Intellectual property (“IP”) is a primary driver of U.S. economic growth and national competitiveness. A recent government study revealed that IP-intensive industries create 27.1 million jobs and indirectly support another 12.9 million jobs, for a total of 40 million jobs. In other words, nearly 30 percent of all U.S. jobs are directly or indirectly attributable to IP-intensive industries. Moreover, the study found that IP-intensive industries account for about $5.06 trillion in value added, or 34.8 percent of U.S. gross domestic product.
IP theft—the unlawful copying, distribution, use, etc. of an invention, movie, musical work, trade secret, software, trademark, etc.—is a growing threat to IP-intensive industries such as the motion picture, music and software industries. In addition to costing U.S. businesses billions of dollars a year, IP theft deprives the nation of jobs and suppressive innovation. These threats are multiplied exponentially by the rise of digital technology and Internet file sharing networks. So what is being done to prosecute and deter offenders, educate the public and offer legal alternatives to consumers?
Government Enforcement Efforts
The prevention of IP theft is a U.S. government priority and an issue that continues to receive attention at both the executive and legislative levels. Government efforts to combat online IP theft have included proposed legislative solutions like the ill-fated Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA), which made headlines last year following vocal opposition and were ultimately defeated. They have also included a host of law enforcement initiatives. For example, in 2010 an initiative called Operation In Our Sites was launched to target websites and their operators that distribute counterfeit and pirated items over the Internet, including counterfeit pharmaceuticals and pirated movies, TV shows, music, software, electronics and other merchandise. This initiative included participation from the U.S. Department of Justice, Immigrations and Customs Enforcement’s Homeland Security Investigations, the National Intellectual Property Rights Coordination Center and the Federal Bureau of Investigations. Through November 2012, the program seized 1,630 websites, and the banner placed on such websites has reportedly been viewed more than 110 million times.
In another example from last year, the United States Justice Department brought charges against two corporations and seven individuals for running an international enterprise allegedly responsible for large-scale online piracy of copyrighted works on certain websites. The websites included megaupload.com, which was once the world’s 13th largest website, and reportedly generated more than $175 million in criminal proceeds and caused more than half a billion dollars in harm to copyright owners.
State and local governments have also been involved in the battle against IP theft. Last year, for example, the U.S. Department of Justice provided more than $2.4 million in grants to 13 jurisdictions around the country to combat this problem. The grants included $405,258 to the California Attorney General’s office and the Sacramento Valley Hi-Tech Crimes Task Force to combat the manufacture, purchase, and sale of counterfeit and pirated products.
IP Industry Enforcement Efforts
Alongside such government initiatives, businesses that operate directly and indirectly in IP-intensive industries have also adopted measures to fight IP theft. For example, the Copyright Alert System, which resulted from a partnership between the entertainment industry and major Internet service providers, was recently launched to help deter online theft of copyrighted materials. Under this system, copyright owners send notices of alleged copyright infringement to participating Internet service providers, who then forward these notices to their subscribers in the form of copyright alerts. The alerts include the date, time, time zone and title of the copyrighted content alleged to have been unlawfully distributed through a peer-to-peer to file sharing network on a subscriber’s account. Users are sent a maximum of six alerts with an increasing degree of seriousness and potential consequences such as slowed Internet speeds.
Other IP industry efforts to combat online theft include promoting innovative consumer choices for enjoying protected products, educating consumers on ways to distinguish between legitimate and infringing products, working with other industries to help reduce the scope of IP theft, advocating for legislative tools to fight online IP theft, and a host of other initiatives. In addition, these industries continue to pursue those who engage in the mass production and distribution of products that infringe IP rights through investigations, litigation, and other enforcement and prosecution methods.
Given the important role of IP in the U.S. economy, coupled with ongoing advances in technologies that provide the means for extensive online IP theft, both government and private resources will continue to be funneled into initiatives to combat this ongoing problem. The nature of these initiatives, and their ultimate effectiveness in reducing IP theft, will likely evolve alongside the changing technologies.