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The MPAA has a new plan to stop copyright violations at the border

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A controversial ruling would give trade courts new power over the web, and a frightening new weapon against piracy

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Hollywood’s war on piracy has reached a strange impasse. While the MPAA and others have launched lawsuits against US-based infringers, reaching offshore torrent sites like Isohunt and The Pirate Bay is still a slow process, and whenever a site is taken down, others quickly pop up to fill its place. As a result, the MPAA has consistently pushed for the power to block infringing sites from the internet: first by pushing for new laws like SOPA in 2011, then through a series of novel legal tactics. The fight has pitted them against some of the most powerful companies on the web, and drawn them into a long, secret battle with Google.

A little-known legal venue that's poised to take on new digital powers

But leaked documents show that Hollywood has a new secret weapon in the fight, a little-known legal venue that's poised to take on new powers over the digital realm. It's called the International Trade Commission, a quasi-judicial agency that regulates imported goods as they enter the country. Traditionally, that means physical goods — if you want to ship in a boatload of fake iPhones, the ITC is the agency that will stop you — but the ITC recently gave itself the power to rule on data as it crosses US borders, as a result of a complex 3D printing case. If the ruling holds, it could have huge implications for the way data moves across the global web, and give the MPAA the site-blocking powers it’s been grasping at for years.

Stopping data at the border

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?

Enforcing import controls on data would require powerful new tools

In April of last year, the ITC arrived at an answer with huge repercussions: stop the data at the border. The ITC is only supposed to rule on "articles," which has usually been taken to mean physical goods, but last year’s ruling took it to include data too. That gives the ITC the power to stop ClearCorrect's contraband braces data at the border, but it could have far greater implications. If a web service like Gmail or Facebook ends up on the wrong side of a patent dispute, the court could potentially forbid the service from transmitting data into the US until the dispute is resolved — making the cost of a losing a court battle astronomically higher. It would also require powerful new tools for monitoring data as it crosses national borders, a fundamental break from the international structure of the web. Aware of the huge issues at stake, the ITC stayed the ruling until the Federal Circuit weighs in later this year — but already, legal groups are reeling from the possible consequences.

The MPAA has taken particular interest in the case, seeing the ITC as its best chance to stop pirated content in transit. Documents obtained in the wake of the Sony hack show MPAA lawyers already mapping out a way to turn the ruling to their advantage. "Seeking a site-blocking order in the ITC would appear to offer a number advantages over federal court litigation," one memo (embedded below) reads. "This now seems even more so given the ITC's recent decision (albeit now on appeal)." The MPAA has also filed two public briefs (available here) to this effect, supporting the ITC’s new authority over data.

If you shipped in a boatload of DVDs, the ITC would have no problem stopping it at the border — so why not an ISO file?

The logic is easy to follow. If you shipped in a boatload of Expendables DVDs, the ITC would have no problem stopping it at the border — so why not an ISO file? The technical mechanisms for blocking that file in transit would end up looking a lot like site-blocking, and the memo goes on to explain why targeting consumer-facing ISPs would be their best strategy in the wake of a favorable ruling by the Federal Circuit. It's still unclear whether copyright would fall under the same rules (the current ruling may only apply to patents), but if it does, it would be Hollywood's best legal channel for blocking sites in transit, supporting the same ISP-based blocking regime that was proposed by SOPA.

The lure of new legal powers

The ITC is a particularly appealing tool for groups like the MPAA because of its strong legal powers and logistical benefits. The ITC usually processes cases faster than federal courts, and trying a case there requires specific legal expertise that gives big companies a kind of home-field advantage. More importantly, if the ITC rules that a particular product is infringing, the company is immediately barred from importing it — a much stronger ruling than most federal courts will ever hand down. That has particularly striking implications for the web, where stopping data in transit is easier said than done. Instead of a monetary settlement, the ITC's infringement penalties would mean preventing sites from sending data into the US entirely.

The threat of legal action might be all it takes to block a site

As with SOPA, the biggest concern is what content owners can do without ever going to court. As long as there's a credible case, the simple threat of legal action against ISPs may be all that's required to take something down. Most ISPs have little stake in the specific sites that travel over their network, and faced with the prospect of a long, expensive legal battle, they'll have no desire to raise trouble.

Furthermore, simply building the infrastructure to comply with the requests may require serious changes to the structure of the web. Public Knowledge's Charles Duan has written a brief for the Federal Circuit pushing exactly this case, claiming that giving the ITC free rein over data would inevitably lead to easy site-blocking procedures. "If this is a successful technique, it's basically going to require ISPs to build in all sorts of systems that would make it very easy for someone to take something down very very quickly," says Duan.

A new threat to the cloud

A fundamental change to how data is routed through the web

It's not just web freedom advocates that are worried. The courts have also heard from the Internet Association, a trade group representing web giants like Google, Facebook, and Amazon, on the grounds that the ITC's new powers might result in major problems for cloud computing. (Google has also filed a separate brief challenging the ruling.) Running a high-traffic service like Netflix or Google Drive means having servers all around the world and routing traffic based on which server has the lowest load. If companies are exposing themselves to a legal challenge every time they send data across US borders, it would require massive changes to the existing server infrastructure, as well as a fundamental rethinking of the way data is routed through the web. Since vicious patent fights are already common within the tech industry, the prospect of stopping patent-infringing software as it crosses the border is seen as particularly dangerous. "The cloud presents enormous economies of scale," said Abigail Slater, the Internet Association's VP of legal and regulatory policy. "But the cloud can only deliver these benefits by being able to operate seamlessly around the globe."

While the stakes are high, we won’t get a clear answer from the courts until late in 2015 at the earliest. The Federal Circuit will be hearing arguments well into the summer, and it may take months beyond that to finally issue a ruling. If the Federal Circuit’s ruling is appealed — as it likely will be — the Supreme Court could take years to settle the issue. In the meantime, lawyers on both sides are left to plead their case and cross their fingers. For web freedom advocates like Duan, it’s easy to see the case as a pre-electronic model of trade that's come smashing into the internet era. As Duan puts it, "it feels like the FAA deciding they want to regulate radio because it's sent over the air."

Use of the ITC to Block Foreign Pirate Websites by Russell Brandom