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August 10th, 2012 Victoria Espinel, Esq.

Intellectual Property Enforcement Coordinator Office of Management and Budget Executive Office of the President Re: Comments on the Joint Strategic Plan Dear Ms. Espinel: Please find below several brief comments regarding the White Houses upcoming Joint Strategic Plan on Intellectual Property Enforcement. We write on behalf of the Connected Innovation Network1, which works closely with internet companies, nonprofit organizations, investors, and academic institutions that study innovation and the web. We encourage the Administration to consider the following three broad points in the development of the Strategic Plan: 1) Generally speaking, the United States Government should take a broader approach to IP strategy, focused on supporting innovation, growth and creativity. As the following points illustrate, effectively supporting rightsholders, innovators and consumers requires a broad view of managing intellectual property assets. Enforcement alone is unlikely to be successful, and doesnt maximize the economic and innovative potential inherent in this dynamic and fast-growing industry. As in other domains, policing alone is less effective than prevention. We encourage you to review the research of Ian Hargreaves, Professor of Digital Economy at Cardiff University, Wales, UK, whose recent report commissioned by the UK Prime Ministers office, Digital Opportunity: A Review of Intellectual Property and Growth2 provides a fresh look at enforcement strategy and market development. As the UK implements the recommendations in Professor Hargreaves report, they are likely to chart a course for a broad-based national approach to intellectual property management and innovation. To facilitate adoption of similar policies for the United States, the Administration should conduct an open and collaborative drafting process to craft amendments to the charter of the Office of the Intellectual Property Enforcement Representative (as defined in Sections 301, 302 and 321 of the PROIP Act3), re-prioritizing the offices efforts away from a singular focus on enforcement, and towards an agenda that prioritizes enabling innovation and promoting functioning markets. 2) Intellectual property management schemes should incentivize creative output and increase the overall number of legal transfers of media. We encourage the Administration to focus on policy for facilitating the development of transparent, liquid, contestable digital markets for content. We believe that this approach -- one that encourages innovation and commerce -- will also be the most effective path to minimizing the negative effects of piracy. The best defense is a good offense. Such an approach has the best potential to increase the size of the pie in digital media, benefitting content producers and rightsholders as well as consumers. This hypothesis is starting to prove true: for example, in Sweden, where the introduction of the commercial music service Spotify has helped drive down rates of unauthorized distribution of content while increasing legal sales. 4
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3) Mounting evidence is showing that a sole focus on enforcement is expensive and may actually be ineffective. Just this month, the French government signaled that their three strikes approach to copyright enforcement has proven to be costly and largely ineffective in both reducing rates of piracy and increasing rates of legal media sales, and that theyll be vastly reducing their investment in this approach.5 This evidence is consistent with our belief that increasing competition through the development of contestable digital markets is both the biggest opportunity for increasing commerce and also the best tool for combatting piracy. In summary, the US, as one of the largest global markets for internet use and media production, and as home to some of the worlds most innovative and productive industrial sectors -- both in media production and internet-based creation and distribution -- has an opportunity to lead by example in the arena of rights management and innovation. We urge you to study the positive and negative lessons being learned in other parts of the world, and to advance the United States position as a leader in this area that is so critical to the future of our economy and society. Sincerely,

Brad Burnham Partner, Union Square Ventures John Buttrick Partner, Union Square Ventures Nick Grossman Founder, Connected Innovation Network Visiting Scholar, MIT Media Lab Beth Noveck Visiting Professor, Robert F. Wagner Graduate School of Public Service, NYU Professor of Law, New York Law School David Weinberger Senior Researcher, Harvard Berkman Center for Internet & Society