IIPA Commends USTR Identification of Notorious Markets Facilitating Global Copyright Piracy

Special 301 Report of “Notorious Markets” Includes Online and Physical Marketplaces That Cause Significant Damage to Copyright Creators and the U.S. Economy

Washington, DC
Thursday, March 5, 2015

Today the International Intellectual Property Alliance (IIPA), representing five leading trade associations of the U.S. copyright industries, praised the United States Trade Representative (USTR) announcement of the results of the 2014 Out-of-Cycle Review of Notorious Markets.  The USTR report identifies more than 50 online and physical marketplaces around the world that sustain global copyright piracy by dealing in infringing goods and services.
These listings include dozens of the notorious markets identified by IIPA members in their respective filings last fall.[1]  This year’s report highlights closures and other developments in notorious markets previously listed, emphasizing the importance of this review in bringing to light markets and services that are built on infringement.  This year, USTR also introduces the issue of “certain domain name registrars” (the “commercial entities or organizations that manage the registration of Internet domain names”), noting the IPR enforcement system can break down due to “the failure of domain name registrars or other similarly situated entities to follow rules intended to help combat illicit activity.”  IIPA appreciates USTR’s focus on this issue.
IIPA Counsel Steven J. Metalitz commented, “We thank USTR and the inter-agency for their tremendous efforts and hard work in identifying notorious markets for copyright piracy.  The listing process works, commanding the attention of marketplace operators and responsible governments.  This year’s report again mentions markets removed from  the list, either because they were shut down by law enforcement, or because the market operators have taken appropriate steps to ensure their market is not used for piracy.  The list is truly a win-win, for right holders seeking to enhance the ability of U.S. creators to reach foreign markets through legitimate channels, and for consumers, who will, as a result of addressing these problematic markets, have greater access to legitimate content – literary works, music, movies and TV programming, video games, software, and other products and services.”
Please see https://ustr.gov/sites/default/files/2014%20Notorious%20Markets%20List%20-%20Published_0.pdfto review the USTR list.
About the IIPA: IIPA is a private sector coalition, formed in 1984, of trade associations representing U.S. copyright-based industries working to improve international protection and enforcement of copyrighted materials and to open foreign markets closed by piracy and other market access barriers. Members of the IIPA include Association of American Publishers (www.publishers.org), Entertainment Software Association (www.theesa.com), Independent Film & Television Alliance (www.ifta-online.org), Motion Picture Association of America (www.mpaa.org), and Recording Industry Association of America (www.riaa.com). IIPA’s five member associations represent over 3,200 U.S. companies producing and distributing materials protected by copyright laws throughout the world. These include entertainment software including interactive video games for consoles, handheld devices, personal computers and the Internet, and educational software; motion pictures, television programming, DVDs and home video and digital representations of audiovisual works; music, records, CDs, and audiocassettes; and fiction and non-fiction books, education instructional and assessment materials, and professional and scholarly journals, databases and software in all formats.
In December 2014, IIPA released the latest update of its comprehensive economic report, Copyright Industries in the U.S. Economy: The 2014 Report, prepared by Stephen E. Siwek of Economists Inc. According to the report, the “core” copyright industries in the U.S. generated over $1.1 trillion dollars of economic output in 2013, accounting for 6.71% of the entire economy. The core copyright industries also employed nearly 5.5 million workers in 2013, accounting for over 4% of the entire U.S. workforce, and nearly 5% of total private employment in the U.S. These workers earn on average 34% higher wages than other U.S. employees. The core copyright industries also outpaced the U.S. economy, growing at 3.9% between 2009 and 2013, while the U.S. economy grew by 2.25%. When factoring in other industries that contribute to the copyright economy (which together make up the “total” copyright industries), the numbers are even more compelling. Finally, the report highlights the positive contribution of selected copyright sectors to the U.S. overall trade balance. In 2013, these sectors contributed $156 billion in foreign sales and exports, exceeding that of many other industry sectors, including: chemicals, aerospace products and parts, agriculture, and pharmaceuticals and medicines.