Joint Strategic Plan

J U N E 2 0 10

2010 JOINT STR ATEGIC

PLAN ON INTELLECTUAL

PROPERT Y ENFORCEMENT

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Table of Contents

Letter to the President of the United States and to the Congress. . . . . . . . . . . . . . . 1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Enforcement Strategy Action Items . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Leading By Example

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Increasing Transparency

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Ensuring Eciency and Coordination

. . . . . . . . . . . . . . . . . . . . . . 10

Enforcing Our Rights Internationally

. . . . . . . . . . . . . . . . . . . . . . . 14

Securing Our Supply Chain

. . . . . . . . . . . . . . . . . . . . . . . . . . 16

Building a Data-Driven Government

. . . . . . . . . . . . . . . . . . . . . . . 18

Summary of Enforcement Strategy Action Items . . . . . . . . . . . . . . . . . . . . 21

Agencies’ Intellectual Property Enforcement Missions. . . . . . . . . . . . . . . . . . 23

Department of Agriculture

. . . . . . . . . . . . . . . . . . . . . . . . . . 23

Department of Commerce

. . . . . . . . . . . . . . . . . . . . . . . . . . 23

Department of Health and Human Services | Food and Drug Administration

. . . . . . . 26

Department of Homeland Security

. . . . . . . . . . . . . . . . . . . . . . . 26

Department of Justice

. . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Department of State

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Executive Oce of the President | United States Trade Representative

. . . . . . . . . . 32

The Library of Congress | The Copyright Oce

. . . . . . . . . . . . . . . . . . . 33

Agencies’ 2010 Major Intellectual Property Enforcement Activities to Date . . . . . . . . . 35

Department of Agriculture

. . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Department of Commerce

. . . . . . . . . . . . . . . . . . . . . . . . . . 35

Department of Health and Human Services | Food and Drug Administration

. . . . . . . 38

Department of Homeland Security

. . . . . . . . . . . . . . . . . . . . . . . 38

Department of Justice

. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

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Department of State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Executive Oce of the President | United States Trade Representative

. . . . . . . . . . 44

The Library of Congress | The Copyright Oce

. . . . . . . . . . . . . . . . . . . 44

Performance Measures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Performance Measures: Data, Measures, and Indicators

. . . . . . . . . . . . . . . 47

Appendix 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

History of the IPEC Oce and Process Leading to this Joint Strategic Plan

. . . . . . . . 49

Appendix 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Literature Review

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Appendix 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

List of Acronyms

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

Letter to the President of the United

States and to the Congress

I am pleased to transmit the 2010 Joint Strategic Plan on Intellectual Property Enforcement.

Intellectual property laws and rights provide certainty and predictability for consumers and producers

in the exchange of innovative and creative products, and for investors shifting capital to their develop-

ment. Where there are insucient resources, ability, or political will to appropriately enforce these rights,

exchanges between investors, producers and consumers may be inecient, corrupt or even dangerous.

Our entrepreneurial spirit, creativity and ingenuity are clear comparative advantages for America in the

global economy. As such, Americans are global leaders in the production of creative and innovative

services and products, including digital content, many of which are dependent on the protection of

intellectual property rights. In order to continue to lead, succeed and prosper in the global economy,

we must ensure the strong enforcement of American intellectual property rights.

The Prioritizing Resources and Organization for Intellectual Property Act (PRO-IP Act) directs the

Intellectual Property Enforcement Coordinator (IPEC) to coordinate the development of a Joint Strategic

Plan against counterfeiting and infringement. To prepare this Joint Strategic Plan, my oce worked

closely across numerous Federal agencies and departments and with signicant input from the public.

We heard from a broad array of Americans and received more than 1,600 public comments with spe-

cic and creative suggestions. Federal agencies, including the U.S. Departments of Agriculture (USDA),

Commerce (DOC), Health and Human Services (HHS), Homeland Security (DHS), Justice (DOJ), and State

(DOS), the Oce of the U.S. Trade Representative (USTR) and the U.S. Copyright Oce participated in

the development of this Joint Strategic Plan. An appendix to this Joint Strategic Plan further details

public and government input.

Through this process, we identied a number of actions the Federal government will take to enhance

the protection of American intellectual property rights:

1. We will lead by example and will work to ensure that the Federal government does not purchase

or use infringing products.

2. We will support transparency in the development of enforcement policy, information sharing

and reporting of law enforcement activities at home and abroad.

3. We will improve coordination and thereby increase the eciency and eectiveness of law

enforcement eorts at the Federal, state and local level, of personnel stationed overseas and

of the U.S. Government’s international training eorts.

4. We will work with our trading partners and with international organizations to better enforce

American intellectual property rights in the global economy.

5. We will secure supply chains to stem the ow of infringing products at our borders and through

enhanced cooperation with the private sector.

6. We will improve data and information collection from intellectual property-related activity and

continuously assess domestic and foreign laws and enforcement activities to maintain an open,

fair and balanced environment for American intellectual property rightholders.

I look forward to continuing to work with you, with the Federal agencies and with the public to improve

enforcement of American intellectual property rights.

Victoria A. Espinel

U.S. Intellectual Property Enforcement Coordinator

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Introduction

“[W]e’re going to aggressively protect our intellectual property. Our

single greatest asset is the innovation and the ingenuity and creativity

of the American people. It is essential to our prosperity and it will only

become more so in this century.”

—President Barack Obama, March 11, 2010

Americans work daily to create a better world. We create products and services that improve the world’s

ability to communicate, to learn, to understand diverse cultures and beliefs, to be mobile, to live better

and longer lives, to produce and consume energy eciently and to secure food, nourishment and safety.

Most of the value of this work is intangible—it lies in America’s entrepreneurial spirit, our creativity,

ingenuity and insistence on progress and in creating a better life for our communities and for communi-

ties around the world. These intangible assets, often captured as copyrights, patents, trademarks, trade

secrets and other forms of “intellectual property,” reect America’s advantage in the global economy.

The U.S. Government supports strengthened enforcement of intellectual property rights for a number

of reasons:

Growth of the U.S. economy, creation of jobs for American workers and support for

U.S. exports

Enforcement of intellectual property rights is a critical and ecient tool we can use, as a gov-

ernment, to strengthen the economy, support jobs and promote exports. Intellectual property

supports jobs across all industries, and in particular where there is a high degree of creativity,

research and innovation: good jobs, with high wages and strong benets. Intellectual property-

related industries can employ an engineer working for a technology company to design the

next generation of cell phones, a software developer writing a new algorithm to improve search

engine results, a chemist working for a pharmaceutical company to develop a new drug, a union

member helping to manufacture a newly-designed tire for automobiles, or a camera operator

working on a movie set to help lm the next Oscar-winning movie. Eective enforcement of

intellectual property rights throughout the world will help Americans export more, grow our

economy and sustain good jobs for American workers.

Promotion of innovation and security of America’s comparative advantage in the global

economy

This Administration believes strongly that promoting innovation is critical to the continued suc-

cess of our nation, to addressing global challenges and to providing peace, safety and prosperity

for our communities. Our ability to continue to lead as a creative, innovative and productive

engine for global benet is compromised by those countries who, for their own narrow and

short-term benet, fail to enforce the rule of law, our agreements with them or adopt policies

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that create unfair markets. Americans should not face inappropriate competition from foreign

companies based on advantages arising or derived from insucient protection of intellectual

property rights. Strong enforcement of intellectual property rights is an essential part of the

Administration’s eorts to promote innovation and ensure that the U.S. is a global leader in

creative and innovative industries.

Protection of consumer trust and safety

Violations of intellectual property rights, ambiguities in law and lack of enforcement create

uncertainty in the marketplace, in the legal system and undermine consumer trust. Supply

chains become polluted with counterfeit goods. Consumers are uncertain about what types of

behavior are appropriate and whether the goods they are buying are legal and safe. Counterfeit

products can pose a significant risk to public health, such as toothpaste with dangerous

amounts of diethylene glycol (a chemical used in brake uid), military systems with untested

and ineective components to protect U.S. and allied soldiers, auto parts of unknown quality

that play critical roles in securing passengers and suspect semiconductors used in life-saving

debrillators. Protecting intellectual property rights, consistent with our international obliga-

tions, ensures adherence and compliance with numerous public health and safety regulations

designed to protect our communities.

National and economic security

Intellectual property infringement can undermine our national and economic security. This

includes counterfeit products entering the supply chain of the U.S. military, and economic

espionage and theft of trade secrets by foreign citizens and companies. The prot from intel-

lectual property infringement is a strong lure to organized criminal enterprises, which could

use infringement as a revenue source to fund their unlawful activities, including terrorism.

When consumers buy infringing products, including digital content, distributed by or benet-

ing organized crime, they are contributing to nancing their dangerous and illegal activities.

Validation of rights as protected under our Constitution

Article I, Section 8 of the U.S. Constitution vests in the Congress the discretion to establish laws

to promote science and artistic creativity “by securing for limited Times to Authors and Inventors

the exclusive Right to their respective Writings and Discoveries.” Over the last two centuries, our

Founding Fathers have been proven right. One of the reasons that the U.S. is a global leader

in innovation and creativity is our early establishment of strong legal mechanisms to provide

necessary economic incentives required to innovate. By the same token, fair use of intellectual

property can support innovation and artistry. Strong intellectual property enforcement eorts

should be focused on stopping those stealing the work of others, not those who are appropri-

ately building upon it.

American industries that depend on intellectual property employ engineers and chemists, artists and

authors, and manufacturers and laborers. As a result, anyone who invests in virtually any enterprise is also

dependent on intellectual property protection. The U.S. is a global leader in developing new technolo-

gies in intellectual property-related industries. From Silicon Valley to Burbank, from Raleigh/Durham’s

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Research Triangle to Boston’s Route 128, we lead the way in bringing new, life-changing pharmaceuti-

cals and medical devices to consumers, developing environmentally-conscious technologies, creating

innovative software products, building new communication networks and producing lms, music and

games craved by consumers throughout the world. However, our leadership in the development of

creative and innovative products and services also makes us a global target for theft.

Combating counterfeiting and piracy requires a robust Federal response. Strong intellectual property

enforcement supports American jobs, protects American ideas and invigorates our economy. Intellectual

property laws provide not only legal protection for creators and consumers, but incentives to encourage

investment in innovation.

Our status as a global innovation leader is compromised by those countries who fail to enforce the rule

of law or international agreements, or who adopt policies that disadvantage American industries. This

Administration is rmly committed to promoting innovation and protecting the creative and innovative

production of the American workforce.

The Internet and other technological innovations have revolutionized society and the way we obtain

information and purchase products. Lowering barriers to entry and creating global distribution chan-

nels, they have opened new markets and opportunities for American exports of information, goods

and services, including enabling small and medium sized businesses to reach consumers worldwide.

These innovations have also facilitated piracy and counterfeiting on a global scale. Counterfeiters have

developed sophisticated distribution networks. Today, the Internet allows for a person who illegally “cam-

cords” a lm at a movie theater in Moscow to distribute a bootleg copy across the globe with the push

of a button. A company in Delhi producing counterfeit pharmaceuticals can instantly create a global

market. Counterfeiters in Shenzhen making routers and switches can inltrate supply chains in the U.S.

These thieves impose substantial costs. They depress investment in technologies needed to meet global

challenges. They put consumers, families and communities at risk. They unfairly devalue America’s

contribution, hinder our ability to grow our economy, compromise good, high-wage jobs for Americans

and endanger strong and prosperous communities.

So long as the rules and rights for intellectual property are predictable and enforceable, Americans will

continue to lead in the eort to improve global prosperity. There are numerous challenges to meeting

these goals of predictability and enforceability. Our eort must be coordinated, ecient and compre-

hensive. Solutions will require strong and decisive government action, transparency and cooperation

from rightholders, importers, exporters and entities that currently benet from infringement. This Joint

Strategic Plan reects such an eort across our government, our economy and with our trading partners

around the world. The 33 enforcement strategy action items spelled out in the section below represent

the U.S. Government’s coordinated approach to strengthening intellectual property enforcement.

These action items and their implementation are our rst collective step towards our goal of combating

infringement.

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Enforcement Strategy Action Items

As provided by the PRO-IP Act, the IPEC and the Federal agencies responsible for combating intellectual

property infringement have worked together, with signicant input from the public, to identify ways in

which the U.S. Government can enhance intellectual property enforcement. See Appendix 1 (further

describing the process). The results are the 33 enforcement strategy action items spelled out below,

which will shape the coordinated ght to combat intellectual property infringement. Those action

items fall within six categories of focus for the U.S.: (1) leading by example; (2) increasing transparency;

(3) ensuring eciency and coordination; (4) enforcing our rights internationally; (5) securing our supply

chain; and (6) building a data-driven Government.

Leading By Example

First, the U.S. Government cannot eectively ask others to act if we will not act ourselves. To that end,

the U.S. Government will lead by example and will work to ensure that the Federal government does

not purchase or use infringing products.

Establishment of a U.S. Government-Wide Working Group to Prevent U.S. Government Purchase

of Counterfeit Products

The U.S. Government shall establish a government-wide working group tasked with studying how

to reduce the risk of the procurement of counterfeit parts by the U.S. Government. Although the

Government Accountability Oce (GAO) recently issued a report identifying deciencies in the procure-

ment process practices and policies with regard to one government agency, all government agencies

would benet from a review of such policies and practices. The IPEC will convene this working group,

whose members will include the National Security Council (NSC), Department of Defense (DOD)/

Acquisition, Technology and Logistics (AT&L), National Aeronautics and Space Administration (NASA),

General Services Administration (GSA), DOC, Small Business Administration (SBA), DHS, and other partici-

pants as may be identied by the IPEC. The working group shall be led by the IPEC, the Administrators of

GSA and Federal Procurement Policy, and the Undersecretary of Defense for AT&L at DOD. The working

group shall submit to the President, within 180 days after its rst meeting, a memorandum outlining

its ndings and issues requiring further analysis.

Use of Legal Software by Federal Contractors

Executive Order 13103, issued by President Clinton on September 30, 1998, requires that Federal agen-

cies take steps to ensure that they use only legal copies of software. However, this prohibition on the

illegal use of software does not apply equally to government contractors. The Executive Order provides

for contractor certication only if the agency discovers that the contractor is using Federal funds directly

to buy or maintain illegal software. To demonstrate the importance we place on the use of legal software

and to set an example to our trading partners, the U.S. Government will review its practices and policies

to promote the use of only legal software by contractors.

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Increasing Transparency

Second, information and information sharing are critical to eective enforcement. The U.S. Government

will thus support transparency in the development of enforcement policy; information sharing with,

from and among federal agencies (including law enforcement agencies); and reporting of enforcement

activities at home and abroad.

Improved Transparency in Intellectual Property Policy-Making and International Negotiations

The Administration supports improved transparency in intellectual property enforcement policy-making

and international negotiations. As such, the U.S. Government will enhance public engagement through

online outreach, stakeholder outreach, congressional consultations and soliciting feedback through

advisory committees, ocial comment mechanisms such as Federal Register notices (FRN), notices of

proposed rulemaking (NPRM) and notices of inquiry (NOI), as appropriate for the relevant process. In

the context of trade negotiations, the Administration will pursue these objectives consistently with the

approaches and considerations set out in the President’s 2010 Trade Policy Agenda, including consid-

eration of the need for condentiality in international trade negotiations to facilitate the negotiation

process.

Increased Information Sharing with Rightholders

As the quality of counterfeit and pirated products improves, it is becoming increasingly dicult for law

enforcement ocials to distinguish counterfeit or pirated goods from genuine products. Rightholders

are particularly well equipped to identify the legitimacy of their own goods, through various methods,

including production coding. Sharing of information between U.S. Government enforcement agencies

and rightholders is therefore helpful in order to make accurate infringement determinations.

Similarly, sharing samples of circumvention devices—devices that would-be-infringers use to defeat

mechanisms put in place to prevent the playing of piratical copies of copyrighted works (a modchip

is a common example of a circumvention device)—would allow rightholders to assist in determining

whether such devices violate an import prohibition. Furthermore, sharing of samples of, and enforce-

ment information on, seized circumvention devices can assist rightholders in their own investigations.

The U.S. Government will take action to provide DHS components with the authority to share informa-

tion and samples of goods and circumvention devices with rightholders before the government seizes

the goods, so that rightholders can assist in accurate determinations of infringement and violation. The

U.S. Government will also take action to provide DHS components with the authority to share samples

and enforcement information related to seized circumvention devices to strengthen criminal and civil

enforcement.

The U.S. Government will ensure that appropriate safeguards are implemented to protect personally

identiable information, including compliance with the Privacy Act, as warranted.

