    [House Hearing, 118 Congress]
    [From the U.S. Government Publishing Office]

                           DIGITAL COPYRIGHT PIRACY:
                     PROTECTING AMERICAN CONSUMERS, WORKERS,
                                   AND CREATORS

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

                                    HEARING

                                   BEFORE THE

                      SUBCOMMITTEE ON COURTS, INTELLECTUAL
                            PROPERTY, AND THE INTERNET

                                     OF THE

                           COMMITTEE ON THE JUDICIARY

                         U.S. HOUSE OF REPRESENTATIVES

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                          WEDNESDAY, DECEMBER 13, 2023

                                   __________

                               Serial No. 118-57

                                   __________

             Printed for the use of the Committee on the Judiciary

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                   Available via: http://judiciary.house.gov

                                   __________

                       U.S. GOVERNMENT PUBLISHING OFFICE
    54-399                      WASHINGTON : 2024

    -----------------------------------------------------------------------------------

                           COMMITTEE ON THE JUDICIARY

                            JIM JORDAN, Ohio, Chair

    DARRELL ISSA, California             JERROLD NADLER, New York, Ranking
    KEN BUCK, Colorado                       Member
    MATT GAETZ, Florida                  ZOE LOFGREN, California
    ANDY BIGGS, Arizona                  SHEILA JACKSON LEE, Texas
    TOM McCLINTOCK, California           STEVE COHEN, Tennessee
    TOM TIFFANY, Wisconsin               HENRY C. ``HANK'' JOHNSON, Jr.,
    THOMAS MASSIE, Kentucky                  Georgia
    CHIP ROY, Texas                      ADAM SCHIFF, California
    DAN BISHOP, North Carolina           ERIC SWALWELL, California
    VICTORIA SPARTZ, Indiana             TED LIEU, California
    SCOTT FITZGERALD, Wisconsin          PRAMILA JAYAPAL, Washington
    CLIFF BENTZ, Oregon                  J. LUIS CORREA, California
    BEN CLINE, Virginia                  MARY GAY SCANLON, Pennsylvania
    LANCE GOODEN, Texas                  JOE NEGUSE, Colorado
    JEFF VAN DREW, New Jersey            LUCY McBATH, Georgia
    TROY NEHLS, Texas                    MADELEINE DEAN, Pennsylvania
    BARRY MOORE, Alabama                 VERONICA ESCOBAR, Texas
    KEVIN KILEY, California              DEBORAH ROSS, North Carolina
    HARRIET HAGEMAN, Wyoming             CORI BUSH, Missouri
    NATHANIEL MORAN, Texas               GLENN IVEY, Maryland
    LAUREL LEE, Florida                  BECCA BALINT, Vermont
    WESLEY HUNT, Texas
    RUSSELL FRY, South Carolina
    Vacant

                                     ------

               SUBCOMMITTEE ON COURTS, INTELLECTUAL PROPERTY, AND
                                  THE INTERNET

                        DARRELL ISSA, California, Chair

    THOMAS MASSIE, Kentucky              HENRY C. ``HANK'' JOHNSON, Jr.,
    SCOTT FITZGERALD, Wisconsin              Georgia, Ranking Member
    CLIFF BENTZ, Oregon                  TED LIEU, California
    BEN CLINE, Virginia                  JOE NEGUSE, Colorado
    LANCE GOODEN, Texas                  DEBORAH ROSS, North Carolina
    KEVIN KILEY, California              ADAM SCHIFF, California
    NATHANIEL MORAN, Texas               ZOE LOFGREN, California
    LAUREL LEE, Florida                  MADELEINE DEAN, Pennsylvania
    RUSSELL FRY, South Carolina          GLENN IVEY, Maryland

                   CHRISTOPHER HIXON, Majority Staff Director
              AMY RUTKIN, Minority Staff Director & Chief of Staff

                                C O N T E N T S

                                  ----------

                          Wednesday, December 13, 2023

                                                                       Page

                               OPENING STATEMENTS

    The Honorable Darrell Issa, Chair of the Subcommittee on Courts,
      Intellectual Property, and the Internet from the State of
      California.....................................................     1
    The Honorable Henry C. ``Hank'' Johnson, Ranking Member of the
      Subcommittee on Courts, Intellectual Property, and the Internet
      from the State of Georgia......................................     2

                                   WITNESSES

    Richard Gladstein, Academy Award nominated producer; President/
      Founder, FilmColony; Executive Director, Brooklyn College
      Feirstein Graduate School of Cinema
      Oral Testimony.................................................     4
      Prepared Testimony.............................................     7
    Riche T. McKnight, General Counsel, Ultimate Fighting
      Championship; Executive Vice President, Deputy General Counsel,
      Co-Head, Litigation, Endeavor
      Oral Testimony.................................................    10
      Prepared Testimony.............................................    12
    Matthew Schruers, President, Computer & Communications Industry
      Association; Co-Founder/Board Chair, Digital Trust & Safety
      Partnership
      Oral Testimony.................................................    21
      Prepared Testimony.............................................    23
    Karyn A. Temple, Senior Executive Vice President, Global General
      Counsel, Motion Picture Association; Former Register of
      Copyrights and Director, U.S. Copyright Office
      Oral Testimony.................................................    32
      Prepared Testimony.............................................    34

              LETTERS, STATEMENTS, ETC. SUBMITTED FOR THE HEARING

    All materials submitted by the Subcommittee on Courts,
      Intellectual Property, and the Internet, for the record........    68

    Statement from the Association of American Publishers, Dec. 13,
      2023, submitted by the Honorable Ben Cline, a Member of the
      Subcommittee on Courts, Intellectual Property, and the Internet
      from the State of Virginia, for the record

                     QUESTIONS AND RESPONSES FOR THE RECORD

    Questions submitted by the Honorable Darrell Issa, Chair of the
      Subcommittee on Courts, Intellectual Property, and the Internet
      from the State of California, for the record
      Questions for Karyn A. Temple, Senior Executive Vice President,
          Global General Counsel, Motion Picture Association, Former
          Register of Copyrights and Director, U.S. Copyright Office
      Questions for Matthew Schruers, President, Computer &
          Communications Industry Association, Co-Founder and Board
          Chair, Digital Trust & Safety Partnership
    A response from Karyn A. Temple, Senior Executive Vice President,
      Global General Counsel, Motion Picture Association, Former
      Register of Copyrights and Director, U.S. Copyright Office, for
      the record
    A response from Matthew Schruers, President, Computer &
      Communications Industry Association, Co-Founder and Board
      Chair, Digital Trust & Safety Partnership, for the record

