Copyright Advocates Stepping Up Efforts Against Online Piracy

On November 26, The Motion Picture Association's (MPA) Executive Vice President and Chief Content Protection Officer Larissa Knapp, published a blog post announcing the MPA Content Protection team's strategic goals to deter, detect, and dismantle online piracy operations in 2025. Ms. Knapp's blog post can be found on the website of the Alliance for Creativity and Entertaining (ACE), an online antipiracy coalition of over 50 media and entertainment companies. ACE addresses piracy through public education, research into piracy trends, criminal referrals, civil litigation, and cease-and-desist operations. 

Hopefully, the efforts of MPA, ACE, and individual U.S. copyright owners to curb unlawful online copyright infringements in 2025 will be successful.

Online piracy of creative works, including movies and TV shows, undermines the rights of copyrighted property owners, inflicting large-scale damages on owners and reducing jobs and economic opportunities for those industries that help support creative enterprises. ACE's July 2023 report "2022 Movie & TV Piracy Trends Worldwide" cites analyst estimates for the U.S. that there were 14.7 billion visits to film and TV piracy sites that year, as well as 1.9 billion pirated movies, primetime TV, and video-on-demand (VOD) shows using peer-to-peer protocols, not including streaming and downloading sites. Additionally, ACE's report cited an estimate that revenue losses to the U.S. economy due to global online piracy totaled $29.2 billion in 2022. 

 

My February 2024 Perspectives from FSF Scholars, "Congress and the Administration Should Move Against Online Copyright Piracy," identified three ways to improve protections for Americans' copyrighted works from online piracy: (1) confirmation of an Intellectual Property Enforcement Coordinator (IPEC) to engage foreign nations on copyright piracy: (2) stepped-up prosecutorial efforts against streaming piracy operations; and (3) legislation by Congress to establish a "notice-and-stay-down" requirement for major online platforms as a condition for receiving immunity for infringements on their websites. My World IP Day 2024 blog post added: (4) legislation by Congress to establish a legal process for judicial site-blocking of third-party websites dedicated entirely or overwhelmingly to unlawful online copyright piracy. 

 

The Free State Foundation is dedicated to the protection of private property rights, including intellectual property. In the year to come, FSF scholars will have more to say about legal and policy measures to combat online copyright piracy. 

Report Shows Digital Piracy Spiked in 2022 in the U.S. and Worldwide

Muso's October 2022 report "Piracy Data Overview January 2022 to August 2022" indicates that Internet user visits to digital piracy websites increased 22% compared to a year earlier. That amounted to a staggering 141.7 billion visits to piracy sites for all industries – movies, TV, publishing, music sound recordings, and software. And according to Muso, "the United States accounts for 10.9% of piracy between Jan-Aug 2022" – the highest of any country – with nearly 15.5 billion visits by Internet users in the U.S. to unlicensed streaming, torrent download, web download, and stream-ripping websites. To put those piracy traffic numbers into perspective, the U.S. share of digital piracy reportedly was more than 87% higher than second-place Russia. India and China rank third and fourth among countries for visits to piracy sites.  

The report by Muso – a U.K. data research company that monitors and measures global piracy – compared piracy traffic between January and August 2022 with piracy traffic between January and August 2021. Another stunning finding by Muso is that film piracy traffic grew almost 50% during the period examined in 2022. Piracy traffic involving published content grew close to 40% during that same period. 

 

Digital piracy is wrong and harmful to copyright owners. It unfairly undermines the value of their intellectual property, seriously curbing copyright owners' opportunities to make honest gains on their creative labors. My June 2021 Perspectives from FSF Scholars, "Fighting Online Piracy Will Boost American Economy and Jobs," identified policy priorities that ought to guide Congress and the Biden Administration in combatting online piracy of Americans' copyrighted works. Some of those actions include: (1) insisting on stronger copyright provisions in foreign trade agreements and proactively seeking enforcement of those provisions when foreign countries fail to adequately protect copyrights; (2) prosecuting mass-scale piracy operators for criminal copyright violations; (3) revising the DMCA to establish a "notice-and-stay down" system that would more strongly protect copyrights from online infringements in an era of high-speed broadband and mass social media user uploads. 

