PRO-IP Act
Encyclopedia
The Prioritizing Resources and Organization for Intellectual Property Act of 2008 ("PRO-IP Act of 2008"), is a United States law
that increases both civil and criminal penalties for trademark
, patent
and copyright infringement
. The law also establishes a new executive branch office, the Office of the United States Intellectual Property Enforcement Representative (USIPER).
The PRO-IP Act permits the Department of Justice to conduct civil suits on behalf of copyright holders. This provision was initially removed from the bill, but then was approved unanimously in the Senate. Not all Senators were present for this vote.
(2004), the Recording Industry Association of America
(RIAA) could not charge Oklahoma woman, Debbie Foster, with infringement of shared files. Judge Lee suggested that Foster could not be held responsible for the download of files, which were attributed to her adult daughter and estranged husband who used her IP number. The RIAA’s use of IP numbers to charge users with infringement was not sufficient evidence to charge Ms. Foster and other defendants in the past. However, in another RIAA case, Elektra v. Santangelo
, the judge did find Patti Santangelo potentially liable for file-sharing in her home via Kazaa software, despite the fact that she may not have been aware of the illegal downloads.
In one case, Capitol v. Thomas
, Capital Records did receive an award of $9,250 in statutory damages for each of the twenty-four infringed songs. Although the jury settled on charging the defendant with only $9,250 out of the possible $150,000 per song, through these cases, Capital Records, the RIAA and others were primarily concerned with sending a message to the public that illegal distribution and download of copyrighted music was unacceptable.
In addition to these domestic issues, United States has a history of participating in global enforcement of intellectual property rights. In 1995, the U.S. participated in negotiating in the World Trade Organization
(WTO) on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which established a minimum standard for protecting various areas of IP rights. Throughout fiscal years 2004 to 2009, the government has tracked the importation of counterfeit goods, including pharmaceuticals, cigarettes, apparel, footwear, computers, software, toys and electronics. In 2006, the government confiscated, for example, cargo containers of counterfeit Nike
Air Jordan
shoes, as well as counterfeit Abercrombie and Fitch clothing, which together were valued at about $19 million. According to the U.S. Government Accountability Office
's April 2010 report, "Observations on the Efforts to Quantify the Economic Effects of Counterfeit and Pirated Goods," such goods undercut American competition with lower prices, thus causing damage to the domestic economy. The U.S. government was also strongly concerned about the piracy of digital products through peer-to-peer networks, streaming sites, and one-click hosting services. The sophistication of piracy among counterfeiters has harmed the music, motion picture, television, publishing and software industries. At the time, there was no government agency that collected or tracked data on digital copyright piracy. Alongside potential lost revenue, these pirated goods pressure producers and IP owners to compete with the counterfeit producers. Overall, this contributes to loss of brand value and reputation, as well as lost investment and innovation. Also, American companies are forced to expend further funds on protecting intellectual property in court.
Based on a study from the U.S. Chamber of Commerce
, intellectual property theft costs American businesses an estimated $250 billion each year, as well as an estimated 750,000 jobs. Another study, from the Business Software Alliance
, states that the software industry lost nearly $48 billion in sales to piracy.
(D-MI) introduced the bill into the House of Representatives. The bill (H.R. 4279) was known as Prioritizing Resources and Organization for Intellectual Property (PRO-IP) Act of 2008. Lamar Smith
(R-TX), Howard Berman
(D-CA), Adam Schiff
(D-CA) and Bob Goodlatte
(R-VI) were among the sponsors of the bill.
Intellectual-property holders, such as entertainment companies, auto parts manufacturers, pharmaceuticals and unions, championed the bill.
On May 8, 2008, the House of Representatives passed the bill 410 to 11. Only 12 representatives did not vote. On July 12, 2008, H.R. 4279 was received in the House and referred to the Committee on the Judiciary. On July 24, 2008, Senator Patrick Leahy
(D-VT) introduced the bill (S.3325) in the Senate as Enforcement of Intellectual Property Rights Act.
On September 26, 2008, S.3325 passed in the Senate with unanimous consent. Two days later, S.3325 passed in the House 381 to 41. In this final House vote, 2008 Presidential candidates, Ron Paul
and Dennis Kucinich
, voted against the bill.
On October 13, 2008, President George W. Bush
signed the bill into law. The official name of the bill reverted back to its original title when it was introduced into the House, Enforcement of Intellectual Property Rights Act.
intellectual property programs.
For civil enforcement, the PRO-IP Act increases the maximum $30,000 penalty for compilations and increases penalties for repeat offenders. It raises the penalty for statutory damages for counterfeit goods from $1,000 to $200,000, which was originally a range from $500 to $100,000. For repeat offenders, the maximum statutory damages range from $1-2 million. In addition, the Justice Department has the authority to conduct civil asset forfeiture, in which any computer or network hardware used in the act of a copyright crime may be seized and auctioned off.
In civil forfeiture, the plaintiff may also access bank accounts, financial information and other documents in order to trace the source of the infringing goods. In criminal enforcement, the PRO-IP Act offers the government more authority in seizure and forfeiture in the trafficking of counterfeit labels, documentation, and packaging.
Under Title II of the Act, the manufacturers of these products face new criminal penalties, especially if the offender knowingly or recklessly causes serious bodily injury or death, as with counterfeit pharmaceuticals. The Act also prohibits the transshipment or exportation of such goods, which would be in violation of the Trademark Act of 1946 or the Lanham Act
.
Section 602 of the Copyright Act states that it is only illegal to import products that infringe a copyright. The PRO-IP revision in Section 105 clarifies this issue, stating that the import and export of such materials is illegal.
U.S. Customs and Border Protection
also provides the opportunity for musicians and performers to register their work with the agency, enabling CBP to notify the artist if unauthorized copies of their work are tracked entering the U.S. from other countries.
