Obama to 'aggressively protect' intellectual property

The president says intellectual property is country's "single greatest asset" and must be protected from piracy and counterfeiting.

Greg Sandoval Former Staff writer
Greg Sandoval covers media and digital entertainment for CNET News. Based in New York, Sandoval is a former reporter for The Washington Post and the Los Angeles Times. E-mail Greg, or follow him on Twitter at @sandoCNET.
Greg Sandoval
4 min read

As a presidential candidate, Barack Obama was young, a technology fan, and appeared to be an establishment outsider. For those reasons some techies hoped he might be sympathetic to copyright reform.

Those hopes are fading fast as President Obama appears to have lined up on the side of copyright owners. In a speech at the Export-Import Bank's annual conference in Washington, D.C., President Obama told attendees Thursday that his administration is firmly behind producers of creative works.

"We're going to aggressively protect our intellectual property," Obama said. "Our single greatest asset is the innovation and the ingenuity and creativity of the American people...It is essential to our prosperity and it will only become more so in this century. But it's only a competitive advantage if our companies know that someone else can't just steal that idea and duplicate it with cheaper inputs and labor."

The president's comments come as his administration continues to revitalize an improving but still ailing U.S. economy. They echo statements made often by leaders in the U.S. film, music, video game, and software industries. For a while these sectors have claimed piracy and Internet file sharing mean the loss of U.S. jobs and poison the economy. Critics say that the job losses are more due to poor business decisions made by the studios and music labels.

They have cited research that shows intellectual property accounts for 20 percent of U.S. gross domestic product (GDP) and nearly 40 percent of U.S. economic growth. The music sector has seen a major decline in jobs over the decade since Napster made file sharing popular. The industry has contracted to four major record companies and with EMI Music, the smallest major label, in deep financial trouble, there's a possibility we'll see more shrinkage. Sony Pictures, the film studio owned by the giant Japanese consumer electronics company, recently announced its second round of layoffs within the past year.

In the president's speech, he signaled his administration plans to help crack down on worldwide piracy.

"There's nothing wrong with other people using our technologies, we welcome it," Obama said. "We just want to make sure that it's licensed and that American businesses are getting paid appropriately. That's why the (U.S. Trade Representative) is using the full arsenal of tools available to crack down on practices that blatantly harm our businesses, and that includes negotiating proper protections and enforcing our existing agreements, and moving forward on new agreements, including the proposed Anti-Counterfeiting Trade Agreement (ACTA)." (Note: You can hear the president discuss ACTA and intellectual property in the video above starting at 18:14 and ending at 19:07.)

The president's stand on these issues were welcomed by some copyright owners and representatives of the entertainment industries.

"We applaud the president's recognition that it's U.S. ingenuity and creativity that is helping to drive the economy," said Rick Cotton, NBC Universal's general counsel. "We think that what should follow from this is the need for much stronger action in enforcement and by intermediaries who allow their infrastructure to be used to distribute stolen digital content or counterfeit products.

The intermediaries he's referring to are video-sharing sites, auction sites, shipping companies (which help distribute physical counterfeited goods), and Internet service providers. ISPs especially have been under pressure from the film, music, and video game sectors to do more to protect intellectual property. There is a push for ISPs to adopt a so-called graduated response to illegal file sharing. This plan would include warnings and possibly also suspension or termination of service.

This is believed to be one of the first times Obama has publicly come out in support of ACTA, the controversial proposed trade agreement that would set standards for protecting intellectual property. Some of those that are said to be participating are Australia, Canada, the European Union, Japan, Mexico, and the United States.

Exactly what ACTA is proposing is vague and representatives have kept their negotiations mostly closed to the public. But among some copyright reformists the fear is that ACTA will call for Internet service providers to boot accused illegal file sharers from their networks.

On Wednesday, the European Parliament rejected ACTA negotiators' closed-door policy. In a vote of 633 to 13, the parliament demanded that ACTA's documents be made accessible to the public.

As for the U.S. attempts to thwart piracy overseas, those efforts have met with mixed results. The U.S. Trade Representative (USTR) saw some success prodding Russian officials to derail Allofmp3.com and other accused pirate sites in that country. The USTA also lobbied Sweden's government for a long time to file copyright charges against BitTorrent search engine the Pirate Bay, accused of helping millions around the globe find unauthorized copies of films and music. Last year, the operators of the Pirate Bay were found guilty of copyright infringement and sentenced to a year in jail. That case is on appeal.

Despite these high-profile cases, piracy thrives in places such as China, and some Eastern European countries. Megaupload is one service that continues to help distribute millions of U.S. films across the globe without the permission of the Hollywood film studios. Illegal streaming sites are cropping up all over and many times investigators working for the Motion Picture Association of America (MPAA) don't even know where the operators are located.

Craig Winter, a former MPAA security executive, told CNET that U.S. officials have a hard time getting some of our allies, such as authorities in Hong Kong, to cooperate. Some nations just put a very low priority on protecting intellectual property, he said.