The "Block BEARD Act" Deserves Speedy Consideration

It's pretty rare these days to have legislation drafted in Congress on bipartisan basis that attempts to address a serious national problem in a meaningful way. Sure, bipartisanship may still occur in  naming post offices or designating a new national Peanut Butter Day or Green Pea Day, but not much else.

 

But Senators Thom Tillis (R-NC), Chris Coons (D-DE), Marsha Blackburn (R-TN), and Adam Schiff (D-CA) released a discussion draft of the Block Bad Electronic Art and Recording Distributors (Block BEARD) Act of 2025. The legislation, if adopted, would allow copyright owners who have had their property stolen to seek an order in federal court to block dedicated foreign online piracy operations from making that stolen content available to American households.

 

Foreign websites pirating American movies, TV shows, art, and books steal tens of billions of dollars from the U.S. economy each year. This theft of Americans' intellectual property enabled by foreign websites costs the U.S. creative community hundreds of thousands of jobs. Consumers are harmed through the malware, phishing, identity theft, and financial fraud perpetuated online by the international pirates.

 

Here is a short summary of what the Discussion Draft intends to accomplish copied from Senator Tillis's press release:

 

The Block BEARD Act would empower copyright owners to seek U.S. federal court orders against foreign websites dedicated to digital piracy, preventing them from making stolen content accessible to American households. To obtain relief, copyright holders must present evidence of specific harm and demonstrate the criminal nature of the targeted site. Courts could then direct internet service providers block access to the identified sites, while granting those providers immunity from liability, including for claims related to the petitioner’s actions.  The legislation includes strong public interest safeguards to protect free expression, due process, and legitimate online services operating in compliance with U.S. law. This targeted legal tool mirrors successful approaches used in over 50 democratic countries to curb foreign piracy operations that undermine creative industry jobs and expose users to malware, identity theft, and fraud.

 

While it's always possible the draft bill might be improved as it goes through the legislative process, the draft appears to strike a proper balance in addressing what is a very serious problem of foreign theft of the intellectual property of the U.S. creative community while safeguarding the legitimate interests of others, including online providers.

 

Senator Tillis and his Senate colleagues should be commended, and the Block BEARD Act deserves speedy consideration.

 

Regulation Article Critiques the Weak IP Rights Regime

The Spring 2025 issue of Regulation magazine features an eye-opening article by Law Professor Jonathan M. Bartlett titled "The Perils of 'Free' Information." In the article, Mr. Bartlett tackles the narrative that IP owners are exploitative monopolists that inflate prices and bar competition and corresponding legal and policy strategies employed by certain tech platforms "to weaken IP rights to reduce the costs of securing content and tech assets, which are then monetized within a portfolio of complementary products and services." 

One of Mr. Bartlett's insights is that "even [IP-free] markets usually restore some form of property rights—whether implemented by IP law, contract, or technology—to sustain incentives to invest in innovation." He describes how tech platforms have migrated toward closed-access subscription models that rely on technology and contracts to serve as a function equivalent of IP rights. The weakening of IP rights undermines innovation and market entry by new competitors. According to Mr. Bartlett, "[w]hile innovation in information-technology industries can sometimes persist in a weak-IP environment, it would likely take place principally within the bundled product-and-service ecosystem maintained by tech platforms or the vertically integrated structures maintained by large bricks-and-mortar producers." 

 

Mr. Bartlett writes that "IP rights are often a precondition for sustaining the innovators and artists that drive knowledge ecosystems." He is in good company in writing this. The idea that creators and inventors require secure and exclusive rights in their writings and discoveries to fully realize their ideas and bring them to market goes back to the earliest days of our nation when the Framers of the U.S. Constitution drafted the Article I, Section 8 IP Clause. 

 

Mr. Bartlett's article is worth reading in full. It is based on his important new book, The Big Steal: Ideology, Interests, and the Undoing of Intellectual Property (Oxford University Press, 2024).