The PRO-IP Act also established the position of the Intellectual Property Enforcement Coordinator within the Executive Office of the President. The purpose of this new position was to coordinate the anti-piracy efforts of the Department of Justice, the Patent and Trademark Office and the Office of the U.S. Trade Representative.
The appointed IPEC would be responsible for developing and implementing a Joint Strategic Plan, a program to battle counterfeiting and piracy. The appointee would also serve as chief advisor to the President on both domestic and international intellectual property enforcement policy.
Under Section 304, the IPEC must submit an annual report to Congress and must update the strategic plan every three years. The legislation also allocates $25 million annually to state and local governments to train law enforcement, educate the public and purchase technology to combat counterfeit activity.
Additional resources, for example, were allotted to the Federal Bureau of Investigation
, which now operates a department of at least five full-time Special Agents who work with the Department of Justice’s Computer Crime and Intellectual Property Section (CCIPS).
The Congressional Budget Office estimated that the federal budget would allocate approximately $429 million between 2009 and 2013 for the implementation of the PRO-IP Act.
In a speech at the Export-Import Bank's Annual Conference in March 2010, President Obama remarked: "...we’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. But it’s only a competitive advantage if our companies know that someone else can’t just steal that idea and duplicate it with cheaper inputs and labor. There’s nothing wrong with other people using our technologies, we welcome it –- we just want to make sure that it’s licensed, and that American businesses are getting paid appropriately."
When the bill was initially introduced, co-sponsor, Rep. Howard Berman, defended the Digital Millennium Copyright Act. He suggested that individuals are willing to steal intellectual property and that the PRO-IP Act would prevent such crimes.
American businesses, such as the Business Software Alliance, Motion Picture Association of America and the Recording Industry of America, were long time supporters of the bill, since it was first introduced into the House. NBCUniversal Media also supported the Act due to countless pirated works on counterfeit DVDs and online, which were circulated throughout the U.S. and abroad.
In response to the changing Internet platforms, corporations like NBC
have transformed traditional media companies into new models to monetize their content. Hulu
, for example, began as a joint venture between NBC and News Corp, parent company to Fox
. Although new resources were provided for consuming entertainment media, it was not sufficient to completely counteract copyright infringement online.
In addition to media and entertainment corporations, the U.S. auto industry, including General Motors
, Ford and Chrysler
, sought protection from counterfeiters. Ford and GM, who hold one third of all green technology patents and their related value, are in competition with China and India in the development of hybrid and green technology. Proponents in the auto industry suggested that the PRO-IP Act was essential to sustain financial viability, as well as enduring competitiveness.
Other groups that supported the Act include the National Music Publishers’ Association and the Copyright Alliance.
(CCIA), Net Coalition, Consumer Electronics Association
(CEA), Public Knowledge
, Center for Democracy and Technology
(CDT), Association of Public Television Stations
and Printing Industries of America
, protested the compilation clause. Under the law at the time, the copyright plaintiff was able to obtain up to $150,000 per work infringed. The compilation clause, from Section 504 (c)(1) of Title 17, states: "For the purposes of this subsection, all the parts of a compilation or derivative work constitute one work." Under the clause, an entire stolen album would count as one work and thus, the infringer would receive a maximum penalty of $150,000. This would mean, for example, that an individual who copied fifty songs from a boxed set would be liable for a minimum $150,000 rather than $7.5 million in damages. Under the PRO-IP Act, however, legislators proposed that the plaintiff could claim up to $150,000 per infringed work. Public Knowledge argued that this proposed change to the compilation clause would "incentivize 'copyright troll
s'" to collect larger damage claims than necessary.
William Patry, senior copyright lawyer for Google, was well known for calling the legislation, the most “outrageous gluttonous IP bill ever introduced in the U.S.,” in response to the compilation clause.Patry, who served in the Copyright Office in the past, suggested that the penalties of the PRO-IP Act would fall on ordinary Americans, not commercial counterfeiters.
Like Patry, many believed that liability per song was an excessive penalty. Digital rights groups and other critics suggested that the Act failed to recognize the difference between commercial counterfeiters and regular consumers, who would be punished with outstanding fees. In fact, they suggested that non commercial, personal copying of such tracks could possibly be considered fair use.
The PRO-IP Act further narrow rights under the Digital Millennium Copyright Act
(DMCA). Under DMCA, fair use
limits the statutory damages available under secondary liability and permits bypassing digital rights management (DRM) for lawful uses. Consumer advocates suggested that the PRO-IP Act, in turn, would serve as a means to protect the business interests of American film, music and software companies. “At a time when the entire digital world is going to less restrictive distribution models, and when the courts are aghast at the outlandish damages being inflicted on consumers in copyright cases, this bill goes entirely in the wrong direction,” stated Public Knowledge's president and co-founder, Gigi Sohn
. Due to this controversy, the compilation clause was ultimately removed from the Act.
(B) by the reproduction or distribution, including by electronic means...copyrighted works, which have a total retail value of more than $1,000; or (C) by the distribution of a work being prepared for commercial distribution, by making it available on a computer network accessible to members of the public..."Under this section, Representative Steve Chabot (R-OH) had proposed that the PRO-IP Act enact stricter penalties, which would lengthen prison terms.
Others claimed that the Act was a violation of net neutrality. As a result of the legislation, Internet service providers would partner with recording companies, for example, in order to detect piracy.
The legislation would also permit the Attorney General to sue individuals on behalf of rights holders, like the MPAA and RIAA.
Advocacy groups, like Public Knowledge
and Electronic Frontier Foundation
stated that the recording industry has threatened or filed over 30,000 lawsuits against individual consumers, suggesting that movie and television producers, software publishers, music publishers and print publishers have sufficient access to their own enforcement programs and do not need additional support from the government.
In addition, the PRO-IP Act was also criticized due to the creation of new federal offices that would further strain taxpayer dollars, such as the U.S. Intellectual Property Enforcement Representative, Intellectual Property Enforcement Division in the Department of Justice and additional intellectual property staff in U.S. embassies.
