Esper: Twilight for Online Pirates?

Posted July 15, 2010 at 2:24pm

Last month, federal law enforcement officials took an important step to curb the growing scourge of intellectual property theft online by seizing the domain names of seven websites that were among the most prolific at illegally distributing copies of motion pictures — including recently released titles such as “The Twilight Saga: Eclipse” and “Toy Story 3.” Combined, these sites attracted an estimated 6 million visitors a month, or more than 70 million visitors annually. Yet despite the success of this recent operation, there are still thousands of other sites profiting from online IP theft — through either the sale of counterfeit goods and copyright piracy, or the free distribution of it that generates ad revenues.

[IMGCAP(1)]This recent crackdown is just the beginning of an effort led by U.S. Immigration and Customs Enforcement dubbed “Operation in Our Sites,” which will target not only films and music but other pirated items as well as counterfeit goods distributed over the Internet — such as fake sports jerseys, handbags and pharmaceuticals. It is absolutely critical that we address IP theft over the Internet; it’s a problem that is increasing exponentially, robbing industries of revenue, killing jobs and putting consumers of all ages at risk.

ICE’s efforts also dovetail with the White House’s recently released National Intellectual Property Enforcement Strategy, which paid significant attention to rogue websites like those shut down last week. This comprehensive plan, created by Victoria Espinel — the nation’s first IP enforcement coordinator — demonstrates the Obama administration’s recognition that better enforcement of our IP laws is critical to the innovative and creative sectors of our economy that will help drive our nation’s economic recovery and future competitiveness.

If fully implemented by the administration and Congress, the plan — the first of its kind — could dramatically improve our nation’s ability to combat the rampant stealing of others’ ideas that is occurring every minute of the day. Additionally, by specifically targeting IP theft online, the plan has the potential to change the growing Internet subculture of “online equals no crime” and defend the rights of American innovators, creators, entrepreneurs and workers whose jobs directly rely on the protection of IP rights — the ideas that are protected by copyrights, patents and trademarks.

In fact, IP-intensive industries — from software and medical technologies, to telecommunications and entertainment — directly employ more than 18 million Americans, and millions more depend on IP to some degree for their livelihoods. These are good jobs that, according to recent reports, pay wages that average 60 percent higher than workers at similar levels in non-IP-intensive industries. But counterfeiters and other digital thieves are stealing these jobs. Studies suggest that the U.S. economy loses up to an estimated 375,000 jobs per year to copyright piracy alone. Hundreds of thousands of other jobs are at risk when you add in other industries affected by this growing problem — including the pharmaceutical, apparel and consumer goods sectors.

The economic impact is just half of the story. Even more frightening is the harm dangerously defective counterfeit products can have on consumers. From counterfeit toothpaste laced with anti-freeze to bogus pharmaceuticals colored with highway paint and faulty brake pads made with sawdust, counterfeiters won’t hesitate to trade your family’s health and safety for a quick buck.

Assistant Secretary John Morton, head of ICE, noted that Operation in Our Sites may not end Internet counterfeiting and piracy overnight. But fortunately for all Americans, Morton and the rest of his colleagues are just getting started. Preet Bharara, U.S. attorney for the Southern District of New York, said that “if your business model is movie piracy, your story will not have a happy ending.” I hope that with more efforts like Operation in Our Sites, Bharara’s assertion will mark the twilight of counterfeiters’ and pirates’ free reign and allow America’s best minds to keep creating the movies, inventing the medicines and designing the products that we’ve come to expect, need and rely upon.

Mark T. Esper is the executive vice president of the U.S. Chamber of Commerce’s Global Intellectual Property Center.