Senators Leahy, Cornyn Introduce Bill To Step Up Enforcement Of Intellectual Property Laws

Judiciary Committee Holds Hearing To Explore Government’s Anti-Piracy Efforts

WASHINGTON (Wednesday, Nov. 7) – Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) and Committee member Sen. John Cornyn (R-Texas) Wednesday introduced bipartisan legislation to strengthen U.S. government efforts to combat copyright infringement and counterfeiting at home and abroad. The Judiciary Committee Wednesday also held a hearing to examine current enforcement efforts. Improving enforcement is a central component of Leahy’s intellectual property agenda this year.

The Intellectual Property Enforcement Act introduced Wednesday by Leahy and Cornyn would strengthen law enforcement capabilities and resources in thwarting copyright theft. The bill would give civil copyright enforcement powers to the Attorney General and the Department of Justice, and it would authorize additional funding to investigate and prosecute intellectual property crimes involving computers and the Internet. The bill also requires the Federal Bureau of Investigation to assign a minimum of 10 agents to work on intellectual property crimes, and it classifies both the importation and exportation of pirated works as infringement.

“Copyright infringement silently drains America’s economy and undermines the talent, creativity and initiative that are a great source of strength to our nation,” said Leahy. “When we protect intellectual property from copyright infringement, we protect our economy and our ideas. I’m pleased to join with Senator Cornyn as we launch our examination of how we can better protect those ideas and products from illegal piracy, infringement and theft.”

“This bill takes important steps to protect American innovators and consumers,” said Cornyn. “By working together in a bipartisan manner, we’ve made significant strides to strengthen and safeguard intellectual property rights in Texas and throughout America. This latest effort builds on that strong record. Our bill gives the law enforcement community the additional tools needed to meet the growing threat to America’s innovation economy posed by intellectual property pirates and counterfeiters. I hope my colleagues will support it.”

The Judiciary Committee Wednesday also heard from a panel of government witnesses who testified about federal enforcement efforts. Also testifying Wednesday was Sen. Evan Bayh (D-Ind.), who earlier this year introduced legislation with Sen. George Voinovich (R-Ohio) to restructure the current inter-agency intellectual property enforcement structure.

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Section-By-Section Analysis
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Leahy Statement On Introduction Of Intellectual Property Enforcement Act Of 2007
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Leahy Statement On Hearing On Examining U.S. Government Enforcement Of Intellectual Property Rights
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A PDF of the bill is available here.

INTELLECTUAL PROPERTY ENFORCEMENT ACT OF 2007
SECTION-BY-SECTION

Sec. 1. Short Title. Cites the short title of the bill as the “Intellectual Property Enforcement Act of 2007.”

Sec. 2. Authorization of Civil Copyright Enforcement by Attorney General. Allows the Attorney General to “commence a civil action… against any person who engages in conduct constituting an offense under section 506.” The Attorney General therefore is limited in this new authority to bringing civil actions for conduct that would currently qualify as a crime.

If the Attorney General is successful in a suit under this Act, the defendant may be fined an amount equal to the amount that would be awarded under 18 U.S.C 3663(a)(1)(B), the criminal restitution statute. Thus, the civil penalties that could be imposed are no greater than the monetary penalties that would be imposed at the end of a criminal proceeding.

The language of this section is substantively similar to the PIRATE Act.

Sec. 3. Improved Investigative and Forensic Resources for Enforcement of Laws Related to Intellectual Property Crimes. Requires the Federal Bureau of Investigation to dedicate a minimum of 10 agents to work with the Department of Justice on intellectual property crimes. Also requires the assignment of one agent located in Budapest and one agent located in Hong Kong, “to assist in the coordination of enforcement of intellectual property laws between the United States and foreign nations.”

Finally, the section requires implementation of a comprehensive training program focused on intellectual property crimes, and the formation of an Organized Crime Task Force with directions to study organized crime relating to intellectual property theft. $12 million is authored for each of fiscal years 2007 through 2011.

Section 4. Additional Funding For Resources to Investigate and Prosecute Criminal Activity Involving Computers. Authorizes an additional $10 million for the FBI and DOJ to hire and train additional agents and prosecutors to investigate and prosecute criminals for intellectual property crimes.

Section 5. Registration in Civil Infringement Actions. Amends section 411 of the Copyright Act. First, it amends 411 to apply only to civil infringement actions, as opposed to the current, more general “infringement actions.”

