CITY SIDEWALKS ONCE were lined with merchants peddling counterfeit designer handbags or second-rate copies of popular movies. Such vendors are less commonplace today, but counterfeit goods have proliferated more than ever, thanks to the Internet.

Fake goods — from sneakers to pharmaceuticals — are produced half a world away but can be marketed to U.S. consumers through foreign Web sites. Some sites stream pirated U.S.-produced or -owned movies and television shows. Such theft costs the copyright- or trademark-holders billions of dollars each year and thwarts the ability of writers, producers, songwriters and others in the creative arts to earn the royalties they are due. Consumers often find themselves saddled with shoddy goods and little or no recourse to get their money back. Unlike domestic sites, these foreign-registered businesses are often out of reach of U.S. laws.

The Protect IP (Intellectual Property) Act, introduced by Sen. Patrick J. Leahy (D-Vt.) and a bipartisan group of lawmakers, would give the government and copyright- and trademark-holders a means to combat this problem. Rep. Lamar Smith (R-Tex.) is expected to introduce a House version once Congress returns next month.

The proposal would allow the Justice Department or a private rights holder to move against a rogue foreign Web site by convincing a federal judge that the site is “dedicated to” and has “no significant use” other than copyright or trademark infringement. Defendant Web sites would have the right to contest the allegation. An otherwise legitimate site that may have sold a product that turned out to be a fake or unknowingly linked to or posted an item to which it did not have the rights would be spared legal action.

A judge could order Internet advertising agencies and those that process financial payments to cease providing services to the offending site.

Some U.S. Internet businesses and open Internet advocates worry that the Protect IP Act could choke off legitimate speech by authorizing the demise of entire Web sites, rather than specific content. They point to the effectiveness of the Digital Millennium Copyright Act (DMCA), which requires Web site owners to take down individual pieces of pirated content after a copyright holder complains. But what if the Web site is a consistent scofflaw?

The Protect IP Act takes pains to protect Internet service providers, search engines and others that may have done business with a rogue site. They are not required to scour the Internet for offenders nor are they held liable if they happen to host or provide services to a site that is eventually deemed unlawful. They are only required to take “reasonable” and “technically feasible” measures to obey a court order. There may still be room to tweak these provisions to ensure that they are not more sweeping than necessary. But there is a need for a legal tool that stops those who persistently leech off the innovations of others.