US companies clash on bill aimed at online piracy

Wed May 25, 2011 7:32pm EDT

Related Topics

* Bill gives Justice Dept. new tools to go after websites

* Google, eBay, Visa raise concern about provisions

By Doug Palmer

WASHINGTON, May 25 (Reuters) - A broad coalition of U.S. entertainment, sports and publishing companies on Wednesday rallied support for a bill to get tough on foreign websites that pirate their goods, one day before a vote on the legislation in the Senate Judiciary Committee.

"We think it's an important step forward to better address the problem of offshore digital piracy," said Mike Mellis, senior vice president and general counsel for MLB Advanced Media, the digital arm of Major League Baseball that provides online streaming video of games and mobile applications to about two million subscribers mostly in the United States.

Sports leagues in the United States, Europe and other countries face a growing problem with websites that steal and redistribute their digital content. Many are foreign websites outside the jurisdiction of U.S. law, Mellis said.

The Judiciary Committee bill gives the U.S. Justice Department new tools to go after domestic Internet service providers, advertisers, payment processors and search engines that help these websites operate.

It is supported by 170 companies and business groups, including the Motion Picture Association of America, the Recording Industry Association of America, the Walt Disney Co. DIS.N>, Time Warner (TWX.N) and Viacom VIAb.N.

"Websites dedicated to trafficking in counterfeit products and digital theft dupe consumers, steal our jobs and threaten the vibrant Internet marketplace," U.S. Chamber of Commerce President Tom Donohue said in a statement.

U.S. industries that depend on strong intellectual property protection account for more than $7.7 trillion of U.S. economic output, drive 60 percent of U.S. exports and employ more than 19 million Americans, the business group said.

But another coalition representing computer, communication, electronic and Internet companies expressed concern about provisions of the bill that they said would "undoubtedly inhibit innovation and economic growth.

"We urge the committee to continue to pursue a process that can result in legislation that all can support," the groups said in a letter to the top Democrat and Republican on the Senate Judiciary Committee.

Internet giants Google (GOOG.O), eBay (EBAY.O) and Yahoo (YHOO.O)! joined with American Express (AXP.N), Discover (DFS.N), Visa (V.N) and PayPal PAPXX.O in a separate letter to raise alarm about parts of the bill.

Those companies said they particularly feared the effect of a provision allowing a private copyright or trademark owner to bring action against a domain name associated with a website dedicated to providing pirated or counterfeit goods.

Since many domain name owners are unlikely to respond to such complaints, the brunt of the legislation would fall on advertising networks and payment processors used by the websites, the Internet and financial services companies said.

That could create a "one-sided litigation machine with rights owners mass-producing virtually identical cases against foreign domain names for the purpose of obtaining orders to serve on U.S. payment and advertising companies," they said. (Reporting by Doug Palmer; editing by Chris Wilson)

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