Each year, online piracy and the sale of counterfeit goods cost American innovators and manufacturers billions of dollars, and result in the loss of hundreds of thousands of jobs. The impact is felt by companies of all sizes, their employees and by the consumers who rely on the authenticity of the products they purchase. As Congress begins to work on anti-piracy legislation again this session, it is imperative that we reach a consensus on how to combat the scourge of intellectual property theft.
Ideas make America work. Intellectual property is a cornerstone of the U.S. economy, employing more than 19 million people and accounting for 60 percent of our exports. Rampant online counterfeiting and piracy presents a significant threat that our government must address. The global sales of counterfeit goods via the Internet from illegitimate retailers reached $135 billion in 2010. Online theft diminishes our ability to maintain and create jobs in America, stifles innovation and makes it far more difficult to attract the capital needed to invest in new products and services.
At Rosetta Stone, we, and our customers, have experienced firsthand the harmful consequences of online counterfeiting. We have devoted substantial resources to combat “rogue” websites that steal our intellectual property, tarnish our brand and dupe consumers. Because we offer a high value, premium product that has strong public recognition, we have been targeted by criminals seeking to profit from the heavy investment in our brand and our intellectual property by selling pirated copies of Rosetta Stone software over the Internet. These pirates have created increasingly sophisticated websites that often copy pages of the Rosetta Stone website in order to lure unsuspecting consumers into purchasing pirated software.
This week, the Senate Judiciary Committee resumed its effort to combat the proliferation of websites offering counterfeit products and services. On Wednesday, I had the opportunity to testify before that panel, outlining the ongoing infringement of Rosetta Stone’s intellectual property and the resulting diversion of sales to these “rogue” websites. We have attempted to combat this problem, but given its magnitude and the serious consequences for U.S. businesses and consumers, greater efforts must be made to combat online piracy and prevent its adverse impacts. To that end, we are grateful to for the Senate’s leadership on the issue.
The distribution of counterfeit content and products would not succeed without the use of services provided by payment processors, online ad networks and search engines to attract and transact sales in the United States. In fact, the most common way for “rogue” websites, especially those based overseas, to reach American consumers is by means of paid advertisements on search engines such as Google. It is therefore critical that the Justice Department is empowered through legislation to thwart rogue websites’ ability to use these services as their gateway to American consumers. This legislation is not censorship. It is simply protecting consumers from counterfeit products and assisting companies with stopping IP theft.
It is vital that the protection of intellectual property be a priority for Congress. At a time when the U.S. economy — and U.S. jobs — are increasingly dependent on ideas and innovation, and as digital commerce is experiencing explosive growth, it is all the more important that protections be put in place against theft and piracy — lest the Internet become a tool for counterfeiters to kill American jobs and innovation.
Tom Adams is the CEO of Rosetta Stone.