MPAA Wants Regulators To Force ISPs To Block Sites 'At The Border'

from the to-stop-pirates,-sometimes-you've-got-to-break-a-few-internets dept

The heart of the case is a company called ClearCorrect, which 3D prints clear plastic braces custom-designed for each patient's teeth. Much of the technology involved in the process is already under patent, but ClearCorrect has gotten around those patents by farming out its intricate computer modeling to an office in Pakistan. That modeling violates a number of US patents — and if ClearCorrect were shipping back the resulting braces in a box, it would be a simple case: the goods would be contraband, to be stopped at the border. But instead, ClearCorrect is only transmitting digital models from Pakistan and printing out the braces in local offices in Texas. The only thing coming in from Pakistan is raw modeling data. So what's a trade commission to do?

In the sweeping and unprecedented decision below, the International Trade Commission found that its authority to regulate trade extends to pure "electronic transmission of digital data" untied to any physical medium. Generally, by statute, the Commission's jurisdiction is limited to oversight of "importation . . . of articles." However, the Commission expansively construed the term "articles" to potentially include anything "bought and sold in commerce," thereby leading to its conclusion that digital data was an article of importation.

As discussed in the 2012 ITC Memo, seeking a site-blocking order in the ITC would appear to offer a number of advantages over federal court litigation, at least at first blush. This now seems even more so given the ITC’s recent decision (albeit now on appeal) holding that electronic transmissions are “articles” within the meaning of Section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337. As also discussed in the 2012 ITC Memo, however, such an action would still involve several difficult questions of first impression, making the prospect of success in that forum uncertain.

Even though site blocking by transit ISPs may be impractical in most (and likely all) cases, it may still be possible for the ITC to issue orders to the consumer-facing network access ISPs requiring them to cease and desist from providing their subscribers with access to the pirate site. To do so, however, the ITC would first have to find that the network access ISPs, by providing their subscribers with access to the pirate site, have themselves violated Section 337.

Because it is the transit ISPs and not the network access ISPs that actually carry the infringing data across the border, we would need to persuade the ITC that the network access ISPs’ conduct is also tantamount to “importation into the United States” of copyright-infringing articles... For this reason, we may be able to develop a case that the network access ISPs, by virtue of the integral role that they play in the process of accessing and delivering infringing content from the foreign site to the end user, should be treated as an importer for purposes of Section 337.

Even if we cannot persuade the ITC that network access ISPs are “importers” of the infringing articles, it can plausibly be argued that the network access ISPs are engaged in a post-importation “sale” of the infringing articles to their end-user subscribers, in violation of Section 337. See 19 U.S.C. §1337(a)(1)(B) (providing that “sale after importation into the United States” is an unlawful act). The difficult question presented here is whether an ISP, by providing network access in exchange for its subscribers’ payment, can be found to have engaged in the “sale” of the infringing articles as that term is used in Section 337.

Evidence from the early 1900s indicates that Congress and others would have cleanly distinguished importation and telecommunication, vesting authority over each in distinct agencies. Treating the Commission as having authority over telecommunications data, then, conflicts with this distinction. To the extent that the Commission’s interpretation of “digital data” as an imported article encompasses such telecommunications data, this Court should reject that erroneous interpretation of the Commission’s purview.



[...]



There is substantial evidence that, around 1930, data transmissions were generally understood to be distinct from articles of commerce and international trade. This understanding influenced Congress, as reflected in its creation of separate and distinct agencies to oversee trade and telecommunications.

The distinction was highlighted by the Supreme Court as early as 1887, in considering one specific type of telecommunications data, namely telegrams:



Other commerce deals only with persons, or with visible and tangible things. But the telegraph transports nothing visible and tangible; it carries only ideas, wishes, orders, and intelligence. Other commerce requires the constant attention and supervision of the carrier for the safety of the persons and property carried. The message of the telegraph passes at once beyond the control of the sender, and reaches the office to which it is sent instantaneously. It is plain, from these essentially different characteristics, that the regulations suitable for one of these kinds of commerce would be entirely inapplicable to the other.

