White House wants stiffer penalties for online piracy

The White House's top intellectual property official on Tuesday recommended legislative changes that would significantly increase the penalties for online piracy and counterfeiting while expanding the government's ability to enforce copyright laws.

"The theft of American innovation costs jobs and imperils economic growth. This must end," said White House Intellectual Property Enforcement Coordinator Victoria Espinel in a post on the White House blog. 

Espinel put forward a list of 20 legislative recommendations for Congress as part of a new white paper.

The White House proposes increasing the maximum penalties for those convicted of stealing trade secrets or of economic espionage from 15 to 20 years. The administration also wants to increase the penalties for knowingly selling counterfeit products for use by the military or law enforcement.

Espinel recommended Congress clarify that illegally streaming online content can be a felony in certain circumstances. 

"Among the proposals is a recommendation to classify streaming, now a common method of illicitly distributing television and motion pictures, a felony under appropriate circumstances," said Motion Picture Association of America President Bob Pisano.

"Closing the legal gap between two methods of equally destructive illegal behavior — unauthorized downloading and streaming — adds more clarity to intellectual property law and, frankly, makes good common sense."

Espinel said the smaller penalties for IP crimes have made copyright infringement an attractive enterprise for organized crime groups.

"Because of the high profit margin and shorter prison sentence for intellectual property crimes compared to other offenses, piracy and counterfeiting are a strong lure to organized criminal enterprises, which can use infringement as a revenue source to fund their other unlawful activities," she said.

"One of the most brutal drug cartels in the world — Mexico-based La Familia — manufacturers and sells counterfeit software, generating more than $2.4 million in profits each day."

To that end, the administration wants to increase the range of sentencing guidelines for intellectual property offenses committed by gangs or organized crime groups, as well as increasing the penalties for violations that risk death or serious bodily injury (such as counterfeit drugs) and for repeat offenders.

In addition, the White House requested Congress make a series of changes that would "give enforcement agencies the tools they need to combat infringement" such as allowing the Department of Homeland Security to share information about possible copyright violations with the rights holders and giving law enforcement wiretap authority for criminal copyright and trademark offenses.

Finally, the administration wants Congress to establish the performance right, which compensates musicians whenever their music is played in public. The policy is strongly opposed by the broadcasters, who have labeled it a tax and lobbied heavily against it.

“The recommendations largely address important areas of intellectual property enforcement that are often overlooked in more contentious debates at the edges of these issues," said Public Knowledge President Gigi Sohn.