On October 8, 2008, President Bush had signed the bailout bill, the Emergency Economic Stabilization Act of 2008
. This context of hard economic times further enhanced the urgency of the PRO-IP Act’s passage. According to co-sponsor, Senator Patrick Leahy, the legislation would serve as a vital means to protect copyrights, patents, trademarks and trade secrets central to the U.S. economy and its job market. "Intellectual property—copyrights, patents, trademarks, and trade secrets—is an ever-growing sector of our economy. We are the envy of the world for the quality and the quantity of our innovative and creative goods and services. If we want to continue to lead the world in producing intellectual property, we need to protect Americans' rights in that property", stated Senator Leahy.
The Bush Administration had questioned the legality of the “copyright czar” position, suggesting that it was a violation of separation of powers.
The Justice Department was opposed to the bill, suggesting that the power of the appointed copyright czar was unnecessary. As a result, the position was placed in the Executive Office of the President instead of the Department of Justice.
Senator Ron Wyden was one of the representatives who requested that Congress remove the provision that requires the involvement of the Department of Justice in intellectual property enforcement.
appointed intellectual property scholar Victoria Espinel
to be the first Intellectual Property Enforcement Coordinator, a position informally known as the copyright czar.
Victoria Espinel, who taught as a professor at George Mason University, had prior experience working at the Office of the U.S. Trade Representative. Espinel also served as an intellectual property advisor to the staff of the Senate Judiciary Committee, the Senate Finance Committee, the House Judiciary Committee and the House Ways and Means Committee.
On December 3, 2009, Espinel's appointment was confirmed. The United States Chamber of Commerce
, Public Knowledge
and other groups approved Espinel for this position.
By Executive Order, President Obama also created two interagencies, the Senior Advisory Committee and Intellectual Property Enforcement Advisory Committee. Espinel serves as the chair of these two groups.
Senate Judiciary chairman Patrick Leahy
(D-VT) was a strong supporter of these committees, which aimed to further support the goals of the PRO-IP Act, centered upon protecting American intellectual property and in turn, protect innovation central to the U.S. economy and its job market.
In 2009, the Justice Department reported on the implementation of PRO-IP Act in its first year. There were a variety of prosecutions in the protection of health and safety. One defendant was imprisoned for trafficking over $400,000 worth of counterfeit pharmaceuticals. These tablets, when consumed with alcohol, caused symptoms such as abdominal cramps, nausea, vomiting and headaches. In another case, New York resident was incarcerated for trafficking more than a half a million tubes of counterfeit toothpaste, which contained microorganisms and diethylene glycol
, a chemical used as a coolant in brake fluids. The most severe of these prosecutions included imprisonment for Kevin Xu of Texas, who trafficked counterfeit cancer drugs, which included less active ingredients than indicated on the labels. The ability to seize these counterfeit products enabled the government to protect citizen health. In commercial counterfeiting online, the Department of Justice reported the operation of forty websites that generated $800,000 selling counterfeit software online. A ring of defendants was also guilty of selling counterfeit software on eBay
valued at more than $25 million. Over the course of about six years, another defendant sold pirated tele-radiological software to hospitals and outpatient facilities.
The Department of Justice also reported that the FBI was able to target piracy organizations, as well as initiate the first-ever peer-to-peer trial conviction. Apocalypse Production Crew
or “APC” was one of these music piracy groups that served as a “release group,” which are the original sources in which pirated works are distributed on the Internet. In the first peer-to-peer trial conviction, Daniel Dove was convicted as the administrator of Elite Torrents, a P2P Internet piracy group, which had over 133,000 members and facilitated the distribution of more than 17,800 titles in movies, software, music and games.
In 2010, the Justice Department’s Criminal Division also coordinated work between investigatory agencies and the International Organized Crime Intelligence and Operations Center, also referred to as IOC-2. In an attempt to close intelligence gaps between these groups, the FBI, ICE and CBP routinely contribute intellectual property data to IOC-2. The IOC-2 has also collaborated with the National Intellectual Property Rights Coordination Center
to train personnel in the identification of intellectual property violations that involve organized crime.
In addition, in 2010, operations detected online piracy in the sale of counterfeit clothing and computer programs. At the Fisherman’s Wharf in San Francisco, California, merchants at eight shops were charged with trafficking counterfeit designer merchandise imported from China, such as clothing, handbags and shoes, all of which were valued over $100 million. In New York, a man had been trafficking NFL, NHL, NBA and MLB sports jerseys. The FBI was also able to track organized crime internationally, such as one group that was responsible for smuggling 120 pairs of counterfeit Nike
shoes, 500,000 counterfeit Coach handbags, 10,000 pairs of Coach and Gucci
shoes and 500 counterfeit Cartier
watches through the Port of Baltimore.
The PRO-IP Act is also utilized to prevent the theft of commercial trade secrets. Many of these cases, for example, entail former employees sharing critical information with international markets. A former Bristol-Myers-Squibb employee stole trade secrets from the company, which he planned to use to establish a pharmaceutical firm in India. Valspar Corporation chemist admitted to stealing formulas and other information valued at $20 million, which he would use working for an overseas competitor. Another chemist stole information from DuPont
on Organic Light Emitting Diodes or OLED technology used for display and lighting applications. An employee for Dow AgroSciences
in Indianapolis had a similar intent to take trade secrets to China.
In June 2010, Espinel’s Joint Strategic Plan integrated perspectives across federal agencies, such as U.S. Departments of Agriculture, Commerce, Health and Human Services, Homeland Security Justice, Office of the U.S. Trade Representative and U.S. Copyright Office. It also considered 1,600 public comments and suggestions from the American public. Under this plan, the federal government will avoid purchase or use of infringing products, support transparency in the development of enforcement policy, as well as improve coordination and thus, effectiveness of intellectual property enforcement. The plan also aims to further protect American intellectual property rights through international outreach and to improve data and information collection regarding criminal violations of intellectual property. IPEC has collected data through a Budget Data Request (BDR), in which federal agencies report the resources used and measured outcomes in intellectual property enforcement.
