The Big Story: Supreme Court weighs copyright rules for ISPs
The Supreme Court is considering how Internet service providers (ISPs) have to respond when their subscribers are accused of online copyright infringement, including whether they should have to terminate subscribers’ access to the Internet altogether. In oral arguments this week in the case Cox Communications v. Sony Music Entertainment, Supreme Court justices grappled with whether Cox Communications contributed to copyright infringement by continuing to provide broadband service to users accused of illegal downloads. If the Supreme Court decides that ISPs are obligated to terminate Internet service based solely on accusations of infringement or risk being held liable for contributing to infringement, all Internet users—including startups and their users—risk losing Internet access.
As Engine and a coalition of pro-innovation organizations—including Internet Works, TechNet, and the American Innovators Network—explained in an amicus brief to the court earlier this year, pressuring ISPs to cut off Internet access would especially harm startups and undermine innovation. ISPs handle large volumes of user activity and are not in a position to adjudicate allegations of copyright infringement, especially given the ambiguity of fair use and the evolving legal questions surrounding AI training data. If implemented, a rule that increases ISP liability—which carries the risk of high statutory damages—would incentivize providers to act out of extreme caution, cutting access entirely, rather than risking costly lawsuits. That would be especially catastrophic in the very common situation where multiple users access the Internet through one ISP subscriber account. “A coworking space, for example, may serve hundreds of individuals under a single ISP account,” Engine wrote in the amicus brief. “Hundreds of individuals, as well as the coworking business itself, are then at risk of being cut off from the Internet because of allegations against a single person, about whom they have no knowledge and over whom they have no control.” For startups—especially AI developers and platforms hosting user content, which are more likely to receive infringement allegations—losing Internet access threatens their survival entirely.
Startups will be watching closely ahead of an expected ruling in early spring. If the decision draws the wrong line—or is interpreted in a way that creates broad new rules for how ISPs—it could undermine Internet access for everyone, including startups and their users.
Policy Roundup:
House panel considers bills to limit kids’ tech access. The House Energy and Commerce subcommittee on commerce, manufacturing, and trade held a hearing this week on a wide range of proposals that would change how Internet companies interact with young users—including creating obligations around how much the companies have to do to identify whether a user is young. Ahead of the hearing, Engine sent a letter outlining how several proposals under consideration could unintentionally burden startups. We emphasized that lawmakers should address issues around inconsistent standards and costly audit requirements.
House tees up vote on capital formation package. The House is expected to hold a floor vote on a new sweeping package aimed at making it easier to raise capital. The Incentivizing New Ventures and Economic Strength Through Capital Formation (INVEST) Act would increase capital access for small businesses, including by expanding the accredited investor definition, making crowdfunding more accessible, creating more investment opportunities for emerging funds, increased investment abilities for emerging funds and addressing regulatory obstacles that can keep companies from going public. A majority of the 22 components of the package have bipartisan support and have already easily passed the House.
New scrutiny for visa applicants’ social media, tech work. The Trump administration rolled out new vetting procedures for visa applicants—especially those seeking H-1B visas—including reviewing LinkedIn profiles and rejecting candidates involved in online content moderation. While the administration claims this is being done to promote free expression online, the move will effectively make it more difficult for startups to access the immigration system and pressure Internet platforms to avoid the content moderation practices necessary to keep their corners of the Internet safe, healthy, and relevant for their users.
Startups need a functioning patent review board. In comments to the U.S. Patent and Trademark Office this week, Engine opposed proposed changes that would restrict access to the Patent Trial and Appeal Board (PTAB). The PTAB is the most accessible, efficient tool for patent holders to combat weak, overbroad patents. If these rules are implemented, patent quality will decrease, harming startup innovation and U.S. competitiveness.
New DHS rule creates more uncertainty for immigrant talent. Engine submitted comments to the Department of Homeland Security warning that the interim final rule ending automatic Employment Authorization Document (EAD) renewal extensions would create harmful work interruptions for high-skilled immigrant talent that startups depend on. Limiting automatic extensions would shrink the already scarce talent pool for early-stage companies and undermine U.S. competitiveness.
On the Horizon:
TUE 12/09: The Senate Judiciary Committee will convene a hearing to examine protecting children online against offenders at 10:15 AM ET.
TUE 12/09: The Senate Judiciary subcommittee on intellectual property will convene a hearing to discuss balancing the interests of local radio, songwriters, and performers in the digital age at 3:00 PM ET.
TUE 12/09: The Senate Appropriations subcommittee on commerce, justice, science, and related agencies will convene a hearing to review next year’s activities and funding priorities of the Office of the U.S. Trade Representative at 4:30 PM ET.
WED 12/10: The House Science, Space, and Technology Committee will convene a hearing on the Trump administration’s “Genesis Mission” at 10:00 AM ET.
WED 12/10: The House Small Business Committee will convene a hearing on supporting veteran entrepreneurs entering the startup ecosystem at 10:00 AM ET.
WED 12/10: The House Financial Services Committee will convene a hearing on how AI is shaping innovation in the financial sector at 10:00 AM ET.
WED 12/10: NTIA will host a virtual listening session on student screen use in schools at 12:00 PM ET.
THU 12/11: The House Judiciary Committee will convene a hearing to examine the Foreign Intelligence Surveillance Act at 9:00 AM ET.
Startup Roundup:
#StartupsEverywhere: Brooklyn, New York. In the busy tech scene of Brooklyn, NY, a startup called Structify is changing how businesses handle their information. Founder Alex Reichenbach’s approach cuts through the traditional complexity of data management by building custom data pipelines that any user can interact with in natural language. We sat down and talked to Alex, who detailed how the company uses AI to automate the role of a data engineer, AI policy, the importance of compute credits to early-stage startups, and the need for STEM talent development.