NO FAKES Act to Combat "Deepfakes" is Reintroduced in Congress

On April 11, the "Nurture Originals, Foster Art, and Keep Entertainment Safe Act of 2025" or "NO FAKES Act" was re-introduced in the U.S. House of Representatives (H.R. 2794) and Senate (S. 1367). The House bill is sponsored by Rep. Maria Elvira Salazar and the Senate bill is sponsored by Sen. Christopher Coons. The NO FAKES Act would bolster individuals' intellectual property rights in their likenesses and voices by recognizing a private right of action against unauthorized and harmful "deepfakes." The bill has bipartisan backing as well as the endorsement of a cross-section of the creative and tech industries. The NO FAKES Act is strong on the merits and the 119th Congress should give it due consideration. 

 

Although generative AI technologies offer potential benefits, they also may be abused. Public displays and dissemination of "deepfake" songs misappropriate the value of recording artists’ voices, damaging the artists economically. Also, generative artificial intelligence (AI) tools and services on the Internet allow users to create "deepfake" explicit pictures and videos of individuals.

 

The NO FAKES Act would address those "deepfake" dangers in a targeted way by establishing a national uniform baseline of legal protection for an individual’s likeness and voice from unauthorized digital replicas. If passed by the 119th Congress and signed into law by President Donald Trump, the Act would make civilly liable anyone who knowingly produces a digital replica without the consent of the rights owner. It also would make civilly liable anyone who knowingly publishes, reproduces, displays, distributes, transmits, or makes the digital replica available to the public without the rights owner's consent. Persons harmed under the Act would have a right to seek statutory or actual damages, recovery of costs and attorneys’ fees, and injunctive relief. 

 

Recognizing the potential benefits of authorized digital replicas, the NO FAKES Act provides that individuals would have the right to license their personas for digital replication by third parties. Additionally, the Act is carefully written to address abuses and it includes safeguards for First Amendment-protected free speech and expression using generative AI tech. It bears emphasis that the NO FAKES Act is about private law – personal rights and intellectual property rights; it is not a federal criminal law bill.

 

A more detailed review of the same bill, previously introduced in the 118th Congress, is provided in my August 2024 Perspectives from FSF Scholars, "The 'NO FAKES Act' Would Protect Americans' Rights Against Harmful Digital Replicas."

Blog Post Provides Update on Legal Battle in Blackbeard's Pirate Ship Case

An August 10 blog post by Stephen Carlisle catches up with the continuing case of Cooper v. Allen, following the Supreme Court's 2020 decision that ruled the Eleventh Amendment barred copyright infringements against states under the Copyright Remedy Clarification Act of 1990. The blog post is titled "State Attempts to Sink Blackbeard Infringement Case by 'Deep Sixing' the Law They Passed to Claim the Copyrights." At issue in the case is the State of North Carolina's unauthorized use of copyrighted video footage created by Mr. Rick Allen of efforts to salvage the pirate Blackbeard's ship, Queen Anne's Revenge.

I first wrote about Cooper v. Allen in an October 2019 Perspectives from FSF Scholars, "States Have No Right to Infringe Copyrights: The Supreme Court Should Enforce the Copyright Remedy Clarification Act." But the Supreme Court saw things differently, concluding that the CRCA's blanket abrogation of state immunity was not proportional or congruent to any proven problem of copyright infringements by states that amounted to unconstitutional injuries. The court's decision left open the door to Congress passing a future statute that is more narrowly targeted to intentional and reckless infringements by states. Language in the court's decision suggested that intentional or at least reckless infringement could come within the reach of the Fourteenth Amendment's Due Process Clause.

Thus, in a July 2020 Perspectives from FSF Scholars, "Congress Should Stop States From Infringing Copyrights," I wrote that the "Congress should craft a statute that will abrogate the sovereign immunity of states from being sued in federal court when they intentionally or recklessly infringe copyrights." To date, no legislation has been introduced in Congress to address intentional and reckless copyright infringements by states. However, in August 2021, the U.S. Copyright Office released a policy study on "Copyright and State Sovereign Immunity." The study explored possible legal bases for addressing infringements by states that may remain for copyright owners following the decision in Cooper v. Allen, such as due process and takings claims. 

 

Despite Mr. Allen's loss on infringement claims against the State of North Carolina in Cooper v. Allen, his takings claims and other claims remain alive in U.S. District Court. Mr. Carlisle's blog post summarizes those claims and describes the "spend your opponent into the ground" litigation strategy that the North Carolina Attorney General and Department of Justice – seemingly aided by the North Carolina General Assembly – appear to be using against a copyright owner who was wrongly denied the exclusive right to use his property and financially harmed by that state. Read Mr. Carlisle's excellent blog post for more. And Godspeed to Mr. Allen in his pursuit of justice. 

