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Civil Remedies ad revenue, payment will necessarily pass through a financial provider before arriving in the website owner’s accounts. This is true whether a website is connected to a legitimate business or to the distribution of counterfeits or pirated content offered by a Predatory Foreign Website, or anything in between. However, there are many financial providers, and even within a single financial provider’s network, there can be thousands of cooperating financial institutions. 20 b) Advertising Networks Advertising networks (e.g., Google AdSense) place ads on foreign websites and in turn provide those websites a payout, based on clickthroughs or ad impressions. The Internet Advertising Bureau’s semiannual report on Internet advertising revenues (conducted by PriceWaterhouseCoopers) recently reported that “Internet advertising revenues for the first quarter of 2012 set a new record for the reporting period at $8.4 billion,” which represents the highest first quarter revenue ever measured and a 15% increase over the Internet advertising revenues reported in the first quarter 2011. 21 The IAB concluded that this dramatic increase in ad revenues was directly related to an increased use of social media and other interactive websites by users around the globe. 22 Notably, the IAB also reported that over 70% of all Internet advertising revenue was concentrated among the top ten ad selling agencies, while an additional 20% was spread among 40 additional agencies. 23 By far, the largest portion of ad revenues resulted from search-based advertisements, totaling 46.5% of the revenues overall in 2011. 24 Because of this advertising model, websites can earn revenues even if they do not charge for their content or for access to their sites. 25 c) Search Engines Search engines (e.g., Google Search, Microsoft Bing) drive traffic to websites by listing websites in the search results. Some of these are organically generated 26 while some are the result of paid advertisements. These paid advertisements include keyword-based ads—also called “sponsored links”—which appear alongside or above organic search results (e.g., Google AdWords, Microsoft adCenter). 27 Just like any other purchaser of sponsored links, Predatory Foreign Websites can purchase ads and have them display when consumers search for a particular set of keywords. 28 Trademark owners concerned about counterfeit websites purchasing sponsored links from Google or other search engines to display when a user searches for their trademarks can submit a web form 29 to request a take down of sponsored links that display misappropriated trademarks. d) DNS Registrars Domain name service providers (e.g., NameCheap, GoDaddy, Network Solutions, Domains by Proxy, etc.) serve as registrars for domain names, enabling visitors to use a domain name instead of an IP address to access a website. e) Internet Service Providers Internet service providers (e.g., Comcast, 30 Verizon 31 ) enable consumers to access the Internet and may provide other services not relevant to this White Paper. f) Webhosts Services offered by website hosting companies can vary greatly, but these generally include “provid[ing] space on a server owned or leased for use by clients, as well as providing Internet 11
Chapter 2 connectivity, typically in a data center.” 32 Website owners generally pay website hosts for hosting expenses (storage space, bandwidth, CPU time), although there are some hosts that offer basic services for free. 33 g) Shippers and Carriers Counterfeiting historically involved bulk shipments of counterfeit goods via container or freight shipping services. 34 The very size of the shipments made it easier for Customs & Border Protection to identify and seize the counterfeit goods. In the wake of increased online shopping activities, consumers frequently order goods directly from online retailers, including Predatory Foreign Websites, and the resulting shipments are more difficult for CBP to identify, as the shipping packages resemble other shipments from legitimate sources and may, in fact, be sent through legitimate multinational carriers (such as Federal Express, UPS or DHL), which handle the delivery to the U.S. consumer. B. Potential Liability of Predatory Foreign Websites and Intermediaries—Copyright 1. Potential Liability of Predatory Foreign Websites—Copyright As noted, this White Paper excludes from the definition of “Predatory Foreign Website” all sites that are subject to jurisdiction in the United States under existing U.S. law or other treaty obligations. If a Predatory Foreign Website were subject to enforceable jurisdiction under U.S. law, 35 the copyright owners would have potential claims against such a site for both the site’s own direct acts of infringement (“direct liability”), and the site’s role in facilitating and supporting direct infringements committed by others, including most notably the site’s users (“secondary liability”). This Section addresses copyright owners’ potential direct and secondary liability claims against Predatory Foreign Websites. Potential claims that could be made by trademark owners are discussed in Section III below. Although copyright owners likely would have strong claims against Predatory Foreign Websites, there are practical and legal challenges to asserting such claims in the U.S. In the first place, it is sometimes difficult for rights owners to locate the operators of such