 

Private initiatives as well as targeted law enforcement efforts also remain important for disrupting and dismantling the lucrative online advertising streams that fund online piracy websites. For more on that subject, see my August 2021 Perspectives, "Online Ads Supporting Copyright Piracy Need to Be Stopped." And as spotlighted in a blog post from September 19 of this year, malvertising on online piracy websites pose significant cybersecurity dangers to Internet users.  

Report Identifies Dangers to Internet Users from Malvertising and Piracy

On September 15, the Digital Citizens Alliance released a report titled "Unholy Triangle: From Piracy to Ads to Ransomware: How Illicit Actors Use Digital Ads on Piracy Sites to Profit by Harming Internet Users." The report, which the Digital Citizens Alliance prepared jointly with White Bullet and Unit 221B, spotlights the phenomena of online pirates working with "malvertisers" and with the effective assistance of online ad intermediaries to exploit Internet users. 

As the report explains, operators of piracy websites lure Internet users by offering them access to "free" content – including copyrighted movies, TV shows, music sound recordings, and ebooks. But many piracy sites feature a barrage of malicious ads intended to confuse, deceive, or scare Internet users into clicking them. The clicked ads then infect Internet users' computers with malware that can steal their financial and personal information as well as with spyware that can track all of their online activities. The report identifies the creators of these harmful ads as "malvertisers" and it calls their tactics "malvertising."

One particularly pernicious malware-related activity is known as "ransomware." In a ransomware attack, an Internet user's computer files are encrypted and the user is locked out. Cybercriminals then demand payment from the Internet user in order to unlock the files. A source cited by the report estimated that global losses due to ransomware totaled $20 billion in 2021.

 

The report authors investigated many online piracy sites and found ransomware and other malware schemes in operation. According to the report, in just a one-month period, visitors to piracy sites were barraged with an estimated 321 million ads designed to harm them. Indeed, the report found that malvertising accounts for 12% of total ads on piracy sites and generates an estimated minimum of $121 million annually, with more than $68 million coming from U.S. Internet user visits to such sites. 

 

Significantly, these piracy website-hosted malvertising schemes would not be operating without ad intermediaries. In their investigation, the report's authors found that some foreign owned and operated ad intermediaries were willing to place deceptive ads and thereby effectively facilitate malvertising campaigns. The report found that the ad industry has made progress in reducing ads for legitimate companies on piracy sites, and it credits the creation of the Trustworthy Accountability Group (TAG) by U.S. ad associations for helping bring about those reductions. 

 

Copyright piracy is wrong in itself and commercial traffickers in infringing content ought to be the target of federal law enforcement efforts. Free State Foundation President Randolph May and I have written about the harms from online piracy – including the role of online ads in facilitating piracy – which undermines copyright owners' ability to seek financial returns and devalues their intellectual property. But the harms of online piracy don't end there. The "Unholy Triangle" report rightly calls attention to the dangers to unsuspecting Internet users from malware on piracy websites that host infringing content. More Internet users should become aware of those dangers. Hopefully, further efforts will be made by responsible U.S. ad associations and by others to curb the high volumes of malicious ads and the illicit revenue streams that they generate.

Online Piracy Poses Substantial Malware Threat to Employer Networks via Remote Access

Digital Citizens Alliance, a nonprofit focused on the threats consumers face on the Internet, has released a research survey highlighting a disturbing connection between online piracy, working from home, and employer network security threats.

As a consequence of the COVID-19 pandemic, millions of Americans are working remotely. When employees allow piracy devices and apps to access their home Internet connections, they open the door to malware attacks.