[2]Studies such as this amply demonstrate the contribution of creators, and the copyright-based industries that support them, to the economy. They also highlight what is at stake if those creators and industries – which rely on high standards levels of copyright protection and open markets – have to face the additional hurdles and costs associated with obstacles such as copyright piracy and market access or discriminatory trade barriers.[3]
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[1]In all, more than 250 online and physical markets were nominated by various stakeholders including IIPA members. The top fifteen countries connected to this year’s nominated notorious online markets were (in order of number of incidences): Germany, Canada, China, Brazil, Netherlands, Russia, Switzerland, Czech Republic, Ukraine, France, Poland, Spain, Bulgaria, Estonia, Luxembourg, and Vietnam.  The top three countries of location for this year’s nominated physical markets were Mexico, India, and China.
[2]See Stephen E. Siwek, Copyright Industries in the U.S. Economy: The 2014 Report, December 17, 2014. The report can be accessed at http://www.iipa.com/copyright_us_economy.html. Core copyright industries are those whose primary purpose is to create, produce, distribute, or exhibit copyright materials. The link between copyright protection and economic growth is well documented by the World Intellectual Property Organization (WIPO) in its report, 2014 WIPO Studies on the Economic Contribution of Copyright: Overview, and the WIPO website now lists 49 country studies employing virtually the same agreed-upon methodology. See http://www.wipo.int/export/sites/www/copyright/en/performance/pdf/economic_contribution_analysis_2012.pdf. These national studies provide the economic underpinnings for efforts to reform copyright law, improve enforcement, and lower market access barriers. The Motion Picture Association Asia Pacific has issued a series of “Economic Contribution of the Film and Television Industry” studies for Malaysia (2014), India (2013, 2010), Taiwan (2013), Shanghai (2012), Japan (2012), New Zealand (2012, 2009), Indonesia (2012), Thailand (2012), South Korea (2012), China (2012), Australia (2011), and Hong Kong (2009). See Motion Picture Association Asia-Pacific, Research and Statistics, at http://mpa-i.org/research-and-statistics/. See also UK Music’s The Economic Contribution of the Core UK Music Industry (2013), at http://www.ukmusic.org/assets/general/ The_Economic_Contribution_of_the_Core_UK_Music_Industry___WEB_Version.pdf, and PWC’s Economic Contribution of the New Zealand Music Industry, 2012 and 2013 (2014), at http://www.wecreate.org.nz/wp-content/uploads/2014/07/PWC-Music.pdf. See also Economists Inc.’s Video Games in the 21st Century: The 2014 Report (2014), at http://www.theesa.com/wp-content/uploads/2014/11/VideoGames21stCentury_2014.pdf.
[3]In an increasingly digital, online, and mobile marketplace, true estimates of the cost of copyright piracy are difficult to quantify. A study released in 2011 by BASCAP (Frontier Economics) estimated the value of digitally pirated music, movies and software (not losses) at $30-75 billion in 2010, potentially growing to $80-240 billion by 2015. Frontier Economics, Estimating the Global Economic and Social Impacts of Counterfeiting and Piracy: A Report Commissioned by Business Action to Stop Counterfeiting and Piracy (BASCAP), February 2011. The Motion Picture Association commissioned studies from IPSOS and Oxford Economics on Economic Consequences of Movie Piracy: Japan (2011) and Economic Consequences of Movie Piracy: Australia (2011). In January 2014, the United Nations Office on Drugs and Crime launched a new global campaign to raise awareness among consumers of the harm being caused by the estimated $250 billion a year illicit trafficking of counterfeiting and piracy. See 'Counterfeit: Don't Buy Into Organized Crime' - UNODC Launches New Outreach Campaign on $250 Billion a Year Counterfeit Business, January 14, 2014, at http://www.unodc.org/counterfeit/. The campaign informs consumers that buying counterfeit goods could be funding organized criminal groups, puts consumer health and safety at risk, and contributes to other ethical and environmental concerns.