U.S. senators introduce legislation to renew bipartisan efforts to counter illegal counterfeit goods, crack down on websites dedicated to the sale of counterfeit goods, such as movies, music, pharmaceuticals

Andrew Rogers

WASHINGTON , May 12, 2011 (press release) – Senate Judiciary Committee leaders Thursday renewed bipartisan efforts to counter the illegal online sale of counterfeit goods. Legislation introduced by Senators Patrick Leahy (D-Vt.), Orrin Hatch (R-Utah), and Chuck Grassley (R-Iowa) aims to crack down on rogue websites dedicated to the sale of infringing or counterfeit goods.

The Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act, or PROTECT IP Act, follows bipartisan legislation introduced in 2010, which won the unanimous support of Senate Judiciary Committee members. The PROTECT IP Act narrows the definition of a rogue website, while ensuring that law enforcement can get at the “worst-of-the-worst” websites dedicated to selling infringing goods. Copyright infringement and the sale of counterfeit goods reported cost the U.S. economy billions of dollars and hundreds of thousands of jobs, as well as billions of dollars in lost tax revenue for federal, state and local governments.

“This legislation will protect the investment American companies make in developing brands and creating content and will protect the jobs associated with those investments,” said Leahy. “It will also protect American consumers, who should feel confident that the goods they purchase are of the type and quality they expect. The PROTECT IP Act targets the most egregious actors, and is an important first step to putting a stop to online piracy and sale of counterfeit goods.”

“With this legislation, we are sending a strong message to those selling or distributing counterfeit goods online that the United States will strongly protect its intellectual property rights,” said Hatch. “Just because it’s on the Internet doesn’t mean it’s free. Fake pharmaceuticals threaten people’s lives. Stolen movies, music, and other products put many out of work. This is why protecting property rights is a critical imperative and is why we’ve come together in introducing this common-sense bill.”

“The online distribution and sale of pirated content and counterfeit goods imposes a huge cost on the American economy in terms of lost jobs, lost sales, lost innovation and lost income. Piracy and counterfeiting can also present serious health and safety problems for consumers,” Grassley said. “This legislation will add another tool to the toolbox for going after these criminals and protecting the American public.”

The PROTECT IP Act will provide law enforcement with important tools to stop websites dedicated to online piracy and the sale of counterfeit goods, which range from new movie and music releases, to pharmaceuticals and consumer products. Key updates to the PROTECT IP Act include:

* A narrower definition of an Internet site “dedicated to infringing activities”;
* Authorization for the Attorney General to serve an issued court order on a search engine, in addition to payment processors, advertising networks and Internet service providers;
* Authorization for both the Attorney General and rights holders to bring actions against online infringers operating an internet site or domain where the site is “dedicated to infringing activities,” but with remedies limited to eliminating the financial viability of the site, not blocking access;
* Requirement of plaintiffs to attempt to bring an action against the owner or registrant of the domain name used to access an Internet site “dedicated to infringing activities” before bringing an action against the domain name itself;
* Protection for domain name registries, registrars, search engines, payment processors, and advertising networks from damages resulting from their voluntary action against an Internet site “dedicated to infringing activities,” where that site also “endangers the public health,” by offering controlled or non-controlled prescription medication.

Online infringement legislation proposed in the last Congress was strongly supported by a broad spectrum of stakeholders and organizations, including labor unions, the Newspaper Association of America, the U.S. Chamber of Commerce, the music, movie and television industries, authors and publishers, and anti-piracy organizations.

Leahy and Hatch introduced legislation to counter online infringement in September 2010, and in November 2010, the Senate Judiciary Committee unanimously approved the legislation by a vote of 19-0. In February, the Senate Judiciary Committee held a hearing examining the impact of online infringement and counterfeit sales. The PROTECT IP Act builds on the consensus legislation approved by the Committee last year, while incorporating provisions in response to concerns raised by stakeholders.

The PROTECT IP Act is cosponsored by Senators Chuck Schumer (D-N.Y.), Dianne Feinstein (D-Calif.), Sheldon Whitehouse (D-.R.I.), Lindsey Graham (R-S.C.), Herb Kohl (D-Wis.), Christopher Coons (D-Del.), and Richard Blumenthal (D-Conn.)

Leahy is the Chairman of the Senate Judiciary Committee. Hatch is a former Committee Chairman and a senior Republican on the panel, and Grassley is the Committee’s Ranking Member. Leahy is expected to schedule Committee consideration of the PROTECT IP Act soon.

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