White House Releases Recommendations for IP Enforcement

On March 15, 2011, Victoria Espinel, the U.S. Intellectual Property Enforcement Coordinator (IPEC) released the Administration’s “White Paper” making recommendations about changes to existing legislation that it believes are required in order to protect intellectual property rightsholders and consumers from counterfeit or illegal products and from economic espionage. The Administration’s White Paper can be found here and its blog post summarizing its conclusions can be found here.

The White Paper targeted several areas for modification: 1) increasing statutory maximum penalties for economic espionage (18 U.S.C. § 1831) and for drug offenses under the Federal Food, Drug & Cosmetic Act; 2) increasing U.S. Sentencing Guidelines for intellectual property offenses; 3) enhancing specific enforcement powers of the Department of Homeland Security (DHS) and its “component” U.S. Customs & Border Protection (CBP); 4) permitting DHS to share information with rightsholders about seizures of infringing goods and/or circumvention devices; 5) increasing enforcement tools regarding counterfeit pharmaceuticals and illegal online pharmacies; and 6) increasing certain administrative penalties that the CBP can impose.

Many of the recommendations focused on conforming available penalties for particular crimes involving intellectual property and counterfeit drugs, rather than focusing on enhancing private rightsholders’ abilities to address and combat specific infringing acts. As a result, these initiatives seem to have little impact on U.S. companies’ efforts to self-police. Perhaps there is more to come on this point.

The White Paper also acknowledged the Senate’s efforts to prepare and introduce a new version of COICA (the Combating Online Infringement and Counterfeits Act, previously introduced as S. 3804 in the previous Congress), for which the Senate Judiciary Committee held a hearing on February 16, 2011 (webcast available).  More information about COICA as originally introduced and the recent Senate Hearing is described here.

Specifically, the White Paper acknowledges:

“Piracy and counterfeiting in the online environment are significant concerns for the Administration. They cause economic harm and threaten the health and safety of American consumers. Foreign-based and foreign-controlled websites and web services raise particular concerns for U.S. enforcement efforts. We are aware that members of Congress share our goal of reducing online infringement and are considering measures to increase law enforcement authority to combat websites that are used to distribute or provide access to infringing products. We look forward to working with Congress on those efforts and the recommendations contained in this paper in the coming year.”

White Paper at 1.  The blog also highlights a combined effort of several private companies (including Google, GoDaddy, and MasterCard) to create a non-profit organization to fight illegal online pharmacies. A prior blog post (February 7, 2011) identifies additional details about the “Voluntary Private Sector Action”, with an additional list of participants (American Express, eNom, GoDaddy, Google, MasterCard, Microsoft, PayPal, Neustar, Visa, and Yahoo!) and notes that “By preventing criminal actors from gaining access to consumers and attaining legitimacy through the use of online payment processors, the purchase of ad space or a registered domain name, these private companies can play a critical role in combating illegal online pharmacies that put American consumers at risk.” This effort is laudable in that it seeks to prevent particularly dangerous counterfeits with substantial health risks from entering the U.S. market, but its limitation to such a narrow window of counterfeiting means that companies are still left to their own devices to police markets for counterfeit products and grey goods on their own, and create their own enforcement tools.

Finally, the White Paper suggests changes to Copyright law, to permit illegal streaming to qualify as a felony. Thus, the Administration advocates updating criminal enforcement tools to take into account new technologies as they are developed. Again, this is a laudable effort, but does not provide private rightsholders with any additional mechanism to combat infringement and counterfeiting outside of criminal investigations involving an already overloaded criminal justice system.