                           DIGITAL COPYRIGHT PIRACY:
              PROTECTING AMERICAN CONSUMERS, WORKERS, AND CREATORS

                                  ----------

                          Wednesday, December 13, 2023

                            House of Representatives

               Subcommittee on Courts, Intellectual Property, and

                                  the Internet

                           Committee on the Judiciary

                                 Washington, DC

        The Committee met, pursuant to notice, at 10:03 a.m., in
    Room 2141, Rayburn House Office Building, the Hon. Darrell Issa
    [Chair of the Subcommittee] presiding.
        Members present: Representatives Issa, Fitzgerald, Bentz,
    Cline, Kiley, Lee, Johnson, Nadler, Lieu, Ross, Lofgren, and
    Ivey.
        Mr. Issa. The Subcommittee will come to order. Without
    objection, the Chair is authorized to declare a recess at any
    time.
        Today we would like to welcome this hearing on digital
    copyright privacy. I will now recognize myself for a short
    opening statement.
        Today we are exploring the topic of copyright privacy in a
    digital era. This is not a new subject. The Digital Millennium
    Copyright Act is more than 20 years old. Yet, emerging
    technologies and emerging threat have, in fact, caused us to
    once again have to revisit the threat to this great industry.
        In 2019, the industries involved in copyright employed
    nearly nine million people, contributed at least $1.3 trillion
    to the U.S. economy. Of these numbers, online piracy is
    estimated to cost over 200,000 jobs and approximately $50
    billion to our gross domestic product. You might ask, well, if
    they are in commerce why it is not in our GDP, because for the
    most part it goes to foreign countries, and it goes to
    individuals who will never pay their taxes.
        While copyright piracy used to be involved in back-alley
    sales of ripped CDs, DVDs, or in my day the bootleg 8-track,
    digital copyright piracy now involves amounts of infringing
    content made widely available on the internet. Much of it is
    given away for free, but not without a cost. The cost often
    includes the spyware and, in fact, side advertising that pays
    for giving away your rights free.
        Unfortunately, many of these websites, like FMovies, are
    hosted on servers that exist outside the United States,
    currently outside our ability to take them down. This creates
    unique judicial challenges for enforcement against widespread
    privacy on such websites. In some cases, these websites are
    even hosted within foreign governments, governments like the
    Russian government on military bases and other enemies of the
    United States.
        It is vital to understand the important difference between
    websites that happen to have infringing activities, websites
    that may host those who, in fact, do not respect intellectual
    property, and criminal websites who exist only for the purpose
    of, in fact, giving away that which they did not buy and have
    no rights to.
        In this hearing, we want to explore possible solutions to
    the worst of the worst, at least a way to minimize the
    prevalence of this infringing content on these illegal sites.
    These solutions could include requiring internet service
    providers to permanently block piracy sites that host only or
    substantially only infringing content. This is a very small
    portion of all ISPs but a large portion of that which is stolen
    on behalf of these individuals. Dynamic site blocking to
    address privacy of live sports and entertainment for set
    periods time may also be explored, working with platforms to
    remove pirated content as soon as possible to better meet the
    needs of live sports entertainment.
        I want to particularly focus on that here today. I look
    forward to the witnesses, because, in fact, notice and takedown
    might be fine in a week, a day, or an hour, unless, in fact,
    the event is only an hour or two along and one or two hours
    means there is no effective takedown in the live broadcast.
        Given the importance of this issue, I want to thank our
    witnesses for appearing here today. I want to say it once and
    for all. This Committee is the Committee of jurisdiction.
    Inaction is not acceptable. We have to find solutions that work
    for the intellectual property producers or we will not have the
    robust industry in the future that we have today.
        With that, I would like to recognize the Ranking Member for
    his opening statement.
        Mr. Johnson of Georgia. Thank you, Chair Issa. Thank you
    for holding this very important hearing.
        When the Barbie movie premiered earlier this year, it made
    $155 million its first three days in U.S. theaters.
    Internationally, it earned $359 million that first box office
    weekend. Barbie ultimately brought an estimated nine million
    new moviegoers to theaters according to a prescreening survey
    done by the Quorum.
        Industries like the film industry, ones that are reliant on
    the exclusive authority to reproduce and distribute creative
    derivative versions and--excuse me. Industries like the film
    industry, ones that are reliant on the exclusive authority to
    reproduce and distribute, create derivative versions, and
    publicly perform a copyrighted work contributed $1.29 trillion
    to the U.S. GDP in 2019. As the viewing public, we often hear
    the most about those top line numbers. That is because box
    office scores and tales of sold-out theaters make the news, but
    they are only a part of the story.
        Of those in this room who joined the crowds to see Barbie
    in theaters, I bet few, if any of us, sat through and watched
    as the credits rolled. If we had, we would have read the names
    of just a few of the myriad individuals required to make a
    movie. Yes, the film studios are the primary rightsholders of
    the copyrighted work, and the actors and directors get most of
    the world's attention. There are so many more people whose
    livelihoods depend on the success of a film. Technicians,
    writers, musicians, carpenters, engineers, artists,
    programmers, and so many more add up to constitute the film
    industry. The U.S. film and TV industries support and are
    supported by millions of individuals employed by those sectors.
        In 2019, copyright intensive industries in the United
    States employed 6.6 million individuals directly and two
    million more people through indirect employment. I say this all
    not to diminish the importance of box office success, far from
    it. It is important for us to remember that copyright law does
    not just support the bottom line, but also the small creators
    and industry workers. Copyright law itself may have little to
    do with driving a truck or feeding hungry studio workers. These
    are some of the people hurt by piracy of copyrighted works.
        Digital piracy of film and television has increased since
    2020. Between January-August 2022, there were 141.7 billion
    visits to copyright piracy sites worldwide. Piracy has caused
    an estimated annual loss of between 230,000 and 560,000 jobs in
    the United States and between $47.5 and $115.3 billion in
    reduced GDP. These are staggering losses to our creative
    fields. They impact not just the stars and studio executives
    but the many individuals who work in the industry. When
    industries cannot afford to pay competitive salaries, students
    look to different fields.
        Piracy of copyrighted works is not a new problem. What
    began as pirated DVDs back in the 1990s became a torrent of
    files in the 2000s. Torrent files have now become streaming.
    Today more than 80 percent of digital video piracy is conducted
    via streaming where copies of movies, television, and other
    copyrighted content are available in real time over the
    internet.
        Congress has acted to protect copyright dependent
    industries before. From the moment personal computers landed in
    homes around the world, we knew content piracy would be a
    concern. That is why Congress passed Section 512 of the Digital
    Millennium Copyright Act in 1998 to provide the opportunity to
    protect copyrighted works on the internet.
        I am looking forward to hearing from our witnesses how
    notice and takedown works today, what challenges exist in
    removing pirated content, and how changes in technology and the
    internet itself have impacted how we think about copyright
    protections overall.
        I would also note that I know the stakeholders are not
    limited to the people in this room. When Congress sets about to
    solve or even examine an issue, we need to look at all the
    facts and hear from everyone. We must approach any issue before
    this Committee with the seriousness and diligence it deserves.
    I am certain that my Chair will do that. This hearing is,
    however, an important first step to examining the problem of
    copyright piracy.
        Finally, welcome to our witnesses. I look forward to
    hearing from you today and appreciate your willingness to
    testify before us. I thank the Chair once again. I yield back
    the balance of--
        Mr. Issa. I thank the Ranking Member. Without objection,
    all other opening statements will be included in the record. It
    is now my pleasure to introduce our witnesses.
        Mr. Richard Gladstein is an Academy Award nominated
    producer and Executive Director of Brooklyn College Graduate
    School of Cinema and President and Founder of the motion
    picture production company, FilmColony. He has produced or
    executive produced films such as The Hateful Eight, Pulp
    Fiction, the one that all us know of, The Cider House Rules,
    Finding Neverland, among others. Welcome.
        Mr. Riche McKnight is General Counsel of the Ultimate
    Fighting Championship or UFC, an Executive Vice President,
    Deputy General Counsel, and Co-Head of Litigation for Endeavor.
    In addition to being UFC's parent company, Endeavor owns and
    operates a number of other businesses spanning sports,
    entertainment, advertising, and talent representation.
        Mr. Matthew Schruers. Mr. Schruers is the President of the
    Computer and Communications Industry Association where he leads
    its advocacy on behalf of the internet, communications, and
    technology companies. He is also Co-Founder and Board Chair of
    the Digital Trust and Safety Partnership, which develops best
    practices to foster a safer and more trustworthy internet.
        A returning champion, to use the UFC terminology, Ms. Karyn
    Temple. Ms. Karyn Temple is now the Senior Executive Vice
    President and Global General Counsel of the Motion Picture
    Association where she oversees the Association's legal affairs,
    content protection efforts around the world. We knew her in her
    previous roles as the U.S. Copyright Office, most recently
    Register of Copyrights. Prior to leading the U.S. Copyright
    Office, Ms. Temple headed the Office of Policy and
    International Affairs.
        I want to take just one more moment. All of you are
    distinguished. To have somebody who has looked at clouds from
    both sides now, so to speak, having been so key to determining
    copyright and how it is to be inherently protected by
    government and now seeing in one of the most fiercely
    competitive areas, the stealing of copyright, is a real honor.
    I want to thank you for all your service in both roles.
        With that, I have to swear you in. Then we can begin. If
    you would, please rise to take the oath.
        Raising your right hand, do you solemnly swear or affirm
    under penalty of perjury that the testimony you are about to
    give will be the truth and correct to the best of your
    knowledge, information, and belief so help you God?
        Let the record reflect that all witnesses answered in the
    affirmative. Please be seated.
        We will now begin with Mr. Gladstein.

                     STATEMENT OF RICHARD GLADSTEIN

        Mr. Gladstein. Chair Issa, Ranking Member Johnson, and the
    distinguished Members of the IP Subcommittee, thank you for
    your invitation to speak with you today on behalf of America's
    creative community.
        As the Chair said, I am a filmmaker and educator. I
    produced such films as The Bourne Identity, Finding Neverland,
    She's All That, The Cider House Rules, Pulp Fiction, among many
    others. I am currently the Executive Director at Brooklyn
    College's Feirstein Graduate School of Cinema, a part of the
    City University of New York, where we are educating the next
    generation of diverse storytellers.
        Film and television production benefits a great many of our
    cities and States. On average, for each and every day a film
    shoots, approximately $250,000 is contributed to that local
    economy. Small films generally shoot for about 24 days and
    large ones for over 70 days. Throughout the U.S., our film and
    television industries employ approximately 2.4 million
    Americans. These numbers bear out what I have always known in
    my heart to be true. Creativity is not just an important part
    of American life. It is the backbone of our Nation's cultural
    and economic strength.
        Despite being a robust engine for the U.S. economy, our
    industries have been besieged by digital piracy since the
    inception of the internet. We have been fighting these illegal
    activities with our hands tied behind our backs ever since.
        I am not here today to speak about issues concerning fair
    use or the use of clips from films or television shows or the
    ways in which ideas or content are used by others in similar
    works. Rather, I am going to confine my thoughts to the
    wholesale theft and distribution of our movies and TV shows by
    criminal enterprises, not facsimile or parts or replicas of our
    work, but rather the entire and actual film or television
    program.
        Large scale piracy operations today are criminal
    enterprises. They create internet sites that look deceptively
    similar to legitimate streaming services. A recent study found
    that as many as 30 million Americans use these illegal
    streaming services often without realizing they are doing so.
    The damages are significant, as another report found that
    piracy causes losses of at least $29 billion and as much as $71
    billion each and every year.
        It has also been proven that digital piracy costs the U.S.
    economy between 230,000 and 560,000 jobs every year. The vast
    majority of these job losses and revenues affect the workers
    behind the cameras, the production designers, costume
    designers, cinematogra-phers, caterers, and every member of
    their crews, including seamstresses, carpenters, electricians,
    and more. These are well paid, skilled jobs for crafts people.
    They often do not require a four-year college degree.
        Many look at us as large corporations. These individuals,
    again the backbone of our industry, are mostly freelance and a
    part of the gig economy. Ninety-two percent of the businesses
    in film and television employ fewer than ten people. Our
    workers' pension and health plans are funded by residuals.
    These residuals are derived from revenue and profits from
    movies and television shows. Piracy is eviscerating these
    profits.
        So, why are we allowing hundreds of thousands of American
    jobs to disappear each year? The truth is that most of the
    piracy happening in the United States is occurring through
    illegal services that are based overseas and beyond the reach
    of U.S. law enforcement. Although there are laws in place
    around the world that are proven to be effective against
    piracy, these tools are not yet available to us here in the
    United States.
        One such effective tool allows courts to issue no-fault
    injunctive relief or site blocking, creating orders that direct
    internet service providers after a full judicial process to
    block access to offshore websites that are found to be
    dedicated to piracy. This tool is effective in more than 40
    countries that have implemented it, including in Western
    democracies like Canada, the U.K., and Australia.
        There is a decade of evidence to support its effectiveness.
    Numerous studies have shown that this tool reduces traffic to
    pirate sites while also increasing traffic to legitimate and
    legal sites, the sites that actually result in fair
    compensation to creatives for their work. Early objections to
    site blocking erroneously said it would be abused, could cause
    harm to free speech, or break the internet. Creatives like me
    are fierce advocates for free speech, and we would never call
    for this important right to be blocked. When piracy is
    diminished with effective laws, film financiers and creatives
    will be able to realize the revenue they are entitled to.
        As my time is running out, I will say that, in sum, I am
    here to request that Congress find reasonable solutions, such
    as site blocking, to curtail the theft and distribution of our
    creative work. Those engaged in illegal behavior, as well as
    internet intermediaries, that consistently aid and abet such
    theft should be stopped and face penalties. Thank you for your
    invitation to speak with you and your consideration of my
    testimony.
        [The prepared statement of Mr. Gladstein follows:]
        [[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Issa. I thank the gentleman. We now go to Mr. McKnight.

