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A proposed US law that would block access to websites that host copyright-infringing material would "throttle innovation and hurt American competitiveness", a group of technology investors has told US legislators.

US Congress members should reject the proposed new law, the proposed Protect IP Act (PIPA), the investors said in an open letter to members of the US Congress.

The 55 investors and venture capitalists behind the letter include Netscape founder Marc Andreessen, former ICANN chair Esther Dyson and LinkedIn founder Reid Hoffman.

"Congress should not chill investment and reduce incentives to work on private sector solutions," the investors' open letter said.

"Instead, we encourage Congress to focus on making it easier to license works and bring new, innovative services to market," the letter said.

The investors said that existing copyright laws under the Digital Millenium Copyright Act (DMCA) already provide the measures needed to combat online copyright infringement.

DMCA guidelines meant internet providers had legal certainty over when they were responsible for taking down infringing material and meant they could not be responsible for the acts of users, but said the Act also gave copyright authors the right to have illegally reproduced material removed.

"We appreciate PIPA's goal of combating sites truly dedicated to infringing activity, but it would undermine the delicate balance of the DMCA and threaten legitimate innovation," the investors said.

The DMCA does not allow US internet providers to block illegally reproduced material on overseas sites and has led US film and music industry bodies to back the censorship measures provided for by PIPA.

"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," Michael O'Leary, the Motion Picture Association of America (MPAA) executive vice president of government affairs said, according to a report in CNET.

"This is a smart, narrowly crafted bill whose purpose is stopping theft, not slowing innovation. All we're asking is that the innovators play by the rules," O'Leary said, according to the report.

But in their open letter to Congress, the group of 55 investors said the new law would place burdens on "countless" services that would have to remove content and said it "endangers the security and integrity of the internet" by requiring domain name system providers to block sites.

The investors also raised concerns about the cost companies could face in adhering to the "significant" scope of court orders and in counteracting legal bids to remove content.

US innovators and investors will be clearly disadvantaged in the global market, the investors said. Copyright infringing works will continue to be loaded outside the reach of US law and help generate traffic to competing foreign services, the investors said.

If enacted the new law would also give other countries the chance to exclude US companies from competing in foreign markets, the investors said.

"PIPA creates a dangerous precedent and a convenient excuse for countries to engage in protectionism and censorship against U.S. services," the investors said in their open letter to US Congress members.

"These countries will point to PIPA as precedent for taking action against US technology and internet companies," the letter said.

The investors said rights-holders should look at new ways of "financing, distributing and profiting from copyrighted material" and advised them to make their material available on new systems online.

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OUT-LAW.COM is part of international law firm Pinsent Masons.

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