[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.
    [The information referred to follows:]
    
    
    
    


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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.
    [The information referred to follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    


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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
