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Remarks at Intellectual Property Enforcement, Belmont University, Nashville, Tennessee

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Monday, August 30, 2010

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Commerce Secretary Gary Locke
Remarks at Intellectual Property Enforcement, Belmont University, Nashville, Tennessee

Thank you, Rob for that introduction -- and for all the work you've done to bring attention to the scourge of music piracy.  With the full house we've got here today, it couldn't be any clearer that this issue has the full attention of the music industry and the city of Nashville.

And I hope the presence today of so many prominent Tennessee leaders, as well as the Commerce Department, lets you know that piracy and copyright issues have the full attention of your government as well.

Congressman Jim Cooper has made intellectual property protection a top priority of his as a co-sponsor of the pending Performance Rights Act. He is an outstanding senior member of congress who is committed to ensuring that the voices of Nashville are heard in Washington.

Governor Bredesen has been at the forefront of protecting individual property as well in Tennessee.  In November 2008, he signed into law a Campus Piracy Bill that requires public and private colleges and universities in the state to ensure that computers connected to their campus network are not being used for illegal file-sharing. Thank you for your leadership, Governor.

And Mayor Dean of course has been an amazingly strong advocate for Tennessee’s music industry, having been the driving force behind financing the Music City Convention Center.  Mayor Dean, thank you for being here.

Before I get started, I’d just like to thank Belmont University for hosting us.  Belmont’s school of music, and its Curb College of Music and Entertainment offer some of America's best education in the music business.  So, it's certainly appropriate that we’re having this discussion here today.  In fact, we’ve got 50 students from the Curb school with us today and I’d like to welcome our next generation of music industry leaders.

I know that all of you came out here with questions to ask and thoughts to share, and I’m looking forward to opening up the floor for discussion.

But first, I want to talk a bit about how the Obama administration is working to tackle the challenges facing the music industry -- and indeed all the creative industries in the United States. 

Just a few hours ago I got an up-close tour of the famous Music Row. 

The record labels, indie shops, publishing houses, studios, and music licensing firms I saw-- that's the heartbeat of this city.  Some 20,000 citizens of Nashville are directly employed by the music industry.  Throw in other support industries like music tourism -- and that number grows to 50,000.

And yet, this longtime engine of Nashville’s economic growth has been under deep strain recently.

Worldwide and certainly in the United States, consumers are spending less on recorded music in all formats.  Recorded music revenues are down by almost half over the last decade.

Compounding the problem is the fact that, like everyone else, Nashville has been dealing with the difficult crosscurrents in the global economy.  And of course most recently, Nashville was flooded by the currents of the overflowing Cumberland River.

The Obama administration has been here to help.  Thanks in part to a robust outreach campaign, which many in the music industry were involved with, more than 67,000 Tennesseans registered for federal assistance after the flood. 

The Federal Emergency Management Agency has provided nearly $159 million to individuals so far, on top of over $160 million Small Business Administration loans that have gone to households and businesses alike.

But that’s just one part of the work being done in Tennessee – Tim McGraw, Faith Hill and others performed a benefit concert in Nashville in June.  And of course it’s the people of Tennessee themselves that deserve the most credit for the recovery – their contributions cannot be measured.

This flood is a challenge that the people of Nashville have faced with remarkable fortitude and determination.  There are some things, like Mother Nature that you can't control -- you just have to deal with.

But there are other problems that we have within our power to solve.  And one of them is the rampant piracy of music, and of intellectual property, that are the lifeblood of this region's economy.

And I think it's important to lay down a marker about how the Obama administration views this issue.  As Vice President Biden has said on more than one occasion, “Piracy is flat, unadulterated theft,” and it should be dealt with accordingly.

This isn't just an issue of right and wrong.  This is a fundamental issue of America's economic competitiveness. 

As the president has said before, America's “single greatest asset is the innovation and ingenuity and creativity of the American people.  It is central to our prosperity and it will only become more so in this century.”

