Second Annual US IP Enforcement Report Shows Extensive Efforts At Home And Abroad

By , Intellectual Property Watch

The second annual report of the Office of the Intellectual Property Enforcement Coordinator (IPEC) Victoria Espinel paints a picture of the United States’ multifaceted and ever-expanding war on IP infringement, at home and abroad.

The study highlighted successful voluntary efforts by industry, such as an agreement among credit card companies to pull services for counterfeiters, a deal among internet service providers and copyright holders, and a group to stop fake online pharmacies. But it also detailed numerous government programmes.

The report is here [pdf]. This is the second of three annual reports arising from the 2010 IPEC Joint Strategic Plan.

It highlights US law enforcement’s “aggressive” fight against counterfeiting and piracy, detailing increases in actions by Customs and Border Protection and Immigration and Customs Enforcement, as well as increased FBI cases against trade secret theft. The number and length of punishments doled out by the Justice Department have tripled in two years, it said. And seizures of counterfeit pharmaceuticals rose nearly 200 percent.

The coordinator also targeted legislative changes it sees as needed.

In general, a focus of IPEC is on securing supply chains from infringing products. The report said an interagency working group led by the Department of Defense, National Aeronautics and Space Administration (NASA), Justice, and the Office of Federal Procurement Policy are nearing completion of a strategy to keep the government from buying counterfeit or pirated goods. The US government purchases more than $500 billion in goods and services per year, it said.

The working group has set six objectives: counterfeit risk assessment; supplier requirements; traceability; testing and evaluation of goods; counterfeit training and outreach; and enforcement remedies.

For software acquired by the government, a reminder was made that only software be legally acquired and used, and of a January 2011 memorandum [pdf] on technology neutrality sent to chief information officers and senior procurement officers. The memo restated the federal government policy that procurement choices be based on “performance and value, and free of preconceived preferences based on how the technology is developed, licensed or distributed.”

“In the context of developing requirements and planning acquisitions for software, for example, this means, as a general matter, that agencies should analyze alternatives that include proprietary, open source, and mixed source technologies,” it said. “This allows the Government to pursue the best strategy to meet its particular needs.”

The report also lists a range of legislative initiatives aimed at strengthening their hand against infringement, including a bill signed into law in December allowing the disclosure of information by rights holders. The provision was added as an amendment to a funding bill.

It also mentioned last year’s creation of the IPR Center, an interagency task force for receiving and following through on reports of IP fraud and infringement.

Numerous other initiatives and accomplishments are cited in the report, such as efforts to add countries to the Anti-Counterfeiting Trade Agreement (ACTA), and the expansion of the Special 301 report now featuring a “notorious markets” list of “foreign pirate websites,” and the opportunity for countries to “negotiate” an action plan with the US government in order to get off the unilateral list of problem countries.

It also urged Congress to approve an administration bill to provide the Department of Homeland Security with “authority to notify rightholders that infringing goods have been excluded or seized pursuant to an ITC order.” Under Section 337 of the Tariff Act of 1930, the US International Trade Commission (ITC) “issues exclusion orders to CBP to stop importation of products that use unfair methods of competition, or unfair acts in violation of the Act, including stolen intellectual property (most often patents).

Also, the administration said it is pushing for Congress to “explicitly authorize DHS to inform rightholders when [copyright] circumvention devices are seized and to provide samples of such devices (subject to any DHS bonding requirement).”

On transparency, the roughly 130-page report (with a fair amount of repetitive language in it) said IPEC encourages transparency in IP policymaking and itself maintains an “open door” approach, meeting with hundreds of stakeholders. The office also encourages public comments to implementation of its strategy. The emphasis of IPEC’s transparency is on victims and rights holders.

International Front

On the international front, China is a big focus, and a key development there has been getting agreement not to link domestic innovation policies to government procurement. International organizations are also cited as partners, such as Interpol and the World Customs Organization.