Stronger Copyrights Would Give Added Boost to Rising Music Market

On March 9, the Recording Industry Association of America (RIAA) released its "Year-End 2022 RIAA Revenue Statistics." RIAA's report highlights continuing annual increases in U.S. recorded music market revenues. Hopefully, recording artists also do well here in 2023. But Congress can promote the continued success and expansion of economic opportunities in the copyright-intensive music recording industry by passing the American Music Fairness Act – S.253 and H.R. 791.

RIAA's report found that retail revenues for the U.S. sound recording industry grew to $15.9 billion in 2022, up from $15 billion in 2022. Revenues from paid subscription music services increased 8% to 10.2 billion in 2022, accounting for 77% of streaming revenues and almost two-thirds of total revenues. Interestingly, in 2022, vinyl records outsold music CDs for the first time since 1987. For the sixteenth year in a row, revenues for vinyl record sales have increased. And in 2022, revenues from sales of vinyl grew 17%, constituting $1.2 billion of the $1.7 total for sales of physical copies that year. Also, $495 million in revenues were generated from sales of digital downloads, an annual figure that amounted to only 3% of annual U.S. recorded music revenues last year. Digital download revenues have declined several years in a row since 2012, when they constituted 43% of annual recorded music revenues. 

Bearing those overall positive findings in mind, there are steps that Congress can and should make to promote flourishing and opportunity in recorded music marketplace. One significant thing that Congress can do is pass the American Music Fairness Act, which was reintroduced in the 118th Congress as S.253 and H.R. 791. 

 

Existing copyright law exempts terrestrial AM/FM radio stations from paying royalties to owners of copyrighted sound recordings when their music is given radio airplay. Online subscription services and online ad-supported services that play copyrighted sound recordings pay royalties to the owners of those sound recordings. But no such payments are required by AM/FM stations that profit from broadcasting copyrighted sound recordings by drawing audiences and resulting ad revues. 

 

The American Music Fairness Act would rectify this unequal legal treatment and the unfairness to copyrighted owners who receive no compensation when third party terrestrial AM/FM stations commercially exploit their creative works. S.253 and H.R. 791 would require AM/FM stations to pay royalties to owners of sound recordings for the use of their intellectual property just like online streaming services do.  

 

An oft-overlooked downside to the current terrestrial AM/FM station exemption for paying public performance royalties to copyrighted sound recording owners is that the exemption effectively precludes the sound recording owners from receiving royalties from foreign stations that play their music over the air. So long as domestic terrestrial AM/FM radio stations have no obligation to pay royalties for broadcasting copyrighted sound recordings owned by American, foreign radio stations are similarly relieved from having to pay those royalties when they play copyrighted music owned by Americans. Passing of the American Music Fairness Act into law would therefore enable American copyright owners to tap royalty streams in foreign nations. Notably, the legislation takes a light-touch approach to smaller commercial and non-profit stations by treating them to a a low, flat royalty rate. 

 

My February 2022 Perspectives from FSF Scholars, "American Music Fairness Act Would Secure Copyrights in Sound Recordings," spotlighted the hearing that the legislation received a in the House Judiciary Committee during the 117th Congress. The 118th Congress is now primed to advance the American Music Fairness Act into law. 

Foreign Stream Ripping Operation Loses Big in U.S. District Court

On February 11, the U.S. District Court for the Eastern District of Virginia entered an order in UMG Recordings, Inc. v. Kurbanov, awarding copyright holders nearly $83 million in statutory damages against two of the world's most high-trafficked websites offering stream-ripping services. Plaintiff copyright owners also received an award of costs and statutory attorney fees, as well as a preliminary injunction against the stream-ripping operation. The respondent in the case owns stream-ripping websites that unlawfully convert copyrighted sound recordings into stored electronic files and makes copies downloadable by users across the world, including about 1.5 million users in Virginia. The websites generate ad revenues targeted to its large user base. 

