in
                    paragraph (2). Proof of service shall be filed with the
                    court.
                        (B) Response.--An entity served under subparagraph
                    (A) shall, not later than 7 days after the date of such
                    service, file with the court a certification
                    acknowledging receipt of a copy of the order and
                    stating that such entity has complied or will comply
                    with the obligations imposed under paragraph (2), or
                    explaining why the entity will not so comply.
                        (C) Venue for service.--A copy of the court order
                    may be served in any judicial district where an entity
                    resides or may be found.
                (2) Reasonable measures.--After being served with a copy of
            an order pursuant to this subsection, the following shall
            apply:
                        (A) Payment network providers.--
                                (i) Preventing affiliation.--A payment
                            network provider shall take technically
                            feasible and reasonable measures, as
                            expeditiously as possible, but in any case
                            within 5 days after being served with a copy of
                            the court order, or within such time as the
                            court may order, that are designed to prevent,
                            prohibit, or suspend its service from
                            completing payment transactions involving
                            customers located within the United States or
                            subject to the jurisdiction of the United
                            States and any account--
                                        (I) which is used by the Internet
                                    site dedicated to theft of U.S.
                                    property that is subject to the order;
                                    and
                                        (II) through which the payment
                                    network provider would complete such
                                    payment transactions.
                                (ii) No duty to monitor.--A payment network
                            provider is in compliance with clause (i) if it
                            takes action described in that clause with
                            respect to accounts it has as of the date of
                            service of the order, or as of the date of any
                            subsequent notice that its service is being
                            used to complete payment transactions described
                            in clause (i).
                        (B) Internet advertising services.--
                                (i) Required actions.--An Internet
                            advertising service that contracts with the
                            Internet site dedicated to theft of U.S.
                            property that is subject to the order to
                            provide advertising to or for such Internet
                            site, or that knowingly serves advertising to
                            or for such internet site, shall take
                            technically feasible and reasonable measures,
                            as expeditiously as possible, but in any case
                            within 5 days after being served with a copy of
                            the order, or within such time as the court may
                            order, that are designed to--
                                        (I) prevent its service from
                                    providing advertisements to or relating
                                    to the Internet site;
                                        (II) cease making available
                                    advertisements for the Internet site,
                                    or paid or sponsored search results,
                                    links, or other placements that provide
                                    access to the Internet site; and
                                        (III) cease providing or receiving
                                    any compensation for advertising or
                                    related services to, from, or in
                                    connection with the Internet site.
                                (ii) No duty to monitor.--An internet
                            advertising service is in compliance with
                            clause (i) if it takes action described in that
                            clause with respect to accounts it has as of
                            the date on which a copy of the order is
                            served, or as of the date of any subsequent
                            notice that its service is being used for
                            activities described in clause (i).
                (3) Communication with users.--An entity taking an action
            described in this subsection shall determine the means to
            communicate such action to the entity's users or customers.
                (4) Enforcement of orders.--
                        (A) Rule of construction.--The authority under this
                    subsection shall be the sole legal remedy to enforce
                    the obligations of any entity under this subsection.
                        (B) Procedures and relief.--
                                (i) Show cause order.--On a showing by the
                            qualifying plaintiff of probable cause to
                            believe that an entity served with a copy of a
                            court order issued under subsection (c) has not
                            complied with its obligations under this
                            subsection by reason of such court order, the
                            court shall require the entity to show cause
                            why an order should not issue--
                                        (I) to require compliance with the
                                    obligations of this subsection; and
                                        (II) to impose an appropriate
                                    monetary sanction, consistent with the
                                    court's exercise of its equitable
                                    authority, to enforce compliance with
                                    its lawful orders, if the entity--
        (aa) has knowingly and willfully failed to file a certification
        required by paragraph (1)(B);
        (bb) has filed such a certification agreeing to comply but has
        knowingly and willfully failed to do so; or
        (cc) has knowingly and willfully certified falsely that compliance
        with the requirements of paragraph (2) is not required by law.
                                (ii) Service of process.--The order to show
                            cause, and any other process, may be served in
                            any judicial district where the entity resides
                            or may be found.
                        (C) Defense.--An entity against whom relief is
                    sought under subparagraph (B) may establish an
                    affirmative defense by showing that the entity does not
                    have the technical means to comply with this subsection
                    without incurring an unreasonable economic burden, or
                    that the order is not authorized by this subsection.
                    Such showing shall not be presumed to be a complete
                    defense but shall serve as a defense only for those
                    measures for which a technical limitation on compliance
                    is demonstrated or for such portions of the order as
                    are demonstrated to be unauthorized by this subsection.
                (5) Immunity.--
                        (A) Immunity from suit.--Other than in an action
                    pursuant to paragraph (4), no cause of action shall lie
                    in any Federal or State court or administrative agency
                    against any entity served with a copy of a court order
                    issued under subsection (c), or against any director,
                    officer, employee, or agent thereof, for any act
                    reasonably designed to comply with this subsection or
                    reasonably arising from such order.
                        (B) Immunity from liability.--Other than in an
                    action pursuant to paragraph (4)--
                                (i) any entity served with a copy of an
                            order under this subsection, and any director,
                            officer, employee, or agent thereof, shall not
                            be liable for any acts reasonably designed to
                            comply with this subsection or reasonably
                            arising from such order; and
                                (ii) any--
                                        (I) actions taken by customers of
                                    such entity to circumvent any
                                    restriction on access to the Internet
                                    site, or portion thereof that is
                                    subject to such order, that is
                                    instituted pursuant to this subsection,
                                    or
                                        (II) act, failure, or inability to
                                    restrict access to an Internet site or
                                    portion thereof that is subject to such
                                    order, despite good faith efforts to
                                    comply with such order by such entity,
                            shall not be used by any person in any claim or
                            cause of action against such entity.
        (e) Modification or Vacation of Orders.--
                (1) In general.--At any time after the issuance of an order
            under subsection (c), or an amended order issued under
            subsection (f), with respect to an Internet site dedicated to
            theft of U.S. property, a motion to modify, suspend, or vacate
            the order may be filed by--
                        (A) any person, or owner or operator of property,
                    that is subject to the order;
                        (B) any registrant of the domain name, or the owner
                    or operator, of such Internet site;
                        (C) any domain name registrar, registry, or other
                    domain name registration authority that has registered
                    or assigned the domain name of such Internet site; or
                        (D) any entity that has been served with a copy of
                    an order under subsection (d), or an amended order
                    under subsection (f), that requires such entity to take
                    action prescribed in that subsection.
                (2) Relief.--Relief under this subsection shall be proper
            if the court finds that--
                        (A) the Internet site subject to the order is no
                    longer, or never was, an Internet site dedicated to
                    theft of U.S. property; or
                        (B) the interests of justice otherwise require that
                    the order be modified, suspended, or vacated.
                (3) Consideration.--In making a relief determination under
            paragraph (2), a court may consider whether the domain name of
            the Internet site has expired or has been re-registered by an
            entity other than the entity that is subject to the order with
            respect to which the motion under paragraph (1) is brought.
                (4) Intervention.--An entity required to take action
            pursuant to subsection (d) if an order issues under subsection
            (c) may intervene at any time in any action commenced under
            subsection (c) that may result in such order, or in any action
            to modify, suspend, or vacate such order under this subsection.
        (f) Amended Orders.--The qualifying plaintiff, if alleging that an
    Internet site previously adjudicated in an action under this section to
    be an Internet site dedicated to theft of U.S. property is accessible
    or has been reconstituted at a different domain name or Internet
    Protocol address, may petition the court to amend the order issued
    under this section accordingly.
        (g) Reporting of Orders.--
                (1) In general.--The qualifying plaintiff shall inform the
            Intellectual Property Enforcement Coordinator of any court
            order issued under subsection (c) or amended order issued under
            subsection (f).
                (2) Alterations.--Upon the modification, suspension,
            expiration, or vacation of a court order issued under
            subsection (c) or an amended order issued under subsection (f),
            the qualifying plaintiff shall, and the defendant may, so
            inform the Intellectual Property Enforcement Coordinator.

    SEC. 104. IMMUNITY FOR TAKING VOLUNTARY ACTION AGAINST SITES DEDICATED
                        TO THEFT OF U.S. PROPERTY.

        No cause of action shall lie in any Federal or State court or
    administrative agency against, no person may rely in any claim or cause
    of action against, and no liability for damages to any person shall be
    granted against, a service provider, payment network provider, Internet
    advertising service, advertiser, Internet search engine, domain name
    registry, or domain name registrar for taking any action described in
    section 102(c)(2), section 103(d)(2), or section 103(b) with respect to
    an Internet site, or otherwise voluntarily blocking access to or ending
    financial affiliation with an Internet site, in the reasonable belief
    that--
                (1) the Internet site is a foreign infringing site or is an
            Internet site dedicated to theft of U.S. property; and
                (2) the action is consistent with the entity's terms of
            service or other contractual rights.

    SEC. 105. IMMUNITY FOR TAKING VOLUNTARY ACTION AGAINST SITES THAT
                        ENDANGER PUBLIC HEALTH.

        (a) Refusal of Service.--A service provider, payment network
    provider, Internet advertising service, advertiser, Internet search
    engine, domain name registry, or domain name registrar, acting in good
    faith and based on credible evidence, may stop providing or refuse to
    provide services to an Internet site that endangers the public health.
        (b) Immunity From Liability.--An entity described in subsection
    (a), including its directors, officers, employees, or agents, that
    ceases or refuses to provide services under subsection (a) shall not be
    liable to any person under any Federal or State law for such action.
        (c) Definitions.--In this section:
                (1) Adulterated.--The term ``adulterated'' has the meaning
            given that term in section 501 of the Federal Food, Drug, and
            Cosmetic Act (21 U.S.C. 351).
                (2) Internet site that endangers the public health.--The
            term ``Internet site that endangers the public health'' means
            an Internet site that is primarily designed or operated for the
            purpose of, has only limited purpose or use other than, or is
            marketed by its operator or another acting in concert with that
            operator for use in--
                        (A) offering, selling, dispensing, or distributing
                    any prescription medication, and does so regularly
                    without a valid prescription; or
                        (B) offering, selling, dispensing, or distributing
                    any prescription medication that is adulterated or
                    misbranded.
                (3) Misbranded.--the term ``misbranded'' has the meaning
            given that term in section 502 of the Federal Food, Drug, and
            Cosmetic Act (21 U.S.C. 352).
                (4) Prescription medication.--
                        (A) Prescription medication.--The term
                    ``prescription medication'' means a drug that is
                    subject to section 503(b) of the Federal Food, Drug,
                    and Cosmetic Act (21 U.S.C. 353(b)).
                        (B) Drug.--The term ``drug'' has the meaning given
                    that term in section 201(g)(1) of the Federal Food
                    Drug, and Cosmetic Act (21 U.S.C. 321(g)(1)).
                (5) Valid prescription.--The term ``valid prescription''
            has the meaning given that term in section 309(e)(2)(A) of the
            Controlled Substances Act (21 U.S.C. 829(e)(2)(A)).

    SEC. 106. GUIDELINES AND STUDY.

        (a) Guidelines.--The Attorney General shall--
                (1) provide appropriate resources and procedures for case
            management and development to effect timely disposition of
            actions brought under this title;
                (2) develop a deconfliction process in consultation with
            appropriate law enforcement agencies, including U.S.
            Immigration and Customs Enforcement, to coordinate enforcement
            activities under this title;
                (3) publish procedures developed in consultation with
            appropriate law enforcement agencies, including U.S.
            Immigration and Customs Enforcement, to receive information
            from the public relevant to the enforcement of this title; and
                (4) provide guidance to intellectual property rights
            holders about what information such rights holders should
            provide to assist in initiating an investigation or to
            supplement an ongoing investigation pursuant to this title.
        (b) Study.--
                (1) Nature of study.--The Register of Copyrights, in
            consultation with appropriate departments and agencies of the
            United States and other stakeholders, shall conduct a study on
            the enforcement and effectiveness of this title and on any need
            to amend the provisions of this title to adapt to emerging
            technologies.
                (2) Reports to congress.--Not later than 2 years after the
            date of the enactment of this Act, the Register of Copyrights
            shall submit to the Committees on the Judiciary of the House of
            Representatives and the Senate a report containing the results
            of the study conducted under this subsection and any
            recommendations that the Register may have as a result of the
            study.

    SEC. 107. DENYING U.S. CAPITAL TO NOTORIOUS FOREIGN INFRINGERS.

        (a) Identification and Recommendations Regarding Notorious Foreign
    Infringers.--
                (1) In general.--Using existing resources, the Intellectual
            Property Enforcement Coordinator, in consultation with the
            Secretaries of Treasury and Commerce, the United States Trade
            Representative, the Chairman of the Securities and Exchange
            Commission, and the heads of other departments and appropriate
            agencies, shall identify and conduct an analysis of notorious
            foreign infringers whose activities cause significant harm to
            holders of intellectual property rights in the United States.
                (2) Public input.--In carrying out paragraph (1), the
            Intellectual Property Enforcement Coordinator shall solicit and
            give consideration to the views and recommendations of members
            of the public, including holders of intellectual property
            rights in the United States.
        (b) Report to Congress.--The Intellectual Property Enforcement
    Coordinator shall, not later than 6 months after the date of the
    enactment of this Act, submit to the Committees on the Judiciary of the
    House of Representatives and the Senate a report that includes the
    following:
                (1) An analysis of notorious foreign infringers and a
            discussion of how these infringers violate industry norms
            regarding the protection of intellectual property.
                (2) An analysis of the significant harm inflicted by
            notorious foreign infringers on consumers, businesses, and
            intellectual property industries in the United States and
            abroad.
                (3) An examination of whether notorious foreign infringers
            have attempted to or succeeded in accessing capital markets in
            the United States for funding or public offerings.
                (4) An analysis of the adequacy of relying upon foreign
            governments to pursue legal action against notorious foreign
            infringers.
                (5) A discussion of specific policy recommendations to
            deter the activities of notorious foreign infringers and
            encourage foreign businesses to adopt industry norms that
            promote the protection of intellectual property globally,
            including addressing--
                        (A) whether notorious foreign infringers that
                    engage in significant infringing activity should be
                    prohibited by the laws of the United States from
                    seeking to raise capital in the United States,
                    including offering stock for sale to the public; and
                        (B) whether the United States Government should
                    initiate a process to identify and designate foreign
                    entities from a list of notorious foreign infringers
                    that would be prohibited from raising capital in the
                    United States.

    TITLE II--ADDITIONAL ENHANCEMENTS TO COMBAT INTELLECTUAL PROPERTY THEFT

    SEC. 201. STREAMING OF COPYRIGHTED WORKS IN VIOLATION OF CRIMINAL LAW.

        (a) Title 17 Amendments.--Section 506(a) of title 17, United States
    Code, is amended to read as follows:
        ``(a) Criminal Infringement.--
                ``(1) In general.--Any person who willfully infringes a
            copyright shall be punished as provided under section 2319 of
            title 18, if the infringement was committed--
                        ``(A) for purposes of commercial advantage or
                    private financial gain;
                        ``(B) by the reproduction or distribution,
                    including by electronic means, during any 180-day
                    period, of 1 or more copies or phonorecords of 1 or
                    more copyrighted works, or by the public performance by
                    means of digital transmission, during any 180-day
                    period, of 1 or more copyrighted works, when the total
                    retail value of the copies or phonorecords, or of the
                    public performances, is more than $1,000; or
                        ``(C) by the distribution or public performance of
                    a work being prepared for commercial dissemination, by
                    making it available on a computer network accessible to
                    members of the public, if such person knew or should
                    have known that the work was intended for commercial
                    dissemination.
                ``(2) Evidence.--For purposes of this subsection, evidence
            of reproduction, distribution, or public performance of a
            copyrighted work, by itself, shall not be sufficient to
            establish willful infringement of a copyright.
                ``(3) Definition.--In this subsection, the term `work being
            prepared for commercial dissemination' means--
                        ``(A) a computer program, a musical work, a motion
                    picture or other audiovisual work, or a sound
                    recording, if, at the time of unauthorized distribution
                    or public performance--
                                ``(i)(I) the copyright owner has a
                            reasonable expectation of commercial
                            distribution; and
                                ``(II) the copies or phonorecords of the
                            work have not been commercially distributed in
                            the United States by or with the authorization
                            of the copyright owner; or
                                ``(ii)(I) the copyright owner does not
                            intend to offer copies of the work for
                            commercial distribution but has a reasonable
                            expectation of other forms of commercial
                            dissemination of the work; and
                                ``(II) the work has not been commercially
                            disseminated to the public in the United States
                            by or with the authorization of the copyright
                            owner;
                        ``(B) a motion picture, if, at the time of
                    unauthorized distribution or public performance, the
                    motion picture--
                                ``(i)(I) has been made available for
                            viewing in a motion picture exhibition
                            facility; and
                                ``(II) has not been made available in
                            copies for sale to the general public in the
                            United States by or with the authorization of
                            the copyright owner in a format intended to
                            permit viewing outside a motion picture
                            exhibition facility; or
                                ``(ii) had not been commercially
                            disseminated to the public in the United States
                            by or with the authorization of the copyright
                            owner more than 24 hours before the
                            unauthorized distribution or public
                            performance.''.
        (b) Title 18 Amendments.--Section 2319 of title 18, United States
    Code, is amended--
                (1) in subsection (b)(1), by striking ``during any 180-day
            period'' and all that follows and insert ``of at least 10
            copies or phonorecords, or of at least 10 public performances
            by means of digital transmission, of 1 or more copyrighted
            works, during any 180-day period, which have a total retail
            value of more than $2,500;'';
                (2) in subsection (c)--
                        (A) in paragraph (1), by striking ``of 10 or more
                    copies or phonorecords'' and all that follows and
                    inserting ``including by electronic means, of at least
                    10 copies or phonorecords, or of at least 10 public
                    performances by means of digital transmission, of 1 or
                    more copyrighted works, during any 180-day period,
                    which have a total retail value of more than $2,500;'';
                    and
                        (B) in paragraph (3), by striking ``if the
                    offense'' and all that follows and inserting ``in any
                    other case;'';
                (3) in subsection (d)(4), by striking ``under paragraph
            (2)'' and inserting ``committed for purposes of commercial
            advantage or private financial gain under subsection (a)'';
                (4) in subsection (f)--
                        (A) by amending paragraph (2) to read as follows:
                ``(2) the terms `reproduction', `distribution', and `public
            performance' refer to the exclusive rights of a copyright owner
            under paragraphs (1), (3), (4), and (6), respectively, of
            section 106 (relating to exclusive rights in copyrighted
            works), as limited by sections 107 through 122, of title 17;
            and'';
                        (B) in paragraph (3), by striking ``; and'' and
                    inserting a period; and
                        (C) by striking paragraph (4); and
                (5) by adding at the end the following new subsection:
        ``(g) Evidence of Total Retail Value.--For purposes of this section
    and section 506(a) of title 17, total retail value may be shown by
    evidence of--
                ``(1) the total retail price that persons receiving the
            reproductions, distributions, or public performances
            constituting the offense would have paid to receive such
            reproductions, distributions, or public performances lawfully;
                ``(2) the total economic value of the reproductions,
            distributions, or public performances to the infringer or to
            the copyright owner, as shown by evidence of fee, advertising,
            or other revenue that was received by the person who commits
            the offense, or that the copyright owner would have been
            entitled to receive had such reproductions, distributions, or
            public performances been offered lawfully; or
                ``(3) the total fair market value of licenses to offer the
            type of reproductions, distributions, or public performances
            constituting the offense.''.
        (c) Rule of Construction.--Any person acting with a good faith
    reasonable basis in law to believe that the person's conduct is lawful
    shall not be considered to have acted willfully for purposes of the
    amendments made by this section. Such person includes, but is not
    limited to, a person engaged in conduct forming the basis of a bona
    fide commercial dispute over the scope of existence of a contract or
    license governing such conduct where such person has a reasonable basis
    in law to believe that such conduct is noninfringing. Nothing in this
    subsection shall affect the application or interpretation of the
    willfulness requirement in any other provision of civil or criminal
    law.

    SEC. 202. TRAFFICKING IN INHERENTLY DANGEROUS GOODS OR SERVICES.

        Section 2320 of title 18, United States Code, is amended as
    follows:
                (1) Subsection (a) is amended to read as follows:
                ``(1) In general.--
                        ``(A) Offenses.--Whoever--
                                ``(i) intentionally traffics or attempts to
                            traffic in goods or services and knowingly uses
                            a counterfeit mark on or in connection with
                            such goods or services,
                                ``(ii) intentionally traffics or attempts
                            to traffic in labels, patches, stickers,
                            wrappers, badges, emblems, medallions, charms,
                            boxes, containers, cans, cases, hangtags,
                            documentation, or packaging of any type or
                            nature, knowing that a counterfeit mark has
                            been applied thereto, the use of which is
                            likely to cause confusion, to cause mistake, or
                            to deceive, or
                                ``(iii) intentionally imports, exports, or
                            traffics in counterfeit drugs or intentionally
                            participates in or knowingly aids drug
                            counterfeiting,
                    shall, if an individual, be fined not more than
                    $2,000,000 or imprisoned not more than 10 years, or
                    both, and, if a person other than an individual, be
                    fined not more than $5,000,000.
                        ``(B) Subsequent offenses.--In the case of an
                    offense by a person under this paragraph that occurs
                    after that person is convicted of another offense under
                    this paragraph, the person convicted, if an individual,
                    shall be fined not more than $5,000,000 or imprisoned
                    not more than 20 years, or both, and if other than an
                    individual, shall be fined not more than $15,000,000.
                ``(2) Serious bodily harm or death.--
                        ``(A) Serious bodily harm.--If the offender
                    knowingly or recklessly causes or attempts to cause
                    serious bodily injury from conduct in violation of
                    paragraph (1), the penalty shall be, for an individual,
                    a fine of not more than $5,000,000 or imprisonment for
                    any term of years or for life, or both, and for other
                    than an individual, a fine of not more than
                    $15,000,000.
                        ``(B) Death.--If the offender knowingly or
                    recklessly causes or attempts to cause death from
                    conduct in violation of paragraph (1), the penalty
                    shall be, for an individual, a fine of not more than
                    $5,000,000 or imprisonment for any term of years or for
                    life, or both, and for other than an individual, a fine
                    of not more than $15,000,000.
                ``(3) Military goods or services.--
                        ``(A) In general.--A person who commits an offense
                    under paragraph (1) shall be punished in accordance
                    with subparagraph (B) if--
                                ``(i) the offense involved a good or
                            service described in paragraph (1) that if it
                            malfunctioned, failed, or was compromised,
                            could reasonably be foreseen to cause--
                                        ``(I) serious bodily injury or
                                    death;
                                        ``(II) disclosure of classified
                                    information;
                                        ``(III) impairment of combat
                                    operations; or
                                        ``(IV) other significant harm--
        ``(aa) to a member--
                                                        ``(AA) of the Armed
                                                    Forces; or
                                                        ``(BB) of a
                                                    Federal, State, or
                                                    local law enforcement
                                                    agency; or
        ``(bb) to national security or critical infrastructure; and
                                ``(ii) the person had knowledge that the
                            good or service is falsely identified as
                            meeting military standards or is intended for
                            use in a military or national security
                            application, or a law enforcement or critical
                            infrastructure application.
                        ``(B) Penalties.--
                                ``(i) Individual.--An individual who
                            commits an offense described in subparagraph
                            (A) shall be fined not more than $5,000,000,
                            imprisoned for not more than 20 years, or both.
                                ``(ii) Person other than an individual.--A
                            person other than an individual that commits an
                            offense described in subparagraph (A) shall be
                            fined not more than $15,000,000.
                        ``(C) Subsequent offenses.--
                                ``(i) Individual.--An individual who
                            commits an offense described in subparagraph
                            (A) after the individual is convicted of an
                            offense under subparagraph (A) shall be fined
                            not more than $15,000,000, imprisoned not more
                            than 30 years, or both.
                                ``(ii) Person other than an individual.--A
                            person other than an individual that commits an
                            offense described in subparagraph (A) after the
                            person is convicted of an offense under
                            subparagraph (A) shall be fined not more than
                            $30,000,000.''.
                (2) Subsection (e) is amended--
                        (A) in paragraph (1), by striking the period at the
                    end and inserting a semicolon;
                        (B) in paragraph (3), by striking ``and'' at the
                    end;
                        (C) in paragraph (4), by striking the period at the
                    end and inserting a semicolon; and
                        (D) by adding at the end the following:
                ``(5) the term `counterfeit drug' has the meaning given
            that term in section 201(g)(2) of the Federal Food Drug, and
            Cosmetic Act (21 U.S.C. 321(g)(2));
                ``(6) the term `critical infrastructure' has the meaning
            given that term in section 2339D(c);
                ``(7) the term `drug counterfeiting' means any act
            prohibited by section 301(i) of the Federal Food Drug, and
            Cosmetic Act (21 U.S.C. 331(i));
                ``(8) the term `final dosage form' has the meaning given
            that term in section 735(4) of the Federal Food, Drug, and
            Cosmetic Act (21 U.S.C. 379g(4));
                ``(9) the term `falsely identified as meeting military
            standards' relating to a good or service means there is a
            material misrepresentation that the good or service meets a
            standard, requirement, or specification issued by the
            Department of Defense, an Armed Force, or a reserve component;
                ``(10) the term `use in a military or national security
            application' means the use of a good or service, independently,
            in conjunction with, or as a component of another good or
            service--
                        ``(A) during the performance of the official duties
                    of the Armed Forces of the United States or the reserve
                    components of the Armed Forces; or
                        ``(B) by the United States to perform or directly
                    support--
                                ``(i) combat operations; or
                                ``(ii) critical national defense or
                            national security functions; and
                ``(11) the term `use in a law enforcement or critical
            infrastructure application' means the use of a good or service,
            independently, in conjunction with, or as a component of,
            another good or service by a person who is directly engaged
            in--
                        ``(A) Federal, State, or local law enforcement; or
                        ``(B) an official function pertaining to critical
                    infrastructure.''.

    SEC. 203. PROTECTING U.S. BUSINESSES FROM FOREIGN AND ECONOMIC
                        ESPIONAGE.

        (a) For Offenses Committed by Individuals.--Section 1831(a) of
    title 18, United States Code, is amended, in the matter after paragraph
    (5)--
                (1) by striking ``15 years'' and inserting ``20 years'';
            and
                (2) by striking ``not more than $500,000'' and inserting
            ``not less than $1,000,000 and not more than $5,000,000''.
        (b) For Offenses Committed by Organizations.--Section 1831(b) of
    such title is amended by striking ``$10,000,000'' and inserting ``not
    more than the greater of $10,000,000 or 3 times the value of the stolen
    trade secret to the organization (including expenses for research and
    design or other costs of reproducing the trade secret that the
    organization has thereby avoided)''.

    SEC. 204. AMENDMENTS TO SENTENCING GUIDELINES.

         Not later than 180 days after the date of the enactment of this
    Act, pursuant to its authority under section 994(p) of title 28, United
    States Code, the United States Sentencing Commission shall--
                (1) review, and if appropriate, amend Federal Sentencing
            Guidelines and policy statements applicable to persons
            convicted of--
                        (A) intellectual property offenses;
                        (B) an offense under section 2320(a) of title 18,
                    United States Code; or
                        (C) an offense under section 1831 of title 18,
                    United States Code;
                (2) in carrying out such review, consider amending such
            Guidelines and policy statements to--
                        (A) apply an appropriate offense level enhancement
                    for intellectual property offenses committed in
                    connection with an organized criminal enterprise;
                        (B) apply an appropriate offense level enhancement
                    to the simple misappropriation of a trade secret;
                        (C) apply an additional appropriate offense level
                    enhancement if the defendant transmits or attempts to
                    transmit the stolen trade secret outside of the United
                    States and an additional appropriate enhancement if the
                    defendant instead commits economic espionage;
                        (D) provide that when a defendant transmits trade
                    secrets outside of the United States or commits
                    economic espionage, that the defendant should face a
                    minimum offense level;
                        (E) provide for an offense level enhancement for
                    Guidelines relating to the theft of trade secrets and
                    economic espionage, including trade secrets transferred
                    or attempted to be transferred outside of the United
                    States;
                        (F) apply an appropriate offense level enhancement
                    and minimum offense level for offenses under section
                    2320(a) of title 18, United States Code, that involve a
                    product intended for use in a military or national
                    security application, or a law enforcement or critical
                    infrastructure application;
                        (G) ensure that the Guidelines and policy
                    statements (including section 2B5.3 of the Federal
                    Sentencing Guidelines (and any successor thereto))
                    reflect--
                                (i) the serious nature of the offenses
                            described in section 2320(a) of title 18,
                            United States Code;
                                (ii) the need for an effective deterrent
                            and appropriate punishment to prevent offenses
                            under section 2320(a) of title 18, United
                            States Code; and
                                (iii) the effectiveness of incarceration in
                            furthering the objectives described in clauses
                            (i) and (ii); and
                        (H) ensure reasonable consistency with other
                    relevant directives and Guidelines and Federal
                    statutes;
                (3) submit to Congress a report detailing the Commission's
            actions with respect to each potential amendment described in
            paragraph (2);
                (4) make such conforming amendments to the Federal
            Sentencing Guidelines as the Commission determines necessary to
            achieve consistency with other Guideline provisions and
            applicable law; and
                (5) promulgate the Guidelines, policy statements, or
            amendments provided for in this section as soon as practicable
            in accordance with the procedure set forth in section 21(a) of
            the Sentencing Act of 1987 (28 U.S.C. 994 note), as though the
            authority under that Act had not expired.

