Gov't efforts target online counterfeits much more than digital piracy

Of 270 websites taken down by ICE and the DOJ in 2011, only 22 involved digital piracy, according to a White House report

Two U.S. agencies seized 270 websites in 2011 for alleged copyright infringement, but just 22 of those sites were targeted for digital piracy, with the rest allegedly selling counterfeit products, according to the annual report from the government's intellectual-property enforcement coordinator.

The U.S. Department of Justice and U.S. Immigrations and Customs Enforcement conducted six operations targeting websites selling counterfeit goods or pirated digital products during 2011, said the report from Victoria Espinel, the White House intellectual-property enforcement coordinator.

One of the biggest operations against digital piracy came in February 2011, when the agencies seized 10 domain names that allegedly provided users access to unauthorized streaming telecasts of professional football, basketball, wrestling and ultimate fighting events. Operators of two of the sites face copyright infringement charges in New York, Espinel's report said.

"With the continued leadership of the Obama Administration and the support of Congress, we can ensure that U.S. innovation and creativity are protected around the world and allow Americans to do what they do best -- out-innovate, out-compete, and continue to lead in the global marketplace in this decade and beyond," Espinel wrote. "Protecting what we invent, create and produce is always important, but at this time, when every job matters, it is especially important that we stop theft that harms our businesses and threatens jobs here at home."

A representative of the Motion Picture Association of America, asked if the numbers show that counterfeiting online is a more serious problem than digital piracy, said it's important for federal agencies to combat both types of infringement.

"Counterfeit goods and digital theft are two parts of the same problem: foreign rogue websites," said Kate Bedingfield, the MPAA's director of strategic communications. "The sale of counterfeit goods that are dangerous to American consumers and the theft of American digital products are both facilitated by criminal websites operating overseas. That's why it's so critically important for all parties involved to come together to find a solution that curbs these dangerous illegal sites."

The MPAA was one of the most vocal groups backing controversial copyright-enforcement bills the Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA), two bills that would allow the DOJ to target foreign websites suspected of selling infringing products. SOPA and PIPA would give the DOJ tools to shut down foreign websites, in addition to the domain name seizures of U.S.-based sites, supporters have said.

Lawmakers put both bills on hold in January after massive online protests.

Espinel's report mentioned SOPA and PIPA in passing, saying Obama's administration is "closely following" the bills. The Obama administration believes that "new legislative and nonlegislative tools are needed to address offshore infringement and counterfeiting," she wrote.

But Espinel's report repeats earlier concerns about unnamed copyright legislation. A January response to concerns about the two bills "recognizes that online piracy is a serious problem, but also makes it clear that the administration will not support legislation that reduces freedom of expression, increases cybersecurity risk (including authority to tamper with the DNS system), or undermines the dynamic, innovative global Internet," the report said.

The DOJ brought intellectual property charges against 215 defendants in 168 cases during the government's 2011 fiscal year, the report said. Both the number of cases and the number of defendants were the lowest in the past five years.

The DOJ also saw 208 defendants sentenced for IP-related charges in fiscal year 2011, with 102 defendants receiving no prison term. Sixty defendants received prison terms of two years or less, while 29 received prison terms of 37 months or longer.

Digital rights group Public Knowledge praised parts of the report, including its emphasis on increasing transparency in the administration's IP enforcement efforts. But the report relies on copyright infringement numbers from copyright holders, when some of those numbers may not be reliable, the group said.

The report also shows that "the content industries have a vast array of tools already at their disposal to enforce their rights" beyond new legislation, said John Bergmayer, a senior staff attorney at Public Knowledge, in an email.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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