The Washington Post’s Rob Malda’s recent blog post appears to argue that the success of a particular film at the box office somehow means that concerns about widespread piracy are misplaced.  This is a bit like condoning shoplifting if it’s done at a successful store.  Of course, we shouldn’t.  And it overlooks the economic damage – and the damage to consumers -- of turning a blind eye to such forms of theft. 

According to a recent Department of Commerce report, IP-intensive industries such as film and television support 40 million jobs and add $5 trillion dollars to U.S. gross domestic product annually – nearly 35 percent of America’s economic output.  2.2 million American jobs depend on the film industry and television industry alone. 

We think that the hard work of those people should be protected.  But the reality is that rampant online theft undermines the ability of IP-intensive industries like ours to invest in new ideas and new products if it’s simply accepted fact that they will be stolen – often before they even have a chance to hit the marketplace.  Copyright protections are critical to keeping the creative industries vibrant so they can continue to employ millions of Americans and produce the films and other creative content that have become such a vital part of our cultural fabric.

Finally, in any discussion of online theft, it is important to recognize the threat that sites that traffic in stolen products often pose to the individual consumers who use them.  They put American consumers at risk for identity theft, fraud and damaging privacy violations.  They jeopardize the security of the computers that access them.  They jeopardize the security of users’ personal financial information.  Curbing online piracy means protecting American industry, but it also means protecting American consumers.

The vigorous online piracy debate produced a critical consensus: stopping foreign criminals who profit from stolen creative content and counterfeit goods on their websites is important to protecting jobs and American intellectual property. Doing nothing is an option that has been taken off the table. Each day we fail to act, American jobs are placed at risk and more consumers will face serious dangers on the Internet, including unknowingly purchasing counterfeit products.

The question now is what is the best method to target these foreign criminal websites. We believe the legislation sponsored by Senator Wyden and Representative Issa, the OPEN Act, falls significantly short in targeting foreign criminal websites in several ways. 

SEARCH ENGINES ALLOWED TO BE PORTALS TO PIRACY. The OPEN Act denies the International Trade Commission (ITC) the authority they already have today to make search engines block infringing websites. Typically, the ITC can stop infringing material from being imported to the U.S. The OPEN Act omits language that requires search engines, like Google, to block “importation” of a link to foreign rogue websites.  

IT TAKES TOO LONG TO GET TO THE CRIMINALS. The OPEN Act re-writes a bureaucratic process instead of relying on experienced enforcement by the Attorney General and U.S. Federal Courts who have been successfully moving against criminal websites for years in the U.S., without any claims of breaking the Internet. This new hurdle – going through the ITC – creates a time consuming and costly method for all copyright holders to go after foreign thieves. The ITC takes an average of 18 months before issuing a final decision in a case.

SMALL BUSINESSES & ARTISTS ARE HURT MOST. The ones who are especially hurt by this new bureaucracy: American artists and small businesses, who will not have the means to come to Washington, DC to cut through the red tape to stop these thieves from stealing their content and goods. 

IT DOES NOT PROTECT CONSUMERS. The bill does not contain language to block dangerous goods, such as counterfeit drugs, from the American marketplace. It allows criminal foreign websites to continue to be a threat to American consumers.

We welcome the Administration's clear statement that legislation is needed to stop foreign based thieves from stealing the hard work and creativity of millions of American workers. For too long in this debate, those that seek to preserve and profit from the status quo have moved to obstruct reasonable legislation. While many of the elements mentioned in the White House statement are critically important, we believe, as do others in our coalition, that protecting American jobs is important too, particularly in these difficult economic times for our nation. We are pleased that Chairman Leahy and Chairman Smith reiterated yesterday that they too support action. So now it is time to stop the obstruction and move forward on legislation.

Our industry not only fully supports free expression, our livelihood is built upon a vibrant First Amendment - it is the foundation of our industry and we would never support any legislation that would limit this fundamental American right.   As had been made clear throughout the legislative consideration of SOPA and the PROTECT-IP Act, neither of these bills implicate free expression but focus solely on illegal conduct, which is not free speech.   We agree with Secretary Clinton's recent statement that "There is no contradiction between intellectual property rights protection and enforcement and ensuring freedom of expression on the Internet."

We also share the Administration's desire to encourage innovation. The American businesses that are victimized on a daily basis by global Internet thieves are among the most innovative industries in this nation and we welcome the Administration's support of these American businesses. Every day, American jobs are threatened by thieves from foreign-based rogue websites. This deplorable situation persists because U.S. law enforcement does not have the tools to fight back.

While we agree with the White House that protection against online piracy is vital, that protection must be meaningful to protect the people who have been and will continue to be victimized if legislation is not enacted. Meaningful legislation must include measured and reasonable remedies that include ad brokers, payment processors and search engines. They must be part of a solution that stops theft and protects American consumers.

We applaud the continued leadership in the House and Senate for working to enact common-sense legislation to stop foreign websites from stealing American creativity and jobs. Misinformation simply can't be allowed to replace honest debate, and derail the critically important fight to protect American jobs.  We hope the Administration’s role in this debate now will help steer the attention now to what can be accomplished and passed into law to protect American jobs.