Second, and more importantly, section 2 inserts into 411 a “harmless error” provision. 411 provides that “no action for infringement of copyright in any United States work shall be instituted until registration of copyright claim has been made in accordance with this title.” In such actions, certificates of registration provide prima facie evidence of copyright ownership. Section 2 preserves the validity of certificates of registration, even if the certificate contains inaccurate information, unless the inaccurate information was included intentionally and, had the inaccuracy been known, the registration would have been refused.

Section 6. Civil Remedies for Infringement. Amends section 503 of the Copyright Act, which concerns the seizing of documents and records in civil infringement actions. In addition to seizing materials used in copyright violation, courts may now also order records documenting the manufacture, sale, or receipt of things involved in such a violation.

Section 3 amends impounding provisions in both the Copyright and the Lanham Act in allowing for courts to enter into appropriate protective orders with respect to discovery.

Section 7. Criminal Infringement. Amends the forfeiture provisions of section 506(b) and 509(a) to refer to a general forfeiture provision added in this measure.

Section 8. Importation and Exportation. Amends 17 U.S.C. 602(a) by adding exportation to the provision; thus importation or exportation of pirated works constitutes an infringement under sections 501 and 506.

Section 9. Defining Terms Related to Circumvention of Copyright Protection Systems. Defines the terms “traffic in” and “financial gain” in the DMCA (17 U.S.C. 1201). The definition for “financial gain” can be found in 17 U.S.C. 101.

“‘Traffic in’ means to transport, transfer, or otherwise dispose of, to another, for purposes of commercial advantage or private financial gain, or to make, import, export, obtain control of, or possess, with intent to so transport, transfer, or otherwise dispose of.”

Section 10. Forfeiture Under Economic Espionage Act. Amends criminal forfeiture language in 18 U.S.C. 1834 in order to conform to the new forfeiture provision added in this measure.

Section 11. Trafficking in Counterfeit Labels, Illicit Labels, or Counterfeit Documentation or Packaging For Works That Can Be Copyrighted. Amends forfeiture language in 18 U.S.C. 2318 in order to conform to the new forfeiture provision added in this measure.

Section 12. Unauthorized Recording of Motion Pictures. Amends forfeiture language in 18 U.S.C. 2319B in order to conform to the new forfeiture provision added in this measure.

Section 13. Trafficking in Counterfeit Goods or Services. Amends forfeiture language in 18 U.S.C. 2320 in order to conform to the new forfeiture provision added in this measure.

Section 14. Forfeiture, Destruction, and Restitution. Creates a new forfeiture section (18 U.S.C. 2323) governing civil and criminal forfeiture for offenses committed under section 506 or 1204 of title 17, or section 2318, 2319, 2319A, 2319B, or 2320, or chapter 90, of title 18.

For civil forfeitures, property subject to forfeiture includes property used to facilitate the commission of an offense and property derived from any proceeds obtained directly or indirectly as a result of the commission of an offense. At the conclusion of forfeiture proceedings, the court shall order that any property be destroyed unless otherwise requested by an agency of the United States.

For criminal forfeitures, any proceedings shall be governed by section 413 of the Comprehensive Drug Abuse and Control Act of 1970. At the conclusion of forfeiture proceedings, the court shall order that any property be destroyed unless otherwise requested by an agency of the United States. Convicted persons must pay restitution to any victim of the offense.

Section 15. Technical Amendments.

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Statement Of Senator Patrick Leahy

On Introduction Of The Intellectual Property Enforcement Bill Of 2007

November 7, 2007

I am pleased to introduce the Intellectual Property Enforcement Act of 2007. Congress is charged “to promote the progress of science and useful arts,” and part of promotion is protection. This legislation will enhance existing intellectual property enforcement laws, provide more resources to combat infringement, and harmonize copyright and trademark laws. I thank Senator Cornyn for joining me in this effort, which is a high priority of mine, and also of the creative communities and industries across the county.

Each year, counterfeiting and copyright infringement cost the U.S. economy billions of dollars. The International Anti-Counterfeiting Coalition estimates that counterfeiting and piracy cost American businesses $250 billion a year – and hundreds of thousands of jobs as well. Clearly, IP theft is big business, and that can devastate small businesses. No one knows this better than Vermont companies such as Hubbardton Forge, Vermont Teddy Bear Company, and Burton Snowboards. Each of these companies, and many others like them across the nation. invests time, money, and effort in the development of new products. When their products are infringed, it devalues the product and threatens the company.