Espinel hosted an Intellectual Property Health and Safety Forum at the White House, meeting with private sector leaders from American Express
, eNom
, GoDaddy, Google
, MasterCard
, Microsoft
, Neustar
, Visa and Yahoo!
to take action against illegal online pharmacies, which pose a threat to health in the act of selling counterfeit drugs online. Due to interagency and cross-border efforts, the FBI was able to convict individuals selling cancer drugs that did not contain ingredients to fight cancer. The PRO-IP Act is also intended to prevent the sale of counterfeit products for use in U.S. defense and weapons systems that may possibly fail under fire, causing harm to troop missions and ultimately, public safety. In one case, a business owner was prosecuted for selling counterfeit Cisco
products, which were intended to relay troop movement and intelligence for a U.S. Marine Corps base in Iraq.
As a result of this work, U.S. Immigration and Customs Enforcement
(ICE HSI) opened 1,033 intellectual property cases, which resulted in 365 arrests, 216 indictments and 170 federal and state convictions.ICE HSI has identified and seized domain names facilitating the trafficking of pirated materials. Customs and Border Protection (CBP) and ICE HSI had 19,959 intellectual property seizures, which resulted in 237 civil fines and penalties totaling over $62 million.
Many have contested the legality of these seizures, suggesting that excessive shutdowns of domain names and other rogue sites is a violation of free speech. John Morton, director of Immigration and Customs Enforcement, has stated that the organization has "zero interest in limiting free speech" and that "ICE is not the police of the Internet."
In 2011, the federal government aims to shut down top illegal websites and to secure legislation that will enable funding for U.S. embassies to monitor American intellectual property internationally.For example, President Obama discussed enforcement of intellectual property rights with Chinese President Hu Jintao
. Alongside Microsoft
CEO Steve Ballmer
, Obama urged Jintao to take action against consumers who purchase Microsoft software and other counterfeit DVDs and CDs for only a fraction of the cost online or in public markets. Other European countries and Japan have also addressed this growing problem in China, where the authorities hesitate to arrest counterfeiters due to the fact that such products may possibly bolster local economies.
Since the passage of the PRO-IP Act, the National Association of Manufacturers
has lobbied for further legislation, as well. In addition to identifying counterfeit and pirate products, the Association would like the legislation that compiles a “watch list” database of importers, shippers and other participants at U.S. ports. Such legislation should also increase fines, as well as develop tools to ensure that manufacturers receive timely information about acts of infringement.
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...
that increases both civil and criminal penalties for trademark
Trademark
A trademark, trade mark, or trade-mark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services to consumers with which the trademark appears originate from a unique source, and to distinguish its products or...
, patent
Patent
A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....
and copyright infringement
Copyright infringement
Copyright infringement is the unauthorized or prohibited use of works under copyright, infringing the copyright holder's exclusive rights, such as the right to reproduce or perform the copyrighted work, or to make derivative works.- "Piracy" :...
. The law also establishes a new executive branch office, the Office of the United States Intellectual Property Enforcement Representative (USIPER).
The PRO-IP Act permits the Department of Justice to conduct civil suits on behalf of copyright holders. This provision was initially removed from the bill, but then was approved unanimously in the Senate. Not all Senators were present for this vote.
Background of the Act
The PRO-IP Act would serve to further protect rights holders in the case of secondary infringement, in which a consumer becomes liable for infringement committed by another. In Capitol Records v. Deborah FosterCapitol Records v. Deborah Foster
Capitol v. Foster is a notable case involving intellectual property and file sharing/distribution of music. The case involves the Recording Industry Association of America filing a lawsuit against an Oklahoma woman, Deborah Foster, in November 2004...
(2004), the Recording Industry Association of America
Recording Industry Association of America
The Recording Industry Association of America is a trade organization that represents the recording industry distributors in the United States...
(RIAA) could not charge Oklahoma woman, Debbie Foster, with infringement of shared files. Judge Lee suggested that Foster could not be held responsible for the download of files, which were attributed to her adult daughter and estranged husband who used her IP number. The RIAA’s use of IP numbers to charge users with infringement was not sufficient evidence to charge Ms. Foster and other defendants in the past. However, in another RIAA case, Elektra v. Santangelo
Elektra v. Santangelo
Elektra v. Santangelo was a case heard before the United States District Court for the Southern District of New York, filed by Elektra Entertainment Group as one of approximately 13,000 lawsuits that the Recording Industry Association of America has brought against individual defendants in the U.S...
, the judge did find Patti Santangelo potentially liable for file-sharing in her home via Kazaa software, despite the fact that she may not have been aware of the illegal downloads.
In one case, Capitol v. Thomas
Capitol v. Thomas
Capitol v. Thomas was the first file-sharing copyright infringement lawsuit in the United States brought by major record labels to be tried before a jury. The defendant, Jammie Thomas-Rasset, was found liable in a 2007 trial for infringing 24 songs and ordered to pay $222,000 in statutory damages...
, Capital Records did receive an award of $9,250 in statutory damages for each of the twenty-four infringed songs. Although the jury settled on charging the defendant with only $9,250 out of the possible $150,000 per song, through these cases, Capital Records, the RIAA and others were primarily concerned with sending a message to the public that illegal distribution and download of copyrighted music was unacceptable.
In addition to these domestic issues, United States has a history of participating in global enforcement of intellectual property rights. In 1995, the U.S. participated in negotiating in the World Trade Organization
World Trade Organization
The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...