The District Court's order from February 11 followed an October 2021 default judgment order, as well as a March 2021 order on remand from the Fourth Circuit in which the District Court concluded that its exercise of jurisdiction over the foreign website owner satisfied constitutional due process concerns. My blog post from June 2020 analyzed the Fourth Circuit's opinion that recognized the District Court's specific personal jurisdiction in the case. 

It may be very difficult for the copyright owners in in UMG Recordings, Inc. v. Kurbanov to collect on their judgment against the owner of the stream-ripping websites. But as explained in my June 2020 blog, the Fourth Circuit's decision may serve as a precedent that will bolster the prospects for copyright owners in pursuing civil justice against online piracy in future cases. 

Free State Foundation President Randolph May and I wrote about the importance of efforts to combat online copyright infringement, including by stream-ripping websites, in our June 2021 Perspectives from FSF Scholars, "Fighting Online Piracy Will Boost American Economy and Jobs."

Third Circuit Declines to Rehear Pro-IP Rights Decision Regarding Section 230

On November 17, the U.S. Court of Appeals for the Third Circuit denied a petition for rehearing en banc of the Circuit panel decision in Hepp v. Facebook. In its decision from September 23 of this year, the Third Circuit concluded that the legal immunity conferred on "interactive computer services" by Section 230(c) of the Communications Decency Act does not apply to claims based on state intellectual property laws. Section 230(e)(2) is title "No Effect on Intellectual Property Law" and it states that "[n]othing in this section shall be construed to limit or expand any law pertaining to intellectual property."

The Third Circuit's decision in Hepp v. Facebook was the subject of my Perspectives from FSF Scholars titled "Court Rejects Section 230 Immunity from State Intellectual Property Law." As pointed out in that Perspectives, the Third Circuit's decision creates a clear circuit split with the Ninth Circuit on the issue of whether Section 230(e)(2) provides an exclusion from immunity for state intellectual property claims. The Third Circuit's decision is solidly grounded in the natural reading of the statutory text, it respects the role of IP rights in flourishing markets, and it deserves to stand. The denial of a rehearing en banc is good thing. It remains to be seen if Facebook, Reddit, or Imgur will appeal the decision to the U.S. Supreme Court.  

Prof. Adam Mossoff Writes on Constitutional Protections for IP Rights

On March 8, the Heritage Foundation published a paper by Professor Adam Mossoff titled "The Constitutional Protection of Intellectual Property." From the intro:

This Legal Memorandum explains how intellectual property rights have long been secured as property rights under the Constitution. It first reviews the constitutional text and original public meaning of the Copyright and Patent Clause. It then details the numerous federal court decisions from the 19th century that have secured patents and other intellectual property rights as “property” under the Due Process and Takings Clauses of the Constitution. It concludes by identifying how the modern Supreme Court has consistently followed these precedents, even if it has occasionally forgotten them or not cited them directly. 

Be sure and check out this excellent paper by Prof. Mossoff on IP rights under the Constitution. It is full of citations to legal authorities dating back to the formation of the Constitution, and offers concise analysis going up to the present. The important truth that copyrights and patent rights are constitutionally-protected property rights can't be made often enough.

 

In addition to teaching at the Antonin Scalia Law School and being a Visiting Intellectual Property Fellow at the Heritage Foundation, Professor Mossoff is a member of the Free State Foundation's Board of Academic Advisers. 

Constitution Day 2020 and Copyrights

Today, September 17, is Constitution Day. Two hundred thirty-three years ago this day, the proposed Constitution of 1787 was signed by the Philadelphia Convention delegates assembled at Independence Hall. As Free State Foundation President Randolph May and I pointed out in our 2018 op-ed, "A Constitution Day Call to Strengthen Copyright Protection," the only express provision for individual rights contained in the Constitution of 1787 is the Article I, Section 8 Intellectual Property Clause – also known as the Copyrights Clause.  

FSF President Randolph May and I give a more detailed account of this in our book, The Constitutional Foundations of Intellectual Property: A Natural Rights Perspective. In the view of the American Founders, copyrights are rooted in individuals' natural rights to the fruits of their labors – in this case, their creative labors. And government exists to protect and enlarge rights to acquire, use, and transfer property, including property in creative works. 

