Could SOPA fly if big media put skin in the game?

The biggest web-related legal controversy over the past few months — if not the entire year — has been the Stop Online Piracy Act, or SOPA. The bill’s shortcomings have been covered to death (including by GigaOM here and here), and watered-down versions have emerged to address its more-controversial points, but the bill itself is far from dead.

But what if the answer to all this political theatre was an amendment forcing copyright holders to put their money where there mouths are? Maybe some of SOPA’s terribly harsh penalties for infringement can stay, but making false allegations would cost accusers dearly. Law professor and blogger Eric Goldman thinks that might be a good start, and that the future of the Internet economy might depend on it.

It all starts with the DMCA

Anyone wondering why SOPA engenders such outrage need only look at the effects of its predecessor, the Digital Millenium Copyright Act. As I’ve noted before, the DMCA — including the oft-mentioned safe-harbor provision (aka 512(c)) — is really a boon for copyright holders and a burden for service providers. We were reminded of this recently when the Ninth Circuit Court of Appeals upheld the now-defunct Veoh’s DMCA defense in its lawsuit against recording label UMG Recording.

Goldman, writing about the case on his Technology and Marketing Law Blog earlier this week, gave a damning assessment of the situation:

Make no mistake, web hosts and their investors got a major 512(c) victory in this ruling. …

But also make no mistake: this case reminds us why we need to strike a fair balance between rightsowners and technology providers, or else our system will break down. This case’s real result is that Veoh is legal, but Veoh is dead—killed by rightsowner lawfare that bled it dry. Meanwhile, rightsowners wrongly assessed the legality of Veoh, but the worst consequence they suffered was overpaying their lawyers. … Veoh’s employees? On the street. Veoh’s investors? SOL. Veoh’s community? Kicked to the curb.

However, as originally written, SOPA makes the DMCA look like child’s play. For foreign websites it doesn’t even provide the option of fighting expensive, protracted legal battles before killing their services.

So, make accusers pay

Reining in copyright infringement is a laudable goal, but SOPA simply goes too far, especially when viewed in light of DMCA cases such as UMG. Goldman offers a compromise: keep some of the draconian penalties for infringement, but make copyright holders pay damages when their accusations prove false. Otherwise, there’s little reason for big-media plaintiffs not to overstretch claims if they can afford the attorney’s fees.

His proposed solution:

Make them put up a $ 1 billion bond for the privilege of sending cutoff notices; and pay liberally out of that bond if the rightsowners get the law or facts wrong. Write checks to the investors and employees whose economic expectations are disrupted when rightsowners get it wrong. Write checks to the payment service providers and ad networks who turn down money from legally legit businesses based solely on rightsowner accusations. Heck, write checks to the users of those legit services who are treated as inconsequential pawns in this chess match. Sure, a $ 1B bond obligation with liberal payouts would turn cutoff notices into a sport of kings that only the richest rightsowners could afford, but perhaps that’s the way it should be. A rightsowner’s decision to send a cutoff notice should be a Big Deal, the equivalent of going to Defcon 5, and not like sending holiday cards to distant relatives you last saw at Ethan’s bar mitzvah.

Sure, it needs some fine-tuning, but I think Goldman’s solution has legs. I’ve written on numerous occasions about the disconnect between the law and the web, but copyright is one area where the law is still relevant because content is still content. The challenge is figuring out how to police copyright law on a medium as fast-moving, flexible and democratized as the web without sacrificing due process for individuals or small companies that can’t afford legal battles with Hollywood.

If drastic measures such as proactive takedown notices and DNS cutoffs without legal proceedings really are the best solution, it seems only fair that companies have a reason to think twice before seeking them.

Image courtesy of Flickr user Ross Elliott.

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