Senator Cornyn and I have heard from a myriad of interested parties about the importance of protecting intellectual property, and have seen many enforcement proposals. The legislation we introduce today will serve as the core of our legislative effort this year. It will start the process of considering how to ensure that our enforcement laws are up to the task, and that the necessary resources are in place to enforce them. Other Senators have introduced legislation to address these issues, and the Department of Justice and others have suggested legislative language. These are all helpful to the debate, and I expect there will be more to come. Introduction of the Intellectual Property Enforcement Act of 2007 is the beginning of this important effort.

The centerpiece of the bill we introduce today gives the Department of Justice the ability to bring civil actions against copyright infringers. Punishment should fit the crime, and a civil action is often more appropriate to the wrong being done in such cases than is criminal prosecution. This concept has passed the Senate on three separate occasions, as the PIRATE Act. Next, this bill adds resources for agents to combat infringement. It does not matter how strong our laws are, if there are not enough agents, or if our agents do not have the proper expertise to investigate and prosecute crimes, piracy will flourish and harm our economy. Third, this bill allows for “harmless errors” on copyright registration forms. Copyright registration should not be voided by innocently checking the wrong box or misspelling a word on a form. Finally, this bill harmonizes the forfeiture provisions in the copyright and trademark statutes.

By enacting well-balanced enforcement laws, we can protect both the creators and the consumers of intellectual property. It is impossible to put a price tag on creativity, but we must do all we can to protect the fruits of creative labor.

I ask unanimous consent that the full bill text be included in the Record.

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Statement Of Senator Patrick Leahy,

Chairman, Senate Judiciary Committee

Hearing On “Examining U.S. Government Enforcement
Of Intellectual Property Rights”

November 7, 2007

Intellectual property – copyrighted works, trademarked goods, and patented inventions – fuels the engine that drives the U.S. economy. Intellectual property reportedly accounts for 40% of our nation’s exports. Just as importantly, we consume IP voraciously here at home. IP is the medicine that cures us, the movies that thrill us, the music that inspires us, the software that empowers us, the technology that aids us. It is everywhere in our lives, and it is evermore important in our economy.

Unfortunately, the piracy and counterfeiting of intellectual property has reached unprecedented levels. Copyright infringement alone costs the U.S. economy at least $200 billion and approximately 750,000 jobs each year. Such theft is unacceptable, but counterfeiting goods not only infringe IP rights, they can endanger our health and safety. Fake drugs that look just like the real thing, tainted infant formula sold to unsuspecting parents, electrical appliances with shoddy insulation, automobile parts that fail under stress – such counterfeit goods are proliferating, and are often difficult to distinguish from their real, and safe, counterparts.

I have worked for years both to strengthen our existing laws and to give our law enforcement agents the necessary tools to combat infringement. In the last Congress, we passed the Stop Counterfeiting in Manufactured Goods Act, which expanded the prohibition on trafficking in counterfeit goods to include trafficking in labels or similar packaging with knowledge that a counterfeit mark had been applied to those goods. I have regularly authored amendments to the State Department’s appropriations bill to provide millions to the Department in order to send staff overseas to specifically combat piracy in countries that are not members of the Organisation for Economic Co-Operation and Development, or OECD. Just this morning, I reintroduced, with my Judiciary Committee colleague Senator Cornyn, the PIRATE Act. This legislation is a simple bill that would give the Department of Justice the authority to prosecute copyright violations as civil wrongs. The PIRATE Act has passed the Senate on three separate occasions; this should be the Congress in which it becomes law.

In the current Congress, there are a number of other bills designed to combat intellectual property infringement. Senator Bayh, who has joined us here today, introduced a bill focused on interagency coordination on intellectual property. Senator Biden recently introduced omnibus crime legislation that includes many provisions suggested by the Department of Justice. No doubt others will join the effort, as we get the legislative conversation started on the critical issue of law enforcement in the realm of intellectual property.

This issue is too important to be addressed piecemeal. In order to effect the greatest change, we must examine enforcement efforts from the top down. Helping us do so is our second panel today. I look forward to hearing from these distinguished government officials about the current state of enforcement, and what needs to be improved to protect our creators and innovators, as well as our economy.

Source: Senate Judiciary Committee Chairman Patrick Leahy

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