Google has reason to rethink IP

Mitch Bainwol Contributor
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It got a cyber attack siren on Drudge. It was all over the news. Google got hacked!

In January, Chinese hackers infiltrated the systems of the biggest technology dog on the global block and, according to the company, stole Google’s intellectual property.

In texting parlance, Google has finally had an OMG! moment when it comes to intellectual property. Unfortunately, it took this theft of their IP to flip on the switch. Frankly, Google has never been very warm to the idea of copyright protections. Google routinely has sided with the “free access” (more aptly the “free of charge”) crowd against those who actually create the intellectual property. Remember the Big G’s idea to digitize every book in the world and put it in their digital library? That went over so well that Association of American Publishers and the Authors Guild of America sued to stop Google from creating the virtual library. Google argued that they were just trying to make the world a better place by making important works of literature available to people all over the globe. A rather egalitarian idea (unless you’re the authors and publishers who depend on people actually buying books in order for you to make a living).

Last month, Google found out just how dangerous free access to one’s property can be to one’s business model. Like Inspector Renault who is “shocked” to find gambling in Rick’s saloon in “Casablanca,” Google was “shocked” to find their systems hacked and their precious intellectual property stolen. Now, I’m not expecting Google to make a 180° turn and join us in our fight to protect IP the way Claude Raines joined Bogart to fight the Nazis, but perhaps Google will have a more reasonable view of the need to protect IP.

What’s the effect of IP theft on the U.S. economy? First, let’s look at the IP industry’s share of the economy. A 2007 International Intellectual Property Alliance study found 11.7 million people working in the total copyright industries. That’s 8.51 percent of the U.S. workforce. These industries help drive our nation’s economy. In 2007, IP companies added $1.52 trillion or 11.05 percent to the GDP. When people say “we don’t make anything in America anymore,” just hit them with those facts.

In cities and towns throughout America, the IP community creates good paying jobs that have an enormous, positive impact. Those jobs come with health care plans and retirement savings accounts. They benefit our cities and towns with increased tax revenues that help pay for the services we all need.

Most importantly, the IP industries create products that are enjoyed the world over—games, movies, books, and of course, music. Yet every year, as broadband technology advances, intellectual property thieves become increasingly more sophisticated. The assaults grow more ferocious. The broader the broadband, the easier to steal copyrighted works.

Like our friends at Google, we fully support the adoption of broadband and the new and exciting opportunities it provides for consumers to enjoy movies, television programs and music. We in the IP industries couldn’t live without these amazing technologies. In fact, digital accounts for a greater percentage of music industry revenues than movies, books and newspapers combined. We are partners with technology companies in the fullest sense of the word.

In the music industry alone, music labels have licensed hundreds of digital partners that offer a range of models: download and subscription services, social networking sites, cable and satellite radio services, Internet radio webcasting, legitimate peer-to-peer services, video-on-demand, podcasts and a myriad of audio and video downloads.

Yet there is no question that despite our extensive and innovative offerings of legal content, the levels of online and physical theft around the world extract a profound toll. That activity has a direct and harmful impact on American jobs and our economy. And as Google has found out, this illegal activity is exacerbated by the unwillingness of some—including some businesses and even some governments—to take reasonable steps to address these problems. As we know too well, IP theft has “enablers” all over the place.

If it is in the national interest to protect the millions of Americans who use Google’s services—and it is —it is also in the national interest to stop the theft of intellectual property. But doing so requires cooperation by other industries and a commitment on the part of government to take reasonable steps, both at home and abroad, to combat the harmful economic effects of IP theft.

Working with our partners in business and in government, we hope to ensure that the American intellectual property community remains a strong, vibrant world leader that helps fuel our nation’s economic resurgence. With the light shining on Google, one of the 21st century’s business icons, perhaps we will see a renewed sense of purpose at home and abroad to protect the heritage and the future of our IP community.

And who knows, maybe Google will lock arms with us so we can say, “Louis, I think this is the beginning of a beautiful friendship.”

Mitch Bainwol is Chairman and CEO of the Recording Industry Association of America.