Stopping Botnets

Just how secure is your firm's information, from intellectual property and trade secrets to financial data?

Well, a major online threat that has been around for a few years just received stepped up attention due to focus from the Federal Communications Commission, various Internet service providers, and the world's leading software maker.

The threat? Botnets. And it's a war against criminals at home and around the globe, in defense of both businesses and consumers on the Internet.

As described in March 22 recommendations from the FCC's Communications, Security, Reliability, and Interoperability Council (CSRIC) to combat botnet attacks, domain name fraud and IP route hijacking, "The growth of bot-infected end-computers poses a threat to the vitality and resiliency of the Internet and to the online economy. Botnets are networks of computers infected with bot malware, which can be controlled remotely. Criminals often use botnets to crash or deny access to a target website, and botnets can be used to steal passwords and financial information."

In a March 25 press release, Microsoft offered a further explanation of how the botnet threat works: "The computers that make up a botnet are usually conscripted without the knowledge of their owners, who unwittingly infect their machines after clicking on links in legitimate-looking e-mails for things like security updates from Microsoft and notices of tax refunds from the Internal Revenue Service. Clicking those links takes users to Web sites that exploit security holes in their browsers or other programs on their computers. Criminals use the holes to install malicious programs that siphon personal information from the infected computers, like online bank account passwords and credit card numbers. They can also harness the infected machines to send millions of e-mail messages to other users on the Internet, including scam messages that help propagate the botnet. Sometimes botnets are rented to clients to send spam messages advertising products like counterfeit pharmaceuticals."

These present serious worries for both personal and business information. So, what have been the recent actions and announcements?

On the FCC and ISP front, the San Jose Mercury News reported on March 22 that "eight large ISPs in an industry working group told the FCC on Thursday that they would not only work to detect botnets on their networks, but would also help affected customers find resources to clean up their computers." The eight firms are AT&T, Comcast, CenturyLink, Cox , Sprint Nextel, Time Warner Cable, T-Mobile and Verizon Communications.

On AT&T's policy blog, Bob Quinn, senior vice president-federal regulatory and chief privacy officer, pointed out: "AT&T has a long history of working to address both physical and cyber threats and has actively participated in the CSRIC process, including having representation on all three working groups. We view cybersecurity to be a cornerstone of the network management functions that we perform in the United States and worldwide. To that end, AT&T is already fulfilling the recommendations in the reports... [T]he Chairman's statements about the need for continued innovation in cybersecurity are probably the most important part of his message today. Effectively addressing cybersecurity is going to require the various stakeholders experimenting and innovating with different solutions and learning from one another."

Indeed, this is very much an ongoing battle fought on different fronts and by varying means. That is, by those various stakeholders.

For example, in that March 25 release, Microsoft announced that "in collaboration with the financial services industry - including the Financial Services - Information Sharing and Analysis Center (FS-ISAC) and NACHA - The Electronic Payments Association - as well as Kyrus Tech Inc., ... it has successfully executed a coordinated global action against some of the most notorious cybercrime operations that fuel online fraud and identity theft."

The May 26 New York Times reported it this way:

"Microsoft employees, accompanied by United States marshals, raided two nondescript office buildings in Pennsylvania and Illinois on Friday, aiming to disrupt one of the most pernicious forms of online crime today - botnets, or groups of computers that help harvest bank account passwords and other personal information from millions of other computers. With a warrant in hand from a federal judge authorizing the sweep, the Microsoft lawyers and technical personnel gathered evidence and deactivated Web servers ostensibly used by criminals in a scheme to infect computers and steal personal data. At the same time, Microsoft seized control of hundreds of Web addresses that it says were used as part of the same scheme."

Again, Microsoft noted: "This disruption was made possible through a successful pleading before the U.S. District Court for the Eastern District of New York, which allowed Microsoft and its partners to conduct a coordinated seizure of command and control servers running some of the worst known Zeus botnets. Because the botnet operators used Zeus to steal victims' online banking credentials and transfer stolen funds, FS-ISAC and NACHA joined Microsoft as plaintiffs in the civil suit, and Kyrus Tech Inc. served as a declarant in the case. Other organizations, including F-Secure, also provided supporting information for the case."

Microsoft's involvement in this law enforcement endeavor is seen as unique. According to the Times, Richard Boscovich, who is "a former federal prosecutor who is a senior lawyer in Microsoft's digital crimes unit," is the one who "devised a novel legal strategy to underpin the growing number of Microsoft's civil suits against bot-herders. Among other things, he argued that the culprits behind botnets were violating Microsoft's trademarks through fake e-mails they used to spread their malicious software."