Communication with Victims/Rightholders

Infringement of intellectual property rights can happen to small businesses or other entities or people

on a single occasion or, unlike some other types of crimes, it can also happen to the same victim on a

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repeated basis. The U.S. Government will work to help victims/rightholders understand: (1) how to report

a potential intellectual property crime; (2) the types of intellectual property cases generally accepted by

the U.S. Government for prosecution; and (3) the types of information that victims/rightholders should

provide when referring an intellectual property case for prosecution. The U.S. Government will have

ongoing communication with victims/rightholders during criminal investigations, as permitted by the

Government’s legal, ethical and law enforcement obligations.

Reporting on Best Practices of Our Trading Partners

Although lack of adequate enforcement remains a problem around the world, individual countries

have adopted laws or practices that have led to signicant improvements in intellectual property

enforcement. While the U.S. needs to continue to raise concerns where they exist, we should also draw

attention to progress made by other countries, including their most eective policies and successful

law enforcement programs. The U.S. Government will report on progress made in other countries and

note specic best practices adopted by those countries. This will serve to commend their eorts and

underscore their leadership example.

Identify Foreign Pirate Websites as Part of the Special 301 Process

Included in USTR’s annual Special 301 report is the Notorious Markets list, a compilation of examples

of Internet and physical markets that have been the subject of enforcement action or that may merit

further investigation for possible intellectual property infringements. While the list does not represent

a nding of violation of law, but rather is a summary of information USTR reviewed during the Special

301 process, it serves as a useful tool to highlight certain marketplaces that deal in infringing goods and

help sustain global piracy and counterfeiting.

USTR will continue to publish the Notorious Markets list as part of its annual Special 301 process.

Additionally, USTR, in coordination with the IPEC, will initiate an interagency process to assess oppor-

tunities to further publicize and potentially expand on the list in an eort to increase public awareness

and guide related trade enforcement actions.

Tracking and Reporting of Enforcement Activities

DOJ reports the number of prosecutions of intellectual property infringers and DHS reports the number

of seizures of infringing products. In addition, under the PRO-IP Act, DOJ and the Federal Bureau of

Investigation (FBI) submit annual reports to Congress detailing enforcement activities. In order to provide

comprehensive information about the scope of intellectual property enforcement activities, DOJ and

DHS will track and report on enforcement activities related to circumvention devices.

Sharing of Exclusion Order Enforcement Data

Under Section 337 of the Tari Act of 1930 (19 U.S.C. § 1337), the International Trade Commission (ITC)

is responsible for investigating allegations regarding unfair practices in import trade, including those

related to intellectual property infringements. Once the ITC makes a determination of infringement, it

issues a Section 337 exclusion order and Customs and Border Protection (CBP) bars the importation of

infringing goods.

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More robust information sharing between CBP and rightholders would enhance CBP’s eective enforce-

ment of exclusion orders, as well as provide transparency to rightholders. The U.S. Government will seek

changes to provide CBP with the authority to share enforcement data with complainant rightholders,

including denials of entry, seizures pursuant to seizure and forfeiture orders and determinations pursu-

ant to an ITC exclusion order.

Enhanced Communications to Strengthen Section 337 Enforcement

Under Section 337 of the Tari Act of 1930, the ITC investigates allegations regarding unfair practices

in import trade, including allegations related to intellectual property infringement, as well as other

forms of unfair competition. Once the ITC nds a violation of Section 337 and issues an exclusion order

barring the importation of infringing goods, CBP and the ITC are responsible for determining whether

imported articles fall within the scope of the exclusion order. In certain cases, this requires a determina-

tion of whether an article has been successfully redesigned to no longer infringe the right addressed

in the exclusion order and therefore would no longer be denied entry. Determinations of this kind are

often initiated at the request of a manufacturer, importer or other interested party and are conducted

through ex parte

procedures.

Because the parties involved in the original ITC investigation can provide useful information related

to the scope of the intellectual property rights being adjudicated, any determinations subsequent to

the issuance of an ITC exclusion order should involve the parties and, where appropriate, the ITC. To

strengthen Section 337 as an intellectual property enforcement mechanism, the ITC and CBP will explore

procedures to facilitate and encourage communications between CBP and the ITC with respect to the

scope of the exclusion order. This would include current CBP-ITC communication during the investiga-

tion phase. Furthermore, CBP will consider initiatives to enhance the eciency and transparency of the

exclusion order enforcement process, including such possible solutions as the development of an inter

partes proceeding that will involve relevant private parties to the ITC investigation.

Ensuring Eciency and Coordination

Third, to increase efficiency and effectiveness and to minimize duplication and waste, the U.S.

Government will strengthen the coordination of: (1) law enforcement eorts at the Federal, state and

local level; (2) personnel stationed overseas; and (3) international training and capacity building eorts.

Coordination of National Law Enforcement Eorts to Avoid Duplication and Waste

Numerous Federal law enforcement agencies are charged with investigating criminal intellectual

property violations. To avoid duplication and waste and to benet from the specialized expertise of

particular agencies, the IPEC will work with Federal agencies and the National Intellectual Property

Rights Coordination Center (IPR Center) to ensure coordination and cooperation, including:

Breadth of Cooperative Eorts: The U.S. Government will ensure the broad participation of

Federal agencies responsible for criminal intellectual property infringement investigations in

cooperative eorts. To date, one of the largest cooperative eorts is the IPR Center, which was

established by Immigration and Customs Enforcement (ICE). In alphabetical order, the enti-

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ties that participate in the IPR Center include CBP, the Defense Criminal Investigative Service

(“DCIS”), DOC International Trade Administration (ITA) and U.S. Patent and Trademark Oce

(“USPTO”), the FBI, the Food and Drug Administration’s (FDA) Oce of Criminal Investigations

(OCI), GSA—Oce of Inspector General, ICE, the Naval Criminal Investigative Service (“NCIS”),

and the U.S. Postal Inspection Service (“USPIS”). The IPEC, in coordination with relevant Federal

agencies, will work to ensure the breadth of cooperative eorts, such as those taking place

at the IPR Center. As part of any such cooperative eort, law enforcement agencies will share

information learned from their investigations that may aid others, such as emerging criminal

trends and new infringing technologies, unless such information sharing is prohibited by law

or regulation.

2. Shared Database: The U.S. Government will have a database—or a combination of databases

serving the same function as a single database—that: (1) is shared by Federal law enforcement

agencies; (2) contains information about intellectual property cases; and (3) can provide case-

specic information about pending investigations, including the name and contact informa-

tion for the lead investigative agent. To satisfy this requirement, the U.S. Government can use

or expand existing databases, such as those used by the Organized Crime Intelligence and

Operations Center (IOC-2) and the Organized Crime Drug Enforcement Task Force (OCDETF)

Fusion Center, the IPR Center, or Regional Information Sharing Systems (RISS) Safe. All Federal

agencies with responsibility for discovering and/or investigating intellectual property crimes

will contribute their case information to the database(s). The database(s) need not include sensi-

tive intellectual property information, such as national security information, trade secrets, or

grand jury information that cannot be disclosed under Federal Rule of Criminal Procedure 6(e),

nor information otherwise prohibited by law or regulation. This information sharing will assist

Federal law enforcement in ensuring that appropriate resources are dedicated to investigations

of the highest priority targets.

3. De-coniction: Federal agencies will develop protocols to determine if another agency (or

another oce or component of the same agency) is already investigating a matter—a process

generally called de-coniction—and, where appropriate, Federal agencies will conduct joint

investigations to maximize U.S. Government resources or conduct investigations by a single

agency (or oce or component of an agency) to minimize duplication and waste of resources.

Federal agencies should use databases or clearinghouses—such as those mentioned above—to

de-conict cases.

Coordination of Federal, State and Local Law Enforcement

The U.S. Government has leveraged groups composed of Federal, state and local law enforcement to

address, among other crimes, narcotics tracking, human tracking and terrorism. Such coordination

of prosecution eorts in intellectual property crime cases will allow law enforcement to benet from

the dierent expertise and experiences of the various Federal agencies, of Federal, state and local law

enforcement and of particular prosecutorial oces. Such coordination will also reduce duplication of

resources and conicts among Federal law enforcement agencies and between Federal and state/local

law enforcement. Examples of such coordinated eorts include the 22 Federal, state and local Intellectual

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Property Theft Enforcement Teams (“IPTETs”) ICE recently established around the country to combat

intellectual property infringement. DOJ’s Bureau of Justice Assistance (BJA) has also recently funded a

number of state and local intellectual property task forces that collaborate with Federal law enforcement.

To continue and expand these eorts, the Federal agencies responsible for discovering and/or investigat-

ing intellectual property crimes including, but not limited to, CBP, the FBI, and ICE will work together in

local/regional working groups to coordinate their intellectual property enforcement eorts with each

other and with the United States Attorneys’ Oces, as appropriate, as least in localities or regions where

intellectual property infringement is most prevalent. The U.S. Government will encourage state and local

law enforcement and prosecutors responsible for intellectual property enforcement to participate in

these working groups.

Coordination of Training for State and Local Law Enforcement and Prosecutors

The U.S. Government will provide training to interested state and local law enforcement and prosecutors

on intellectual property enforcement. Federal agencies will work with each other and with state and

local law enforcement organizations and non-prot entities—including the National White Collar Crime

Center (“NW3C”) and the National Association of Attorneys General (“NAAG”)—to coordinate eorts to

develop materials for such training and to provide such training.

Improve the Eectiveness of Personnel Stationed Overseas to Combat Intellectual Property

Infringement

Combating intellectual property infringement overseas is a priority for the Administration because of

its eect on jobs, the U.S. economy and threats to health and public safety. It is critical that we station

overseas personnel in countries of concern to ensure intellectual property is made a priority. It is also

critical that we ensure that overseas personnel receive clear guidance on the Administration’s overall

enforcement priorities. Thus, to improve the eectiveness of these personnel with regard to protecting

intellectual property rights, the U.S. Government will take the following steps:

1. prioritize stationing of all overseas personnel trained to address intellectual property enforce-

ment based on an assessment by the U.S. Government of the need to address intellectual

property enforcement issues in particular countries or regions;

2. prioritize stationing of additional law enforcement personnel with significant intellectual

property enforcement responsibilities overseas;

3. develop intellectual property enforcement work plans for appropriate embassy personnel to

follow in all countries in which intellectual property enforcement is a priority;

4. establish or enhance working groups within embassies to implement embassy intellectual

property enforcement work plans in priority countries;

5. strengthen regular coordinated communication between personnel stationed overseas and

the agency headquarters to ensure U.S. government personnel stationed overseas have a clear

sense of priorities and guidance; and

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6. introduce and implement procedures to measure the eectiveness of overseas personnel in

addressing identied intellectual property enforcement issues.

Coordination of International Capacity Building and Training

The U.S. Government has undertaken substantial eorts to reduce intellectual property infringement

internationally through capacity-building exercises including seminars, workshops, outreach programs

and training programs designed to educate foreign governments, citizens and private sector stakehold-

ers on the need and mechanisms for strengthening intellectual property protection, and to provide the

tools for eective enforcement of intellectual property. However, these eorts could be more eective

if existing coordination was strengthened.

In order to increase coordination and to promote ecient use of U.S. Government resources, the U.S.

Government will:

1. to strengthen interagency coordination of international capacity building and training, establish

an interagency committee through which agencies will share plans, information and best prac-

tices and also integrate coordination of capacity building eorts with interagency coordination

of overall development assistance to developing countries;

2. focus capacity building and training eorts in those countries in which intellectual property

enforcement is a high priority and where those eorts can be most eective;

3. develop comprehensive needs assessments and, based on those assessments, develop agency

strategic plans for capacity building in the coming years;

4. establish mechanisms to evaluate the eectiveness of capacity building and training programs;

5. deposit international intellectual property enforcement training materials or catalogs in a shared

database so that all agencies have access to them to promote greater consistency and to avoid

duplication and waste of resources;

ensure that training and capacity building materials are consistent with U.S. intellectual property

laws and policy goals;

ensure that training oered by the U.S. Government on U.S. copyright law includes an explana-

tion of the relevant balance provided in U.S. law between a creator’s rights in his or her work

and specically dened legal limitations on those rights; and

8. coordinate training eorts with international organizations and the business community to

make training more ecient.

Establishment of a Counterfeit Pharmaceutical Interagency Committee

The IPEC shall establish an interagency committee on the counterfeiting of pharmaceutical drugs

and medical products. This committee will bring together the expertise of numerous Federal agen-

cies, including the Oce of National Drug Control Policy, the National Institutes of Health (NIH), DOC,

DOS/U.S. Agency of International Development (USAID), HHS/FDA, the IPR Center, CBP, ICE, FBI, the Drug

Enforcement Administration (DEA), USTR, and Veterans Aairs. The committee will invite experts from the

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private sector to participate as needed, and in full compliance with the Federal Advisory Committee Act

and other relevant Federal laws and regulations. Among other issues, the committee shall examine the

myriad of problems associated with unlicensed Internet pharmacies, health and safety risks in the U.S.

associated with the distribution of counterfeits and the proliferation of the distribution of counterfeit

pharmaceuticals in Africa. The IPEC shall chair the committee. The committee shall produce a report

with specic recommendations for government action within 120 days of the commencement of its

rst meeting.

Enforcing Our Rights Internationally

Fourth, addressing infringement in other countries is a critical component of protecting and enforcing

our rights. To that end, the U.S. Government will work collectively to strengthen enforcement of intel-

lectual property rights internationally.

Combat Foreign-Based and Foreign-Controlled Websites that Infringe American Intellectual

Property Rights

The use of foreign-based and foreign-controlled websites and web services to infringe American intel-

lectual property rights is a growing problem that undermines our national security, particularly our

national economic security. Despite the scope and increasing prevalence of such sites, enforcement is

complicated because of the limits of the U.S. Government’s jurisdiction and resources in foreign coun-

tries. To help better address these enforcement issues, Federal agencies, in coordination with the IPEC,

will expeditiously assess current eorts to combat such sites and will develop a coordinated and com-

prehensive plan to address them that includes: (1) U.S. law enforcement agencies vigorously enforcing

intellectual property laws; (2) U.S. diplomatic and economic agencies working with foreign governments

and international organizations; and (3) the U.S. Government working with the private sector.

Enhance Foreign Law Enforcement Cooperation

International law enforcement cooperation is a critical part of combating the global nature of piracy

and counterfeiting. Federal law enforcement agencies will encourage cooperation with their foreign

counterparts to: (1) enhance eorts to pursue domestic investigations of foreign intellectual property

infringers; (2) encourage foreign law enforcement to pursue those targets themselves; and (3) increase

the number of criminal enforcement actions against intellectual property infringers in foreign countries

in general. Federal law enforcement agencies will also use, as appropriate, formal cooperative agree-

ments or arrangements with foreign governments as a tool to strengthen cross-border intellectual

property enforcement eorts.

Promote Enforcement of U.S. Intellectual Property Rights through Trade Policy Tools

The U.S. Government has traditionally sought to use the tools of trade policy to seek strong intellectual

property enforcement. Examples include bilateral trade dialogues and problem-solving, communicating

U.S. concerns clearly through reports such as the Special 301 Report, committing our trading partners

to protect American intellectual property through trade agreements such as the Anti-Counterfeiting

Trade Agreement (ACTA) and the Trans-Pacic Partnership (TPP), and, when necessary, asserting our

ENF O RC EM EN T S TRAT E GY AC TIO N I TEMS

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rights through the World Trade Organization (WTO) dispute settlement process. USTR, in coordination

with the IPEC and relevant Federal agencies, will continue the practice of using these tools to seek

robust intellectual property enforcement, including protection of patents, copyrights, trade secrets and

trademarks including geographical indications, as well as strong civil, criminal and border measures.

Furthermore, USTR will be vigilant in enforcing U.S. trade rights under its trade agreements. These eorts

will be conducted in a manner consistent with the balance found in U.S. law and the legal traditions of

U.S. trading partners.

Special 301 “Action Plans”

USTR conducts annual reviews of intellectual property protection and market access practices in foreign

countries. Through an extensive Special 301 interagency process, USTR publishes a report annually,

designating countries of concern on dierent watch lists, referred to as “priority watch list” (PWL), “watch

list” and “priority foreign country.” Countries placed on the PWL are the focus of increased bilateral atten-

tion concerning the problem areas. The 2010 Special 301 report countries on the PWL included Algeria,

Argentina, Canada, Chile, China, India, Indonesia, Pakistan, Russia, Thailand and Venezuela.

USTR also develops action plans and similar documents to establish benchmarks, such as legislative,

policy or regulatory action, and as a tool to encourage improvements by countries in order to be

removed from the Special 301 list. In order to work with foreign governments to improve their practices

related to intellectual property and market access, USTR, in coordination with the IPEC, will initiate an

interagency process to increase the eectiveness of, and strengthen implementation of, Special 301

action plans. The action plans, or other appropriate measures, will focus on selected trading partners

for which targeted eorts could produce desired results.

