"Given the legitimate vocal concerns, it is imperative that we take a step back to allow everyone to come together and find a reasonable solution," he said.
Hatch and Sen. Mike Lee, R-Utah, voted to move the bill out of the Senate Judiciary Committee. At the time, Lee said he would oppose the bill when it reached the full Senate unless there were changes. Hatch called it a "common-sense bill" meant to counter fake pharmaceuticals and stolen movies and music.
He now says it "is not ready for prime time."
Hatch wasn't the only senator to back away from the bill on Wednesday. Sens. Marco Rubio, John Cornyn and Roy Blunt also withdrew their support.
The reaction comes on the day of a widespread online protest with Wikipedia going dark and Google blacking out its name on its home page.
These companies say the Protect IP Act in the Senate and a companion bill in the House called the Stop Online Piracy Act would hinder online innovation, violate free speech rights and undercut online security.
Proponents of the legislation, which would allow the government to block sites that in some way support online piracy, say the action is needed to protect U.S. businesses.
The House Judiciary Committee is expected to continue debate on the Stop Online Piracy Act in February. Rep. Jason Chaffetz, R-Utah, is a member of that committee, and an opponent of the bill. Utah's other two House members Reps. Rob Bishop and Jim Matheson also announced their opposition to the legislation on Wednesday saying it could give the government too much power.