Given the malicious intent, criminal incentives and technological skills, the botnet problem has been and will continue to be an ongoing battle, requiring action by law enforcement, legislators, courts, and private entities. Make no mistake, the government's role to protect property stands, whether offline or online, as a primary duty. At the same time, private businesses with the knowhow will need to be part of the effort, working with government and advancing their own safeguards, in order to make the Internet a safer realm in which opportunity, business and consumer choices can continue to fully flourish.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is "Chuck" vs. the Business World: Business Tips on TV.

China's IP Challenge for U.S. Small Business

The protection of intellectual property is important to all entrepreneurs, investors, innovators and businesses. And of course, the encouragement that such protection provides for these creators benefits consumers in terms of new and improved products and services.

It follows that if a government wants to maximize opportunity and economic development, then the protection of intellectual property is critical. And while IP protections have been important dating back to the dawn of the Industrial Revolution, it is more so now than ever before given the vast technological changes and opportunities in the twenty-first century.

For good measure, the role that government plays in terms of establishing the rule of law whereby contracts are enforced, and strong rights, protections and enforcement are established in terms of patents, copyrights and trademarks, is more important to small businesses, given the limited resources that smaller enterprises possess. And this goes for domestic and international protections of intellectual property.

That international aspect was highlighted in an interesting article about China in the March 19 USA Today. The piece, titled "Chinese copycats challenge U.S. small businesses," focuses on a U.S. firm, SylvanSport, that has a patent for a recreational camper trailer that "folds to a trailer that can be used to carry boats and bikes on top then converts to a camper with a self-inflating mattress and a tent that sets up in minutes."

A company in China copied the trailer, and now threatens the firm's growth and, ultimately, its survival. According to SylvanSport founder Thomas Dempsey, as noted in the article, "‘Our politicians, when they describe the companies that are necessary for the economic recovery, (they are talking about) companies like ours' ... But because of SylvanSport's lost sales, ‘There's a very real chance that the Chinese company could be the survivor here and we could go out of business.'"

A few important takeaways can be found the piece:

• "Yet in Asia, ‘The Western idea of intellectual property seems not yet fully established,' says Peter Zec, the founder of the Red Dot Institute for Advanced Design Studies in Essen, Germany, and a former president of the International Council of Societies of Industrial Design. The severe copycat problem in China and other Asian nations exposes foreign companies, big and small, to copyright, patent and trademark infringement issues, legal experts say."

• "In the past, it was ‘fairly common' for Chinese factories that produced legitimate products to be used at night to make counterfeit goods using the same raw materials, says Leon Perera, chief executive of Spire Research and Consulting, a Singapore firm that specializes in emerging markets. Today, what's more common is for Chinese companies to reverse engineer a product, or take it apart to figure out how it's made, then order parts to produce a similar product, according to Perera."

• "Only 15% of small companies that do business overseas realize that U.S. patents and trademarks protect them only within the U.S., according to the U.S. Patent and Trademark Office. Companies should file patents and trademarks in countries where their products will be made and sold, as well as where they're based..."

The story and points raised in this article point to the responsibility that the U.S. government has in terms of pushing for strong IP protections in the global marketplace, as well as the potential pitfalls and opportunities that entrepreneurs have to be aware of in that same international market.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is "Chuck" vs. the Business World: Business Tips on TV.

France Fights to Protect IP

The great early 19th century, French economist Jean-Baptiste Say noted the importance of property rights: "Political economy recognises the right of property solely as the most powerful of all encouragements to the multiplication of wealth."

On protecting private property as a necessary role of government, Say wrote: "Without this protection of each individual by the united force of the whole community, it is impossible to conceive any considerable development of the productive powers of man, of land and of capital; or even to conceive the existence of capital at all; for it is nothing more than accumulated value, operating under the safeguard of authority."

While the technological state of our economy is light years ahead of where it stood two hundred years ago, the protection of private property - including intellectual property - remains a critical duty of government, and central to economic development and growth.

On February 20, The New York Times ran an interesting article titled "A Piracy Law in France Appears to Curb File-Sharing and Lift Digital Music." The main point of the story was that two years afo France approved a measure to fight digital piracy, and the result has been a sharp decline in file-sharing piracy, growth in digital sales, and a stabilization of music industry revenues.