Strengthen Intellectual Property Enforcement through International Organizations

Numerous international organizations have an interest in and focus on intellectual property rights. The

IPEC will work with relevant Federal agencies and the IPR Center to raise awareness of intellectual prop-

erty enforcement and to increase international collaborative eorts through international organizations,

such as the World Intellectual Property Organization (WIPO), the WTO, the World Customs Organization

(WCO), the World Health Organization (WHO), the Group of Twenty Finance Ministers and Central Bank

Governors (G-20), the International Criminal Police Organization (INTERPOL), the Asia-Pacic Economic

Cooperation (APEC) Forum, and the Organization for Economic Co-operation and Development (OECD).

By working with such organizations, the U.S. Government can strengthen international intellectual

property enforcement eorts and increase cross-border diplomatic and law enforcement cooperation.

In particular, the U.S. Government will explore opportunities for joint training, sharing of best practices

and lessons learned and coordinated law enforcement action.

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Securing Our Supply Chain

Fifth, the U.S. Government will work to secure supply chains to stem the ow of infringing products

through law enforcement eorts and through enhanced cooperation with the private sector.

FDA Notication Requirement for Counterfeit Pharmaceuticals and Other Medical Products

Because of the serious risk to public health, manufacturers and importers shall be required to notify the

FDA in the event of a known counterfeit of any pharmaceutical and other medical product. The required

notication shall also specify any known potential adverse health consequences of the counterfeit prod-

uct. Drug manufacturers shall also be required to provide the FDA with a list and complete description

of any legitimate drug products that are currently being distributed in the stream of U.S. commerce on a

twice annual basis, so that the FDA has updated information on all drugs and medical devices currently

being sold by the manufacturer. This could be eectuated by amending 21 U.S.C. Section 331.

Mandated Use of Electronic Track and Trace for Pharmaceuticals and Medical Products

The Food, Drug and Cosmetic Act should be modied to require that manufacturers, wholesalers and

dispensers implement a track-and-trace system, which allows for authentication of the product and

creation of an electronic pedigree for medical products using unique identiers for products. Eective

track-and-trace systems can make it more dicult for persons to introduce counterfeit or intentionally

adulterated medical products into the U.S. market, make it easier to identify persons responsible for

making a product unsafe and facilitate the recall of unsafe products by more quickly identifying where

a product is located in the marketplace. Privacy concerns will be considered when deciding where the

information will be housed and who will have access to the information.

Increased Enforcement Eorts to Guard Against the Proliferation of Counterfeit Pharmaceuticals

and Medical Devices

In an eort to further secure our supply chains, and to help stop the proliferation of counterfeit phar-

maceuticals and medical devices in the stream of commerce, increased U.S. Government action is

warranted. The IPEC will therefore work with relevant Federal agencies, including DHS (CBP and ICE)

and HHS/FDA, to establish increased enforcement cooperation, coordination and information sharing

consistent with current agreements, procedures, notices, alerts, guidance, memoranda of understanding

and established partnerships for daily operations at U.S. borders. To further these eorts, the IPEC will

work with these agencies to make certain that they have the enforcement authority that they need to

address the problems associated with counterfeit pharmaceuticals and medical devices.

Penalty Relief for Voluntary Disclosure

In cases where importers or other parties discover that they have acquired counterfeit or pirated prod-

ucts without their knowledge, there is no existing process by which the importers can voluntarily disclose

violations to CBP without being subject to seizures and other enforcement actions. In order to discover

counterfeit goods, encourage voluntary disclosure and strengthen cooperation between industry and

enforcement entities, the U.S. Government will take action to allow importers and others involved in the

importation of infringing goods to receive relief from civil enforcement action as appropriate when they

ENF O RC EM EN T S TRAT E GY AC TIO N I TEMS

★ ★

voluntarily disclose the violation to CBP prior to the beginning of an investigation. If a valid disclosure

is made, the infringing goods in the disclosing party’s possession or control would be destroyed under

CBP’s supervision and the disclosing party would bear the costs of destruction.

Penalize Exporters of Infringing Goods

While CBP has seizure and forfeiture authority related to the exportation of intellectual property infring-

ing goods, it does not have express authority to issue administrative penalties on infringing exports. In

order to ensure broader authority to protect U.S. intellectual property across the supply chain, the U.S.

Government will seek legislative amendments to specify authority for CBP to create and implement

a mechanism to evaluate and issue administrative penalties for intellectual property-related export

violations.

Streamline Bonding Requirements for Circumvention Devices

One of the tools available for rightholders to assist CBP in enforcing against counterfeit and pirated

goods is for rightholders to obtain a sample of the suspected product to determine if it is infringing. In

those instances, CBP requires that rightholders post a bond to cover the potential loss or damage to

the sample if the products are ultimately found to be non-infringing. Certain rightholders interact with

CBP frequently in this cooperative manner so posting an individual transaction bond for each sample

can be burdensome.

To streamline this requirement, in October 2009, CBP implemented a continuous bond option for

trademark and copyright infringement cases, allowing rightholders to post a single bond that covers

several transactions at dierent ports of entry. Contingent on CBP obtaining the authority to provide

rightholders samples of circumvention devices and in order to further streamline bonding requirements,

CBP will extend the new bond practice to cover samples of circumvention devices.

Facilitating Cooperation to Reduce Intellectual Property Infringement Occurring Over the

Internet

The U.S. Government supports the free ow of information and freedom of expression over the Internet.

An open and accessible Internet is critical to our economy. At the same time, the Internet should not be

used as a means to further criminal activity. The Administration encourages cooperative eorts within

the business community to reduce Internet piracy. The Administration believes that it is essential for

the private sector, including content owners, Internet service providers, advertising brokers, payment

processors and search engines, to work collaboratively, consistent with the antitrust laws, to address

activity that has a negative economic impact and undermines U.S. businesses, and to seek practical

and ecient solutions to address infringement. This should be achieved through carefully crafted and

balanced agreements. Specically, the Administration encourages actions by the private sector to eec-

tively address repeated acts of infringement, while preserving the norms of legitimate competition, free

speech, fair process and the privacy of users. While the Administration encourages cooperative eorts

within the business community to reduce Internet piracy, the Administration will pursue additional solu-

tions to the problems associated with Internet piracy, including vigorously investigating and prosecuting

criminal activity, where warranted.

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Establish and Implement Voluntary Protocols to Help Reduce Illegal Internet Pharmacies

Google, Yahoo and Bing recently updated voluntary protocols designed to prevent the sale of spon-

sored results for unlawful businesses selling counterfeit medications on-line. These protocols utilize a

“White List” of pre-approved Internet pharmaceutical sellers that include verication by the National

Association of Boards of Pharmacy’s Veried Internet Pharmacy Practice Sites (VIPPS) or certications

from the original manufacturers of legitimate and FDA-approved pharmaceuticals. The U.S. Government

applauds these eorts by the private sector and will continue to work with these companies and other

search engine operators, advertising brokers and payment processors to explore methods to prohibit

paid advertising for on-line illegal pharmaceutical vendors. Simultaneously, the U.S. Government will

explore means by which online pharmaceutical companies operating in violation of intellectual property

laws can be made subject to the full reach of law enforcement jurisdiction.

Building a Data-Driven Government

Sixth, information is critical to developing effective enforcement strategies. To that end, the U.S.

Government will improve data and information collection from intellectual property-related activities

and assess domestic and foreign laws and enforcement activities to enable an open and fair environment

for American intellectual property rightholders.

U.S. Government Resources Spent on Intellectual Property Enforcement

Several agencies across the U.S. Government dedicate resources toward the enforcement of intellectual

property. In order to better track resource baselines and inform future resource allocations dedicated

to intellectual property enforcement, the IPEC will collect annually the amount of U.S. Government

resources spent on intellectual property enforcement personnel, technologies, programs and other

eorts.

The IPEC has already begun that process by collecting this information in Fiscal Year (FY) 2010 through

a Budget Data Request (BDR), whereby agencies reported the amount of resources they dedicated to

human capital and programs, identied metrics used in measuring intellectual property enforcement

successes, and planned and estimated expenditures for future years. Moving forward, the IPEC will

continue coordinating this BDR annually, and will request the same data and metrics to allow for cross

and multi-year comparisons.

Assessing the Economic Impact of Intellectual Property-Intensive Industries

There is no known comprehensive study that attempts to measure the economic contributions of intel-

lectual property-intensive industries across all U.S. business sectors. Improved measures of intellectual

property linked with measures of economic performance would help the U.S. Government understand

the role and breadth of intellectual property in the American economy and would inform policy and

resource decisions related to intellectual property enforcement.

To assess the feasibility of improving measures of intellectual property and linking those measures to

economic performance, the Economic and Statistics Administration (ESA) within DOC, in coordination

ENF O RC EM EN T S TRAT E GY AC TIO N I TEMS

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with the IPEC, will convene an interagency meeting with relevant agencies to establish a framework

for conducting this work. Once that framework is established, ESA will test the feasibility of developing

improved intellectual property measures and, if those measures can be developed, they will be linked

to measures of economic performance. The resulting analysis and datasets will then be made public.

Comprehensive Review of Existing Intellectual Property Laws to Determine Needed Legislative

Changes

Due to changes in technology and the growing sophistication of intellectual property violators, the U.S.

Government must ensure that intellectual property laws continue to eectively and comprehensively

combat infringement. The IPEC will initiate and coordinate a process, working with Federal agencies,

to review existing laws—whether they impose criminal and/or civil liability—to ensure that they are

eectively reaching the appropriate range of infringing conduct, including any problems or gaps in

scope due to changes in technologies used by infringers. Federal agencies will also review existing

civil and criminal penalties to ensure that they are providing an eective deterrent to infringement

(including, as to criminal penalties, reviewing the United States Sentencing Guidelines). Finally, Federal

agencies will review enforcement of existing laws to determine if legislative changes are needed to

enhance enforcement eorts. The initial review process will conclude within 120 days from the date of

the submission of this Joint Strategic Plan to Congress. The Administration, coordinated through the

IPEC, will recommend to Congress any proposed legislative changes resulting from this review process.

Supporting U.S. Businesses in Overseas Markets

With the launch of the President’s National Export Initiative, it is an Administration priority to improve

U.S. Government support for U.S. businesses in overseas markets. American exporters face various

barriers to entry into overseas markets including barriers related to intellectual property rights. U.S.

companies may be reluctant to export due to a lack of certainty that innovation, and the intellectual

property rights in that innovation, can be protected. In addition, exporters may not be familiar with the

legal environment in which they need to operate to protect their rights.

In coordination with the IPEC, DOC and other relevant agencies will conduct a comprehensive review

of existing U.S. Government eorts to educate, guide and provide resources to those U.S. businesses

that are:

1. acquiring intellectual property rights in foreign markets;

2. contemplating exporting intellectual property-based products or choosing markets for export;

3. actively entering foreign markets or facing diculties entering foreign markets; and

encountering diculties enforcing their intellectual property rights in foreign markets.

The goal of the review is to increase the scope and eectiveness of existing eorts through improved

coordination of our diplomatic, cooperative, programmatic and other bilateral mechanisms. This eort

will focus in particular, but not exclusively, on the Chinese market.

★ ★

Summary of Enforcement

Strategy Action Items

Action Items

Leading By

Example

Establishment of a U.S. Government-Wide Working Group to Prevent U.S. Government

Purchase of Counterfeit Products

Use of Legal Software by Federal Contractors

Increasing Transparency

Improved Transparency in Intellectual Property Policy-Making and International

Negotiations

Increased Information Sharing with Rightholders

Communication with Victims/Rightholders

Reporting on Best Practices of Our Trading Partners

Identify Foreign Pirate Websites as Part of the Special 301 Process

Tracking and Reporting of Enforcement Activities

Sharing of Exclusion Order Enforcement Data

Enhanced Communications to Strengthen Section 337 Enforcement

Ensuring Eciency

and Coordination

Coordination of National Law Enforcement Eorts to Avoid Duplication and Waste

Coordination of Federal, State and Local Law Enforcement

Coordination of Training for State and Local Law Enforcement and Prosecutors

Improve the Eectiveness of Personnel Stationed Overseas to Combat Intellectual

Property Infringement

Coordination of International Capacity Building and Training

Establishment of a Counterfeit Pharmaceutical Interagency Committee

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Action Items

Enforcing Our Rights

Internationally

Combat Foreign-Based and Foreign-Controlled Websites that Infringe American

Intellectual Property Rights

Enhance Foreign Law Enforcement Cooperation

Promote Enforcement of U.S. Intellectual Property Rights through Trade Policy Tools

Special 301 “Action Plans”

Strengthen Intellectual Property Enforcement through International Organizations

Securing Our Supply Chain

FDA Notication Requirement for Counterfeit Pharmaceuticals and Other Medical

Products

Mandated Use of Electronic Track and Trace for Pharmaceuticals and Medical

Products

Increased Enforcement Eorts to Guard Against the Proliferation of Counterfeit

Pharmaceuticals and Medical Devices

Penalty Relief for Voluntary Disclosure

Penalize Exporters of Infringing Goods

Streamline Bonding Requirements for Circumvention Devices

Facilitating Cooperation to Reduce Intellectual Property Infringement Occurring

Over the Internet

Establish and Implement Voluntary Protocols to Help Reduce Illegal Internet

Pharmacies

Building a Data-Driven

Government

U.S. Government Resources Spent on Intellectual Property Enforcement

Assessing the Economic Impact of Intellectual Property-Intensive Industries

Comprehensive Review of Existing Intellectual Property Laws to Determine Needed

Legislative Changes

Supporting U.S. Businesses in Overseas Markets

★ ★

Agencies’ Intellectual Property

Enforcement Missions

Department of Agriculture

USDA supports intellectual property rights enforcement related to agriculture, primarily through the

provision of technical expertise in interagency trade agreement negotiations, dispute resolution and

enforcement mechanisms, and through USDA’s close relationships with the U.S. agricultural industry.

USDA’s support to intellectual property enforcement includes the following:

• Trade Agreements: USDA’s Foreign Agricultural Service (FAS) supports USTR in negotiating,

implementation, and monitoring and enforcement of free trade agreements (FTAs), and inter-

faces with U.S. agricultural industry groups on intellectual property trade agreement issues.

• World Trade Organization: USDA’s FAS supports dispute settlement, accession processes and

negotiations in the WTO related to agriculture.

• Bilateral and Regional Dialogues and Cooperation: USDA’s FAS participates in intellectual

property enforcement discussion in a wide range of trade and economic policy dialogues with

trading partners, and in trade and investment framework agreement discussions. FAS Attachés

overseas and sta in Washington participate in interagency working groups addressing intel-

lectual property issues.

• Coordination of U.S. Intellectual Property Enforcement Trade Policy: USDA’s FAS participates

in the Special 301 process, an interagency venue for resolving intellectual property policy issues.

Department of Commerce

International Trade Administration

ITA strengthens the competitiveness of U.S. industry, promotes trade and investment and ensures fair

trade through the rigorous enforcement of our trade laws and agreements. As part of its mission, ITA

ensures that our trading partners are fullling their international trade commitments to enforce and

protect intellectual property rights. ITA also responds to inquiries, develops trade programs and tools to

help U.S. businesses and citizens enforce and protect their intellectual property rights in foreign markets,

and conducts outreach to raise awareness.

The Oce of Intellectual Property Rights (OIPR) is responsible for developing and coordinating ITA input

on trade-related intellectual property rights policies, programs and practices and for assisting companies

to overcome challenges to protecting and enforcing their intellectual property rights overseas. The

U.S. Commercial Service, with oces in over 100 U.S. cities and 77 locations abroad, advocates for the

interests of U.S. companies on intellectual property issues with appropriate foreign government ocials,

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counsels U.S. companies operating or selling abroad in understanding foreign-country business climates

and legal environments and assists companies to identify in-country resources to assist with registering

and/or protecting their intellectual property rights through administrative or court actions.

As part of an overall strategy to educate the U.S. business community and, in particular, U.S. Small and

Medium Sized Enterprises (SMEs), ITA and USPTO, working with other U.S. Government agencies and

the private sector, have developed the www.StopFakes.gov/ website and a number of associated tools

for small businesses. The site includes information on:

• 17 Market-Specic Toolkits, which provide detailed information on protecting U.S. intellectual

property in key markets like China, Brazil and the European Union (EU).

• An online training program developed by OIPR with the Foreign Commercial Service (FCS),

USPTO, and the SBA, for SMEs about evaluating, protecting and enforcing intellectual property

rights (translated into Spanish and French to broaden outreach).

• A program developed by OIPR and the FCS to promote protection of intellectual property rights

at domestic and international trade fairs.

• A program developed with the American Bar Association through which American SMEs can

request a free, one-hour consultation with a volunteer attorney to learn how to protect and

enforce their rights in Brazil, China, Egypt, India, Russia and Thailand.

