piracy

  • September 27, 2012
    Guest Post

    By Eric Priest, Assistant Professor, University of Oregon School of Law


    China’s pervasive intellectual property piracy problem, and the resulting impact on American industry and jobs, is a constant refrain in U.S. media and even the presidential campaign.  But are some U.S. companies also benefitting from the infringement?  Some policy makers and software companies are beginning to ask whether U.S. businesses are actually indirect beneficiaries of pirated intellectual property in China (and elsewhere).  When an upstream producer such as a Chinese factory uses pirated software in its manufacturing or logistics operations, the cost of production is reduced.  Some of those savings can also be passed along to the U.S.-based firm that hired the factory, or to the retailer that sells the product.  These cost savings arguably give the overseas manufacturer and the seller of such a product in the U.S. an unfair edge over competitors in the U.S. market.

    Louisiana and Washington State passed laws in 2010 and 2011, respectively, that make it an act of unfair competition to sell a product manufactured using “stolen or misappropriated” information technology.  The Louisiana statute is terse and therefore broad, while the Washington statute contains detailed limitations on liability and requires that the defendant be given notice and have the opportunity to cure.  The Washington statute creates liability for the manufacturer as well as for certain third parties (i.e., sellers other than the manufacturer), although it limits potential third-party liability to large companies with over $50 million in annual revenue, which are better positioned to police suppliers.  

    In addition, Attorneys General from thirty-six states and three U.S. territories last November requested that the FTC consider using its broad unfair competition authority under § 5 of the FTC Act to pursue manufacturers who sell in the U.S. goods that they produced using pirated software in competition with law-abiding manufacturers.  In addition to such federal action, some state Attorneys General have indicated they would consider the possibility of using existing state unfair competition laws (the “mini-FTC Acts”) to the same effect.

  • April 3, 2012

    by Nicole Flatow

    Responding to the concerns of 39 attorneys general over the impact of piracy on the U.S. manufacturing industry, a bipartisan group of senators has asked the Federal Trade Commission to “use all tools at your disposal to fight the theft of and use of stolen American manufacturing information technology (IT) and intellectual property (IP).”

    The request comes in response to a November letter from the National Association of Attorneys General that asked the FTC to help the AGs combat piracy by deploying a section of the Federal Trade Commission Act that prohibits unfair methods of competition.

    “Competition is the bedrock of free enterprise,” they write. “Competition is unfairly distorted, however, when a manufacturer gains a cost advantage by using stolen information technology, whether in its business operations or manufacturing processes. It offends our sense of fairness when such wrongdoers reap commercial advantage from their illegal acts.”

  • December 13, 2011

    by Jeremy Leaming

    Renowned constitutional scholar Laurence H. Tribe is weighing in on the House’s consideration of the so-called Stop Online Piracy Act.

    CNET’s Declan McCullagh reports that Tribe, the Carl M. Loeb University Professor at Harvard Law School, has detailed why SOPA is unconstitutional. McCullagh also notes that the measure, which the House Judiciary Committee is scheduled to consider on Dec. 15, is garnering opposition from companies, such as Facebook, Twitter, Mozilla, eBay, and Google. The Motion Picture Association, Bloomberg reports, “is mounting its own counterattack in support of the legislation, through White House visits and a national advertising campaign.”

    The bill, in part, would allow the Department of Justice to seek court orders requiring Internet-service providers, search engines, among other entities, to block or stop doing business with non-U.S. websites allegedly linked to piracy.

    In a 23-page legislative memorandum, Tribe explains the numerous reasons why the measure rests on wobbly constitutional ground.