The article described the process under the French law: "The agency that administers the three-strikes system, known by the French abbreviation Hadopi, had sent 822,000 warnings by e-mail to suspected offenders as of the end of December. Those were followed up by 68,000 second warnings, issued through registered mail. Of those, 165 cases have gone on to the third stage, under which the courts are authorized to impose fines of €1,500, or nearly $2,000, and to suspend Internet connections for a month."

The piece also quoted Éric Walter, the secretary general of Hadopi, explaining: "Our work is to explain to people why piracy is a bad thing and why they should stop... When the people understand that, they stop. Of course, some people don't want to understand. Then we have to transfer their dossiers to the justice system."

A study on the impact of Hadopi by researchers from Carnegie Mellon University and Wellesley College was referenced in the article. That study, conducted by Brett Danaher, Michael D. Smith, Rahul Telang and Siwen Chen, summed up its key findings this way: "Our results suggest that increased consumer awareness of HADOPI caused iTunes song and album sales to increase by 22.5% and 25% respectively relative to changes in the control group. In terms of robustness, we find that these sales changes are similar for each of the four major music labels, suggesting that our results are not driven by one particular label. We also find that the observed sales increase is much larger in genres that, prior to HADOPI, experienced high piracy levels (e.g., Rap and Hip Hop) than for less pirated genres (e.g., Christian music, classical, and jazz). This tends to strengthen the causal interpretation of our results given that if HADOPI is causing pirates to become legitimate purchases, its effects should be stronger for heavily pirated music."

So, credit France for taking a significant and apparently powerful step to protect intellectual property. Jean-Baptiste Say would be pleased, and U.S. policymakers should take note.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is "Chuck" vs. the Business World: Business Tips on TV.

Steve Jobs' IP Grammy

The 54th Grammy Awards on February 11 claimed boffo ratings. Some 44 million viewers tuned in, up from 27 million people watching last year.

Perhaps that was not surprising given the salute to Whitney Houston after her untimely death, along with a reuniting of the Beach Boys, the comeback of Adele, and Paul McCartney taking the stage, among other top performers.

But one of the most interesting Grammies awarded this year did not go to a singer or musician. Instead, it went to a businessman. The late Steve Jobs, co-founder of Apple Computer Inc., received a Trustees Award.

At the Recording Academy's Special Merit Awards Ceremony on February 11, as noted on the Grammy's website, "Jobs' Trustees Award was accepted by Eddy Cue, Apple's senior vice president of Internet software and services, who made note of Jobs' love of music. ‘Music shaped his life and made him who he was,' said Cue. ‘When he introduced the iPod in 2001, people asked, "Why are you doing this?" He said, "We love music and it's always good to do something you love.'"

If anyone deserved being honored by the music industry, it would be Jobs, who, arguably, saved the industry.

It's worth reminding ourselves that online theft of music took off in the late 1990s, in particular with the creation of the Napster file sharing business in 1999. Jobs responded with the iPod and iTunes in 2001, which made online purchases of songs affordable, easy and appealing.

Music theft online continues, of course. Indeed, it remains a major problem. The RIAA, for example, reports: "While the music business has increased its digital revenues by 1,000 percent from 2004 to 2010, digital music theft has been a major factor behind the overall global market decline of around 31 percent in the same period. And although use of peer-to-peer sites has flattened during recent years, other forms of digital theft are emerging, most notably digital storage lockers used to distribute copyrighted music." The RIAA numbers show how daunting music theft is: "Since peer-to-peer (p2p) file-sharing site Napster emerged in 1999, music sales in the U.S. have dropped 53 percent, from $14.6 billion to $6.9 billion in 2010. From 2004 through 2009 alone, approximately 30 billion songs were illegally downloaded on file-sharing networks."

The RIAA also notes a striking correlation between the decline in music sales and a decline in the number of people working as "musical groups and artists" according to Bureau of Labor Statistics numbers (see the analysis here.) The RIAA analysis sums up: "Selling music is an important motivator to creating music, and ... the decline in sales has correlated with fewer people making a living in music."

Keep in mind that the music business is overwhelmingly about small firms. For example, in that industry category of "musical groups and artists," 93.6 percent of firms with employees had less than 20 workers, and 99.9 percent (i.e., all but five firms) had less than 500 employees (according to the latest Census Bureau data from 2009).