                     STATEMENT OF RICHE T. McKNIGHT

        Mr. McKnight. Chair Issa, Ranking Member Johnson,
    distinguished Members of the Subcommittee, thank you for
    inviting me to testify today.
        My name is Riche McKnight. I am Executive Vice President
    and General Counsel of the Ultimate Fighting Championship and
    Deputy General Counsel and Co-Head of Litigation at Endeavor,
    one of the world's largest sports, entertainment, and fashion
    companies. I am honored to testified about the internet piracy
    challenges that UFC faces as a provider of popular live sports
    content. UFC appreciates working with Congress on this issue,
    including the enactment of the Protecting Lawful Streaming Act
    in 2020.
        UFC is a preeminent content creator that hosts and airs
    live mixed martial arts content, including through a pay-per-
    view option in the United States in partnership with ESPN+. UFC
    events are beloved and highly anticipated.
        As explained in my written statement, a critical element of
    UFC's content is that the essence of the event often involves
    highly impactful but very brief moments in time, such as a
    knockout in a fight or a well-executed move. These key moments
    frequently last only minutes or even seconds.
        Because UFC's content is so popular, UFC faces pervasive
    piracy of its live content. Pirates record the live streams not
    just through holding their phones up to a screen to record a
    UFC event and livestream it, but also through more
    sophisticated techniques resulting in HD quality video. The
    pirates also brazenly advertise on social media platforms to
    get viewers to come to their pirate websites with slogans like
    Watch UFC Free. When people learn that they will be able to
    access UFC content for free, they have no reason to purchase
    UFC content via pay-per-view.
        The problem is not unique to UFC. UFC recently submitted a
    joint letter with the NBA and the NFL to the U.S. Patent and
    Trademark Office that highlighted the challenges we all face
    with respect to the piracy of live sports events. By one
    estimate, the financial impact of online piracy across the
    global sports industry is up to $28 billion in additional
    potential annual revenue. UFC estimates that online piracy
    diverts multiple millions of dollars from legitimate purchases
    of UFC's content each year. In turn, this results in a
    substantial loss of tax revenue and harms sports providers'
    ability to host events that benefit local businesses and
    communities.
        UFC does the hard work to submit thousands of takedown
    requests to a variety of online service providers during and
    immediately after each UFC event. It has also engaged in
    outreach to individual platforms. However, despite these
    efforts, piracy persists. You have heard from and will continue
    to hear from my co-panelists about site blocking. UFC supports
    those efforts for the reasons that have already been discussed.
        UFC has also identified a few additional solutions that I
    will talk about today and that would significantly help address
    the problem of piracy of live sporting events. First and
    foremost, OSPs do not remove infringing livestreams and videos
    expeditiously, as is required for them to attain a safe harbor
    from liability for the infringement of their users under the
    Digital Millennium Copyright Act. In fact, infringing
    livestreams often stay online for a full UFC event. UFC has
    found the OSPs exploit a lack of clarity in DMCA as to what it
    means to remove content expeditiously, which clearly must
    account for whether the request is time sensitive.
        To put matters concretely, for each UFC pay-per-view event
    between January of last year and this past November, UFC sent
    thousands of takedown requests on average, even putting aside
    infringing content that was automatically removed by certain
    OSPs. For livestream content, 26 percent of infringing UFC
    content was permitted to stay up for longer than one hour after
    requests, a significant portion of a live event. Approximately
    six percent of content was permitted to stay up for longer than
    five hours. It is not uncommon for these streams to collect
    hundreds of thousands or even millions of views while they are
    available.
        Congress can and should clarify that at least for time-
    sensitive content like live sporting events expeditious removal
    means that infringing content must be removed instantaneously
    or near instantaneously. It is not enough if an infringing
    livestream is left up until the live content ends.
        Second, many OSPs have not adopted an effective process for
    identifying and terminating repeat infringers, as is also
    required for them to have a safe harbor under the DMCA. Too
    frequently, UFC sees that after a user is terminated for repeat
    infringement, that same user will create new accounts that are
    obviously connected to the previous account. Clarification is
    needed that a reasonable repeat infringer policy would among
    other things involve account verification measures that prevent
    the creation of new accounts by the same person and other
    measures that would limit the ability of newly created accounts
    to live stream for a certain period or reach a widespread
    audience of viewers.
        We recognize this continues to be an ongoing conversation
    requiring input from all stakeholders. We hope to be able to
    work with you and the Members of this Subcommittee going
    forward. I want to thank the Subcommittee again for giving UFC
    the opportunity to testify today. I would be happy to answer
    any questions you may have. Thank you.
        [The prepared statement of Mr. McKnight follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Issa. Thank you. Mr. Schruers.

                     STATEMENT OF MATTHEW SCHRUERS

        Mr. Schruers. Chair Issa, Ranking Members Johnson, and the
    Members of the Subcommittee, thanks for the invitation. It is
    good to be with you again today. My name is Matt Schruers. I'm
    President of CCIA.
        For over 50 years, CCIA has been a voice for information,
    communications, and technology firms. Products provided by our
    members connect and empower users around the world, enabling
    work and study in commerce and entertainment for billions. In
    so doing, the digital sector is a proud and critical partner to
    the creative industry. Widespread adoption of technology
    products and services have created entirely new markets for the
    legal consumption of content, permitting users to lawfully
    enjoy digital media nearly anywhere at any time, generating
    more revenue opportunities for creators than have ever existed
    before.
        Tech companies are themselves IP creators, spending
    hundreds of millions of dollars on premium, award-winning
    content and millions more licensing content from others for
    lawful distribution. As leading providers of content and
    licensees, they understand well the value of that investment.
        It is the case that a small minority of bad actors' misuse
    digital tools to infringe IP rights. The digital sector shares
    the goal of preventing this. We must achieve this goal without
    interfering with legitimate online commerce, communication, and
    the Constitution. The most powerful tool to prevent
    infringement is ensuring that consumers can lawfully access the
    content they want, where they want it, when they want it on the
    device want it. Products provided by American tech leaders are
    making this possible.
        Now, in addition, CCIA members regularly engage with
    rights-
    holders to identify and enforce against infringers, including
    through extensive content moderation systems that go above and
    beyond the notice and takedown that is currently contemplated
    by Federal law. Now, automated filtering is not always
    effective. It relies on third-party input, granular
    information. It can be misused. It can result in over-removal
    and over-enforcement against noninfringing content and fair
    use, thus suppressing lawful expression. So, automated systems
    do require human oversight and pairing the right solution with
    the problem to ensure they function properly.
        Policymakers should be wary of the proposal for online
    enforcement that is DNS level site blocking. This approach
    involves interfering with the basic architecture of the
    internet to suppress content. This blunt instrument of
    architectural regulation is inherently imprecise. It cannot be
    achieved file by file or even country by country, but instead
    disappears entire sites for the entire world. This puts far
    more speech at risk of suppression, similar to closing the
    Library of Congress over a single book. So, for that reason,
    DNS level site blocking is not technically or constitutionally
    possible to implement and certainly not without significant
    collateral damage.
        My written testimony describes in greater detail the EU's
    website blocking system, which is littered with false
    positives. It provides an instructive example of the unintended
    consequences of policy. There is little transparency around
    blocking orders and few ways to determine when content is being
    withheld from the public by court order. This is why
    technological experts like ICANN and the Internet Society have
    strongly advised against DNS level blocking.
        Now, election season is on us. It is prudent to recall that
    political speech is frequently a target of wrongful copyright
    allegations. In the last Presidential election, multiple
    candidates were prevented from livestreaming their own speeches
    due to dubious copyright claims. Campaign advertisements are
    regularly accused of infringement. Whether inadvertent or
    intentional, this cannot be tolerated in a democracy.
        So, in conclusion, the more blunt the instrument, the
    greater the risk to expression. So, we must calibrate solutions
    appropriately. Nevertheless, CCIA members are committed to
    fighting infringement by investing significant resources in new
    products that give new opportunities to creators and create
    better responses to infringement.
        I look forward to your questions. Thank you.
        [The prepared statement of Mr. Schruers follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Issa. Thank you. Ms. Temple.