    SEC. 205. DEFENDING INTELLECTUAL PROPERTY RIGHTS ABROAD.

        (a) Resources To Protect Intellectual Property Rights.--
                (1) Policy.--The Secretary of State and the Secretary of
            Commerce, in consultation with the Register of Copyrights,
            shall ensure that the protection in foreign countries of the
            intellectual property rights of United States persons is a
            significant component of United States foreign and commercial
            policy in general, and in relations with individual countries
            in particular.
                (2) Dedication of resources.--The Secretary of State and
            the Secretary of Commerce, in consultation with the Register of
            Copyrights, and the heads of other appropriate departments and
            agencies, shall ensure that adequate resources are available at
            the United States embassy or diplomatic mission (as the case
            may be) in any country that is identified under section
            182(a)(1) of the Trade Act of 1974 (19 U.S.C. 2242(a)(1)) to
            ensure--
                        (A) aggressive support for enforcement action
                    against violations of the intellectual property rights
                    of United States persons in such country;
                        (B) cooperation with and support for the host
                    government's efforts to conform its applicable laws,
                    regulations, practices, and processes to enable the
                    host government to honor its international and
                    bilateral obligations with respect to the protection of
                    intellectual property rights;
                        (C) consistency with the policy and country-
                    specific priorities set forth in the most recent report
                    of USTR under such section 182(a)(1); and
                        (D) support for holders of United States
                    intellectual property rights and industries whose
                    access to foreign markets is improperly restricted by
                    intellectual property related issues.
        (b) New Appointments.--
                (1) Appointments and administration.--The Secretary of
            State and the Secretary of Commerce, in consultation with the
            Register of Copyrights, shall appoint at least one intellectual
            property attache to be assigned to the United States embassy or
            diplomatic mission (as the case may be) in a country in each
            geographic region covered by a regional bureau of the
            Department of State. The Director of the Patent and Trademark
            Office shall maintain authority over hiring, personnel ratings,
            and objectives for the attaches, in consultation with the
            Secretary of State. Depending on experience and expertise,
            intellectual property attaches shall be designated as the
            diplomatic rank in-mission of First Secretary or Counselor.
                (2) Regions defined.--The geographic regions referred to in
            paragraph (1) are the following:
                        (A) Africa.
                        (B) Europe and Eurasia.
                        (C) East Asia and the Pacific.
                        (D) The Near East.
                        (E) South and Central Asia and the Pacific.
                        (F) The Western Hemisphere.
                (3) Duties.--The intellectual property attaches appointed
            under this subsection shall focus primarily on intellectual
            property matters, including the development, protection, and
            enforcement of applicable law. Each intellectual property
            attache shall work, in accordance with guidance from the
            Director, and in coordination with appropriate staff at the
            Departments of Commerce and State and the Copyright Office, to
            advance the policy goals and priorities of the United States
            Government. Those policy goals and priorities shall be
            consistent with USTR's reports under section 182(a)(1) of the
            Trade Act of 1974. The intellectual property attaches shall
            work with United States holders of intellectual property rights
            and industry to address intellectual property rights violations
            in the countries where the attaches are assigned.
        (c) Priority Assignments.--
                (1) In general.--Subject to paragraph (2), in designating
            the United States embassies or diplomatic missions where
            attaches will be assigned under subsection (b), the Secretary
            of State and the Secretary of Commerce shall give priority to
            countries where the activities of an attache are likely to
            achieve the greatest potential benefit in reducing intellectual
            property infringement in the United States market, to advance
            the intellectual property rights of United States persons and
            their licensees, and to advance the interests of United States
            persons who may otherwise be harmed by violations of
            intellectual property rights in those countries.
                (2) Assignments to priority countries.--In carrying out
            paragraph (1), the Secretary of State and the Secretary of
            Commerce shall consider assigning intellectual property
            attaches--
                        (A) to the countries that have been identified
                    under section 182(a)(1) of the Trade Act of 1974 (19
                    U.S.C. 2242(a)(1)); and
                        (B) to countries of critical economic importance to
                    the advancement of United States intellectual property
                    rights and interests.
        (d) Training.--The Secretary of State and the Secretary of Commerce
    shall ensure that each intellectual property attache appointed under
    subsection (b) is fully trained for the responsibilities of the
    position before assuming duties at the United States embassy or
    diplomatic mission to which the attache is assigned.
        (e) Coordination.--The activities of intellectual property attaches
    under this section shall be determined in consultation with the
    Intellectual Property Enforcement Coordinator. The Director shall
    assist in coordinating the policy priorities and activities of the
    intellectual property attaches and oversee administrative and personnel
    matters.
        (f) Training and Technical Assistance.--
                (1) Consistency.--Using existing resources, all training
            and technical assistance provided by intellectual property
            attaches appointed under subsection (b), or under other
            authority, relating to intellectual property enforcement and
            protection abroad shall be designed to be consistent with the
            policy and country-specific priorities set forth in the most
            recent report of USTR under section 182(a) of the Trade Act of
            1974.
                (2) Role of ipec.--Such training and technical assistance
            programs shall be carried out in consultation with the
            Intellectual Property Enforcement Coordinator. The Director
            shall assist in coordinating the training and technical
            assistance programs conducted by intellectual property
            attaches.
        (g) Activities in Other Countries.--In the case of countries that
    are not identified under section 182(a)(1) of the Trade Act of 1974,
    the activities of Federal departments and agencies with respect to
    intellectual property rights in those countries, intellectual property
    programs and outreach of the United States Government in those
    countries, and training and technical assistance programs of the United
    States Government relating to intellectual property in those countries
    may be conducted to the extent they are consistent with compelling
    commercial or foreign policy interests of the United States.
        (h) Reports to Congress.--The Intellectual Property Enforcement
    Coordinator shall include in the annual report submitted under section
    314 of the Prioritizing Resources and Organization for Intellectual
    Property Act of 2008 (15 U.S.C. 8114) on the activities of the advisory
    committee established under section 301 of that Act (15 U.S.C. 8111)
    information on the appointment, designation for assignment, and
    activities of all intellectual property attaches of any Federal
    department or agency who are serving abroad.
        (i) Definitions.--In this section:
                (1) Director.--The terms ``Director of the Patent and
            Trademark Office'' and ``Director'' mean the Under Secretary
            for Intellectual Property and Director of the Untied States
            Patent and Trademark Office.
                (2) Intellectual property enforcement.--The term
            ``intellectual property enforcement'' has the meaning given
            that term in section 302 of the Prioritizing Resources and
            Organization for Intellectual Property Act of 2008 (15 U.S.C.
            8112).
                (3) Intellectual property enforcement coordinator.--The
            term ``Intellectual Property Enforcement Coordinator'' means
            the Intellectual Property Enforcement Coordinator appointed
            under section 301 of the Prioritizing Resources and
            Organization for Intellectual Property Act of 2008 (15 U.S.C.
            8111).
                (4) Intellectual property rights.--The term ``intellectual
            property rights'' means the rights of holders of copyrights,
            patents, trademarks, other forms of intellectual property, and
            trade secrets.
                (5) USTR.--The term ``USTR'' means the United States Trade
            Representative.
                (6) United states person.--The term ``United States
            person'' means--
                        (A) any United States resident or national;
                        (B) any corporation, partnership, other business
                    entity, or other organization, that is organized under
                    the laws of the United States; and
                        (C) any foreign subsidiary or affiliate (including
                    any permanent foreign establishment) of any
                    corporation, partnership, business entity, or
                    organization described in subparagraph (B), that is
                    controlled in fact by such corporation, partnership,
                    business entity, or organization.
        (j) Authorization of Appropriations.--The Secretary of State and
    the Secretary of Commerce shall provide for the training and support of
    the intellectual property attaches appointed under subsection (b) using
    existing resources.

        Mr. Conyers. Thank you, Chairman Smith, and good morning to
    my fellow colleagues on the Committee. This is a very important
    hearing, and I want to commend you on your statement, because
    you raise some issues that I think we will have to go into
    quite carefully.
        Now, there have been attempts to deal with the problem that
    is before us today. But HR 3261, the ``Stop Online Piracy
    Act,'' represents a great deal of work and some experience from
    our attempts to deal with this subject before.
        I am very pleased that this is a bipartisan bill, and I
    think that is very important.
        Now, there have been a number of attempts to stop online
    intellectual property theft and fraud. Some of the leading
    Internet service providers and right holders, and the best
    practices standards that are being developed with in the
    advertising network and payment processing companies, and
    particularly MasterCard, have all come to my intention. I
    commend them. But this private cooperation is not sufficient.
    Our studies have shown that upwards of one-quarter of all
    Internet traffic is copyright infringing. And to those who say
    that a bill to stop online theft will break the Internet, I
    would like to point out that it is not likely to happen.
        Users connect to the Internet through service providers,
    like AT&T and Verizon, but by most accounts, and I have to
    bring up Google's name again in the beginning of this
    discussion, Google's search engine connects users to Internet
    content more often than any other, and places the most
    advertisements. As users surf the web, their computers, connect
    with domain name servers to resolve the site name that they
    type into their browser and its location on the web.
        Now, we are getting a number of reactions from this
    proposal. Some rightsholders have said that the market based
    process outlined in Section 103 of the bill does not go far,
    and too many players who profit from piracy. But on the other
    hand, there are some in the technology sector that have said
    this bill will break the Internet and strangle startups and
    Silicon Valley giants alike. And so, I reluctantly asked to put
    this into the record, ``The attack of the Internet killers.''
        Mr. Smith. Without objection, that will be made a part of
    the record.
        [The information referred to follows:]

                                   __________

        Mr. Conyers. It is very serious business. ``Do not walk,
    run.'' ``Tell Congress there is a better way.'' ``Threatens
    global Internet security.'' ``Kills cloud computers.'' ``An
    American job crushing monster.'' That is our bill, H.R. 3261.
        Mr. Smith. Is that not a comic?
        Mr. Conyers. No, this is serious. [Laughter.]
        It is a terrible thing, and that we ought to know better.
        Now, on a more serious note, we have from our friends in
    the American Civil Liberties Union a caution that I have to
    take more seriously because they have some questions that I
    think needs to be examined here, and that is, the first one is
    that there is an Attorney General section of the bill that only
    the Justice Department, in its wisdom, can ask a court to
    filter or block web content. What the American Civil Liberties
    Union is telling us is that we will, with this legislation,
    inadvertently involve non-infringing operators, and that this
    would violate their constitutional rights.
        Now, against that, I am going to ask to put in the imminent
    First Amendment scholar, Floyd Abrams', recommendation that
    says that the notion that this bill threatens freedom of
    expression is unsupportable. It protects creators of free
    speech, as Congress has done and the Judiciary Committee
    especially has been particularly sensitive to protecting. And
    so, I ask unanimous consent to put in the statement of attorney
    Floyd Abrams. And I yield back the balance of my time. Thank
    you.
        Mr. Smith. Without objection.
        [The information referred to follows:]

                                   __________

        Mr. Smith. Thank you, Mr. Conyers.
        The gentleman from Virginia, Mr. Goodlatte, the Chairman of
    the Intellectual Property Subcommittee, is recognized.
        Mr. Goodlatte. Mr. Chairman, thank you for holding this
    hearing, and thank you for your leadership on this issue.
        For more than two centuries, America's economic strength
    has been built on a firm foundation. The rule of law, respect
    for individuals and private property, and the promotion of
    industry through policies that reward creativity and innovation
    are essential virtues that helped the fledgling Nation
    encourage the initiative of its citizens, and in time emerged
    the most advanced and prosperous on earth. These virtues are
    not universal. In an increasingly connected world, threats that
    emanate from areas where these principles are not shared are
    jeopardizing our ability to sustain the incentives needed to
    foster growth and development and advance human progress.
        These threats create challenges for us in both the physical
    world and the virtual world where the systematic and willful
    violation of intellectual property rights now poses a clear,
    present, and growing danger to American creators and
    innovators, U.S. consumers, and our collective confidence in
    the Internet ecosystem.
        In order to continue to incentivize artists, authors, and
    inventors, we need to ensure that these creators have the
    ability to earn a return on their investments. Increasingly,
    foreign piracy is stripping creators of that ability. Within
    the Internet ecosystem today, there are legitimate commercial
    sites that offer consumers authorized goods and services.
    Indeed, many exciting new technologies and websites help
    content owners distribute music, movies, books, games,
    software, and other copyrighted works in ways that were not
    even imaginable 10 years ago. However, there are also rogue
    sites that steal the intellectual property of others, and
    traffic in counterfeit and pirated goods.
        In recent years, these websites have grown and evolved.
    They have become increasingly sophisticated and rival the
    legitimate sites in appearance, operation, and indicia of
    reliability.
        U.S. consumers are frequently led to these sites by search
    engines that list them among the top search results. After
    clicking on a site, they are immediately reassured by the logos
    of U.S. payment processors and the presidents of major
    corporate advertising supporting the site. These sites sell
    infringing copyrighted works, but they are not limited to
    those. Increasingly, these sites also offer counterfeit goods,
    such as counterfeit automobile parts, medicines, baby formula,
    and other products that can pose serious threats to the health
    and safety of American citizens. What is worse, these rogue
    sites often list the real customer service contact information
    for the legitimate companies, which deteriorates the reputation
    of the legitimate maker of these goods.
        For all these reasons, I have joined Chairman Smith in
    introducing the Stop Online Piracy Act, which creates new tools
    for law enforcement to combat these growing threats.
    Specifically, this legislation gives law enforcement the
    authority to bring an action in a Federal court to declare a
    website in violation of the law, and allows the court to issue
    a court order to intermediaries to block transactions and
    access to those sites found to be infringing. The bill also
    provides content owners with a limited liability to request a
    court to declare a website as violating the law. However, the
    content owners must first attempt to work directly with
    financial services and advertising intermediaries to solve the
    problem. Only if those parties cannot reach agreement are
    content owners allowed to seek a court declaration against and
    infringing website.
        It is my hope that this provision will allow content owners
    and intermediaries to work together to root out infringing
    sites quickly.
        It should be noted that there has been criticism from many
    in the online community about the scope of this bill, its
    effect on the functioning of the Internet, and that it could
    entangle legitimate websites. It is not my intention to do so,
    and I stand ready to work with the tech community to address
    any legitimate concerns they have. I have requested detailed
    comments from the tech community about their concerns, and look
    forward to continuing to work with them and Chairman Smith and
    other Members of the Judiciary Committee to ensure that this
    legislation punishes lawbreakers while protecting content
    owners as well as legitimate online innovators and startups.
        Mr. Chairman, this is a good bill, but a number of issues
    raised about it need to be carefully addressed. I look forward
    to working with you on those issues as we move forward to
    protect content owners online, and I look forward to hearing
    from our witnesses today.
        Mr. Smith. Thank you, Mr. Goodlatte.
        The gentleman from North Carolina, Mr. Watt, the Ranking
    Member of the Intellectual Property Subcommittee, is
    recognized.
        Mr. Watt. Thank you, Mr. Chairman.
        Mr. Chairman, in my experience, there is usually only one
    thing that is at stake when we have long lines outside a
    hearing, as we do today, and when giant companies, like those
    opposing this bill and their supporters, start throwing around
    rhetoric like, ``This bill will kill the Internet,'' or, ``It
    is an attempt to build the great firewall of America.'' And
    that one thing is usually money.
        While I appreciate that the stakeholders of Internet
    companies that have market caps in the billions of dollars
    care, as we all do, about the First Amendment and other
    precious rights, it seems clear to me that the obstinate
    opposition we have seen in the days since introduction of the
    Stop Online Piracy Act is really about the bottom line--piracy
    and counterfeiting, make money, and lots of it.
        This is not speculative. Sites that specialize in stolen
    goods attract a lot of eyeballs, which, in turn, attracts a lot
    of advertising, which in turn means, well, you got it, lots of
    money.
        To be fair, many of the copyright and trademark owners who
    want this bill to help enforce their rights are also businesses
    owners and are also motivated by money. But in my mind,
    stopping theft of your work or products is an appropriate
    incentive to secure profits. But doing nothing or next to
    nothing to prevent theft through the use of tools a company
    creates or controls is not an appropriate incentive to secure
    profits.
        So, as policymakers, our goal must be to confront the
    criminal enterprises that are flourishing on the Internet,
    stealing from the rightsholders, and visiting untold harm on
    consumers. Doing nothing is not an option. Not only are online
    piracy and counterfeiting drains on our economy, they expose
    unworried consumers to fraud, identity theft, confusion, and,
    at worst, physical harm. The penetration of hazardous product
    and goods into the American marketplace, including our military
    supply chain, poses an unacceptable risk of serious bodily
    injury or death to our citizens. Tolerance of online theft of
    music, movies, and software reinforces a culture of
    entitlement, stifles creativity, injures artist, and undermines
    job stability and growth.
        While I have never been a big advocate of current seizure
    laws, why would we not, as this bill does, give the Attorney
    General, at a minimum, the same power to block foreign thieves
    from access to the U.S. markets as the Attorney General has for
    domestic markets? Given the limits of government resources, why
    should we not establish a framework to enable rightsholders to
    engage specific intermediaries within the Internet ecosystem to
    meet the challenges of online piracy and counterfeiting?
        I think one of the big problems here is that to date, the
    economic incentives for the big Internet companies to work
    against online piracy are just not there. To be sure, there are
    many intermediaries that are inadvertently involved with pirate
    sites who have come to the table with constructive suggestions
    for crafting a balanced bill that will work. I commend ISPs,
    payment processors, like MasterCard, who is here today, and
    Visa, Go Daddy, who is the largest registrar of domain names,
    and a number of software companies who have raised reasonable
    concerns, and are willing to work together to address them.
    But, again, when I hear overblown claims like, this bill is a
    ``Give away to greedy trial lawyers,'' or ``A killer of
    innovation and entrepreneurs,'' that the co-sponsors of this
    bill are the ``Internet killers,'' I become suspicious of the
    message, as well as the messengers.
        As is and as one who cares deeply about the constitutional
    guarantees of free speech and due process, it is beyond
    troubling to hear hyperbolic charges that this bill will open
    the floodgates to government censorship. That is simply not the
    world we live in, and to suggest that by establishing a means
    to combat theft of intellectual property online, we will
    somehow default into a repressive regime, belittles the
    circumstances under which true victims of tyrannical government
    actually live.
        I urge everyone to set aside all the hyperbole and
    accusations. I am the first to admit that I do not like or love
    everything about this bill, but it is a very strong, solid
    effort to begin the process of responsibly providing the
    Attorney General and rightsholders with necessary tools to keep
    pace with, and ultimately, to outpace the high-tech bandits
    roving the Internet. I believe there are still some things we
    can do in the legislation to avoid unintended consequences,
    maintain the integrity of the Internet, and preserve certain
    freedoms, including many of the specific suggestions made by
    the Ranking Member.
        Our staffs have worked closely together to identify ways to
    improve this bill, and we will continue to do so. And I
    appreciate the fact that crafting a bill governing the online
    environment requires attention to technological details. But I
    start from the premise that Internet freedom does not and
    cannot mean Internet lawlessness, and that the goals of freedom
    and lawfulness are no more incompatible in the Internet space
    than they are in the physical world.
        Mr. Chairman, there is an African proverb that says, when
    elephants fight, it is the grass that suffers. Perhaps if we
    refocus this debate on the ills that may befall innocent
    consumers who fall prey to the perils of pirated and
    counterfeit goods rather than on the balance sheet of all the
    big companies, we can reach a worthy compromise.
        I look forward to hearing from the witnesses, and engaging
    in ongoing dialogue as we move the bill forward. The stakes for
    America and American consumers are too high to get engaged in
    too much hyperbole.
        Mr. Chairman, I yield back the balance of my time.
        Mr. Smith. Thank you, Mr. Watt.
        Without objection, other Members' opening statements will
    be made a part of the record.
        [The prepared statement of Mr. Forbes follows:]

                                   __________
        [The prepared statement of Ms. Lofgren follows:]

                                   __________
        [The prepared statement of Mr. Johnson follows:]

                                   __________
        Mr. Smith. We welcome our distinguished panel today, and I
    will now introduce them.
        Our first witness is Marie Pallante, the Register of
    Copyrights. Ms. Pallante was appointed by the Librarian of
    Congress, Dr. James Billington, as the 12th Register on June
    1st of this year. Immediately prior to that appointment, Ms.
    Pallante served as the Acting Register.
        As a Register, Ms. Pallante continues the tradition of
    serving as the principal advisor to Congress on matters of
    copyright policy. Ms. Pallante has spent much of her career in
    the office, where she previously served as the associate
    Register for Policy and International Affairs, Deputy General
    Counsel, and Policy Advisor. In addition, Ms. Pallante spent
    nearly a decade as Intellectual Property Counsel and Director
    of Licensing for the Guggenheim Museum in New York.
        She earned her law degree from George Washington University
    and her Bachelor's degree from Misericordia University, where
    she was also awarded an honorary degree of humane letters.
        Our second witness is John P Clark, the Vice President of
    Global Security and Chief Security Officer for Pfizer. Since
    joining Pfizer in 2008, Mr. Clark has been recognized as the
    leading authority on the threat that counterfeit medicines pose
    to patient health and safety.
        Prior to joining Pfizer, Mr. Clark served as Deputy
    Assistant Secretary of the U.S. Immigration and Customs
    Enforcement. In that capacity he was responsible for overall
    management and coordination of the agency's operation, and he
    served as the Assistant Secretary's principal representative to
    the Department of Homeland Security and to the law enforcement
    and intelligence communities.
        Starting as a U.S. Border Patrol Agent in 1980, Mr. Clark
    spent more than 25 years as a law enforcement professional
    before retiring from public service. A New York native, Mr.
    Clark received his Bachelor of Science degree in History from
    the State University of New York at Binghamton, and a Master of
    science degree from National-Louis University.
        Our third witness is Michael O'Leary, the Senior Executive
    Vice President for Global Policy and External Affairs at the
    Motion Picture Association of America. In that position, Mr.
    O'Leary supervises all international, Federal, and State
    affairs operations around the world for the association.
        Before moving to MPAA, Mr. O'Leary served more than a dozen
    years at the Department of Justice, where he worked on
    legislative, intellectual property, and enforcement issues.
    During his tenure at the DoJ, he served as the Deputy Chief of
    the Computer Crime and Intellectual Property section, where he
    prosecuted and supervised some of the most significant domestic
    and international criminal and IP cases undertaken by the
    Department. Before joining DoJ, Mr. O'Leary spent 5 years
    serving as Counsel to the Senate Judiciary Committee.
        He grew up in Montana as a graduate of Arizona State
    University and the University of Arizona School of Law.
        Our fourth witness is Ms. Linda Kirkpatrick, who serves as
    the Group Head of Customer Performance Integrity at MasterCard
    Worldwide. In this role, Ms. Kirkpatrick is responsible for
    driving the strategy, development, and execution of global
    customer compliance programs, data integrity, and dispute
    resolution management.
        Ms. Kirkpatrick has been with MasterCard since 1997. She
    earned her Bachelor of Arts degree in Economics with a
    concentration in Finance from Manhattanville College in
    Purchase, New York.
        Our fifth witness is Katherine Oyama, a Policy Counsel for
    Google, where she focuses on copyright and trademark law and
    policy.
        From 2009 to early 2011, she worked in the Office of the
    Vice President as Associate Counsel and Deputy Counsel to Vice
    President Joseph R Biden. Prior to her government service, Ms.
    Oyama was a litigation associate with Wilmer Cutler Pickering
    Hale & Dorr, where she worked on intellectual property cases,
    government regulatory, litigation, and pro bono matters. She
    previously worked in the Media and Entertainment practice of a
    New York-based strategy consulting firm, for the Silicon
    Valley-based Internet startup, LoudCloud, Inc., and for a
    Texas-based company, Electronic Data Systems.
        Ms. Oyama is a graduate of Smith College, where she
    graduated with honors in Government, and the University of
    California Berkeley School of Law, where she served as senior
    articles editor of the Berkeley Technology Law Journal.
        Our final witness is Paul Almeida, the President of the
    Department for Professional Employees of the AFL-CIO.
        Mr. Almeida has served as President of the DPE since
    February 2001. Prior to his tenure with DPE, Mr. Almeida served
    as President of the International Federation of Professional
    and Technical Engineers for 7 years.
        Mr. Almeida earned his degree in Engineering from Franklin
    Institute in Boston, and he resides in Arlington,
    Massachusetts.
        We welcome, you all. Every member of the panel will have 5
    minutes to give their testimony, and we have a light on the
    table to indicate when that time is about to expire and has
    expired. Again, we welcome you.
        And, Ms. Pallante, we will begin with you?

        TESTIMONY OF THE HONORABLE MARIA PALLANTE, REGISTER OF
                  COPYRIGHTS, U.S. LIBRARY OF CONGRESS

        Ms. Pallante. Mr. Chairman, thank you for the opportunity
    to appear today, and I would also like to thank you, Ranking
    Member Conyers, Chairman Goodlatte, and Ranking Member Watt of
    the Subcommittee, and all of the Members of the Committee for
    your continued leadership on copyright policy.
        Congress has updated the Copyright Act many times in the
    past 200 years, including the enforcement provisions, but as we
    all know, this work is never finished. Infringers today are
    sophisticated, and they are bold. They blatantly stream and
    disseminate books, music, films, and software through websites
    using the services of trusted search engines, advertising
    networks, and credit card companies. This is not a problem that
    we can accept. In my view, it is about the rule of law on the
    Internet.
        Much of the bill employs a strategy of follow the money. I
    testified in support of this approach in March, and I still
    agree that it is an important part of the equation. Many sites
    make money by selling illegal access to copyrighted works or by
    offering related advertising. But the approach does have some
    limitations. Many of the worst sites do not sell infringing
    content; they offer it for free, and they do not run ads.
        I would like to offer an example involving Google, but I
    would first like to say that I have a great deal of respect for
    Google, and I cannot imagine the Internet without it. However,
    if you conduct a search for the phrase ``download movies,''
    Google search engine will supply the words ``for free,'' and it
    will return a list of sites that offer illegal copies or
    streams at no charge and with no advertising. These cases
    require a different kind of strategy. Then, follow the money.
    The same is true when damages imminent, for example, when a
    site is streaming live sporting events or selling movies
    before. They have been released to the public.
        In the context of foreign infringing sites, the bill
    addresses this problem by giving the Department of Justice, the
    power to require search engines to dismantle direct hyperlinks,
    and to require service providers to block the access of
    subscribers within the United States. These actions require
    court approval and incorporate the existing legal standards of
    seizure and civil forfeiture law. These are the same standards
    that ICE has used effectively for operation in our sites.
        Mr. Chairman, I do not want to suggest that blocking
    websites is a small step; it is not. And the public interest
    groups that oppose this part of the bill are right to be
    concerned about unintended consequences. However, it may
    ultimately come down to a question of philosophy for Congress.
    If the Attorney General is chasing 21st century infringers,
    what kinds of tools does Congress want to provide? How broad
    and how flexible?
        The bill also gives copyright owners some tools, but these
    do not involve search engines or ISPs, and I think that this is
    the right calibration. Put another way, the bill reflects the
    fact that many industries contribute to the success of the
    Internet, and it properly distinguishes between the actions
    that law enforcement and private citizens can bring.
        One of the more interesting aspects of the bill is that
    before authors or other copyright owners can seek court orders,
    it requires them to alert payment processors and ad networks
    about infringing content, and request that they sever financial
    ties. This approach is creative and provide incentives for the
    parties to cooperate. It also allows for counter notification.
    However, whether the notification system is ultimately
    effective will largely depend upon whether it can be
    implemented in a manner that is clear and fair for all
    involved. The intermediaries at issue are running businesses in
    good faith, and the websites at issue are entitled to due
    process.
        The bill does incorporate due process where court orders
    are involved. The notification system would operate outside the
    purview of the court, and, therefore, it may benefit from
    further due process review.
        Finally, I do not believe it is the intent of the bill to
    negate the safe harbors of the DMCA, and I do not read it that
    way. Nothing subjects ISPs to liability for their acts or their
    failure to act. No monetary relief can be obtained, and the
    injunctive relief permitted by the bill appears to be
    consistent with what the DMCA already permits. This said, the
    bill has many moving parts, and I note that a number of
    stakeholders with differing perspectives have offered
    productive suggestions. As the Committee works to refine the
    bill, I would encourage you to fully consider the suggestions.
    However, in closing, I would also like to state that I believe
    that Congress has the responsibility to protect the exclusive
    rights of copyright owners. And I hope that you will advance
    the bill with this in mind.
        Thank you, Mr. Chairman.
        [The prepared statement of Ms. Pallante follows:]

                                   __________
        Mr. Smith. Thank you, Ms. Pallante.
        Mr. Clark?

      TESTIMONY OF JOHN P. CLARK, CHIEF SECURITY OFFICER AND VICE
               PRESIDENT OF GLOBAL SECURITY, PFIZER, INC.