Jobs' love of music, combined with his business common sense, led him to understand the need to protect intellectual property if the music business were to survive.

In another recent SBE Council Technology & Entrepreneurs analysis, we quoted the recent biography Steve Jobs by Walter Isaacson, when the author wrote about Jobs, piracy and protecting IP. That is worth highlighting here once more:

"At this point Jobs could have decided simply to indulge piracy. Free music meant more valuable iPods. Yet because he really liked music, and the artists who made it, he was opposed to what he saw as the theft of creative products. As he later told me:

"‘From the earliest days at Apple, I realized that we thrived when we created intellectual property. If people copied or stole our software, we'd be out of business. If it weren't protected, there'd be no incentive for us to make new software or product designs. If protection of intellectual property begins to disappear, creative companies will disappear or never get started. But there's a simpler reason: It's wrong to steal. It hurts other people. And it hurts your character.'

"He knew, however, that the best way to stop piracy - in fact the only way - was to offer an alternative that was more attractive than the brain-dead services that music companies were concocting."

Steve Jobs combined an understanding of the importance of IP with an incredible talent for innovating, and the result allowed the music industry to have a fighting chance in competing with "free," that is, online piracy.

Depending on your music tastes, you can always debate who did or did not deserve a Grammy. But whatever kind of music you happen to favor, there's no debating the Grammy honor awarded to Steve Jobs.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is "Chuck" vs. the Business World: Business Tips on TV.

Top 10 Reminders of Importance of IP

As legislation and issues such as piracy get discussed and debated, sometimes it can become easy to lose focus on why intellectual property rights and their protection matters to businesses of all types and sizes, and to the economy as a whole.

The World Intellectual Property Organization, or WIPO, is an international organization established in 1967. It's stated purpose is "developing a balanced and accessible international intellectual property (IP) system, which rewards creativity, stimulates innovation and contributes to economic development while safeguarding the public interest." In November, WIPO published its "2011 World Intellectual Property Report: The Changing Face of Innovation."

The report offers analysis on assorted IP-related topics, with this annual particularly focused on issues of collaboration and competition, as well as the role of public research. But it's worth highlighting key foundational points from the report that address IP in terms of the broader economy, international markets, and the individual firm.

I've boiled this down to a "Top 10 Reminders on the Centrality of IP to Prosperity."

1) The role of innovation cannot be overestimated: "Innovation is a central driver of economic growth and development. Firms rely on innovation and related investments to improve their competitive edge in a globalizing world with shorter product life cycles."

2) The data make clear that innovation is a driver of economic, productivity and income growth. "As early as the mid-1990s, the economic literature suggested that innovation accounted for 80 percent of productivity growth in high-income economies; whereas productivity growth, in turn, accounted for some 80 percent of gross domestic product (GDP) growth. More recent studies at the country-level demonstrate that innovation - as measured by an increase in R&D expenditure - has a significant positive effect on output and productivity."

3) The importance of intellectual property rights for firms and the economy in general is driven home by the international growth in patents: "Turning to the IP system, there is every indication that IP ownership has become more central to the strategies of innovating firms. IP policy has, therefore, moved to the forefront of innovation policy. Demand for patents has risen from 800,000 applications worldwide in the early 1980s to 1.8 million in 2009. This increase has occurred in different waves, with Japan driving filing growth in the 1980s, joined by the United States (US), Europe and the Republic of Korea in the 1990s and, more recently, by China."

4) International integration regarding IP is further emphasized: "Dividing in patenting worldwide in to so-called first filings - approximating new inventions - and subsequent filings - primarily filings of the same invention in additional countries - shows that the latter explains slightly more than one-half of that growth over the last 15 years... Patent applicants increasingly seek to protect their patents abroad and, indeed, in a larger number of countries, reflecting greater economic integration."

5) Along with patents, other areas where are IP rights and protections matter have expanded as well: "Demand for other IP rights - which firms often use as a complement to patents - has also seen marked growth. Trademark applications worldwide increased from 1 million per year in the mid-1980s to 3.3 million in 2009. Similarly, industrial design applications worldwide more than doubled from about 290,000 in 2000 to 640,000 in 2009. Greater internationalization is also an important factor behind the rising demand for protection of these forms of IP."

6) How much of a difference do IP protections make when it comes to relative competitiveness in the international marketplace? "Differences in innovative activity and related technological gaps between countries are a significant factor in explaining cross-country variation in income and productivity levels. According to several studies, roughly half of cross-country differences in per capita income and growth can be explained by differences in total factor productivity, a measure of an economy's long-term technological change or dynamism."