Our founding fathers understood this as well as anyone, which is why they put in place a set of rules and laws to reward and protect the ideas and inventions of the artists, engineers and scientists who create them.

But this copyright and patent framework needs to evolve to meet the evolving challenges of the 21st century. 

Recently, I've had a chance to read letters from award winning writers and artists whose livelihoods have been destroyed by music piracy.  One letter that stuck out for me was a guy who said the songwriting royalties he had depended on to “be a golden parachute to fund his retirement had turned out to be a lead balloon.”

This just isn't right. 

And this administration is doing everything it can to ensure our creators and our innovators are compensated for the great work that they do.

From day one, the Obama administration has placed a strong focus on:

  • establishing global intellectual property norms,
  • promoting compliance with global norms; and
  • strengthening the international copyright system.

And I think that the Administration's recent release of a Joint Strategic Plan by the newly created Intellectual Property Enforcement Coordinator reflects the depth of our commitment to curb intellectual property piracy both here and abroad.

This plan, which contained input from eight different federal agencies and over 1,600 public comments, has over 33 different discrete action items to ensure that everyone across the government is working together, and presenting a united front on the protection of intellectual property.

To take just one area that I know is important to this group, in our government-wide strategy, we endorsed and affirmatively encouraged the private sector – including content owners and Internet service providers – to work collaboratively to combat intellectual property infringement online. 

Especially to combat repeat infringement. 

While those cooperative efforts are underway, the Administration will continue to vigorously investigate and prosecute online criminal activity, and at the Commerce Department we will continue to press these issues in our dealings with foreign officials, like those in China.

To learn more about the challenges and opportunities facing America’s creative industries, the Department is also conducting a comprehensive review of the relationship among copyright policy, creativity, and innovation in the Internet economy. 

The Internet is of course a double-edged sword for the music industry.  On the one hand, online copyright infringement is a growing threat, with cyberlockers as well as peer-to-peer, file sharing, streaming and user generated content sites providing a constant challenge to the music industry.

But the Internet, if used correctly, can be a great growth engine.  In the United States alone, sales of digital music downloads reached $3.1 billion in 2009, a 19 percent increase above the previous year.

At the Commerce Department, we are trying to figure out how we shut out the pirates, while preserving the Internet as an avenue for commerce for music and for other creative industries.

That's why earlier this summer, the Department’s Patent and Trademark Office and our National Telecommunications and Information Administration hosted a conference that brought together representatives of the music industry and other content owners, Internet service providers, and public interest groups to help chart a new way forward.

In the very near future, the Department will be issuing a Notice of Inquiry, seeking public comment on the challenges of protecting copyrighted works on-line and the relationship between copyright law and innovation. 

And I would invite any of you here today to throw in your two cents.   

We'll be using these comments to create a report that will help shape the administration-wide policy on copyright protection and innovation.

I'd be remiss if I didn't mention one other issue that I know is of serious concern to people in this room.

Under current copyright law, a traditional AM/FM radio broadcaster pays royalties to song writers for playing their songs but – under a decades’ old carve out -- the other contributors to the recording – the artists, musicians, and record labels – are not compensated.

In other words, if a radio station plays a Carole King/James Taylor duet – and Carole King wrote the song – Carole King gets paid a royalty, but there is nothing in existing law that says James Taylor has to get paid as well.

That makes absolutely no sense.

The Department of Commerce believes strongly that “providing fair compensation to America’s performers and record companies through a broad public performance right in sound recordings is a matter of fundamental fairness to performers.”

In fact, this is precisely what's contained in the Performance Rights bill, which is pending before Congress.

In wrapping up, let me emphasize that these are but a few of our efforts, and I can assure you that the Department of Commerce is continually looking for new ways to ensure that the creativity that is the lifeblood of the U.S. and Nashville’s economy is protected.

I know you all came here with a lot to say, and I'm happy to open up the floor to any of your questions.