USTR Goes Off The Deep End: Names Domain Registrar Tucows As A 'Notorious Market' For Piracy

As part of the annual joke from the USTR known as the Special 301 Report (which is so ridiculous that even top people at the US Copyright Office mock the USTR about it), the USTR publishes what it calls its "notorious markets list." The Special 301 Report, if you don't know, is the report where big companies whine to the USTR about countries those companies feel don't respect US intellectual property rights enough. The USTR collects all of those whinings, and rewrites it as a report to send out to US diplomats to try to shame countries into "cracking down" on the behaviors that these companies don't like -- no matter whether or not it complies with US or local intellectual property laws. Starting a few years ago, the USTR broke out a separate list of online websites, which it refers to as "notorious markets." It started doing this in 2011, in a process that was intended to support SOPA (because SOPA supporters wanted the list of "rogue" sites that would be banned under SOPA).

The USTR itself admits that there's basically no objective or legal rationale behind its process:

The List does not purport to reflect findings of legal violations, nor does it reflect the U.S. Government’s analysis of the general IPR protection and enforcement climate in the country concerned.

The latest Notorious Markets list is out (technically, it's the "2014 Out-of-Cycle Review of Notorious Markets") and it's full of the usual misleading crap. It's quite amazing to watch US government officials celebrating the censorship of online forums and websites, calling it "progress." Free expression is not particularly important to the USTR when the MPAA complains about it, apparently.

But the really astounding move in this latest report is by the USTR to start including domain registrars as "notorious markets," including one of the most popular and widely used registrar in the world, Tucows:

This year, USTR is highlighting the issue of certain domain name registrars. Registrars are the commercial entities or organizations that manage the registration of Internet domain names, and some of them reportedly are playing a role in supporting counterfeiting and piracy online.

And here is the entry against Tucows:

Tucows.com: Based in Canada, Tucows is reportedly an example of a registrar that fails to take action when notified of its clients’ infringing activity. Consistent with the discussion above, USTR encourages the operators of Tucows to work with relevant stakeholders to address complaints.

Not surprisingly, the USTR lays the FUD on thick in claiming that it feels the need to do this to protect you against dangerous counterfeit drugs that are being offered on these sites, and those evil domain registrars that refuse to shut down an entire business because someone has complained:

Several respondents to the 2014 Federal Register Request identified registrars that purportedly facilitate the distribution of unauthorized copyright-protected content. One respondent identified several registrars that have apparently refused requests to lock or suspend domain names used to sell suspected counterfeit pharmaceuticals to consumers worldwide. This conduct also presents a public health challenge, and requires a coordinated response by governments and a variety of private sector stakeholders.

According to one report, an estimated 96 percent of online pharmacies targeting U.S. consumers are operating in violation of applicable U.S. law and standards. An estimated 50 percent of websites worldwide that hide their physical address are selling illicit pharmaceuticals, including those labeled with counterfeit trademarks. The website www.LegitScript.com has reviewed over 40,000 online drug sellers, but found fewer than 400 to be legitimate. Studies have found that counterfeit anti-cancer, anti-HIV/AIDS, and other medications are not only ineffective, but in some cases may contain toxic or deadly adulterants, such as rat poison.

As you may recall, the scary stories about "counterfeit drugs" and conflating that with copyright infringement is standard operating procedure for those pushing for stronger copyright enforcement. That's because they can't show any real harm from copyright infringement, so they talk about drugs. But what they miss is the fact that counterfeit drugs are actually a very very small problem. The cases of "toxic or deadly adulterants" are exceedingly rare. Even when dealing with unauthorized pharmacies, studies have shown that they tend to deliver legitimate products (it's not good business to kill your clientele, after all).

As for the whole "only 400 out of 40,000 online drug sellers are legit" claim -- well, consider the source. LegitScript is known for frequently conflating online pharmacies that are questionable, with perfectly reasonable authorized Canadian pharmacies that merely "reimport" legitimate versions of drugs at much lower costs than US pharmacies. LegitScript has regularly been used to try to shut down or to tar and feather Canadian pharmacies that provide much cheaper access to medicine. President Obama, in the past, spoke out in favor of allowing more "reimportation," but later went back on that campaign promise, once American pharmaceutical companies got angry. Even Senator Patrick Leahy, the author of PIPA (SOPA's companion bill in the Senate) has been a big supporter of reimportation of drugs from Canada.

And yet, the USTR implies that merely reimporting drugs is the same as someone selling rat poison pretending it's something else. The big pharmaceutical companies have been really pushing a lot lately to force ISPs to completely take down websites if they sell drugs that weren't originally intended for the US, even if there is no court order or other adversarial process. They just want to complain and have the sites taken down. It appears that Tucows, quite reasonably, finds this to be somewhat excessive... and in response the USTR labels it as a "notorious market."

To put it mildly, this is absolutely crazy.

Note that this is the very same USTR that is currently negotiating the TPP and TTIP agreements, which it insists will help promote a free and open internet. Yet, at the very same time, it's going around and calling domain registrars "rogue markets" because they won't arbitrarily take down entire websites, because some pharmaceutical company complains that it doesn't want the competition and some movie studio is pissed off that a website links to some infringing content (no matter what else may be on that site, or who is actually responsible).

It is difficult to see how the USTR can claim to be in favor of an open and free internet, and the free flow of information (as it claims), when at the very same time, it's arguing that domain registrars themselves should not only be held responsible for any infringement, but rather that they should censor entire sites just because the users of some sites whose domains were registered via that registrar, happened to infringe. Next thing you know, the USTR will be demanding that the makers of asphalt be held responsible for not stopping cars that have counterfeit tires from driving.

The USTR has long been something of a joke, but recently it has tried to present itself as really "getting" the internet after years of not getting it. By naming Tucows as a "notorious market," however, the USTR has only shown how totally clueless it remains, and raises very serious questions about its focus and knowledge as it negotiates important trade agreements.

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