Chairman Voinovich, Ranking Member Akaka, and Members of the Subcommittee:
Thank you for this opportunity to appear before you once
again to discuss international intellectual property (IP) piracy and
counterfeiting problems. In the year
since I last testified before your Subcommittee, there have been several
significant developments regarding the U.S. Department of Commerce’s role in
protecting IP both domestically and overseas.
Secretary of Commerce Carlos Gutierrez is keenly aware of the increasing
significance of IP protection for
As Under Secretary of Commerce for Intellectual Property and
Director of the United States Patent and Trademark Office (USPTO), I am
dedicated to marshalling
Scope of Global IP Piracy and Counterfeiting Problem
Increasingly, both the
According to the
International Intellectual Property Alliance, U.S. copyright industries
continue to lead the
Unfortunately, the economic benefits of capitalizing on IPR have captured the attention of pirates and organized crime. The global criminal nature of IP piracy has effects in other areas as well. As former U.S. Attorney General John Ashcroft reported: "In addition to threatening our economic and personal well being, intellectual property crime is a lucrative venture for organized criminal enterprises. And as law enforcement has moved to cut off the traditional means of fund-raising by terrorists, the immense profit margins from intellectual property crimes risk becoming a potential source for terrorist financing." Senator Susan Collins, Chairwoman of this Committee, stated two weeks ago during her opening remarks of the “Counterfeit Goods: Easy Cash for Criminals and Terrorists” hearing that “The unclassified evidence linking terrorism and counterfeiting is compelling and spans several years and agencies.”
USPTO
and DOC Efforts to Combat IP Theft
Given these threats to
The Role of the USPTO and IP Policy
The passage of the American Inventors Protection Act of 1999 (AIPA) (P.L. 106-113) set the stage for the USPTO to advise the President, through the Secretary of Commerce, and all Federal agencies, on national and international IP policy issues, including IP protection in other countries. USPTO is also authorized by the AIPA to provide guidance, conduct programs and studies, and otherwise interact with foreign IP offices and international intergovernmental organizations on matters involving the protection of intellectual property.
Our established Offices of International Relations and
Enforcement carry out the functions authorized by the AIPA. These include (1) working with Congress to
implement international IP treaties; (2) providing technical assistance to
foreign governments that are looking to develop or improve their IP laws and
systems; (3) training foreign IP officials on IP enforcement; (4) advising the
Department of State and the Office of the U.S. Trade Representative (USTR) on
drafting/reviewing of IP sections in bilateral investment treaties and trade
agreements; (5) advising USTR on intellectual property issues in the World
Trade Organization (WTO) and working closely with USTR in seeking assurances
from our trading partners of higher levels of IP enforcement than those set
forth in the Agreement on Trade Related Aspects of Intellectual Property Rights
(TRIPs); and (6) working with USTR and industry on the annual review of IP
protection and enforcement under the Special 301 provisions of the Trade Act of
1974. The USPTO also represents the
I am pleased to discuss with you the STOP! Initiative, the
most comprehensive U.S. government-wide initiative ever advanced to demolish
the criminal networks that traffic in fakes, stop trade in pirated and
counterfeit goods at America's borders, block bogus goods around the world, and
help small businesses secure and enforce their rights in overseas markets. What makes the STOP! Initiative so
unprecedented is that for the first time, the issues surrounding IP enforcement
have been raised to the highest levels in the administration and there is
strong coordination by the NSC of the key agencies with a role to play in
finding and fighting fakes. There are several important features of the STOP! Initiative,
both international and domestic, that I would like to discuss.
Harmonizing the
Trademark Application Process
The USPTO is seeking to simplify, streamline and improve the cost efficiency of the trademark application process across borders in order to make it more efficient and less burdensome for right holders. The Trademark Law Treaty (1994) (“TLT”), administered by WIPO, harmonizes trademark application and renewal formalities among its members. It contains a maximum list of formalities that members can require during the trademark application and renewal process. From the intellectual property owner’s perspective, the TLT saves time and money in trademark prosecution and maintenance. As part of the STOP! Initiative, the USPTO will seek to harmonize trademark formality standards with all WIPO members, especially EU countries, Japan and Korea, and will continue to actively work with like-minded countries to find a consensus on how best to revise the TLT so as to make the process of applying for and maintaining trademarks more streamlined, efficient and cost effective for all trademark applicants.