• The Intellectual Property Protection and Enforcement Manual and the No Trade in Fakes Supply

Chain Tool Kit, which OIPR encouraged the U.S. Chamber of Commerce and the Coalition Against

Counterfeiting and Piracy (CACP) to develop and release. These documents, posted online at

www.thecacp.com/, showcase proven strategies companies, both small and large, use to protect

their supply chains from counterfeiters and pirates.

Patent and Trademark Oce

USPTO has a long history of encouraging and supporting trading partners, particularly developing and

least developed countries, to move beyond mere adoption of laws protecting intellectual property rights

to the operation of eective systems for enforcement. In 1999, USPTO expanded its technical assistance

and capacity building activities to address intellectual property enforcement. Such capacity building

has included training for foreign government law enforcement ocials, prosecutors, the judiciary and

customs and border enforcement ocials, and technical assistance on drafting laws and regulations

on enforcement-related issues.

USPTO has created a exible team enterprise that meets the challenges of intellectual property enforce-

ment in today’s global economy by: (1) carrying out statutory and international treaty obligations to

assist developing nations in implementing accessible and eective intellectual property enforcement

systems; (2) responding rapidly to changing global and international conditions; (3) establishing alli-

ances with other national and international intellectual property organizations to strengthen, protect

and enforce American intellectual property rights globally; and (4) working with other U.S. Government

agencies, national intellectual property enforcement authorities and international organizations to

AGEN C IES’ IN T ELLECT UA L P RO P ER T Y ENF O RC E M EN T M ISSI ON S

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increase the accessibility, eciency and eectiveness of civil, administrative and criminal enforcement

mechanisms in global trade, foreign markets and electronic commerce.

USPTO regularly consults with foreign governments and other U.S. Government agencies on the sub-

stantive, technical aspects of intellectual property enforcement laws, legal and judicial regimes, civil

and criminal procedures, border measures and administrative regulations relating to enforcement;

advises USTR and DOC on the trade-related aspects of intellectual property enforcement and serves as

technical advisors on enforcement provisions in trade agreements by reviewing, analyzing and monitor-

ing legislative and legal developments pertaining to intellectual property enforcement mechanisms,

administration and public education eorts; develops, conducts, coordinates and participates in training

programs, conferences and seminars, and develops training materials, including long-distance learning

modules, to improve the level of expertise of those responsible for intellectual property enforcement

and the overall enforcement environment; gathers information on and monitors foreign national

enforcement systems, and coordinates intellectual property enforcement-related activities undertaken

by various intergovernmental and non-governmental organizations; and provides technical expertise

on legislation involving intellectual property enforcement.

USPTO’s Global Intellectual Property Academy, established in 2006, is a focal point for intellectual

property rights technical assistance and training, and a crucial component in an integrated approach to

enforcement training and capacity-building, both domestically and internationally. In addition, USPTO

operates the overseas intellectual property Attaché program, which places resident experts in a num-

ber of U.S. missions abroad in order to provide direct, on-the-ground technical expertise, support and

coordination of all intellectual property rights protection and enforcement issues, including training

and capacity-building activities for foreign government ocials.

Commercial Law Development Program

The Commercial Law Development Program (CLDP) improves the legal environment for U.S. businesses

worldwide by removing non-tari barriers to trade and ensuring eective implementation of intellectual

property policies and enforcement provisions. CLDP programs level the playing eld for U.S. industries to

compete in developing markets and provide follow-up support to countries that have limited capacity

to implement some provisions of trade agreements entered into with the U.S. Although CLDP technical

assistance is largely government-to-government, each program is designed to address a pressing need

identied by both local and U.S. businesses.

CLDP partners with other oces within DOC (including USPTO, ITA and National Telecommunications

and Information Administration (NTIA)), as well as DHS, DOJ, DOS/ USAID to provide capacity building

and enforcement technical assistance in developing countries. CLDP’s intellectual property work with

host countries covers drafting legislation, establishing regulations, increasing skills development,

promoting public outreach and ensuring transparency. Many programs address needs across regions

by gathering judiciaries, policy-makers and regulators from multiple countries to share best practices

and develop workable solutions to regional problems related to counterfeiting and piracy. CLDP’s intel-

lectual property work over the years has led to the development of a small library of case studies in a

multitude of languages that include technology transfer, licensing and border measures. These materi-

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als, frequently shared with other U.S. Government partners, are essential learning tools for developing

countries looking to improve intellectual property enforcement.

More information about CLDP’s work and successes related to intellectual property enforcement and

capacity building can be found at

www.cldp.doc.gov.

Department of Health and Human Services | Food and Drug Administration

The FDA is responsible for protecting the public health by assuring the safety and ecacy of medical

products, and the safety of foods. Expanded markets and more complex supply chains have required

the FDA to nd new ways to safeguard global public health. The FDA is acutely aware of the illegality

of and the direct-and-indirect risk posed to the public health by counterfeit medical products, infant

formula and foods that falsely represent their identity and/or source. Those who manufacture and dis-

tribute falsied medical products and foods not only defraud patients and consumers, they also deny ill

patients the medical products that can alleviate suering and save lives and, for a formula that may be

an infant’s sole source of nutrition, the healthy start in life that every child needs. Consequently, the FDA

takes all reports of suspect counterfeits seriously and the FDA’s regulatory ocials have responded to this

emerging threat by: strengthening its ability to prevent the introduction of falsied medical products

and foods into the U.S. distribution chain, facilitating the identication of falsied medical products and

foods, and by minimizing the risk and exposure of patients and consumers to falsied products through

recalls, public awareness campaigns and other steps.

As a part of these eorts, the FDA’s OCI expeditiously investigates reports of suspected falsied products

in order to protect U.S. citizens. Specically, OCI investigates counterfeit products that violate 18 U.S.C.

Section 2320 and 21 U.S.C. Section 331(i). OCI routinely coordinates counterfeit investigations and intel-

ligence with other international, Federal, state and local law enforcement agencies and has initiated

numerous investigations focused on protecting the public health that have led to criminal convictions.

The issue of falsied medical products and food is a global issue that requires a global solution and

the FDA is working with its international regulatory partners to address the public health aspects of

counterfeit medical products and foods. The FDA has also worked with our partners in foreign markets

to strategically establish FDA oces worldwide that help provide technical assistance, among other

things, to help countries enhance their regulatory systems to ensure that counterfeits are kept out of

the legitimate supply chain so consumers receive safe, eective and quality products. In addition, the

FDA is also working with U.S. medical product supply chain stakeholders to put measures in place in

the U.S. to ensure the integrity of the U.S. closed distribution system, such as the tracking and tracing

of prescription drugs, in order to keep counterfeits out of this system.

Department of Homeland Security

DHS plays a key role in the protection of intellectual property rights. In the pursuit of an eective intel-

lectual property enforcement strategy, DHS aims to ensure the facilitation of legitimate trade, while

enforcing U.S. trade and intellectual property rights laws, as well as investigating intellectual property

rights violations, specically trademark, counterfeiting and copyright piracy. In February 2010, DHS

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presented the Quadrennial Homeland Security Review (QHSR) to Congress, which outlines a strategic

framework for DHS’ mission. Intellectual property rights enforcement falls within Mission 2 of the QHSR,

which identies the safeguarding of lawful trade and travel as one if its key goals. DHS is able to execute

its mission through its components, including CBP, ICE, U.S. Secret Service (USSS) and others.

DHS actively engages with international organizations like the WCO and INTERPOL; works to develop

increased information sharing and partnership programs involving trade; actively participates in global

intellectual property rights training; and works with other U.S. Government agencies to further build

and enhance intellectual property rights eorts. DHS components continue to work toward enhancing

its intellectual property enforcement capabilities within its agency-wide mission to secure the nation

and to facilitate the secure ow of legitimate goods through legitimate trade and travel.

DHS conducts several joint operations to investigate and act against intellectual property violations. For

example, Operation Guardian is a DHS-led, multi-agency public health and safety initiative, conducted

with ICE, CBP, FDA, the Consumer Product Safety Commission (CPSC), USPIS, USDA, and the Government

of Mexico’s Tax Administration Service. Since Operation Guardian’s inception in FY 2008, ICE has initiated

437 investigations which have resulted in 102 criminal arrests, 25 administrative arrests, 155 search war-

rants and, with CBP, 925 seizures valued at over $26 million. Further, Operation Apothecary is another

DHS-led multi-agency operation, conducted with ICE, CBP, FDA and USPIS that identied vulnerabilities

in the mail and express courier entry process that allowed for the smuggling of commercial quantities

of counterfeit, unapproved and/or adulterated drugs. Since Operation Apothecary’s inception, ICE has

initiated 274 investigations which have resulted in 87 criminal arrests, 58 search warrants and, with CBP,

664 seizures valued at over $2.7 million.

Customs and Border Protection

As the Federal agency responsible for the management, control and protection of U.S. borders, CBP is

critical to enforcement of intellectual property rights. CBP acts under its own authorities to seize and

forfeit goods that infringe on trademarks, trade names and copyrights; conduct audits; and impose

and collect nes and penalties against intellectual property infringement. CBP also enforces exclusion

and seizure and forfeiture orders issued by the ITC for imports that are determined to be intellectual

property rights infringing. CBP is implementing a 5-year strategy for intellectual property enforce-

ment to ensure the competitiveness of America’s businesses, prevent harm to consumer health and

safety and protect our way of life against threats to critical infrastructure and national security posed

by the theft of intellectual property. CBP has laid out a number of initiatives, including private sec-

tor partnership programs to facilitate legitimate trade, enhanced targeting and training to increase

interdictions of intellectual property infringing goods and levying penalties and conducting audits

more eectively to deter intellectual property violations. CBP’s 5-year strategy leverages resources

and partnerships with U.S. industry, other Federal agencies and foreign governments in a compre-

hensive plan to attack intellectual property rights infringement throughout the international trade

process. CBP receives allegations of illegal importation through its on-line e-allegations website at

http://www.cbp.gov/xp/cgov/trade/trade_programs/e_allegations/. Allegations of trade violations may

also be reported by calling 1-800-BE-ALERT.

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Immigration and Customs Enforcement

ICE is a lead U.S. agency for the investigation of criminal intellectual property violations involving the

illegal production, smuggling, and distribution of counterfeit and pirated products, as well as associated

money laundering violations. ICE seizes for forfeiture goods associated with these investigations, such

as those that infringe on trademarks, trade names, and copyrights. ICE criminal investigations focus

on identifying, disrupting and dismantling the transnational criminal organizations that promulgate

this activity. In addition to the 26 Special Agent in Charge oces responsible for conducting domestic

enforcement actions, ICE has 63 Attaché Oces in 44 countries that coordinate with host governments

to conduct intellectual property enforcement that extend beyond U.S. borders.

IPR Center

To more eectively counter the ood of infringing products, ICE established the IPR Center. The mis-

sion of the IPR Center is to address and combat predatory and unfair trade practices that threaten our

economic stability and national security, restrict the competitiveness of U.S. industry in world markets,

and place the public’s health and safety at risk. The IPR Center brings together key domestic and foreign

investigative agencies and industry partners to increase the ecient and eective leverage of resources,

skills and authorities to provide a comprehensive response. The IPR Center maintains an intellectual prop-

erty theft reporting system through its website at

www.ICE.gov, through email at IPRCenter@dhs.gov

and through a toll free phone number at 866-IPR-2060.

U.S. Secret Service

USSS investigates violations of laws relating to counterfeiting of obligations and securities of the U.S.;

nancial crimes that include, but are not limited to, access device fraud, nancial institution fraud,

identity theft, computer fraud; and computer-based attacks on our nation’s nancial, banking and

telecommunications and critical infrastructure. As part of the investigative mission of safeguarding the

nation’s nancial infrastructure, USSS investigations discover links to intellectual property violations.

In response to the growing problem of intellectual property theft, USSS, through its Electronic Crimes

Task Force (ECTF) program will continue to support Federal, state and local law enforcement agencies

and prosecutors to combat computer and intellectual property crime and promote information sharing

between government and the private industry.

Department of Justice

Aggressive enforcement of intellectual property laws is a high priority of DOJ. DOJ combats intellectual

property theft and related intellectual property crime utilizing the full resources of its Criminal Division,

U.S. Attorneys’ Oces and Civil Division, as well as the investigatory and law enforcement resources of

the FBI and other law enforcement partner agencies. DOJ’s intellectual property priorities include the

investigation and prosecution of intellectual property crimes involving: (1) health and safety; (2) trade

secrets and economic espionage; and (3) commercial on-line piracy and counterfeiting. In addition,

DOJ armatively supports the intellectual property enforcement eorts of its state and local partners

through the use of targeted intellectual property-focused grant programs.

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Criminal Division and U.S. Attorneys’ Oces

DOJ prosecutes the most serious perpetrators of intellectual property crimes involving a wide range of

criminal oenses. Since 1999, when then-Deputy Attorney General Holder announced DOJ’s rst intel-

lectual property enforcement initiative, the Criminal Division has dramatically increased its intellectual

property focus, resulting in an 800% increase in the number of intellectual property investigations and

prosecutions. DOJ’s intellectual property prosecution mission is handled by the 94 U.S. Attorneys’ Oces

and the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS).

Intellectual property prosecutions through DOJ’s 94 U.S. Attorneys’ Oces utilize the knowledge and

skills of highly specialized Assistant U.S. Attorneys working under its Computer Hacking and Intellectual

Property (CHIP) coordinator program. The program consists of a network of over 220 specially-trained

Federal prosecutors in U.S. Attorneys’ Oces across the country who aggressively pursue computer

crime and intellectual property oenses. Each U.S. Attorney’s Oce has at least one CHIP prosecutor; in

addition, 25 U.S. Attorneys’ Oces have CHIP Units, which consist of two to eight CHIP attorneys each.

Each CHIP prosecutor has four core responsibilities to: (1) prosecute computer crime and intellectual

property oenses; (2) serve as the district’s legal counsel on matters relating to those oenses, and the

collection of electronic or digital evidence; (3) train prosecutors and law enforcement personnel in the

region; and (4) conduct public and industry outreach and awareness. Most CHIP prosecutors also work

on other non-intellectual property cases, depending on the needs of their respective districts.

DOJ’s CHIP program is complemented by the Criminal Division’s CCIPS, a highly specialized team of 40

prosecutors focused on computer crime and intellectual property oenses. Fourteen CCIPS attorneys

are devoted exclusively to the intellectual property criminal enforcement program. These attorneys

prosecute intellectual property cases; assist in developing and implementing DOJ’s criminal intellectual

property enforcement strategy and legislative and policy initiatives; provide advice and guidance to

agents and prosecutors in the eld on a 24-hour basis; develop training and resource materials for

prosecutors and investigative agents both domestically and abroad; work with Federal agency partners

to strengthen overall U.S. intellectual property enforcement eorts; and provide public outreach and

training to intellectual property creators, owners and industry.

The cornerstone of DOJ’s strategy to strengthen international intellectual property criminal enforcement

is the Intellectual Property Law Enforcement Coordinator (IPLEC) program. With support from DOS, DOJ

has deployed two experienced Federal prosecutors to serve as IPLECs in Bangkok, Thailand for Southeast

Asia, and in Soa, Bulgaria for Eastern Europe. The IPLECs provide operational assistance and critical

intellectual property training to increase in-country enforcement capacity. In addition, in the past ve

years, DOJ attorneys have provided training and education on intellectual property enforcement to

over 10,000 prosecutors, police, judicial ocers and other government ocials from over 100 countries.

DOJ has also incorporated intellectual property into its existing International Organized Crime Strategy

and has assigned a prosecutor to serve as Counsel to the IOC-2. DOJ’s Criminal Division, the FBI, DHS, and

other relevant participating Federal agencies are coordinating their eorts through IOC-2 and working

to ensure that critical intellectual property-related intelligence and case information is contributed to

its data pool.

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Civil Division

Intellectual property enforcement is also an integral part of the mission of three sections of the

Department’s Civil Division: the Intellectual Property Section, the National Courts Section and the

Oce of Consumer Litigation. Through the Civil Division’s Intellectual Property Section, DOJ assists

with prosecution of civil actions to recover penalties imposed by CBP with respect to the importation

of counterfeit goods, brings armative cases when U.S. intellectual property is infringed, and consults

with other sections of DOJ and other agencies on intellectual property matters. The National Courts

Section prosecutes civil actions to recover various penalties or customs duties arising out of negligent or

fraudulent import transactions, many of which include importation of counterfeit goods. The National

Courts Section also defends CBP enforcement of the ITC’s Section 337 exclusion orders at the Court of

International Trade; these orders are an important tool for intellectual property enforcement. Finally,

the Oce of Consumer Litigation enforces and defends the consumer protection statutes of the FDA,

including the criminal provisions of the Food, Drug, and Cosmetics Act that govern counterfeit drugs

and medical devices.

