Small Business Groups Seek Better IP Protection at Home, Abroad
Software and IT industry groups hailed the administration’s Joint Strategic Plan on IP enforcement Wednesday, reiterating the need for stronger IP protection in the U.S. and abroad. Five industry groups spoke at Wednesday’s House Committee on Small Business hearing to evaluate the impact of intellectual property on entrepreneurship and job creation. They said the administration’s plan was a positive step toward protecting small business from losses incurred by online piracy.
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The toll online piracy has taken on small business developers is both measurable and large, said witnesses. “In the U.S., one in five PC applications installed last year were unauthorized and unpaid-for,” said Business Software Alliance President Robert Holleyman. The ratio is larger in other countries such as China, which has a PC software piracy rate of 79 percent, he said. “Small software developers are particularly disadvantaged by software theft. They generally lack the resources to devote to fighting infringement of their products.”
"What we need is the government to help us with technological solutions to prevent piracy,” said Rick Carnes, president of the Songwriters Guild of America. It estimates that for every song purchased online, 20 are stolen digitally. It’s been difficult to establish a new digital music delivery business model when it would have to compete “in a marketplace submerged in stolen music,” Carnes said. “How can I take people to court when they are 15-year-old kids who don’t have a credit card?”
"The big problem today with the Internet world is that copyright has been devalued,” said CEO Peter Carnes of Traffax, a transportation monitoring equipment startup, not related to the songwriters guild president. “It is an unfortunate reality of the Web culture that says ‘if it’s on the Web it must be free.'” Carnes suggested the committee consider expanding the U.S. Patent and Trademark Office’s budget to promote faster processing of patent applications. He also sought more international protection of intellectual property and suggested modernization of the Small Business Administration loan approval process to account for the unique qualities of IT companies.
Some groups cautioned that changes to intellectual property rules could imperil small businesses as much as benefit them. “Out-of-focus intellectual property laws have been used to stifle small innovative businesses and protect the status quo,” said Steven Friedman, president of t3 Technologies, speaking on behalf of the Computer & Communications Industry Association. Current IP laws sometimes enable larger companies to prevent small businesses from growing, and the committee should recognize ways to avoid this, he said. “The current intellectual property system is out of balance and hinders innovation … disproportionately so for small businesses.”