The Office of the United States Trade Representative (USTR) released the findings of its 2022 Review of Notorious Markets for Counterfeiting and Piracy (also known as “the Notorious Markets List”), which highlights online and physical markets that “reportedly engage in, facilitate, turn a blind eye to, or benefit from substantial piracy or counterfeiting. A goal of the NML is to motivate appropriate action by the private sector and governments to reduce piracy and counterfeiting.”
This year’s report identifies 39 online markets and 33 physical markets that are reported to engage in or facilitate substantial trademark counterfeiting or copyright piracy. The business models and characteristics of each are detailed in the report.
Focus on Piracy
Each year’s Notorious Markets List contains an “Issue Focus,” and this year’s resumes a focus on the adverse impact of online piracy on U.S. workers involved in the production of creative digital works, such as films, books, music, television shows, games, and software. It isn’t the first time piracy has been showcased in the report. In 2019, the Issue Focus was malware and online piracy, and in 2017, was illicit streaming devices.
This year’s Issue Focus section describes how online piracy can impact the wages, residuals, pensions, and health care benefits that workers in the creative industries depend on and how combatting online piracy requires coordination between relevant actors in order to effectively address the rapidly shifting delivery methods of infringing content.
The report recognizes that the threat of pirate distribution has increased as illegal reproduction can be done rapidly and distribution costs have fallen, and recognizes a wide range of illegal distribution options:
- Streaming “IPTV” sites serving apps running on smart TVs, illegal devices, computers and mobiles, such as bestbuyiptv.store, said to offer over 10,000 channels from 38 countries, reseller and restreamer services to more than 900,000 users, 12,000 resellers and 2,000 restreamers globally, and Chaloos which operates a streaming distribution platform and sells illicit streaming devices
- Torrent sites to distribute files over peer-to-peer networks, including thepiratebay.org, and 1337x.to/1337x.tw which have been the subject of blocking orders by at least 11 countries
- Cyberlocker sites and cloud services, where content is stored virtually, including 1Fichier of France and rapidgator.net
- Hosting providers, like Amarutu and Flokinet, both offshore hosting providers
- Online commerce sites like Baidu, the China-based online marketplace that is reportedly lax in responding to takedown notices
- Linking sites, like 2embed.ru, which crawls infringing sites and search engines to scrape infringing content, and makes it searchable by other pirate sites that link to it
- Stream ripping to copy and convert content into files for downloading and offline use, like flvto.biz and 2conv.com which enable users to copy and paste YouTube links into a conversion bar to convert videos into files.
A public comment period ran from April to October 2022, with 29 submissions coming from the Motion Picture Association (but not from ACE, the MPA’s enforcement arm), by IBCAP, the Football Association Premier League, beIN Media Group and Miramax LLC..
Successes against piracy recognized
The report cited several successes that occurred in 2022 that were emblematic of progress against piracy during 2022. In October 2022, the Malaysian Ministry of Domestic Trade and Consumer Affairs (MDTCA) seized more than 600 ISDs containing unauthorized copyrighted content and arrested one person suspected of selling the devices. The fourth phase of Brazil’s “Operation 404,” with direct operational support from authorities in the United States and the United Kingdom, resulted in the takedown of 226 piracy websites and 461 piracy applications, building upon positive results from the third phase in 2021. The Dutch anti-piracy group BREIN conducted 368 investigations that resulted in the shutdown of 349 piracy sites and services.
No US sites or US social media
Social media is recognized as a common means of promoting and connecting consumers with piracy sites. “Over the past three years, the NML has identified a continuing and growing concern from right holders about the proliferation of counterfeit sales facilitated by social commerce platforms (social media platforms with integrated e-commerce ecosystems),” the report said.
And yet, while this year’s list identifies two “social commerce platforms” (Tencent’s WeChat and Pinduoduo, both of China), no US-based social media platforms and no US-based sites of concern were listed in the report.
Each year’s list reflects some turnover when compared with those of previous years, with five new additions and eight others removed. One of those removed was Popcorn Time, a notorious piracy operation in past years which essentially faded into oblivion.
The piracy ecosystem
Many of those who submitted public comments this year highlighted the complex ecosystem—including domain name registries and registrars, reverse proxy and other anonymization services, hosting providers, caching services, advertisers and advertisement placement networks, payment processors, social media platforms, and search engines—that providers of pirated content abuse.
Access the full report: 2022 Review of Notorious Markets for Counterfeiting and Piracy, January 31, 2023. Office of the US Trade Representative
Read the press release. USTR Releases 2022 Review of Notorious Markets for Counterfeiting and Piracy. January 31, 2023. Office of the US Trade Representative
View the 29 comments submiitted online. (via Regulations.gov, Docket USTR-2022-0010)
Read further commentary about the exclusion of US-based and social media sites: USTR resists calls to include social media platforms in Notorious Markets List, Feb 1, 2023, World Trademark Review
Read about previous years’ reports
Why it matters
“Intellectual Property and the US Economy, Third Edition, a report published in 2019 by the US Patent and Trademark Office found that “companies in IP- intensive industries accounted for $7.8 trillion in U.S. gross domestic product (GDP), or 41% of total GDP. IP-intensive industries also supported 63 million American jobs, or 44% of the U.S. workforce.
Copyright-intensive industries alone make up a significant portion of total U.S. employment and contribute substantially to the U.S. economy. Total copyright-intensive industries added about $1.3 trillion to the U.S. economy and directly employed over 6.6 million workers in 2019. Furthermore, the output of copyright-intensive industries grew on average 4.2% per year from 2014 to 2019, while the U.S. economy as a whole averaged 2.4% annual growth over the same period, demonstrating the importance of these industries to employment levels.”
Further background about the Notorious Markets report
“The Notorious Markets report first appeared as part of the US Trade Representative’s Special 301 Review in 2006, and as a stand-alone report in 2011. The two reports are annual and complement one another.
Published each April, the Special 301 Review is named after Section 301 of the Trade Act of 1974 (19 U.S.C. §2411); a statutory framework under which the “US imposes sanctions on foreign countries that violate US trade agreements.”