Internet Piracy

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History of the Internet Piracy Debate
Executive and Legislative Branch Actions

T

he Internet has become a central part of the American economy, delivering innovative products while eliminating the need for inefficient middlemen. However, the free flow of information facilitated by the Internet has also created problems with copyright and trademark infringement. The problem is significant; as much as 6 percent of the U.S. gross national product is generated by industries supported by intellectual property laws. A recent report contends that nearly 24 percent of all Internet traffic worldwide is infringing. Piracy of the content created by movie, music, and software companies, and counterfeiting of goods such as clothing, pharmaceutical drugs, and consumer electronics, negatively impacts the American economy. Although the Government Accountability Office cautions that it is difficult to precisely quantify the economy-wide impacts of piracy, it is believed to be a serious problem. To combat problems with online copyright and trademark infringement, U.S. Immigration and Customs Enforcement (ICE) began a new initiative called “Operation In Our Sites.” Between June 30, 2010, and February 14, 2011, ICE seized 112 domain names associated with Internet piracy. Domain name seizures are an innovative use of civil forfeiture proceedings authorized under criminal copyright law. Domain name registrars redirected traffic from the seized domains to a government website explaining that the domain name had been seized by ICE pursuant to a warrant issued by a Federal court. However, the sites remain online and accessible through their Internet protocol addresses. The global nature of the Internet presents problems to the civil forfeiture approach. Only domain names registered within the United States and subject to ICE’s jurisdiction may be seized. However, many websites trafficking in copyrighted content or counterfeit goods are registered and operate entirely in foreign countries. These foreign “rogue sites” often provide content protected by

U.S. intellectual property law to people located within the United States. S. 968, the Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act (PROTECT IP Act), is a legislative response to this jurisdictional problem. The act restricts access to foreign sites promoting infringement or the sale of counterfeit goods by targeting domain name servers, Internet advertisers, and financial transaction providers located in the United States. There has been considerable public debate about this approach. ■ Legislative History of

COICA and PROTECT IP
On September 20, 2010, Senator Ptrick Leahy (VT-D) with Senator Orrin Hatch (UT-R) introduced the Combating Online Infringement and Counterfeits Act (COICA). COICA is a predecessor to the PROTECT IP Act and follows a similar legislative approach, though with some significant differences. The Senate Judiciary Committee voted to report COICA favorably to the Senate, with an amendment in the nature of a substitute. However, no public hearing was held to consider COICA before the end of the 111th Congress, and the full Senate did not act on the legislation before the end of the congressional term. At the request of Senator Tom Coburn (OK-R), the Senate Judiciary Committee in the 112th Congress held a hearing February 16, 2011, on the topic of “Targeting Websites Dedicated To Stealing American Intellectual Property.” This hearing considered the scope of intellectual property theft over the Internet and the problem of “rogue websites” that exclusively traffic in infringing material, issues that COICA was designed to address. On May 12, 2011, Senator Leahy introduced the PROTECT IP Act. On May 26, 2011, the Senate Committee on the Judiciary voted to report the legislation to the full Senate, with an amendment in the nature of a substitute and without written report. Senator Ron Wyden (OR-D) then placed a hold on the bill,...
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