We build on those principled themes and make a case for strengthening copyright protections today in our new book, Modernizing Copyright Law for the Digital Age: Constitutional Foundations for Reform. Today, it's fitting to remember that Congress's ongoing responsibility for securing copyrights is based on the high authority of U.S. Constitution. 

Modernizing Copyright Law for the Digital Age is available through Amazon (here) and through Carolina Academic Press (here).

George Washington: Pro-Copyright

Today, President's Day, the U.S. government observes George Washington's birthday. No doubt most people are aware of many of the accomplishments of the Father of our Nation. Yet comparatively few are aware that George Washington was pro-copyright. As President, he signed the first federal law protecting creative works – the Copyright Act of 1790. Free State Foundation President Randolph May and I discussed this and more in our 2016 Perspectives from FSF Scholars paper, "George Washington: Indispensable to Intellectual Property Rights in America."

Expect to hear more on copyright-related topics in 2020, as this month marks the publication of our new book with Carolina Academic Press, titled "Modernizing Copyright Law for the Digital Age: Constitutional Foundations for Reform." Hot off the press, our book is now available for order at CAP's website. 

USTR Issues Two Important IP Reports

Piracy of intellectual property (IP) remains a major global problem, and it is important that the United States, along with governments around the world, maintain – and in many cases – strengthen efforts to combat such illegal conduct.

To that end, two reports released by the United States Trade Representative in connection with #WorldIPDay on April 26 contribute to an understanding of the scale of the piracy problem and the need to take measures to combat it. pertaining to global intellectual property rights in advance of World IP Day, which is celebrated on April 26. The USTR’s 2018 "Out-of-Cycle Review of Notorious Markets Report" identifies markets around the world that engage in and facilitate copyright piracy. And USTR's "Special 301 Report" is an annual review of the state of IP rights protection and enforcement globally.

Pasted in below is the statement of MPAA Chairman and CEO Charles Rivkin regarding the release of the two USTR reports:

“The film and television industry is a community of millions of creators and innovators whose daily work in the business and art of storytelling entertains and inspires audiences worldwide. In the United States alone, the industry employs 2.6 million Americans and contributes hundreds of thousands of dollars into local economies every day. The industry also generates a trade surplus with every major economy across the globe, producing a $10.3 billion aggregate surplus. Ahead of World IP Day tomorrow, the USTR rightfully shines a light on the foreign threats to our creative economy, specifically around online content theft.

“The Notorious Markets report makes it clear how criminals are profiting on the backs of American workers in our creative economy. In addition, the Special 301 report underscores this Administration’s commitment to protecting those workers’ intellectual property from those threats. 

“Today’s reports highlight the global nature of piracy and demonstrate that all governments need to do their part in protecting intellectual property, fostering legitimate commerce, and protecting creators. We applaud Ambassador Lighthizer and the USTR staff for doing their part in recognizing some of the most critical challenges and committing to address them. We look forward to continuing our work with them to protect intellectual property rights and grow our creative economy.”

Policymakers should be committed to protecting IP rights every day, of course. But surely World IP Day should be an occasion to recommit to that end."

Signing of USMCA Spotlights International Copyright Protections

On November 30, President Trump and leaders from Canada and Mexico officially signed the proposed United States-Mexico-Canada Agreement (USCMA). Completion of the trade agreement's negotiation was announced in October. If approved by Congress, USMCA will replace the North American Free Trade Agreement (NAFTA). 

USMCA contains several provisions to better secure Americans' copyright protections. FSF President Randolph J. May and I address many of those provisions in our Perspectives from FSF Scholars paper, "Modernizing International Copyright Agreements to Combat Copyright Infringement." Among its pro-copyright provisions, USMCA would help American owners of sound recordings the full scope of public performance rights. Additionally, USMCA provides for stepped up enforcement through increased civil and criminal penalties for infringing activities such as "stream-ripping" and "camcording." 

However, USMCA incorporates language similar to the Section 512 "notice-and-takedown" provision contained in current U.S. copyright law. Section 512 is outdated and ineffective in protecting digital music and video content from mass infringement on popular user-upload websites. Future trade agreements and treaties should avoid that language. Congress and the Trump Administration should work to reform and update the notice-and-takedown system. We discuss these aspects of Section 512 in further detail our Perspectives paper, "Modernizing Civil Copyright Enforcement for the Digital Age Economy: The Need for Notice-and-Takedown Reforms and Small Claims Relief."