                       STATEMENT OF KARYN TEMPLE

        Ms. Temple. Thank you, Chair Issa, Ranking Member Johnson,
    and the Members of the Subcommittee, for the opportunity to
    testify today on behalf of the motion picture, television, and
    streaming industries. Thank you for the very kind introduction
    at the beginning.
        The American motion picture and television production
    industry is the world leader in this sector, distributing its
    films and TV shows in over 130 countries. In 2021, the enduring
    value and global appeal of the U.S. movie industry earned $14.4
    billion in exports. Our industry is also a major U.S. employer
    that supported 2.4 million jobs and $186 billion in total wages
    in 2021.
        The topic of today's hearing is an issue of critical
    importance to our industry and to the many other industries
    that are part of the creative sector, piracy of valuable
    intellectual property.
        Piracy, of course, is not a victimless crime as you have
    heard. Piracy of filmed entertainment costs the U.S. economy
    $29.2 billion in over 230,000 jobs annually. It does not just
    affect big Hollywood studios and megastars. It affects everyone
    who works in the industry, such as carpenters, electricians,
    and hair stylists, as well as the businesses, as you heard most
    of them small businesses, that provide related services, like
    caterers, dry cleaners, and florists.
        In addition, piracy services can directly threaten
    Americans' personal and financial security, including exposing
    everyday people to credit card fraud, identity theft, and
    malware. Take FMovies, for example. It is a piracy website that
    has been blocked in 16 countries and was referred to U.S. law
    enforcement more than four years ago in 2019. It is still up
    and accessible to millions of users in the United States.
        If you would, please turn your attention to the screens.
    Anyone can simply type the FMovies' URL into their favorite
    browser today and an extremely professional and legitimate
    looking site pops up. You can literally scroll through
    thousands of movies and television shows, including this year's
    blockbusters, and even movies that have not yet hit theaters.
    You will see all our top-rated blockbusters and popular films.
        Here you see coming up Wonka, which won't be out into the
    United States' theaters until this Friday. It is just a click
    away on this piracy streaming service. Also, notice the ads for
    slotlights.net. That is an illegal online casino, likely
    Russian, that is targeting U.S. consumers. Analysis shows that
    this single piracy site had 168 million visits in just the
    month of November. Most of these visits come from the United
    States, accounting for roughly 38 percent of all users. This
    means that this site was visited more than 64 million times by
    people in the United States in just one month.
        As you clearly saw from this video, this is not a
    legitimate site that might include grandma's home movies or
    public domain documentaries. This is a commercial-scale
    operation whose sole purpose is to steal creative content and
    funnel the proceeds back to criminal organizations. If we had
    site blocking in the United States, as we do in the 16 other
    countries where versions of this site had been blocked already,
    then this piracy site's U.S. traffic would have plummeted,
    protecting U.S. consumers and the U.S. creative sector, and
    removing the financial incentives for piracy.
        So, it is beyond time for Congress to revisit no-fault
    injunctive relief to combat blatant forms of piracy. When
    Congress a decade ago considered establishing an express
    authority for such relief, opponents responded with the
    unfounded prediction of potential harm to the internet. As a
    result, Congress declined to move forward with legislation.
        Much of the world enacted these tools despite the
    overheated rhetoric. More than 40 countries, including leading
    democracies, such as the U.K., much of Western Europe, Canada,
    Australia, India, and South Korea, have enacted no-fault
    injunctive relief regimes that expressly authorize courts or
    administrative agencies to issue orders to ISPs to block access
    to websites dedicated to piracy. These laws work. They
    dramatically reduce visits to piracy sites. Even more
    important, they result in more visits to legal sites.
        None of the hyperbolic predictions about the effects of
    site blocking have come true. Examples of over-blocking, that
    is blocking of noninfringing content, or stifling free
    expression or deprivation of due process have been rare to the
    point of nonexistence. In fact, none of the examples of
    purported over-blocking that CCIA cited in its testimony
    actually involved a blocking order to an ISP because of
    copyright infringement.
        So, I am here today with some very good news. Effective
    tools to combat piracy exist. The sky has not fallen. Despite
    the widespread use of site blocking around the world, the
    internet is emphatically not broken. Thus, it is time for
    Congress to consider enacting express authority for a no-fault
    injunctive regime that will give rightsholders what more than a
    decade of experience around the globe has shown is one of the
    most effective tools to address piracy.
        Thank you for your time and attention to this important
    issue. I am happy to answer your questions.
        [The prepared statement of Ms. Temple follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Issa. Thank you. I am going to forego my initial round
    of questions and first go to the gentlelady from Florida, Ms.
    Lee.
        Ms. Lee. Thank you, Mr. Chair. Thank you to all our
    witnesses for being here today and sharing with us your
    insights and your expertise.
        Mr. Gladstein, I would like to begin with you. During your
    testimony, you described one remedy that you propose, which is
    site blocking. That is directing ISPs to block local access to
    websites that are dedicated to privacy. You also mentioned that
    you personally have a strong commitment to the First Amendment
    and protecting free speech. If you would please, elaborate for
    us on your perspective that site blocking does not infringe on
    First Amendment rights to speech and expression.
        Mr. Gladstein. Thank you for your question. You just were
    shown a website that is dedicated virtually entirely to
    distributing illegal programming that they don't own the rights
    to be disseminate. Blocking that site from doing what they are
    doing, the concept that this would be an infringement on free
    speech is I think a specious argument.
        If someone were to go and take a bunch of Ford F-150s and
    steal them and create a lot and judicial process went in and
    showed that. You looked at the VIN numbers, and you saw that
    they didn't have the right to sell. So, the person that set up
    this shop to sell these cars didn't have the right to do it.
    You went through a judicial review. You wanted to stop that
    store from selling illegal merchandise. The concept of saying
    that free speech would be infringed by blocking their
    advertising to sell free merchandise I think is specious,
    irrelevant, and it just makes no sense to me whatsoever.
        Ms. Lee. Tell us if you would, why and the what are the
    alternative remedies of the takedown? If the site is
    identified, having it shut down, why is that different and
    inadequate instead of the all-out site blocking?
        Mr. Gladstein. Well, I believe, I am not an expert at this,
    and Karyn would be better probably to answer, but the laws in
    which what we are able to do with companies that U.S. companies
    versus companies that are international companies is different.
    I think Karyn--
        Ms. Lee. We will give that to Ms. Temple. If you would,
    share with us a little bit more about your concepts of
    remedies, no-fault injunctive relief, and the distinction
    there.
        Ms. Temple. Yes, as he mentioned, the issue that we have
    been focusing on with respect to no-fault injunctive relief are
    those websites that are dedicated exclusively to infringement.
    They are not UGC sites. If we send them a takedown notice, they
    are not going to take it down because that is their primary and
    sole purpose. They are also often located overseas. So, the
    DMCA doesn't even apply necessarily to them.
        So, the only way that we can go after those types of sites
    is through a lot of civil enforcement, a lot of trying to get
    law enforcement overseas to actually go after the sites. If we
    are not able to get law enforcement overseas and we aren't able
    to find the website operators wherever they may be, then site
    blocking is the only remedy we have for the United States.
        For example, FMovies is a site where the operators of the
    site are actually located in Vietnam. Their servers are
    actually in Bulgaria. I recently went to Vietnam and requested
    and asked the Vietnamese law enforcement to go after those
    website operators. Again, we also referred this to U.S. law
    enforcement. So far, we have not been able to get that site
    down. So, again, millions and millions of U.S. consumers are
    accessing this illegal content.
        Ms. Lee. Mr. McKnight, you have a unique perspective on the
    takedown process, given your industry. Tell us if you would,
    your perspective on why that is inadequate.
        Mr. McKnight. Yes, we think that essentially the speed with
    which material moments occur in live events. Focusing on UFC,
    in particular, we may have a main car that features a popular
    fighter like Connor McGregor. In 5-10 minutes or less,
    sometimes 5-10 seconds, those moments that the fans care most
    about seeing can elapse. So, if they are able to pirate a
    stream for 5-10 minutes, they get what they want, essentially
    taking away any incentive to pay a dime for a legitimate piece
    of content.
        The technology is advancing, not just the means to access
    the content, but the quality. Some of these feeds, if you look
    at these pirated sites, are HD quality. They are just as good,
    or close to as good, as what you are getting on our site.
        So, our focus is on the definition of expeditious removal.
    We have evidence, empirical evidence that sites can do better.
    These are oftentimes social media platforms, not specifically
    folks who are dedicated to criminal conduct, but simply folks
    who have an opportunity and the technology to do better taking
    down these illegal streams in a way that we believe is
    appropriate. They can do it. We think they have a commercial
    incentive not to always put their best foot forward. We think
    in the absence of clarification as to what expeditious removal
    should mean, which is immediate or near immediate, then they
    will continue to not put their best foot forward. That is the
    issue we have in the--
        Mr. Issa. Would the gentlelady yield for just a second?
        Ms. Lee. Yes, Mr. Chair. I yield the balance of my time to
    the Chair.
        Mr. Issa. We will say balance. Just as a followup to make
    sure it is in the record with your questioning, Mr. McKnight,
    what is the fastest that you have seen takedown occur, just so
    that we understand how fast it has been and can be?
        Mr. McKnight. Yes, we have seen it happen in several
    minutes. That is about the fastest we see it happen. It has
    taken sometimes hours, sometimes days. It is really these
    fluctuations that give us the proof that the best foot forward
    is not always being put forward.
        We have been told by a particular platform that at one
    point we were elevated to kind of most favored Nation status.
    We saw a dramatic improvement for a few weeks. Then things kind
    of went back to what they were, status quo.
        Mr. Issa. I thank the gentlelady for yielding. With that, I
    recognize the Ranking Member for his questions.
        Mr. Johnson of Georgia. Thank you, Mr. Chair.
        Mr. Gladstein, what does copyright enforcement in the
    United States look like for individuals or small group creators
    who do not have access to resources like the UFC's or the MPA's
    Alliance for Creativity and Entertainment?
        Mr. Gladstein. We have various guilds and unions that
    assist filmmakers of all types. So, they are helpful. We rely
    on the distributors, who are often the financiers, of our films
    to make the decisions about where our films go. As a producer
    of Pulp Fiction, I am not, I don't get to weigh in on where my
    film is distributed. I can have an opinion, but it is often not
    listened to.
        I think the important thing to cite is that as a creator,
    the more people that see that very product that I have created
    thrills me. So, there are, I think, 140 legal streaming sites.
    So, it isn't a problem if there is not enough places to find
    the films in legitimate areas. Studios such as Warner Bros.,
    Disney, and smaller art house distributors are trying to find
    the most vast audience that they can find in every corner of
    the world.
        We rely on those studios or distributors to issue these
    kind of takedown notices, et cetera. As a filmmaker, it is not
    something that I participate in. I would rather create my next
    movie while someone else is fighting the battle of swiping
    money from us somewhere else.
        Mr. Johnson of Georgia. Thank you.
        Ms. Temple, one of the many developments in recent years
    has been the trend from illegal downloads to illegal streaming.
    Can you explain what the implications of this shift are?
        Ms. Temple. Yes, thank you for the question. To add on to
    what the other witness said as well, in terms of notice and
    takedown and individuals not being able to really protect their
    rights, I will say that it is very difficult. We spend hundreds
    and millions of dollars to develop notice and takedown systems
    to send millions of notices to various UGC sites. Individual
    artists and creators often don't have the ability, and
    resources to do that. So, it is a very difficult situation for
    individual creators. That is something that has often been
    discussed with respect to the DMCA.
        I will say that with respect to how piracy works now, we
    are seeing online piracy that is streaming piracy now be the
    vast majority of the type of piracy that is out there. That is
    more than 90 percent of the piracy that is out there is
    streaming piracy. The difficulty, of course, as I mentioned
    earlier, is that it starts outside of our jurisdiction. So, the
    operators are not in the United States. We are able to go after
    them when they are here.
        The operators might be in one country. The servers where
    the infringing content is hosted might be in yet another
    country. The registrar or registry might be another country's
    registry that is actually like from Tonga. So, it is extremely
