Leahy: Senate Should Focus On Stopping Online Theft That Undercuts Economic Recovery

[WASHINGTON (Jan. 23, 2012) – U.S. Senator Patrick Leahy (D-Vt.) spoke Monday on the Senate floor about the critical need for legislation to address online theft of copyrighted and trademarked goods. Since Leahy first announced in June 2010 his intention to introduce legislation to address online theft by foreign, rogue websites, he worked with Senators, stakeholders, and other interested parties to craft bipartisan legislation to increase the tools law enforcement and rights holders have available to them to protect American intellectual property from foreign criminals.]

Statement Of Senator Patrick Leahy (D-Vt.),

Chairman, Senate Judiciary Committee,

On The PROTECT IP Act, S.968

January 23, 2011

I ask consent to insert in the Record my statement on judicial nominations and that of John Gerrard of Nebraska as if read, and to proceed as in morning business to speak about an important effort to help the American economic recovery and preserve American jobs.

Rogue websites, primarily based overseas, are stealing American property, harming American consumers, hurting the American economic recovery and costing us American jobs. Stealing and counterfeiting are wrong. They are harmful. The Institute for Policy Innovation estimates that copyright infringement alone costs more than $50 billion a year, and the sale of counterfeits online is estimated to be several times more costly. The AFL-CIO estimates that hundreds of thousands of jobs are lost to these forms of theft.

And this is not just an economic and jobs problem for Americans. This is a consumer safety issue. According to a study released earlier this year, a couple dozen websites selling counterfeit prescription drugs had more than 141,000 visits per day, on average. Counterfeit medication, brake linings and other products threaten Americans’ safety. These are serious concerns. These are the concerns I have kept in mind over the last several years as I have worked with Senators on both sides of the aisle to help resolve these serious problems.

I admire and respect the marvelous advances of technology and, in particular, those represented by the Internet. I have promoted its democratizing impact around the world. I have fought to keep the Internet free and open, as it has become the incredible force that it is today. I have promoted its potential for access in rural areas, for distance learning, for increasing points of view and allowing all voices to be heard and as a means for small start ups and firms in Vermont and elsewhere to market quality products. Nor is this a newfound interest or passing fancy. I started and chaired a Judiciary Committee panel two decades ago on technology and the law and was a founder of the bipartisan, bicameral congressional Internet Caucus.

Yesterday, The Washington Post got it right in its editorial entitled “Freedom on the Internet”:

“A free and viable Internet is essential to nurturing and sustaining the kinds of revolutionary innovations that have touched every aspect of modern life. But freedom and lawlessness are not synonymous. The Constitution does not protect the right to steal, and that is true whether it is in a bricks-and-mortar store or online.”

Last week, a Wall Street Journal editorial was like-minded, noting:

“The Internet has been a tremendous engine for commercial and democratic exchange, but that makes it all the more important to police the abusers who hijack its architecture.

. . . Without rights that protect the creativity and innovation that bring fresh ideas and products to market, there will be far fewer ideas and products to steal.”

Two years ago, I announced a bipartisan effort to target the worst-of-the-worst of the foreign rogue websites that profited from piracy, stealing and counterfeiting, while also ensuring that we protect the Internet. I have been working since that time to do just that. In 2010, the bill that Senator Hatch and I introduced was reported unanimously by the Senate Judiciary Committee.

I took seriously the views of all concerned. I reached out to the administration. We incorporated revised definitions suggested by Senator Wyden. We held additional hearings to which we invited Google and Yahoo!. And we redrafted the legislative measure and reintroduced it as The Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act, more commonly known as the PROTECT IP Act. Senator Grassley joined as an original cosponsor. I continued to work with all who showed interest. The measure was reported unanimously from the Judiciary Committee in May 2011, and 40 Senators from both sides of the aisle have cosponsored it.

It is rare that editorial boards with divergent viewpoints such as The Wall Street Journal and The Washington Post agree on a problem and legislative approach. As I have already noted, this problem of foreign rogue websites engaging in piracy, theft and counterfeiting is one such time. I ask that copies of the recent editorials from The Washington Post and The Wall Street Journal be included in the Record at the conclusion of my remarks.

Few issues unite the United States Chamber of Commerce and the AFL-CIO; the National Association of Manufacturers and the Teamsters; the cable industry and the broadcast industry. By targeting the worst-of-the-worst and protecting the integrity of the Internet, we have been able to create a broad ranging coalition of support of the PROTECT IP Act. Along with law enforcement groups, more than 400 companies, associations, and unions have come together to support this targeted, bipartisan legislation to combat foreign rogue websites.

Protecting American intellectual property and the American jobs that depend on it is important. Last year we were able to reform our patent laws to unleash American innovators and help boost our economic recovery. Now we need to confront the threat to our economic recovery posed by Internet piracy.

As I have demonstrated throughout my service in the Senate and again during the last two years, I have remained flexible in terms of the legislative language in order to best meet our goals of stemming the criminality when protecting legitimate activities and guarding against doing anything to undercut innovation or fetter free discussion. I have urged those with concerns to come forward and to work with us. We adjusted the very definitions in the bill to narrow them as Senator Wyden had suggested. I announced two weeks ago that I took seriously the concerns about the domain name system provisions and would fix it as part of a manager’s amendment when the bill was considered by the Senate.

