On Wednesday, NVCA signed on to a letter to lawmakers that seeks to slow down the consideration of two bills that, if enacted in their current form, would have a chilling effect on investments in Internet companies and technology innovation in the U.S. 

The House legislation was introduced by Judiciary Chairman Lamar Smith (R-TX) and is known as HR 3261, the Stop Online Piracy Act (SOPA).  The Senate bill, introduced by Judiciary Chairman Patrick Leahy (D-VT), is referred to as the Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act, or PIPA (S. 968).  Both bills have garnered considerable attention, both positive and negative.  The bills are aimed at fighting piracy and counterfeiting on foreign “rogue” websites by enabling copyright owners and the Justice Department to require search engines, paid advertising providers, social networking sites and domain name service providers to immediately terminate access or cease providing services to websites that are “dedicated to infringing activities.” 

While the goals of the legislation are laudable, we have concerns, particularly about new parameters for liability that could threaten entrepreneurs and investors of legitimate domestic websites.  As currently written, company websites can be targeted and essentially shut down if the Attorney General believes copyright infringement has taken place.  Additionally, the owners of the site and any investors in the company could be liable for infringement damages.  Given the seemingly broad nature of the legislative language, many VC-backed sites could be at risk if there is just a single link or reference to copyrighted material.  The legislative language also makes it very difficult for a company to adequately defend itself in ample time so that their websites are not immediately shut down.

A bipartisan group of Senators and Representatives, including Sens. Ron Wyden (D-OR), Maria Cantwell (D-WA), and Rep. Darrell Issa (R-CA) put forward a draft framework for legislation that would address the problem of rogue sites in an alternative manner.  NVCA intends to work with lawmakers to bring all sides together to reach a reasonable compromise that doesn't threaten the operations of our companies.  We will keep you informed of developments here at NVCAccess.