        Mr. Clark. Chairman Smith, Ranking Member Conyers,
    distinguished Members of the Committee----
        Mr. Watt. Could you pull your mic a little bit closer,
    please, or cut it on?
        Mr. Clark. It is a pleasure to appear before you today to
    discuss the threat that counterfeit medicines posed to the
    health and safety of patients in the United States and around
    the world. It is a closer global issue.
        As Vice President of Global Security for Pfizer, I work to
    mitigate the threat that counterfeit medicines posed to the
    health and safety of patients who rely on Pfizer medicines to
    live healthier and longer lives. I commend the Chairman and the
    Ranking Member of on the Committee for co-sponsoring the Stop
    Online Piracy Act for their legislative effort. It is a
    positive step forward in our fight against counterfeit
    medicines.
        Counterfeit medicines pose a threat because of the
    conditions under which they are manufactured, on unlicensed,
    unregulated sites, frequently under unsanitary conditions. In
    many instances, they contain none of the active pharmaceutical
    ingredients found in authentic medicines or in incorrect
    dosages, depriving patients, depriving patients of the
    therapeutic benefit of the medicine prescribed by their put
    physicians. And others, they may contain toxic ingredients,
    such as heavy metals, arsenic, pesticides, rat poison, brick
    dust, floor wax, leaded highway paint, and even sheet rock or
    wallboard.
        Counterfeit medicines are a global problem, and I am
    pleased to share our experience in combating them, and how the
    Stop Online Piracy Act aims to strengthen the U.S. arsenal.
        Pfizer has implemented an aggressive anti-counterfeiting
    campaign that attacks counterfeits at their source. Since 2004,
    we have prevented more than 138 million dosages of counterfeit
    Pfizer medicines alone, more than 68 million finished dosages,
    and enough active pharmaceutical ingredients to manufacture
    another 70 million from reaching global patients. Additional
    raid by law enforcement, based on evidence we have provided
    have also resulted in seizures of millions of dosages of
    counterfeits marketed by other major pharmaceutical companies.
        In the United States, we work closely with ICE, the FBI,
    and FDA on their investigations, and with Customs and Border
    Protection to improve their ability to prevent counterfeit
    Pfizer medicines from reaching U.S. patients. While the true
    scope of the counterfeit problems is hard to estimate, we have
    confirmed that counterfeit Pfizer medicines have been found and
    seized and at least 101 countries, and have reached the supply
    chains and 53 countries.
        Technology has created a new front in this battle. Today
    the major threat to patients in the U.S. are the many
    professional looking websites that promise safe, FDA approved,
    branded medicines from Canada or the UK, and for that reason,
    we appreciate the Chairman and Ranking Member's focus on the
    threat in Title I of the bill, giving the Attorney General new
    tools and incentivizing private stakeholders to act against
    rogue websites, with immunity in place for every stakeholders'
    action would be an important step forward.
        Patients do not realize that many of the websites do not
    disclose the true source of the products they dispense, or even
    where their alleged dispensing online pharmacy is located. In
    such instances, the World Health Organization has estimated
    that patients have more than a 50 percent chance of receiving a
    counterfeit medicine. I happen to believe that is a very low
    estimate.
        I would like to share two short case studies. The first is
    Rx North. Patients who visited Rx North's website thought they
    were ordering from a Canadian pharmacy and would receive
    authentic FDA approved medicines. In reality, the medicines
    dispensed from our Rx North were traced from China, where they
    were manufactured, through Hong Kong, on to Dubai, into the UK
    where they were intercepted. Among the medicines seized by UK
    customs were Lipitor, found to contain only 82 to 86 percent of
    the active pharmaceutical ingredient, which is an incredibly
    high number for most counterfeit, as well as counterfeit
    versions of medicines from four other companies, including one
    found to contain traces of metal.
        The second is the case of Kevin Xu, convicted of
    misbranding drugs and trafficking in counterfeit goods. It
    demonstrates how attractive a target the U.S. supply chain is
    who account for those who counterfeit our medicines, and how
    weak our current penalties for counterfeiting medicine are.
        During meetings with our undercover consultant, Xu boasted
    of the global scope of his criminal enterprise. He offered a
    list of branded counterfeit medicines that he could provide,
    including five Pfizer medicines. The evidence we gathered was
    shared with an ongoing ICE investigation of Xu. An order placed
    by an ICE undercover agent was filled with the counterfeit.
    When the tablets were tested, they were found to contain only
    insignificant levels of the active pharmaceutical ingredient
    found in the authentic medicine.
        Xu was sentenced to just 78 months in Federal prison
    without parole, the maximum sentence under the applicable U.S.
    sentencing commission guideline range. This punishment does not
    reflect the seriousness of the crime. The Stop Online Piracy
    Act takes a positive step toward making these penalties even
    tougher.
        Pharmaceutical counterfeiting is a low risk, high profit
    criminal activity that has attracted drug traffickers, fire
    arms smugglers, and terrorists. One of the principal players in
    the 2003 Lipitor breach here in the U.S. was a convicted
    cocaine trafficker. In 2006, the U.S. attorney for the Eastern
    District of Michigan announced the indictment of 19 people who
    gave a portion of their profits from the sale of counterfeit
    Viagra to Hezbollah.
        Those who counterfeit medicines are confident that even if
    caught, they will get just a slap on the wrist. Even here in
    the U.S., the maximum sentence imposed under the Food and Drug
    and Cosmetics Act is just 3 years. Recognizing the inherent
    risk that any counterfeit medicine poses to patients, we must
    enhance the penalties for pharmaceutical counterfeiting to
    provide a greater deterrent. Expedited procedures must be in
    place to shut down rogue websites dispensing counterfeit
    medicines to the U.S.
        The Stop Online Piracy Act is a significant step forward in
    those efforts, and I thank the Chairman and Ranking Member for
    introducing this important piece of legislation. I would like
    to work with you so that our laws recognize the grave health
    and safety risk posed by counterfeit medicines and serve as a
    deterrent.
        I work with foreign government representatives in the
    global fight against counterfeiting. It is hypocritical for us
    to speak with foreign government representatives, as I often
    do, about their lack of effective legislation, when U.S. laws
    are still lacking. This bill, if enacted, with strong penalties
    and mechanism to shut down rogue websites will be highly
    effective in our global argument for all governments to fully
    appreciate the serious health and safety aspects of this
    problem, and encourage similar efforts around the world.
        Thank you again for this opportunity to express my views.
    For Pfizer, pharmaceutical counterfeiting is first and foremost
    an issue of patient health and safety. We look forward to
    working with you on the global fight against counterfeit
    medicines.
        [The prepared statement of Mr. Clark follows:]

         Prepared Statement of John P. Clark, Chief Security Officer,
                                 Pfizer, Inc.
                      and Vice President, Global Security

        Chairman Smith, Ranking Member Conyers, distinguished Members of
    the Committee. It is indeed a pleasure to appear before you today to
    discuss an issue of great importance--the threat that counterfeit
    medicines pose to the health and safety of patients in the United
    States and around the world.
        My name is John Clark, and I am the Chief Security Officer for
    Pfizer Inc, and Vice President of its Global Security Team. In those
    positions I am responsible for ensuring that programs are in place to
    protect Pfizer's personnel, real and intellectual property, reputation,
    and the integrity of its medicines.
        Prior to joining Pfizer in 2008, I served as Immigration and
    Customs Enforcement (ICE) Deputy Assistant Secretary, responsible for
    the overall management and coordination of the agency's operation, as
    well as the Assistant Secretary's principal representative to the
    Department of Homeland Security and to the law enforcement and
    intelligence communities. During my more than 25 years in ICE and its
    predecessor agency, U.S. Customs, I held a variety of investigative,
    management and executive positions.
        Pfizer is a diversified, global health care company and the world's
    largest biopharmaceutical company. Our core business is the discovery,
    development, and marketing of innovative pharmaceuticals for human and
    animal health, and we are committed to ensuring the integrity of those
    products when they reach the market.

                      THREAT TO PATIENT HEALTH AND SAFETY

        A significant aspect of my job is to mitigate the threat that
    counterfeit medicines pose to the health and safety of patients who
    rely on Pfizer medicines to live healthier, longer lives. For that
    reason, I commend the Chairman and Ranking Member and the many members
    who are co-sponsors of the Stop Online Piracy Act for their legislative
    effort. It is a positive step forward in our fight against counterfeit
    medicines.
        Counterfeit medicines pose a threat because of the conditions under
    which they are manufactured--in unlicensed and unregulated sites,
    frequently under unsanitary conditions--and the lack of regulation of
    their contents. In many instances, they contain none of the active
    pharmaceutical ingredient (API) found in the authentic medicine, or an
    incorrect dosage, depriving patients of the therapeutic benefit of the
    medicines prescribed by their physicians. In others, they may contain
    toxic ingredients such as heavy metals, arsenic, pesticides, rat
    poison, brick dust, floor wax, leaded highway paint and even sheetrock
    or wallboard.
        Counterfeit medicines are a global problem, one from which no
    region, country, therapeutic area is immune. And, while my comments
    today focus on Pfizer's experience in combating counterfeit medicines
    and the positive impact the Stop Online Piracy Act can make in that
    effort, it is a threat to the entire pharmaceutical industry.

                    PFIZER'S PROGRAM TO MITIGATE THAT THREAT

        We have implemented an aggressive anti-counterfeiting campaign to
    detect and disrupt major manufacturers and distributors of counterfeit
    Pfizer medicines. By attacking counterfeits at or near their source, we
    protect the global market. Through our efforts we have, since 2004,
    prevented more than 138 million doses of counterfeit Pfizer medicines--
    more than 68 million finished doses and enough active pharmaceutical
    ingredient to manufacture another 70 million--from reaching patients
    around the world. And, because those who counterfeit our medicines have
    no ``brand loyalty'', raids by law enforcement authorities based on
    evidence we have provided have also resulted in seizures of millions of
    doses of counterfeits marketed by other major pharmaceutical companies.
        I attribute the success of our program to our talent--colleagues
    placed strategically around the world with extensive law enforcement
    experience who know how to initiate and develop cases--and the
    effective partnerships we have forged with enforcement authorities
    around the world. As part of those partnerships, we not only refer the
    results of our investigations, but also provide support as required in
    investigations and test--free of charge--suspected counterfeit Pfizer
    medicines to determine their authenticity.
        We also provide training to enforcement authorities to raise
    awareness to the counterfeiting problem and enhance their ability to
    distinguish counterfeit from authentic Pfizer medicines. As of
    September 30, 2011, we have provided training to authorities in 117
    countries, often in conjunction with programs sponsored by the US
    Patent and Trade Office (USPTO) and the World Customs Organization
    (WCO). In some instances, we have sponsored regional conferences to
    facilitate collaboration between authorities in the regions, and work
    with them to develop actionable plans of action to address the problem.
        These training efforts have produced tangible results in increased
    enforcement activity in Egypt, Jordan, Lebanon, the UAE and Poland, and
    the passage of strong anti-counterfeiting legislation in Jordan and
    Kenya.
        In the U.S., we work closely with ICE, the FBI and FDA on their
    investigations, and with CBP to improve their ability to prevent
    counterfeit Pfizer medicines from reaching U.S. patients.
        One example of our collaboration with CBP is the use of our
    ``mobile labs'', which we have used in pilot programs with CBP at
    International Mail Facilities in San Francisco, Los Angeles, New York,
    Miami and Chicago.
        While the true scope of the counterfeit problem is hard to
    estimate, we can provide some metrics based on the seizures reported to
    us by enforcement authorities and confirmed by our labs. Based on that
    data, we have confirmed counterfeit Pfizer medicines in at least 101
    countries, and having breached the legitimate supply chains of 53.

        While Viagra is our most counterfeited medicine, counterfeiters
    have targeted more than 50 of our products, including Aricept
    (Alzheimers), Celebrex (anti-inflammatory), Genotropin (human growth
    hormone), Lipitor (high cholesterol), Metakelfin (anti-malarial),
    Norvasc (high blood pressure), Prevnar (vaccine to prevent infection
    caused by pneumococcal bacteria), Sutent (for treatment of treatment of
    rare cancer of the stomach, bowel or esophagus (GIST), advanced kidney
    cancer (RCC, and a type of pancreatic cancer (pNET), Viagra (erectile
    dysfunction), Xanax (anxiety disorders), Zithromax (anti-infective) and
    Zoloft (depression).
        And counterfeit versions of 23 of those medicines, including
    Celebrex, Genotropin, Lipitor, Metakelfin, Norvasc, Prevnar, Sutent,
    Viagra, Xanax and Zithromax, have breached supply chains around the
    world.

                               THE ONLINE THREAT

        The major threat to patients in the U.S., however, is the Internet
    and the many professional looking websites that promise safe, FDA-
    approved, branded medicines from countries such as Canada or the UK.
    And, for that reason, we appreciate the Chairman and Ranking Member's
    focus on that threat in Title I of the bill. Giving the Attorney
    General new tools and incentivizing private stakeholders to act against
    rogue websites if immunity is in place for every stakeholder's actions
    would be an important step forward.
        Patients are lured by the ease with which they can order their
    medicines online, often without the need to consult a doctor or provide
    a valid prescription. They do not realize that many of those sites have
    failed to disclose the true source of the products they dispense or
    even where they--the ``dispensing'' online pharmacy are located. In
    such instances, the WHO has estimated that patients have more than a
    50% chance of receiving a counterfeit medicine.
        It is possible for U.S. patients to buy their medicines safely
    online through pharmacies that have been accredited by the National
    Association of Boards of Pharmacies (NABP). To be accredited, a
    pharmacy must comply with the licensing and inspection requirements of
    their state and each state to which they dispense pharmaceuticals. If
    they meet these criteria they are designated VIPPS sites--Verified
    Internet Pharmacy Practice Sites. Pharmacies displaying the VIPPS seal
    have demonstrated to NABP compliance with VIPPS criteria including
    patient rights to privacy, authentication and security of prescription
    orders, adherence to a recognized quality assurance policy, and
    provision of meaningful consultation between patients and pharmacists.
    VIPPS pharmacies represent only a small percentage of online
    pharmacies. In a recent survey of more than 8000 websites selling
    medicines, the NABP found that 96% were not operating in accordance
    with pharmacy laws and standards.

                              CASE STUDY: RXNORTH

        The case of RxNorth is an excellent example of how easily patients
    can be deceived, and the risks to which they expose themselves when
    ordering online from a rogue website, which the Stop Online Piracy Act
    aims to shutdown.
        Patients, who visited the RxNorth website, thought they were
    ordering from a Canadian Pharmacy and would receive authentic FDA-
    approved medicines.

        In reality, however, the medicines dispensed from RxNorth were
    traced from China, where they were manufactured, through Hong Kong,
    Dubai, to the UK where they were intercepted. Among the medicines
    seized by UK Customs were Lipitor--found to contain only 82 to 86% of
    the claimed dosage of active pharmaceutical ingredient--as well as
    counterfeit versions of medicines from four other companies, including
    one found to contain traces of metal.
        Subsequent investigation revealed that had they not been
    intercepted, those medicines would have been sent to a fulfillment
    center in the Bahamas, where they would have been split from their
    pallets and placed in individual packages corresponding to customer
    order. To gain ``credibility'', the packages would then have been
    shipped to the UK, from where they would have been sent to the U.S.
    patients who had placed their orders with RxNorth, believing it to be a
    ``safe'' pharmacy in Canada.

        As a result of this investigation, the FDA warned consumers not to
    place orders with RxNorth and not to take the medicines they had
    received. But, more needs to be done to combat these rogue websites.
                       case study: operation cross ocean
        Operation Cross Ocean also demonstrates the threat to unsuspecting
    U.S. patients who order their medicines online. Chinese and U.S.
    authorities worked together to dismantle an operation that manufactured
    counterfeit versions of Viagra and other medicines in China, then
    dispensed them via the Internet through a network of brokers, largely
    in the U.S. and Europe.
        When they raided the manufacturing site (pictured below),
    authorities seized 10 lines of manufacturing equipment and counterfeit
    medicines, including 570,000 finished pills and enough active
    pharmaceutical ingredient to manufacture 1.82 million more.

                              CASE STUDY: KEVIN XU

        The case of Kevin Xu, convicted of misbranding drugs and
    trafficking in counterfeit goods, demonstrates how attractive a target
    the U.S. supply is for those who counterfeit our medicines and how weak
    our current penalties for counterfeiting medicines are.
        An investigation initiated in our Asia-Pacific region identified Xu
    and his company, Orient Pacific International, as a major manufacturer
    and distributor of counterfeit medicines, including several Pfizer
    products. During meetings with our ``undercover'' consultant, Xu
    boasted of the global scope of his criminal enterprise, including his
    responsibility to oversee the quality of counterfeits produced in
    China, and provided a list of branded medicines that he could provide,
    which included Pfizer's Alzheimer's drug, Aricept, ulcer drug, Cytotec,
    cholesterol lowering drug, Lipitor, kidney cancer drug, Sutent and
    erectile dysfunction drug, Viagra.
        The evidence we gathered was shared with ICE, which had already
    begun an investigation of Xu. An order placed by an ICE undercover was
    filled with counterfeit Aricept, Pfizer's Alzheimer's drug, packaged
    for the French market. When the tablets were tested, they were found to
    contain only insignificant levels of the active pharmaceutical
    ingredient found in authentic Aricept.
        Xu was arrested in July 2007 and charged with manufacturing
    counterfeit versions of medicines intended to treat prostate cancer
    (Casodex, Astra Zeneca), blood clots (Plavix, Bristol Myers Squibb),
    schizophrenia (Zyprexa, Lilly), and Alzheimers (Aricept, Pfizer),
    mislabeling them as chemicals, and smuggling them into the U.S. where
    they were to be introduced into our supply chain.
        The likelihood of Xu's success was high. European authorities have
    identified Xu as the source of counterfeit versions of non-Pfizer
    products--Zyprexa (Lilly, anti-psychotic), Plavix (Bristol Myers
    Squibb, blood thinner), and Casodex (Astra Zeneca, prostate cancer) -
    recalled from the legitimate supply chain in the UK, a supply chain as
    tightly regulated as ours, in May 2007.
        As reported in a press release by the U.S. Attorney's Office for
    the Southern District of Texas, Xu was ``sentenced to 78 months in
    federal prison without parole, the maximum sentence under the
    applicable U.S. Sentencing Commission guideline range for conspiring
    with others in the Peoples Republic of China to traffic in counterfeit
    pharmaceutical drugs and causing the introduction of counterfeit and
    misbranded drugs into interstate commerce.'' http://www.cybercrime.gov/
    XuSent.pdf, accessed on November 10, 2011
        This is a good example of the punishment not rising to the level of
    the seriousness of the crime and why we need stronger penalties. The
    Stop Online Piracy Act takes a positive step forward and we would
    welcome the opportunity to work with you to perfect the penalty
    section.

                         CASE STUDY: ARAB CHINA NETWORK

        Based upon information provided by Global Security, more than 300
    Chinese law enforcement officers, from both the Public Service Bureau
    (PSB) and State Food and Drug Administration (SFDA), initiated
    enforcement actions that dismantled one of the most prolific
    counterfeiting organizations ever uncovered in China. The network,
    comprised of males of Middle East descent living in the southern
    provinces of China, was responsible for distributing large quantities
    of counterfeit medicines, manufactured in China, throughout the Gulf
    States and U.S..
        In two separate but related enforcement operations, authorities
    raided two manufacturing sites and 26 storage facilities, making 26
    arrests. They seized vast amounts of finished products--a mix of
    counterfeits and generics--including counterfeit Pfizer's ulcer drug,
    Cytotec, Viagra and Pfizer's anti-anxiety drug, Xanax. Initial
    estimates by authorities placed the pill count as high as 200 million,
    including counterfeits of Pfizer medicines as well as those of four
    other pharma companies. Also seized were large quantities of active
    pharmaceutical ingredient, including barrels of sildenafil, the active
    pharmaceutical ingredient in Viagra, which may be beyond the capability
    of the authorities to accurately weigh. The seizures included
    equipment--54 machines and 1230 moulds, tools and dies, at least 200 of
    which are for Pfizer medicines--with which to manufacture the
    counterfeits.
        In a subsequent release to Chinese Media, authorities stated that
    they had seized approximately 7 million counterfeit Viagra in those
    raids.

                        CASE STUDY: OPERATION EAGLE EYE

        Based on information provided by Pfizer, China's Ministry of Public
    Security (MPS) raided sites in Eagle Eye Action in Henan, Zhezjang,
    Guangdong provinces, making 36 arrests. They seized more than 5.6
    million counterfeit tablets including medicines from Pfizer (Aricept,
    Lincocin, Lipitor, Viagra, Xanax) and two other major pharmaceutical
    companies, as well as 45 machines.
        The head of the operation was sentenced to life imprisonment. Other
    members of the criminal network received sentences ranging from 2 to 15
    years in jail.

                              WHAT MORE CAN WE DO?

        We have seen progress in the fight against counterfeit medicines,
    but much more needs to be done. In some countries, pharmaceutical
    counterfeiting is not a crime; in others it has only minimal sanctions.
    Lax enforcement of laws that do exist is yet another problem.
        Pharmaceutical counterfeiting is a low risk, high profit criminal
    activity that has attracted drug traffickers, firearm smugglers, and,
    even terrorists. One of the principal players in the 2003 Lipitor
    breach here in the U.S. was a convicted cocaine trafficker. In 2006,
    the U.S. Attorney for the Eastern District of Michigan announced the
    indictment of 19 people who gave a portion of their profits from the
    sale of counterfeit Viagra to Hezbollah.
        Those who counterfeit medicines are confident that even if they get
    caught, they will get a mere slap on the wrist. Even here in the U.S.,
    the maximum sentence imposed under the Food Drug and Cosmetics Act is 3
    years. Recognizing the inherent risk that any counterfeit medicine
    poses to patients, we must enhance the penalties for pharmaceutical
    counterfeiting to provide a greater deterrent. Expedited procedures
    must be put in place to shutdown ``rogue'' websites dispensing
    counterfeit medicines to U.S. patients.
        The Stop Online Piracy Act is a significant step forward in those
    efforts and I thank the Chairman and Ranking Member for introducing
    this important piece of legislation. I would like to work with you so
    that our laws recognize the grave health and safety risks posed by
    counterfeit medicines and serve as a deterrent.
        I work with foreign government representatives in the global fight
    against counterfeiting. It is hypocritical for us to speak with foreign
    government representatives, as I do, about their lack of effective
    legislation when U.S. law is still lacking. This bill, if enacted with
    strong penalties and mechanisms to shut down rogue websites, will be
    highly effective in our global argument for all governments to fully
    appreciate the serious health and safety aspects of this problem and
    encourage similar efforts.

                                   CONCLUSION

        Thank you again for this opportunity to express my views. For
    Pfizer, pharmaceutical counterfeiting is first and foremost an issue of
    patient health and safety. We look forward to working with you on the
    global fight against counterfeit medicines.
                                   __________

        Mr. Smith. Thank you, Mr. Clark.
        Mr. O'Leary?

        TESTIMONY OF MICHAEL P. O'LEARY, SENIOR EXECUTIVE VICE
     PRESIDENT, GLOBAL POLICY AND EXTERNAL AFFAIRS, MOTION PICTURE
                     ASSOCIATION OF AMERICA (MPAA)

        Mr. O'Leary. Thank you. Mr. Chairman, Ranking Member
    Conyers, Chairman Goodlatte, and Ranking Member Watt,
    distinguished Members of the Committee, I am honored to be here
    today and, and thank you for holding this important hearing. I
    also want to thank you for introducing this legislation, which
    will help protect American creativity and American jobs from
    thieves who hide overseas and seek to profit off the hard work
    of people in this country.
        I also want to acknowledge my fellow panelists. I am
    pleased to be here with all of them today, and look forward to
    working with them throughout this process. I want to
    particularly acknowledge the contributions of Ms. Kirkpatrick
    and MasterCard. As the Chairman alluded to earlier, they are
    truly a fine example of a corporation trying to make the
    Internet a safe marketplace for people all over the world. And
    frankly, their example is one to be followed.
        Critics would have you, as Mr. Watt alluded to, believe
    that this is a battle between two giant corporations, and there
    is certainly a lot of truth to that. But I am also very proud
    to be part of a wide ranging coalition that includes the AFL-
    CIO, who we will hear from shortly, members of the Chamber of
    Commerce, big business, small business, individual creators,
    and entrepreneurs. So, I think critics would have you believe
    that this bill is really about supporting Hollywood and things
    like that, but the truth of the matter, when you look behind
    the rhetoric and the hyperbole, is that intellectual property
    is something which affects every facet of the American economy,
    and it affects people all over the country.
        In the case of the industry that I represent, the American
    motion picture and television industry, we believe that these
    jobs are worth protecting. They are more fully detailed in my
    written testimony, but I would just mention a few. There are
    people like Dan Lemieux, who is a stunt coordinator from
    Michigan. He has worked on numerous films and television shows
    like Nip Tuck and The Shield. The industry includes over 95,000
    small businesses. They employ 10 people or less. Businesses
    like Fletcher Camera, which is in Chicago. They have 25
    employees in that small business, and they provide movie
    equipment for productions that occur all over the Midwest.
    There are hundreds of thousands of businesses that provide
    services to production. There is a small paint and decorating
    firm in Baltimore, Maryland. It is a fifth generation family
    run operation, and it has applied paint for virtually every
    major production, which has occurred in the mid-Atlantic region
    over the past few years.
        I want to be very clear with this Committee that hard work,
    innovation, and creativity are not solely the province of
    people who live in northern California. There are people all
    over this country who contribute to the economy every day, who
    contribute to our culture, who contribute to what we make
    creatively. And their jobs are just as important and just as
    worth protecting as anyone else's. And that is why we think
    this bill is so important, because it is a positive step in
    that direction.
        In this economic climate, we simply cannot afford to turn
    our back on any industry, which is coming forward and producing
    things that we can take all over the world and be successful
    with. Our industry competes. When we are given an opportunity
    to compete globally, we succeed. Where we have trouble,
    frankly, Mr. Chairman, is where we do not have an opportunity
    to compete fairly. And one of the problems we have is competing
    with people who are trying to steal our stuff. We are not
    before the Congress looking for a handout or a bail out. We are
    simply asking for an opportunity to stop from stealing the
    products that we make.
        In recent weeks, you have heard a lot of spurious arguments
    about this legislation. They have been chronicled in a number
    of the opening remarks, that it violates the First Amendment,
    that it undermines existing protection laws, that it somehow
    stifles innovation, and that it will, yes, break the Internet.
    The irony, of course, of that argument is that I believe it was
    first raised by those opposing the DMCA many years ago, as the
    Chairman will recall. And I believe some of those same people
    are here today opposing this bill because they think it will
    undermine the DMCA. So, there is a bit of irony there, which
    seems to be lost inside the Beltway, but I suspect that,
    outside the Beltway people see it for what it is.
        These allegations that you are hearing are simply taken
    from the playbook of those people who have consistently opposed
    every effort that the Congress has come forward with in the
    past few years to protect intellectual property. The good news
    is that every time Congress protects intellectual property, the
    Internet flourishes. Every time the United States stands for
    legitimacy over illegitimacy, the Internet gets bigger and
    stronger. More things are available to consumers. More products
    are available to consumers. We make more movies. They see more
    television. Protecting legitimacy is a positive thing for the
    economy and for innovation, and people that tell you otherwise
    are wrong. They have been wrong when they have been raising
    these arguments for the past two decades, and they are wrong in
    the context of this bill.
        What you understand so clearly, Mr. Chairman, and the Stop
    Online Piracy Act reflects this, is that there is a very great
    difference between legitimate marketplace and the illicit sites
    and services that we are talking about. When the legitimate
    market is protected against the threat of online theft, the
    only people who lose are those who do not work, take no risk,
    make no investment. Instead, those are the people that simply
    try to profit off the hard work of others.
        We have also heard arguments that Congress should limit its
    approach to the threat of rogue sites to ``following the
    money.'' It is worth noting that whoever usually makes that
    argument is really saying you should follow someone else's
    money. If we are, in fact, going to follow the money, which is
    something we should do, we should follow all of the money, not
    just some of it.
        Piracy is a complex problem that cannot be fixed in
    piecemeal solutions, but this bill is an important first step
    in trying to deal with what is a very real and growing threat.
    This is fundamentally about jobs and about protecting the jobs
    that Americans have, creating products that are enjoyed all
    over the world.
        Ultimately, someone once said that to lead is to choose,
    and the bill, Mr. Chairman, that you put before the Congress in
    this debate is one which provides a number of choices. It is a
    choice between illegal and legitimate. It is a choice between a
    safe, vibrant Internet for everyone and all black-market
    Internet. It is a choice between protecting American creativity
    and jobs or protecting thieves. These are simple choices from
    our perspective, and with the leadership that has been provided
    by this Committee, we look forward to this process, debating
    this bill, putting something on the President's desk that both
    Republicans and Democrats can support, and at the end of the
    day, will allow these hard-working Americans to keep their jobs
    and keep creating the products that the world enjoys. Thank
    you.
        [The prepared statement of Mr. O'Leary follows:]

                                   __________

        Mr. Smith. Thank you, Mr. O'Leary.
        Ms. Kirkpatrick?

