Creative Industries Protecting Property Rights Through Collaboration, Not Big Government

Alexander Hendrie Americans for Tax Reform
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Rather than looking to Washington for solutions, a coalition of thousands of advertising firms are looking to collaboration to combat digital piracy and counterfeiting in today’s globalized economy. This new initiative is part of an industry led and managed effort designed to restrict the activities of those that promote counterfeit or stolen products and hamper innovation.

Earlier this week, the Trustworthy Accountability Group (TAG), a coalition of advertising industry groups, launched the “Brand Integrity Program.” The initiative, supported by the Association of National Advertisers, the American Association of Advertising Agencies, and the Interactive Advertising Bureau plans to “attack ad-supported piracy, digital advertising fraud, malware, and other deficiencies in the digital communications supply chain.”

The Brand Integrity Program is completely voluntary and industry organized and will help advertisers and their partners identify and screen websites that are involved in distributing infringing content. TAG will work with a number of independent third party validators to certify advertising technology companies. Under the initiative, companies must prove they can ensure that advertisers will have the tools to limit their exposure to undesirable websites by meeting a series of criteria.

Unfortunately, advertisers all too often unknowingly gift substantial ad revenue to websites involved in illegal activity. A recently released report by the Digital Citizens Alliance found that websites involved in stolen content make $227 million in annual ad revenue. In fact, the largest 30 sites involved in counterfeit products made $4.4 million annually from ads and smaller sites made more than $100,000 a year.

The existence of legitimate, well-known brands advertising on websites involved in stolen content gives consumers a false sense of security by serving as an implicit endorsement of the website. Even worse, these ads often appear alongside offensive advertising or links to malware. As a result, companies can do long-term damage to their brand identity even though they are unaware that the site is related to digital piracy.

Not only does this harm advertisers, the ad revenue helps bad actors distribute pirated goods. This has the effect of discouraging creators from innovating – which, if left unresolved can have wide-ranging effects on the vitality of an economy.  The International Property Rights Index produced annually by the Property Rights Alliance demonstrates a clear link between respect for property rights and strong economic conditions. Moreover, the Global Intellectual Property Center estimated that production and consumption of counterfeit and pirated products costs the U.S. economy $215 billion annually. This new initiative will clamp down on bad actors by cutting off an important source of revenue.

Perhaps more importantly, this new initiative provides stakeholders with the ability to directly fight IP infringement rather than waiting for government action. While the United States government has long fought to protect intellectual property rights – even producing an annual “Special 301 report” to identify opportunities and challenges facing innovation throughout the world – its efforts have not been enough to protect innovators. In fact, despite a stated commitment to innovation, Congress has dragged its feet in providing needed reforms to protect IP.

While Congress is failing adequately protect IP, the rest of the world often treats IP rights with outright indifference. Developing countries commonly take their responsibilities of protecting the rights of innovators and creators lightly, if they even acknowledge them at all. China’s lax enforcement of e-commerce giant Alibaba is an all too common example of piracy being tolerated. India, which for years was known for its weak IP protections, is finally making strides towards strong reform — aware of the economic boost that IP protection will bring.

Instead, creators are taking action into their own hands and creating their own solutions to protect innovation. Last year, entertainment studios released a new website – wheretowatch.com – to help customers locate TV shows and movies in a legal and easy way. This service provides information on where to find content online, in theaters on television and in stores.

These new developments represent a step in the right direction for the protection of innovation. In an increasingly globalized world, creators must look away from government solutions and towards innovative solutions to protect intellectual property.