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.

Senate Judiciary Committee Considering New COICA Bill

On February 16, 2011, the Senate Judiciary Committee held a public hearing entitled “Targeting Websites Dedicated to Stealing American IP.” Witnesses testifying before the Committee included Tom Adams (President and CEO, Rosetta Stone), Scott Turow (President, Authors Guild), Christine N. Jones (EVP, General Counsel and Corporate Secretary, The Go Daddy Group, Inc.), Thomas M. Dailey (Vice President and Deputy General Counsel, Verizon), and Denise Yee (Senior Trademark Counsel, Visa, Inc.). Representatives for both Google and Yahoo were invited to attend, but declined to appear. As of this writing, a webcast (lasting the entire 2 hours of the hearing) is still available.

Based on the remarks made during the hearing, it appears that the Committee is considering introducing a modified version of the Combating Online Infringement and Counterfeits Act (COICA) that had been introduced in the last term as S. 3804 (and passed the Committee on a 19-0 vote). The Second Session of the 111th Congress ended before further action was taken on this Bill. (Summary of the status of the bill can be found here, along with a copy of the related Committee Report submitted by Sen. Leahy on December 17, 2010.)

By congressional rules, this Bill must be re-introduced in this Congress (the 112th Congress) before any further action can be taken on it. Given the amount of public comment that the Committee received in connection with the most recent version of the Bill, and given the tenor of the comments during the February 16 hearing, it is likely that the re-introduced Bill will have some important differences from last term’s Bill. Some of the issues that may be addressed in this Bill could be a private right of action, removal of a “black list” onto which “bad” websites could be placed and some measure of safe harbor provided for the ISPs and/or other service providers who comply with the regulatory provisions of the new Bill. (For more comments on some of these provisions and their expected impact, see the comments of the Electronic Frontier Foundation (as well as additional links provided on their page) and the Center for Democracy and Technology (again, including some of the cross links within their blog relating to Digital Copyright). Of course, without seeing an actual draft yet, it is difficult to predict which provisions will end up in a new version of the Bill, if introduced this term.

During the hearing, several Senators referred to a second round of questions/comments on this initiative, which suggests that the Committee may hold a follow-up hearing. As of this writing, I could not find a scheduled hearing to re-address a potential COICA draft. At the end of the hearing, Senator Leahy commented that COICA in the last term had bipartisan support and passed in the Committee on a vote of 19-0. He closed with a promise that some version of this Bill will be reintroduced in the current term.

After the hearing concluded, Senator Leahy posted a press release that identified some of the comments that both he and other Committee members have received in support of a bill to stop counterfeiting on the Internet. (Copies of the submissions were also provided in the press release and can be found separately here.) Ranking Member Sen. Grassley’s prepared remarks can be found on the hearing summary page, and also in his own list of press releases.

IPEC Releases Joint Strategic Plan on Intellectual Property Enforcement

Last week (on June 22), the Intellectual Property Enforcement Coordinator (IPEC) Victoria Espinel published the Joint Strategic Plan mandated by the PRO-IP Act. (For prior posts about the IPEC’s duties and responsibilities, see my June 1, 2010 post.) A full copy of the Plan can be found on the IPEC’s site and remarks about the program can be found on the White House’s Blog, (IPEC’s announcement of the Plan’s availability and some general remarks about the program).
This report outlines 33 “enforcement strategy action items”, divided into six categories: 1) leading by example; 2) increasing transparency; 3) ensuring efficiency and coordination; 4) enforcing our rights internationally; 5) securing our supply chain; and 6) building a data-driven government. Listed below are just some of the highlights – not a full list or explanation of each of the 33 action items.