         TESTIMONY OF LINDA KIRKPATRICK, GROUP HEAD, CUSTOMER
              PERFORMANCE INTEGRITY, MASTERCARD WORLDWIDE

        Ms. Kirkpatrick. Thank you. Good morning, Chairman Smith,
    Ranking Member Conyers, and Members of the Committee. My name
    is Linda Kirkpatrick, and I am group head, franchise
    development and customer performance and integrity at
    MasterCard Worldwide in Purchase, New York.
        MasterCard commends the Committee on its attention to the
    issue of Internet-based infringement, including the work that
    went into H.R. 3261, the ``Stop Online Piracy Act.'' We greatly
    appreciate the opportunity to be here today, and look forward
    to working with you to combat this critical issue.
        MasterCard's rules and requirements prohibit the use of its
    system for any illegal purposes, including for the sale of
    products or services that infringe on intellectual property
    rights. MasterCard recognizes the important role it plays in
    combatting this issue, and has taken a number of steps that
    demonstrate its commitment to this important cause.
        These efforts, which are discussed in my written testimony,
    include: publishing the MasterCard anti-piracy policy, which
    sets out the specific process by which MasterCard and
    rightsholders can work together to identify and prevent the
    sale of infringing products or services; working with the White
    House's Office of U.S. Intellectual Property Enforcement
    coordinator in the development of industry best practices to
    address online infringement; and the implementation and
    maintenance of MasterCard's business risk assessment and
    mitigation program, otherwise known as our BRAMA program.
        By way of background, MasterCard operates a global payment
    system that connects over 1 billion cardholders and millions of
    merchants worldwide to complete MasterCard branded payment
    transactions. MasterCard neither issues payment cards to
    cardholders, nor does it contract with merchants to accept
    payment cards. Rather, MasterCard's financial institution
    customers issue payment cards to cardholders, and contract with
    birches to accept the cards.
        The card issuing customers are known as issuers; those
    customers that contract with merchants for card accepted are
    commonly called acquirers. Each cardholder's account
    relationship is with the issuer that issued the card to the
    cardholder, and each merchant's acceptance relationship is with
    its acquirer.
        MasterCard has a long history of working with law
    enforcement, private stakeholders, its customers, and others,
    to address illegal or otherwise BRAM damaging activities that
    may involve the MasterCard payment system or the unauthorized
    use of our widely recognized family of payment brands. Our
    commitment to working with rightsholders to prevent the
    MasterCard system from being used to facilitate online
    infringement is evidenced by our industry leading anti-piracy
    policy, which is publicly available on our Internet site.
        In accordance with that policy, MasterCard has established
    procedures that apply when a law enforcement entity or
    rightsholder brings to MasterCard's attention evidence of
    alleged infringement. We have established an e-mail address for
    the submission of such requests and a set of information
    requirements for such requests, which are largely similar to
    the information required of rightsholders in H.R. 3261.
        The process we implemented was developed collaboratively
    through strong working relationships with rightsholders and
    their trade associations, and has led to the investigation of
    thousands of Internet sites, and the termination of hundreds of
    rogue merchants.
        MasterCard has also worked closely with the White House's
    Office of U.S. Intellectual Property Enforcement coordinator in
    the development of a best practices document to address online
    infringement. Development of the best practices document
    involved input from a wide variety of stakeholders, including
    numerous representatives from the rightsholder community,
    payment networks, and other parties involved in online
    commerce. The best practices are designed to assist
    rightsholders in protecting their intellectual property through
    a voluntary system, and in no way diminish the ability of
    rightsholders to take independent action to enforce their
    intellectual property rights.
        Our business risk assessment and mitigation program, or
    BRAM program, is another key component of MasterCard's
    corporate effort to preserve the integrity of the MasterCard
    payment systems and protect against illegal and BRAM damaging
    transactions. More specifically, the Bram program serves to
    restrict access to the MasterCard system by merchants whose
    products and services may pose significant fraud, regulatory,
    or legal risks.
        The BRAM program was created to enforce MasterCard rules,
    prohibiting acquirers from engaging in or supporting any
    merchant activity that is illegal, or that may damage the good
    will of MasterCard, or reflect negatively on the MasterCard
    brand. Merchant activities that infringe upon the intellectual
    property rights of another are expressly covered under the
    protocols of the BRAM program.
        MasterCard is fully committed to continuing to address this
    important issue. As the Committee moves forward with
    legislation, MasterCard believes it is essential to ensure that
    any obligations imposed on payment systems are capable of being
    readily implemented through reasonable policies and procedures,
    and that payment systems be shielded from litigation and
    liability when acting in accordance with the bill's
    requirements. Thank you. In my written testimony, we have
    offered a few general comments on the bill along those lines
    that we believe are consistent with the Committee's objectives.
        I look forward to answering any questions that you may
    have.
        [The prepared statement of Ms. Kirkpatrick follows:]

                                   __________

        Mr. Smith. Thank you, Ms. Kirkpatrick.
        And, Ms. Oyama?

                     TESTIMONY OF KATHERINE OYAMA,
                    COPYRIGHT COUNSEL, GOOGLE, INC.

        Ms. Oyama. Thank you. Chairman Smith, Ranking Member
    Conyers, Members of the Committee, thank you so much for the
    opportunity to testify today, not just on behalf of Google, but
    also on behalf of the Consumer Electronics System Association,
    CCIA, Net Coalition, TechNet, and Tech America, which together
    represents thousands of companies.
        Google takes the problem of online piracy and
    counterfeiting very seriously. We devote our best engineering
    talent and tens of millions of dollars every year to fight it.
    In the last year alone, we have spent more than $60 million to
    weed out bad actors from our ad services. We have shut down
    nearly 150,000 adware accounts, mostly based on our own
    detection efforts. And so far, this year, we have processed 5
    million DMCA takedown requests, targeting nearly 5,000,000
    items.
        We are as motivated as anyone to get this right, but the
    Stop Online Piracy Act is not the right approach. SOPA
    undermines the legal, commercial, and cultural architecture
    that has propelled the extraordinary growth of Internet over
    the past decade, a sector that has grown to $2 trillion in
    annual U.S. GDP, including $300 billion from online
    advertising.
        Virtually every major Internet company from Twitter to
    Facebook, Yahoo and eBay, as well as a diverse array of other
    groups from venture capitalists, to librarians, to musicians,
    have expressed serious concerns about this bill. Unfortunately,
    this legislation is overbroad. It undermines the Digital
    Millennium Copyright Act, which has, for more than a decade,
    struck a balance. The DMCA provides copyright owners with
    immediate recourse when they discover infringement online,
    while also giving service providers the certainty that they
    need to investigate in the products on which America, millions
    of Americans rely.
        The bill sweeps in and it will send websites that have
    violated no law. It imposes harsh and arbitrary sanctions
    without due process.
        The following example shows how the bill, as currently
    written, would work. Imagine a website--let us call it Dave's
    Online Emporium, which enables small businesses to sell
    clothing and accessories. More than 99 percent of the sellers
    on Dave's Emporium are entirely legitimate, but unbeknownst to
    Dave, one seller has started selling counterfeit bags and T-
    shirts that parity a copyrighted design. Dave's Emporium takes
    great care to comply with copyright laws, including takedown
    procedures, including repeat infringement provisions of the
    DMCA. But, under the Stop Online Piracy Act, the entire site
    could be deemed ``dedicated to theft.'' Based on the violations
    of this single seller, the whole business effectively shut
    down. Just about any private party--a corporation, the
    copyright troll, someone with an ax to grind--could send a
    notice to payment and advertising companies to terminate
    services to the site without first involving law enforcement
    were triggering any judicial process. The complaining party has
    no duty to contact Dave's Emporium directly to resolve the
    issue before going straight to ads and payment services to
    terminate his service. If the emporium fails to respond with a
    counter notice, within 5 days, Dave's site could effectively be
    put out of business.
        Facing these potential risks, Dave might think twice about
    establishing his online Emporium in the first place. Countless
    websites of all kinds, commercial, social, personal, could be
    shuttered or put out of business, based on allegations that may
    or may not be valid, and the resulting cloud of legal
    uncertainty would threaten new investment, entrepreneurship,
    and innovation. In a new study of venture capitalists, released
    today, more than 80 percent said that the safe harbor
    provisions of digital copyright laws are essential. Weakening
    those safe harbor provisions would have a recession like impact
    on new investment. And at the same time, this proposal imposes
    new and unclear obligations on Internet service providers to
    take ``technically feasible and reasonable measures to block
    access to sites, to remove them from search results, turning
    these providers into de facto web censors.''
        This will not work. As long as there is money to be made
    pushing pirated and counterfeit products, tech savvy criminals
    around the world will find ways to sell these products online,
    and ordering ISPs and search engines to disappear websites from
    the Internet will not change this fundamental reality. We urge
    you, instead, to target the problem at the source. Shut down
    illegal foreign sites by cutting off their revenue. We support
    legislation that builds on the DMCA. Our proposal would empower
    the Justice Department to target foreign sites that violate
    current law, and the court could send out order, advertisers
    and payment services in which our services would be included,
    to cut off ads and payments to those sites. Google has been
    working with the Committee on such a solution for over 6
    months, and we will continue to do so.
        When all is said and done, we must address online piracy
    effectively in ways that continue to allow the Internet to
    drive this economy and this country forward. Thank you.
        [The prepared statement of Ms. Oyama follows:]

                                   __________

        Mr. Smith. Thank you, Ms. Oyama.
        Mr. Almeida?

         TESTIMONY OF PAUL ALMEIDA, PRESIDENT, DEPARTMENT FOR
      PROFESSIONAL EMPLOYEES (DPE), AMERICAN FEDERATION OF LABOR,
             CONGRESS OF INDUSTRIAL ORGANIZATIONS (AFL-CIO)

        Mr. Almeida. Good morning Chairman Smith, Ranking Member
    Conyers, and distinguished Members of the Committee. My name is
    Paul Almeida. I'm the President of the Department for
    Professional Employees (DPE), a coalition of 22 national unions
    affiliated with the AFL-CIO. I am honored to speak today on
    behalf of the 4 million professional and technical people whom
    our affiliated unions represent. Those people include creators,
    performers, and crafts people in arts and entertainment and
    media, professional and technical people in education, health
    care, and public administration, in aerospace, and other
    manufacturing, and pharmaceuticals, science, engineering,
    information, and in professional sports.
        The people I represent work in a wide range of occupations
    and industries. They share a wide range of interests as workers
    and consumers, as well as ardent defenders of the First
    Amendment. On their behalf, permit me to commit you and thank
    you. Their unions unanimously support the Stop Online Piracy
    Act, as does the entire AFL-CIO.
        My message is simple. It has three parts. First,
    strengthening protections for U.S. intellectual property helps
    American workers, jobs, incomes, and benefits. Second,
    counterfeit goods endanger danger, workers, both as workers and
    consumers. Third, there is no inconsistency between protecting
    free speech and an open Internet and safeguarding intellectual
    property. If the United States allows attacks on intellectual
    property to get an answer, it puts good livelihoods at risk.
        Online access continues to accelerate and expand. It
    increasingly displaces traditional models for distributing
    content and, thus, heightens the potential for digital theft.
    Estimates of the number of jobs lost to digital theft in arts,
    entertainment, and media sector alone run in the hundreds of
    thousands. Losses of income arise because entertainment
    professionals depend on compensation at two points--first, when
    the professionals do the work, and later with the reuse of the
    intellectual property. Royalties and residuals from downstream
    revenues enable entertainment professionals to survive between
    projects.
        In manufacturing, the estimates of losses from counterfeits
    also run in the billions. Again, the victims include workers
    who face lost jobs and income. We should not allow rogue
    websites to facilitate the distribution of counterfeit goods.
        My second point, counterfeits endanger workers as workers
    and as consumers. Only last week, the Senate Committee on Armed
    Services heard about an astonishing extent of counterfeit
    electronic parts in the military supply chain. Counterfeits
    kill. When protective vests are fake, soldiers and police
    officers can die. When prescription drugs are fake, patients
    can die. And when smoke detectors are fake, home owners and
    firefighters can die.
        In May, the Atlanta, Georgia, Fire and Rescue Department
    recalled roughly 18,500 smoke detectors that it distributed for
    a free Atlanta smoke alarm program. The smoke detectors were
    counterfeit, and so were the underwriter laboratory seals. An
    alert from the U.S. Consumer Product Safety Commission noted,
    ``The unreliable, counterfeit alarms pose a life safety hazard
    to the occupants in the event of a fire.''
        Counterfeit smoke detectors pose a life safety hazard, not
    just home owners, but to firefighters. Harold Schaitberger,
    General President of the International Association of
    Firefighters, another union affiliated with DPE, wrote to
    Chairman Smith and Ranking Member Conyers to support the Stop
    Online Piracy Act. President Schaitberger noted that, ``The
    preparedness and safety of our members depends on reliable
    equipment.'' A blog called TechKnit.com posted a defamatory
    response. ``Who does the MPAA actually think it is fooling? Is
    Congress so stupid that it cannot figure out for itself that
    firefighters have no clue what the debate is about?'' The blog
    accused firefighters of supporting censorship. It implied the
    only reason the firefighters spoke up was because the MPAA was
    paying off the union. Firefighters know the consequences of
    counterfeit equipment.
        My third point, freedom of speech is not the same as
    lawlessness on the Internet. Protecting intellectual property
    is not the same as censorship. The First Amendment does not
    protect stealing goods off trucks. I mentioned earlier that the
    people whom I represent today include ardent defenders of the
    First Amendment, newspaper and broadcast journalists, radio
    broadcasters, news writers, script writers, and many others in
    the arts and entertainment and media. When they oppose wage
    theft, there is no inconsistency with the First Amendment.
        Digital theft and rogue websites diminishes incentives to
    invest, and leads to a downward spiral for U.S. workers in our
    economy. That is the bad news. The good news is that you are
    taking action. The professional and technical workers and their
    unions whom I represent look forward to your passing the Stop
    Online Piracy Act.
        Thank you.
        [The prepared statement of Mr. Almeida follows:]

                                   __________
        Mr. Smith. Thank you, Mr. Almeida.
        I will recognize myself for questions. And, Ms. Pallante,
    let me direct a couple of questions to you.
        In your prepared a written statement, you said, ``If
    Congress does nothing to provide serious responses to online
    piracy, the U.S. copyright system will ultimately fail.'' What
    did you mean by that?
        Ms. Pallante. Thank you, Mr. Chairman. Yes, I do not think
    that is an overstatement. The system that we have for copyright
    and have had since 1790, is based on a system of exclusive
    rights with which authors can license and which publishers and
    producers can invest in, and then distribute and otherwise
    bring to life for consumers, not only here, but through
    reciprocal agreements with foreign countries.
        If those exclusive rights cannot be meaningfully enforced
    and can be usurped in a lawless environment, they will become
    meaningless. And if Congress does not update the piracy laws,
    as it has done consistently for many, many years, many decades,
    hundreds of years----
        Mr. Smith. I think you just anticipated my next question,
    which was going to be, do you think the legal system has all
    the tools it needs now to combat the infringing websites?
        Ms. Pallante. I do not. I think that this is a timely
    hearing. I think Congress has done an excellent job of
    intervening when technology outpaces the law. It did that in
    the Net Act. It did that in the Art Act. And I think that this
    is similar legislation. We are looking at a situation where
    very sophisticated and very smart and very blatant infringers
    will leap to offshore locations so that they can direct
    infringing goods, which often belong to our companies, back to
    American consumers. They are outside the jurisdiction of our
    courts. We are not suggesting that we would intervene in
    domestic courts in foreign countries. What we are saying is
    that we should have some response to allowing them to do that
    with impunity.
        Mr. Smith. Okay. Thank you, Ms. Pallante.
        Ms. Oyama, let me direct a couple of questions to you. And,
    first, let me say that you spoke a lot of the right words
    today. We have heard those words before, and I only hope that
    your company and other similar companies will practice what you
    preached. And that we will wait to see.
        Let me ask you a couple of questions. You do acknowledge
    that there is a severe problem, I gather, with the theft of
    intellectual property by foreign criminals?
        Ms. Oyama. That is a problem that we take extremely
    seriously. We have hundreds of employees that work on it.
        Mr. Smith. And I believe you agreed that if we cut off
    access to American consumers and U.S. dollars, that that will
    decrease the amount of intellectual property theft as well.
        Ms. Oyama. We think cutting off the money is a very
    effective solution.
        Mr. Smith. Okay.
        Ms. Oyama. The sites are in business because they profit.
        Mr. Smith. Now, particularly with regard to Google, do you
    think Google should stop returning search results for foreign
    sites that are breaking U.S. law?
        Ms. Oyama. Under the Digital Millennium Copyright Act, a
    rightsholder could come directly to Google. It would not need
    to go to court, and they could alert us of the foreign
    infringement. And we remove that.
        Mr. Smith. Well, a lot of people do not think the DMCA is
    sufficient, including the Register of Copyrights. Do you think
    we should go beyond that to try to stop returning search
    results for foreign sites?
        Ms. Oyama. Thank you for the question. I think there is a
    lot of misperception about what is and what is not----
        Mr. Smith. No, no. I was asking you a specific question
    here. Should Google stop returning search results for foreign
    sites that are breaking U.S. law?
        Ms. Oyama. We do when notified by rightsholders. We have
    done that more than 5 million times.
        Mr. Smith. The answer is yes, then?
        Ms. Oyama. Yes.
        Mr. Smith. Okay, thank you. Another question is this.
    Should Google stop placing ads on illegal sites that are
    stealing American intellectual property?
        Ms. Oyama. Our policies prohibit that. We have proactively
    ejected more than 12,000 sites this year.
        Mr. Smith. Okay. And so, you would agree not to either
    facilitate or place ads on illegal sites that are stealing U.S.
    property?
        Ms. Oyama. If a site is violating the law, we would eject
    them from our system, and we do that.
        Mr. Smith. Again, I hope you can practice what you preach
    today. That would be a major breakthrough.
        It seems to me, and let me just conclude in this way, that
    Google and other companies really have a decision to make. And
    I hope they will make the right decision. I hope they will
    decide to help other American companies. It is not necessarily
    going to benefit Google or some of your allies, but I hope you
    will decide to help American companies protect their
    intellectual property from being infringed by foreign
    criminals. And that is, I know a decision that you all are
    having to make and weigh.
        I acknowledge and regret to a large extent that if you make
    the right decision, that is going to mean you are going to have
    to give up some of the revenue you might get from some of those
    ads that are actually on the infringing websites themselves.
    That is a decision for you all to make, but I think you can
    make the right one there.
        I simply hope that you and others will decide to do what is
    good for other American companies, do what is good for American
    jobs, and do what is good for the American economy as well. But
    thank you for your testimony.
        The gentleman from California, Mr. Berman, is recognized
    for 5 minutes.
        Mr. Berman. Well, thank you very much, Mr. Chairman and
    Ranking Member Conyers. And I would like to thank the Chairman
    for responding to my letter inviting Google to testify. I think
    it is extremely important to understand what legitimate issues
    the opposition may have, so they can be addressed. I have not
    heard contrary changes they would recommend. I have not
    received a Google proposal or suggested proposal on focusing on
    foreign rogue websites, and would love to see it since it has
    apparently been discussed with the Committee.
        Opponents of the legislation say we support the bill's
    stated goals, and asked that sponsors consider more targeted
    ways to combat foreign rogue websites. That is the response to
    every idea put forward to stop that. Why is this not the time
    for the tech community to put forward concrete and specific
    proposals that will effectively combat the theft that take
    place on the Internet?
        The rhetoric around this bill is over the top. None of the
    sponsors of this bill are against the First Amendment. None of
    the sponsors of this bill want to shut down the Internet. And
    none of the sponsors want to stymie technology. Perhaps the
    first example that I will focus on is opponents claiming that
    the legislation will undermine U.S. foreign policy, and
    encourage repression by foreign governments. I wrote to
    Secretary Clinton and asked her opinion. She clearly and
    forcefully said there is no contradiction between intellectual
    property rights protection and enforcement ensuring freedom of
    expression on the Internet. In other words, we can adopt
    legislation like H.R. 3261. To better protect U.S. intellectual
    property online, at the same time demand that foreign
    governments respect Internet freedom. And I would like to
    submit those letters for the record.
        Mr. Smith. Without objection.
        [The information referred to follows:]