(WTO) on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which established a minimum standard for protecting various areas of IP rights. Throughout fiscal years 2004 to 2009, the government has tracked the importation of counterfeit goods, including pharmaceuticals, cigarettes, apparel, footwear, computers, software, toys and electronics. In 2006, the government confiscated, for example, cargo containers of counterfeit Nike
Nike, Inc.
Nike, Inc. is a major publicly traded sportswear and equipment supplier based in the United States. The company is headquartered near Beaverton, Oregon, which is part of the Portland metropolitan area...
Air Jordan
Air Jordan
Air Jordan, also known simply as Jordans, are a brand of shoes and athletic apparel produced by Nike originally designed for and endorsed by NBA Hall of Famer and Six Time NBA Champion Michael Jordan. The Air Jordan line is now sold by the Jordan Brand subsidiary of Nike...
shoes, as well as counterfeit Abercrombie and Fitch clothing, which together were valued at about $19 million. According to the U.S. Government Accountability Office
Government Accountability Office
The Government Accountability Office is the audit, evaluation, and investigative arm of the United States Congress. It is located in the legislative branch of the United States government.-History:...
's April 2010 report, "Observations on the Efforts to Quantify the Economic Effects of Counterfeit and Pirated Goods," such goods undercut American competition with lower prices, thus causing damage to the domestic economy. The U.S. government was also strongly concerned about the piracy of digital products through peer-to-peer networks, streaming sites, and one-click hosting services. The sophistication of piracy among counterfeiters has harmed the music, motion picture, television, publishing and software industries. At the time, there was no government agency that collected or tracked data on digital copyright piracy. Alongside potential lost revenue, these pirated goods pressure producers and IP owners to compete with the counterfeit producers. Overall, this contributes to loss of brand value and reputation, as well as lost investment and innovation. Also, American companies are forced to expend further funds on protecting intellectual property in court.
Based on a study from the U.S. Chamber of Commerce
Chamber of commerce
A chamber of commerce is a form of business network, e.g., a local organization of businesses whose goal is to further the interests of businesses. Business owners in towns and cities form these local societies to advocate on behalf of the business community...
, intellectual property theft costs American businesses an estimated $250 billion each year, as well as an estimated 750,000 jobs. Another study, from the Business Software Alliance
Business Software Alliance
The Business Software Alliance is a trade group established in 1988 and representing a number of the world's largest software makers and is a member of the International Intellectual Property Alliance...
, states that the software industry lost nearly $48 billion in sales to piracy.
Legislative history
On December 5, 2007, John ConyersJohn Conyers
John Conyers, Jr. is the U.S. Representative for , serving since 1965 . He is a member of the Democratic Party...
(D-MI) introduced the bill into the House of Representatives. The bill (H.R. 4279) was known as Prioritizing Resources and Organization for Intellectual Property (PRO-IP) Act of 2008. Lamar Smith
Lamar Smith
Lamar Smith may refer to:* Lamar S. Smith , U.S. Representative from Texas* Lamar Smith , U.S. civil rights activist; murdered in Mississippi* Lamar Smith , NFL running back, 1994–2004...
(R-TX), Howard Berman
Howard Berman
Howard Lawrence Berman is the U.S. Representative for , serving since 2003. He is a member of the Democratic Party. He earlier served in the California State Assembly from 1974 to 1982, and as the U.S...
(D-CA), Adam Schiff
Adam Schiff
Adam Bennett Schiff is the U.S. Representative for . He has served in Congress since 2001. He is a member of the Democratic Party...
(D-CA) and Bob Goodlatte
Bob Goodlatte
Robert William "Bob" Goodlatte is the U.S. Representative for , serving since 1993. He is a member of the Republican Party. The district is based in Roanoke and also includes Lynchburg, Harrisonburg and Staunton.-Early life, education and career:...
(R-VI) were among the sponsors of the bill.
Intellectual-property holders, such as entertainment companies, auto parts manufacturers, pharmaceuticals and unions, championed the bill.
On May 8, 2008, the House of Representatives passed the bill 410 to 11. Only 12 representatives did not vote. On July 12, 2008, H.R. 4279 was received in the House and referred to the Committee on the Judiciary. On July 24, 2008, Senator Patrick Leahy
Patrick Leahy
Patrick Joseph Leahy is the senior United States Senator from Vermont and member of the Democratic Party. He is the first and only elected Democratic United States Senator in Vermont's history. He is the chairman of the Senate Judiciary Committee. Leahy is the second most senior U.S. Senator,...
(D-VT) introduced the bill (S.3325) in the Senate as Enforcement of Intellectual Property Rights Act.
On September 26, 2008, S.3325 passed in the Senate with unanimous consent. Two days later, S.3325 passed in the House 381 to 41. In this final House vote, 2008 Presidential candidates, Ron Paul
Ron Paul
Ronald Ernest "Ron" Paul is an American physician, author and United States Congressman who is seeking to be the Republican Party candidate in the 2012 presidential election. Paul represents Texas's 14th congressional district, which covers an area south and southwest of Houston that includes...
and Dennis Kucinich
Dennis Kucinich
Dennis John Kucinich is the U.S. Representative for , serving since 1997. He was furthermore a candidate for the Democratic nomination for President of the United States in the 2004 and 2008 presidential elections....
, voted against the bill.
On October 13, 2008, President George W. Bush
George W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
signed the bill into law. The official name of the bill reverted back to its original title when it was introduced into the House, Enforcement of Intellectual Property Rights Act.
Content of the Act
The PRO-IP Act makes changes to prior intellectual property law in the areas of civil enforcement, criminal enforcement, coordination of federal intellectual property efforts and funding and resources of the Department of JusticeUnited States Department of Justice
The United States Department of Justice , is the United States federal executive department responsible for the enforcement of the law and administration of justice, equivalent to the justice or interior ministries of other countries.The Department is led by the Attorney General, who is nominated...
intellectual property programs.