On behalf of the 2.2 million Americans whose jobs depend on the film and television industries, we look forward to the Administration playing a constructive role in this process and working with us to pass legislation that will offer real protection for American jobs. The failure to pass meaningful legislation will result in overseas websites continuing to be a safe haven for criminals stealing and profiting from America.

We applaud Chairman Lamar Smith and the House Judiciary Committee on working with all interested parties to craft measured legislation that targets criminal websites.  This shows that there is broad agreement that doing nothing is not an option.  

We need to pass the Stop Online Piracy Act (H.R. 3261) as soon as possible to preserve American jobs and help grow our economy.  Every day that we don’t act, criminal websites and companies profiting from these websites continue to reap financial gain at the expense of American jobs and Americans’ hard work, investment and ingenuity.

The good news is that Congressman Darrell Issa and Senator Ron Wyden recognize that doing nothing to stop foreign criminals who profit from stolen creative content and counterfeit goods on their websites is not an option.  American jobs are being placed at risk and consumers can face serious dangers from counterfeit drugs and other products, so it is critical that action be taken by Congress.

The bad news is that this draft legislation fails to provide an effective way to target foreign rogue websites and goes easy on online piracy and counterfeiting.  By changing the venue from our federal courts to the U.S. International Trade Commission, it places copyright holders at a disadvantage and allows companies profiting from online piracy to advocate for foreign rogue websites against rightful American copyright holders.  It even allows notification to some of these companies if they want to help advocate for rogue websites.

We need action now to preserve American jobs and help grow our economy.  Every day that we don’t act foreign rogue websites and companies profiting from these websites continue to reap financial gain at the expense of American jobs and Americans’ hard work, investment and ingenuity.  Hopefully, this draft legislation is not just a delaying tactic to prevent Congress from acting quickly on this serious problem.

The PROTECT IP Act, sponsored by Senators Patrick Leahy, Orrin Hatch and 38 others, and the Stop Online Piracy Act, sponsored by Representatives Lamar Smith, John Conyers and 28 others offer measured, needed solutions to target online theft and counterfeiting by rogue websites.  Few bills have this type of bipartisan support and the backing of businesses and labor groups.  The draft legislation introduced by Congressman Issa and Senator Wyden goes far easier on the criminal enterprises operting these rogue websites than these two bills.

Online piracy is a major threat to our economy, consumer safety, and our national security.  Currently, many foreign websites that profit from counterfeit goods and stolen content are beyond the reach of U.S. law.  So, how do we target these dangerous foreign websites while upholding free speech, promoting innovation, encouraging commerce and preserving American jobs? 

The Stop Online Piracy Act (H.R.3261) in the House and the PROTECT IP Act (S.968) in the Senate provide measured, needed tools to go after these websites that are beyond the reach of our current laws and preserve millions of American jobs.  Everyone engaged in legal commerce on the Internet should welcome new tools to go after websites that illegally profit from American innovation and creativity.  While we can never stop online piracy, this legislation is a step in the right direction. 

Yesterday, the New York Times published an editorial on this legislation.   It rightly stated that piracy is “the bane of the Internet.”  However, it failed to mention the importance of copyright laws in creating the Internet of today and the jobs that are at stake if we don’t target online piracy.  Unfortunately, it also misrepresented many important parts of the Stop Online Piracy Act. 

Copyright protection laws have helped create the Internet of today, alive with free speech, innovation and commerce.  Foreign rogue websites that profit from stolen content and counterfeit goods are a danger to consumers and a drag on our economy.  Copyright laws in the U.S. uphold free speech while encouraging innovation by giving an economic incentive for artists and investors to create new content and distribute it on the Internet.   

The editorial rightly stated that piracy saps our economy but failed to give the full picture of the millions of American jobs at stake.  The editorial said, “Piracy’s cost is measured in less innovation and less economic activity, as creators lose hope of making a living from their creations.”  The creators of new content are not the only ones who depend on copyrighted material for their livelihoods. More than 10.6 million Americans depend on the copyright industries for their jobs.  That’s about 1 in 10 private sector jobs in the U.S.  And about 2.2 million Americans depend on the film and television industries for their jobs.  Many of these Americans work behind the scenes in good paying middle class jobs.  

The protection of free speech on the Internet by U.S. law and the signal it sends to other countries, especially China, is very important.  The New York Times editorial stated that we should think about the signal we send to China.  There is no doubt about this.  Our copyright laws already send a strong signal to China and the Stop Online Piracy Act and the PROTECT IP Act uphold the tradition of protecting intellectual property while promoting free speech.  

Celebrated First Amendment attorney Floyd Abrams has written that the Stop Online Piracy Act upholds free speech.  In a recent letter, he wrote, “The notion that adopting legislation to combat the theft of intellectual property on the Internet threatens freedom of expression” is “insupportable.”  Secretary of State Hillary Clinton has also written that “The State Department is strongly committed to advancing both Internet freedom and the protection and enforcement of intellectual property rights on the Internet.  Indeed, these two priorities are consistent.” 