                                   __________

                                   __________

        Mr. Berman. Based on your answers to Mr. Smith's question,
    I would like to follow up. I thought I heard you say in
    response to the Chairman's question that Google does not legal
    to pirate websites?
        Ms. Oyama. Under the DMCA procedures that Congress set out,
    a rightsholder can notify Google about foreign infringement,
    and we would remove that site.
        Mr. Berman. All right. Well, explain to me this one. The
    Pirate Bay is a notorious pirate site, a fact that its founders
    proudly proclaim in the name of the site itself. In fact, the
    site's operators have been criminally convicted in Europe. One
    has apparently fled to Cambodia. It is being blocked by court
    order in at least Italy, Denmark, Belgium, Ireland, and
    Finland. And yet, Google continues to send U.S. customers, or
    at least I do not know what you are doing this morning, but
    before this morning, because maybe you could read my mind.
    U.S.-Google continues to send U.S. consumers to the site by
    linking to the site in your search results. Why do you do this,
    requiring copyright owners to send thousands upon thousands of
    notices for individual Torrent Links Pirate Bay, only to have
    those same files reappear on the system, when Google calls The
    Pirate Bay again? And we all know that this is a notoriously
    egregious pirate site. Why does Google refuse to de-index the
    site in your search results?
        Ms. Oyama. Copyright infringement, counterfeiting, these
    are issues that we take incredibly seriously. We invest tens of
    millions of dollars into the problem. We have hundreds of
    people around the world that work on it.
        When it comes to copyright----
        Mr. Berman. Why does Google refuse to de-index the site in
    your search results?
        Ms. Oyama. We will immediately, if we are notified by a
    rightsholder, we would remove the link from our search results
    to The Pirate Bay. We have done that over 5 million times this
    year. When it comes to copyright----
        Mr. Berman. You remove the link to a particular item.
        Ms. Oyama. Right.
        Mr. Berman. Why do you not refuse to de-index the site in
    your search results?.
        Ms. Oyama. The procedures that Congress set out under the
    DMCA ensure that today with websites----
        Mr. Berman. Would it make sense to have a law that allowed
    you, if the DMCA does not go far enough, a law that essentially
    told you that is what you should do in response to dealing with
    a clearly established rogue website that flaunts it in every
    possible way?
        Ms. Oyama. So, we have no idea of knowing if a given search
    result is infringing or is authorized. We do need the
    cooperation of the rightsholder to let us know. And today we
    are removing links. We think in terms of a legislative approach
    something that goes after the real incentive for those sites to
    be in business makes sense. So enhancing the DMCA and going
    after advertising, which is our services, and payment
    providers, we think makes sense. We think it is that----
        Mr. Berman. Could you draft some proposals that reflect
    that position, so we could look at them? I mean, I would love
    it if you and the Consumer Electronics Association, and Public
    Knowledge, and these groups would give us something specific.
    You think it goes too far, it is too excessive. Give us
    something specific. Infuse herself with the notion that you
    want to stop digital theft. What works? And use your brilliant
    mind that you have into organizations to give us some
    specifics, because the DMCA is not doing the job. That is so
    obvious.
        Ms. Oyama. We are very interested in working with your
    staff, with the Chairman, and other Members of the Committee. I
    do believe through NetCoalition, we have provided that
    language, and would be happy to follow up.
        We do think, in terms of search results, that Congress got
    it right under the DMCA. It leaves up legitimate content. It
    takes down infringing content. We want to make sure that when
    we are dealing with speech, that we use a scalpel.
        Mr. Berman. Well, my time has expired, but you cannot look
    at what is going on since the passage of the DMCA and say
    Congress got it just right. Maintain the status quo.
        Ms. Oyama. We certainly believe more tools would be useful.
        Mr. Smith. The gentleman's time has expired. Thank you, Mr.
    Berman.
        The gentleman from North Carolina, Mr. Coble, is
    recognized?
        Mr. Coble. Thank you, Mr. Chairman. Good to have you. I
    have had to miss some of the hearing, Mr. Chairman, because of
    other meetings, but it is good to be here. I was going to
    examine Ms. Pallante, but the Chairman beat me to it. I was
    going to examine Ms. Oyama, but Mr. Berman beat me to it. But I
    will still try to recover.
        Ms. Oyama, let me ask you this. What relief does the DMCA
    offer to a trademark owner who is trying to prevent
    counterfeiters from selling fakes?
        Ms. Oyama. So, for counterfeit, it is dealt with a little
    bit differently. For counterfeit at Google, we will act through
    our advertising. We had eject it, so, for example, for ad
    words, we have ejected over 100,000 accounts in the last year.
    There is a very kind of stark difference between copyright and
    trademark. Congress so far has not enacted by DMCA for
    trademark. Copyright laws are exclusive rights. Trademarks--it
    depends on what geography you are in, right, what product you
    can use. There is a given name specifically that can be used on
    lots of different products. And so, I know there has been kind
    of a long-standing conversation about that issue.
        Certainly, if we ever were to receive a court order about
    counterfeit and related to search, well, well of course, we
    would comply with that court order.
        Mr. Coble. I thank you.
        Mr. Clark, how involved are our organized criminal networks
    in the manufacture and distribution of counterfeit medicines?
        Mr. Clark. From my estimation and experience, it is a
    problem that is growing. I do not think we have reached the
    level yet where we are seeing global cartels, per se, as we do
    in narcotics, but as the notoriety of the crime gets around,
    the profit margins are so phenomenal and the abilities on a
    global scale are so low, that it is a no-brainer for organized
    crime to look at this as a way to go. So, it is growing.
        We have seen instances of it, not systemic instances, but
    we have seen, as I just cited, the Detroit instance, where
    money was going to Hezbollah. We have seen drug traffickers.
    But I think it is growing in that capacity.
        Mr. Coble. Mr. Clark, what aspects of SOPA do you believe
    are particularly important to combating the problem of
    counterfeiting medicines?
        Mr. Clark. I apologize, Congressman. I missed the first
    part of that?
        Mr. Coble. What aspects of SOPA, the bill before us, do you
    believe are particularly important to combating the problem of
    counterfeiting medicines?
        Mr. Clark. I think all aspects. My biggest worry,
    Congressman, is that counterfeit medicines are still not
    perceived by the public, by law enforcement, by judiciary, our
    judges, and prosecutors as a serious crime yet. When you see
    somebody like Kevin Xu, who has a global reputation for
    supplying counterfeits--it was my understanding during his
    undercover discussions, he offered a list of counterfeit
    medicines, and he said if anything is on that list, anything
    else off that list that you want, I can have it for you. Give
    me 2 weeks. We are talking cancer medicines. We are talking
    blood pressure medicines. We are talking Alzheimer's medicines.
        And I think when we see a few tablets here or there, we
    have a tendency not to think of the consequences those tablets
    bring. A lot of people in the United States, I think, look at
    it and say, there are no bodies in the street. Nobody seems to
    be dying from counterfeits, so it cannot be that serious of a
    crime.
        Mr. Coble. I got you.
        Mr. Clark. But when you look at people, at best. If they
    are getting 20 percent of the active pharmaceutical ingredient
    in the medicine that they are taking, such as this Alzheimer's
    medicine that was manufactured in Turkey, manufactured in
    facilities such as this where there are no conditions that in
    terms of licensing. Regulatory, environmental, are applied.
    Even with just 20 percent of the active ingredient in it, what
    is the other 80 percent? And if there is nothing but benign
    chemicals in that 80 percent, they are still not going to get
    relieved of their disease, and they eventually die.
        So, my biggest worry, Congressman, people are dying from
    these counterfeits. We just have not figured out a way to
    correlate the deaths from counterfeits with the problem yet.
        Mr. Coble. I thank you. I want to beat that red light that
    will illuminate imminently, and say to Ms. Kirkpatrick, I am
    advised that MasterCard has been instrumental in combating
    piracy. And, Mr. Chairman, I think it should be noted, for
    those of you who have combated, particularly flagrant, that
    that should be noted. And I thank you all for being with us.
        And I yield back, Mr. Chairman.
        Mr. Smith. Thank you, Mr. Coble.
        The gentleman from North Carolina, Mr. Watt, is recognized?
        Mr. Watt. Thank you, Mr. Chairman. And let me start by
    thanking all of the witnesses for being here today. This is a
    difficult issue. This legislation rages some interesting new
    challenges, but circumstances are raising difficult new
    challenges.
        Ms. Oyama, let me start with you because I want to be sure
    I understood your testimony. I got the impression that you do
    not object strenuously to the provisions of Section 102,
    because they require a court order; that your primary
    objections are with respect to the provision in 103, where
    market based system to protect customers are involved because
    it does not require giving notice to the site owner or whoever
    has put up the site. Am I misstating where you are on that?
        Ms. Oyama. We would certainly agree that concerns about 103
    are the greatest, one, because of the scope of what is the
    definition----
        Mr. Watt. Well, let me separate the question. Do you have
    concerns with Section 102?
        Ms. Oyama. The legislation. We support----
        Mr. Watt. The question is, do you have concerns with
    section 102?
        Ms. Oyama. With some of the remedies, yes.
        Mr. Watt. Some of the remedies? Okay. And you will give us
    that in writing so that we can evaluate those concerns.
        Ms. Oyama. The ads----
        Mr. Watt. But your primary concerns are with section 103.
    Am I misstating that?
        Ms. Oyama. I think the remedies in 102 focused on ads and
    payments, the way that these sites are making money----
        Mr. Watt. I am not trying to get you to resolve that issue
    about 102 today. I would rather have that in writing.
        Ms. Oyama. It is much more workable, yes.
        Mr. Watt. Right. But your concerns about 103 have to do
    with the lack of notice to the site owner, right?
        Ms. Oyama. It has, in part. I think----
        Mr. Watt. Okay. So, is there some effective way that we
    could give notice to the site owner, that you are aware of? And
    if you could give me those suggestions in writing, because I
    have those concerns, too. The problem is we do not currently
    have an effective way, access to those information to give them
    notice. And you do, I think, in your system because you put up
    the site. Okay.
        Now, if you could help me with those two things, we will be
    far down the road. I am not adverse to addressing your
    concerns. I have indicated that to you both in private and I am
    saying it publicly today.
        Let me talk about this constitutional standard, and make
    sure that I understand where you are on that because you appear
    to be advocating a constitutional standard that would prohibit
    the enforcement of any laws online. In your written testimony,
    you disagree with Professor Abrams' conclusion that it is
    constitutional to block access to a website that is primarily
    infringing, even though such blocking may incidentally impact
    protected speech.
        Your written testimony will not concede that blocking a
    website that is almost entirely infringing would be
    constitutional. And you have confirmed that in what you just
    said verbally here. Does that mean that you consider it
    unconstitutional for law enforcement to seize a child
    pornography site if the site also contains one copy of the King
    James Bible?
        Ms. Oyama. So, the speech concerns that have been raised--
    --
        Mr. Watt. Just answer that question for me, and then I will
    go forward from there.
        Ms. Oyama. There are certainly legitimate problems----
        Mr. Watt. What about if it contains 20 copies of the King
    James Bible, but it is still 90 percent child pornography? Are
    you saying First Amendment rights will not allow us to do that?
        Ms. Oyama. I think we agree with Floyd Abrams that you need
    to look at the whole site. You need to make sure that it is
    really dedicated to infringement--and we need legitimacy.
        Mr. Watt. Okay. Well, and probable cause would require the
    Attorney General's office to do that. I mean, he is not going
    to go and cite you unless or stop this process unless he has
    gone through that analysis.
        The question is, do you think that there is something
    unconstitutional about taking down a site that is
    overwhelmingly, primarily devoted to two stolen products? And
    I've, you know, if that is your position, I think we are going
    to have a real problem with that.
        Ms. Oyama. No. I think if there was a site out there that
    was 100 percent terrible, that is a separate issue. The
    definition----
        Mr. Watt. No, I am saying 90 percent terrible. It's him,
    saying 98 percent terrible. Is 2 percent going to save the site
    from being taken down?
        Ms. Oyama. I do not think there is an exact number. I think
    when you are sweeping in mast majorities of legitimate speech
    without notice, that raises significant questions----
        Mr. Watt. Is that 51 percent, or is it 60 percent? I mean,
    how are we going to do this? You are telling me I cannot
    violate somebody's constitutional rights if it incidentally
    adversely impacts their protected rights. That is what you are
    saying.
        Ms. Oyama. No. I think if a site was primarily dedicated to
    infringement, there is a lot of tools that----
        Mr. Watt. Okay. Well, that is what the bill says, does it
    not?
        Ms. Oyama. Well, we would not agree that the scope of the
    definition captures totally infringing sites. We have a lot of
    concerns that it sweeps in legitimate----
        Mr. Watt. No, I did not say totally infringing. That is not
    what you said either. That is not what you said. You said
    primarily infringing. And then, all of a sudden you shifted
    over to totally infringing. Is this a question about whether
    something is totally infringing or primarily infringing, or do
    you think that both of them, that one should be protected and
    one should not be protected?
        Ms. Oyama. I think a definition that was, you know,
    narrowly drawn that had something like primarily would be
    helpful.
        Mr. Watt. Okay. So you are going to give us some language
    on that. My time is up.
        Ms. Oyama. We have a definition.
        Mr. Smith. The gentleman's time has expired. Thank you, Mr.
    Watt.
        The gentleman from Virginia, Mr. Goodlatte, is recognized?
        Mr. Goodlatte. Thank you, Mr. Chairman.
        Ms. Oyama, I want to pursue that line of questioning. Years
    ago, a former Chairman, Henry Hyde, put me in a room with about
    30 government representatives from the content industry, from
    the online industry, Internet service providers, and a few that
    had a foot in both camps. And we worked for months in a hot
    room, and came to agreement on the Digital Millennium Copyright
    Act, and, in particular, the notice and takedown provisions,
    which you have spoken highly of. And I agree with you that
    those provisions still have a role in protecting online
    copyright.
        But the Internet has changed dramatically since then. The
    speeds have accelerated. The technology is more sophisticated.
    Search engines are more sophisticated. And the criminals who
    use all of that to rip off legitimate businesses of all kinds
    are more sophisticated.
        So, as you know, and, as I have said, I am interested in
    making sure this legislation gives effective tools to combat
    lawbreakers, but to also ensure it does not entangle legitimate
    online businesses or the ability of entrepreneurs to continue
    to bring exciting new products and services to the Internet.
        Can you tell the Committee the top concerns the tech
    community has about the bill and your specific recommendations
    on how to fix those concerns within the bill?
        Ms. Oyama. Sure, thank you. I think when the conversation
    started, the idea was to target foreign rogue sites, sites that
    were clearly breaking the law, build on the DMCA, and introduce
    new harsh remedies. That is definitely an approach that we
    would get behind, that we would support. I think when the tech
    community now is looking at is this language. There are serious
    concerns that the definition of a site that is dedicated to the
    theft of U.S. property, you know, probably purely
    unintentionally, it sweeps in a great amount of lawful
    websites, so, for example, the unit of analysis for what the
    site is. There is some language in there that says an Internet
    site or a portion thereof. So there is some concern about
    whether we are looking at the whole site or are we just looking
    at one blog, one tweet, one comment, one page on a site. So,
    getting the definition right would be really important.
        There are other words within the definition that seem to
    introduce notions like ``facilitate.'' That is one of the
    reasons why the Consumer Electronics Association, who I
    mentioned, they have serious concerns because they manufacture
    so many different devices. Somebody could say that the Internet
    itself facilitates infringement. So, we need to make sure that
    we are really staying within the existing confines of copyright
    law.
        I would also mention in the definition there is some
    language, you can be dedicated to fast if you have. No one
    understands, sir, what this means. If you have taken deliberate
    actions to avoid confirming a high probability of the use of
    your site for infringement.
        Right now, small business owners, when they are starting a
    website, they know if they comply with the DMCA, that they are
    lawful companies. They can seek investment, they can go
    forward. If they have to somehow subscribe to that kind of
    definition, the folks that we are hearing from, they just have
    no idea how they would even possibly build their sites to build
    to fit that definition. So I think getting the scope of what is
    a site dedicated to infringement would be critical.
        And from there, we are certainly more than happy to work on
    remedies. The two that we think are really smart, if you look
    at Wikileaks, I think this is a good example of the fact that
    this is a strong remedy, is choking these sites off at their
    revenue source. They are in business because they can either
    sell advertising or because they can profit from subscribers.
    If you could get the entire industry together and you could
    choke off advertising, and you could choke off payments to
    those sites, you would be incredibly effective without
    introducing the collateral damage that we had discussed to free
    speech or to Internet architecture, things like that.
        So, ensuring that we had the right remedies and the right
    scope, I think there is plenty of opportunity for all players
    out for a cross-section of industry to come together.
        Mr. Goodlatte. Let me just follow up on that. The more
    detailed information you give us, the better our ability to
    address legitimate concerns. So, will you commit to working
    with me to identify the specific problems that the tech
    community has with the bill, and working to address those
    specific problems to improve the bill as we move forward?
        Ms. Oyama. Absolutely.
        Mr. Goodlatte. And some of have argued that this
    legislation would break the Internet. As the co-chair of the
    Congressional Internet Caucus, that is the last thing I want to
    do. Can you explain exactly how this legislation would impact
    the functioning of the Internet?
        Ms. Oyama. So, I think the major concerns that have been
    raised really kind of in a cybersecurity field. So, so there is
    a white paper by a group of engineers who designed DNS-SEC.
    There are some other leading cyber security folks who have
    spoken out about it. I think Stewart Baker has been on record.
    He is a former Senior Official at DHS, and the formal General
    Counsel of the NSA.
        One of the provisions in the bill would require ISPs to
    perform DNS blocking. There is kind of a twofold concern there.
    One is that the methods proposed here are not compatible with a
    more than 10-year long effort into cybersecurity field to
    implement DNS-SEC in a way that would prevent cyber security
    attacks. So, I am not the cyber security expert, but the folks
    that wrote that code are saying that this will really harm the
    U.S. in the global effort to make deacons as more secure.
        I think the second piece is, we know that users
    unfortunately, are seeking this material. We can predict that
    there are going to be circumvention efforts. And so, there is a
    big concern that if we play certain obligations on you as DNS
    providers, that users are going to reroute their traffic to
    offshore rogue providers. And the vulnerabilities that an
    offshore rogue provider could introduce into the network, not
    just for the kids that are looking for the movie, or for some
    bad actor, but for anyone who is on the network that they are
    on is really significant. It could introduce spyware, malware,
    privacy concerns.
        Mr. Smith. The gentleman's----
        Ms. Oyama. I know this is, you know, something that really
    the folks who are the experts in this field have raised, but,
    you know, that has been kind of a critical concern about----
        Mr. Goodlatte. Ms. Oyama, I hate to interrupt. I do believe
    that Mr. Clark, if the Chairman will permit Mr. Clark from his
    past experience with the Department of Justice might also be
    able to comment on this issue, if the Chairman allows.
        Mr. Smith. Mr. Clark, could you give a very brief response?
        Mr. Clark. Very briefly, unfortunately I do not have the
    cyber experience. It was not one of the areas I actually worked
    myself. I have managed it. I do not know the intricacies about
    it. So in all honesty, so I apologize for not having an answer
    for that.
        Mr. Goodlatte. I apologize, Mr. Chairman. I thought there
    was an opportunity there, but perhaps not. Ms. Oyama, thank
    you. We look forward to working with you.
        Mr. Smith. Thank you, Mr. Goodlatte.
        The gentlewoman from California, Ms. Lofgren, is
    recognized?
        Ms. Lofgren. Before my questions, I would like to ask
    unanimous consent to introduce a number of items into the
    record, opposition to the provisions of the bill. The letters
    are from the Consumer Union and other consumer groups; TechNet;
    Tech America; the American Library Association; the Competitive
    Enterprise Institute; Human Rights Watch and other public
    interest groups; dozens of human rights groups around the
    world; a written statement from the ACLU; a paper from the
    Brookings Institute explaining how the bill would undermine
    security and stability of the Internet; a white paper by five
    leading DNS engineers and Internet security experts, a letter
    from the Anti-Phishing Working Group; an article from Stewart
    Baker, the former General Counsel of the NSA and Policy Chief
    for DHS under the Bush Administration entitled ``Copyright
    Bills Could Kill Hopes for Securenet;'' a letter signed by AOL,
    eBay, Facebook, Twitter, Yahoo, LinkedIn, Google, Mozilla, and
    Zynga; and a Harvard Business Review article entitled ``Great
    Firewall of America.''
        Mr. Smith. Without objection.
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        Ms. Lofgren. You know, I think some today have sort of
    written off, I think, serious criticisms of this bill as
    hyperbole, and that the only objection is about money and
    hyperbole, and I just do not think that is the case. The big
    tech companies were not the ones who said this bill would cause
    the U.S. to lose its position as a global leader in supporting
    a free and open Internet. That is from dozens of human rights
    groups around the world. The big tech companies were not the
    ones that wrote that the bill has the potential to do consumers
    more harm than good. That is from the Consumer Union and other
    nonprofit consumer groups.
        The big tech companies did not write that the bill is in
    conflict with the First Amendment. That is from the ACLU and
    over 100 law professors. It was not the big tech companies who
    said the bill would kill our best hope for securing Internet.
    No, that is from Stewart Baker, the former Assistant Secretary
    for DHS and the former General Counsel of the National Security
    Agency. Dozens of venture capitalists, not big tech companies,
    wrote that the bill will stifle investment and Internet
    services, throttle innovation, and hurt American
    competitiveness. And it has not generally been the policy of
    this Committee to dismiss the views of those in industries that
    we are going to regulate, and these are just a few of the
    examples.
        Now, I understand why co-sponsors of the legislation are
    not happy about widespread criticism of the bill, but I think
    impugning the motives of the critics rather than engaging in
    the substance is a mistake.
        I have a number of questions, and I note that, yeah, we
    have got six witnesses here. Five are in favor and only one is
    against, and that troubles me. I will just say that. You know,
    I do not think it is a balanced effort, and I am sorry that we
    do not have any technical expertise on this panel in terms of
    engineering talent, because I think that is an important issue
    as to the DNS blocking portions of the bill.
        So, let me ask a question of Mr. O'Leary. Do you believe
    that software programs should be illegal if they allow a user
    to circumvent Internet filtering ordered by the government?
        Mr. O'Leary. I do not believe that software programs should
    be per se illegal. I think if people misuse them, then they
    should be. If they misuse any product in violation of a law,
    they should suffer the consequences.
        Ms. Lofgren. So, the ability to just simply circumvent the
    takedown order as a software add-on to a browser should
    continue to be illegal?
        Mr. O'Leary. Well, no. If you are saying you are building
    something and specifically to avoid an order of the court not
    to do something, I do have a problem with that.
        Ms. Lofgren. So, you think that software ought to be
    illegal.
        Mr. O'Leary. Well, that is not what I said, no.
        Ms. Lofgren. Well, it is one or the other. Either you
    should be able to do that, or you should not be able to do it.
    Which is it?
        Mr. O'Leary. Does the software have a legitimate purpose,
    or is it simply to circumvent a court order?
        Ms. Lofgren. Well, circumventing software can be a
    multiplicity of views. For example----
        Mr. O'Leary. Right, but in your question, you said the
    software would be created to allow circumvention.
        Ms. Lofgren. There is an add-on to Firefox that will
    allow----
        Mr. O'Leary. I think that most legitimate companies in the
    United States, including Firefox, should abide by court orders
    and follow the law.
        Ms. Lofgren. So, well, you are not really answering the
    question. I will take from here you think that that ought to be
    regulated at least.
        Mr. O'Leary. Regulated in much the same way as we regulate
    people driving drunk and stealing things, yeah, I think that--I
    know that the word ``regulation'' has----
        Ms. Lofgren. Let me ask you this, because I do not have a
    long time, and I assume that you were directing your comments
    that people did not--that Northern California people did not
    care about jobs in the rest of America, either to myself or Mr.
    Lungren since we are the only Members of the Committee from
    Northern California. I will say I do care about jobs all over
    America. And, in fact, eBay, which is headquartered in San
    Jose, has enabled thousands of Americans all over the country
    to form small businesses, and to use the Internet to sell
    products.
        I would like to know, your concept--do you think that this
    is a big problem? I think it is a problem. I think that
    Internet piracy is something that is troubling. It is illegal.
    And I think we need to do something about it. So, let me just
    put that out there.
        How many sites do you think need to be shut down in order
    to say we have succeeded in the fight against Internet high
    receipt? Is it a dozen? Is it hundreds? Is it thousands? Do you
    have any idea the scope of the number of sites that need to be
    removed?
        Mr. O'Leary. Well, I think, first of all, you've
    mischaracterized my comment about Northern California, and I
    would like to correct the record on that. I was simply----
        Ms. Lofgren. Well, do it later, because I do not have that
    much time. Answer my question, please.
        Mr. Smith. Actually, the gentlewoman's time has expired,
    but you are free to answer the question.
        Mr. O'Leary. Thank you. The comment about Northern
    California was in the context of this debate. The perception
    has been created by opponents of this bill that all of the
    innovation and all of the creative thinking comes out of
    Silicon Valley. I was not taking umbrage with anyone in Silicon
    Valley. We have great relationships with a lot of people in
    Silicon Valley. Pixar, which makes wonderful movies, is in
    Silicon Valley. Apple, which is a legitimate online retailer,
    is in Silicon Valley. I was also making the simple point,
    Congresswoman, that there are people all over this country in
    places like Detroit, Baltimore, Texas, North Carolina----
        Ms. Lofgren. Mr. Chairman, I wonder since----
        Mr. Smith. The gentlewoman----
        Mr. O'Leary. I would be happy to answer your question.
        Ms. Lofgren. May I have an additional 30 seconds?
        Mr. Smith. Well, the gentleman--answer the question very
    briefly.
        Ms. Lofgren. How many sites?
        Mr. O'Leary. Well, I know for a fact that we could start
    with Pirate Bay, which was mentioned earlier. I do not know how
    many----
        Ms. Lofgren. So, is it just Pirate Bay, do you think, or do
    you think it is a dozen? Is it 100? Is it 1,000? What do you
    think?
        Mr. O'Leary. It would be easier to answer the question if I
    was allowed to. There are multiple sites out there. This is a
    legitimate problem. We have been very clear, and we will
    continue to be clear, that there is no silver bullet. The
    problem is evolving and changing. I cannot sit here right now
    and tell you in good faith that I know what that number is, but
    what I do know is that there are literally hundreds of sites
    out there that are engaging in this activity. And all you need
    to know that----
        Ms. Lofgren. Do you think it is in the neighborhood of----
        Mr. Smith. The gentlewoman's time----
        Mr. O'Leary [continuing]. Know that is to go to Google and
    type in J. Edgar, and you will get a list of page after page
    after page----
        Ms. Lofgren. Or Baidu, or Bing, or any of them.
        Mr. O'Leary [continuing]. Of sites that are engaging in
    this illegal activity.
        Ms. Lofgren. So, it is hundreds of thousands.
        Mr. Smith. The gentlewoman's time has expired, but let me
    remind Members that they are welcome to submit written
    questions to any of the panelists, and we will try to get those
    answers to the Members quickly as we can.
        The gentleman from California, Mr. Issa, is recognized?
        Mr. Issa. Thank you, Mr. Chairman. And the gentlelady from
    the North, while I am deep in the Confederacy of California,
    went through quite a litany of good opponents to the bill. I
    would like to add to that, by unanimous consent, the following:
    a joint letter by 160 entrepreneurs, founders, and CEOs, and
    executives; a letter expressing concern about SOPA from the
    Digital Media Association; a statement by the Consumer
    Electronics Association, which was denied an opportunity to be
    here as a witness; a letter signed by 53 venture capitalists
    expressing concern regarding the Protect Act; and a transcript
    of recent remarks made by Vice President Joe Biden that he gave
    at the London Cybersecurity Conference germane to his concerns
    about this bill.
        Mr. Smith. Without objection.
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        Mr. Issa. Thank you, Mr. Chairman. I have been the victim
    of piracy, so you are not going to have a problem with me
    agreeing with the problem. Hardware/software, got it all. But,
    Mr. Clark, I am going to hope that you can stretch for this
    part of it, even though it is not in your title. You are
    familiar with the ITC, are you not?
        Mr. Clark. Yes, I am.
        Mr. Issa. Pfizer regularly for patent infringement on
    imported products would go to the ITC and get relatively quick
    justice using administrative law judges available to them,
    injunctive relief against a patent violator, correct?
        Mr. Clark. Outside of my field, but I would believe that
    would be the case.
        Mr. Issa. So, when we deal with rogue elements outside the
    jurisdiction of the United States that are importing in the
    United States, we have a history of an organization that is
    quick, administrative, and can have continued jurisdiction
    against non-U.S. entities who are, in fact, trying to take what
    they have stolen and sell it into America. Is that correct to
    your understanding?
        Mr. Clark. Generally speaking, yes.
        Mr. Issa. Okay. Have any of you--just raise your hand--
    worked with the ITC in your background or are familiar with
    them? One or the other.
        Well, let me just run through quickly, because time will be
    very limited and the answers seem to be long. We have a court
    of jurisdiction. Now, they do not specifically have the mandate
    to follow the money and provide injunctive relief against
    Google, eBay, or anybody else after they find an offshore
    infringer and seek remedies, but they have their own counsels.
    They have administrative law judges. They have a procedure.
        Mr. Chairman, I object to this bill in its current form,
    mostly because I believe it fails to use tools that are
    generally better than the tools that we have at our disposal in
    this bill. And I believe that if the real remedies sought is,
    in fact, a court of continued jurisdiction specializing in
    intellectual property and designed to it, in fact, reach a
    quick solution to a question of whether there is wrongdoing,
    and then follow the money through injunction, not through
    fines, and obviously a criminal referral.
        My intention is to offer legislation on a bipartisan basis
    that will, in fact, look at the legitimate concerns, take a
    great deal of these 80 pages; however, and this is where it is
    tough, Mr. Chairman and Ranking Member, suggest that a
    jurisdiction not within this Committee get a substantial
    portion of this bill, because I believe that that is as
    appropriate as it is for the Federal courts to consider
    domestic entities who are violating it.
        And so, with that, Ms. Oyama, if I am pronouncing it right.
        Ms. Oyama. Yes.
        Mr. Issa. In your experience, has Google worked with the
    ITC or any other administrative law judges and executing on
    other people's judgments?
        Ms. Oyama. I would imagine in the patent context, yes. It
    is not my field, so I cannot speak to it.
        Mr. Issa. Okay. But do you agree that having a court of
    continued jurisdiction that, in fact, can work for injunctive
    relief as technology is available is generally something that
    Google and the other search engines would see as reasonable
    once there is a judgment entered against an offender somewhere?
        Ms. Oyama. Yeah, I think we would be happy to work on that
    type of solution.
        Mr. Issa. And I am going to get to the others, but, Mr.
    Clark, if you had that, and you had a judgment against party A
    who had an Internet site, and then 25 other similar parties
    show up from the same country and have all the identities that
    tell you it is basically the same group of you already have a
    judgment against, would you not benefit from a court that we
    specifically gave jurisdiction to to determine quickly that
    those are alter egos and execute upon them so that you would
    not go through this wackomo again and again, trying to prove to
    somebody that it is basically the same people doing it again?
        Mr. Clark. My working relationship with the ITC has been
    very, very limited. I am not quite certain what their
    capabilities are. If you are saying you are going to empower
    them to do certain work like that, it would make some sense.
        Mr. Issa. Currently they are, and the others would probably
    know this, it is a place that plaintiffs go to if there is any
    importation and they have a patent because they can administer
    a decision faster than the fastest rocket docket. And unlike
    the eBay decision, they have injunctive relief, not only as a
    tool, but as their one and only tool, and they use it without
    discretion because, in fact, that is the mandate of Congress.
        Mr. Clark. But you are still talking of a referral process.
    I think the DoJ then for a criminal follow-up and for asset----
        Mr. Issa. And I recognize at some point the administrative
    law judges look and say we have a domestic entity that is not
    compliant with our injunctions, or a site that is just as broke
    in the U.S. So, I am very aware that there are elements here
    that if you are cooperating or facilitating with a foreign
    entity, that there would have to be a referral. That is not
    going to be Yahoo, or Google, or eBay. It is going to be, as
    you know, the rogue sites you fight every day.
        Mr. Clark. Right. And I would just be worried about the
    bifurcation of activity in the referral process and the
    elongation of the end result is something like that were
    arranged.
        Mr. Issa. Well, I look forward to showing both our
    witnesses and the Committee that, in fact, the ITC's time to
    judgment and their execution is actually much shorter than our
    Federal courts, and less discretionary than the Justice
    Department's generally. And I thank the Chairman for his
    indulgence, and yield back.
        Mr. Smith. Thank you, Mr. Issa.
        The gentlewoman from Texas, Ms. Jackson Lee, is recognized?
        Ms. Jackson Lee. Let me thank the Chairman very much, and
    the Ranking Member, and let me call the roll, for the record,
    and say that I want the U.S. Library of Congress, I want
    Pfizer, the Motion Picture Association of America, MasterCard,
    Google, and our good friends in the technical aspect of our
    moviemaking business, and all supporters to be made whole. I
    think we have a consensus that online piracy is a both
    devastating and destructive element of the Nation's economy. In
    fact, I have said, I think, I believe often that it steals the
    genius of this country.
        We are very proud of the motion picture industry, and I am,
    if you will, a cup runneth over. I may be your physical armor
    when I see the massive thievery that goes on, and certainly in
    some of our international friends.
        So, I start off with that, and I want to find a common
    ground. And as I have looked at the legislation, I hope the
    Chairman and Ranking Member will give us the time to really
    study the legislation. Several things come to mind. One, this
    legislation has no referral. I am a Member of the Homeland
    Security Committee, and our Committee spent years helping to
    build the switch to the DNS-SEC. And if this bill would pass,
    we would have a challenge with that format.
        And the question is, would everyone who needs to make
    changes to the DNS-SEC would instead be on the phone to their
    lawyers, asking whether they would be sued for adopting
    security technology that will make the mandated block and
    redirect system even more difficult. We have to look at all of
    these issues.
        So, I want to ask the Library of Congress first if she has
    any comments regarding that conflict. We are supposed to be
    collaborative. You are the only government witness. I am not
    sure if you have thought of that, but let me give you a second
    question quickly since our time is going quickly. I am
    concerned about what effect it will have on small businesses,
    particularly those that could not afford to go to court should
    a rightsholder come forward and demand that their access to
    revenue be shut off. If a rightsholder accuses a small business
    website of facilitating infringement and a payment processor
    shuts off payments to that business, is the payment processor
    immune from suit under section 104, and what rights do they
    have?
        So, first, is there any collaboration or recognition about
    the system that the DHS has formulated?
        Ms. Pallante. I am sorry, I do not know the answer.
        Ms. Jackson Lee. You do not have that question. Mr.
    Chairman, I think we have to have that answer from whatever
    resources we can get.
        Next, if you can have any insight on how it impacts small
    businesses----
        Ms. Pallante. Yes.
        Ms. Jackson Lee [continuing]. This particular legislation.
        Ms. Pallante. That section of the bill, I believe, was
    actually intended to make it easier and quicker, and to avoid
    the court process and the cost. That is the goal. There is no
    liability for the intermediaries under that section. There is
    an obligation if it goes to the next stage and there is a court
    order. There is an obligation.
        Ms. Jackson Lee. Right. So, there is still a process that
    is small business might have to be engaged in. There is still a
    process which makes it easier----
        Ms. Pallante. There is, and they are good faith
    intermediaries, and they have not themselves broken the law,
    and the bill tries to take that into account. If we can refine
    that, we should.
        Ms. Jackson Lee. Yes, because they still have an obstacle
    to climb, if you might.
        Let me go to Ms. Oyama. Forgive us all for not reading the
    name correctly. I do not have it in front of me. But let me
    quickly give you a series of questions.
        Ms. Oyama, is that correct?
        Ms. Oyama. Yes.
        Ms. Jackson Lee. All right, thank you. One of the kinds of
    groups that I have been engaged in over the last couple of
    months is the generation of youth that are excited about
    startups. They are everywhere. They are job creators, and I see
    them as the next nucleus of job creation in America. They are
    obviously functioning now. They are all trying to emulate all
    of the stars of social networks. We know that will not be the
    case, but they are trying to create jobs.
        So, let me raise these concerns with you. I think
    immediately what comes to mind is that this legislation may be
    overly broad, that it too easily circumvents Internet users,
    and it is inherently incompatible with the way the Internet
    actually works. Would you comment on the overbroad, these
    circumventing Internet users, and incompatible with the way the
    Internet works? Could you do that quickly for me? And then, I
    would like to go back to--if you could be listening to this
    question about the--Ms. Pallante, if you have any idea about
    the problematic aspect of this, again, for smaller minority
    businesses. But, Ms. Oyama?
        Ms. Oyama. Sure. On the over breadth concern----
        Ms. Jackson Lee. Over broad.
        Ms. Oyama. Over broad, a huge concern is the scope of the
    definition of what is a site dedicated to the theft. So, that
    is a concern that has been raised amongst small businesses,
    larger tech companies. If we are going to go after rogue sites,
    we have to make sure that they are rogue sights and they are
    breaking the law. There is a lot of concern that right now. The
    definition would cover new ground. It would cover sites that
    today are complying with the DMCA, so they are taking down