For civil enforcement, the PRO-IP Act increases the maximum $30,000 penalty for compilations and increases penalties for repeat offenders. It raises the penalty for statutory damages for counterfeit goods from $1,000 to $200,000, which was originally a range from $500 to $100,000. For repeat offenders, the maximum statutory damages range from $1-2 million. In addition, the Justice Department has the authority to conduct civil asset forfeiture, in which any computer or network hardware used in the act of a copyright crime may be seized and auctioned off.
In civil forfeiture, the plaintiff may also access bank accounts, financial information and other documents in order to trace the source of the infringing goods. In criminal enforcement, the PRO-IP Act offers the government more authority in seizure and forfeiture in the trafficking of counterfeit labels, documentation, and packaging.
Under Title II of the Act, the manufacturers of these products face new criminal penalties, especially if the offender knowingly or recklessly causes serious bodily injury or death, as with counterfeit pharmaceuticals. The Act also prohibits the transshipment or exportation of such goods, which would be in violation of the Trademark Act of 1946 or the Lanham Act
Lanham Act
The Lanham Act is a piece of legislation that contains the federal statutes of trademark law in the United States. The Act prohibits a number of activities, including trademark infringement, trademark dilution, and false advertising.-History:Named for Representative Fritz G...
.
Section 602 of the Copyright Act states that it is only illegal to import products that infringe a copyright. The PRO-IP revision in Section 105 clarifies this issue, stating that the import and export of such materials is illegal.
U.S. Customs and Border Protection
U.S. Customs and Border Protection
U.S. Customs and Border Protection is a federal law enforcement agency of the United States Department of Homeland Security charged with regulating and facilitating international trade, collecting import duties, and enforcing U.S. regulations, including trade, customs and immigration. CBP is the...
also provides the opportunity for musicians and performers to register their work with the agency, enabling CBP to notify the artist if unauthorized copies of their work are tracked entering the U.S. from other countries.
The PRO-IP Act also established the position of the Intellectual Property Enforcement Coordinator within the Executive Office of the President. The purpose of this new position was to coordinate the anti-piracy efforts of the Department of Justice, the Patent and Trademark Office and the Office of the U.S. Trade Representative.
The appointed IPEC would be responsible for developing and implementing a Joint Strategic Plan, a program to battle counterfeiting and piracy. The appointee would also serve as chief advisor to the President on both domestic and international intellectual property enforcement policy.
Under Section 304, the IPEC must submit an annual report to Congress and must update the strategic plan every three years. The legislation also allocates $25 million annually to state and local governments to train law enforcement, educate the public and purchase technology to combat counterfeit activity.
Additional resources, for example, were allotted to the Federal Bureau of Investigation
Federal Bureau of Investigation
The Federal Bureau of Investigation is an agency of the United States Department of Justice that serves as both a federal criminal investigative body and an internal intelligence agency . The FBI has investigative jurisdiction over violations of more than 200 categories of federal crime...
, which now operates a department of at least five full-time Special Agents who work with the Department of Justice’s Computer Crime and Intellectual Property Section (CCIPS).
The Congressional Budget Office estimated that the federal budget would allocate approximately $429 million between 2009 and 2013 for the implementation of the PRO-IP Act.
Proponents
Based on the 2010 Joint Strategic Plan, the main function of the PRO-IP Act is to protect the growth of the national economy. The act also serves to promote creativity, research and innovation, which are essential to the technology, pharmaceutical, automobile, and entertainment industries and in turn, protect the jobs in those fields. The U.S. federal government also depends on the promotion of innovation to solve global problems and to preserve national and economic security, including the prevention of criminal activity, such as the sale of counterfeit drugs that cause fatal harm to consumers. In addition, the Act reaffirms commitment to Article I, Section 8 of the Constitution, which aims to promote scientific and artistic creativity.In a speech at the Export-Import Bank's Annual Conference in March 2010, President Obama remarked: "...we’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. But it’s only a competitive advantage if our companies know that someone else can’t just steal that idea and duplicate it with cheaper inputs and labor. There’s nothing wrong with other people using our technologies, we welcome it –- we just want to make sure that it’s licensed, and that American businesses are getting paid appropriately."
When the bill was initially introduced, co-sponsor, Rep. Howard Berman, defended the Digital Millennium Copyright Act. He suggested that individuals are willing to steal intellectual property and that the PRO-IP Act would prevent such crimes.
American businesses, such as the Business Software Alliance, Motion Picture Association of America and the Recording Industry of America, were long time supporters of the bill, since it was first introduced into the House. NBCUniversal Media also supported the Act due to countless pirated works on counterfeit DVDs and online, which were circulated throughout the U.S. and abroad.
In response to the changing Internet platforms, corporations like NBC
NBC
The National Broadcasting Company is an American commercial broadcasting television network and former radio network headquartered in the GE Building in New York City's Rockefeller Center with additional major offices near Los Angeles and in Chicago...
have transformed traditional media companies into new models to monetize their content. Hulu
Hulu
Hulu is a website and over-the-top subscription service offering ad-supported on-demand streaming video of TV shows, movies, webisodes and other new media, trailers, clips, and behind-the-scenes footage from NBC, Fox, ABC, and Obstacle on October 20th 2011 Nickelodeon and CBS and many other...
, for example, began as a joint venture between NBC and News Corp, parent company to Fox
Fox
Fox is a common name for many species of omnivorous mammals belonging to the Canidae family. Foxes are small to medium-sized canids , characterized by possessing a long narrow snout, and a bushy tail .Members of about 37 species are referred to as foxes, of which only 12 species actually belong to...
. Although new resources were provided for consuming entertainment media, it was not sufficient to completely counteract copyright infringement online.
In addition to media and entertainment corporations, the U.S. auto industry, including General Motors
General Motors
General Motors Company , commonly known as GM, formerly incorporated as General Motors Corporation, is an American multinational automotive corporation headquartered in Detroit, Michigan and the world's second-largest automaker in 2010...