Preserving safe harbors for websites that remove copyrighted material is important to enable innovation and commerce.   The editorial raised concerns that the legislation will undermine the safe harbors for domestic websites under the Digital Millennium Copyright Act.  This missed a key distinction: Those safe harbor protections protect legitimate websites, not websites that are dedicated to theft and have no intention of complying with U.S. law.  The Stop Online Piracy Act upholds and has no impact on these safe harbors because it is directed at websites that are dedicated to the theft of copyrighted works and the sale of counterfeit goods – sites that are ineligible for the DMCA’s safe harbors to begin with.  Websites that are engaged in legal commerce will continue to have safe harbor protections.  Opponents of the Stop Online Piracy Act should be careful about this distinction or it would appear that they are arguing that blatantly infringing websites that have no intention of complying with U.S. law should enjoy safe harbor protections.

The Stop Online Piracy Act follows established due process standards and targets websites that are dedicated to counterfeiting and piracy.   The site blocking techniques provided for in the Stop Online Piracy Act are not new.  They are currently used to combat all kinds of harmful behavior including spam, phishing, malware, viruses, and other forms of Internet crime, all without claims of Internet censorship or harm to the Internet.  In fact, some of the same experts cited by the New York Times developed these techniques for use in fighting those kinds of Internet wrongs.  They apparently believe copyright infringement is not a problem that merits the same kind of enforcement efforts.   

Combating piracy is important for the future of free speech, innovation, and commerce on the Internet.  We should work together to create legislation that targets piracy that is currently out of the reach of our laws.  Congress and the courts have crafted reasonable, measured techniques to protect copyrights while preserving free speech.  The Stop Online Piracy Act and the PROTECT IP Act continue in this tradition and help ensure that the Internet will continue to be free and open while preserving millions of American jobs.

Google’s progress report today on its steps to curtail content theft online is very encouraging for the millions of Americans whose jobs depend on film and television production.  For creators racing the clock to respond to deluges of illegal copies of their works online, the notice-and-takedown process can’t be fast enough, and revisions to auto-complete and AdSense that deter piracy are commendable changes.  If these efforts have indeed shown progress, they are undoubtedly steps in the right direction.

But here’s the real question: can Google and the tools it provides be conveniently and easily used to locate illegal content online?  Unfortunately, the answer is still "yes."  Clearly more needs to be done, and we look forward to working with Google to address these challenges as it continues to refine its approach. 

In particular, we would welcome Google to join the hundreds of other businesses, workers’ groups, trade associations, and law enforcement officials that support federal legislation – such as the PROTECT IP Act – aimed at preventing access to foreign rogue websites that serve up unauthorized content.  Notwithstanding Google executive chairman Eric Schmidt’s pledge earlier this year to "fight" this measure, we believe it could have a truly significant impact on online content theft.

Yesterday, the Computer & Communications Industry Association (CCIA) released a report that aimed to measure the economic impact in the U.S. of what it describes as “fair use industries,” or “economic activity that benefits from copyright fair use and other limitations on the copyright regulatory regime.”

No surprise that the study turned up big numbers – Capital Trade, Inc., the firm that conducted it, found that one-sixth of economic activity and the jobs of more than 17 million workers in the U.S. could be attributed to these “fair use industries.”  

But what’s interesting is the us-versus-them language that’s all over CCIA’s announcement of the report, at least as it applies to the PROTECT IP Act and other efforts to prevent content theft.  This is from a statement by CCIA President and CEO Ed Black:

“Too often we hear about the cost of piracy without also considering the cost to legitimate sectors of the US economy of poorly targeted copyright enforcement measures like the pending Protect IP Act.  A better understanding of the costs of overzealous copyright enforcement should help policymakers make sure new rules, legislation and trade agreements protect rightsholders as well as innovation.” (emphasis ours)

Puzzling, because many of the “fair use industries” the report suggests would in some way be harmed by stopping the massive proliferation of online content theft include the people and organizations whose work and livelihoods are most at risk from that theft.  The version of CCIA’s report released last year, and we assume this one as well, counted the motion picture industry (that would be us) among the “fair use industries,” as well as independent artists, writers and performers; radio and TV broadcasters; software publishers; promoters of sporting events; and many others for whom copyrighted content is indispensable to their work.  (See Appendix I of the 2010 report.)  So what gives?
 
Here’s the real story.  Fair use and other recognized exceptions to the exclusive rights of copyright owners are important – but there’s an enormous difference between fair use and the blatant, massive, wholescale taking of intellectual property occurring online.  That isn’t fair use nor any other legally permitted use; it’s theft that robs the millions of people working in IP industries of jobs, retirement savings, and earnings to invest in future creations. 

It’s one thing to celebrate the clearly enormous contribution to the U.S. economy made both by those who create intellectual property and those who use it fairly as part of legitimate business models.  It’s another thing entirely to turn fair use into a red herring, obscuring the very real harm of content theft to our entire economy.

Ultimately, fair use depends on the availability of rich, creative, original content that is protected from infringement.  We welcome the support of the fair use industries – or should we say the other fair use industries? – as we work to pass legislation protecting from that theft the very same content on which they rely.