    complicated and difficult for us to actively go after these
    dedicated infringing sites because of the global nature of
    piracy.
        Mr. Johnson of Georgia. Thank you.
        Mr. McKnight, can you explain why this is especially
    significant for live events like those put on by the UFC?
        Mr. McKnight. Yes, as mentioned previously, we think that
    the short timeframe with which material moments can take place
    in the context of live events makes it ultimately important
    that platforms are putting their best foot forward in taking
    down this illicit content as soon as possible.
        This proverbial case of justice delayed is justice denied.
    So, oftentimes, if we're getting take-downs in 10-15 minutes,
    and hour, or certainly days, it's too late. The folks viewing
    the pirated streams have already seen these material moments
    and they've already made the decision that if those are
    available, they're not going to pay for legitimate content.
        Mr. Johnson of Georgia. Thank you. The Protect Lawful
    Streaming Act was enacted nearly three years ago to close
    certain gaps that made enforcement of infringement challenging
    when it was conducted by digital streaming. What effect has the
    Protect Lawful Streaming Act had on internet piracy so far, Mr.
    McKnight?
        Mr. McKnight. So, I think that the passage is certainly
    helpful. We worked long to get that passed. We would like to
    see it enforced because I think that the end of the day the
    true deterrent to folks who are professional pirates that we've
    been--some of which we've been speaking about today, is when
    they actually see these laws enforced. So, I think it's a huge
    step in the right direction and we'd love to see greater
    enforcement so that a true deterrent effect can take place in
    the market.
        Mr. Johnson of Georgia. Thank you, and I yield back.
        Mr. Issa. I thank the gentleman.
        We now go to the gentleman from Mr. Wisconsin, Mr.
    Fitzgerald.
        Mr. Fitzgerald. Thank you, Chair.
        Ms. Temple, how does piracy affect the type of films that
    might be financed or produced? Any opinion on that?
        Ms. Temple. Yes, that's a great question. Unfortunately,
    piracy does affect the variety of films that might be produced
    because you--it costs so much money to be able to produce a
    film that you want to make sure that the film will actually be
    able to get back its revenue. If a film is pirated, if it's an
    indie film or a niche film, then the revenue that is going to
    be affected by piracy will even be lower.
        So, unfortunately, that means that you often might see a
    few more of those blockbusters and those sequels and series
    types of films because those you know are going to have a large
    amount of revenue versus being able to have a wider variety of
    types of films. It really does impact minority filmmakers and
    independent filmmakers because they are not able as much as
    some of the larger studios to prevent the piracy that is going
    on.
        Mr. Fitzgerald. Yes, so the studios are more or less likely
    to take a risk on a film knowing that the prevalence of that
    piracy might be related to the content. Does that sound
    accurate?
        Ms. Temple. Yes, exactly.
        Mr. Fitzgerald. OK. Very good.
        Mr. McKnight, the area that you have been discussing is
    fascinating to me, to many other people, because of the live
    stream angle. What financial impact does copyright privacy--do
    you have any idea what impact it has on the live sports
    industry per se? Ballpark or any type of estimate on that?
        Mr. McKnight. So, we've done studies. You can't do it with
    exactitude, obviously, because you can't say every single
    person who looks at a pirate stream is going to convert to a
    paying consumer.
        Mr. Fitzgerald. Right.
        Mr. McKnight. Even if you take very conservative numbers,
    one out of five, you get into tens to hundreds of millions of
    dollars in losses. As Ranking Member Johnson correctly pointed
    out, the real problem here is a lot of people view this as
    victimless crimes, but the lack of these resources aren't just
    affecting an inanimate entity, or the wealthy members of that
    entity. There are also people downstream. They're the athletes,
    they're people who work the cameras, people who work in just
    very basic jobs like in the production crew, driving trucks,
    and doing things of that nature, all whom are impacted by this
    loss in revenue.
        Mr. Fitzgerald. The other thing I would say is as someone
    who--you brought up Connor McGregor, and I have seen a few of
    his fights. Oftentimes, that results in somebody organizing a
    party or bringing a group of people together to watch that. So,
    have you looked at the consumer end of it? Are people aware
    oftentimes that they may be not on an official site, but on a
    pirated site? What do people--how do they gauge where they are
    going to seek their entertainment or a live stream of a
    sporting event?
        Mr. McKnight. So, I think people are aware. I think the
    real issue is, like I said, they view it as somewhat of a
    victimless crime. If you go on a social media platform, for
    example, and someone uploads a UFC fight, you go and you click
    on the link, you don't view yourself as doing anything
    inappropriate. What you think you're doing is getting free
    access to an event you enjoy, and that the wealthy UFC won't
    miss the money they could be obtaining as a result of a
    legitimate purchase.
        When you multiply that thought process by hundreds of
    millions of times, obviously the dollars get significant and
    then you have that cascading effect on everyone involved up and
    down the stream of producing that event that I had mentioned
    before.
        So, I do think they know. They certainly know in the case
    of folks who are going to the professional pirates and paying
    cut rates that are advertising sometimes on the social media
    platforms essentially saying don't buy the event from the UFC;
    come here and get it for free. They're doing it in ways that I
    think it's readily easily to identify that you're not doing
    something proper.
        Mr. Fitzgerald. In a lot of commercial settings, whether it
    be a bar or a restaurant or someplace where they are actually
    using it to bring people to their restaurant or their place of
    business--have you guys looked at that angle of it? Is this
    something that is happening and is it a violation?
        Mr. McKnight. So, we do look at that. We do have commercial
    licensing agreements with many of these establishments--
        Mr. Fitzgerald. OK.
        Mr. McKnight. --that are showing it at bars and things of
    that nature. We have ways to police it when people are showing
    it without paying that commercial fee. That aspect of it is
    actually less of an issue than the individual user going to the
    social media sites or folks going to these professionally
    pirated sites where they are putting these sites up for the
    specific reason of showing pirated content.
        Mr. Fitzgerald. Very good. Thank you very much.
        I yield back, Chair.
        Mr. Issa. The gentleman yields back.
        We now go to my friend and colleague from California, Mr.
    Lieu.
        Mr. Lieu. Thank you, Chair Issa and Ranking Member Johnson,
    for holding this important hearing.
        So, Ms. Temple, I have a question for you. You showed
    FMovies, the online piracy site for movies. If you are in
    Europe and you typed in that website, would you be able to
    watch free movies in Europe?
        Ms. Temple. No, and the vast majority would not because
    again it's been blocked in 16 countries including most of the
    EU. So, you would not be able to access FMovies in those places
    where it has been site blocked through the legislation there.
        Mr. Lieu. Thank you.
        So, Mr. Schruers, I just went on my phone and went on
    FMovies, and it is still up, and I can watch Willy Wonka for
    free without paying for it. Why don't the online server
    providers block it right now, like today?
        Mr. Schruers. So, I take as described the site that we saw
    here, though I do have to ask--that might have to do with
    something with why Federal law enforcement hasn't taken action
    against this either. There are, of course, lots of remedies
    that are available today under existing Federal law.
        Mr. Lieu. I think the reason is because they are based in
    Vietnam. You don't have to take it as described. You can just
    go on your phone right now.
        Mr. Schruers. So, I think we should take a step back and
    recognize that if the remedy that is sought is implemented
    here, all we're doing is preventing a domain name from
    resolving to an IP address, right?
        Mr. Lieu. Right, I think that is important. So, I am going
    to ask the members of your organization to take it down right
    now.
        So FMovies is so popular, there is a whole Wikipedia site
    on it. I just read it. It has been in existence since 2016. It
    was launched seven years ago. It says what countries have
    blocked it, what countries haven't. Your members can take it
    down or can block it right now. I am just asking you to do
    that.
        Because we are trying to be reasonable here. This is such
    an unreasonable case. It is so clearly online piracy, copyright
    infringement. You don't want your organization, your members to
    be defending something so blatantly unlawful and unreasonable.
    So, I just asked your members to block that site today.
        Mr. Schruers. So, the broadband providers that actually
    provide the resolution of these domain names are not at this
    table, right?
        Mr. Lieu. Get them to block the site today. People should
    block the site today because you cannot defend this. It is just
    not defensible, and the Members of Congress here are watching
    this. This is not where you want to be. This is not where your
    industry wants to be. I get the nuances. I may not even oppose
    the views that you espouse today, but this particular site for
    example is not defensible, and certainly not for seven years.
        Mr. Schruers. I think I--
        Mr. Lieu. You did say in your testimony--you talk about how
    your organization and your companies work with stakeholders to
    do with copyright infringement. This has been going on since
    2016. It is so clearly indefensible. I am just asking you to
    take it down, to block it.
        Mr. Schruers. The digital services that are--content
    creators among my constituent are also victims of these sites.
    They, too, distribute content online and their content is also
    pirated. So, this is a broadly shared interest in preventing
    infringement. Obviously, the best tool for that is to make
    content as widely available as possible where and when
    consumers want it. Meeting consumers' needs is--
        Mr. Lieu. So, that is very interesting. I know you said
    that; you put it in your testimony. Do you think people
    actually don't know how they can watch the movie Willy Wonka?
    Do you think with internet search they won't be able to figure
    out how they can stream it and pay for it?
        Mr. Schruers. I think that's a great question because, at
    least as we've been told, Wonka is not yet available on this
    market, but it's available on other markets. So, we often see
    that pirates arbitrage windowed releases to try and take
    advantage of content not being available on one market. That's
    why a number of audiovisual producers have gone to worldwide
    releases, but--
        Mr. Lieu. So, what you are saying is that all movie CDOs
    immediately on releasing a movie in the movie studios need to
    also release it, right, online? Then is that your solution?
        Mr. Schruers. What I'm saying is the best strategy to fight
    piracy, among many strategies, is ensuring that consumers can
    access the content that they want to pay for. We've seen that
    when lawful services are launched in countries where there is
    high piracy, those rates go down because consumers by and large
    want to pay for the stuff. They want to consume it lawfully.
    There's obviously risk to infringing services. The vast
    majority of them want to support the creators that they enjoy.
        Mr. Lieu. Thank you. So, I ask the Members of your
    organization that can block this to block it. If they don't
    exist in your organization, I ask Chair of this Committee to
    call in a hearing with a witness that does represent the
    Members that could block this site and block it now.
        Mr. Issa. Would the gentleman yield?
        Mr. Lieu. Yes. No, no. Go ahead.
        Mr. Issa. Pursuant to your request I will agree to invite,
    if you will, members of the ISP community here to have a
    discussion about the proposed remedies and how some or all them
    might be implemented pursuant to court order. So, that will be
    an invitation that the Ranking Member and I will send out
    before we get to Christmas.
        Mr. Lieu. Thank you, Mr. Chair. I yield back.
        Mr. Issa. I thank the gentleman.
        We know go to the gentleman from Oregon, Mr. Bentz.
        Mr. Bentz. Thank you, Mr. Chair.
        Thank all of you for being here.
        Ms. Temple, I am trying to figure out if this is an issue
    of technology that we can fix it, or a lack of enforcement, or
    something else. So, tell me--as we listened to the exchange
    just previous to my questions, I am a little bit unclear. So,
    which is?
        Ms. Temple. Well, as I mentioned earlier, it is a very
    complicated issue. I will respond to what Mr. Schruers said
    about access to legitimate content. I think that is an argument
    that we were hearing 20 years ago, but quite frankly today,
    there are hundreds of ways to access movies legally online
    through streaming services throughout the world. So, there are
    a wide variety of legitimate offerings for consumers. Piracy
    still exists.
        What makes piracy so complicated and difficult is that
    technology does change and we do have to keep laws updated to
    be able to address the changing technology. As I mentioned
    before, streaming piracy has become one of the most prolific
    types of piracy that we have out there.
        Also, it's cross-jurisdictional again so it's difficult to
    be able to attack the websites where they are. I think
    Representative Lieu was right when he said that probably the
    reason that the U.S. law enforcement has not gone after FMovies
    is because the website operators are in Vietnam. We do
    encourage law enforcement and they do work together, but it
    sometimes takes time and years. We also went to Vietnam.
    Personally, I went to Vietnam to ask law enforcement to take
    action, but they have not done so yet.
        So, if we had a solution in addition to the solutions--this
    is not a panacea. We don't think that site blocking alone is
    the only solution. We still engage in a lot of self-help, but
    if we had that additional tool of site blocking that would