, Ford and Chrysler
Chrysler
Chrysler Group LLC is a multinational automaker headquartered in Auburn Hills, Michigan, USA. Chrysler was first organized as the Chrysler Corporation in 1925....
, sought protection from counterfeiters. Ford and GM, who hold one third of all green technology patents and their related value, are in competition with China and India in the development of hybrid and green technology. Proponents in the auto industry suggested that the PRO-IP Act was essential to sustain financial viability, as well as enduring competitiveness.
Other groups that supported the Act include the National Music Publishers’ Association and the Copyright Alliance.
Compilation Clause
However, the PRO-IP Act also faced opposition. Before the act was passed, Library Copyright Alliance (LCA), Computer and Communications Industry AssociationComputer and Communications Industry Association
Computer & Communication Industry Association is an advocacy organization based in Washington, D.C. which represents a diverse member base in the computer, Internet, information technology, and telecommunications industries...
(CCIA), Net Coalition, Consumer Electronics Association
Consumer Electronics Association
The Consumer Electronics Association is a standards and trade organization for the consumer electronics industry in the United States. The Consumer Electronics Association is the preeminent trade association promoting growth in the $173 billion U.S...
(CEA), Public Knowledge
Public Knowledge
Public Knowledge is a non-profit Washington, D.C.-based public interest group that is involved in intellectual property law, competition, and choice in the digital marketplace, and an open standards/end-to-end internet....
, Center for Democracy and Technology
Center for Democracy and Technology
The Center for Democracy & Technology is a Washington, D.C. based 501 non-profit public-interest group that works to promote an open, innovative and free Internet....
(CDT), Association of Public Television Stations
Association of Public Television Stations
In 1980, America’s public television stations created the Association of Public Television Stations to represent their interests.-Mission & Goals of APTS:...
and Printing Industries of America
Printing Industries of America
Printing Industries of America is a nonprofit trade association which advocates for the United States printing industry.It is the world’s largest graphic arts trade association, representing more than 10,000 member companies and an industry with more than $174.4 billion in revenue and 1 million...
, protested the compilation clause. Under the law at the time, the copyright plaintiff was able to obtain up to $150,000 per work infringed. The compilation clause, from Section 504 (c)(1) of Title 17, states: "For the purposes of this subsection, all the parts of a compilation or derivative work constitute one work." Under the clause, an entire stolen album would count as one work and thus, the infringer would receive a maximum penalty of $150,000. This would mean, for example, that an individual who copied fifty songs from a boxed set would be liable for a minimum $150,000 rather than $7.5 million in damages. Under the PRO-IP Act, however, legislators proposed that the plaintiff could claim up to $150,000 per infringed work. Public Knowledge argued that this proposed change to the compilation clause would "incentivize 'copyright troll
Copyright troll
A copyright troll is a pejorative term for a party that enforces copyrights it owns for purposes of making money through litigation, in a manner considered unduly aggressive or opportunistic, generally without producing or licensing its own works for paid distribution...
s'" to collect larger damage claims than necessary.
William Patry, senior copyright lawyer for Google, was well known for calling the legislation, the most “outrageous gluttonous IP bill ever introduced in the U.S.,” in response to the compilation clause.Patry, who served in the Copyright Office in the past, suggested that the penalties of the PRO-IP Act would fall on ordinary Americans, not commercial counterfeiters.
Like Patry, many believed that liability per song was an excessive penalty. Digital rights groups and other critics suggested that the Act failed to recognize the difference between commercial counterfeiters and regular consumers, who would be punished with outstanding fees. In fact, they suggested that non commercial, personal copying of such tracks could possibly be considered fair use.
The PRO-IP Act further narrow rights under the Digital Millennium Copyright Act
Digital Millennium Copyright Act
The Digital Millennium Copyright Act is a United States copyright law that implements two 1996 treaties of the World Intellectual Property Organization . It criminalizes production and dissemination of technology, devices, or services intended to circumvent measures that control access to...
(DMCA). Under DMCA, fair use
Fair use
Fair use is a limitation and exception to the exclusive right granted by copyright law to the author of a creative work. In United States copyright law, fair use is a doctrine that permits limited use of copyrighted material without acquiring permission from the rights holders...
limits the statutory damages available under secondary liability and permits bypassing digital rights management (DRM) for lawful uses. Consumer advocates suggested that the PRO-IP Act, in turn, would serve as a means to protect the business interests of American film, music and software companies. “At a time when the entire digital world is going to less restrictive distribution models, and when the courts are aghast at the outlandish damages being inflicted on consumers in copyright cases, this bill goes entirely in the wrong direction,” stated Public Knowledge's president and co-founder, Gigi Sohn
Gigi Sohn
Gigi Sohn is president and co-founder of Public Knowledge. She was formerly with the Ford Foundation. She graduated from Boston University with a B.S. in Broadcasting and Film and earned a J.D. from the University of Pennsylvania Law School...
. Due to this controversy, the compilation clause was ultimately removed from the Act.
Attempted Infringement Clause
Another contested clause was the “attempted infringement” penalty.Section 506 (a)(1) of Title 17 states that "any person who willfully infringes a copyright shall be punishe...if the infringement was committed—(A) for purposes of commercial advantage or private financial gain;(B) by the reproduction or distribution, including by electronic means...copyrighted works, which have a total retail value of more than $1,000; or (C) by the distribution of a work being prepared for commercial distribution, by making it available on a computer network accessible to members of the public..."Under this section, Representative Steve Chabot (R-OH) had proposed that the PRO-IP Act enact stricter penalties, which would lengthen prison terms.
Consumer Rights
In addition, American consumers were concerned about Section 206, which expanded the scope of civil forfeitures. The government could confiscate an iPod, for example, that contained illegal music downloads when crossing the border.Others claimed that the Act was a violation of net neutrality. As a result of the legislation, Internet service providers would partner with recording companies, for example, in order to detect piracy.