A Trade War May Not Fix China's Weak IP Protections

Earlier this month, President Donald Trump threatened to impose tariffs on $500 billion of Chinese imports, the value of all U.S. imports from China in 2017, because he claims China has taken advantage of the United States. President Trump already imposed 25% tariffs on $34 billion of Chinese goods. He said his action was taken “in light of China's theft of intellectual property and technology and its other unfair trade practices.” China immediately retaliated with equivalent tariffs, 25% on $34 billion of imported U.S. goods.

President Trump’s concerns about China’s weak protections of intellectual property (IP) rights are justified, but imposing tariffs and igniting a trade war may not be the best way to fix the problem.

In 2013, international trade of counterfeit and pirated goods represented up to 2.5% of world trade, or as much as $461 billion. Of that, China alone is estimated to account for more than 70% of global physical trade-related counterfeiting, amounting to more than $285 billion. Physical counterfeiting accounts for the equivalent of 12.5% of China’s exports of goods and over 1.5% of its GDP. China and Hong Kong together are estimated to account for 86% of global physical counterfeiting, which translates into $396.5 billion of counterfeit goods each year.

China and Hong Kong account for 87% of counterfeit goods seized coming into the United States. The annual cost to the U.S. economy of counterfeit goods, pirated software, and theft of trade secrets exceeds $225 billion and could be as high as $600 billion. According to the Global Innovation Policy Center’s (GIPC) 2018 International IP Index, China ranks 25^th out of 50 countries in the study with regard to strong IP systems. So while China’s IP system may not be the weakest in the world, the size of its economy in conjunction with its lack of strong IP protections and enforcement means it is a major threat to U.S. creators and innovators.

IP-intensive industries comprised over 38% of the entire U.S. economy in 2014, equating to $6.6 trillion. And IP-intensive industries directly accounted for 27.9 million jobs and indirectly accounted for 17.6 million jobs, totaling 45.5 million jobs or about 30% of all U.S. employment in 2014. Therefore, when IP rights are violated in the U.S. or abroad, it stifles innovation and job-growth throughout the economy.

As FSF Senior Fellow Ted Bolema discussed in a Perspectives from FSF Scholars, “Why Economists Consistently Support Free Trade Policies,” free trade policies lead to higher paying jobs and lower prices. Protectionist policies, like tariffs and trade wars, ultimately harm consumers and entrepreneurs in both China and the United States and likely harm other countries because investment and innovation are hindered.

The best way to address violations of IP rights in China is through diplomatic efforts, like the adoption of a new free trade agreement creating robust IP protections in China. Hopefully, China will adopt IP protections that are similar to those in the United States, the global leader according to GIPC’s 2018 International IP Index. Then, consumers and entrepreneurs in both countries will benefit from mutual gains from trade and legitimate economic activity.

The U.S.-China Joint Commission on Commerce and Trade (JCCT) is a high-level dialogue on bilateral trade issues between the United States and China, dealing extensively with strengthening IP rights protections in both countries and fostering innovation. Also, the U.S.-China IP Cooperation Dialogue is a group of professionals from both countries who meet to discuss how IP systems can be improved to spur innovation and economic activity between the two countries. The common theme of both of these groups is that China’s IP rights protections can be improved in three main areas: reducing the amount of bad-faith trademarks, combatting online piracy, and decreasing theft of trade secrets.

Bad-faith trademarks are trademarks that are meant to look similar to popular brands and confuse consumers into buying seemingly familiar products. According to GIPC’s Index, China’s trademark law “provides limited criteria for obtaining design protection and no substantive review takes place, leading to many low-value patents and a high rate of invalidations.” China should combat the pervasive problem of bad-faith trademarks by strictly filtering trademark applications. On a positive note, the establishment of China’s IP courts in 2014 has already created a strong precedent on bad-faith trademarks when it found that the Chinese retail sports chain Qiaodan had violated Michael Jordan’s naming rights. Hopefully, this precedent will deter bad-faith trademarks from emerging in the future.

