In my previous article on Section 103 of SOPA, I discussed concerns relating to the Act as it was first presented to the House. The Act, however, has undergone a Manager's Amendment and as a result some of the language cited in the previous article has been removed. Many of the issues discussed in the earlier article have also been addressed.
Some of the salient points of the Amendment:

• Language such as "website or any portion thereof" has been replaced with simply website or site;
  
• Notification procedures by private parties to payment vendors and advertising providers have been removed and replaced by court order procedure;
  
• Private parties under Section 103 of the Manager's Amendment must now seek a temporary restraining order, preliminary injunction, or injunction against the defendant prior to sending notice to payment vendors and advertising providers for service suspension;
  
• The definition for "Sites dedicated to theft of U.S. Property" has been revised in a few ways:
  
  
  
  • It now only applies to foreign sites;
    
  • the "engages in, enables, or facilitates" language has been removed, and the following definition applies: "... the site is primarily designed or operated for the purpose of, has only limited purpose or use other than, or is marketed by its operator or another acting in concert with that operator primarily for use in, offering goods or services in violation of..." copyright infringement for commercial purposes or for private financial gain, or trademark infringement;
    
  • the problematic monitoring language ("is taking, or has taken, deliberate actions to avoid confirming a high probability of the use of the U.S. Directed site to carry out acts" that constitute copyright infringement) has been replaced with "the operator of the site operates the site with the object of promoting, or has promoted its use to carry out acts that constitute a violation of section 501 or 1201 of Title 17, United States Code, as shown by clear expression or other affirmative steps taken to foster such violation."
    

Section 104 provides that in cases where the alleged violations only occur on a portion of a website, payment vendors and advertising providers are only required to blacklist that portion.

Section 105 has expanded the scope of its limitation of liability in a two ways: (1) the types of entities protected by the limitation of liability has increased to include credit unions and banking institutions; and (2) the limitation on liability, which was once limited to protecting the entities' preemptive removal of sites posing a threat to public health, has increased to include the blacklisting of "foreign infringing sites" and "Internet sites dedicated to theft of U.S. Property"

The changes in the Manager's Amendment seem to be a step in the right direction; however, a number of risks still exist and the vague, inadequately defined language used in the amendment creates a multitude of interpretations and loopholes. Taken one by one, the changes seem problematic for the following reasons:

• Although "any portion thereof" has been removed, there is nothing to say that a website or site couldn't be limited to a single web address--for instance, the web address for page two of a forum, or in the example referred to in my previous post, a page dedicated to the sale of a single product. The obligation restrictions provided for in Section 104 seem to support this presumption.
  
• While section 104 would arguably permit payment vendors and advertising providers to limit enforcement to that single page, the option may not always be technically reasonable depending on how the payment system is structured. Furthermore, this is simply an option for payment vendors and advertising providers--they may still decide to blacklist the entire website.
  
• The increased scope of Section 105 is one of the more deceptive aspects of the amendment, and potentially creates a back door approach to the revisions made to section 103. As Logan Margulies, attorney for Riot Games, pointed out in his IAmA on Reddit, the immunity offered, which is based on proactive blacklisting of allegedly infringing sites, presents a Hobson's choice to payment vendors, advertising providers, search engines, domain name registries and domain name registrars: if a private party notifies those entities of an alleged infringement on a site and threatens to sue under SOPA, the entity has the option of either a) blacklisting the site and guaranteeing immunity based on a "good faith, credible" belief that the content is infringing (this is approximately the same standard a plaintiff needs to send a take down notice under the DMCA- in other words and based on historical reference, not much); or b) fight the good fight alongside the website owner and potentially lose that liability. As Mr. Margulies points out, that isn't much of a choice for any business.
  
• Although the notification procedure is removed and private parties can no longer submit baseless notifications to payment vendors and advertising providers, the Act now gives plaintiffs immediate access to the courts--once again bypassing the exhaustion of remedies under the DMCA Safe Harbors and other legal channels. And while this change may prohibit individuals with shallow pockets from throwing a website onto the blacklist, it certainly doesn't prohibit deep pockets that would use those court orders to defeat competitors. As stated before, take down notifications by businesses to drive out competitors constituted more than 50% of the take down notices received by Google. It is very likely that this amendment will be treated in the same manner by companies with the financial backing to drive out foreign digital distributors from the U.S. market, even if (and possibly because) they offer customers better service;
  
• While the definition of "Site dedicated to theft of U.S. property" has changed significantly, problems still exist. When we're talking about user generated content or pages dedicated to content uploaded by a user when that content is potentially infringing, that page or "site" is arguably operated for the purpose of that infringement. However, although the website owner is not a direct infringer, the website owner would still ostensibly be on the hook for that infringement even though they are not the direct infringer, and would still be subject to injunctive relief by court order;
  
• The addition of legally vague standards like those provided for in 103(a)(I)(C)(ii) of the Manager's Amendment ("as shown by clear expression or other affirmative steps taken to foster such violation,") may not actually make any difference as far as removing the obligation to monitor created in the original draft. A plaintiff could argue that an "affirmative step" includes asserting a policy of not monitoring or moderating content except as necessary to comply with DMCA safe harbors or their own country's laws. Other "affirmative steps" may include permitting a forum to exist, or if we look at the example provided in my earlier article, having an infrastructure that permits users to create their own "sites".
  

While the original hypothetical mentioned in my original article may change in light of these revisions, the Act at its core threatens legitimate digital distribution channels with both criminal and civil penalties. The threat of an injunction and the removal of financial support by private parties is still a prominent part of the Act even if the easily-exploited notification procedures are removed. Under this legislation any large business can easily petition for court orders for the sole purpose of driving out foreign competitors, thus providing customers and content creators alike with fewer options for digital distribution. And the revisions to section 105 arguably makes the court order approach unnecessary- entities granted a promise of immunity have a greater stake in protecting that immunity, legally and financially speaking, than protecting foreign sites that may only offer incremental income.
Living in a global market facilitates competition and growth. Digital distribution channels are the living example of that growth and are vital for independent game developers. The U.S. marketplace does not exist in a vacuum, and it makes little difference where a site's owner is located. U.S. consumers still have a right to enjoy those distribution channels without the threat of those channels being blacklisted to the sole benefit of U.S. competitors.
This Act doesn't just threaten digital distribution. It threatens every facet of the Internet and particularly online communities. At this time the markup of the Act has been delayed- other changes may be implemented that either reduce the risks presented or reintroduce earlier regulations and procedures. However, there is nothing to suggest that the core drive behind the legislation will change in any way.

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