7) Indeed, being at the cutting edge of innovation matters: "In addition, the variation in the growth rate of GDP per capita is shown to increase with the distance from the technology frontier. Countries with fewer tdchnological and inventive capabilities generally see lower and more diverse economic growth than do richer countries."

8) The reality for individual businesses conforms to broader economic realities on IP: "At the firm-level, there is emerging but increasingly solid evidence that demonstrates the positive links between R&D, innovation and productivity in high-income countries. Specifically, these studies imply a positive relationship between innovative activity by firms and their sales, employment and productivity. Innovative firms are able to increase efficiency and overtake less efficient firms. Firms that invest in knowledge are also more likely to introduce new technological advances or processes, yielding increased labor productivity. In addition, a new stream of research stresses the role of investing in intangible assets for increased output and multifactor productivity growth."

9) As for the views of economists, while research continues to explore the finer details of IP and IP protections, the main point of intellectual property rights being a central driver of innovation and growth remains clear. It is noted in the report: "Understanding how IP protection affects innovative behavior has long been a fertile field in economic research. Important insights from the past still shape how economists view the IP system today. Above all, compared to other innovation policies, IP protection stands out in that it mobilizes decentralized market forces to guide R&D investment."

10) Finally, the bottom line: "Innovation is a driver of economic growth and development. Importantly, innovative capability is no longer seen only in terms of the ability to develop new inventions. Recombining existing inventions and non-technological innovation also counts."

These realities hold at the firm level, for the domestic economy, internationally, and online or offline. IP stands as a main ingredient to innovation, productivity and growth, which is why policymakers must be sure that intellectual property is properly protected.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is "Chuck" vs. the Business World: Business Tips on TV.

Piracy not a big problem??

A January 30 headline at TheHill.com caught my attention: "Report minimizes online piracy impact." Really?

The article was about a new study from the Computer and Communications Industry Association (CCIA), authored by Mike Masnick who writes about technology policy for Techdirt, which focuses on the growth of entertainment choices and opportunities that have emerged in recent times due in large part to the Internet and broadband.

The study highlights, for example, that consumer entertainment spending as a share of household income grew by 15 percent from 2000 to 2008; the entertainment sector employment grew by 20 percent during that last decade, including 43 percent growth among those identified as independent artists; box office revenues, according to the MPAA, rose by 25 percent from 2006 to 2010; music concert sales in the U.S. tripled from 1999 to 2009; and the value of the entertainment industry, according to data from PricewaterhouseCoopers and iDATE, grew from $449 billion in 1998 to $745 billion in 2010.

That's great news, and given the obvious expanded opportunities due to Internet and broadband advancements, it's not a surprise.

The study also offers the following summary on the challenges and opportunities at hand: "For the traditional middlemen, the internet represents both a challenge and an opportunity. There is no doubt that the internet has eaten away at some traditional means by which these businesses made money. But, as the data shows, there is more money going in to the overall market, more content being created, and many new ways to make money. That shows that there is a business model challenge -- and a marketing challenge -- but much more opportunity in the long run. The key challenge for business is in figuring out how to capture more of the greater revenue being generated by the wider entertainment industry. Legacy players certainly face a lot more competition (and fewer reasons that artists have to do deals with them) -- which can explain some of the public complaints about the ‘death' of various industries -- but overall, it's clear that by embracing new opportunities, there are plenty of ways to succeed."

That assessment is basically on the mark. But none of this should minimize the impact of piracy, and the need to countdr such theft.

Unfortunately, though, the minimization of piracy appears to be the main purpose of this CCIA report.

CCIA President & CEO Ed Black declared: "The numbers paint a quite a contrast from the vision of doom and gloom the entertainment industry has pointed to lately. Having a more clear picture of the economic successes and challenges of the content industry will help lawmakers around the world as they consider policies like increased copyright enforcement." As TheHill.com reported, "Both Masnick and CCIA were strong critics of the Stop Online Piracy Act and Protect IP Act, which were championed by the entertainment industry as vital cures for the epidemic of online piracy."

The line of thinking in the CCIA report seems to be that since new opportunities exist, then the very real losses experienced due to IP theft do not matter, and stronger IP rights and protections do not matter. That's absurd.