With regard to online piracy, China should adopt e-commerce-related legislation to strengthen the supervision and enforcement of online piracy and counterfeiting. China must continue to provide more licensing opportunities for Internet companies in the music and movie industries, which should discourage piracy by increasing access to legal content. Also, improving the patentability of software by allowing applicants to file partial design claims and extending the grace period that precedes the patent application should reduce rampant software piracy in China by encouraging competition and ultimately lowering prices.

Theft of trade secrets is defined as stealing, misappropriating, or receiving such secrets with intent to convert the trade secret into an economic benefit for anyone other than the rights holder. Although China recently amended its Anti-Unfair Competition Law to shift the burden of proof to the accused infringer for many trade secrets cases, this action does not address the issue sufficiently. The amended law likely will lead to a “one-size-fits-all” enforcement approach that may not be suitable for all types of trade secrets. Instead, China must adopt trade secret legislation which should include steps to assist rights holders in seeking preliminary injunctions and include evidence and asset preservation measures under China’s Civil Procedure Law. Also, China can do more to engage the public about trade secrets protection and streamline its processes for providing trade secrets licensing.

Instead of igniting a trade war, President Trump should welcome free trade with China. With the adoption of a new bilateral free trade agreement (or multilateral if other countries choose to participate), the United States could address the concerns regarding bad-faith trademarks, online piracy, and theft of trade secrets by establishing an IP chapter that creates strong IP rights protections in China. This would spur trade between the two countries even more because a strong IP system in China would encourage additional innovation and economic activity.

Economists Continue to Support Free Trade Policies

Earlier this week, the Free State Foundation published a new Perspectives from FSF Scholars by Senior Fellow Ted Bolema titled “Why Economists Consistently Support Free Trade Policies.” In the paper, Ted Bolema discusses how free trade policies promote economic growth, higher wages, and increased innovation in the economy.

Today, the National Taxpayers Union sent an open letter to President Donald Trump and members of Congress urging them to reject protectionist policies, such as tariffs and withdrawing from trade agreements. This is a response to President Trump’s decision to impose costly tariffs on certain goods and to withdraw from the Trans-Pacific Partnership. The letter was signed by more than 1,100 economists throughout the United States, including three members of FSF’s Board of Academic Advisors - Michelle Connolly, Stan Liebowitz, and James Prieger.

Free State Foundation scholars have maintained the position that bilateral and multilateral free trade agreements create innovation and economic growth, and strong protections of intellectual property rights implemented in those agreements encourage creation throughout the global economy. Make sure you read Ted Bolema’s new paper!

Music Industry Grew Significantly in 2017

The Recording Industry Association of America (RIAA) recently released its 2017 Revenue Statistics, which show significant growth in the music industry over the last few years. In 2017, music streaming revenues were $5.7 billion, more than triple what they were in 2014 at $1.8 billion. Streaming applications now generate 65% of music industry revenues. Moreover, the number of paid music subscriptions grew by more than 55% from 2016 to 2017. Overall, the retail value of revenues throughout the entire music industry grew by $1.2 billion from 2016 to 2017.

While there are still problems with online piracy that need to be addressed, the growth of the music industry would not be possible with strong copyright protections, which enable artists and creators to earn a return on their labors.

IP Theft Commission Calls for New Policies to Combat IP Theft By Chinese Companies

The IP Theft Commission has issued a slate of policy recommendations in connection with the Office of the U.S. Trade Representative’s current investigation of China’s practices relating to intellectual property (IP) theft and forced technology transfer.

As noted in a prior blog post, at the prompting of an August 2017 memorandum issued by President Trump, U.S. Trade Representative Robert Lighthizer opened the investigation pursuant to Section 301 of the Trade Act of 1974.

Among the IP Theft Commission’s recommendations:

• Use and expand the authority of the executive branch to deny access to the U.S. market and banking system to Chinese and other foreign companies that steal and benefit from stolen American IP.
• Create new national policy centers that coordinate efforts across relevant agencies, including the Department of Commerce and the Department of Treasury, to monitor and protect American IP.
• Establish multilateral policy dialogues with Japan, the European Union, Australia, South Korea, Singapore, and other states that share interests in protecting IP to strengthen policies to harmonize national, legal, and regulatory frameworks and to share information.