The most effective way to target foreign Websites that illegally stream copyrighted material may be to cut off their funding, Maria Pallante, acting register of copyrights, told a House subcommittee Monday.
"The parasites who operate so-called rogue websites build businesses on piracy, counterfeiting and other unlawful activity, in part based on the expectation of weak enforcement," Pallante told the House Intellectual Property, Competition, and the Internet Subcommittee.
"These parasites could be cut off from payment mechanisms and advertising revenues in the United States. This could combat their very existence, or at least substantially decrease their impact on the market for legitimate copyrighted content."
To effectively target foreign websites, American authorities need to cooperate with other governments, David Sohn, senior policy counsel for the Center for Democracy & Technology, said. "While such cooperation undoubtedly takes some effort, it ultimately offers the most effective approach, because it is the only way to ensure that the bad guys and the computer servers they use are actually taken offline for good," he said.
Lawmakers at Monday's hearing were largely united in their criticism of such "rogue" websites, which stream pirated movies, music, sports events, and other copyrighted material without permission, but some of the committee members expressed concern that enforcement efforts could compromise website operators' rights and that current measures are not working well enough.
"Internet piracy is so profitable and pernicious that is discourages investments, innovation and licensed content from legitimate companies," said Judiciary Chairman Lamar Smith, R-Texas. "It is clear that existing laws are inadequate, and we must do more to confront the problem."
Some witnesses, however, said current efforts are not only inadequate, but potentially cause more problems. Sohn said that domain-name blocking and seizures, which have been criticized for crippling legal sites, "are certainly not the answer; codification and widespread use of this tactic would carry costs and risks that would far exceed its minimal impact on infringement."
He went on to urge Congress to look beyond the controversial practices. "Any enforcement measures that aim to sidestep normal judicial process would, at a minimum, need to be narrowly tailored and contain carefully crafted procedural safeguards," Sohn said. "Without such safeguards, there would be a risk of impairing lawful websites and speech," he added.
Frederick Huntsberry, chief operating officer for Paramount Pictures, described an "online shadow economy" that "steals from the U.S. economy and enriches thieves."
"The same technology that will enable consumers to enjoy motion pictures and other forms of copyrighted content in new and exciting ways is being used in the online shadow economy to steal that content," Huntsberry said. "Unless the rule of law is effectively applied to online distribution platforms - and it currently is not - that technology will not reach its promised potential."
Huntsberry urged lawmakers to "level the playing field" and crack down on offenders, including going after foreign websites.