Federal Bureau of Investigation

The FBI’s strategic objective is to disrupt and dismantle state sponsored groups and international and

domestic criminal organizations that steal, manufacture, distribute and otherwise prot from the theft of

intellectual property. The highest priorities for intellectual property rights investigations are counterfeit

health and safety products and theft of trade secrets. The FBI aggressively pursues intellectual property

enforcement through liaison with private industry, domestic and foreign law enforcement partners

and its partnership with the IPR Center. The FBI’s Intellectual Property Rights Unit (IPRU) became fully

operational within the IPR Center on April 15, 2010, and now includes ve dedicated FBI agents who

work full time at the Center. In addition, by the end of FY 2010, the FBI intends to employ over 50 Special

Agents exclusively devoted to pursuing intellectual property investigations operating in eld oces

throughout the country and four enhanced intellectual property squads.

Additionally, the FBI’s IPRU is fully engaged with other FBI divisions, including the Criminal Investigative

Division and Organized Crime and Health Care Fraud Units, as well as the Counterintelligence Division

Economic Espionage Unit, to coordinate and track theft of trade secret investigations that have a

state sponsorship nexus. The objective of the FBI’s Counterintelligence Division’s Economic Espionage

Program is to prevent the loss of trade secrets to foreign agents, governments and instrumentalities as

dened by the Economic Espionage Act of 1996. These collaborations act as a force multiplier allowing

for multiple criminal charges resulting in higher penalties for oenders.

The FBI also established an Intelligence Fusion Group at the IPR Center. Together the partner agencies

dene the intellectual property rights threat picture, share tactical and strategic intelligence, establish

IPR Center joint collection requirements, produce joint intelligence products and develop the national

strategy.

The FBI also trains domestic and international law enforcement ocials in intellectual property rights

matters. The FBI is collaborating with its partner agencies to develop more comprehensive and advanced

intellectual property training curriculum. The curriculum will ensure a uniform foundation across law

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enforcement agencies conducting intellectual property rights investigations and provide state and local

law enforcement and industry liaisons with information as to how to most eectively partner with the

Federal government on intellectual property rights investigations.

Oce of Justice Programs

DOJ affirmatively supports the intellectual property enforcement efforts of its state and local law

enforcement partners through grants awarded by its Oce of Justice Programs, BJA. In 2009, BJA cre-

ated the Intellectual Property Enforcement, Training, and Technical Assistance Program consisting of

eight eld-initiated grants and two training and technical assistance grants. The program is designed to

provide national support and improve the capacity of state and local criminal justice systems to address

criminal intellectual property enforcement, including prosecution, prevention, training and technical

assistance. BJA also formed a partnership with the NW3C and NAAG to improve the quantity and qual-

ity of enforcement and prosecution of intellectual property crimes by providing training and technical

assistance to state and local ocials.

Department of Justice Task Force on Intellectual Property

Overseeing and coordinating all of DOJ’s intellectual property enforcement eorts is the newly revital-

ized DOJ Task Force on Intellectual Property. This Task Force, which is chaired by the Deputy Attorney

General, is composed of senior ocials from the oces of the Attorney General, the Deputy Attorney

General, and the Associate Attorney General, the Criminal Division, the Civil Division, the Antitrust

Division, the Oce of Legal Policy, the Oce of Justice Programs, the Attorney General’s Advisory

Committee, the Executive Oce for U.S. Attorneys and the FBI. The Task Force monitors and coordinates

overall intellectual property enforcement eorts at DOJ, provides a vehicle for increased cooperation

with Federal, state and local law enforcement and serves as an engine of policy development to com-

prehensively address the evolving technological and legal landscape of intellectual property crimes.

Department of State

Protecting American intellectual property abroad is a DOS priority and DOS works closely with other

U.S. government agencies, the private sector and foreign governments to combat piracy and coun-

terfeiting. U.S. embassies, consulates and missions are on the front line of protecting U.S. intellectual

property rights: responding to complaints raised by U.S. companies and vigorously pressing foreign

governments to fulll their bilateral and international obligations. In addition to diplomatic resources,

DOS uses training and public diplomacy strategies to support these goals.

Robert D. Hormats, DOS Undersecretary for Economic, Energy, and Agricultural Aairs, is the senior eco-

nomic ocial at the DOS. He advises the Secretary of State on international economic policy, including

intellectual property issues, and serves as the U.S. government’s Sous-Sherpa for the G8/G20 process.

DOS’ Oce of International Intellectual Property Enforcement (IPE), in the Bureau of Economic, Energy,

and Business Aairs (EEB), was founded by Congress in 2005, and is dedicated specically to promoting

intellectual property enforcement and innovation. The IPE team works with ocers at DOS’ overseas

posts and regional bureaus to ensure that the interests of American rightholders are represented over-

seas, and to highlight the integral role of intellectual property rights protection in the development of

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the global economy. IPE works with other U.S. Government agencies in international organizations and

bilateral negotiations dedicated to intellectual property enforcement, including the WIPO and the WTO/

Trade-Related Aspects of Intellectual Property Rights (TRIPS) Council.

EEB and State’s Bureau of International Narcotics and Law Enforcement together implement a

Congressionally-earmarked $4 million/year intellectual property enforcement training and technical

assistance for developing countries that funds an average of ten projects per year. DOS’ public diplo-

macy programs include a group international visitor program sponsored by the Bureau of Educational

and Cultural Aairs that invites up to 30 foreign intellectual property stakeholders for three weeks of

capacity-building meetings and observations in the U.S.

Executive Oce of the President | United States Trade Representative

USTR is supporting and implementing President Obama’s commitment to aggressively protect American

intellectual property internationally. As the President said just a few months ago,

“Our single greatest asset is the innovation and the ingenuity and creativity of the American

people. It is essential to our prosperity and it will only become more so in this century.”

The President spoke of the importance of making sure that American businesses are paid appropriately

and intellectual property is not stolen. He related this to our work at USTR:

“at’s why USTR is using the full arsenal of tools available to crack down on practices that

blatantly harm our businesses, and that includes negotiating proper protections and enforcing

our existing agreements, and moving forward on new agreements, including the proposed

Anti-Counterfeiting Trade Agreement.”

The ACTA, mentioned by President Obama, is an initiative to negotiate a new intellectual property

enforcement agreement with a number of key trading partners who share our ambition and commit-

ment to stepping up the ght against global counterfeiting and piracy.

Other key tools that USTR uses to advance the cause of intellectual property rights enforcement include:

• Trade Agreements: USTR works with countries to strengthen their intellectual property enforce-

ment regimes through trade agreements. The ACTA negotiations are one example. Another is

the negotiation, implementation, monitoring and enforcement of U.S. FTAs that include world-

class provisions on intellectual property rights enforcement.

• World Trade Organization: This multilateral organization provides opportunities for USTR to

lead engagement with trading partners on intellectual property enforcement issues in several

contexts, including accession processes for prospective members like Russia, the Council for

TRIPS and dispute settlement.

• Special 301 and preference program reviews: USTR uses the “Special 301” process to encour-

age specic trading partners to address signicant deciencies in intellectual property protec-

tion, including weak intellectual property enforcement. Each April, USTR issues a Special 301

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Report setting out specic intellectual property rights concerns in countries worldwide. USTR

works with other countries in other contexts, such as reviews under the Generalized System

of Preferences (GSP) and other trade preference programs to ensure that the country is mak-

ing progress on providing adequate and eective protection and enforcement of intellectual

property rights.

• Bilateral and Regional Dialogues and Cooperation: USTR leads or is a signicant participant

in intellectual property enforcement discussion in a wide range of other trade and economic

policy dialogues with trading partners. A few of the many examples include the APEC Forum;

the U.S.-China Strategic and Economic Dialogue; the U.S.-China Joint Commission on Commerce

and Trade; the U.S.-EU Summit; and the U.S.-Russia Intellectual Property Rights Working Group.

Intellectual property rights issues also feature prominently in many of our Trade and Investment

Framework Agreement discussions.

• Coordination of U.S. Intellectual Property Rights Enforcement Trade Policy: USTR leads

the interagency trade policy coordination process, including on intellectual property rights,

pursuant to statute and Executive Orders. USTR consults regularly with stakeholders, including

through numerous advisory committees. USTR provides trade policy leadership and expertise

across the full range of interagency initiatives on intellectual property rights and innovation

policy, including intellectual property enforcement matters.

The Library of Congress | The Copyright Oce

The Copyright Oce advises Congress on national and international issues relating to copyright and

provides information and assistance to Federal departments and agencies and the Judiciary on national

and international issues relating to copyright. See 17 U.S.C. §701.

The Copyright Oce does not have enforcement duties, but supports the copyright enforcement activi-

ties of the U.S. Government in a number of ways.

Regarding international matters, the Oce plays a substantive role on the U.S. delegations to interna-

tional organizations such as WIPO, working with USPTO and other interested agencies to establish and

implement U.S. copyright initiatives. Copyright issues also frequently arise in the context of trade, in

which the Copyright Oce works very closely with the USTR and other agencies to address copyright

enforcement deciencies in legal systems of our trading partners.

The Copyright Oce always contributes to the Special 301 process and 2010 was no exception. This

year, the Oce’s contribution included detailing an attorney from the Oce of Policy and International

Aairs to USTR to be the Special 301 Coordinator. In addition, the Copyright Oce has lent its technical

expertise to USTR’s premier enforcement-related initiative, ACTA.

The Copyright Oce also engages in training, education and outreach programs. For example, in coop-

eration with WIPO, the Copyright Oce hosted a week-long training program entitled, “International

Training for Developing Countries and Countries in Transition on Emerging Issues in Copyright and

Related Rights and Issues Pertaining to Blind and Visually Impaired Persons.” The program ran from

March 8 to March 12 and featured several panels and speakers devoted to subjects related to copyright

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enforcement. Participation in the enforcement section of the program involved speakers from across the

U.S. Government, including Ms. Victoria Espinel, the IPEC, and Ms. Kira Alvarez, USTR’s Chief Negotiator

for Intellectual Property Enforcement, as well as the Copyright Oce and speakers representing a wide

array of stakeholders.

On April 21, 2010, the Copyright Office co-sponsored the “Internet Intermediary/Joint Liability

Roundtable” in Beijing, China along with USPTO, the National Copyright Administration of China, and

China’s Ministry of Commerce. This event brought together Chinese copyright and trade ocials, judges

and academics with U.S. copyright and trade ocials and stakeholders for a frank and candid exchange

of copyright enforcement on the Internet.

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Agencies’ 2010 Major Intellectual Property

Enforcement Activities to Date

Department of Agriculture

USDA’s intellectual property enforcement-related activities include:

• Trade Agreements: USDA’s FAS supports USTR in negotiating, implementation, and monitoring

and enforcement of FTAs, and interfaces with U.S. agricultural industry groups on intellectual

property trade agreement issues.

• World Trade Organization: USDA’s FAS supports dispute settlement, accession processes and

negotiations in the WTO related to agriculture.

• Bilateral and Regional Dialogues and Cooperation: USDA’s FAS participates in intellectual

property enforcement discussion in a wide range of trade and economic policy dialogues with

trading partners, and in trade and investment framework agreement discussions. FAS Attachés

overseas and sta in Washington participate in interagency working groups addressing intel-

lectual property issues.

• Coordination of U.S. Intellectual Property Enforcement Trade Policy: USDA’s FAS participates

in the Special 301 process, an interagency venue for resolving intellectual property policy issues.

Department of Commerce

International Trade Administration

• Trade Agreements Compliance and Market Access: OIPR monitors foreign governments’ imple-

mentation of and compliance with international trade agreements. As part of that work, OIPR

assists U.S. rightholders overcome specic barriers in foreign markets that impede commercial

transactions involving U.S. intellectual property. Since January 1, 2010, OIPR has initiated 21

market access and compliance cases in 13 dierent foreign markets on behalf of U.S. righthold-

ers. Of those 21 cases, 18 were on behalf of U.S. SMEs.

• Translation of SME Training Module to French and Spanish: In April 2010, OIPR launched the

French and Spanish versions of its online SME training module, which help rms recognize,

resource.

• OIPR Participates in the Mexico and New Zealand Rounds of the ACTA Negotiation: In January

and April 2010, OIPR sta represented the ITA on the U.S. negotiating team during the Mexico

and New Zealand rounds for the ACTA negotiations.

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• ITA Hosts a Meeting of the Trans-Atlantic Consumer Dialogue on ACTA: In April 2010, OIPR

sta hosted and participated in a day-long meeting of the Trans-Atlantic Consumer Dialogue

in which both U.S. and European consumer groups discussed the ACTA negotiation.

• Croatia Intellectual Property Right Tool Kit: The U.S. Commercial Service in Zagreb, Croatia,

in close cooperation with OIPR and USPTO, developed the Croatia Intellectual Property Rights

Toolkit to aid U.S. rightholders in Croatia. This toolkit has been posted on the website of the U.S.

Embassy in Zagreb, Croatia, and can also be accessed through a link from www.StopFakes.gov/.

• 2010 Special 301 Report: ITA played a signicant role during the interagency review led by USTR

in the lead up to the 2010 Special 301 Report’s publication on April 30, 2010. ITA coordinated

six industry meetings for DOC sta, and actively participated in all interagency discussions.

• U.S.-EU Intellectual Property Rights Working Group: On June 7, 2010, ITA co-chaired a meet-

ing of the U.S.-EU Intellectual Property Rights Working Group in Brussels, Belgium. At the

meeting, ITA and other U.S. Government agencies held detailed discussions with the European

Commission on U.S.-EU cooperative eorts to strengthen intellectual property rights enforce-

ment and protection in key third-country. ITA also held talks with DG Enterprise on ways in

which the U.S. and EU can leverage resources to help SMEs.

Patent and Trademark Oce

• USPTO has participated in the ACTA negotiations, including the recent rounds in Mexico

(January 2010), New Zealand (April 2010), and Switzerland (June 2010).

• In March 2010, USPTO organized an intellectual property border enforcement workshop in Cairo,

Egypt, to support eorts by the government of Egypt in revamping its customs laws.

• In March 2010, USPTO conducted a regional workshop in Estonia, for investigators and prosecu-

tors on investigation and prosecution of digital piracy for ocials from Estonia, Latvia, Lithuania

and Russia, with ocials from Sweden and Finland also participating.

• In March 2010, USPTO organized a regional seminar on combating counterfeit products for

the East African Community in Dar Es Salaam, Tanzania, with the seminar timed to capitalize

on progress the East African Community has made in developing an anti-counterfeiting policy

statement and an anti-counterfeiting law.

• In March 2010, USPTO participated in the APEC-IPEG 30th meeting in Hiroshima, Japan, at

which, USPTO led the U.S. delegation at the meeting and continued to push initiatives on anti-

camcording and signal piracy, as well as trade in counterfeit goods.

• As part of a partnership with INTERPOL and the WCO, USPTO co-funded Operation Jupiter

trainings in Paraguay (April 2010), Peru (May 2010), and Western Africa (May 2010), with these

regional activities focused on transnational criminal organizations involved in intellectual

property crime.

• USPTO, as part of its on-going partnership with the Association of Southeast Asian Nations

(ASEAN), organized and funded intellectual property rights enforcement capacity-building

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programs for regional customs ocials in Brunei, Darussalam (March 2010), and public prosecu-

tors and law enforcement ocials/police in Cambodia (May 2010).

• In May 2010, USPTO organized a two-week study tour program for Mexican judges in the U.S.,

and will provide a detail to the Embassy in Mexico City to work on intellectual property enforce-

ment and protection-related programs from June to September 2010.

• USPTO has provided expert technical advice to USTR in the TPP Agreement negotiations on

enforcement-related provisions.

Commercial Law Development Program

• In March 2010, CLDP held a U.S. Consultations on Intellectual Property and Technology Transfer

for a group of Algerian representatives from the GAO and the private sector.

• CLDP held a follow up workshop in March 2010 for representatives of Kosovo’s information

technology industry on intellectual property and software licensing.

• In April 2010, in collaboration with DHS and DOJ, CLDP held a two-day training consultation on

intellectual property enforcement at the borders for 150 participants from the Malian Customs

Service as well as regional delegations from Cameroon, Cote d’Ivoire, Togo, Benin, Burkina Faso

and Senegal, in Bamako.

• In April 2010, as a part of ongoing judicial capacity building programs in Libya, CLDP arranged

consultations and training with DOJ enforcement attorneys, and USPTO enforcement attorneys

for four high-level Justice Ocials from Libya.

• In May 2010, CLDP held a three-day workshop in Accra for 50 participants that facilitated the

development of an Interagency Intellectual Property Task Force, by bringing together a wide

range of Ghanaian agencies and stakeholders involved in the ght against counterfeiting and

piracy.

• In May 2010, as part of the AGCI program, CLDP held a regional workshop on the adjudica-

tion of intellectual property cases in collaboration with USPTO and DOJ and the Southern

African Development Community (SADC) for a group of judges from across the SADC region

to Botswana.