  • A “government-wide working group” will be established to determine how best to ensure that the U.S. government does not obtain counterfeit parts in connection with its government contracts. This group would be required to submit a formal report within 180 days after its first meeting that details its findings and issues remaining for determination. (Page 7)
  • The U.S. government “will review its practices and policies” to ensure that it is not purchasing pirated software so that it can “set an example to our trading partners.” In this regard, the IPEC will propose legislative amendments necessary to implement a 1998 Executive Order. (Page 7)
  • Enhance communications with rightsholders and victims of IP infringement/crimes/piracy, to inform them about how to report IP crime, which types of cases are generally accepted by the U.S. government for prosecution, and the types of information victims could provide to support an enforcement action. (Page 8-9)
  • The U.S. Trade Representative is currently responsible – through its Special 301 process – for providing a Notorious Markets list (defined in the Plan as “a combination 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.”) (Page 9)
  • The U.S. government will create a database (or combination of databases that function as a unitary whole) that contains information about IP cases, case-specific information about pending investigations. The database “need not” include sensitive IP information such as national security information, trade secrets or grand jury investigation that cannot be disclosed under the Federal Rules of Criminal Procedure (Rule 6(e)). (Page 11)
  • The U.S. Customs and Border Protection will provide samples of allegedly infringing products to rightsholders for testing, provided that a bond is posted for each sample “to cover the potential loss or damage to the sample if the products are ultimately found to be non-infringing.” In this Plan, the IPEC described a streamlined bond option that allows the posting of a single bond to cover multiple samples released by CBP. (Page 17).
  • The U.S. government broadly encourages cooperation in the private sector to police infringing activity and to enforce existing IP rights: “the Administration encourages actions by the private sector to effectively address repeated acts of infringement, while preserving the norms of legitimate competition, free speech, fair process and the privacy of users.” (Page 17)
  • Google, Yahoo and Bing were lauded specifically for their development of “voluntary protocols to prevent the sale of sponsored results for unlawful businesses selling counterfeit medications on-line.” Their list of so-called “unlawful businesses” is based, in part, on verification by the National Association of Boards of Pharmacy’s Verified Internet Pharmacy Practice Sites and/or certifications from the original manufacturers of legitimate and FDA-approved pharmaceuticals. (Page 18) – See also Pharmaceutical Security Institute (PSI) and the Partnership for Safe Medicines. (Page 53).
  • The IPEC will initiate and coordinate a process of reviewing existing IP laws and their penalties (whether civil or criminal) to determine whether their reach is far enough, or whether there are modifications required to “enhance enforcement efforts.” (Page 19).

The Plan also summarizes various Federal Agencies’ enforcement activities in 2010 (to date) (Page 35).
Please comment below about other portions of the Plan if there are other points that should not be overlooked here.

Summary of IPEC’s Responsibilities

On October 13, 2008, President Bush signed into law the Prioritizing Resources and Organization for Intellectual Property Act of 2008 (“PRO-IP Act of 2008”). Pub. L. No. 110-403, 122 Stat. 4256 (2008). While the Act principally targets copyright issues, it also increases civil penalties for trademark counterfeiting (including for direct as well as for certain types of contributory infringement), enhances criminal penalties for trafficking in counterfeit goods bearing others’ trademarks and provides additional anti-piracy tools at the executive branch level in the form of an Intellectual Property Enforcement Coordinator (IPEC). It took a full year before someone was appointed to fill the IPEC role (see my October 2009 post describing Ms. Victoria Espinel, the current IPEC).

Since Ms. Espinel’s appointment, however, a number of projects have been assigned to her office. The purpose of this blog post is to summarize briefly those projects and provide links for more information. I also commend to you an article published on CNET shortly after the PRO-IP Act was enacted by Congress (but before the President signed it into law) that provides a basic outline of the position.

As Assigned by the PRO-IP Act

From the outset, the IPEC was tasked with coordinating the development and implementation of a Joint Strategic Plan against counterfeiting and infringement and to facilitate the issuance of policy guidance to other U.S. government agencies and departments relating to domestic and international intellectual property enforcement programs. Pub. L. No. 110-403 § 301. This position appears to be directed to correct a flaw in the “lack of permanent and effective leadership in coordinating” IP enforcement efforts. Prioritizing Resources and Organization for Intellectual Property Act of 2008, House Report 110-617, May 5, 2008 (“House Report”), at 26. As enacted, however, this position does not have any independent prosecutorial or other law enforcement authority, and appears to only have “advisory” duties. Pub. L. No. 110-403
§ 301(b)(2).

Among the IPEC’s initial advisory responsibilities were the following:

1) chair an “interagency intellectual property enforcement advisory committee”;

2) coordinate the Joint Strategic Plan (the “Plan”);

3) assist, when requested, in the implementation of the Plan;

4) facilitate the issuance of policy guidance on “basic issues of policy and interpretation, to the extent necessary to assure the coordination of intellectual property enforcement policy and consistency with other law;”

5) report to the President and to Congress about IP enforcement programs;

6) report to Congress about the implementation of the Plan; and

7) “carry out such other functions as the President may direct.” Id. § 301(b)(1).