sites. And, even where they can be located, such sites likely would raise jurisdictional challenges to a suit based on a violation of U.S. copyright law. Section D discusses some of these issues. a) Direct Liability of Predatory Foreign Websites—Copyright Law “To prove a claim of direct copyright infringement, a plaintiff must show that s/he owns the copyright and that the defendant himself violated one or more of the plaintiff’s exclusive rights under the Copyright Act.” 36 The range of infringing conduct that takes place through Predatory Foreign Websites implicates numerous exclusive rights. An individual site may be responsible for the infringement of more than one exclusive right with respect to the same conduct. We discuss each of these rights in turn. (1) Right of Reproduction The owner of copyright under U.S. law has the exclusive right to make copies of his or her work. 37 The activities occurring through many Predatory Foreign Websites involve the direct, unauthorized reproductions of copyright owners’ works. Peer-to-peer services, for example, involve the making of a copy on the computer hard drive of the person downloading the file. Sites that stream—or that link to other sites that host—infringing content also will utilize unauthorized copies of copyrighted works that are copied to one or more computer servers. 12
Page 1 and 2: A Section White Paper: A Call for A
Page 3 and 4: The views expressed herein represen
Page 5 and 6: Call for Action for Online Piracy a
Page 7 and 8: Call for Action for Online Piracy a
Page 10 and 11: INTRODUCTION: BALANCING THE INTERES
Page 12 and 13: Introduction found in national laws
Page 14 and 15: Introduction There are also many si
Page 16: Introduction 12. “Medicines: spur
Page 19 and 20: Chapter 1 adjudication of extra-ter
Page 21 and 22: Chapter 1 law and the broadest pote
Page 24 and 25: Chapter 2 CIVIL REMEDIES I. SECTION
Page 26 and 27: Civil Remedies By way of further cl
Page 30 and 31: Civil Remedies Whether the Predator
Page 32 and 33: Civil Remedies Knowledge. The “kn
Page 34 and 35: Civil Remedies ISPs and web hosting
Page 36 and 37: Civil Remedies . . . . However, thi
Page 38 and 39: Civil Remedies trademark owner, Tif
Page 40 and 41: Civil Remedies Finally, the alterna
Page 42 and 43: Civil Remedies Legislative revision
Page 44 and 45: Civil Remedies Most intermediaries
Page 46 and 47: Civil Remedies of foreign sites who
Page 48 and 49: Civil Remedies the RIAA initiated l
Page 50 and 51: Civil Remedies employ DNSSEC, which
Page 52 and 53: Civil Remedies 25. See BAE Systems
Page 54 and 55: Civil Remedies 121, 134-35 (2d Cir.
Page 56 and 57: Civil Remedies 84. Id. at 1169. 85.
Page 58 and 59: Civil Remedies 124. Id. at 5. 125.
Page 60 and 61: Civil Remedies at *10-*11, *24-*25
Page 62 and 63: Civil Remedies 188. A technical ove
Page 64 and 65: Chapter 3 PRIVATE ENFORCEMENT ACTIO
Page 66 and 67: Private Enforcement Actions labeled
Page 68: Private Enforcement Actions interme
Page 71 and 72: Chapter 4 the Civil Remedies chapte
Page 73 and 74: Chapter 4 These complaints, while b
Page 75 and 76: Chapter 4 The Act would not have es
Page 77 and 78: Chapter 4 Evoking by far the most i
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Chapter 4 States Interests at Home
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Chapter 4 47. Combating Online Infr
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Chapter 5 VOLUNTARY ACTION I. SECTI
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Voluntary Action it timely responde
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Voluntary Action Content owners may
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Voluntary Action various ISPs and m
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Voluntary Action Partnerships, such
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Voluntary Action (1) Google Play Fo
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Voluntary Action Other registrars,
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Voluntary Action Notes 1. Preventin
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Voluntary Action websites. eBay rec
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Voluntary Action 80. See “What is
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Voluntary Action 116. See “Report
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Chapter 6 SUMMARY OF CONCLUSIONS Th
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Summary of Conclusions • Encourag
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Appendix summaries provided below o
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Appendix from the Senate bill. In m
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Appendix It appears that this bill
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Appendix b) Statements in Oppositio
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Appendix 4. Miscellaneous Provision
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Appendix As of December 15, 2011, a
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Appendix 106 C. Online Protection a
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Appendix • Finally, costs to proc
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Appendix plenty-criticism); see als
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Appendix 49. Art Brodsky, “Public
Page 132:
About the ABA Section of Intellectu
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