The report said 2011 was the first in which 17 have interagency work plans in place, setting objectives for each country’s intellectual property issues. Countries in which the US embassies have a formal interagency team working on IP rights protection are: China, Brazil, India, Russia, Thailand, Canada, Chile, Egypt, Colombia, Mexico, Ukraine, Spain, Saudi Arabia, Israel, Peru, Turkey, and Nigeria.

Other initiatives that IPEC said it is working with agencies to station more US personnel working on IP issues overseas. This includes the FBI’s placement of an “intellectual property-trained agent” in Beijing in September 2011 to work full time on IP crime, and the further expansion of the US Patent and Trademark Office international IP attaché programme with new posts in Mexico City and Shanghai. Also, it said, the Justice Department “would place up to six International Computer Hacking and Intellectual Property (“ICHIP”) attorneys, if funded as called for in the President’s FY 2012 budget, in strategic global locations to strengthen international enforcement.”

Other highlights: the parade of top-shelf US officials to tell China to buckle down on IP enforcement, the list of legal actions against websites deemed to be trading in infringing material, and the Group of Eight industrialised nations’ strongest statement on IP enforcement.

The report mentioned the Protect IP Act (PIPA) and the Stop Online Piracy Act (SOPA), both of which were pulled from Congress after enormous public outcry about their perceived over-restrictiveness. But it did not mention the negative reception the bills received, nor did it indicate whether they or similar legislation would be brought back later.

More to Come

As to the coming year, IPEC promised to continue to increase law enforcement crackdowns and legislative changes.

“There are a number of areas in which IPEC will seek to make significant progress in 2012,” it said “For instance, we will encourage the expansion of voluntary best practices for online advertising to cut off revenue to websites distributing counterfeit and pirated goods. We will continue to assess Federal laws and work with Congress to make certain that Federal agencies have the necessary enforcement tools they need to effectively combat intellectual property theft and we are focused on increasing international cooperation and enhancing capacity building through training, deployment of US personnel overseas and diplomatic engagement with foreign nations.”

Reactions

The US Chamber of Commerce, the biggest trade association, applauded the report on the fight against “the scourge of IP theft”. Mark Elliott, executive vice president of the Chamber’s Global Intellectual Property Center, commended Espinel for her “continued leadership and the federal agencies that play a role in making great strides to strengthen IP enforcement this year.”

In a statement, Elliott called the implementation of the 2010 Joint Strategic Plan a “major step forward,” and said the Chamber is “pleased to see that the Administration commits to advance proactive measures that would shore up the protection of American innovation and creativity.”

But Elliott cited limited resources for the IPEC office and called on the Obama administration Congress “to expand on current enforcement efforts and ensure there are dedicated resources throughout the government, including the Office of the IPEC, to effectively enforce and promote IP rights both at home and abroad.”

The industry Copyright Alliance Executive Director Sandra Aistars said in a statement, “Today’s report issued from the Office of the Intellectual Property Enforcement Coordinator details many activities that are to be commended. But there is still work to be done.”

“Many hardworking authors, songwriters, photographers and others have lost their ability to make a living due to digital theft,” the Alliance asserted. “When stolen content is made available for free, those creators are unable to benefit economically from what they¹ve created. And the nation loses related jobs and taxes.”

Meanwhile, civil liberties group Public Knowledge’s John Bergmayer, a senior staff attorney, said the group was pleased that the report “demonstrates a commitment to transparency in policymaking for intellectual property.”

Bergmayer said trade negotiations such as the Trans-Pacific Partnership agreement “need more participation from the public in their formulation.”

Public Knowledge also praised the coordinator’s confirmation of the administration’s opposition to legislation “that reduces freedom of expression, increases cybersecurity risk (including authority to tamper with the DNS system), or undermines the dynamic, innovative global Internet,” it said.

But Public Knowledge also said in its release that the report “clearly shows that the content industries have a vast array of tools already at their disposal to enforce their rights, while the listing of enforcement cases also clearly shows the industries and the government have a world-wide reach when action is needed in any country in the world.”

And the group said it is “extremely wary” of how much the report depends on information from copyright industries for information about infringement. “Particularly in cases involving fair use, rights holders have not shown themselves to be reliable judges of infringement,” it said.

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