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Sen. Chris Dodd National Association of Attorneys General Panel on Campus Piracy Monday, March 5, 2012
Its an honor to introduce this panel on campus piracy today. Id like to personally thank Washington State Attorney General Rob McKenna, not only for this kind invitation, but for everything that he, you, and the National Association of Attorneys General have done to help advance the battle against online content theft and counterfeiting. Id also like to recognize the panelists today: My industry colleague, Rick Cotton, NBCUniversal. Larry Conrad, University of North Carolina; and Joseph Storch, State University of New York

As we discuss the problems posed by online piracy and counterfeiting there is an important fundamental truth to remember about our business, the film and T.V. business; Hollywood is pro-internet. We are pro-innovation. Our business is built on innovation. Just look at IMAX, 3D, instant streaming and video on demand to name just a few. I believe it is critically important that any solution to the piracy problem protect a free and open internet and continue to foster cutting-edge innovation.

It is also clear that any overall solution will need to include a plan of action at our nations colleges and universities.

Congress recognized this in 2008 with passage of the Higher Education Opportunities Act (HEOA), which requires institutions of higher learning to reduce digital content theft on their own university networks.

2 University students are growing up in an era far different from when many of us went to college. In fact, far different than students who attended college even a few years ago. Information is at their fingertips, in both legal and illegal form.

Some have argued that intellectual property protection and the freedom of speech that universities cherish cannot coexist. This is wrong.

As the Supreme Court reaffirmed just this year in Golan v. Holder, the founders, the Court said, saw copyright as an engine of free expression. By establishing a marketable right to the use of ones expression, copyright supplies the economic incentive to create and disseminate ideas.

I firmly believe universities can, and should, play a vital role in educating students about the importance of respecting intellectual property rights and the rule of law.

And the MPAA stands ready to work with universities and their students, along with the State Attorneys General who represent these state universities, to ensure that this nation remains the most creative, and most innovative, place on earth. A place, I want to add, where students can graduate, and fulfill their creative dreams whether it be in New York, Nashville, Austin, Seattle, Hollywood, or one of so many other growing centers where creative content is produced throughout our nation. But as this panel discusses campus piracy, it is critical too that this not just be considered a debate about downloading music and movies in dorm rooms. As Attorney General McKenna wrote last fall, The sale of counterfeit products and piracy of copyrighted content online not only undermines our nations economy, it robs state and local governments of much-needed tax revenue and jobs. Even worse, some counterfeit goods can pose serious health and safety hazards to consumers.

3 A study by Envisional found that nearly one-quarter of all global Internet traffic involves copyright theft. At the heart of the problem is the proliferation of foreign rogue sites whose sole purpose is to facilitate, and profit from, the theft and counterfeiting of intellectual property.

According to the Institute for Policy Innovation, the theft of creative content, all creative content driven by rogue sites, foreign and domestic, costs our nation $16 billion in earnings each year; $3 billion in state, local, and federal taxes each year; and a total of $58 billion in economic output each year.

And as Attorney General McKenna also mentioned, the growth of these rogue sites also has potentially serious health and safety risks for our nation as well.

These are sophisticated criminal enterprises. They do not just traffic in stolen movies and television they market counterfeit products such as prescription drugs, auto parts, aerospace and defense equipment, even equipment for police and firefighters. They are selling to American parents childrens pajamas that turn out to be flammable, and to American law enforcement officers bulletproof vests that are anything but.

And, as the Wall Street Journal recently reported, the makers of the cancer drug Avastin have announced that counterfeit vials of the drug made their way to American patients posing additional risks.

Recent research by the National Association of Boards of Pharmacy found that more than 96% of sites offering prescription drugs for sale are doing so illegally. creating a significant health risk to Americans. Criminal activity doesnt end there. These rogue sites often look just like legitimate websites that use valid methods of payment, which means many Americans use them unintentionally without realizing they are criminal sites and when they enter their credit card information, they are extremely vulnerable to identity theft, which is a growing problem.

These cyber criminals are also becoming increasingly sophisticated in selling their products through popular online search engines and advertising services that make their products appear to be legitimate.

In the process, some American companies are reaping huge profits from this illegal activity by selling the advertising linked to these counterfeit products. Simply put, they are taking money from these illegal companies in exchange for prime space advertising to American consumers.

In the past year, according to Peer Media Technologies, there were more than 690 million uploads and downloads of unauthorized copies of major motion pictures via P2P technologies. And this is just a small portion of the piracy problem.

Infringing copies of movies were viewed uncounted millions of other times by accessing links on cyberlockers such as Megaupload, by streaming from largely foreign websites and through other technological means.

In the Megaupload case, federal investigators tell us that the man known as Kim Dotcom and his colleagues made more than $175 million through subscription fees and online ads while robbing authors and publishers, movie makers, musicians, video game developers and other copyright holders of more than $500 million.

Some continue to argue that the debate about piracy and counterfeiting is not about the money. Dont believe it. As a famous 20th century pundit H.L Mencken was fond of saying, When they tell you its not about the moneyits about the money. Just look at Mr. Dotcom. And he is not alone. There are companies out there, both legal and illegal, who are reaping huge profits from the theft of intellectual property.

When it comes to piracy, college students are just one part of the picture. But this is the generation of the future and if we have any hope of being successful in this effort we need to

5 communicate with these students and help them understand the full ramifications and dangers to them personally of engaging in the theft of intellectual property.

We need to engage them in our effort to ensure that the internet remains a free and open cornerstone of innovation in our business. Young people are key consumers of our content online, and we want to ensure that they can continue to legally watch the shows and movies they love in a whole host of different formats online. We believe that both innovation -- and the cooperation of the tech companies -- are critical parts of the conversation about content theft.

But as all of you know, the problem also goes much deeper than young people in college, and any real solution will need the assistance of our nations law enforcement community in curbing this rampant criminal activity.

I believe our state Attorneys General will and must play a major role -- and I look forward to forward to working with all of you in this effort.