    infringement when they are notified by rightsholders. It would
    be sites that today under existing laws if they were hauled
    into court, they would be found not guilty under existing
    copyright laws. So, I think there is the scope concerns there.
        Ms. Jackson Lee. Circumvented by Internet users? It could
    be too easily circumvented by Internet users?
        Ms. Oyama. Yeah. So, one of the concerns is that on the
    notice and terminate provision, that peace does not go through
    the courts, and so somebody could just notify a service
    provider. You could go away for Thanksgiving if you are a
    website owner, and your ads and payment providing services
    under the bill should be could be shut off in 5 days. So, there
    is a lot of concern that, you know, that does not really
    provide adequate due process in terms of the way current
    businesses work.
        I will say in terms of the incompatibility with the
    Internet, in the Internet sphere, Internet traffic is going to
    route around blockages, and so kind of working with a grain of
    the Internet we think is really smart, is really effective. It
    is why we support the legislation. We have discussed before
    about cutting of the funding sources. It is an incredibly
    sophisticated site. Much of international law enforcement was
    going after Wikileaks, and if you go to Wikileaks home page, it
    says that they are going down because payment providers shut
    them off.
        Mr. Smith. The gentlewoman's time has expired.
        The gentleman from Florida, Mr. Ross, is recognized?
        Mr. Ross. Thank you, Mr. Chairman.
        Ms. Oyama, do you feel that this bill is an infringement of
    the First Amendment right of free speech?
        Ms. Oyama. You know, I think short of the
    constitutionality; it certainly raises free speech concerns.
        Mr. Ross. Is it censorship that you are concerned about?
        Ms. Oyama. Yeah. So, the U.S. has had a good platform
    globally to speak out for free expression, and I think a lot
    like this, which would for the first time empower the
    government----
        Mr. Ross. It would empower the government to require you to
    do something that you do not want to do, which would be to shut
    down a site. Is that correct?
        Ms. Oyama. We are happy to disable links, when we are
    notified by rightsholders. We think that----
        Mr. Ross. And as long as you do it without a third party,
    such as the government, it is not an infringement of First
    Amendment rights of free speech, nor is it a censorship, is it?
        Ms. Oyama. We do not do full site blockages; we do page by
    page for a----
        Mr. Ross. But you do takedowns.
        Ms. Oyama. Under DMCA, yes.
        Mr. Ross. Yes, which is the same thing. I am just having a
    hard time distinguishing when you do it. It is okay, but when
    you have the third party, such as the Federal Government,
    requiring you to do it, then it becomes censorship and an
    infringement of First Amendment rights.
        Ms. Oyama. I see. I think the government approach is much
    broader in this bill.
        Mr. Ross. Let me go a little further here because I want to
    go your example of Dave's Emporium, which I think is a great
    example for people, such as me, that think simply to understand
    a small business. But I want to look at it from a consumer
    rights perspective.
        Let us say that Dave's Emporium, because of that 1 percent
    vendor that he uses on the Internet that is found through your
    Google search, results in the purchase of a product that causes
    death or personal injury. Now, in that chain of commerce,
    Google would be brought into action, especially where there is
    joint and several liability as a deep pocket, to defend that
    suit and probably pay damages. All of that could have been
    prevented had there been an investigation, had there been the
    appropriate execution under this Act.
        In fact, not only would it have been prevented, but also
    under this bill, is there not an affirmative defense that
    Dave's Emporium could have asserted in the sense that I do not
    have the resources to hire a lawyer that would mitigate my
    responsibility to now have to defend the order to take down.
        So, what I am getting is that, even further you have
    immunities under this Act that would prevent a third party suit
    against you if you shut it down. But you do not have immunities
    if, in fact, you allow for the sale and purchase of products
    that are not only counterfeit, but they also result in death or
    personal injury.
        Ms. Oyama. So, on counterfeit, it is definitely something
    that we agree with you. Counterfeit is a big problem. It is
    something that we invest tons of engineering hours, millions of
    dollars, into going after. For example, for ad words, we
    ejected 95 percent----
        Mr. Ross. But it would seem to me that you would want to
    have the immunities. You would want to have some protection,
    some safe harbors to prevent lawsuits against you in the
    execution of your business.
        Ms. Oyama. I think if a court is instructing intermediaries
    to take action, there is probably some plays for its
    immunities. But the concern here is that Dave could be shut off
    for 5 days, not pursuant to his terms of service. Certainly no
    one has an absolute----
        Mr. Ross. But he could be put out of business being sued
    because of the harmful product that could have been prevented
    had Google investigated the site.
        Ms. Oyama. So, certainly, no one has an absolute right to
    ad payment services. We think that there should be----
        Mr. Ross. Well, Dave is in a bad situation either way, and
    I think that he needs to have some protections, and I think
    that this bill will offer some of that.
        But let me shift to another thing, and let me tell you, I
    appreciate what Google has done with regard to child
    pornography. I mean, you guys have stepped up to the plate
    tremendously. And I think that is a wonderful example; you need
    to be congratulated for that. You do it because it is the right
    thing to do. And it would seem to me that following the letter
    of the law, you could do the same thing in this regard in an
    effort to hold down or at least eliminate the use of pirated
    sites by way of the search engine, Google.
        Ms. Oyama. So, child pornography certainly is a huge
    problem. It is something we take very seriously. Technically,
    going after child pornography in a search engine is completely
    different from copyright because a machine can detect tapped
    child pornography, and a machine can look for flesh tones.
    Human, if you look at it, would know what it is and could
    ejected, and with a copyright----
        Mr. Ross. But it is still the right thing to do.
        Ms. Oyama [continuing]. You cannot just look at the video
    and know whether it is infringing or licensed, right? It needs
    to be in collaboration with the rights owner.
        Mr. Ross. Real quickly, Ms. Kirkpatrick, not a question,
    just a thank you on behalf of MasterCard for what you are doing
    because you are cutting off the source of the problem. And that
    is very important.
        Ms. Kirkpatrick. Thank you.
        Mr. Ross. Mr. Almeida, I had a chance to meet a couple of
    days ago with one of your members, a gentleman, a lifelong
    songwriter. He is in this room. And he met with me, and he
    said, you know, the problem is not that it is a fight between
    the movie houses and the producers; it is the small people, the
    people who have followed their passion, the people who have the
    artistic ability to do something they have always wanted to do
    that now, after 30 years of being a songwriter has to look at
    whether he can keep his house, what his future is going to
    hold. And I wish you would do for me, and explain to the
    Members up here, is how this adversely impacts not the giants
    in Hollywood, and not the giants in Nashville, but those that
    participate, those whose creativity and innovation will be
    stifled unless there are some protections.
        Mr. Almeida. Well, I think there does need to be
    protections, and I think that is what this bill hopes to do.
    And this is not to protect the big dogs in Hollywood.
        Mr. Ross. Right.
        Mr. Almeida. Our members who are behind the scenes, who are
    stage hands----
        Mr. Ross. The foundation.
        Mr. Almeida [continuing]. The people who build the sets,
    the back end payments for those workers support their health
    and pension fund, and that is being cut off. They are adversely
    being impacted by these rogue site sand by the piracy of their
    videos. A video being released today will be available by the
    weekend on the web. And so, we are hoping that this legislation
    will help to take a step forward in that area.
        Mr. Ross. Thank you. I see my time has expired. I yield
    back.
        Mr. Smith. Thank you, Mr. Ross.
        The gentlewoman from California, Ms. Waters, is recognized?
        Ms. Waters. Thank you very much, Mr. Chairman.
        Let me just say that I find the discussion on H.R. 3261
    extremely interesting and engaging. I think Mr. Watt framed
    this issue somewhat in his opening statement when he talked
    about the giants, and competition, and the profits and the
    money that is involved being at the basis of all of it. And let
    me just say that I view any proposed changes in IP and
    copyright law as an opportunity to examine whether changes will
    expand opportunities for women and minority entrepreneurs, both
    in Hollywood and Silicon Valley.
        And I come to this discussion just having witnessed a CNN
    presentation called ``Black in America'' by Soledad O'Brien
    this past weekend, which I found very, very interesting.
        Having said that, I would like to direct my first question
    to Maria Pallante, U.S. Copyright Registrar. User generated
    content, websites like Facebook and YouTube, are extremely
    popular. Individuals and groups use these platforms to share
    videos that range from fraternity and sorority step shows and
    high school talent shows, to videos of kids performing a new
    dance or imitating a new music video. Many of the common
    artists who do not have record deals also use UGC sites to
    showcase their talents, covering popular songs.
        Now, to the extent many uploaded video clips feature the
    use of copyrighted music and other type of content that is not
    for profit or commercial gain, do you think that this bill
    would include a safe harbor, their use exception or other
    explicit provision that would ensure we are not trying to
    subject parity and leisurely activities to felony penalties?
    Are you at all concerned that some of the section's broader
    language could have unintended consequences that may chill the
    use of UGC sites and digital platforms that have served an
    important source of social utility?
        Ms. Pallante. Thank you for the question. I am not
    concerned as it is written. We are talking about two different
    levels of activity. This bill would go after sites dedicated to
    infringement. I think what is on the table in this room is a
    position that one can be compliant with the DMCA through notice
    and takedown of very specific sites when notified, and,
    therefore, not have an obligation to participate in a solution
    that is about fraud, willful, criminal, egregious, dedicated
    activity. These two things will operate at the same time, and
    the notice and takedown system will remain intact.
        Ms. Waters. Also I would like to ask about another issue
    that I am very concerned with, and I would like to direct this
    to Ms. Katherine Oyama, to Google. I am very concerned about
    the voluntary authority and legal immunity the bill gives
    Internet service providers to block access to sites they
    reasonably believe are infringing sites. This provision would
    seem to run counter to the FCC's recently issued open Internet
    net neutrality rules.
        I can foresee cases in which an Internet service provider
    that owns online content may use this section as pretext to
    unfairly block access to a competing website that is not really
    dedicated to infringement. This section does not require
    credible claims, merely a reasonable belief that does not
    exclude commercial disputes or anti-competitive conduct. It is
    my understanding that the Senate does not have ISP involuntary
    blocking authority in its bill.
        Can you foresee any unintended consequences with the
    voluntary blocking provisions? Is there a way that this bill
    could be refined to ensure that voluntary actions are based on
    credible evidence and certain thresholds?
        Ms. Oyama. Sure, thank you. So we do see today, the
    Internet used by countless small businesses to facilitate
    communication to facilitate e-commerce. It is truly people's
    daily livelihood, and so we do think there should be due
    process built-in if something essential to your site, like your
    services, is going to be taken away.
        I think the provision you are mentioning is Section 104 in
    the bill. I think the broader technology community shares those
    concerns. You know, want, if you look at the scope of sites
    that could be captured by a service provider's reasonable
    belief that they were dedicated to theft within the bill, that
    is a very broad group. And then, two, the number of service
    providers that receive complete immunity for terminating
    service without going through a court, without going through
    due process. It is not just the providers that are required to
    take action under this bill; it is much broader. So, it would
    include advertisers, search engines, payment providers, but
    also domain name registers, ISPs, you know, a much broader
    group of folks.
        If you were to lose your domain name and you are a small
    and independent business, that is everything. And so, making
    sure that you are at least protected by the terms of service
    when you sign up for the contract would, you know, probably
    makes sense to us.
        Ms. Waters. Thank you very much, Mr. Chairman. I yield back
    the balance.
        Mr. Smith. Thank you, Ms. Waters.
        The gentleman from Iowa, Mr. King, is recognized?
        Mr. King. Thank you, Mr. Chairman. I appreciate being
    recognized, and I appreciate the testimony of the witnesses.
        I wanted just to take a bit of a different tack here, if I
    could, and looking at the fraudulent Internet sites and the
    peace of this that is a direct focus of this hearing. And I am
    just looking through some of the background material, the
    problem of illegal pirating of copyrighted intellectual
    property. And I would think that it is all trademarks, and
    copyrights, and patents all together that I think about, not
    just websites and things that we can look at.
        And so, there is a pattern across this country or across
    the world of certain countries that are pretty effective with
    this. And I just ask if there is anybody on the panel, just
    raise your hand, or answer. Do you have a list of countries
    that are the most egregious violators of intellectual property
    rights from an American perspective? Yes, sir. I cannot read
    your names, I am sorry.
        Mr. O'Leary. Thank you, Congressman. It is Michael O'Leary.
        The content industries contribute to something through the
    State Department. There are a number of different ways. There
    is a notorious markets filing, which chronicles the areas of
    the world where this is the most problematic, and then there is
    a special 301 process whereby the United States puts forward a
    list and kind of categorizes where countries fall in terms of
    their protection of intellectual property.
        And the reason for that, frankly, very simply, is that
    intellectual property is not just an American problem; it is a
    global problem. And what you are seeing around the world is
    that other countries are starting to recognize the benefit of
    not just protecting American intellectual property, but
    protecting their own.
        I would note, for example, that there are at least 16
    countries in the world that engage in sight blocking now, which
    has been the focus of some of the debate here. The Internet
    seems to be working fine in those countries. It seems to be
    having an impact in terms of taking sites, like the Pirate Bay,
    which is blocked in many other countries, but not in the United
    States, offline.
        So, in many ways, the United States has historically been a
    world leader, but the truth of the matter, Congressman, from
    our perspective is, if we do not step up and deal with the
    problems we have today, we are going to cede that ground, and
    we are not going to be the world leader. And that is
    unfortunate for our country, because we do lead the world in
    the production of intellectual property, and we ought to be
    leading the world in protecting it.
        Mr. King. Mr. O'Leary, do you have an opinion then? You
    have given me a couple of sources I might look at. Do you have
    a recollection on from which countries originate the greatest
    theft of intellectual property?
        Mr. O'Leary. Off the top of my head, I would hesitate to
    list them and any type of specific order. I mean, there are
    different problems in different parts of the world. There are
    hard goods problems, which is kind of more the traditional disk
    type piracy that that occurs in places like Russia. There are
    problems with online; a country like Spain has a significant
    online piracy problem. There are other places in Europe.
        We would be happy to provide you and the Committee with a
    complete list. I am hesitant to speculate because I do not
    trust my memory well enough to get them in the right order.
        Mr. King. Is China on your list?
        Mr. O'Leary. China is on the list, yes. There is definitely
    a piracy problem in China, yes.
        Mr. King. And do you have any recollection of what the loss
    might be to American property rightsholder from China?
        Mr. O'Leary. I do not off the top of my head. I am not
    sure, frankly, that there is a way to measure it given the
    realities of China.
        Mr. King. Would anyone on the panel be aware of any
    studies, U.S. Trade Representative? It seems to me that three
    or 4 years ago at least, a U.S. Trade Representative has a
    study done that calculates that loss to U.S. intellectual
    property rightsholders to different nations, China and Russia
    come to mind. Anyone care to answer that? I saw a nod on the
    end of the line.
        Ms. Pallante. Maria Pallante from the Copyright Office. I
    do not have the dollar amount for you, but I would just echo
    what Michael said, which is that the special 301 process
    identifies problematic standards in our trading partners when
    it comes to IP, as well as notorious markets and websites.
        Mr. King. Does anyone have more of a comprehensive
    solution? We are talking about shutting down some websites. But
    it is billions in theft of intellectual property rights
    globally. And here we are in the United States of America with
    some of the strongest laws and the strongest traditions and
    respect for intellectual property. And I do not see a broader
    comprehensive solution to this.
        It seems to me that they can move faster than we can adjust
    to them, and that we are dealing with a component rather than
    the big picture. Yes, sir, Mr. O'Leary, and then----
        Mr. O'Leary. Congressman, I would argue that you are
    correct in the sense that this is a global problem. It is
    multi-faceted. There is not a single approach that fits. But it
    is critically important that the United States maintain the
    high ground and the leadership in this because if we do not do
    it, other countries will not.
        I would also note that the problem you are highlighting
    about the criminals moving faster, that is true regardless of
    what the crime is. You ask anyone in law enforcement that and
    they will tell you, you catch the ones who keep doing the same
    thing, and the people who adapt and change, you have to keep
    changing that.
        Mr. King. Are you aware of any State-sponsored intellectual
    property right theft?
        Mr. O'Leary. Are we worried about it?
        Mr. King. Are you aware of State-sponsored?
        Mr. O'Leary. We believe that that occurs, yes.
        Mr. King. And I want to say, I believe that happens from
    China as probably the lead globally to do that. Does anyone
    disagree with that on the panel? I did not hear any
    disagreement.
        I think I have gone far enough with this since my red light
    came on. But I do appreciate all your testimony, and I hope we
    can bring some peaceful solution to this. And I hope at some
    point we can bring a whole solution to it.
        Thank you very much, and I yield back the balance of my
    time.
        Mr. Smith. Thank you, Mr. King.
        The gentleman from Tennessee, Mr. Cohen, is recognized?
        Mr. Cohen. Thank you, Mr. Chairman. This is indeed an
    important issue for us to work out, and the theft of
    intellectual property is of great concern. But nevertheless,
    First Amendment issues are important, too.
        And my first thought is, it does not seem like that there
    should be that much difference from what the Google folks and
    the techie folks are wanting and what the MPAA and the RIA and
    the other AAs want.
        Let me ask maybe the gentleman from motion pictures, who
    apparently has a Rick Perry problem with not being able to
    count to something, Mr. O'Leary. Have you all not gotten
    together and tried to work this out in some way and fine tune
    this to where there are not these issues of people being
    penalized that are not guilty and sites being shut down where
    there is just a small infringement, but not a total
    infringement?
        Mr. O'Leary. Well, we do not believe that this legislation
    will result in either of those things happening. But our
    studios work with Google on a regular basis in terms of trying
    to get stuff taken down off the Internet. There are ongoing
    relationships.
        On this piece of legislation there have not, to my
    knowledge, been specific discussions about this. But I want to
    be very clear. We have said from the beginning that if people
    are willing to come forward with constructive suggestions on
    how to do things that are not a pretext for maintaining the
    status quo, that we would listen to those things.
        Mr. Cohen. Wonderful.
        Ms. Oyama, do you have some positive, you know, not under a
    pretense type, pretext type of discussions that you would like
    to come forth with?
        Ms. Oyama. Yes. So, I think just in the broader context of
    figuring out how to go after piracy, it is really important to
    keep in mind the number one most effective tool for going after
    piracy would be to increase the amount of legitimate, lawful
    services that are available on the Internet, right? So, if we
    can cut off the funding, we would decrease the supply of these
    pirate sites. If we could have more legitimate services for
    music and movies and everything else, which I know the studios
    are working very hard to do, that would also decrease the
    consumer demand for this type of----
        Mr. Cohen. Without itemizing each of them now, have you had
    the opportunity----
        Ms. Oyama. Sure.
        Mr. Cohen [continuing]. Have you had the opportunity to
    pose these to other team?
        Ms. Oyama. Yeah. So, although we are here in D.C. today, I
    would assure you that all of our businesses partners, you know,
    on the West Coast are working very collaboratively, very, you
    know, much together to get to those solutions. And we are
    always more than happy to continue to work with Mr. O'Leary and
    others.
        Mr. Cohen. So, are you all working now trying to come up
    with some language that the Chairman might put in a manager's
    amendment that would make all people happy?
        Ms. Oyama. You know, there has been some conversations, but
    I think there would need to be a lot more.
        Mr. Cohen. I would hope there would be a lot more, and I
    think that is something that should take place.
        Let me ask you a question since you are on the microphone.
    There are a couple of search engines in China and Russia, and
    Yandex I think is one of them, and Baidu. And some consider
    these rogue sites, and whether they are or not, I do not know.
    They could be.
        If they were considered such and they were blocked because
    they had some pirate type folks among their constituency, how
    do you think the Chinese and Russians would respond toward your
    company and toward the United States' companies?
        Ms. Oyama. That is an excellent question. So, I think we
    should realize that even though we would do something for a
    really good reason here, it could potentially have
    international ramifications. If the U.S. government is ordering
    U.S. companies to disappear foreign search engines from our
    results, it should be expected that there is going to be some
    form of retaliation internationally.
        Mr. Cohen. And those sites are the leading Chinese and
    Russian search engines, is that correct?
        Ms. Oyama. The sites that you mentioned?
        Mr. Cohen. Yes, ma'am.
        Ms. Oyama. Yeah.
        Mr. Cohen. Yeah. So, is it possible under this legislation,
    they would be totally cut off entirely?
        Ms. Oyama. If they were deemed rogue sites----
        Mr. Cohen. Right.
        Ms. Oyama [continuing]. Under Section 102, search engines
    could receive an order to disappear the whole site.
        Mr. Cohen. Right.
        Ms. Oyama. It is really tough in a search engine because
    although you can remove the direct link from a search, you
    know, as long as a rogue site exists, people are still going to
    talk about it. They are still going to blog about it. They are
    still going to post about it. And so, it is really not possible
    to remove all worldwide discussion of a link. And that is why
    we support the follow the money type legislation because that
    is really going after the source of the problem by choking off
    their financial reason to exist.
        Mr. Cohen. Let me ask you another question, or maybe to the
    panel. I cannot lose my constituent services. We do great
    constituent services in Tennessee 9. And this week on 11/14,
    Ryan Turner wrote me an e-mail, and he says, ``I am writing as
    your constituent. As a constituent, I oppose this Stop Online
    Piracy. I am a student studying management of information
    systems. Should this pass, I believe my future IT would be
    crippled. Having a government hand in DNS service scares me,
    especially with the government suing website owners with
    1(i)''--I think that was a misprint, but links, ``as a content.
    As a college student who owns over 30 domain names, most of
    these places for third parties to post text responses, should
    one of those include a link to material that infringe
    copyrights, now I would be held responsible. I have no funding
    available. I handle these claims, and I am lucky enough to be
    trained on how to handle lawsuits, but many other entrepreneurs
    without formal training have no idea how to handle it.''
        If he had this and there was one text that came back that
    was maybe linked to an illegal site, would he be cut off, and
    what he then have to go to hire a lawyer and possibly go to
    court?
        Ms. Oyama. I think so. I think there are two ways that
    could happen. So, one of the concerns, you know, not just
    Google, but the other technology companies who endorse the
    testimony, the other trade associations, are concerned about is
    that the definition 103 of what is a site dedicated to fast is
    very broad. There is some language in there that also refers to
    a site or a portion of the site. So, people have a lot of
    serious questions about what does that really mean. Are we
    looking at a full site?
        And today's Internet, the way most websites work, there is
    real time communication, and so you have read lots of real time
    comments. You have lots of real time posts. If one comment or
    post is infringing, does that, you know, impugn the entire
    site, or are we looking at it holistically? There are some
    other words in the definition that give people concerned that
    it is overbroad.
        So, either being swept in that way, or under the very broad
    immunities that are being given to service providers, pretty
    much anyone who qualifies under the definition of a qualifying
    plaintiff, which is very broad. They could go to a payment or
    advertising service provider. They could allege that the person
    that you mentioned is dedicated to theft, and then those
    providers have complete immunity to shut him off. So, there is
    a concern that there is a strong incentive in the bill that if
    you wanted to immunize yourself the easy thing to do would be
    to comply with that notice and shut them off.
        Mr. Smith. The gentleman's time has expired. And I do not
    mean to cut you off, but if you could bring your answer to a
    quick conclusion. Have you finished?
        Ms. Oyama. I think that is good.
        Mr. Smith. Okay.
        Mr. King. I think she could go longer.
        Mr. Smith. The gentleman from Arizona, Mr. Quayle, is
    recognized?
        Mr. Quayle. Thank you, Mr. Chairman. And I want to thank
    all the witnesses for being here.
        Ms. Oyama, I want to go back to what you were just talking
    about earlier about how long-term we can address the piracy
    issues via more legitimate websites that provide legitimate
    content on the Internet. And I want to go to your testimony
    that you indicated. The only long-term way to beat piracy
    online is to offer consumers more compelling legitimate
    alternatives. And you cited YouTube's free ad-based model for
    Monarch ties in content.
        I mean, there could be some disagreement. I do not know
    what is the best way to monetize content, whether it is fee-
    based or free ad-based. And if you look over the course of
    history, except for broadcast, it seems like most quality
    content has not been given away for free.
        So one thing that I want to ask you is, would you agree
    that the piracy issues that we are dealing with and the pirate
    websites that we are dealing with actually makes it more
    difficult for a company to start a fee-based site that offers
    legitimate content, and, thus, it forces content providers to
    look for ways that are going toward web and ad-based content to
    give it away for free?
        Ms. Oyama. I think there are so many different models in
    the ecosystem model right now. Certainly the problem of piracy
    is of tremendous importance and great concern to any content
    provider, right? You want to have control over the distribution
    of your content. Some people choose to release it for free
    because they want to participate with their friends and that
    way. Others want to license it, and others want to have an
    advertising model.
        I think the kind of beauty, of all the new services that we
    are seeing is that there is no one-size-fits-all. I do think we
    would approach YouTube as a really great example of how kind of
    technology and copyright can work together. There is a tool on
    YouTube called Content ID. Because YouTube is a hosted
    platform, we host all the content, so it is on our servers.
        So through Content ID, we are able immediately; a
    rightsholder would give us their file. If a user uploads a
    piece of content, we would immediately scanned 6 million
    reference files, and we could capture, if their song or their
    movie was being uploaded, and then the rightsholder would have
    control whether to monetize it.
        Mr. Quayle. But I think might more direct question is that
    if we are not able to crack down and have the tools and the
    ability to crack down on the pirate websites, then you are
    actually forcing content providers into a narrow avenue of ad-
    based, providing only content via ad-based and free markets.
    Not free market, but free content.
        Ms. Oyama. So, both would be tremendously important, right,
    increasing license and piracy.
        Mr. Quayle. Exactly. But, I mean, when you are looking at
    that and how we need to crack down on the piracy and ad-based,
    which is the model that Google uses, and that seems to be one
    of the reasons you would be pushing for that, because that is
    the way that Google makes their money, right?
        Ms. Oyama. There are different ways, but that is the
    primary way for sure.
        Mr. Quayle. And I think that is just my biggest concern, is
    that if you are looking at just ad-based, you are cutting down
    one significant avenue for people to provide content. And if we
    do not shut down these pirate websites, then we are going to
    actually lose out on different types of business models,
    different types of content providers. And that was the point I
    wanted to make.
        Ms. Pallante, I want to go to you. Earlier you stated in
    your opening testimony that you do not believe that the safe
    harbors under the DMCA are actually weakened by SOPA. Could you
    explant on that a little bit?
        Ms. Pallante. Yes. First of all, the bill says that as a
    savings clause. And, secondly, there is no monetary relief. The
    injunctions that are allowed are already permitted under the
    DMCA. There are, contrary to popular belief, ways to enjoin
    certain action for certain action for search engines and ISPs.
    And really, this bill is really designed to sit next to the
    DMCA. The DMCA is related to particular files on a website, and
    does not require the participation of those who are really in a
    good position to help stem the tide of piracy.
        So, I would object to a couple of things. I just heard from
    my fellow witness. One is that I am pretty sure that Google
    just said that it is the fault of content owners that we have a
    rogue websites. That just cannot be the truth. Secondly,
    although follow the money could be effective, it does not bring
    in everybody in the ecosystem. It does not bring in ISPs. It
    does not bring in search engines. It does not account for the
    vast number of websites that offer content purposely for free.
    And it does not really address the broader role of law issue
    that we have on the Internet right now.
        Mr. Quayle. And under the DMCA, are there actually
    instances where a service provider can take down all content on
    a webpage or a website if there is infringing content on that
    website?
        Ms. Pallante. The only way I see that happening is if every
    single rightsholder comes together at the same time, and
    approaches the website, and every file is infringing.
        Mr. Quayle. So, it could be possible under the DMCA.
        Ms. Pallante. It is highly unlikely.
        Mr. Quayle. Okay. But the one thing I wanted to just get
    your final thoughts on, because opponents of the bill actually
    say that it is going to endanger the security and integrity of
    the Internet. One of the things that the Internet has been very
    good at is in commerce. And would it not also be fair to say
    that without shutting down these pirate websites, then we are
    also endangering the security and integrity of the Internet
    because they are putting out often counterfeit goods, and also
    infringed copyright materials?
        Ms. Pallante. Right. So, there are three underlying
    purposes. One is to protect content owners about their own
    property. The second is to allow those who want to invest a
    place where there is sunshine and oxygen and a good environment
    for that. And the third is to protect consumers, absolutely.
        Mr. Quayle. Thank you. I yield back.
        Ms. Oyama. Can I just clarify one point? I just wanted to
    make sure that nothing was mischaracterized, because I do not
    think that it is the fault of the rightsholders. Certainly,
    rightsholders have the right to protect their content however
    they want, and we are completely committed to going after
    piracy. My only point was that the success and the consumer
    appetite for services like Netflix and iTunes shows that
    there's are a lot of different licensing models out there.
        Mr. O'Leary. May I follow up on that, on one point, which I
    think is a practical point, which is being missed, to Mr.
    Quayle's question. There are legitimate services out there now,
    there are more of them than there have been before. There will
    be more of them tomorrow. The problem is that when you go to
    Google and you punch in the name of the movie, those legitimate
    sites are buried on page 8 of the search results. There is a
    better than average chance that Pirate Bay is going to end up
    ahead of Netflix. That is a fundamental problem, no matter how
    many legitimate sites are out there, that we cannot overcome,
    and we cannot do anything about.
        If we could get Google to reach index of those sites in a
    way that favored legitimacy, to your question, Congressman
    Quayle, then consumers would be getting to those first. But
    when Netflix is buried way down in the search results, it does
    not matter how good Netflix is going to be, and that is just a
    practical problem that could be addressed today.
        Mr. Smith. Okay. Thank you, Mr. Quayle.
        The gentlewoman from California, Ms. Chu, is recognized?
        Ms. Chu. Thank you, Mr. Chair. I would like to ask about
    the savings clause, and I would like to ask both Ms. Oyama and
    Mr. O'Leary about your opinion on this. I am aware that
    concerns have been raised by Internet companies and many others
    that the language of the bill may have unintended consequences.
    And even though everybody agrees that the problem of foreign
    rogue sites is critical and that we need to cut revenue to
    these sites, there may be disagreement on the language as
    drafted. And I think it is really important that we try to
    reach some common ground, that we work through language that is
    balanced and effective, and make sure that we do not have
    unintended consequences.
        One of the areas of disagreement on the Stop Online Piracy
    Act is on this question of the savings clause, and whether
    there is the immunity that is provided under the Digital
    Millennium Copyright Act for search engines and Internet
    service providers. And so, I would like to have your different
    opinions, because some have represented to me that the Senate
    bill has a savings clause. That seems to address this, but SOPA
    does not. And is that true? I would like to have your different
    opinions on this, Ms. Oyama and Mr. O'Leary.
        Ms. Oyama. Sure. So this is actually, it sounds technical,
    the savings clause, but it is of critical importance to the
    technology industry. Businesses today really build their
    business models under the safe harbors that they know they have
    under the DMCA. So, if a technology company receives notice of
    infringement, they are required to expeditiously remove that
    infringement, but they do not have kind of a general monitoring
    obligation.
        So, the balance that we are trying to strike in any
    legislation would be if there are intermediaries who are
    required to do new things. Under this bill, that would be
    really clear--advertisers shut off your services, payments shut
    off your services. And that would be clear, and we would take
    those obligations. We want to make sure that this bill that is
    going after rogue sites does not strip us of those important
    safe harbors and kind of a related litigation and, you know,
    open the possibility that those types of orders could be used
    to establish red flag knowledge.
        And so, there is some language that we propose that would
    kind of allienate that concern and keep this bill as effective
    as it needs to be to go after rogue sites. But a savings clause
    to make sure that we are not opening ourselves up to liability
    in a way that we would somehow be to proactively monitor all
    user generated content in real time is really important to us.
        Ms. Chu. Mr. O'Leary?
        Mr. O'Leary. Congresswoman, I would just associate myself
    with the comments and the testimony provided by the Register of
    Copyrights. This legislation is a complement to the DMCA. It
    does not impute those rights or the safe harbor in any way,
    shape or form. DMCA deals with good actors, legitimate services
    that are trying to take steps to get infringing stuff off of
    their sites. Rogue sites deal with a group of people that under
    no definition would fit underneath the DMCA. They are bad
    actors. They are dedicated to infringement. These actually fit
    together. They complement each other. In no sense does this
    undermine the DMCA.
        Ms. Oyama. I think if that is the case, a one sentence
    clarifying that in any legislation would be tremendously
    helpful.
        Ms. Chu. Ms. Pallante, what is your opinion on this, on the
    savings clause, and whether there are enough protections, and
    DMCA is not----
        Ms. Pallante. Right. Thank you for the question. The
    question, again, is just--well, the problem is, just because
    somebody may be compliant under the DMCA does not mean that
    they should not take action if the Attorney General finds that
    there is a foreign infringing site run by criminals who are
    engaged in piracy. That is just an unfair comparison. And if
    that is the argument, this bill does allow for that, and it is
    my view that it should.
        Ms. Chu. Okay. Well, I would like to ask a different
    question, and that is about job creation. There are some that
    are saying SOPA would stifle innovation and job growth, and
    that with an opinion, which was a finding by the U.S. Supreme
    Court that it contributed to infringement, that venture capital
    would try up.
        But, Mr. Almeida, in your testimony, you noted that you
    represent over 4 million U.S. workers, and on their behalf that
    you actually support the Stop Online Piracy Act as an important
    jobs bill. How do you respond to these claims that this
    legislation would stifle innovation and job growth?
        Mr. Almeida. I think innovation is alive and well in the
    U.S., and I do not see this as stifling this in the least. Our
    members work in the United States. They are taxpayers. They go
    to work. They make products that we view as entertainment. That
    is what we see this online piracy infringing on. And you cannot
    hit a price point when someone is giving it away for free to
    make a business model to compete with free.
        It also has to do with constructive innovation, and we
    believe in constructive innovation, like Netflix, as opposed to
    TV shack.bz, which is an infringing site that should be taken
    down.
        Ms. Chu. Thank you. I yield back.
        Mr. Smith. Did you yield back?
        Ms. Chu. Yes, I yield back.
        Mr. Smith. Thank you, Ms. Chu.
        The gentleman from Texas, Mr. Poe, is recognized?
        Mr. Poe. Thank you, Mr. Chairman. Thank all of you for
    being here. This panel or this Committee is made up of former
    prosecutors, defense lawyers, and there are even two former
    judges here. And back in my experience on the bench down at the
    courthouse or the palace of perjury, as I referred to it in
    those days, I saw a lot of thieves. Stealing is stealing, and
    thieves are people we are to deal with. I disagree with you,
    Mr. O'Leary. They are not bad actors, they are thieves. And
    this legislation is trying to get a grip on this.
        We have got really three groups that are here. We have the
    credit card companies, we have the search engine folks, and the
    content providers. If I had my way, I would lock all three of
    you in a room and do not come out until you all agree, then we
    could solve it, I would think.
        If you pull up, as I did, if you pull up on the Google
    search engine ``The Grinch Who Stole Christmas,'' or ``Harry
    Potter,'' ``free Harry Potter movies'' or ``free the Grinch Who
    Stole Christmas,'' you get a lot of free sites on there. And as
    a consumer, I cannot tell who is a thief and who is not a
    thief. And I know Google is doing a lot, millions of sites and
    all of that. I have heard the testimony. But at the point we
    are now, what can Google offer to this bill that Google would
    sign on to the bill, specifically?
        Ms. Oyama. Sure. So, to your point about the search
    results, one of the major commitments that we made this year
    was to improve the tools to make sure that when rightsholders
    notify us those search results will be disabled in the search.
    And so, the commitment that we had made at the beginning of the
    year was to reduce the turnaround times to under 24 hours. And
    so, we are happy to say right now it is 6 hours or less is the
    average turnaround.
        In terms of what we could do affirmatively----
        Mr. Poe. Yes, from this day forward. You pull up ``The
    Grinch Who Stole Christmas,'' and you keep going page after
    page for free Grinches.
        Ms. Oyama. So long as those sites are there, they are going
    to show up on the Internet. And so, we think that legislation
    that would target the source of those sides is necessary. What
