Leahy, Hatch, Grassley Unveil Targeted Bill To Counter Online Infringement

WASHINGTON (Thursday, May 12, 2011) – 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

Protect yourself from online counterfeit goods and identity theft

Online shopping is increasingly popular for its convenience, variety and easy-to-compare prices. But Internet shoppers must be aware that the web is full of illegitimate sites that are selling pirated and counterfeit goods, as well as sites that are not secure and may expose you to identity theft.

There are many reasons to avoid these illegitimate sites. Pharmaceuticals from sham sites may be ineffective or even toxic. Counterfeit cosmetics have been found to contain chemicals such as antifreeze or harmful bacteria. Counterfeit toys may not meet the safety standards expected in the United States. Illegal music downloading sites may contain malwear that allows the scammer access to your personal and financial information.

And while some of these sites may look legitimate with corporate advertising, credit card acceptance and professional-looking graphic design, a careful shopper can spot warning signs that these are places to avoid.

So follow these tips to avoid illegitimate websites and make your shopping on line experience safe and rewarding:

  1. If it's too good to be true . . . it probably is. Use your common sense. If you think something seems wrong with a site, it could be an illegitimate company. Watch out for sites with poor quality photos; spelling mistakes; logos that look similar, but not identical to corporate logos; and lack of terms. If you are purchasing from an auction site, see how many identical products they have available — for example, if they have too many of an expensive designer handbag, the handbags are probably fake. Avoid websites offering unlimited downloads of music or movies, or offering mixed versions of songs.
  2. Use a credit card for online shopping. When shopping online, it is best to use credit cards with low or no balances. Shopping with a low balance credit card not only offers protection from the credit card company for fraudulent purchases should your information be used, but the balance also limits potential damage.
  3. Only shop from reputable online businesses. Many online businesses offer substantial discounts on products to lure you into their site. Be careful dealing with a company that you have never heard of. Many of these companies are not authorized vendors for certain high-ticket items. For example if you buy a Canon camera from a retailer that is not an authorized vendor, you will not be able to get any relief from the manufacturer's warranty. Purchasing a high-ticket item from a well-known retailer is the way to go.
  4. Read product reviews when shopping online. Many stores allow customers to leave feedback on various products and the service of the site.
  5. Look for secure websites. Shop from online sites that display https:// rather than http:// in the address bar. Also look for a padlock image at the bottom of the browser. These indicate the website is secure, and has a safe encrypted connection. Sites that do not have secure connections are not storing customer data in a secure manner and could be a threat to steal your identity or financial information.
  6. Use authorized retail sites. Many companies have lists on their websites or product packaging of sites where you can buy their goods. These are sites that are considered authorized online retail stores, and you are guaranteed to purchase a legitimate product. If you are uncertain that a site is selling genuine products, ask the retailer where they got the goods and for other verifiable information.
  7. Watch out for fakes. Many illegitimate goods may look genuine. And online sites may advertise their quality. But when examining them closer, you may find products certainly aren't of the quality of the real thing. The key is that you won't find a $500 bag that is legitimate for sale for $10 or $20.
  8. Take care on prescriptions. Always consult with your doctor, and only take medications prescribed by your doctor or another health care professional. Use a licensed pharmacy. The National Association of Boards of Pharmacy can tell you whether an online pharmacy is licensed and in good standing. Some sites carry a seal of approval from Verified Internet Pharmacy Practice sites. To gain this approval, sites must maintain state licenses and allow inspections by the National Association of Boards of Pharmacy. Do insist on access to a registered pharmacist. Reputable sites offer toll-free access to registered pharmacists to answer your questions. Some online pharmacies have traditional physical locations as well. Do read the privacy and security policies — before placing an order, be confident that your credit card number, personal health information and other personally identifiable information will be protected. Do compare prices — you may find great deals online, but there may not be any guarantees. Check your local drugstore price; it might beat the online price. Do be alert for counterfeits. In some cases, drugs ordered online turned out to contain no active ingredient or to contain the wrong medicine.

Also make sure to check your credit report and credit card balances regularly, in case you do have malware installed on your computer. Use antivirus and firewall software to protect you from viruses and malware software hidden in downloadable files.

If you find yourself looking at a website that looks suspicious, or have purchased goods from a website that are defective or pirated, report that information to the legitimate company they are copying from, and to the proper authorities, such as the Justice Department or the FBI.