Top VCs Tell Congress: PROTECT IP Will Harm Innovation

Innovation

from the good-for-them dept

While the entertainment industry has assumed that they would have a smooth ride getting PROTECT IP approved, it seems they’ve run into a bit of turbulence. We’ve already pointed out that both the NY Times and LA Times have come out against the bill as written and now a group of some of the most well known, and most successful, venture capitalists have all gotten together to send a letter to every member of Congress warning that PROTECT IP will harm investment and innovation. The list of people signing it really is a who’s who of the top venture capitalists around. You’ve got Vinod Khosla, Fred Wilson, Marc Andreessen, Ron Conway, Bill Draper, Esther Dyson, Brad Feld, Roger Ehrenberg, Eric Hippeau, Reid Hoffman, Tim O’Reilly, Alan Patricof, Danny Rimer, and many many others. In total 53 of the top venture capitalist signed on, and they don’t mince words about why this is a bad bill:

The bill is ripe for abuse, as it allows rights-holders to require third-parties to block access to and take away revenues sources for online services, with limited oversight and due process.

In particular:

1. By requiring “information location tools” — potentially encompassing any “director[ies], index[es], reference[s], pointer[s], or hypertext link[s]” — to remove access to entire domains, the bill puts burdens on countless Internet services.

2. By requiring access to sites to be blocked by Domain Name System providers, it endangers the security and integrity of the Internet.

3. The bill’s private right of action will no doubt be used by many rights-holders in ways that create significant burdens on legitimate online commerce services. The scope of orders and cost of litigation could be significant, even for companies acting in good faith.

While we understand PIPA was originally intended to deal with ?rogue? foreign sites, we think PIPA will ultimately put American innovators and investors at a clear disadvantage in the global economy. For one, services dedicated to infringement will simply make their sites easy to find and access in other ways, and determined users who want to find blocked content will simply shift to services outside the reach of U.S. law, in turn giving a leg up to foreign search engines, DNS providers, social networks, and others. Second, PIPA creates a dangerous precedent and a convenient excuse for countries to engage in protectionism and censorship against U.S. services. These countries will point to PIPA as precedent for taking action against U.S. technology and Internet companies.

As one of the VCs behind the letter, Brad Burnham, noted in his blog post about the bill, unlike most of the support for PROTECT IP, this is not a “usual group” of lobbyists. This is not an organized group or a trade organization. This is a bunch of very concerned people with their finger on the pulse of innovation, who are quite scared of the bill:

Venture capitalists are notoriously apolitical. We believe in markets. We are not asking for tax breaks or favorable regulatory rulings, we are asking for restraint.

The group of venture capitalists who joined us in expressing concern about S. 968, the PROTECT IP Act (“PIPA”) represent a broad range of political views. We share a passion for start-ups and a conviction that young companies are a fantastic source of productive innovation. This group is responsible for a significant amount of investment in the U.S. economy.

Unfortunately, chances are their pleas will be ignored, in part because they’re not a big lobbying organization. However, anyone supporting PROTECT IP would be smart to take a look at who’s speaking here, note that these are not the usual folks who speak up about what’s going on in DC, and recognize that this isn’t just a standard complaint. These are people who are legitimately worried about the impact of such a bill on American innovation.

Filed Under: copyright, innovation, protect ip, rogue sites, venture capital