Alarmingly, it appears that a significant number of consumers do just that: 1 in 5 of those surveyed admitted to visiting a piracy website, 1 in 10 to using a piracy device.

Home networks that include piracy devices, or other devices running piracy apps, are three times more likely to experience issues relating to malware, which in turn expose the employer networks that they are used to access to cybersecurity risks.

Such concerns are particularly troubling with respect to those employees remotely accessing systems upon which confidential or sensitive data is stored.

Fully half of the respondents with access to such information and piracy devices attached to their home networks had issues relating to malware during the previous 12 months. By contrast, less than 20 percent of those not using piracy devices reported malware infections.

Trump Administration Releases its Joint Strategic Plan for IP Enforcement

On November 9, the Intellectual Property Enforcement Coordinator (IPEC) released the 2020 to 2023 Joint Strategic Plan by coordinated federal agencies for promoting and protecting intellectual property (IP) rights. 

The IPEC-developed plan provides an overview of recent and ongoing strategic efforts by the Trump Administration in all areas of IP policy, including copyrights. And it addresses domestic IP policy issues as well as initiatives to ensure that Americans' IP rights receive protections internationally. Included in the Joint Strategic Plan are efforts to better secure copyrights from infringement – particularly online infringement:

The [U.S.-China] Phase One Agreement requires China to provide effective and expeditious action against infringement in the online environment, including by requiring expeditious takedowns and by ensuring the validity of notices and counter notices. It also requires China to take effective action against e-commerce platforms that fail to take necessary measures against infringement. The United States and China agreed to address additional intellectual property issues, including with regard to unauthorized camcording of motion pictures and copyright protection for sporting event broadcasts, in future negotiations... 

 

The Justice Department and the Department of Homeland Security will continue to aggressively investigate and prosecute individuals and corporations that engage in large-scale online copyright piracy (through illicit streaming services and anti-circumvention devices), which not only violates the rights of copyright holders but also often involves the commission of other serious crimes such as money laundering and tax evasion… In addition, the Justice Department, DHS, and other Federal agencies (as appropriate) will also continue to work with foreign law enforcement and other governmental offices to prosecute and otherwise prevent large-scale online copyright piracy, including the large-scale online pirates that are identified in USTR’s annual List of Notorious Markets... 

 

The Department of Homeland Security (U.S. Customs and Border Protection (CBP)) will continue to modernize, update and expand the existing e-Recordation program, which provides right holders the opportunity to record their registered trademarks and copyrights to receive enhanced border enforcement of the IP. DHS will continue to provide education and outreach to the industry regarding the critical importance of obtaining trademark and copyright recordations in order to stem the flow of infringing goods into the United States. DHS will continue to educate personnel at all Ports of Entry on the importance of IP enforcement, and arm them with the necessary tools to detect and interdict infringing goods at the border...

 

The United States will continue to support and encourage the broader and more regularized adoption of voluntary "Trusted Notifier" agreements involving Internet domain registries. These agreements have proven effective in removing websites that engage in large-scale copyright piracy, as has been demonstrated in the implementation of the agreements that the MPAA (now, the MPA) entered into in 2016 with the Radix and Donut registries.

We will likely have more to say on the Joint Strategic Plan – particularly its call for further examination of the copyright "notice-and-takedown" system for removing expeditiously infringing content from Internet websites. Free State Foundation President Randolph May and I wrote about the need for reforms to the "notice-and-takedown" provision in the Digital Millennium Copyright Act in our June 2020 Perspectives from FSF Scholars paper, "Copyright Office Report Should Spur Modernizing the DMCA."

Report: Pirate Subscription IPTV Is a Billion-Dollar Illegal Business

A report by Digital Citizens Alliance and NAGRA released on Thursday reveals the serious and increasing harms that pirate subscription Internet Protocol TV (PS IPTV) imposes on content creators, programming distributors, and consumers.