• In May and June 2010, CLDP implemented a two-part program in Pakistan focusing on intel-

lectual property. Part one helped create a core group of specialists able to advise tenants of

university technology incubators and to manage university technology transfer oces. Part

two built the information technology community’s capacity to manage intellectual capital, and

support its eorts to modify the legislative and institutional environment (focus on copyright

registration).

• In June 2010, CLDP held a program in Ukraine for 65 customs ocials and other government

authorities of Ukraine, Poland, Slovakia, Hungary, Romania, Moldova and Russia on ways to

better interdict the entry of infringing goods.

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Department of Health and Human Services | Food and Drug Administration

• In January 2010, HHS/FDA issued a public warning about a counterfeit version of the weight-loss

drug Alli 60 mg capsules (120 count rell pack) being sold over the Internet, which included an

incorrect active ingredient that should not be used without a prescription and could be harmful

to certain patients.

• In March 2010, the FDA issued a standard for unique identication for packages of prescription

drugs, which is an important rst step towards establishing track and trace and supply chain

security in the U.S.

• In March 2010, the FDA warned health care providers and consumers about counterfeit surgi-

cal mesh being distributed in the U.S. under the C. R. Bard/Davol brand name. Surgical mesh

products are used to reinforce soft tissue where weakness exists.

• In May 2010, the FDA was actively engaged in discussions at the World Health Assembly, seek-

ing international consensus on public health strategies to address the problem of counterfeit

medical products.

• Throughout 2010, the FDA and CBP are conducting drug inspection “blitzes” to identify coun-

terfeit and substandard drugs sent to U.S. consumers usually as a result of purchases over the

Internet.

Department of Homeland Security

DHS has conducted a number of intellectual property rights enforcement activities in 2010.

• QHSR: In February 2010, DHS presented the QHSR to Congress, which identied the safeguard-

ing of lawful trade and travel as one if its key goals.

• Anti-Counterfeiting Trade Agreement: DHS, including CBP and the Oce of Policy, served as

subject matter experts advising the USTR at the Mexico negotiating round in January, and CBP,

ICE, and the Oce of Policy attended the New Zealand negotiating rounds in April.

• 2010 Special 301 Report: DHS provided signicant input and subject matter expertise to the

interagency review led by USTR to publish the 2010 Special 301 Report on April 30, 2010.

Customs and Border Protection

• 5-Year Strategy for Intellectual Property Rights Enforcement: In early July, CBP will unveil an

ambitious and comprehensive 5-year strategy for intellectual property enforcement aimed at

improving enforcement throughout the entire international trade process. This multi-layered

strategy manages intellectual property rights risk by expanding the border to ght counterfeit-

ing, not only as cargo arrives at our ports of entry, but also internationally before cargo is laden

on vessels destined for our shores, and after illicit goods arrive in our country.

• Intellectual Property Rights Seizures Increase: At mid-year FY 2010, intellectual property rights

seizures are at almost 9,700, an increase of approximately 50% over mid-year FY 2009.

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• Supply Chain Management Program: CBP hosted a kick-off meeting with private sector

stakeholders on the development of a trade partnership to expedite entry of shipments into

the U.S. that are at low risk for intellectual property rights infringement and to better focus CBP’s

inspection resources on shipments of high or unknown risk.

• Intellectual Property Rights Targeting Models: CBP coupled the expertise of its Intellectual

Property Rights National Targeting and Analysis Group with new technology and targeting

methods to build a new intellectual property rights risk model. In just completed testing, the

model increased eectiveness in identifying shipments of counterfeit goods by a factor of four.

• Applications for Intellectual Property Rights Enforcement: CBP approved 862 applications,

known as recordations, from trademark and copyright owners for CBP to protect their rights

against counterfeit and pirated goods.

• Technical Analyses: Scientists in CBP’s Oce of Laboratories and Scientic Services have ana-

lyzed approximately 3,000 samples of suspected intellectual property rights-infringing products

so far this year. These laboratory tests have resulted in seizures of products such as circuit boards,

computer chips, video game systems, cigarettes, watches, perfumes and pharmaceuticals.

• Foreign Training and Capacity-Building: This year, CBP has traveled to Brunei, Cairo, Egypt,

Bangkok, Thailand, Lima, Peru and Bamako, Mali to provide intellectual property enforce-

ment expertise for regional training and capacity-building programs sponsored by the U.S.

Government.

• Enforcement Operations: As a result of its targeting and interdiction successes, including

targeting and interdiction for the IPR Center Operation Guardian and Operation Apothecary

(see previous section), CBP continues to be the leading source of referrals to ICE for possible

criminal investigations.

Immigration and Customs Enforcement

• Operation Holiday Hoax: Operation Holiday Hoax was a joint operation with CBP, the FDA and

the USPIS that seized counterfeit goods in transit, at transportation hubs and at local retail sales

points throughout the U.S. and Mexico. In the U.S., ICE and its partners seized more than 700,000

counterfeit items, with a total value of more than $26 million. Fifteen individuals were arrested

in New York and Texas. Mexico’s eorts resulted in the execution of 100 search warrants and the

seizure of 274 tons of counterfeit goods.

• Operation Spring Cleaning: Initiated in April 2010, Spring Cleaning was an interagency intel-

lectual property theft enforcement surge operation that targeted the manufacture, distribution

and retail sale of counterfeit goods. Coupled with a simultaneous multi-national investigation

in Baltimore, the two actions resulted in a combined total of 45 arrests and the seizure of 1.7

million items of counterfeit merchandise valued at $263 million.

• Operation Global Hoax: Initiated in May 2010, Operation Global Hoax is a multinational eort to

identify, investigate and interdict the distribution of pirated movie and music products. Between

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May and July 2010, 35 countries around the globe will work with the WCO in this operation and

exchange gathered intelligence in furtherance of this eort.

• Operation Mercury II: Operation Mercury II is a ve-day surge operation planned for June 2010

to combat the importation and distribution of substandard and counterfeit pharmaceuticals.

This operation will be a joint eort with the WCO.

• Between January and March 2010, ICE and CBP teamed with the NFL, NBA, NCAA, industry and

local law enforcement to conduct operations targeting counterfeit sports merchandise sold

during the Super Bowl, NBA All-Star Game, and the NCAA Final Four and Frozen Four tourna-

ments. These operations resulted in seizures of over 14,000 items valued at more than $760,000.

• In April 2010, ICE announced partnerships with state and local law enforcement, resulting in

the formation of 22 IPTETs, in which 70 federal, state and local law enforcement agencies have

joined the 10 federal partners of the IPR Center in collaborating on activities to more eectively

combat intellectual property theft nationwide.

• In early June 2010, ICE and the IPR Center, along with INTERPOL, co-hosted the 2010 Certication

Industry Against Counterfeiting (CIAC) North America conference.

• In early June 2010, the IPR Center hosted a Symposium on International Organized Crime,

Terrorism and Intellectual Property Theft, bringing together academia, industry, law enforce-

ment and government.

• From January 1, 2010 through May 19, 2010, ICE’s intellectual property theft enforcement activ-

ity resulted in 166 criminal arrests, 56 indictments, 34 convictions, and 1,078 seizures valued at

more than $358 million.

Department of Justice

Over the past several months, DOJ spearheaded several key intellectual property initiatives:

• In February 2010, DOJ created a revitalized DOJ Task Force on Intellectual Property. The Task

Force monitors and coordinates DOJ’s overall intellectual property enforcement eorts.

• In March 2010, BJA posted its FY 2010 Intellectual Property Enforcement Program solicitation,

making $4 million in funding available to state and local enforcement entities, including pros-

ecutors, for intellectual property enforcement task forces and local intellectual property training

and technical assistance. BJA anticipates, based on the $200,000 maximum award amount,

awarding 20 eld-initiated grants. The grants awarded in 2010 will build upon the previous

intellectual property grant awards of nearly $2 million in August 2009 to eight state and local

law enforcement agencies and two non-prot enforcement member organizations.

• On March 12, 2010, DOJ conducted an Antitrust Workshop: Agricultural and Antitrust

Enforcement in our 21st Century—Issues for Farmers. The workshop included a panel that

discussed how the patenting of genetically modified seeds has affected the competitive

dynamics of the seed industry, and issues facing the industry as patents covering certain traits

are nearing expiration.

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• In April, 2010, DOJ announced the appointment of 20 additional FBI Special Agents dedicated

to investigating intellectual property rights cases. These agents joined the 31 agents already

deployed to eld oces around the country devoted to investigating intellectual property

crimes. As a result of these new appointments, the FBI created four enhanced intellectual

property enforcement squads and increased personnel resources to six additional eld oces.

• In April 2010, DOJ also announced the appointment of 15 new Assistant U.S. Attorneys positions

devoted to prosecution of high tech crime, including computer crime and intellectual property

oenses. The new positions will be located in California, the District of Columbia, Maryland,

Massachusetts, Michigan, New Jersey, New York, Pennsylvania, Texas, Virginia and Washington.

• On May 26, DOJ participated in a rst of its kind tri-agency workshop with the Federal Trade

Commission (FTC) and USPTO (including high-level ocials from each agency) on signicant

patent and antitrust issues that can have critical implications on innovation and competition.

The workshop, labeled “The Intersection of Patent Policy and Competition Policy,” discussed

standard-setting, the patent backlog and the use of injunctions in district courts and at the ITC.

• During July, in coordination with USTR and FTC, DOJ will be holding an intellectual property/

antitrust workshop for the Chinese antimonopoly agencies in China as part of our ongoing

technical assistance.

• Over the past year, the Attorney General has also personally emphasized DOJ’s renewed focus

and eorts to combat intellectual property crime through cooperation with international law

enforcement partners. On February 24, 2010, the Attorney General met with ocials from the

Rio De Janeiro Prosecutor’s General’s Oce to emphasize the need for strong enforcement of

criminal intellectual property laws and to develop stronger partnerships with Brazil as both

countries seek to enhance their intellectual property enforcement eorts.

In addition to program-wide initiatives, DOJ has successfully participated in several high-prole intel-

lectual property cases:

• In January 2010, a defendant was sentenced to 30 months in prison and ordered to pay $790,683

in restitution to Cisco Systems, Inc., as a result of his conviction for tracking in counterfeit Cisco

computer products. The defendant, a citizen of China, carried out the scheme while doing busi-

ness as Gaoyi Tech, a company located in Shenzhen, China. The defendant procured counterfeit

Cisco products in China in response to orders and then shipped the products to the U.S. [FBI]

• In 2009, an investigation uncovered a scheme to sell free-to-air satellite TV receiver boxes which

would illegally decrypt Dish Network/Nagrastar signals and provide them free to the free-to-air

receiver box purchasers. The main defendant hired computer hackers to break the encryption

algorithm that Dish Network/Nagrastar used (know as Nagra 3) for placement into his free-to-air

boxes. His co-conspirators received over $650,000 in payments from the main subject for their

part in recruiting and trying to crack the encryption. Dish Network estimated its losses would

have been more than $100 million if the subjects had succeeded in breaking the encryption.

The three defendants pled guilty to conspiracy to violate the Digital Millennium Copyright Act.

In January 2010, the main subject was sentenced to 18 months in custody followed by three

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years supervised release. The two co-defendants were sentenced to one month in custody and

ve months of house arrest. [FBI]

• In February 2010, DOJ led a second brief in connection with the proposed class action settle-

ment in the Google Books matter. (The Authors Guild Inc. et al. v. Google (S.D.N.Y.). DOJ submitted

its views on the proposed settlement, indicating that the settlement raised class certication,

• In May 2010, two defendants were sentenced, respectively, to 10 years and one month in prison

and seven years and 10 months in prison for roles in operating a major Internet-based DVD

importation and distribution business as well as fraudulent receipt of government benets.

The defendants imported counterfeit DVDs in bulk from suppliers in the Philippines by means

of false Customs declarations and sold them through websites. [FBI, USPIS and CBP]

• In May 2010, a man pleaded guilty to selling counterfeit cancer drugs using the Internet. The

defendant admitted selling what he falsely claimed was the experimental cancer drug sodium

dichloroacetate, also known as DCA, to at least 65 victims in the U.S., Canada, the United

Kingdom, Belgium and the Netherlands. The defendant admitted that, in actuality, he sent vic-

tims a white powdery substance that was later determined through laboratory tests to contain

starch, dextrin, dextrose or lactose, and contained no DCA. According to court documents, along

with the counterfeit DCA, the packages also contained a fraudulent certicate of analysis from

a ctitious laboratory and instructions on how to dilute and ingest the bogus DCA. DCA is an

experimental cancer drug that has not yet been approved by the FDA for use in the U.S. [FBI]

• In May 2010, a defendant was sentenced to 51 months in prison and ordered to pay $119,400

in restitution to Cisco Systems, Inc. A Federal jury found the defendant, a Saudi citizen, guilty of

charges related to his tracking in counterfeit Cisco products. According to evidence presented

at trial, the defendant purchased counterfeit Cisco Gigabit Interface Converters (GBICs) from an

online vendor in China with the intention of selling them to DOD for use by U.S. Marine Corps

personnel operating in Iraq. The computer network for which the GBICs were intended is used

by the U.S. Marine Corps to transmit troop movements, relay intelligence and maintain security

for a military base west of Fallujah, Iraq. [ICE]

• In May 2010, two defendants pleaded guilty to conspiracy to produce and sell counterfeit

video gaming machines, commonly known as slot machines. The defendants admitted that

they conspired to make and sell unauthorized copies of computer programs designed for

video slot machines and counterfeit video slot machines bearing registered trademarks. One

of the defendants was arrested in Riga, Latvia, and extradited from Latvia to the U.S. on Oct. 23,

2009. This defendant is the rst individual to be extradited from Latvia to the U.S. under a new

extradition treaty between the U.S. and Latvia, which entered into force on April 15, 2009. [FBI]

• In June 2010, two defendants were convicted after trial of importing more than 300,000 fake

luxury handbags and wallets from China bearing counterfeit trademarks, including those of

Burberry, Louis Vuitton, Gucci, Coach, Fendi, Chanel and others. The counterfeit luxury goods

had an estimated worth of more than $ 100 million. At sentencing, the defendants each face a

maximum of 30 years in prison and $4.75 million in nes. [ICE].

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• In June 2010, DOJ’s Antitrust Division led a brief in a signicant case involving patents, In Re:

Ciprooxacin Hydrochloride Antitrust Litigation (Arkansas Carpenters Health and Welfare Fund

v. Bayer A.G.), discussing the proper standard for evaluating “reverse payment” settlements of

patent infringement litigation between branded and generic drug manufacturers.

Department of State

Counterfeit Medicines Initiatives: Undersecretary Hormats and EEB Assistant Secretary Jose W.

Fernandez launched a comprehensive initiative to combat counterfeit medicines. In consultation with

industry and other agencies, DOS will focus part of its $4 million government-to-government training

budget to build enforcement capacity in this specic area. A new public diplomacy initiative will fund

outreach/public education activities in 25 countries.

Special 301 Contributions: EEB and Embassy Tel Aviv provided support for an extensive round of

negotiations with Israel and Saudi Arabia, e.g., reporting, information gathering, diplomatic contacts

and logistics. The out-of-cycle reviews resulted in rm commitments for improved intellectual property

regimes in both countries. DOS participated in the regular annual Special 301 review through reporting,

analysis and strategy development.

Foreign Government Capacity Building: DOS-funded intellectual property rights law enforcement

training and technical assistance (using Bureau of International Narcotics and Law Enforcement, Oce of

Crime Programs funds coordinated through a partnership with EEB-IPE) is currently being implemented

by U.S. law enforcement agencies in countries around the world. Examples include the work of senior

intellectual property advisors in Indonesia and the IPLEC in Eastern Europe, as well as regional training.

Examples also include a March anti-counterfeiting workshop in Tanzania and a May intellectual property

criminal enforcement training with INTERPOL in Senegal. A four-day workshop for Mexican ocials in

April reinforced recent legislative changes in that country. IPLEC training in Macedonia in February led

to the largest raid in Macedonian history.

Public Diplomacy Initiatives: Undersecretary Hormats, EEB Assistant Secretary Fernandez, and many

posts abroad participated in World Intellectual Property Day activities on April 26, highlighting the

importance of intellectual property and DOS’ commitment to protecting it. Many posts chose to screen

the National Geographic “Illicit” video for local groups, including for the rst time, a Spanish language

version of the program.

Training State Employees: EEB, led by Assistant Secretary Fernandez, held an intensive training session

for intellectual property ocers in Western Hemisphere posts in January 2010. Industry and Washington-

based intellectual property experts conducted a day of briengs and discussions of “lessons learned”

in working intellectual property issues from an embassy perspective. Planning is underway for similar

capacity-building sessions for intellectual property ocers in Africa and Europe in the fall.