Improving International IPR Regimes by Posting IP Attaché Abroad
The
importance of intellectual property to the global economy cannot be
overstated. With knowledge-intensive
industries forming an ever-greater part of the world economy, intellectual
property has become a key issue for both businesses and government policy
makers all over the world. Fast-moving
developments in new technologies ranging from computer software to
biotechnology, and the emergence of the Internet as a tool to move products
across international borders pose new challenges for inventors and innovators,
big and small companies, and creative artists, all of who must rely on
intellectual property. It also poses challenges for government policy makers to
find ways to effectively promote, protect and enforce valuable economic and
creative resources.
As
the agency with the technical experts in intellectual property protection and
enforcement, the USPTO is in a unique position to offer technical assistance,
training and capacity-building programs to other countries to address and
strengthen intellectual property protection and enforcement worldwide. As part of these efforts, the USPTO currently
deploys two intellectual property lawyers to work overseas on intellectual
property rights issues, namely at the U.S. Embassy in Beijing, China, and at
the U.S. Trade Representative Mission to the World Trade Organization in
Geneva, Switzerland. Placing our
Attaché, who is fluent in Mandarin, for a three-year appointment in China
highlights the seriousness of IP violations in China and has enhanced the
USPTO’s ability to work with Chinese government officials to improve IP laws
and enforcement procedures in addition to assisting U.S. businesses to better
understand the challenges of protecting and enforcing their IPR in China.
Building Coalitions
The ultimate success
of the STOP! Initiative involves building coalitions with many of our
like-minded trading partners, such as
International Outreach
A delegation of
Last week, our USPTO
representatives and officials from the STOP! agencies met with their
counterparts and representatives from the private sector in five capitals
throughout
We have tentatively planned that countries receptive to
cooperation on STOP! will be invited to attend a meeting in
USPTO-Customs and Border Patrol (CBP) Initiative
The
U.S. Customs and Border Protection (CBP) at the Department of Homeland Security
provides the opportunity for trademark registrants to record their registration
with them. This recordation provides the
basis upon which the trademark registrant can stop the importation of
infringing goods at the
The USPTO believes that CBP border enforcement is not utilized by trademark owners to its fullest. To that end, USPTO is in the process of creating a notice that will be mailed to trademark registrants when they receive their Certification of Registration that will direct them to the services that CBP offers. Furthermore, USPTO is in the process of putting a website link on our trademark homepage to the CBP IPR website which contains the form for recordation. Once the CBP electronic recordation system is online, USPTO’s website will link directly to the CBP’s recordation system.
USPTO believes that educating trademark registrants as to the services offered by CBP will increase awareness of the importance for trademark owners to actively enforce their rights and address the issue of infringing importation directly. Such efforts will increase the value of the trademark goods for the trademark owner and will decrease the cases where consumers are confused and disappointed by infringing imported products that do not meet their quality expectations.
Hotline and Website
First, the USPTO participates
heavily in this initiative by managing a hotline, 1-866-999-HALT, established by the Department
of Commerce to help business protect their IPR at home and overseas. The goal of the hotline is to empower
Callers receive
information from IP attorneys at the USPTO with regional expertise on how to
secure patents, trademarks, and copyrights, and on the enforcement of these
rights. Businesses and innovators now
have access to a place to learn more about the risks of global piracy and
counterfeiting and how to protect their IP rights in both individual countries
and in multiple countries through international treaties. In addition, we have established a link from
our USPTO website to www.stopfakes.gov on the Department of
Commerce’s website, which provides in depth detail of the STOP!
Initiative.
One key feature of
the Internet website at www.stopfakes.gov
is the country specific “Toolkits” that have been created by our embassies
overseas to assist small and medium sized businesses with IPR issues in
STOP! also seeks to increase global awareness of the risks and
consequences of IP crimes through a section of its website, www.stopfakes.com/smallbusiness,
that is specifically designed and operated by the USPTO to answer common
questions of small businesses so they can better identify and address their IP
protection needs. We’re working with
organizations like the U.S. Chamber of Commerce and the National Association of
Manufacturers to help spread the word about the benefits of filing for IP
protection both domestically and abroad.
We have also developed informational materials—that can be downloaded
off the Web site - to help guide small businesses through the often-complicated
world of intellectual property protection.