    allow us to be even more effective to combat piracy today the
    way it occurs.
        Mr. Bentz. All right. Well, you take us directly to my
    question of what we should anticipate should the ISP folk come
    in. What are they going to say?
        Ms. Temple. Well, it's interesting because in our
    experience overseas where this has happened in 40 countries, we
    actually worked collaboratively with the ISPs. So, we have had
    great relationships and cooperative relationships with the ISPs
    because they understand that this is a process that is not
    overly burdensome to them. It's a process also that they are
    engaged in.
        So, my hope would be that the ISPs that you would call in
    would talk to the ISPs in the 40 countries that have this type
    of legislation. Then they would realize that the type of
    legislation we're asking for is legislation that works, that's
    effective, and that provides all the guardrails and due process
    issues that have been raised in the past.
        Mr. Bentz. We will see. So, let's stick with this for a
    second. The tools that you suggest: Site blocking, ham-handed,
    not directed. What is wrong with the device?
        Ms. Temple. Yes, certainly those who are not familiar with
    legislation and the way site blocking works could say that is
    the case, but in our experience for the last 10 years, that is
    just not true. The way that site blocking works is in all the
    jurisdictions in which we operate there is a very specific
    process first to assess whether the website is actually
    dedicated exclusively to infringement.
        Mr. Bentz. So, let me hop ahead. Does it on occasion not
    get it right?
        Ms. Temple. In our experience--
        Mr. Bentz. Is it perfect?
        Ms. Temple. Well, no law is perfect, so I can't say that--
        Mr. Bentz. I am not talking about the law; I am talking
    about the technology.
        Ms. Temple. In our experience, as I said, we do not see
    instances of over-blocking or--
        Mr. Bentz. In anticipating a difference of opinion, Mr.
    Schruers, maybe you can answer the question.
        Mr. Schruers. Yes, so I think there are a number of
    examples cited in my testimony and others that we can provide
    where these architectural-level solutions have gone wrong.
        Now, if we're talking about this one site that we've seen,
    and this remedy that's being proposed would only be available
    against that site, then that's one situation. If this remedy
    would be available against any online presence that's accused
    of infringement, well then would this remedy be available
    against campaign advertisements that are alleged to have not
    licensed their music? I mean, we have to ask against what
    constituency can this be applied, first of all. Then second,
    what's the potential collateral damage?
        It may not be remembered, but 10 years ago due to miscali-
    bration I understand of IT the digital service Spotify was
    blocked in this building, right? So, mistakes happen, and we
    need to ensure that the remedies are properly scoped for the
    problem.
        Mr. Bentz. Thank you. I yield back.
        Mr. Issa. I thank the gentleman.
        We now go to the gentlelady from North Carolina, Ms. Ross.
        Ms. Ross. Thank you, Mr. Chair and Ranking Member. Thanks
    to all the witnesses for joining us today.
        When artists and creators pour their energy into developing
    a product or a creative work, whether it is a song, a movie, a
    book, an article, a piece of visual art, or anything else, they
    deserve the opportunity to profit from their work. Digital
    privacy is theft of that opportunity. It deprives not only the
    copyright holders, but the individual artists and technicians
    who have contributed to a product to earn their livelihood and
    be able to profit from their creativity and their work. This is
    embodied in our Constitution.
        Ms. Temple, I know you have gotten a lot of questions about
    how site blocking works. Which countries have been most
    effective in executing site blocks while also respecting due
    process?
        Ms. Temple. Thank you for the question. I think in our
    experience the United Kingdom has been very effective in
    implementing site blocks, but also recognizing and protecting
    individual freedoms. Australia is another jurisdiction that has
    extensive experience in this and has been very effective. They
    recently in 2018 did a full review of their legislation to see
    if it had any negative impacts and continued on with the
    legislation because it did not. So, those are two jurisdictions
    that we find to be very, very effective.
        Ms. Ross. Just to pick up in Australia, because you cited
    evidence from studies in Australia that when there were no-
    fault injunctions that would encourage a shift to legal
    channels. Can you tell us more about these findings and how no-
    fault injunctions affect users' behavior and choices?
        Ms. Temple. Yes, thank you. We've done a lot of studying
    over the last 10 years in which we've been operating in
    countries that have no-fault injunctive relief regimes, and our
    statistics and research shows that not only does traffic to the
    websites, that are actually illegal websites--not only has that
    plummeted, but consumers then go to legal websites. So, we see
    an increase of between 5-12 percent to legal websites after we
    block in a certain jurisdiction.
        Ms. Ross. That is great. That goes a little bit to Mr.
    McKnight's testimony.
        I want to shift a little bit. I represent the Research
    Triangle area of North Carolina, a number of research
    universities, and I want to highlight how digital piracy
    impacts scientific journals and threatens the security of
    American research. For example, Sci-Hub, an active private
    website based on Russia, has amassed over 80 million scientific
    journal articles often by illegally targeting university
    websites in the U.S.
        Mr. Schruers, are you familiar with Sci-Hub and do you know
    if your members, including AI developers, have systems in place
    to ensure that they do not obtain content to train AI systems
    from Sci-Hub or other pirated sites?
        Mr. Schruers. I'm familiar with the website, but I don't
    think I have enough information to answer that question right
    now. I'm happy to followup for the record.
        Ms. Ross. That would be terrific.
        Then for all the witnesses, and maybe we will start with
    Mr. McKnight because I haven't addressed a question to you,
    yet.
        Have there been any international policies that have been
    especially effective at preventing consumers from cyber fraud
    that often result in engagement with piracy sites?
        Mr. McKnight. I think the site blocking that we've been
    talking about has been demonstrated to be effective in certain
    countries, at least against professional pirates. I'm certainly
    not an expert in this area. We're focusing more on expeditious
    removal and enforcement here in the U.S. So, that's how I would
    answer from our perspective.
        Ms. Ross. Mr. Gladstein, do you have anything to add? Then
    we can come to the other two.
        Mr. Gladstein. No.
        Ms. Ross. OK. Mr. Schruers?
        Mr. Schruers. I don't know if I have any more to add to
    that. Thank you.
        Ms. Ross. Ms. Temple?
        Ms. Temple. Yes, I would just add that again we've noticed
    that site blocking has been effective and in our analysis of
    those harms that come to consumers that go to those sites
    you're for example four times more likely to be the victim of
    credit card fraud, four times more likely to be the victim of
    malware, I think 30 times more likely to have viruses on your
    computers. So, site blocking does help protect consumers.
        We were actually very pleased that we were able to work
    with the Department of Homeland Security and the IPR Center a
    few months ago to issue a PSA that talked about the harms to
    consumers from online pirated websites. So, site blocking would
    be able to help that as well.
        Ms. Ross. Thank you very much.
        Mr. Chair, I yield back.
        Mr. Issa. I thank the gentlelady. The gentlelady yields
    back.
        We now go to the gentleman from California, Mr. Kiley.
        Mr. Kiley. Thank you, Mr. Chair.
        Mr. McKnight, I appreciated your testimony and certainly
    understand the harm that is done that is sort of unique when we
    are talking about live sports, that there is a real value
    proposition to actual live consumption. So, a remedy that is
    delayed even by an hour or so is insufficient.
        So, we have talked about various potential remedies, maybe
    redefining expeditiously to mean instantaneously or near
    instantaneously. Could you help me understand kind of how the
    mechanics of this work? Like if there is a fight going on how
    do you sort of in the moment find the illegal streams and then
    alert the ISPs?
        Mr. McKnight. Sure. There's a number of ways. Some of the
    ISPs have automatic--to the extent you can identify and
    digital--the technology, depending on how good the stream is
    and the quality of it, can identify it and pull it down.
        Where we have the issues is where we then have to identify
    and then submit these take-down requests. Then it's a question
    of how fast they take action after that, after those requests
    are submitted. We're seeing very, very uneven performance. In
    some areas there's just nonresponsiveness and that's when
    you're seeing things like hours to days.
        Then with other sites we've worked with we've--social media
    platforms that we've worked with we've seen it happen 7-9
    minutes. It's not terrible, but it's not effective. Most
    importantly we know it's not the best they can do because it's
    been better.
        Mr. Kiley. Right.
        Mr. McKnight. We've had conversations and seen things
    improve, but only momentarily, only to go back to sort of like
    the problematic practices that we observed a long time.
        Mr. Kiley. So, you said that the ISPs--that if the quality
    of the stream is good enough, they can find it. How do they do
    that?
        Mr. McKnight. They have technology. Like say if someone
    holds their phone up to a screen.
        Mr. Kiley. Yes.
        Mr. McKnight. Depending on the quality of which that stream
    is put forth on a social media platform, for example, there is
    technology that can identify it as a problematic stream and
    automatically take it down off of a social media platform or--
        Mr. Kiley. OK. So, it is automatic? In other words, the
    technology identifies this as a copy essentially?
        Mr. McKnight. Correct.
        Mr. Kiley. There is no need for notice and take down, and
    for a person to approve it? It just comes down?
        Mr. McKnight. Correct, in those instances where that can be
    identified.
        Mr. Kiley. So, is there a way to incorporate that
    technology even on the provider side where you could sort of
    include it in--
        Mr. McKnight. Giving us access. Yes. One particular
    provider has offered to do that, but many others haven't. Yes,
    there are technological potential to develop that type of
    technology. Some folks have it already. They're just not
    putting their best foot forward.
        Mr. Kiley. Yes.
        Mr. McKnight. Look, without making accusations, the natural
    commercial incentive, if you're running one of these sites, is
    the more users you have viewing content over your site the
    better it is for you commercially.
        Mr. Kiley. Right.
        Mr. McKnight. Right? So, you don't necessarily have the
    incentive to put your best foot forward here. If you look at
    the law the way it's currently constructed, it's not clear that
    we have a case that hours isn't expeditiously or that even a
    day isn't expeditiously. The point we're making is if you're
    dealing with a live event as opposed to something like a movie;
    and there are other issues there that have been explained well
    by my co-panelists, that isn't expeditiously. It's
    definitionally not expeditiously to not take it down after it's
    already over.
        Mr. Kiley. Right.
        Mr. McKnight. In effect the commercial value is gone.
        Mr. Kiley. Is there any way to--I think there is a way with
    the technology where it can just be scrambled, or whatever, so
    you don't have to have an active taking it down per se. It is
    just that there is no--it doesn't actually--I don't know, Mr.
    Schruers, do you want to weigh in on that as well? Maybe you
    have some technical expertise. I am just trying to understand
    the nature of what is available technologically so that can
    inform the best solution from a policy perspective.
        Mr. Schruers. Filtering technology is sadly not magic.
    There's no metadata that says this is an infringing stream,
    although perhaps humans can determine from certain contextual
    clues whether or not something is authorized, although we can
    get that wrong, too.
        Mr. Kiley. How can you not make that--if you have one
    authorized transmission wouldn't any retransmission of that
    sort of definition unauthorized? So, that could be identified?
        Mr. Schruers. So, there's a crucial piece of data there,
    which is what is the authorized transmission? A number of
    leading services do allow and invite live sporting events to
    pre-identify what content is lawful. They may furnish hashes
    that allow for real-time filtering, but that does require data
    and interindustry collaboration to ensure that the digital
    services have the tools to prevent the content from being
    ingested into their system. Of course, that all assumes that
    this isn't just a hyperlink to some site elsewhere.
        Mr. Kiley. Right. Yes. Did you have anything else you
    wanted to add? I am sorry, Mr. McKnight.
        Mr. McKnight. Well, I would just say in our case we only
    have one legitimate authorized partner in the U.S., which is
    ESPN+. So, if our live events are being shown anywhere else,
    it's definitionally unauthorized.
        Mr. Kiley. Right. Right. OK. Thank you very much.
        Mr. Issa. I thank the gentleman.
        Continuing with our California run, the gentlelady from San
    Jose, Ms. Lofgren.
        Ms. Lofgren. Well, thank you very much, Mr. Chair, and
    thanks to each one of these witnesses for their excellent
    testimony.
        Mr. Gladstein, no one is going to defend that infringing
    site, including me. To me the only question is how do we
    prevent this piracy? None of us should be defending it, and I
    include myself very much in that category.
        It was just 12 years ago that we had a very tumultuous
    markup in this room. I think just Mr. Issa, Mr. Johnson, and I
    were here. At the time technical experts: The Internet Society,
    ICANN, and others, strongly advised against DNS-level filtering
    or blocking and instead urged that content-level decisions be