    we would do is we would support legislation that would go
    through the Department of Justice, so you would have law
    enforcement on that. You would have a court determined that a
    site is dedicated to infringement, and you could serve those
    orders on U.S.-based payment providers and advertising.
        We have Google Checkout for payment. We have AdSense,
    AdWords, a lot of different advertising products that would
    directly regulate and impact our business. But we think that if
    we can break the financial ties for those sites, then, that
    really is smart, targeted, and effective, and would avoid some
    of the collateral damage that we have discussed earlier this
    morning.
        Mr. Poe. So, your answer is just go after the finances.
        Ms. Oyama. Cut off the funding.
        Mr. Poe. Yeah, cut off the money. So, if that were
    something that we added to the bill that would cut off the
    money, then Google may support it. Is that what you are telling
    me?
        Ms. Oyama. Yes. There are certainly concepts in the bill
    that reflect that. But we think if you look at Wikileaks, that
    is how they have been taken out is by cutting off the money. It
    is an approach that U.S. law enforcement uses for many in
    different international problems, you know, narcotics,
    terrorism. I mean, it has been a proven way. If you cut off
    someone's financial incentive, they are not going to want to
    pay for the servers, and the bandwidth, and the infrastructure
    to run these websites.
        Mr. Poe. Okay. Let me be a little more specific. What can
    Google do, not what the financial providers can do, what can
    Google do to move this legislation forward?
        Ms. Oyama. So, there is a lot we are doing in the private
    sector, but in terms of the legislation, we would publicly
    support legislation like what I described, follow the money
    approach. We would be happy to do that. We would be happy to
    work with your staffs on legislation in that way, if it can
    avoid the collateral damage that we have discussed, and if we
    got a good definition of what is a rogue site, that did not
    sweep in legitimate U.S. businesses.
        Mr. Poe. But you cannot tell when you pull it up, ``The
    Grinch Who Stole Christmas,'' who is the real grinch is and who
    is not. You get page after page of free Grinches.
        Ms. Oyama. That is why is court adjudication or a
    collaboration with rightsholders is really important. There are
    lots of legitimate free movies. There are lots of heat, you
    know, content that just the middleman would not really know if
    that was licensed or infringing.
        Mr. Poe. You want in on that, Mr. O'Leary, and then Ms.
    Pallante.
        Mr. O'Leary. I think, to use the example of the Grinch,
    there is a movie right now, as I mentioned earlier, called J.
    Edgar. The only lawful place you can see that movie is in a
    theater. If you go back to your office and put ``J. Edgar''
    into Google, you are going to get the same list of eight pages
    of sites where it is free. That movie is not available for free
    anywhere. If you want to see it, you have to go to a theater
    right now.
        So, I understand the complexity when you are talking about
    something that is perhaps not in the theater, but this is
    actually in the theater right now, and there is no reason for
    it to be online in any fashion frankly. I also think that what
    is being proposed, what was being suggested is, as I said
    earlier, we should follow everybody's money.
        And isolating one or two things, that does not solve the
    search engine problem that we have been talking about, and we
    think that should be a part of the discussion to. We think it
    requires all of the people who are involved in this to work
    together to get it done, kind of to your theory of throw
    everybody in a room and sort it out. If everybody does not go
    into the room at the beginning, you are not going to get it
    sorted out.
        Mr. Poe. Maybe we need a court order to get you all three
    in a room.
        Thank you, Mr. Chairman. I will yield back.
        Mr. Lungren [presiding]. Thank you. Maybe get the FBI to
    help you on that J. Edgar Hoover stuff.
        Mr. Deutch, you are recognized for the next 5 minutes?
        Mr. Deutch. Thank you, Mr. Chair. First of all, it is not
    just J. Edgar. I have teenaged daughters who are awfully
    excited about the new Breaking Dawn movie, which is coming out.
    You can watch that right now online for free.
        What troubles me about this a whole exchange, quite
    frankly, is on the one hand, there is this great technology,
    Ms. Oyama, that you have so proudly trumpeted, understandably,
    about YouTube and what YouTube does in order to prevent illegal
    content from being posted. Yet when you enter ``watch Breaking
    Dawn for free,'' and you can do it online now, there you throw
    your arms up in the air. Well, there is nothing we can do.
        Ms. Oyama. Sorry, I can understand how that would feel
    frustrating. Technologically there is a distinction. So, on
    YouTube, the content that is posted on YouTube is hosted on our
    servers, so we are able to match files. If someone tries to
    upload something on YouTube, we have a reference file we can
    match against. We do not control the World Wide Web.
        Mr. Deutch. I understand that is a technology issue. We
    could talk more about that. I have another question for you.
    This has been a fruitful exchange, different than I might have
    expected from the way, as a number of us have read referenced
    already. The way this debate has played out in the local press
    in particular, I do not know whether Google shares the position
    publicly that this bill will kill the Internet and all of the
    advertisements that have resulted, and all the phone calls that
    we have received in our office. But I do wonder if there is any
    base level here that you would agree needs to be tackled.
        And so, if the issue is the language that says a ``portion
    thereof,'' let us assume the bill did not have that language in
    there. So you cannot argue that Twitter would have to be taken
    down, which, by the way, is an argument, there is no basis for
    that argument. Under this bill. You cannot argue under this
    bill, that Facebook would have to be taken down. There is no
    basis for that under this proposed bill. And I think that you
    understand that, notwithstanding the reference to individual
    tweets that might lead a whole site to be taken down.
        My question is, if that language were not in there, are
    there any of these websites that you believe should be taken
    down and that Google ought to play a role in helping us
    accomplish that?
        Ms. Oyama. Yes. We would be happy to work with the
    Chairman, with your office, on a follow the money legislation.
        Mr. Deutch. Okay. Well, I understand. So, you do not like
    the way the bill is written. Let me ask about that because you
    have many references to day to following the money. Yesterday,
    your Chairman recommended regulations based on tracing payments
    at websites offering illegal materials as a replacement for
    this bill, consistent with what you said today. Many of the
    offshore sites clearly engaging in that are driven by, as you
    point out, are driven by ad revenue, not just credit card
    transactions. And if we follow the money, we cannot just focus
    on the credit cards obviously. We have to focus on the ads.
        Google, at least from the statistics I have been told,
    retains over 75 percent of all search advertising revenue in
    the U.S., therefore, following the money leads us to you. So,
    tell me the steps that Google has taken already, understanding
    that you are concerned about this intellectual property theft,
    understanding the impact that it is going to have every day on
    our economy, tell me the steps that Google has taken to combat
    it using the following the money approach that you favor.
        Ms. Oyama. Okay. So, just to confirm, legislation that
    would go after ads is a big part of our business.
        Mr. Deutch. I understand, but given----
        Ms. Oyama. And we are happy to support that.
        Mr. Deutch. I understand that, but tell me what you have
    done----
        Ms. Oyama. Okay.
        Mr. Deutch [continuing]. Now, because we all acknowledge
    this is an important issue. And if a 75----
        Ms. Oyama. And one should not prevent the other, right.
        Mr. Deutch. Right. You can play a significant role today.
    So, if you could just speak to what I have already done.
        Ms. Oyama. Okay. So, there was some major commitments that
    our General Counsel, Kent Walker, made at the beginning of the
    year. I will just try to tick off the major ones, but we should
    probably follow up with your office on more specifics.
        For DMCA, we have removed more than 5 million infringing
    files. This year, when rightsholders notified us. One of the
    concerns we have heard is that there were some grit in the
    system, and that there was frustration that it was taking too
    long. So, we invested significant engineering hours and money
    to improve the tool.
        Mr. Deutch. Ms. Oyama, I hate to cut you off. I do not have
    a lot of time here, but I would ask that you would follow up. I
    remember Mr. Walker's testimony. I followed up with a letter
    after that hearing requesting all sorts of information. I have
    not received a response. So, I hope that a response will be
    forthcoming to that letter and to the request that I have made
    here today.
        I would like to finish with this. This notion that we are
    going to break the Internet, that somehow we are going to
    stifle innovation, the fact that the kid serving me coffee at
    Starbucks told me, ``hey, I hear you are taking up legislation
    that is going to make it impossible for me to download music.''
    The fact is what we are worried about is, and the reason we are
    having this discussion, what we are worried about is not
    stifling that innovation in the future. That is a concern that
    we all have. And I do not believe that the legislation does
    that. But we know right now if we do nothing, that the film
    industry and those young directors who are starting out, are
    not going to be able to do their craft, and we are not going to
    have the next Dell, or we are not going to have the next Drake,
    because they are not going to be compensated for their work.
        And I hope that as we go forward in this that you provide
    those answers, that we can have an honest discussion about what
    is really at stake here, and let us move past this. These
    attacks on those of us who believe this, and suggest that
    somehow we are going to mean an end to the Internet, it is not
    accurate. I think you understand that it is not accurate, and
    it does not do the American economy any great service at all.
        And with that, I yield back.
        Mr. Lungren. The gentleman yields back, and the other
    gentleman from Texas, Mr. Gohmert, is recognized for 5 minutes?
        Mr. Gohmert. Mr. Chairman, again, also appreciate your
    being here. It is a tough subject, and we are dealing with
    intellectual property here. And, I, like my friend, Judge Poe,
    was a District Judge and also a Chief Justice. And we dealt
    with, it was not called bad actors, you know. You dealt with
    that, and that is really what we are talking about here. It is
    a crime. It is theft. We do not want thieves working their way
    through an honest, legitimate, wonderful means of, in this
    case, the Internet.
        In the past, some have used the example of the pawn shop
    cannot intentionally and knowingly assist in that effort. And
    so, there were laws made. Most States have them where law
    enforcement can go in and get information. And I know, and I
    have been resistant to some of the pushes to force Internet
    providers, search engines, into doing things that we do not
    even require pawn shops to do. And I thought some were going
    overboard in trying to make demands on search engines that we
    do not even demand of pawn shops.
        But, on the other hand, there is this aspect of our
    criminal law, and every State has it, the Federal Government
    has it. Anyone who aids, abets, encourages, in any way assists
    someone in committing a crime, the law is very clear in every
    State and the Federal Code, you are just as guilty as if you
    committed the crime yourself.
        The question is, do you intentionally or knowingly aid.
    Well, it has been brought up often enough. There are thieves
    using the Internet. And I keep hearing from people who say,
    look, if it were illegal for me to use that free website, then
    how come I get access so easily? They are expecting us to do
    something. And I think most of us were hoping that there would
    be something worked out between the interests here.
        But I can give you an example. I know what the law is, and
    I had an eight track ``Warm Shade of Ivory, Henry Mancinci''
    back in college, and it got me through some all-nighters, that
    and ``Jonathan Livingston Seagull'' soundtrack. So, anyway,
    Sleepless in Seattle has this song in the wee, small hours of
    the morning. And I wanted to get that. I wanted to download it.
    I would pay for two bucks for it, not just 99 cents. Nobody has
    it except some free websites I knew not to go use those and
    download it free because it is illegal. Most people do not.
        So, when we talk about follow the money, we are talking
    about something terribly difficult in going to China, going to
    Russia and trying to follow the money over there. We are not
    getting help from those folks. Marsha Blackburn and I met with
    their folks in China that handle this stuff, and it seemed
    pretty clear to me we were not going to get a whole lot of help
    out of them.
        So, what should we do to keep from hurting the innovation
    of the Internet, and Google, and Bing, and these folks that
    come up with great ideas, but at the same time balance the
    interests in this being a law abiding society. And I am
    gratified to hear people on both sides of the aisle have
    similar concerns.
        So, it just does not seem to me to be that onerous to say
    if someone goes to court, for heaven's sakes, and proves with
    probable cause standard that somebody is committing a crime of
    theft, and then that is presented to an Internet provider or
    search engine, these people are committing a crime. There is
    probable cause to believe that is justification for a warrant,
    why that is too onerous to say do not make them accessible. And
    I am still having trouble understanding that, and I would
    welcome comments in that regard from whoever wishes to. Thank
    you.
        Ms. Oyama. Thanks. I think we completely agree about the
    importance of having a Federal judge play the role of an
    arbiter so that folks' services are not being terminated just
    by a 5-day notice to their provider without the ability to
    appear and defend themselves.
        I think to your point about what we can do, it is probably
    three things. So, one would be building on the DMCA. Under the
    DMCA today, search results can be line edited out if a
    rightsholder tells us, a search engine, to remove a piece of
    content. We have worked incredibly hard over the last year to
    improve our tools. The average turnaround time today is 6 hours
    if we receive notice.
        So, we are working really hard on improving that. It is not
    perfect. It is not done. It is something we will continue to
    work on.
        The second piece, though, would be to build on that and to
    come together and support legislation that would impose new
    obligations on other providers. So, we are also an advertising
    provider, largely an advertising provider, a payment provider.
        A judicial process where a court determined that a site was
    dedicated to infringement, and then instructed U.S. based
    intermediaries to shut off financial ties to that website, that
    is the most important and effective thing we could. If we can
    knock them off at their knees and we can cut off their
    financial ties, they will not have a reason to be in business
    anymore. They will not be making money. That is the effective
    way to go.
        And then the third piece would be to get rid of ineffective
    and harmful pieces. So, I realize reasonable people can
    disagree about this, but there a tremendous concern in the
    technology industry about some of the remedies that are being
    proposed and some of the unintended consequences that would
    have, you know, potentially very severe repercussions for the
    Internet network, for people's security, and for free speech
    concerns.
        So, getting the balance right is something we think is
    important. We certainly think that there is a way forward and a
    way that we could agree on going after these sites.
        Ms. Lofgren. Would the gentleman yield?
        Mr. Gohmert. Well, I would ask unanimous consent to allow
    others to finish answering because there are a couple of hands.
    And I certainly----
        Mr. Lungren. The gentleman is extended another minute.
        Mr. Gohmert. You had requested to comment.
        Mr. Clark. I would just add that in regard to your comments
    about thievery and Congressman Poe's, from our industry's
    perspective, it is more than thievery. It is murder. We do
    feel, I particularly feel, and I have 28 years of Federal law
    enforcement, I know crime when I see it, and I see counterfeit
    medicines as actually attempted murder. I mean, it is not
    quick, it is not immediate. But when you are only giving a
    patient 20 percent of the medicine they need to cure their
    cancer or their heart problems or their high blood pressure,
    you are, in fact, killing them slowly. But that is the issue
    here.
        Mr. Gohmert. As a prosecutor, you know that may be not be
    murder, it may be negligent homicide or some other type of
    homicide.
        Mr. Clark. Along those lines. And it is frustrating. If we
    are not immediately making progress in cutting that down. I
    have worked with CDP and pilot programs, and I am seeing
    counterfeits flooding in because of the purchases over the
    Internet from the rogue websites that are selling counterfeit
    medicines. And it is incredulous to me how much is coming into
    the United States.
        So, I would say, you know, this bill is going forward with
    demonstrating that we need to change the status quo. We cannot
    accept what is existing right now. And I agree very much that
    we have to demonstrate to people that there are consequences,
    and this is a serious crime. When you look at 6 months, 4
    months, 3 years. You say your cost of doing business, it cannot
    be that bad if that is all they are going to give.
        So, I also see the Title II in this as very, very
    significant as well.
        Mr. Gohmert. Was there anybody else that wanted to comment?
    All right. Thank you.
        Ms. Lofgren. Would the gentleman yield?
        Mr. Gohmert. Yes.
        Ms. Lofgren. I just wanted to briefly, I think it was Mr.
    O'Leary suggested that if you type in ``J. Edgar movie'' you
    get all these infringing sites. And I just did that, and what
    you get is the show times in Washington, a review, the
    Wikipedia article, the trailer from Warner Brothers, several
    reviews of the movie, the iTunes trailer. There is not a single
    infringing site that comes up. So, I just thought we----
        Mr. Gohmert. Reclaiming my time----
        Mr. Marino. Would the gentlewoman or the gentleman yield?
        Mr. Gohmert.--I think if you use the word ``free'' in
    there, that is where those things come up. But, yes, I will
    yield.
        Mr. Marino. Would you yield? Well, I just did the same
    thing, and on----
        Ms. Lofgren. Did you use Google?
        Mr. Marino. I just Googled it, ``watch J. Edgar Hoover free
    online,'' on YouTube, full versions. It shows you how to
    download it, no cost. Right here. There is a list of----
        Ms. Lofgren. Well, I did a different search engine. But the
    point I am trying to make going back----
        Mr. Gohmert. Well, reclaiming my time, I do not know what--
    --
        Mr. Lungren. The gentleman's time has expired.
        Ms. Lofgren. I would ask that the gentleman be granted 15
    seconds and so I might say just in answer to--the point is the
    search engines are not capable of actually censoring the entire
    World Wide Web. That is the problem. You cannot do that. And
    so, we need to go after the people who are committing crimes in
    a way that is going to work. I think we can do that, but this
    bill is not it. And I thank the gentleman.
        Mr. Gohmert. Reclaiming my time----
        Mr. Lungren. The gentleman's time has expired.
        Mr. Gohmert. I agree, but also need to cut off the getaway.
    And with that, and I am not sure what the gentlelady has
    against Google, but I respect her using Bing, and yield back my
    time.
        Mr. Lungren. The gentleman yields back time he does not
    have. [Laughter.]
        I am going to accuse you of being a liberal here in a
    minute.
        Mr. Johnson is recognized for 5 minutes?
        Mr. Johnson. Thank you, Mr. Chairman. Mr. O'Leary, SOPA
    requires payment networks, like MasterCard, to suspend payment
    transactions between a U.S. customer and an online merchant
    within 5 days. According to Ms. Kirkpatrick's testimony, there
    are very legitimate challenges that payment networks have in
    meeting such a short deadline, especially considering the
    multiple players involved in an online transaction.
        The Senate version requires payment networks to take action
    as expeditiously as reasonable. Earlier this year, the White
    House negotiated a best practices document with the payment
    industry that has a reasonable period of time standard.
        Which of these standards is acceptable to you that within 5
    days under SOPA the ``expeditiously as reasonable'' under the
    Senate version, and a reasonable period of time as negotiated
    between the White House and the payment industry?
        Mr. O'Leary. Yes, sir. I think it is a legitimate question,
    and one that we believe can be resolved favorably to everyone.
        Mr. Johnson. Which one do you think is most acceptable to
    you?
        Mr. O'Leary. As I sit here right now, I am not prepared to
    pick between the three, quite honestly. I certainly understand
    the point that was made by our colleagues at MasterCard if it
    is not possibly done within 5 days. We certainly do not want to
    create a time limit which forces them into an impossible
    standard.
        Mr. Johnson. All right.
        Mr. O'Leary. At the same time, we would like the
    legislation to recognize that if someone is trying to run the
    clock out, they do not do it.
        Mr. Johnson. If I open up the tent for you to stick your
    nose in, boy, you are going to get all the way up in there. I
    am just appreciating your gift of gab.
        If I might ask Mr. Clark the same question.
        Mr. Clark. I feel the same way.
        Mr. Johnson. Okay. All right.
        Mr. Clark. Sorry. I feel the same way.
        Mr. Johnson. All right. Ms. Pallante, Section 506 of the
    Copyright Act establishes criminal liability for the willful
    infringement of a copyright. Recently, there has been confusion
    as to the definition of that term, ``willful.'' Do you think
    that willfulness is the same as intentional? Tell me about the
    difference between those two standards.
        Ms. Pallante. Right. So, that is a great question, and the
    point of SOPA is to capture those that knowingly engage in a
    known legal duty. And that is the standard that most courts
    have accepted. There are some exceptions to that. I think that
    is something that could be clarified in the bill, in
    legislative history perhaps.
        Mr. Johnson. All right. Ms. Oyama, the DMCA in Section 230
    of the Communications Decency Act represent the legal
    underpinnings of the view that intermediaries need not monitor
    or supervise the communications of users. It is a view that we
    have long touted and pushed across the world through various
    diplomatic channels. We have harshly criticized governments who
    use such virtual walls to prevent citizen access to the
    Internet. China is a great example. With that in mind, would
    this legislation allow companies to demand that search engines
    located inside the U.S. censor where American consumers are
    able to go on the Internet? And how would this legislation
    likely be viewed by China, and Iran, and other countries that
    put these roadblocks in terms of content to their citizens on
    the Internet? And how would that affect our diplomacy?
        Ms. Oyama. Thanks. So, for the DMCA piece that you
    mentioned, I think we would certainly agree that DMCA has
    proved to be a foundation for American innovation, and has
    struck a balance. So, if you are a new company or starting up,
    you know what the laws are. You have certainty. And it also
    helps rightsholders. If a rightsholder is aware that there is
    infringing content on the service provider, they just need to
    let us know. Web hosting companies search and engines. We will
    remove access to that content. It strikes the right balance. It
    takes care of infringing speech. It leaves up legitimate
    speech. And it reflects a careful balance. And also, because of
    the way web services are used today, we see all over the place
    when there are real time events, it is important that a web
    platform enables that type of real time communication, of real
    time e-commerce.
        If you did not have the DMCA and an intermediary platform
    was required or potentially liable for what its users were
    posting in real time, you would have to implement some type of
    proactive monitoring system. It could really change the
    dynamics of the Web today.
        I think the second piece----
        Mr. Johnson. That would stifle the small entrepreneur that
    is just getting started, more than it would hamper the larger
    providers of content.
        Ms. Oyama. I think it is both, but it certainly----
        Mr. Johnson. It would be a burden on both.
        Ms. Oyama. Yeah. If you are a new company starting up, you
    will have less money to invest in that type of monitoring. So,
    certainly, it would have an impact on small businesses.
        To your question about, you know, kind of the speech
    aspect, you know, if we impose a law here, which would have
    court orders requiring of domestic search engines to make
    entire full websites disappear, and especially if there is some
    type of overbroad definition which would capture also
    legitimate speech, you know, unfortunately, what we do here
    would have other ramifications. And we may think that this is a
    good reason, we do think this is a good reason here. But we see
    all the time for Google DMCA requests. Competitors tried to
    take each other down. Pro-democracy speech tries to be quelled.
    We have seen in Libya and the recent activities there,
    different politicians tried to take each other's YouTube
    channels out because they disagree with their views. We see
    copyright use all the time as an excuse to quell speech.
        If we mandate this type of approach here, we really need to
    think carefully about what types of international ramifications
    that will have on free expression globally.
        Mr. Lungren. The gentleman's time has expired.
        Mr. Johnson. If I might get just one more question.
        Mr. Lungren. All right. The gentleman has already had extra
    time, but so has everybody else, so go ahead.
        Mr. Johnson. Thank you. Thus, Justice Department has
    responsibilities under the SOPA act. While at the same time, we
    have been talking about downsizing government, and, in fact,
    the Justice Department has lost about 30 percent of their
    attorneys. How does this affect the effort to criminally go
    after these pirates, and also from a civil standpoint? I will
    ask that to Mr. O'Leary.
        Mr. O'Leary. Well, I think that, you know, this bill
    actually speaks directly to that point. That is part of the
    reason there is the ability for individual plaintiffs to move
    so that the burden does not fall solely on the Justice
    Department.
        The content industry, Pfizer----
        Mr. Johnson. What about the criminal part, though, because
    we get people being prosecuted for shoplifting and stealing
    little small petty items. But this is multi-billion white
    collar fraud, which only the Justice Department has or should
    have the, really had the resources and the breadth of law
    enforcement ability to address. How does the downsizing of the
    Justice Department impact criminal prosecution?
        Mr. O'Leary. Well, I think as a general premise, would you
    downsize the Justice Department, obviously it has an impact.
    But let us be very clear. The Justice Department does pursue
    criminal cases internationally.
        Mr. Johnson. Well, how can it do so----
        Mr. Lungren. The gentleman's time has expired.
        Mr. Johnson. Thank you, Mr. Chairman.
        Mr. Lungren. Some time ago. Recognize myself for 5 minutes.
        Mr. Johnson. Well, I am a liberal. [Laughter.]
        Mr. Lungren. Well, I would not accuse you of being anything
    else. [Laughter.]
        Mr. Johnson. Well, I bear that shame with great honor.
    [Laughter.]
        Mr. Lungren. This is sort of a reverse to the old story
    that I went to a fight and a hockey game broke out. I came here
    as one who has not made up his mind on this bill, hoping to
    receive information on this. And I think everybody on this
    panel is committed to fighting piracy. I mean, maybe I am the
    only Member of this Committee who has got a gold record. I got
    it from the recording industry for my work on anti-
    counterfeiting. When I was attorney general of California. So I
    very much believe there is an important role for us to play,
    law enforcement, in civil law in this regard.
        But my concern is something that was brought to my
    attention as the Chairman of the Cybersecurity Subcommittee on
    Homeland Security, and that is the existence of a system that
    has been going on for some years, called DNS security or DNS-
    SEC. And I have heard from some of the engineers who have been
    working on this in the Internet area that we of applied this
    law in this way, it would undo what we have been doing it to
    try and secure the Internet by way of DNS-SEC or DNS security.
    So, I would like to ask the panelists if any of you feel you
    can speak to this point, because it is one that was raised with
    me. I am not a technical expert on this, but there was some
    real alarm by Internet engineers, I would call them, who really
    do not have a dog in this fight and in terms of the disputes
    between the various special interests here. And I mean that in
    the proper way, special interests.
        And so, what I ask Mr. Clark, for instance, are you aware
    of this criticism, and does this legislation, would it
    incentivize Internet service providers from using the DNS
    security extensions because it mandates the redirection of
    customers to another website?
        Mr. Clark. No, I am afraid I do not. I am not familiar with
    that.
        Mr. Lungren. Okay. Mr. O'Leary?
        Mr. O'Leary. Well, I am certainly aware of the argument,
    and the people that we have talked to, it is a concern, which
    is, frankly, overstated. As I mentioned earlier in response to
    another question, there are numerous countries around the world
    that engage in this type of activity. The Internet has worked
    without a problem in regard to that. And I think also, you
    know, they are overlooking and looking at this debate. There is
    an existing security problem with the current state of play,
    and that is these rogue sites taking private information from
    consumers and spreading malware and spyware and things like
    that.
        The final thing I would say is that in regard to other
    things, like dealing with malware, dealing with spyware,
    dealing with child pornography, this type of activity occurs
    all the time, and the Internet seems to function just fine.
        I tend to agree with the comments of Mr. Deutch that if the
    Internet is going to be all things to all people, it should
    also be in terms of trying to help us stop people from stealing
    our stuff. The problem, frankly, is that the Internet seems to
    be for trade----
        Mr. Lungren. Well, that is not my point. My point is
    whether or not you can respond to the specific question raised
    by Stewart Baker, former DHS Assistant Secretary of Policy and
    former NSA General Counsel, to the effect that if this approach
    to respond to a legitimate problem were put into effect, it
    would undercut an effort that has been going on for nearly a
    decade to secure the Internet by way of this program that I
    referred to.
        Mr. O'Leary. We disagree with that position.
        Mr. Lungren. Okay. Can you submit in writing for us
    specifically how you disagree with that approach?
        Mr. O'Leary. Certainly, I would be happy to.
        Mr. Lungren. Ms. Kirkpatrick?
        Ms. Kirkpatrick. I am unfamiliar with that element. I am
    unaware of it. I do not have the technical expertise to comment
    on it.
        Mr. Lungren. Does anybody with your organization have the
    expertise?
        Ms. Kirkpatrick. I certainly can follow up and get back to
    you.
        Mr. Lungren. Would you please respond to that specific
    question, because to me it is an underlying question that is
    extremely important, having worked on the problem of
    cybersecurity. If what we are doing here has the unintended
    consequence of upsetting what is, at least in the opinion of a
    number of experts, and they may be wrong. I am trying to ferret
    this out, undercut a real effort that would practically help us
    secure the Internet, that is bothersome to me.
        Ms. Oyama?
        Ms. Oyama. Sure. So, I think the concerns that you
    mentioned are the ones that we have heard as well, from many
    cyber security experts. I knows Stewart Baker has written about
    this. The designers of DNS-SEC themselves have published a
    white paper. I am not--yeah.
        Mr. Lungren. Do you have anybody that has expertise with
    your association and can respond to that specifically, because
    this is not part of this hearing, and I am very concerned that
    evidently this bill is not being referred to my Subcommittee.
    And I am not parochial about this, but if we are going to do
    it, we ought to at least talk about it and to have people come
    in here and say, well, our organization--either we do not take
    a position or we are not experts on this is upsetting.
        Ms. Oyama. I think that there is great concern within our
    company.
        Mr. Lungren. Well, could you please respond in writing on
    that?
        Ms. Oyama. Sure, happy to.
        Mr. Lungren. Could you, please?
        Ms. Oyama. Yes.
        Mr. Lungren. And, Mr. Almeida?
        Mr. Almeida. No, no expertise.
        Mr. Lungren. Okay. Ms. Pallante, do you have any?
        Ms. Pallante. I think that Congress should absolutely
    consult objective technical experts. But I will add is that
    ICE, through operation on our sites, has been using the
    existing seizure and civil forfeiture laws to essentially
    disappear website in the United States. So, this bill would
    take that criminal standard and apply it to foreign sites.
        Mr. Lungren. Thank you very much. Let us see, who is next?
    Mr. Marino is next for 5 minutes?
        Mr. Marino. Thank you, Chairman. Thank you, ladies and
    gentlemen, for being here. I think my colleague and friend, Ms.
    Lofgren, and I pointed out a very good example of how easy it
    is. This is on some sides and not others. I think so. Zoe went
    to Bing and got the trailers, and I went to Google, typing in
    ``free,'' who sent me to YouTube for the free movie. So, you
    know, there is a lot of work to be done here.
        Ms. Oyama, I want to compliment you on your decorum and
    your professionalism and your loyalty to your company, for
    being here and answering the tough questions that you have been
    answering. You are certainly an asset to your corporation.
        Ms. Oyama. Thank you.
        Mr. Marino. Nevertheless, I think it is reprehensible that
    the chairman, that the CEO, that the president, that the
    counsel, none of them thought it was responsible enough for
    them to be here, and they sent you into the lion's den. And you
    certainly deserve a large portion of their bonus at the end of
    the year.
        Ms. Oyama. Can I just add one thing to your question on our
    general counsel, he was here in the spring. He cares very much
    about this problem and doing it the right way.
        Mr. Lungren. Good.
        Ms. Oyama. He, I think, sent a letter saying he had a long
    standing personal commitment for today, any other day, he would
    be here, and he looks forward to continuing----
        Mr. Marino. All right, I give that to him, and I remove his
    name from that list, and he can keep his bonus, all right?
        Let me ask you a question here. I want to thank Google for
    what it did for child pornography, getting it off the website.
    I was a prosecutor for 18 years, and I find it commendable. And
    I put those people away. So if you can do that with child
    pornography, why can you not do it with these rogue websites?
    And let me follow that up with, why not hire some whiz kids out
    of college to come in and monitor this and work for the company
    to take these off?
        My daughter, who is 16, and my son, who is 12, we would
    love to get on the Internet, and we download music, and we pay
    for it. And I get to a site, and I say, this is a new one, this
    is good, we can get some music here. My daughter says, ``Dad,
    do not go near that one, it is illegal, it is free, and given
    the fact that you are on the Judiciary, I do not think you
    should be doing that.'' So, maybe we need to hire her. But why
    not?
        Ms. Oyama. So, the two problems are similar in that they
    are both very serious problems. They are both things that we
    all should be working to fight against. But they are very
    different in how you go about combating it. So, for child porn,
    we are able to design a machine that can detect child porn. You
    can detect certain colors that would show up in pornography.
    You can detect flesh tones. You can have a manual reviewer.
    Someone would look at the content and they would say this is
    child porn, and it should not appear.
        We cannot do that for copyright just on our own because any
    video, any clip of contact, it is going to appear to the user,
    to be the same thing. And so, you need to know from the
    rightsholder, the owner of the right, how have you licensed it,
    have you authorized it, or is this infringement.
        Mr. Marino. I only have a limited amount of time here, and
    I appreciate your answer. But we have the technology. Google
    has the technology. We have the brainpower in this country. We
    certainly can figure it out.
        Let me move on here. First of all, Mr. Clark and Mr.
    O'Leary, I want to thank you for your dedication to law
    enforcement. I have been down there for 18 years, and thank you
    so much. And, Mr. Almeida, my father was a fireman for 30
    years, so I know exactly what you are talking about. So, I want
    to pose this question to anyone.
        It is my understanding that taking down a portion of the
    site is much more difficult than taking down the entire site,
    so I am hearing from the testimony here. So, is there a more
    balanced approach that we can assist you in letting you take
    the lead on it in defusing of this problem and stopping this
    infringement on these materials, this illegal stealing of our
    materials that is costing us jobs and is costing this country a
    lot of money? If you understand my question, please jump in,
    anyone. I do not think anyone understands my question.
    [Laughter.]
        Ms. Pallante?
        Ms. Pallante. Well, no, I appreciate the question. I do not
    know the answer. Certainly, when law enforcement goes before a
    judge and tries to get a court order that would allow it to
    seek relief from the website, and then engage the search
    engines, the ISPs, the payment processors et cetera, to help,
    they would like to stop the infringing material and not be non-
    infringing material. I do not know if it is a technical
    solution, or if it is just a question of each website, having
    different pages where they can easily find the infringing
    content.
        Mr. Marino. Do any of you agree with me that we do have the
    brainpower and the technology available to figure this out, if
    we want to spend the money?
        All right, thank you, and I yield back my time.
        Mr. Lungren. Great. The gentleman's time is up.
        Mr. Amodei, you are recognized for the last 5 minutes of
    this hearing.
        Mr. Amodei. Thank you for that strategic timing of my
    recognition, Mr. Chairman. I appreciate that. And so, in honor
    of your discretion, I will not use the whole time.
        I would like to, first of all, associate myself with the
    comments of my colleague from California at the of the dais,
    Mr. Deutch. I think he has hit the nail on the head. When you
    are the last guy, you do not want to try to see if you can
    prolong things any more than usual.
        I would like to ask the Chair, however, since there is
    written responses to this security thing, and I tried to write
    the guy's name down. I am new; I do not know. Maybe it was
    Stewart Baker? Maybe we could have Stewart Baker's concerns
    written so we can have something to compare those with. And if
    that is out of order, then I will shut up on that and move
    right along.
        Mr. Lungren. Mr. Baker's article was made part of the
    record. [Laughter.
        And the gentlelady from California is giving it to you
    right now.
        Mr. Amodei. Okay, good. Thank you.
        Mr. Lungren. And if I were Chair, I would have him here,
    but I am only temporary Chair. [Laughter.]
        Mr. Amodei. Thank you for your compassion for someone who
    has been here for 61 days.
        Finally, so that I have something to yield back, I
    appreciate the concerns. This strikes as one of those deals
    where the pursuit of the perfect is going to get in the way of
    the good. One thing, and I apologize for missing the part that
    I missed, but there was an opportunity to talk with some folks
    in another Committee that was kind of important. But I did not
    hear anything that said, ``no, this is not an issue; no, this
    is not taking place; no, those jobs, or this gentleman on the
    end, are not being threatened; no, it is not real time impacts
    when Mr. Marino can dial in and be watching it right now.''
        Quite frankly, I think there is an issue--I do not how you
    address it because nobody should leave the room thinking I am
    technically savvy. But I do not have anything to type on, as a
    matter of fact. They even took my iPhone away today.
        But I will tell you this. The impacts are instantaneous.
    Once it is downloaded, it is gone. That horse is out of the
    barn, and it is never coming back. And when you have a broken
    leg, you need to go to the hospital.
        And I agree with Mr. Marino's comments. Way to go. Whatever
    they are paying you, it is not enough. And so, if those pansies
    want to come by someday and say hi, tell them they are welcome.
    [Laughter.]
        So, anyhow, when your leg is broken, you got to go to the
    hospital, and unfortunately you are in the medical business on
    this stuff, and so I can just say that my concern is this. You
    are a major operational piece of this. The criminal activities
    are uncontroverted that are happening, and to do nothing is
    wrong. Nothing happens quick in this process. I believe from my
    vast amount of experience, and so it is time to try something.
        And so, while I appreciate the concerns, when I hear the
    recurring think of follow the money, there is plenty of money
    around to follow. And that is a good thing. I am a Republican;
    it is a good thing to make money.
        So, I will just tell you from my perspective, it is time to
    move. If there was a perfect bill that ever came out of here,
    it will sure be neat for me to be here while it happens, but I
    am guessing it is not going to happen when I do. So, I would
    appreciate best recommendations so that we can get moving on in
    terms of stopping something that is taken 7 years just to get
    to this point. I am not picking on you.
        And so, with that, Mr. Chairman, I see the light is where
    it is. I yield back the most time that anybody has yielded back
    today.
        Mr. Lungren. Very good. The gentleman will be commended.
        I would like to thank our witnesses for the testimonies
    today. Without objection, all Members will have 5 legislative
    days to submit additional written questions for the witnesses
    or additional materials for the record.
        We thank you all. We appreciate your testimony on a very
    difficult subject.
        This hearing is adjourned.
        [Whereupon, at 1:29 p.m., the Committee adjourned.]