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Executive Oce of the President | United States Trade Representative

1/12/2010: USTR called for public comments on intellectual property protection and enforcement in

preparation for release of the 2010 Special 301 Report.

1/26/2010: USTR led U.S. Delegation at the 7th round of the ACTA negotiations in Mexico.

2/17/2010: Following extensive USTR-led engagement, successfully concluded the Special 301 out-of-

cycle review for Israel, leading to enhanced protection of data submitted to obtain marketing approval

in Israel and improvements to Israel’s patent regime.

2/24/2010: Following extensive USTR-led engagement, successfully concluded the Special 301 out-

of-cycle review for Saudi Arabia, resulting in enhanced protection of pharmaceuticals and improved

enforcement of copyrights.

3/3/2010: USTR held a public hearing on intellectual property protection and enforcement in preparation

for release of the 2010 Special 301 Report.

4/6/2010: Following extensive USTR-led engagement, Mexico passed a law expanding ex ocio author-

ity for intellectual property enforcement (issue noted in 2009 Special 301 report).

4/12/2010: USTR led U.S. delegation at the 8th Round of the ACTA negotiations in New Zealand.

4/19/2010: USTR co-led U.S. delegation at U.S.-China JCCT intellectual property rights working group;

urges stronger intellectual property enforcement.

4/21/2010: USTR released draft text of ACTA.

4/26/2010: Remarks by Ambassador Ron Kirk on World Intellectual Property Day.

4/26/2010: Remarks by Deputy U.S. Trade Representative Miriam Sapiro to the U.S. Chamber of Commerce

Global Intellectual Property Center on World Intellectual Property Day.

4/30/2010: USTR released the 2010 Special 301 Report on intellectual property rights; announced

removal of Czech Republic, Hungary and Poland from Special 301 Watch List due, in part, to stronger

intellectual property enforcement achieved following extensive USTR-led engagement. The report

included USTR’s annual list of “notorious markets.”

5/26/2010: Following extensive USTR-led engagement, the Philippines enacted a law to strengthen

enforcement against illegal camcording in movie theaters (issue noted in 2010 Special 301 Report).

The Library of Congress | The Copyright Oce

Consistent with its role of supporting the copyright enforcement activities of the U.S. Government,

include signicant discussion of enforcement issues. Among the programs this year are the following:

• a speech about U.S. copyright developments for the Council of U.S. International Businesses in

New York, NY on April 7;

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• a speech on the topic of “Copyright and New Technology” on April 8 at the annual meeting of

the American Bar Association in Crystal City, VA;

• a speech about current copyright developments for the annual intellectual property program

hosted by the Special American Business Internship Program in Washington, D.C. on April 20;

• two presentations on current domestic and international policy issues of the Copyright Oce

on May 6 and 7 at the American Intellectual Property Association 2010 Spring Meeting in New

York, NY; and

• a speech on ACTA and its negotiation as part of a panel of experts at the Future of Music

Coalition’s Policy Day in Washington, D.C. on May 25.

★ ★

Performance Measures

Performance Measures: Data, Measures, and Indicators

It is important that the U.S. Government measure the eectiveness of this Joint Strategic Plan to protect

and enforce the intellectual property rights of American innovators, creators, producers and workers.

Such measurements convey to the public the impact of the U.S. Government’s work and help the U.S.

Government to continue and expand eective enforcement activities and x or curtail ineective ones.

At the same time, it must be recognized that the goal—reduced infringement of intellectual property

rights—is dicult to accurately measure, in large part, because infringers, like other types of thieves,

try to hide their actions. This report sets out an initial list of key performance indicators for intellectual

property enforcement, primarily measuring government activities. As the U.S. Government as a whole

gains experience collecting and analyzing these indicators, further modications or additional measures

may follow. We intend to use these measures to track year-to-year changes to give some indication of

whether the U.S. Government’s intellectual property enforcement eorts are producing results.

Law Enforcement Actions

First, the IPEC, in coordination with the DHS, DOJ, HHS, and other relevant agencies will report on the

number of enforcement actions involving intellectual property infringement.

Seizures

Second, the IPEC, in coordination with DHS, DOJ, and other relevant agencies will report on seizures

involving intellectual property infringement.

Training/Outreach

Third, the IPEC, in coordination with DOC, DHS, DOJ, and DOS, and other relevant agencies will report

on training and outreach by the U.S. Government involving intellectual property.

Increased Intellectual Property Protection in Other Countries

Fourth, the IPEC, in coordination with DOS, DOC, USTR, and other relevant agencies will report on

changes in other countries in intellectual property protection.

Measuring Public Perceptions of Intellectual Property Rights

Fifth, the IPEC will work with DOC to explore the feasibility of using surveys to track public perceptions

of intellectual property rights, particularly among key demographics (such as youth).

★ ★

Appendix 1

History of the IPEC Oce and Process Leading to this Joint Strategic Plan

On October 13, 2008, the PRO-IP Act created the position of the IPEC, placing it within the Executive

Oce of the President. As dened in the PRO-IP Act, the term ‘‘intellectual property enforcement’’ means

“matters relating to the enforcement of laws protecting copyrights, patents, trademarks, other forms

of intellectual property, and trade secrets, both in the United States and abroad, including in particular

matters relating to combating counterfeit and infringing goods.”

President Barack Obama nominated Victoria A. Espinel as the rst IPEC on September 25, 2009, and the

Senate conrmed Espinel on December 4, 2009. The Administration placed the IPEC within the Oce

of Management and Budget (“OMB”), in the Executive Oce of the President. The oce of the IPEC

currently consists of the IPEC, one permanent employee, and four employees temporarily detailed

from other federal agencies, including one each from: (1) DOC, USPTO, Oce of the Solicitor; (2) DHS,

Oce of Policy; (3) DOJ, Civil Rights Division; and (4) DOJ, United States Attorney’s Oce for the Central

District of California (Los Angeles), Cyber and Intellectual Property Crimes Section (CHIP Unit Attorney).

The PRO-IP Act directed the IPEC to submit to Congress a Joint Strategic Plan. To prepare this Joint

Strategic Plan, the IPEC worked with: (1) OMB; (2) DOJ, including the FBI; (3) DOC, including ITA and

USPTO; (4) USTR; (5) DOS; (6) DHS, including CBP and ICE; (7) HHS, including the FDA; (8) USDA; and

(9) the United States Copyright Oce. Additionally, the IPEC worked with other oces, including the

Oce of the Vice President, the Oce of Science and Technology Policy, the Domestic Policy Council

and the White House Counsel’s Oce.

The Joint Strategic Plan was formulated based on signicant input from the public. In March 2010,

the IPEC issued a FRN, seeking the public’s input on: (1) the costs to the U.S. economy resulting from

intellectual property infringement; (2) threats to public health and safety posed by intellectual prop-

erty infringement; and (3) specic recommendations for ghting infringement, including ways the

government could improve its eectiveness and coordination of intellectual property enforcement

eorts. The Oce of the IPEC received and reviewed more than 1,600 responses. To promote transpar-

ency, all of the responses were posted on the IPEC’s website and are available for the public to review.

See http://www.whitehouse.gov/omb/intellectualproperty/frn_comments/.

The IPEC also met with numerous companies aected by intellectual property infringement, organiza-

tions interested in intellectual property enforcement (both those seeking strong intellectual property

enforcement and those seeking strong exceptions/defenses to intellectual property rights), trade

associations representing industries for which intellectual property enforcement is important to their

success, and labor organizations representing workers in aected industries. Most of these meetings

took place in Washington, D.C., but the IPEC also traveled to cities and regions around the country to

hear from industries aected by intellectual property infringement. The IPEC will continue to meet

with the public to determine how well this Joint Strategic Plan is being implemented and to hear new

concerns that arise.

★ ★

Appendix 2

Literature Review

As part of the eort to craft the Joint Strategic Plan, the IPEC gathered data through several means,

including through soliciting public comments in response to the FRN, collecting information on U.S.

Government intellectual property enforcement-related spending through an interagency request and

reviewing relevant literature.

The following is intended as a summary of submissions and studies and is not intended to be a U.S.

Government endorsement of any specic study, methodology or data.

Summary of Data Received from Federal Register Notice Comments

The FRN issued by the IPEC in February 2010 requested that comments submitted identify costs to

the U.S. economy resulting from infringement of intellectual property rights, both direct and indirect,

including any impact on the creation or maintenance of jobs. The FRN provided guidance that data

cited in the submissions should clearly state the methodology used in calculating estimated costs and

any critical assumptions relied upon, identify the source of the data on which the cost estimates were

based, and provide a copy of or citation to each such source.

Many of the comments submitted by organizations and companies representing specic industries

reported economic data for those industry sectors. Such data included the number of jobs directly

and indirectly generated by that sector, the average wages paid, sector-specic contribution to Gross

Domestic Product (GDP), tax revenue and export data. For example, organizations from the semiconduc-

tor industry cite that the sector employs approximately 185,000 people in the U.S. and comprises the

U.S.’ second largest exporting industry. According to the Business Software Alliance (BSA), the software

industry in the U.S. employed 1.7 million people in direct and related industry positions, with wages

that equaled 195% of the average U.S. income, and contributed more than $261 billion to the U.S. GDP

in 2007. Similarly, the Motion Picture Association of America reports that direct industry jobs had an

average salary that was 26% higher than the national average and generated $15.7 billion in public

revenues in 2008.

Some submissions also identied the amount of investment made toward research and development

(R&D). The Pharmaceutical Research and Manufacturers of America (PhRMA) reports that the biophar-

maceutical industry invested $56.1 billion in R&D for new medicines, $44.9 billion of which was directed

 As reported by the Semiconductor Industry Association in its comments to the February 2010 FRN, and based on

the ITC database (industry dened at a six digit North American Industry Classication System level.)

 As reported by the BSA in its comments to the February 2010 FRN, and based on the OECD STAN Database,

available online at

http://stats.oecd.org/Index.aspx?DatasetCode=STAN08BIS&lang=en. “Software and related services”

are those businesses that fall under code 72 in the ISIC rev. 3 industry classication.

 As reported by the Motion Picture Association of America in its submission to the February 2010 FRN, and based

on analysis of total jobs and wages (direct and indirect) using U.S. Bureau of Labor and Statistics (BLS) data and SIC

to NAICS bridge, industry data, and the RIMS II model of the U.S. Bureau of Economic Analysis (BEA), and analysis of

employment and payments data, using income and sales tax rates.

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toward research conducted in the U.S. In 2009, PhRMA estimates that industry investment in R&D was

approximately $65.3 billion.

A few organizations noted the need for balance in the U.S. Government’s approach to intellectual prop-

erty enforcement and for due consideration to be given to fair use of intellectual property rights. They

cited the Computer and Communications Industry Association (CCIA) study from 2007 which reported

that industries relying on the fair use doctrine generated revenue of $4.5 trillion and contributed $507

billion—18%—to U.S. GDP growth, generated $194 billion in exports, fueled productivity gains of

$128,000 per employee and employed 17 million people. The study provided total revenue generated

by these industries, without dening which portion of the revenue resulted from use of intellectual

property under the fair use doctrine.

Several submissions included numbers aimed at capturing the breadth of intellectual property in the

U.S., highlighting, for example, that intellectual property-based industries account for more than $5

trillion of the U.S. GDP.

Comments also oered estimates of the loss of jobs and revenue to the U.S. economy due to intellectual

property theft. The most frequently cited studies were those from the Institute for Policy Innovation (IPI),

which estimate that, annually, copyright piracy aecting the U.S. motion pictures, sound recordings,

business software and entertainment software/video game industries cost the U.S. economy $58 billion

in total output, 373,375 jobs, $16.3 billion in earnings, and $2.6 billion in Federal/state/local tax revenue.

Other submissions criticized these studies, contending that they relied on two unsubstantiated assump-

tions—that each pirated good represented a lost legitimate sale (a one-to-one substitution rate), and

that jobs lost in one industry could not be replaced by jobs in other industries (no job migration)—that

skewed the ndings to overstate the impact of intellectual property theft on the U.S. economy.

Trends in Health, Safety, and Security

The FRN issued by the IPEC also requested that submissions identify threats to public health and safety

posed by intellectual property infringement, in the U.S. and in other countries. The submissions identi-

ed a few intellectual property infringement trends related to health and safety issues, notably in the

areas of pharmaceuticals; critical defense, and health and safety infrastructure; and activities in support

of organized crime. The sections below provide a brief summary of those concerns.

 The Biopharmaceutical Sector’s Impact on the U.S. Economy: Analysis at the National, State, and Local Levels,

Archstone Consulting, Lawton R. Burns, March 2009

 Burrill & Company, analysis for PhRMA, 2005-2009, includes PhRMA research associates and nonmembers;

Pharmaceutical Research and Manufacturers of America, PhRMA Annual Member Survey (Washington, DC: PhRMA,

1980-2009).

 Computer & Communications Industry Association, Fair Use in the U.S. Economy (2007),

http://www.ccianet.org/CCIA/les/ccLibraryFiles/Filename/000000000085/FairUseStudy-Sep12.pdf. Note that CCIA has

recently published a 2010 updated version of the study.

 Robert J. Shapiro and Kevin A. Hassett, “The Economic Value of Intellectual Property,” USA for Innovation, 10/05.

 Stephen E. Siwek, “The True Cost of Copyright Industry Piracy to the U.S. Economy”, Policy Report 189, Institute for

Policy Innovation, 10/3/2007.

AP PENDI X 2

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Pharmaceuticals

Counterfeiting of pharmaceuticals can cause great harm and even death. Many counterfeits contain

a dangerous amount of harmful chemicals which can cause serious adverse reactions. Others do not

contain enough, or any, of the necessary active ingredients, thereby causing harm to patients who rely

on these pharmaceuticals to overcome medical conditions and promoting drug-resistant diseases.

On its face, it can be dicult to distinguish a counterfeit pharmaceutical from the legitimate product.

Furthermore, the proliferation of pharmaceutical websites makes intellectual property enforcement in

this area a signicant challenge.

Organizations such as the Pharmaceutical Security Institute (PSI) collect and share information on

counterfeit pharmaceuticals and help initiate enforcement actions. The Partnership for Safe Medicines

(PSM) reported in its submission that, in 2009, PSI saw increased growth in the number of counterfeit-

ing incidents globally, from 1,216 in 2006 to 1,585 in 2008, along with an expansion in the number of

countries connected to such incidents. According to the WHO, approximately “8% of the bulk drugs

imported into the U.S. are counterfeit, unapproved, or substandard” and “10% of global pharmaceuti-

cal commerce, or $21 billion, involves counterfeit drugs.” LegitScript, an online pharmacy verication

service, identied over 36,000 online pharmacies as of March 2010 that do not meet the standards for

certication by this company. PSM research indicates that the sale of all prescription pharmaceuticals

online generated an estimated $15-20 billion in 2004.

Critical, Defense and Health and Safety Infrastructure

Many submissions highlighted concerns that counterfeits are being found in products related to the

nation’s critical infrastructure, in defense technologies and in life-saving medical machines such as

debrillators and medical imaging equipment. The Semiconductor Industry Association (SIA) conducted

a survey of its member companies in May 2007, and reported case-specic evidence of counterfeit

semiconductors. One of the SIA member companies reported that a broker website indicated 40,000 of

the company’s devices being available; however the company had manufactured fewer than 200 units

of that device. SIA notes several concerns with counterfeit semiconductors. Incorrect die or inserting

the wrong chip into a system can lead to electronic system failure. Counterfeit chips being mislabeled

as military-grade can lead to fatal malfunction in military and aerospace parts. SIA reports that while

the military/aerospace market comprises less than one percent of the world market, this market is an

attractive target for counterfeiters because it provides for particularly high prot margins due to the

price dierential between commercial and military-grade chips.

The submission by Underwriters Laboratories (UL), a not-for-prot product safety testing and certica-

tion organization, highlights a growth of counterfeiting in scope and product categories. UL states that

increasingly sophisticated counterfeit products are being seized at U.S. ports at an increasing rate and

 As reported in the Partnership for Safe Medicines in response to the February 2010 FRN.

 Albert I. Wertheimer, et al, “Counterfeit Pharmaceuticals: Current Status and Future Projections,” 43 J. Am. Pharm.

Assoc. 710-8 (2003).

 As reported in the Alliance for Safe Online Pharmacies in response to the February 2010 FRN. Also see

http://www.legitscript.com

 As reported in the Partnership for Safe Medicines comments in response to the February 2010 FRN.

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reports that it has recently found unauthorized UL marks on healthcare appliances. WHO estimate that

6-8% of medical devices are counterfeit, or approximately $5.5-$7.3 billion in the U.S. market.