    made at the network edge and not at the internet's
    infrastructure core. I think that probably continues to this
    day. So, the question is what are the best remedies? I think
    that is something I would love to focus on, Mr. Chair.
        One of the things that I am interested in is when we have
    done a number of laws to help on this, I would like to know how
    they are being administered by those charged with enforcement.
    For example, the Copyright Claims Board has the ability to take
    action as part of the CASE Act, which I supported. I don't know
    how that is going. I would like to know that. Obviously, that
    is not the major studios.
        Federal prosecution under the Protecting Lawful Streaming
    Act of 2020. What has been done on that? Has the DOJ brought
    any cases? I would like to know about that.
        The National Intellectual Property Rights Coordination
    Center led by Homeland Security is supposed to help with the
    Protecting Lawful Streaming Act. They have a center there. How
    is that working? I would like to know that as well.
        One of the concerns, I think that we are missing the boat,
    frankly, and I thought so 12 years ago when we had this
    tumultuous markup. These piracy sites would not exist if they
    weren't lucrative. They are making money and that is why they
    exist.
        There are problems in terms of the effectiveness of trying
    to block IP addresses. There are technical issues that the
    internet engineers brought to a head 12 years ago, but there is
    no technical problem in preventing the funding. If the credit
    card companies are going to be told they cannot process the
    funds for a variety of sites, these sites will go away.
        Now, there is a problem internationally, but the OPEN Act
    that I supported would have made the copyright trademark
    infringements and unfair trade practice and would have brought
    in the U.S. International Trade Commission as a partner in
    this. I think even though sometimes we are not happy with their
    level of concern, and sometimes they go in the wrong direction,
    it is a hook actually in terms of going abroad with the
    financial services component of this. To me the answer has
    always been to cutoff the money and this will go away.
        So, I am interested--Mr. Schruers, you are the only one
    here with--speaking from technology, and I know the Chair has
    said we are going to have other hearings on technology, but
    part of--YouTube for example has gotten the digital file for
    various content, so that they can take action when there is an
    infringement.
        One question I have, and it has been problematic, because
    you can make minor changes to that digital file and evade it--
    have we explored or is it even possible to do that kind of
    digital file on a broader basis and would it work given the
    alteration that could be made?
        Then if anybody has a comment about cutting off the money,
    which I think is probably going to be the most lucrative, the
    most effective method we can--I would be very interested.
        Mr. Schruers. Thank you for the question, Congresswoman. I
    think that's a great point. There are among leading services
    and leading content providers evolving strategies to share what
    we call hashes, which are sort of like digital fingerprints of
    a piece of content. Digital services will filter for that hash.
    That's used both in the copyright context and outside of it,
    and it's a very effective way to intercept at the point of
    ingestion content that should not be in a particular place or
    should not be available for any number of reasons.
        Obviously, technology is expensive. It has to be
    implemented in each service in a different fashion, but it is a
    very effective way to solve these problems at the front end. It
    requires a lot of intersectoral cooperation.
        Ms. Lofgren. I see my time is expired, but I would invite
    the witnesses--
        Mr. Issa. I would ask unanimous consent that the gentlelady
    have one additional minute. Without objection, so ordered.
        Ms. Lofgren. Thank you. I would just invite each of the
    witnesses to comment, even after this hearing, on the concept
    of denying access to financial rewards through the financial
    system, the credit card companies and the like, on how we might
    work together to explore that. I know that we have got just a
    few minutes here and it is a deep subject.
        Mr. Gladstein. May I make a quick comment?
        Ms. Lofgren. I would love to make this impossible to profit
    from.
        Mr. Gladstein. May I make a quick comment?
        Ms. Lofgren. Sure.
        Mr. Gladstein. One of the issues with following the money
    that might not service this issue as well as you've just
    stated, quite frankly, is that many of these sites don't charge
    the consumer anything to be able to watch that film. So, what
    Netflix or Apple or anyone is competing with is the free
    dispersal of the product. The way in which those sites are
    making money is from advertising and from selling malware that
    they get from those that go onto their sites. For credit
    cards--
        Ms. Lofgren. Right. So, we would have to go after the
    advertisers as well?
        Mr. Gladstein. So, the consumer isn't using their credit
    card. They're just hitting a button. The technology is such
    that the programming that they're watching doesn't look like
    someone sat in the back of a theater with their iPhone and
    copied the movie. It is a digital copy of the film that looks
    exactly like the film I just made. I couldn't tell the
    difference between the version that's on FMovies and the
    version that's on Netflix.
        So, following--and also bitcoin is used often now.
        Ms. Lofgren. Right.
        Mr. Gladstein. There are various other ways in which these
    folks doing this illegal activity is doing other illegal
    activity and benefiting from those that are going on to their
    sites. So, merely the credit card is not a solution, I don't
    think.
        Ms. Lofgren. Not all of it.
        Mr. Chair, I appreciate your giving me an additional
    minute. I will just close with this: I hope we don't get into
    another tumultuous dysfunctional technical fight as we did 12
    years ago, but I do think we have a lot of opportunity to look
    at enforcement including DOJ, including potential financial
    cutting off. I think the gentleman's testimony is enlightening
    and we could spend a lot more time getting into this and maybe
    getting some real results. So, I yield back, and I thank--
        Mr. Issa. I thank the gentlelady. Those 12 years ago the
    names SOPA and PIPA were bantered around, and we thought that
    this was going to be a solution without any debate. I can
    promise the gentlelady that we are going to invite all the
    parties, we are going to go through a process that at least
    makes sure that all facts and capabilities are known before any
    legislation goes forward.
        I have a history with several here on the dais of fighting
    against our own Chair at the time and Ranking Member and
    against the Senate. We won, but unfortunately the content
    producers do not have a solution. So, I want to find justice at
    a fair rate, something that you and I fought against more than
    a decade ago, but we know we still need to protect the content
    producers. So, I look forward to working with it and I promise
    an open and transparent process.
        Ms. Lofgren. Very good.
        Mr. Issa. I know thank the gentleman from Virginia for his
    patience and yield to him.
        Mr. Cline. Let me tell you, Mr. Chair, thank you for the
    time. I want to thank the gentlelady from California, because I
    wasn't here 12 years ago, but I was here 20, 25 years ago, but
    I was sitting back there and watching the DMCA debate and
    watching the telecom activate. So, this is fascinating for me,
    and I appreciate the gentlelady's expertise and all her work.
        Ms. Lofgren. If the gentleman will yield, I think--
        Mr. Cline. I am happy to.
        Ms. Lofgren. --the Chair, former Chair, and I may be the
    only Members of this Subcommittee who were here when the DMCA
    was approved, and obviously the technology has changed since
    that time. So, I appreciate your--
        Mr. Cline. It has. I would want to start by agreeing with
    the gentlelady in her comments about DOJ. In 2020 only four
    criminal copyright cases were charged. In 2021 only five were
    charged. Only three were charged in 2022. So, we have a ways to
    go.
        I would like to have DOJ here and have the opportunity to
    get into a discussion with them about this issue, because there
    are so many different issues with DOJ that we have to discuss
    that it is a challenge to cover everything you need to. With
    this topic I think having a specific hearing regarding the lack
    of prosecution would be helpful.
        I also want to address your comments about the technologies
    12 years ago. The changes in technology might not be all that
    significant, but when you are talking about the internet, I
    mean 12 years is a lifetime. I would guess that there have been
    changes in technology that may make site blocking more
    feasible, more effective, maybe more targeted.
        Ms. Temple, can you comment on any of the technological
    developments in that area?
        Ms. Temple. Yes, I think the main thing that we have
    learned over the last 10 years of working with these laws with
    ISPs is to work again collaboratively with them and provide
    them flexibility in terms of the use of technology. I know that
    there's been a lot of talk about DNS-level blocking, but that's
    not the only type of blocking, and that's not even the primary
    type of blocking that we're talking about.
        So, when we ask for site blocking orders overseas, we work
    with the ISPs. They have flexibility in the law in terms of
    utilizing the most effective and most efficient and least
    burdensome type of technology, whether that is DNS blocking,
    IPS address blocking, or URL blocking. So, that is one of the
    things that we've found to be--one of the most effective ways
    to accomplish it is to work collaboratively with the ISPs and
    allow them the flexibility to determine how they will actually
    implement blocks that don't negatively affect networks.
        Mr. Cline. Mr. Schruers, I will give you the opportunity to
    respond there and talk about the technologies that are used.
        Mr. Schruers. So, it's critical to think about the--I'd say
    the first question you have to ask is: At what level of
    abstraction are we solving this problem? I'd say throughout the
    digital sector there's an interest, a desire, an urgency about
    responding to piracy because in many cases these sites are
    dangerous. Of course, there's a lot of content interest within
    the digital sector. So, everybody agrees this is a problem.
        Mr. Cline. I want to go specifically to the technology,
    though.
        Mr. Schruers. Right. So, as to the technology, if we're
    talking about broadband providers at the architectural level--
    and I should make clear those--not principally my constituents
    and I don't want to speak for them--I am aware of and my
    testimony cites a number of problems with that.
        For digital services that are at the edge of the network
    they, of course, comply with the Digital Millennium Copyright
    Act notice and take down, and maybe go above and beyond that
    and do allow even live events to pre-identify URL-level
    filtering to ensure that URLs don't resolve.
        Mr. Cline. How many take-down notices do CCIA members who
    operate content platforms receive in a given year?
        Mr. Schruers. I don't have that at my fingertips, but the
    number is in the millions, if not the billions.
        Mr. Cline. OK. How much money is spent processing these
    take-down notices?
        Mr. Schruers. Again, I don't know that companies break that
    out, but they spend extraordinary amounts not only on the
    processing by their trust teams, but on the development of
    technologies that go well beyond what they're required to do by
    law. Tens of millions of dollars are being invested every year
    for some companies in their systems that don't just block
    content, but actually allow rights holders to monetize
    infringing uses of the works.
        So, in many cases they're given the option to say, hey, I
    can leave this content up and get a share of the revenue if I
    so choose, or of course have it removed. Increasingly rights
    holders choose to do that and get a cut of the ad revenue,
    which is a win/win.
        Mr. Cline. Mr. Chair, my time is expired. I would just like
    to note that this hearing is focused on audiovisual, but
    copyright piracy impacts several industries, from movies,
    music, books, and publishing. I would like unanimous consent to
    submit a comment for the record from the American Association
    of Publishers regarding the online--
        Mr. Issa. Without objection, so ordered.
        Mr. Cline. Thank you, Mr. Chair.
        Mr. Issa. If the gentleman would yield, I would share with
    you that I was not here in 1998, but I was Chair of the
    Consumer Electronics Association.
        Mr. Cline. OK. Yes.
        Mr. Issa. So, we were paying close attention and working
    closely, of not collaboratively, with the MPAA.
        Mr. Cline. Mr. Chair, I do see a lot of familiar faces who
    might have been on this side of the dais, whether staff or
    otherwise, out in the audience and they may be a little grayer
    and a little more wrinkled, but they are recognizable today.
        Mr. Issa. Just as interested. I thank the gentleman.
        We now go to the Ranking Member of the Full Committee, Mr.
    Nadler.
        Mr. Nadler. Thank you, Mr. Chair, for holding this
    important hearing. Mr. Chair, not only do the creative arts
    serve to entertain and educate us, but they also support
    industries that contribute billions of dollars to the economy
    every year. Those industries exist because of the audiences
    that buy their final product. We as consumers want the
    inspiration, emotion, and diversion evoked by artistic
    expression. In exchange we are expected to pay a fair market
    rate for those products no matter the format in which we
    consume them.
        Intellectual property laws including copyright laws exist
    to foster creativity and innovation. They are a promise that
    with hard work and a lot of luck you can monetize your
    imagination. No technological changes have challenged that
    promise like the advent of the internet. Even as technology
    helped us discover art beyond our small corners of the world it
    made those creations easier to steal and thus less lucrative to
    produce.
        Copyright law is nothing without the ability to enforce
    those ownership rights. It was with this reality in mind that
    in 1998 when the internet was still in its infancy Congress
    passed the Digital Millennium Copyright Act, or DMCA, to