                                A P P E N D I X

                                  ----------

                   Material Submitted for the Hearing Record

                Prepared Statement of the Honorable Ron Wyden,
                    a U.S. Senator from the State of Oregon

        I would like to take this opportunity to commend Chairman Smith and
    Ranking Member Conyers for holding this hearing. While I would have
    liked to see a more diverse range of voices included at today's table,
    I appreciate the opportunity to share my views on this important
    subject.
        While some would like to paint this issue as a simple matter of
    being for or against intellectual property, that would be a mistake.
        Believing that a free and open Internet is worth fighting to
    protect does not mean that we aren't concerned about copyright
    infringement or that we are somehow oblivious to the fact that
    unscrupulous foreign suppliers are using the net to traffic counterfeit
    and illegal goods. They are and Congress and this committee are right
    to be considering remedies to stop them and to protect the hard work of
    our creative industries.
        Rather, those of us who value the Internet's growing role in our
    society recognize that any government intervention in the online
    ecosystem that is the Internet can and will have a ripple effect on
    more than just its bad actors. Interfering in the Domain Name System
    (DNS) for example would undermine the net's structure and harm
    cybersecurity efforts. Authorizing a private right of action, for
    example, wouldn't just allow rights holders to use the courts to
    protect their intellectual property. Companies could also abuse such
    authority to protect out-dated business models by quashing new
    innovations in their infancy and discouraging less than complimentary
    speech.
        In other words, the wrong approach to combating infringement could
    fundamentally change the Internet as we know it, moving us towards a
    world where transactions are less secure, ideas are less accessible and
    starting a website wouldn't be an option for anyone who couldn't afford
    a lawyer.
        The Internet has become an integral part of our everyday lives
    precisely because it has been an open-to-all land of opportunity where
    entrepreneurs, thinkers and innovators are free to try and fail. The
    Internet has changed the way we communicate with each other, learn
    about the world and conduct business, because instead of picking
    winners and losers, we created a world where every idea has an
    opportunity to be heard regardless of where it originates.
        As Members of Congress we can now engage with our constituents via
    online innovations in social media, while a small business in rural
    Oregon can use the Internet to find customers around the world. And the
    Internet isn't just becoming the global marketplace for goods and
    services, it is the marketplace of ideas challenging tyranny and
    championing democracy. It has made lies harder to sustain, information
    harder to repress and injustice harder to ignore.
        But while the Internet has become a dependable part of our lives,
    it is essential that we not take it for granted or make assumptions
    about a medium that is still taking shape and that few in Congress
    fully understand.
        Moreover, it is important to remember that the Internet we know did
    not happen by accident. Rather, it grew from a set of principles that
    we deliberately put into law during a situation not unlike the one
    before the committee today.
        Over 15 years ago, when Congress first started thinking about
    Internet regulation the concern was protecting children from
    pornography. There were competing ideas and some argued that Congress
    should simply censor the Internet and use the government to cut off
    access to objectionable material.
        But a few of us saw value in letting the Internet develop free from
    corporate or government control. Instead of having government censor
    the web, we developed an approach that would empower users and
    technology to address content concerns on their own. And we took the
    opportunity to pass a law that said that neutral parties on the net are
    not liable for the actions of bad actors.
        That fundamental principle enshrined in Section 230 of the
    Communications Decency Act both addressed the problem and freed
    innovators to develop new ideas like YouTube, Facebook, Wikipedia and
    Twitter. So now, as we again debate web censorship, let's ask
    ourselves: What next generation of innovations won't be realized if we
    backtrack on that principal now?
        Yes, the Internet needs reasonable laws and bad actors need to be
    pursued, but the freedoms of billions of individual Internet users
    should not be sacrificed in the interest of easing that pursuit. The
    decisions we make to police the Internet today will also govern how
    this relatively new medium will continue to develop and shape our
    world. And yes, giving moneyed interests a louder voice and a greater
    ability to determine what that online world will look like would
    fundamentally alter the Internet which currently treats all voices as
    equal.
        As I have said before, this is not an issue where we should use a
    bunker-buster bomb when a laser beam would do. And that is not just my
    opinion, venture capitalists who fund Internet start-ups, the biggest
    and smallest actors in the tech community, law professors concerned
    with speech, Internet technologists, security experts and mainstream
    and new media have all expressed concerns about the legislation
    advancing in Congress.
        In writing laws to police the Internet, we need to consider more
    than how effective a proposed remedy would be at combating
    infringement, we must also consider the impact proposed remedies will
    have on everything else online. This means keeping the following in
    mind:

            1.  Be deliberate. While rights holders and law enforcement are
            understandably eager to go after bad actors, we must be mindful
            of the precedents we set here at home, and around the world.

            2.  Get the scope right. Narrowly focus law enforcement's
            authority on those who are willfully and deliberately breaking
            the law or infringing on others' property rights for commercial
            gain.

            3.  Avoid collateral damage. Rather than frustrating the
            architecture of the Internet or establishing a censoring
            regime, consider instead promoting approaches that empower
            users and do no harm to the 'Net. More simply, fish for tuna
            without catching dolphins.

            4.  Promote innovation over litigation. Our efforts should be
            to protect copyrights and trademarks, not outdated business
            models.

        Again, I thank the committee for its consideration of my views.

             Prepared Statement of Terry Hart, Creator of Copyhype

       List of submitters contributing material in association with the
                          consideration of H.R. 3261*
    ---------------------------------------------------------------------------
        *The material received by the Subcommittee from the submitters
    whose names appear in this list, is not printed in this hearing record
    but is on file with the Subcommittee.

    60 plus
    ABC
    AFL-CIO
    Alliance for Safe Online Pharmacies
    American Bankers Association
    American Civil Liberties Union
    American Consumer Institute Center for Citizen Research
    American Society of Composers, Authors and Publishers
    Americans for Tax Reform
    Association of American Publishers
    Association of State Criminal Investigative Agencies
    Association of Talent Agents
    Beachbody, LLC
    BMG Chrysalis
    Broadcast Music Incorporated
    Building and Construction Trades Department (AFL-CIO)
    Capitol Records Nashville
    CBS (including subsidiary Simon & Schuster)
    Cengage Learning
    Center for Indicvidual Freedom
    Christian Music Trade Association
    Church Music Publishers' Association
    Coalition Against Online Video Piracy
    Comcast/NBCUniversal
    Computer & Communications Industry Association
    Concerned Women for America
    Congressional Fire Services Institute
    Copyright Alliance
    Coty, Inc.
    Council of Better Business Bureaus
    Council of State Governments
    Country Music Association
    Country Music Television
    Creative Community
    Deluxe Entertainment Services Group, Inc.
    Disney Publishing Worldwide, Inc.
    Educause
    Electronic Transactions Association
    Elsevier
    EMI Christian Music Group
    EMI Music Publishing
    Entertainment Software Association
    ESPN
    GoDaddy
    Gospel Music Association
    Graphic Artists Guild
    Hachette Book Group
    HarperCollins Publishers Worldwide, Inc.
    Hyperion
    Independent Film & Television Alliance
    International Anti-Counterfeiting Coalition
    International Brotherhood of Electrical Workers
    International Brotherhood of Teamsters
    International Trademark Association
    International Union of Police Associations
    Internet Society
    Joint letter of support from AFM, AFTRA, DGA, IATSE, IBT, and SAG
    Joint letter of opposition from ALA, ARL, CDT, CEI, DP,EFF, FH,HRF,
        HRW,
    Internews, NAFOTI, PK and TF
    Joint letter of opposition from educational interests
    Joint letter of support from First Amendment & Intellectual Property
        Counsels
    Let Freedom Ring
    Library Copyright Alliance
    Lilly
    L'Oreal
    Lost Highway Records
    Macmilian
    Major City Chiefs
    Major County Sheriffs
    Major League Baseball
    Marvel Entertainment, LLC
    Mastercard Worldwide
    MCA Records
    McGraw-Hill Education
    Mercury Nashville
    Minor League Baseball
    Minority Media & Telecom Council
    Motion Picture Association of America
    Moving Picture Technicians
    MPA--The Association of Magazine Media
    National Association of Fusion Center Directors
    National Association of Manufacturers
    National Association of Prosecutor Coordinators
    National Association of Theater Owners
    National Association of State Chief Information Officers
    National Cable & Telecommunications Association
    National Center for Victims of Crime
    National Criminal Justice Association
    National District Attorneys Association
    National Domestic Preparedness Coalition
    National Football League
    National Governors Association
    National League of Cities
    National Narcotics Officers' Association Coalition
    National Sheriffs Association
    National Songwriters Association
    National Troopers Coalition
    Net Coalition
    News Corporation
    Pearson Education
    Penguin Group (USA), Inc.
    Pfizer, Inc.
    Pharmaceutical Research and Manufacturers of America
    Professors' Letter In Opposition to PROTECT-IP
    Provident Music Group
    Random House
    Raulet Property Partners
    Republic Nashville
    Revlon
    Sandia National Laboratories
    Scholastic, Inc.
    Showdog Universal Music
    Sony Music Entertainment
    Sony Music Nashville
    Sony/ATV Music Publishing
    State International Development Organizations
    The Estee Lauder Companies
    The Honorable Ron Wyden
    The Perseus Books Group
    Tiffany and Co.
    Time Warner
    True Religion
    U.S. Chamber of Commerce
    U.S. Conference of Mayors
    U.S. Olympic Committee
    Ultimate Fighting Championship
    UMG Publishing Group Nashville
    United States Tennis Association
    Universal Music
    Universal Music Publishing Group
    Viacom
    Visa Inc.
    W.W. Norton & Company
    Wallace Bajjali Development Partners LP
    Warner Music Group
    Warner Music Nashville
    Wolters Kluewer Health
    Word Entertainment
    Zumba Fitness