Organized Crime

Several organizations including the Copyright Alliance have cited the 2009 report by the RAND

Corporation’s Safety and Justice Program and the Global Risk and Security Center. Through the study

of 14 dierent cases, the report identied “a broad, geographically dispersed, and continuing connection

between lm piracy and organized crime” and links prots from motion picture piracy to 17 dierent

organized crime rings in the U.S., Canada, Hong Kong, Italy, Japan, Malaysia, Mexico, Pakistan, Paraguay,

Russia, Spain, Northern Ireland and the United Kingdom. The report also documented lm piracy as

having been used to nance terrorist group activities in three of the 14 case studies, including those of

Hezbollah, a group designated as a foreign terrorist organization by DOS. The Alliance for Safe Online

Pharmacies (ASOP) notes in its submissions examples of investigations, indictments or convictions

linking counterfeiting of prescription drugs to terrorist organizations and organized crime networks.

Summary of Additional Literature and Data

As part of the information and data collection eort, the IPEC also reviewed studies and reports, many

of which were referenced frequently in the public submissions responding to the February 2010 FRN.

Below is a summary of a few of these studies. The following is intended as a summary of submissions

and studies and is not intended to be a U.S. Government endorsement of any specic study, methodol-

ogy or data.

OECD Global Study

The OECD global study on “The Economic Impact of Counterfeiting and Piracy” conducted in 2008, and

subsequently updated in 2009, reported that trade in counterfeit and pirated products reached a value

of approximately $200 billion U.S. dollars in 2005 (this number was later adjusted based on updated

trade data to be closer to $250 billion). Some of the key ndings and recommendations of the report are:

• That understanding the primary market and secondary market consumer trends and factors

oers a framework within which to assess the propensity of a product to be counterfeit or

pirated and can help guide quantitative research, and government and industry eorts.

• That the magnitude and scope of counterfeiting and piracy is larger than the national GDPs of

150 economies and aects nearly all product sectors.

 As reported in UL’s comment in response to the IPEC FRN from February 2010.

 Gregory F. Treverton, Carl Matthis, Karla J. Cunnigham, Jeremiah Goulka, Greg Ridgeway, Anny Wong, “Film Piracy,

Organized Crime, and Terrorism,” The RAND Corporation Safety and Justice Program and the Global Risk and Security

Center, 2009,

http://www.rand.org/pubs/monographs/2009/RAND_MG742.pdf, pgs. xii and xiii

 Ibid., pg. xii

 ASOP provides links to two news stories (the links provided here have been updated from

the FRN submission). See Ed White, “Detroit-area man guilty in cigarette scheme,” Associated

Press 1/12/2009,

http://www.chroniclejournal.com/stories_oddities.php?id=157825; Reuters,

“Counterfeit goods are linked to terror groups,” International Herald Tribune, Feb. 12, 2007,

http://www.nytimes.com/2007/02/12/business/worldbusiness/12iht-fake.4569452.html. Please reference ASOP’s FRN

submission for more references to such articles and reports.

 Information from “The Economic Impact of Counterfeiting and Piracy,” OECD, 2008.

AP PENDI X 2

★ ★

• That the eects are broad and profound and impact socio-economic environments, righthold-

ers, consumers and governments. The study also reports that counterfeiting and piracy activities

support criminal networks and organized crime.

Institute for Policy Innovation Studies

The IPI conducted three studies in 2006 and 2007 looking at the cost of piracy to the motion picture,

sound recording and copyright industries in the United States. Notable statistics reported in the studies

include:

• “The total costs to the U.S. economy of copyright piracy are estimated to exceed $58 billion in

lost output, 373,375 lost jobs, $16 billion in lost employee earnings and more than $2.6 billion

in lost tax revenues.”

• “Because of music piracy, the U.S. economy loses a total of $12.5 billion in economic output each

year. Furthermore the U.S. economy also loses 71,060 jobs. […] As a consequence of piracy in

sound recordings, U.S. federal, state, and local governments lose a minimum of $422 million in

tax revenues annually.”

• “Motion picture and video piracy exact a heavy toll not only on the U.S. motion picture indus-

try, but the overall U.S. economy as well: $20.5 billion annually in total lost output among all

industries, $5.5 billion annually in lost earnings for all U.S. workers and 141,030 jobs that would

otherwise have been created are lost. In addition, as a result of piracy, governments at the

federal, state, and local levels are deprived of $837 million in tax revenues each year.”

These three studies used a U.S. Government-developed Regional Input-Output Modeling System (“RIMS

II”) to extrapolate and estimate direct and indirect losses to industry as a result of piracy.

NDP Consulting Study on Impact of Innovation and Intellectual Property on U.S. Economy

The NDP Consulting study on “The Impact of Innovation and the Role of Intellectual Property Rights

on U.S. Productivity, Competitiveness, Jobs, Wages, and Exports” examines data of 27 U.S. exportable

and importable industries during the 2000-2007 timeframe. Of the 27 tradable industries assessed, 15

are intellectual property-intensive industries and 12 are non-intellectual property-intensive industries,

based on measures of R&D expenditures, “as such expenditures are direct inputs for innovation and are

the most widely used measures for intellectual property, enjoy higher productivity and greater com-

petitiveness than non-intellectual property intensive industries.” The key ndings of this study include:

• “IP-intensive industries create jobs and spur economic growth resulting from high investments

in research and development (R&D) in comparison to non-IP-intensive industries. […] During

 Stephen E. Siwek, “The True Cost of Copyright Industry Piracy to the U.S. Economy,” Institute for Policy Innovation,

11/2007



Stephen E. Siwek, “The True Cost of Sound Recording Piracy to the U.S. Economy,” Institute for Policy Innovation,

8/2007



Stephen E. Siwek, “The True Cost of Motion Picture Piracy to the U.S. Economy,” Institute for Policy Innovation,

9/2006



Nam D. Pham, PhD., “The Impact of Innovation and the Role of Intellectual Property Rights on U.S. Productivity,

Competitiveness, Jobs, Wages, and Exports,” NDP Consulting, April 2010.

 Ibid., pg. 52

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2000-2007, IP-intensive industries spent almost 13 times the R&D per employee that non-IP-

intensive industries spent.”

• “IP-intensive industries sustain great long-term economic growth. […] Annual output (as mea-

sured by value-added) was $218,373 per employee in IP-intensive industries and only $115,239

in non-IP intensive industries.”

• “IP-intensive industries […] accounted for about 60 percent of total U.S. exports.”

• “IP-intensive industries pay both highly-skilled and low-skilled employees more than non-

IP-intensive industries. […] During 2000-2007, the annual salary of all workers in IP-intensive

industries averaged about 60 percent higher (1.6 times) than the workers at similar levels in

non-IP-intensive industries.”

Economists Incorporated – “Engines of Growth Study”

Stephen E. Siwek authored a study in 2005 titled “Engines of Growth: Economic Contributions of the

U.S. Intellectual Property Industries” which sought to quantify the economic contributions of certain

intellectual property industries to the U.S. economy. In doing so, Siwek used industry-specic data

that was organized based on the North American Industry Classication System (NAICS) and focused

on three industry groups: (1) convergence industries—industries that participate in the creation and

management of information in digital form (note that this grouping omits the motion picture and

recorded music industries), (2) other patent industries—industries that rely on patent protection but

are not considered convergence industries (such as chemical products, motor vehicles, and machinery),

and (3) non-dedicated support industries—intended to capture certain industries’ partial contribution

to and support of the distribution of copyright and patent protected products.

Key ndings from this study were repeatedly referenced in the responses to the FRN, namely:

• “IP industries are among the largest and highest-paying employers in the country, representing

18 million workers who earn on average 40% more than all U.S. workers.”

• “For all IP industries, gross exports in 2004 exceeded $455 billion.” Given the DOC’s ITA reported

value of total U.S. exports in 2004, $814,874,653,655, one could calculate that intellectual prop-

erty industries accounted for more than 50% of U.S. exports, a statistic that has been referenced

by U.S. Government ocials and industry.

Computer & Communications Industry Association—“Fair Use in the U.S. Economy”

The Computer & Communications Industry Association (CCIA) 2010 study on “Fair Use in the U.S.

Economy” looks at the economic contributions of industries that benet from fair use, the provisions of

U.S. copyright law that allow for limitations and exceptions. Highlights from the study include:

 Ibid., pg. 4

 Ibid. pg. 5

 Ibid., pg. 6

 Ibid.

 Stephen E. Siwek, “Engines of Growth: Economic Contributions of the U.S. Intellectual Property Industries,”

Economists Incorporated, 2005, pgs. 9-13

 Ibid., pg. 1

 Ibid., pg. 4

AP PENDI X 2

★ ★

• “In 2007, fair use industries generated revenue of $4.7 trillion, a 36 percent increase over 2002

revenue of $3.4 trillion.

• Fair use related industry value added in 2007 was $2.2 trillion, 16.2 percent of total U.S. current

dollar GDP.

• Employment in industries benetting from fair use increased from 16.9 million in 2002 to 17.5

million in 2007. About one out of every eight workers in the United States is employed in an

industry that benets from the protection aorded by fair use.

• Exports of goods and services related to fair use industries increased by 41 percent from $179

billion in 2002 to $281 billion in 2007.”

Department of Commerce Assessment of Defense Industrial Base

In January 2010, DOC issued a study that provided statistics on “the extent of the inltration of coun-

terfeits into U.S. defense and industrial chains.” DOC gathered survey data from 387 companies and

organizations across the procurement supply chain, covering the 2005-2008 timeframe. The data showed

that “39% of companies and organizations participating in the survey encountered counterfeit electron-

ics during the four-year period. Moreover, information collected highlighted an increasing number of

counterfeit incidents being detected, rising from 3,868 incidents in 2005 to 9,356 incidents in 2008.

These counterfeit incidents included multiple versions of Department of Defense qualied parts and

components.”

GAO Report on Quantifying the Economic Eects of Counterfeit and Pirated Goods

Title V of the PRO-IP Act required the GAO to conduct a study on the impact of counterfeit goods on

the manufacturing industry and on the U.S. economy. The GAO conned its analysis to “the impacts of

counterfeit and pirated goods on the economy and industries of the United States.”

Based on its review of literature and meetings with experts (but no independent analysis), the GAO

concluded that, while it may be extremely dicult to quantify the eect of counterfeiting and piracy

on the economy as a whole, primarily because data on these illicit activities are hard to obtain, “coun-

terfeiting and piracy is a sizeable problem, which aects consumer behavior and rms’ incentives to

innovate.” It noted that this problem “is of particular concern as many U.S. industries are leaders in the

creation of intellectual property.”

Specically, the GAO concluded that counterfeiting and piracy slowed growth of the U.S. economy,

reduced innovation, and caused a decline in trade with countries having weak intellectual property

enforcement. The report acknowledges that there are several “negative eects” on industries including

lost sales, lost brand value and reduced incentives to innovate, but found that these eects vary widely

among sectors and companies. It found that, as a result, the U.S. Government loses tax revenue, incurs

 Thomas Rogers and Andrew Szamosszegi, “Fair Use in the U.S. Economy,” Computer & Communications Industry

Association, 2010, pgs. 8-9

 U.S. Department of Commerce, “Defense Industrial Base Assessment: Counterfeit Electronics,” 01/2010, pg. i

 Ibid., pgs. i-ii

 United States Government Accountability Oce, “Intellectual Property: Observations on Eorts to Quantify the

Economy Eects of Counterfeit and Pirated Goods,” GAO-10-423, April 2010

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intellectual property enforcement expenses, and that counterfeit goods pose risks to national security

and to public health and safety.

On the other hand, the GAO questioned the piracy rates estimated by certain industry groups and cer-

tain assumptions and methodologies used in those studies. For example, the IPI studies employ RIMS

II multipliers, which the GAO notes “assume(s) no job immigration or substitution eect.” In reviewing

the OECD study, the GAO reports that the OECD itself stated that “one of the key problems is that data

have not been systematically collected or evaluated and, in many cases, assessments ‘rely excessively

on fragmentary and anecdotal information; where data are lacking, unsubstantiated opinions are often

treated as facts.’ […] most of the international trade data were supplied by national governments and

relevant industries, and the OECD did not independently assess the reliability of these gures.”

Budget Data Request FY2009-2011

The IPEC sent out a BDR to relevant U.S. Government agencies engaged in intellectual property enforce-

ment to collect data on agency resources and other information pertinent to such activities. Data

collected included a brief description of department or agency intellectual property enforcement

programs; budget amounts allocated and obligated in FY 2009, estimated amounts for FY 2010, and

planned amounts for FY 2011; personnel dedicated to intellectual property enforcement in FY 2009 (and

estimated and planned numbers for FY 2010 and FY 2011); performance metrics used by the depart-

ment or agency to measure enforcement success; and any budget request for additional intellectual

property enforcement funds for FY 2011. The IPEC will conduct annual BDRs, using consistent measures

in order to allow for multi-year comparisons.

 Ibid., pg. 23

 Ibid., pgs. 16 and 24

 The BDR asked departments and agencies to provide the total number of personnel available to work on

intellectual property enforcement regardless of the number of hours actually spent on such enforcement. It also asked

departments and agencies to provide the total number of Full-Time-Equivalents (FTEs) dedicated to intellectual property

enforcement. To calculate the number of FTEs, departments and agencies were asked to compile the number of hours

actually spent on intellectual property enforcement divided by the number of working hours in a year.

★ ★

Appendix 3

List of Acronyms

ACTA Anti-Counterfeiting Trade Agreement

APEC Asia-Pacic Economic Cooperation Forum

ASEAN Association of Southeast Asian Nations

AT&L Acquisition, Technology and Logistics, U.S. Department of Defense

BDR Budget Data Request

BJA Bureau of Justice Assistance, U.S. Department of Justice

CACP Coalition Against Counterfeiting and Piracy

CBP Customs and Border Protection

CCIPS Computer Crime and Intellectual Property Section, U.S. Department of Justice

CHIP Computer Hacking and Intellectual Property, U.S. Department of Justice

CIAC Certication Industry Against Counterfeiting

CLDP Commercial Law Development Program

CPSC Consumer Product Safety Commission

DCA Sodium Dichloroacetate

DCIS Defense Criminal Investigative Service

DEA Drug Enforcement Administration

DHS U.S. Department of Homeland Security

DOC U.S. Department of Commerce

DOD U.S. Department of Defense

DOJ U.S. Department of Justice

DOS U.S. Department of State

ECTF Electronic Crimes Task Force

EEB Bureau of Economic, Energy and Business Aairs, U.S. Department of State

ESA Economic and Statistics Administration

EU European Union

FAS Foreign Agricultural Service, U.S. Department of Agriculture

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FBI Federal Bureau of Investigation

FCS Foreign Commercial Service, U.S. Department of Commerce

FDA Food and Drug Administration

FRN Federal Register Notice

FTA Free Trade Agreement

FTC Federal Trade Commission

FY Fiscal Year

GAO Government Accountability Oce

GBIC Cisco Systems, Inc. Gigabit Interface Converters

GSA General Services Administration

GSP Generalized System of Preferences

G-20 Group of Twenty Finance Ministers and Central Bank Governors

HHS U.S. Department of Health and Human Services

ICE Immigration and Customs Enforcement

INTERPO LInternational Criminal Police Organization

IOC-2 Organized Crime Intelligence and Operations Center

IPE Oce of International Intellectual Property Enforcement, U.S. Department of State

IPEC Intellectual Property Enforcement Coordinator

IPLEC Intellectual Property Law Enforcement Coordinator

IPR Center National Intellectual Property Rights Coordination Center

IPRU Intellectual Property Rights Unit, Federal Bureau of Investigation

IPTET Intellectual Property Theft Enforcement Teams, Immigration and Customs Enforcement

ITA International Trade Administration, U.S. Department of Commerce

ITC International Trade Commission

NAAG National Association of Attorneys General

NASA National Aeronautics and Space Administration

NCIS Naval Criminal Investigative Service

NIH National Institutes of Health

NOI Notices of Inquiry

NPRM Notices of Proposed Rulemaking

AP PENDI X 3

★ ★

NSC National Security Council

NTIA National Telecommunications and Information Administration,

U.S. Department of Commerce

NW3C National White Collar Crime Center

OCDETF Organized Crime Drug Enforcement Task Forces

OCI Oce of Criminal Investigations, Food and Drug Administration

OECD Organization for Economic Co-operation and Development

OIPR Oce of Intellectual Property Rights, U.S. Department of Commerce

PRO-IP Act Prioritizing Resources & Organization for Intellectual Property Act (2008)

PWL Priority Watch List

QHSR Quadrennial Homeland Security Review

RISS Regional Information Sharing Systems

SADC Southern African Development Community

SBA Small Business Administration

SME Small and Medium Sized Enterprise

TPP Trans-Pacic Partnership

TRIPS Trade-Related Aspects of Intellectual Property Rights

USAID U.S. Agency of International Development, U.S. Department of State

USDA U.S. Department of Agriculture

USPIS U.S. Postal Inspection Service

USPTO U.S. Patent and Trademark Oce

USSS U.S. Secret Service

USTR U.S. Trade Representative

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