Statement of Judiciary Committee Chairman Lamar Smith Hearing on H.R. 3261, the “Stop Online Piracy Act”

Statement of Judiciary Committee Chairman Lamar Smith
Hearing on H.R. 3261, the “Stop Online Piracy Act”

Chairman Smith: Today’s hearing is on legislation that will help protect one of the most productive sectors of the American economy. 

While the Digital Millennium Copyright Act does provide some relief to copyright owners whose works are infringed, it only helps in limited circumstances:

It provides no effective relief when a rogue website is foreign-based and foreign-operated like the PirateBay - the 89th most visited site in the U.S.;

It doesn’t protect trademark owners and consumers from counterfeit and unsafe products like fake prescription medicines and misbranded drugs that are often presented to the public by unlicensed “online pharmacies”;

Nor does the law assist copyright owners when rogue web-sites contribute to the theft of intellectual property on a massive scale;

And, finally, it does nothing to address the use of certain intermediaries such as payment processors and Internet advertising services that are used by criminals to fund illegal activities.

That’s where the Stop Online Piracy Act comes in. 

This bill focuses not on technology but on preventing those who engage in criminal behavior from reaching directly into the U.S. market to harm American consumers.
We cannot continue a system that allows criminals to disregard our laws and import counterfeit and pirated goods across our physical borders. 

Nor can we fail to take effective and meaningful action when criminals misuse the Internet.  
The problem of rogue websites is real, immediate and wide-spread.  It harms all sectors of the economy.

And its scope is staggering. One recent survey found that nearly one quarter of global Internet traffic infringes on copyrights.

A second study found that 43 sites classified as ‘digital piracy’ generated 53 billion visits per year and that 26 sites selling just counterfeit prescription drugs generated 51 million hits annually.

Since the United States produces the most intellectual property, our country has the most to lose if we fail to address the problem of these rogue websites.

Responsible companies and public officials have taken note of the corrosive and damaging effects of rogue sites.

One of our witnesses today represents MasterCard Worldwide, a company that takes seriously its obligation to reduce the amount of stolen intellectual property on the Internet. MasterCard deserves thanks for its commitment to support legislation that addresses the problems of online piracy.

In contrast, another one of the companies represented here today has sought to obstruct the Committee’s consideration of bipartisan legislation. 

Perhaps this should come as no surprise given that Google just settled a federal criminal investigation into the company’s active promotion of rogue websites that pushed illegal prescription and counterfeit drugs on American consumers.

In announcing a half billion dollar forfeiture of illegal profits, the U.S. Attorney, Peter Neronha,     who led the investigation stated, “Suffice it to say that this is not two or three rogue employees at the customer service level doing this…  This was a corporate decision to engage in this conduct.”

Over several years, Google ignored repeated warnings from the National Association of Boards of Pharmacy and the National Center on Addiction and Substance Abuse at Columbia University that the company was violating federal law. 

The company also disregarded requests to block advertisements from rogue pharmacies, screen such sites from searches and provide warnings about buying drugs over the Internet. 

The Wall Street Journal reports Mr. Neronha characterized Google’s efforts to appear to control unlawful advertisements as “window-dressing” since “it allowed Google to continue earning revenues from the allegedly illicit ad sales even as it professed to be taking action against them.”

Given Google’s record, their objection to authorizing a court to order a search engine to not steer consumers to foreign rogue sites is more easily understood.

Unfortunately, the theft of America’s intellectual property costs the U.S. economy more than $100 billion annually and results in the loss of thousands of American jobs.

Under current law, rogue sites that profit from selling pirated goods are often out of the reach of U.S. law enforcement agencies and operate without consequences. The Stop Online Piracy Act helps stop the flow of revenue to rogue websites and ensures that the profits from American innovations go to American innovators.

Protecting America’s intellectual property will help our economy, create jobs, and discourage illegal websites.