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When SOPA died its inglorious death , the MPAA's best shot at ISP-level site blocking died with it. But the MPAA is nothing if not stubborn and is still willing to wreak havoc on the internet in exchange for a slight dip in infringement.According to a leaked document from the MPAA's law firm [ pdf link ] and two public filings in support of the International Trade Commission (sent over by Charles Duan of Public Knowledge), the movie industry is hoping to use the agency's new willingness to regulate digital transmissions like physical goods as a foundation for site blocking.As we've discussed for years, the ITC has been an active player in helping US patent holders go after those they believe are infringing. Generally, this has taken the form of blocking imports of infringing physical goods -- that the ITC deems as infringing (using different rules than the US court system). This has often allowed patent holders two separate bites at the apple -- one in the courts, and one at the ITC. But a recent case saw the ITC shift its focus -- and its purview -- in response to some circuitous patent infringement. Russell Brandon at the Verge details the case that has led to the MPAA's next attempt at site blocking In October of 2014, the trade commission -- blowing past legal precedent and established statutory limits -- granted itself the power to treat the incoming digital models as physical goods … and stop them at the border.The MPAA, which has entered comments in favor of the ITC's self-granted power expansion, wants to use the agency's power over digital imports to block websites at the ISP level . The leaked Jenner & Block memo confirms this. The MPAA's lawyers don't consider it a slam dunk but they are cautiously hopeful that the ITC's land grab will pay off.While the ITC's new aim -- stopping infringing digital files at the "border" -- would seem to be the ideal starting point, the memo points out that many technical limitations make this approach less than feasible. The "transit" ISPs -- those that "ship in" data from other countries -- can be handled more easily by other court orders than by ITC regulation. The ITC's purview only covers inbound traffic, and technical limitations make this a weaker approach. For one, the lack of information on incoming packets means the blocks would only affect IP addresses. If a "pirate site" shares an IP address with another site, the block won't work. And IP addresses could easily be shared to circumvent blocking at transit ISP level.The memo also notes that the internet is designed to flow around obstructions. Applying blocks at the transit level would simply shift infringing loads to other pathways, nullifying the blocks altogether.The law firm then addresses blockingtraffic to infringing sites at the ISP level. This would ignore the inbound traffic of "transit" ISPs and demand action be taken by US ISPs.That's the sales pitch for ISP-level site blocking. It somewhat ignores the new powers of the ITC and instead relies on convincing the agency that access to "pirate sites" -- even as a "dumb pipe" -- is a violation of Section 337. Definitions will need to be stretched and ISPs that allow their customers to roam the web freely will need to be painted as contributors to infringing activity.If that doesn't work, the next argument is to portray the ISPs as involved in the sale of counterfeit goods.The arguments don't get any less ridiculous. There's a pitch for ISPs to have participated in "unfair acts" by "forcing" (read: allowed customers to access sites the MPAA doesn't like) the motion picture industry to "compete" against infringing copies of its own works. There's even a small paragraph that pushes the notion of contributory infringement, although the law firm notes that this would be the longest shot of all. The likeliest approach appears to be the use of the ITC's power to obtain cease-and-desist orders against ISPs, forbidding them from allowing access to "pirate" sites.Public Knowledge's brief [ pdf link ] in opposition to the ITC's pending power shift points out that even though the statute itself is old (Tariff Act of 1930), its authors directly contemplated the difference between physical and more ethereal goods -- and made it clear that the two shouldn't be treated identically.The brief also points out that, while the ITC is correct in noting that internet transmissions couldn't possibly have been envisioned during the crafting of the 1930 Tariff Act, similar "articles" like telecommunications and radio signals had already been discussed by Congress, and each time, these were not allowed to fall under the same regulatory agency.Putting the ITC in charge of digital transmissions will turn ISPs into ad hoc customs agents who need to inspect incoming packets and outgoing requests. Cloud services would also be negatively affected, as load balancing would need to be rebuilt from the ground up in order to accommodate the legal concerns now inherent in every transmission. The DMCA safe harbor would no longer exist, forcing ISPs to stay one step ahead of IP holders, building in anticipatory takedown response systems and choke points. The MPAA still wants site blocks and is still willing to break the internet to get them. Even the cautiousness displayed in the legal memo still glosses over the severe disruptions this use of the ITC's new powers will cause.The good news? The ITC's "digital = physical" shift isn't in effect yet. The case prompting this shift is still under appeal and no decision is expected until late 2015. Chances are, this decision will be appealed as well, likely landing it in front of the Supreme Court sometime in the next few years. The MPAA can't move on its arguments until this is all decided. But it's ready to move as soon as it can, and this isn't its only plan of attack.

Filed Under: 3d printing, copyright, itc, patents, site blocking, sopa, virtual goods

Companies: clearconnect, mpaa