"Money for Nothing: The Billion-Dollar Pirate Subscription IPTV Business" details the consequential scope of these increasingly sophisticated criminal operations, which combine stolen video content, readily available streaming technology, and enabling capabilities provided by legitimate businesses (such as credit card processors and hosting services) to create highly polished consumer offerings.

The report finds that approximately 9 million U.S. consumers subscribe to PS IPTV, typically for only $10-15 per month. Because none of that revenue, totaling at least $1 billion per year, makes its way back to content creators, the profit margins are astounding: between 56 (for the 3,500+ retail services in operation) and 85 percent (for wholesalers). Money for nothing, indeed.

These illegal services obviously steal from both programmers and legitimate distributors. They also harm consumers, both directly and indirectly.

• Directly, by involving them, perhaps unwittingly, in criminal conduct; revealing their personal information to unsavory actors; exposing their devices to malware; and potentially sharing their Internet connections with unknown third parties.
• Indirectly, by reducing incentives for the creation of (uncompensated) new content and raising prices for legal offerings.

As this report clearly illustrates, pirated video content today is big business with serious ramifications. Policymakers should open their eyes to the scope of this problem and take steps to discourage this criminal conduct through updated penalties and enforcement mechanisms that reflect the billion-dollar stakes involved.

Morning Consult Op-Ed on Combatting Digital Piracy

Free State Foundation President Randolph May and I today published an op-ed in The Morning Consult titled "World IP Day 2020 – Protect Americans' Copyrights From Digital Piracy." This just-published op-ed addresses online piracy and counterfeiting of copyrighted goods in digital media. Many thanks The Morning Consultfor running our op-ed. 

The need to combat international digital piracy of copyrighted works receives a fuller treatment in our new book, Modernizing Copyright Law for the Digital Age – Constitutional Foundations for Reform (Carolina Academic Press 2020). The new copyright book is available both in print and e-book formats.

The Importance of Combatting Digital Piracy

This week the Chamber of Commerce's Global Innovation Policy Center (GIPC) and NERA released a new report titled, "Impacts of Digital Piracy on the U.S. Economy." Anyone interested in protecting intellectual property rights, especially including copyrights, should read this important, if somewhat alarming, study.

The report chronicles the extraordinary growth of digital streaming video services just in the past few years. Now, according to the report, there are more than 500 licensed online video portals. And more streaming subscribers than paid TV subscribers. Not only are all the proliferating video streaming services providing consumers with an abundance of choices for enjoying an incredibly wide variety of content, but, not surprisingly, they have contributed significantly to economic growth and produced hundreds of thousands of new jobs.

All that is good.

But there is a dark side too – an alarming increase in digital piracy – which largely is the focus of the new GIPC/NERA report.

It's worth reading the entire report, but here are some of the key findings:

·     80% of digital piracy is now due to streaming, largely encouraged by the widespread proliferation of piracy devices and apps that make pirated content easier to access. 

·     Overall, approximately 26.6 billion viewings of U.S.-produced movies and126.7 billion viewings of U.S.-produced television episodes are digitally pirated each year, mostly from outside the U.S.

·     Digital video piracy deprives the U.S. economy of a minimum of $29.2 billion in reduced revenue each year.

Enough said to demonstrate that the losses resulting from digital piracy – the harm suffered by the artists and creators who labor to produce the pirated works, and the harm to the overall economy – demand attention from U.S. policymakers and those abroad.

My Free State Foundation colleague, Seth Cooper, and I have addressed the scourge of digital piracy many times in the past, and we've offered various proposals to combat it. Here are two FSF Perspectivesthat contain proposals for addressing digital piracy at home and abroad:

·     Modernizing Criminal Copyright Law to Combat Online Piracy, June 18, 2018

·     Modernizing International Agreements to Combat Copyright Infringement, November 16, 2018

I submit that along with the new GIPC/NERA report, these Free State Foundation papers are worthwhile reading too.