No Trade in Fakes
Program
The Department of
Commerce is in charge of another important component of the STOP! Initiative,
the no-trade-in-fakes program that is being developed in cooperation with the
private sector. This is a voluntary,
industry-driven set of guidelines and a corporate compliance program that
participating companies will use to ensure their supply chains and retail
networks are free of counterfeit or pirated goods.
Small Business
Concerns
While piracy, counterfeiting and theft of intellectual property pose a serious threat to all American businesses, small and medium sized businesses are particularly at risk in today’s global marketplace because they often lack the knowledge and expertise to effectively combat it. Because small and medium sized businesses typically do not have personnel or maintain large operations in other countries, American products and branding can be stolen without the rightful owner even being aware of it. Small businesses lack the knowledge, expertise, and resources to prevent the theft of their ideas, their products, and their good names. Small businesses generally do not have the level of access to specialized legal counsel available to larger companies. In the fierce competition for the time of a typical small-businessman or woman, things that go beyond the payroll, accounting and general operations – including IP protection -- often get put on the back burner.
That is why the USPTO has launched an intensive
communications program specifically designed to educate small businesses about
protecting their intellectual property from pirates and counterfeiters – both
in the
Campaign on Protecting Intellectual Property Rights
For
the reasons just noted, as part of our public affairs campaign the USPTO is
holding a series of seminars around the country to assist small and medium
sized companies as to what IPR are, why they are important, and how to protect
and enforce these rights domestically and internationally. The
first of these workshops took place three weeks ago in
We are replicating this program in other cities throughout
several regions of the
The USPTO has a group of in house IP experts on
The USPTO has also
developed its own
In addition and closer to home, the USPTO’s
This Week’s Activities for Small Businesses
I am leaving today for a USPTO sponsored 2-day seminar in
Increasing and Communicating Enforcement
The USPTO's Office of Enforcement works to raise the level of and standards for intellectual property enforcement worldwide. The Office of Enforcement accomplishes this mission by, among other things: (1) training law enforcement personnel and other government officials throughout the world on best practices for, and the importance of, enforcing intellectual property rights; (2) drafting and negotiating strong, modern intellectual property enforcement provisions in free trade and other international agreements with U.S. trading partners; and (3) monitoring how intellectual property rights are enforced by other countries, and, where appropriate, engaging other governments on enforcement issues and demanding increased intellectual property protection.
Enforcement Training and Technical Assistance
The USPTO provides a variety
of IP enforcement training and technical assistance activities. These programs are designed to foster respect
for IP, encourage governmental and right holders’ efforts to combat
infringement, and promote best practices in the enforcement of IPR. Our technical assistance and capacity
building initiatives grew out of
Bilateral and Multilateral
Negotiations
The USPTO
advises many
Special 301
The USPTO
advises the USTR in the administration of the Special 301 provisions in
Conclusion
Mr. Chairman, the past year has presented great challenges and opportunities for all of the U.S. Government’s agencies that have a role in fighting the theft of intellectual property. The Administration rose to these challenges in several ways, including the launching of the STOP! Initiative. The requirements on the Department of Commerce and USPTO’s expertise in the international arena have grown dramatically in the last few years. These demands will continue to increase in the next few years, along with our obligations to meet our core patent examination and trademark registration functions.
However, while there are challenges both here and overseas, there is reason for optimism. I remain hopeful that with the continued support and partnership of Congress, we will be able to do even more to provide American businesses and entrepreneurs with the valuable IP information and protection they need. We will continue to work closely with the IP community, small businesses coast-to-coast, the STOP! team, and you Mr. Chairman to meet the huge challenge of combating piracy and counterfeiting. Clearly, in terms of the economy and national security, much is at stake. That is why our dedicated team of experts will continue to work tirelessly to protect American intellectual property all around the globe.
Thank you very much.
[1] “Copyright Industries in the U.S. Economy: The 2004 Report,” Stephen E. Siwek, Economists Inc., prepared for the International Intellectual Property Alliance. “Core” industries include: newspapers, publishing, recording, music, motion pictures, radio, television broadcasting and computer software.
[2] “
[3] The evaluations also had complimentary feedback such as “it was a great IP conference for small business.” Again, I must brag about the efforts of my staff.