Internet and broadband technologies have vastly expanded opportunities for creators, consumdrs and businesses. That's not really in dispute. At the same time, this does not mean that real and significant losses due to IP theft are not occurring. The full potential of the Internet obviously is being restrained due to widespread stealing of intellectual property, as has been made clear by countless studies and analysis on, for example, losses to the entertainment and software industries.

Stronger IP protections are not bad for consumers, or for small businesses and independent artists. To the contrary, beefing up IP rights will only further expand choices for consumers, and increase opportunities for independent creators and the business community.

Acknowledging new opportunities should not serve as an excuse for ignoring IP theft.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is "Chuck" vs. the Business World: Business Tips on TV.

Megaupload and Protecting IP

The anti-intellectual property forces on the Internet are upset, as various governments around the world are doing exactly what they should be in protecting private property from theft.

On January 19, the U.S. Justice Department and FBI announced one of "the largest criminal copyright cases ever brought by the United States." The target? As described by the DoJ, it's "an international organized criminal enterprise allegedly responsible for massive worldwide online piracy of numerous types of copyrighted works through Megaupload.com and other related sites."

All entrepreneurs and businesses that rely on and build value through IP, and the consumers that enjoy and want more IP-based products and services, should strongly approve of, even celebrate, such actions by law enforcement.

To say that this was an international effort is a bit of an understatement, as in addition to the U.S., law enforcement from New Zealand, Hong Kong, the Netherlands, the United Kingdom, Germany, Canada, Australia and the Philippines were involved to varying degrees.

The seven people charged in the indictment - four originally arrested in New Zealand - are charged with "engaging in a racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering, and two substantive counts of criminal copyright infringement."

Federal authorities estimate that the harm to copyright holders is far in excess of $500 million, with $175 million in illegal profits being earned.

The DoJ explained: "According to the indictment, for more than five years the conspiracy has operated websites that unlawfully reproduce and distribute infringing copies of copyrighted works, including movies-often before their theatrical release-music, television programs, electronic books, and business and entertainment software on a massive scale... The indictment states that the conspirators conducted their illegal operation using a business model expressly designed to promote uploading of the most popular copyrighted works for many millions of users to download. The indictment alleges that the site was structured to discourage the vast majority of its users from using Megaupload for long-term or personal storage by automatically deleting content that was not regularly downloaded."

Again, if you operate a business or have a job in the movie, television, publishing and software industries, this case is a positive step forward.

Unlike lawful online storage sites, Megaupload is commonly known as allowing widespread and easy access to unauthorized copies of video and music. Large files can be accessed, shared and/or downloaded anywhere by anyone.

In a January 20 report, the New York Times highlighted the difference between Megaupload, for example, and legitimate services: Aaron Levie, chief executive of Box.net, a popular online storage company, "noted that his company and Dropbox, as well as the services from Google and Microsoft, were less likely prosecution targets because they depended to a large extent on legitimate corporate purchases of their storage. These services are more focused on sharing within organizations and small groups. While this can make it more difficult for an outsider or the authorities to see who is storing what, it makes it less likely that huge copyright violations are taking place. Lori Shen, a spokesman for YouSendIt, said any comparison between that site and Megaupload would be inaccurate. ‘YouSendIt is a private and secure business collaboration tool for business users. It provides a secure vehicle to share, send, sign and sync business content online,' Ms. Shen said."

And on January 23, another Times article pointed out steps being taken in response to these actions, including: "Filesonic, Fileserve, FileJungle and UploadStation now forbid users from downloading any content they did not upload themselves."

The Wall Street Journal also explained the recent shift in pirating and its international aspects: "Sites such as Megaupload, known as cyberlockers, have grown in popularity and shifted the technology and business of stealing content. Cyberlockers-so called because they offer virtual storage homes for files that can be accessed from any device with a Web browser-are often foreign sites that offer a smorgasbord of pirated movies, TV shows, music and e-books that people can download with a few clicks, say media companies, and now account for about half of all online pirate activity."

Unfortunately, nations like China and Russia serve as ideal hosts for such services given that government enforcement of intellectual property is weak, at best, in those nations. And that's exactly where assorted IP thieves are increasingly turning to operate.

The Megaupload case should not be a cause for concern or protest by IP creators or consumers. Instead, it should be highlighted as an example of government exercising its proper role of enforcing property rights, and international cooperation protecting IP in the integrated, twenty-first century economy.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is "Chuck" vs. the Business World: Business Tips on TV.