    protect copyrighted works online. Even with that landmark law
    in place copyright piracy is still an issue that threatens
    industry stability and artists' livelihoods, and the problem is
    growing larger each year.
        I appreciate the opportunity to examine the issue of
    piracy, but as we consider any potential solutions, we should
    make sure we are looking at the problem not as it existed 25
    years ago, but as it exists today. Copyright piracy now
    encompasses broad cybersecurity concerns, artificial
    intelligence considerations, and distribution changes like
    streaming services. Any action we contemplate must be flexible
    enough to stand not just the test of time, but also changes in
    technology that we cannot possibly imagine.
        Artists and content creators deserve to have their works
    and industries protected from illegal online piracy and I am
    grateful to Chair Issa and Ranking Member Johnson for giving
    this issue the attention it deserves. With that in mind I have
    a few questions for our excellent panel of witnesses.
        Ms. Temple, could you please help clarify the differences
    between IP address blocking, DNS blocking, and dynamic site
    blocking? When and how are each of these remedies useful?
        Ms. Temple. Yes, thank you for the question. As I mentioned
    earlier, in most of the jurisdictions in which we operate the
    site blocking order that is issued is flexible, so the ISP is
    just ordered to block access to the site. The actual way in
    which that is done is up to the ISP. They might use DNS
    blocking. They could use IP address blocking or URL blocking.
    In most cases it's usually either DNS or IP address blocking.
        With respect to DNS blocking it's typically--imagine I
    guess sending an envelope through the mail and you have an
    address that you're looking for. The ISP, the access ISP is
    going to need to look for the address of pirate.com, for
    example, because they don't know the specific IP address. They
    have to go to a DNS resolver and get the actual physical IP
    address, the 12312.34.5 address for the website. So, in DNS
    blocking the access ISP knows that they should not be going to
    look up the IP address for that site. Instead, usually they
    just disregard the request to go look up that site. So, they
    can't get the address to that website.
        IP address blocking is similar, but it's looking at the IP
    address. So, as opposed to the pirate.com issue it might--if
    you know the actual IP address, the ISP will not actually allow
    access to the specific IP address that the website has.
        Then URL blocking is a little bit more complicated, but
    that is really they inspect the packet that's going over the
    internet and ensure that the very, very specific URL is not
    able to be returned back to the customer.
        Mr. Nadler. Thank you.
        Mr. McKnight, one of the primary challenges of enforcing
    anti-piracy laws is that the source of most pirated content is
    overseas. Could you please explain why this is significant and
    what policies if any can improve identification and enforcement
    of overseas actors?
        Mr. McKnight. So, a lot of our enforcement efforts are
    actually based here domestically because even though it is
    certainly true, as has been explained by my co-panelists, that
    a lot of the problem does start and originate overseas, a lot
    of the social media platforms in things like Facebook, Twitch,
    the usual suspects that we're seeing our content pirated over,
    actually here is domestically in the U.S. So, when we're
    looking for the definition of expeditious removal to be
    clarified, it's primarily to address that issue.
        The closing of the streaming loophole, which was something
    that we got--you all helped us get passed in 2020, has been
    tremendously effective. I think with respect to that it's all
    about enforcement, domestic or overseas is getting enforcement
    against these career pirates. Because unless they see folks
    actually going to jail or being shut down as a result of this
    legislation that's powerful and has been enacted, they don't
    necessarily have a full incentive not to engage in the conduct.
    They pay attention to laws being passed. It's meaningful. It's
    helpful. What's really helpful is when they see folks being
    caught and they see them suffering consequences.
        Mr. Nadler. Thank you. My last question is to Mr. Schruers.
    Mr. Schruers, sites hosting pirated content often endanger
    consumers through malware, cyber schemes, and insecure
    connections. If in your view site blocking regimes go too far,
    how do you suggest we keep consumers safe?
        Mr. Schruers. So, thank you for the question. Obviously, as
    I said, the best defense is a good offense and making content
    widely available on as many platforms and in many contexts
    possible is one of the first things that we need to do.
        Once we've moved beyond that we need to look at
    interindustry collaboration to ensure that digital services
    have the granular data and metadata about content to
    meaningfully pre-identify, for example, in the context of live
    streams that something would be infringing, to filter on
    ingest, and obviously strike arrangements such as those that I
    described earlier where in some cases rights holders can choose
    to monetize instead of simply prevent. So, there's a lot of
    options available.
        Then of course we have the existing panoply of remedies
    that are available under existing copyright law. Statutory
    damages, actual damages, all the extrajudicial relief that's
    available under Section 512, to say nothing of technological
    protection measures and small claims. There are probably more
    remedies in the Copyright Act than many of our other IT laws.
        So, we have a lot of robust tools at our disposal. There
    are many arrows in the quiver that we can use. To be clear,
    we're only raising concern about one specific arrow and one
    specific context when we raise concerns about DNS-level site
    blocking.
        Mr. Nadler. Thank you. Mr. Chair, I thank you for your
    indulgence and I yield back.
        Mr. Issa. You have always granted me similar indulgences. I
    thank the former Chair and Ranking Member.
        Now for me. Mr. Schruers, I found it interesting that one
    of the things we haven't gotten too much into is Mr. McKnight's
    question. From your knowledge, technical knowledge, forgetting
    about how something is blocked, when Mr. McKnight puts in a
    notice and take-down, is there any reason that it should not be
    able to be done in single-digit minutes as it sometimes is, or
    even faster today based on technology?
        Mr. Schruers. So, the ability of a given service is going
    to respond to take-downs are going to vary depending on the
    context, the nature of the work, the scope of the take-down.
    It's not uncommon for a rights holder to submit millions of
    URLs, some of which may not be accurate. Because every take-
    down does terminate access to expressive content, there are
    consequences for getting things wrong.
        So, I know many services are instantaneous. A lot of
    services that allow rights--
        Mr. Issa. Wait a second. I didn't ask that question. I only
    asked is there any technological reason that it can't be done
    instantly?
        Mr. Schruers. When access to content is terminated--if you
    remove--
        Mr. Issa. You are getting into the ramifications. Maybe I
    will clarify my question. We I think can all agree that the
    technology using AI is available for Mr. McKnight to submit for
    it to be validated against metadata comparison. If he is making
    that data available through the live stream, the idea that it
    can be compared and identified and taken down essentially
    without human interaction would seem to be unequivocal. So, it
    sounds like there may be administrative reasons that an entity
    can respond to why they're not taking it down.
        As the entity that created the original notice and take-
    down and the entity that can update it, as Mr. McKnight is
    asking us to, is there any reason we shouldn't update a
    requirement that it either be taken down using that technology,
    which is near-instant, or that he or his--any company receive a
    response within the same period of time as to that which delays
    it?
        That is what I am asking. It is much more narrow than the
    other subjects we are talking about because we are not talking
    about do you have the capability? We are assuming the
    capability exists, because it does exist for notice and take-
    down. What is your response to that? Either do it or respond
    near instantly?
        Mr. Schruers. I think we agree that an expeditious response
    is appropriate, particularly where there's economic
    consequences as have been described. Of course, Section 512
    already requires expeditious response. There has been some
    litigation about what that means in practice.
        Mr. Issa. Well, we are really good at eliminating the need
    for litigation by redefining to the courts what we really
    meant. It sometimes saves a court a lot of trouble.
        Let me just go on with another round of questions. Ms.
    Temple, you have heard a lot here and you certainly saw us say
    we don't want to have SOPA and PIPA revisited. We want to have
    full and complete. I want to leave free speech in another
    bucket, but I want to ask you a question.
        Based on the actions of these internet providers of using
    their protections under 230 to regularly take down infringing
    content that you often see--in other words Mr. McKnight and
    others, and even Mr. Schruers has said that providers do it,
    but lawyers say sua sponte. They do it without a complaint
    often and they do it with reasonable protection. If they can do
    it without a complaint, as they often do, by matching, is there
    any reason that we shouldn't encourage them to do it more often
    or substantially all the time?
        Ms. Temple. Yes, if you're talking about filtering and
    ensuring that illegal content is not posted up on UGC sites,
    that is something that certainly we want them to do more of and
    we want to have more automated ways that you don't have to send
    them millions and millions of notices that the other mentioned.
        With respect to dedicated websites, of course it's much--
    that are dedicated to infringement, are not UGC sites where
    people are posting, it is much more complicated because those
    websites are not going to take down the infringing content.
    They're not going to filter it out because they're dedicated to
    piracy.
        Mr. Issa. Let me close with just a couple of questions.
        Mr. Gladstein, I haven't asked you any questions, but I am
    going to ask these questions in a sense on your behalf as a
    producer of content that finds himself somewhat harmless--or
    harmed without any ability. I might note that at one time I had
    dinner at a large banquet, but we were at the end of the table.
    It was Francis Ford Coppola who bemoaned how little control he
    had over Godfather III, and if he had only had more control how
    much better it would have been. So, it is not just the fire and
    forget. Sometimes it is even when you are producing it.
        Ms. Temple, because you have this unique expertise on both
    sides of it, let me just ask a few simple technical questions.
    To the best of your knowledge when somebody imports a tangible
    product that violates IP rights, including patent, trademark,
    copyright, does the U.S. Customs have the authority to stop it?
        Ms. Temple. Yes, it does.
        Mr. Issa. When a court or the ITC issues either an
    exclusion order in the case of the ITC or injunction in the
    case of Article 3, do all Federal agencies have the ability to
    use their powers to stop the importation of those products?
        Ms. Temple. Yes. Yes, they do.
        Mr. Issa. So, today as a closing question aren't we just
    talking about finding the equivalent of what for 200-plus years
    our Customs and other agencies have done when there is due
    process and entities such as Article 3 courts have reached a
    decision? The execution of that protection is done by our
    government or on behalf of our government by orders to those
    who participate in bringing things into the United States?
        Ms. Temple. Yes, I would agree that's a very similar
    process.
        Mr. Issa. So, as we invite the Department of Justice, which
    was suggested, and as we reinvite those who chose not to be
    here today, those who can talk to us about--Mr. Schruers, I
    appreciate your expertise, but I want to have more of those
    entities in here to talk about what is technically possible,
    not just what is technically difficult. Because it is this
    Committee's jurisdiction and this Committee's decision that we
    protect through our ports of entry when a DVD comes in bootleg,
    we must be able to protect on the internet. If we do not have
    that ability today, it is our responsibility to create that
    ability.
        I want to close by just making one statement: I know there
    have been good-faith negotiations that have gone on behind the
    scenes. I have been told that those negotiations broke down to
    a certain extent because of hold harmless questions in our very
    litigious society. It is also the jurisdiction of this
    Committee, at the Full Committee level, to provide that type of
    protection.
        So, let's be clear that in getting it I am aware that if
    you get a court order and Customs seizes DVDs coming into the
    country, everybody is held harmless. There isn't, in fact, a
    government right to do so, and all you can do is maybe get your
    DVDs back later if there was a mistake. You don't get to
    litigate against the person that brought the claim in court.
        What is possible in the tangible world; I want to put on
    notice those that we are going to have in followup, we want to
    find a solution in the internet world. We will not quit under
    this Committee, including my Ranking Member to my left and my
    Full Committee Ranking Member also to my left, until we do so.
        With that I want to thank your witnesses and I want to
    thank all those in attendance who often represent people who
    did not speak here today. With that we stand--oh, I am sorry.
    All Members will have five days to issue questions.
        I would ask the witnesses would they respond to written
    questions if they receive them?
        Ms. Temple. Yes.
        Mr. Schruers. Yes.
        Mr. Issa. Thank you. With that we stand adjourned.
        [Whereupon, at 11:51 a.m., the Subcommittee was adjourned.]

        All materials submitted for the record by Members of the
    Subcommittee on Courts, Intellectual Property, and the Internet
    can
    be found at: https://docs.house.gov/Committee/Calendar/ByEvent
    .aspx?EventID=116671.

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