Richard O’Dwyer, a 23-year old university student who lives in the United Kingdom, is facing extradition to the United States to stand trial in New York for copyright infringement in the US. O’Dwyer ran a website called TVShack, which provided links to Internet sites where people could download movies and TV shows for free. Now I am no fan of copyright infringement and am not defending this man’s actions, but that is not what makes this case interesting (and downright scary) to me.
Richard O’Dwyer has never been to the United States. Not once. His Internet site ran on servers in Sweden. Neither Sweden nor his home country has charged him with a crime.
So how in the world could the United States government make a case against O’Dwyer and enforce its laws against a foreign citizen like this?
Because he used a .com domain name. All .com domains (among many other global top level domains or gTLDs) are registered with Versign, a US-based company.
The implications of this are huge. Can the US government exert its laws against a non-US website based on the registry used for that domain name? The US Immigration and Customs Enforcement agency (ICE) thinks so.
Erik Barnett, assistant deputy director for ICE, said in an interview with the Guardian:
"The jurisdiction we have over these sites right now really is the use of the domain name registry system in the United States. That's the key."
ICE started targeting international “copyright infringers” with “Operation In Our Sites,” launched in June 2010. TVShack was listed in the original press release as one of the suspect sites.
The first well-publicized use of domain name seizures by ICE was against Puerto 80, a Spanish company which ran the websites rojadirecta.com and rojadirecta.org. These websites streamed sports from a variety of media sources from all over the world. While a Spanish court found that Puerto 80 did not violate copyright laws in Spain, ICE seized both domains. A US lawsuit to return those domains has been denied.
An interesting note from the lawsuit: in denying the return of the domains, the US federal judge claimed there was no “substantial hardship” caused by the seizures. The decision further stated that the company “can simply distribute information about the seizure and its new domain to its customers.”
I can imagine that you might feel differently if this was your online business… with your bank account possibly enduring some “substantial hardship.” Now imagine if, along with your business disappearing, you were facing criminal charges and an extradition order.
To make things even more problematic, the European Police Office (Europol) is now getting in on the act. In a recent joint effort with ICE called “Project Transatlantic,” Europol seized 133 domains based in European Union countries. The domains included gTLDs such as .be, .eu, .dk, .fr, .ro, and .uk.
How To Protect Yourself and Your Business From ICE and Europol
I previously wrote that Hollywood was pushing for legislation to combat potential IP infringement. While both bills discussed in that article have been “postponed” due to wide-spread opposition, the government is already leveraging domain name seizures, and now criminal prosecution and extradition, to combat complaints of copyright infringement from the big US media companies. And this effort now extends to sites with domain registry and hosting in the European Union.
Even if the complaints turn out to be invalid and your domains are eventually returned… can you stay solvent long enough for the fight? Could your business survive its domains being seized and the loss of all the links from across the Internet? Can your reputation survive customers coming to your site and seeing a banner from ICE or Europol telling them that you broke the law?
For most business owners, the answer is “no.” So how do you protect yourself? You internationally diversify the various components of your website.
Every single component of your online business can be diversified internationally. You can protect your business from abusive US and EU intellectual property enforcement while making your business more successful by reaching new customers around the world. Here are the two easiest components to internationalize:
- Domain Name: The domain name is an important, yet inexpensive, resource of your online business. There are many gTLDs that are not under the jurisdiction of the US or EU. For instance, the “.co” domain is run by a corporation in Bogota, Colombia, and the “.bz” domain for Belize is run by an entity located there. “.me” is run from a corporation in Montenegro. For a few extra dollars per year you can get domain names for your business that the US cannot easily seize.
- Hosting: The next most important resource for your website is hosting. There are many solid hosting companies located outside of the US. If your web business is focused in North America, there are hosting providers in Toronto, Panama City, and Bermuda who can provide great response time for your customers. Outside of North America, investigate Switzerland for European-focused sites and Malaysia or Hong Kong for Asian-focused sites. Hosts in these locations will generally not respond to US website takedown requests without an accompanying court order from their own government.
The Next Steps
Start by examining your current online business and the resources you are using. If every component of your business (incorporation, domain name, hosting, merchant account, e-mail, etc.) is located in the US, look for ways to internationally diversify these components. Perhaps you can start a mirror of your current website that could focus on a different market (e.g., Asia or Europe) and use international components so as not to disrupt your current business.
If you are planning a new online business, make sure that you look at all of the available options for every aspect of your website. Begin with the jurisdiction for your business incorporation, followed by website hosting and the location of the domain name. Many popular international jurisdictions have a wide choice of suppliers for each component of your online business structure.
About the Author: *Kyle Gonzales* is a self-taught, self-made business professional with 14 years of experience in the IT industry. Over that time, he has assumed leadership positions ranging from corporate networking to technical sales. In 2011 he launched *JumpShip Services*, a firm that offers "multi-flagged" internet solutions that offer enhanced security, privacy and peace of mind for your digital communications."