Investors say Protect IP Act would 'throttle innovation'

More than 50 venture capital investors in tech firms are opposing the Protect IP Act, a major piece of anti-piracy legislation targeted at websites devoted to trafficking in infringing content that has broad support from showbiz.

The investors sent a letter to all 100 senators and members of the House contending that the current bill will “stifle investment in Internet services, throttle innovation, and hurt American competitiveness.” Those who signed include Marc Andreessen of Andreessen Horowitz, Brad Burnham of Union Square Ventures, Esther Dyson of EDventure Holdings, Kenneth Lerer of Lerer Ventures, Tim O’Reilly of OATV and Alan Patricof of Greycroft Partners.

The letter expresses concerns that the legislation would be “ripe for abuse,” including a “private right of action” provision that allows copyright holders to initiate legal action against infringing sites, and the payment processors and ad services that support them. They also cited provisions where information location tools, like search engines, can be required to cut off access to domain names.

The legislation “creates a dangerous precedent and a convenient excuse for countries to engage in protectionism and censorship against U.S. services,” their letter states.

Backers of the Protect IP Act have said that the legislation is narrowly crafted and has substantial legal checks to prevent abuse. They also cite its bipartisan support: It passed the Senate Judiciary Committee unanimously last month.

Hollywood studios, guilds and unions all support it, and it also has drawn endorsements from companies like Microsoft and media figures like First Amendment lawyer Floyd Abrams.

Michael O’Leary, executive vice president of government affairs for the MPAA, said in a statement, “The writers of this letter get it wrong about several elements of the bill, but here’s the bigger question: when they say they are concerned the bill would take away “revenues sources for online services,” are they saying businesses like Facebook and Twitter depend on these illegal sites for revenues? That doesn’t make sense. This bill won’t apply to them, or to the ventures they’re backing, unless their sole purpose is criminal activity.

“We can’t keep being asked to choose between technology and creativity, and we can’t stand by as criminals profit from the hard work of the millions of American men and women of the creative and entertainment industry.”

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