So, where is this Joint Strategic Plan? On February 23, 2010, the IPEC requested public comment about the proposed content of a Joint Strategic Plan. Coordination and Strategic Planning of the Federal Effort Against Intellectual Property Infringement: Request of the Intellectual Property Enforcement Coordinator for Public Comments Regarding the Joint Strategic Plan, 75 Fed. Reg. 8137 (Feb. 23, 2010). Comments were due by March 24, 2010, and can be found on the IPEC’s web site.

As Assigned by the Trademark Technical and Conforming Amendment Act of 2010

On January 26, 2010, Representatives John Conyers, Jr. (MI) and Lamar Smith (TX) co-sponsored a bill (H.R. 4515) intended to “make certain technical and conforming amendments to the Lanham Act.” Similarly, on January 28, 2010, Senators Patrick Leahy (VT) and Jeff Sessions (AL) co-sponsored an identical bill in the Senate (S. 2968) which was passed without amendment by Unanimous Consent the same day. These bills have now been enacted. See Pub. L. No. 111-146 (enacted Mar. 17, 2010).

In addition, the Act requires the IPEC to conduct a one-year study and prepare a substantive report on two subjects: 1) “the extent to which small businesses may be harmed by litigation tactics by corporations attempting to enforce trademark rights beyond a reasonable interpretation of the scope of the rights granted to the trademark owner;” and 2) “the best use of Federal Government services to protect trademarks and prevent counterfeiting.” The IPEC’s report would be due within one year after the enactment of the Bill, or no later than March 17, 2011.

For More Information

The Official Site for the IPEC’s Office is http://www.whitehouse.gov/omb/intellectualproperty/. Should you wish to contact the IPEC, the official e-mail address is mailto:intellectualproperty@omb.eop.gov?subject=Contact%20IPEC.

White House appoints IP Enforcement Coordinator

On September 25, 2009, President Obama appointed Victoria A. Espinel as IP Enforcement Coordinator (“IPEC”). This position was mandated by the Prioritizing Resources and Organization for Intellectual Property Act of 2008 (“PRO-IP Act”) S. 3325, Public Law No. 110-403, signed into law by President George W. Bush on October 13, 2008. See Current Status of the House Bill and of the Senate Bill.

The Act governs enforcement of IP infringement matters, particularly counterfeiting of copyrighted works and trademarks. With respect to trademarks, the Act increases civil penalties for trademark counterfeiting, including for direct as well as for certain types of contributory infringement and enhances criminal penalties for trafficking in counterfeit goods bearing others’ trademarks.

The IPEC is a cabinet-level position in the Executive Office focused on combating counterfeiting and IP infringement.

Under the Act, the IPEC will be an advisor only, not a prosecutor or other law enforcement officer. Specifically, the IPEC is charged with chairing an “interagency intellectual property enforcement advisory committee”, coordinating a Joint Strategic Plan (defined with more specificity in the Act) against counterfeiting and infringement, assist (when requested) in the implementation of the Plan, facilitate the issuance of policy guidance on “basic issues of policy and interpretation, to the extent necessary to assure the coordination of intellectual property enforcement policy and consistency with other law,” report to the President and to Congress about IP enforcement programs, report to Congress about the implementation of the Plan, and “carry out such other functions as the President may direct.” Public Law No. 110-403 § 301(b)(1).

Note that the Act was signed into law nearly a year ago. Under the precise terms of the PRO-IP Act, the Joint Strategic Plan described in the Act was due to be completed and submitted to various House and Senate committees no later than October 13, 2009 – in other words, two days ago!

However, given that the appointment has just been made for the IPEC, the various deadlines set forth in the act must be modified in some manner. It will be interesting to see how much the deadlines change.

For more information, see the following:

* White House Press Release, “President Obama Announces More Key Administration Posts,” September 25, 2009. The press release describes Ms. Espinel’s background and qualifications for the position.

* Official Summary of the Senate version of the bill (which ultimately was signed by Pres. Bush in 2008)

* Wikipedia’s description of the PRO-IP Act

* “FAQ: What to expect from a new IP cabinet position,” CNET News, Sept. 30, 2008 (just before the Act was signed into law).

Ms. Espinel’s nomination was received in the Senate on September 29, and the matter has been referred to the Senate Committee on the Judiciary. Nomination PN1027-111. It does not appear that a confirmation hearing has yet been scheduled.