I regret that the Senate will not be proceeding this week to debate the legislation, and any proposed amendments. I thank the Majority Leader for seeking to schedule that debate on this serious economic threat. I understand that when the Republican leader recently objected and Republican Senators who had cosponsored and long supported this effort jumped ship, he was faced with a difficult decision.

My hope is that after a brief delay, we will, together, confront this problem. Everyone says they want to stop the Internet piracy. Everyone says that they recognize that stealing and counterfeiting are criminal and serious matters. This is the opportunity for those who want changes in the bill to come forward, join with us and work with us. This is the time to suggest improvements that will better achieve our goals. The PROTECT IP Act is a measure that has been years in the making, and which has been twice reported unanimously by the Senate Judiciary Committee to better enforce American intellectual property rights and protect American consumers. It has been awaiting Senate action since last May. Today the rogue foreign websites based in Russia that are stealing Americans’ property are delighted to continue their operations and counterfeiting sweatshops in China are the beneficiaries of Senate delay.

People need to understand that the PROTECT IP Act would only affect websites that have been judged by a federal court to have no significant use other than engaging in theft – whether through stolen content or the selling of counterfeits. It is narrowly targeted at the worst-of-the-worst. Websites that have some infringing content on their sites but have uses other than profiting from infringement are not covered by the legislation. Websites like Wikipedia and YouTube that have obvious and significant uses are among those that would not be subject to the provisions of the bill. That Wikipedia and some other websites decided to “go dark” on January 18 was their choice, self imposed and was not caused by the legislation and could not be.

It was disappointing that sites linked to descriptions of this legislation that were misleading and one-sided. The Internet should be a place for discussion, for all to be heard and for different points of view to be expressed. That is how truth emerges and democracy is served. Last week, however, many were subjected to false and incendiary charges and sloganeering designed to inflame emotions.

I am concerned that while critics of this legislation engage in hyperbole about what the bill plainly does not do, organized crime elements in Russia, in China, and elsewhere who do nothing but peddle in counterfeit products and stolen American content are laughing at their good fortune that congressional action is being delayed.

Nothing in PROTECT IP can be used to cut off access to a blog. Nothing in PROTECT IP can be used to shut off access to sites like YouTube, Twitter, Facebook or eBay. Nothing in PROTECT IP requires anyone to monitor their networks. Nothing in PROTECT IP criminalizes links to other websites. Nothing in PROTECT IP imposes liability on anyone. Nothing in PROTECT IP can be required without a court order, first, and without providing the full due process of our Federal court system to the defendants before a final judgment is rendered.

I also note that the guarantees of due process provided in the PROTECT IP Act are those likewise provided every defendant in every Federal court proceeding in the United States, no less. The PROTECT IP Act requires notice to the defendant. If the plaintiff seeks an injunction, the court must apply Federal Rule of Civil Procedure 65, which is the standard for all courts in determining whether to issue an injunction, including whether to issue the injunction as a temporary restraining order for a limited period of time. When stealing of copyrights are involved, such court orders can be made if, upon a factual showing, a court finds that serious harm would otherwise occur and it is in the public interest to do so while the case is more fully considered.

The PROTECT IP Act is directed at the foreign websites that are the worst-of-the-worst thieves of American intellectual property and operate from outside the United States and the jurisdiction of our courts. These website operators prey on American consumers, steal from our creators and economy, but are currently beyond the jurisdiction of U.S. courts.

The Obama administrative officials were right in a recent post saying “existing tools are not strong enough to root out the worst online pirates beyond our borders.” They called on Congress “to pass sound legislation this year that provides prosecutors and rights-holders new legal tools to combat online piracy originating beyond U.S. borders while staying true to the principles outlined. . . . We should never let criminals hide behind a hollow embrace of legitimate American values.” That is what we are trying to do with the PROTECT IP Act.

What the PROTECT IP Act does is provide tools to prevent websites operated overseas that do nothing but traffic in infringing material or counterfeits from continuing to profit from piracy with impunity. The Internet needs to be free, but not a lawless marketplace for stolen commerce and not a haven for criminal activities.

In the flash of interest surrounding this bill last week, those who were forgotten were the millions of individual artists, the creators and the companies in Vermont and elsewhere who work hard every day only to find their works available online for free, without their consent. There are factory workers whose wages are cut or jobs are lost when low-quality counterfeit goods are sold in place of the real thing they worked so diligently to produce. There are men and women of our National Guard and military who put their lives on the line for all of us every day, and for whom a counterfeit part can literally be a matter of life and death. There are the seniors who are struggling to be able to afford medications and order from what appears to them to be a reputable site, only to find that a foreign website has sent them an untested counterfeit drug that will not control their blood pressure or diabetes or heart problem.

At the end of the day, this debate boils down to a simple question. Should Americans and American companies profit from what they produce and be able to provide American jobs, or do we want to continue to let thieves operating overseas steal that property and sell it to unsuspecting American consumers? I hope that in the coming days the Senate will focus on stopping that theft that is undercutting our economic recovery. I remain committed to confronting this problem. And I appreciate the efforts of Senator Kyl, Senator Alexander and others who want to continue to work in a thoughtful manner with all interested parties to find an effective solution to eliminate online theft by foreign rogue websites.

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