Statement of Judiciary Committee Chairman Lamar Smith Subcommittee on Intellectual Property, Competition and the Internet Hearing on "Promoting Investment and Protecting Commerce Online: Legitimate Sites v. Parasites, Part II"

Statement of Judiciary Committee Chairman Lamar Smith
Subcommittee on Intellectual Property, Competition and the Internet
Hearing on “Promoting Investment and Protecting Commerce Online:
Legitimate Sites v. Parasites, Part II”

Chairman Smith: This important hearing is the second of two of the IP Subcommittee devoted to the destructive effects of online “parasites” – web-based entities that steal intellectual property. 

Practically anything capable of being reproduced digitally or available for sale in stores is only a click or two away today.  That’s a good thing when consumers purchase from legitimate businesses.  But, increasingly, consumers are being steered to web-stores that traffic in counterfeit products.

According to the Alliance for Safe Online Pharmaceuticals (ASOP), 95% of online pharmacies are unlicensed or traffic in counterfeit drugs. 

When patients go online and end up buying fake medicines, more than a trademark is in jeopardy.  Their lives or those of their loved ones are placed at risk. 

So this is about both protecting lives and intellectual property. It is also about jobs - jobs lost as a result of digital theft and online counterfeiting.

The jobs lost in legitimate industries tend to be high-paying jobs that provide income and security to tens of thousands of Americans.

For instance, jobs in the U.S. entertainment industry have an average salary of $76,000.  This is 72% higher than the national average. When jobs like these are lost, entire families become victims. 

With digital theft, what is distributed was created by those who have had their property stolen.  Perfect reproductions of movies, sound recordings, books, software and musical compositions compete directly with licensed goods.  

The Constitution provides for the “Progress of Science and useful Arts” by giving Congress the specific responsibility and duty to spur creativity and innovation by “securing” IP rights. 
Our job on the House Judiciary Committee is to protect the right of free expression and to provide due process of law.

A recent study of online activity revealed that nearly one quarter of global Internet traffic involves stolen IP. This digital theft is now so pervasive, profitable and pernicious that it discourages creative companies from investing in the production of new licensed content. 

IP theft not only adversely affects creators but also undermines investments in new technology by innovative companies. 

Securing property rights and protecting IP is a matter that unites Members on both sides of the aisle and on both sides of the Hill. 

While we’ll never achieve unanimity, there is a great deal of consensus that new legislation is needed to deal with threats that have emerged as technology has progressed.