The legislation would also permit the Attorney General to sue individuals on behalf of rights holders, like the MPAA and RIAA.
Advocacy groups, like Public Knowledge
Public Knowledge
Public Knowledge is a non-profit Washington, D.C.-based public interest group that is involved in intellectual property law, competition, and choice in the digital marketplace, and an open standards/end-to-end internet....
and Electronic Frontier Foundation
Electronic Frontier Foundation
The Electronic Frontier Foundation is an international non-profit digital rights advocacy and legal organization based in the United States...
stated that the recording industry has threatened or filed over 30,000 lawsuits against individual consumers, suggesting that movie and television producers, software publishers, music publishers and print publishers have sufficient access to their own enforcement programs and do not need additional support from the government.
In addition, the PRO-IP Act was also criticized due to the creation of new federal offices that would further strain taxpayer dollars, such as the U.S. Intellectual Property Enforcement Representative, Intellectual Property Enforcement Division in the Department of Justice and additional intellectual property staff in U.S. embassies.
Bush Administration
In September 1999, Congress instituted the National Intellectual Property Law Enforcement Coordination Center to coordinate efforts to protect IP across federal agencies. In 2004, the Strategy for Targeting Organized Piracy (STOP) was also established in response to rising industry concerns about piracy. However, the functions of these agencies overlapped and lacked an overall strategy.On October 8, 2008, President Bush had signed the bailout bill, the Emergency Economic Stabilization Act of 2008
Emergency Economic Stabilization Act of 2008
The Emergency Economic Stabilization Act of 2008 The Emergency Economic Stabilization Act of 2008 The Emergency Economic Stabilization Act of 2008 (Division A of , commonly referred to as a bailout of the U.S. financial system, is a law enacted in response to the subprime mortgage crisis...
. This context of hard economic times further enhanced the urgency of the PRO-IP Act’s passage. According to co-sponsor, Senator Patrick Leahy, the legislation would serve as a vital means to protect copyrights, patents, trademarks and trade secrets central to the U.S. economy and its job market. "Intellectual property—copyrights, patents, trademarks, and trade secrets—is an ever-growing sector of our economy. We are the envy of the world for the quality and the quantity of our innovative and creative goods and services. If we want to continue to lead the world in producing intellectual property, we need to protect Americans' rights in that property", stated Senator Leahy.
The Bush Administration had questioned the legality of the “copyright czar” position, suggesting that it was a violation of separation of powers.
The Justice Department was opposed to the bill, suggesting that the power of the appointed copyright czar was unnecessary. As a result, the position was placed in the Executive Office of the President instead of the Department of Justice.
Senator Ron Wyden was one of the representatives who requested that Congress remove the provision that requires the involvement of the Department of Justice in intellectual property enforcement.
Obama Administration
In September 2009, President Barack ObamaBarack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
appointed intellectual property scholar Victoria Espinel
Victoria Espinel
Victoria Angelica Espinel is the United States Intellectual Property Enforcement Coordinator for the Office of Management and Budget. She was appointed to the position by Barack Obama on September 25, 2009, and her appointment was confirmed by the U.S. Senate on December 3, 2009...
to be the first Intellectual Property Enforcement Coordinator, a position informally known as the copyright czar.
Victoria Espinel, who taught as a professor at George Mason University, had prior experience working at the Office of the U.S. Trade Representative. Espinel also served as an intellectual property advisor to the staff of the Senate Judiciary Committee, the Senate Finance Committee, the House Judiciary Committee and the House Ways and Means Committee.
On December 3, 2009, Espinel's appointment was confirmed. The United States Chamber of Commerce
United States Chamber of Commerce
The United States Chamber of Commerce is an American lobbying group representing the interests of many businesses and trade associations. It is not an agency of the United States government....
, Public Knowledge
Public Knowledge
Public Knowledge is a non-profit Washington, D.C.-based public interest group that is involved in intellectual property law, competition, and choice in the digital marketplace, and an open standards/end-to-end internet....
and other groups approved Espinel for this position.
By Executive Order, President Obama also created two interagencies, the Senior Advisory Committee and Intellectual Property Enforcement Advisory Committee. Espinel serves as the chair of these two groups.
Senate Judiciary chairman Patrick Leahy
Patrick Leahy
Patrick Joseph Leahy is the senior United States Senator from Vermont and member of the Democratic Party. He is the first and only elected Democratic United States Senator in Vermont's history. He is the chairman of the Senate Judiciary Committee. Leahy is the second most senior U.S. Senator,...
(D-VT) was a strong supporter of these committees, which aimed to further support the goals of the PRO-IP Act, centered upon protecting American intellectual property and in turn, protect innovation central to the U.S. economy and its job market.
In 2009, the Justice Department reported on the implementation of PRO-IP Act in its first year. There were a variety of prosecutions in the protection of health and safety. One defendant was imprisoned for trafficking over $400,000 worth of counterfeit pharmaceuticals. These tablets, when consumed with alcohol, caused symptoms such as abdominal cramps, nausea, vomiting and headaches. In another case, New York resident was incarcerated for trafficking more than a half a million tubes of counterfeit toothpaste, which contained microorganisms and diethylene glycol
Diethylene glycol
Diethylene glycol is an organic compound with the formula 2O. It is a colorless, practically odorless, poisonous, and hygroscopic liquid with a sweetish taste. It is miscible in water, alcohol, ether, acetone, and ethylene glycol. DEG is a widely used solvent...
, a chemical used as a coolant in brake fluids. The most severe of these prosecutions included imprisonment for Kevin Xu of Texas, who trafficked counterfeit cancer drugs, which included less active ingredients than indicated on the labels. The ability to seize these counterfeit products enabled the government to protect citizen health. In commercial counterfeiting online, the Department of Justice reported the operation of forty websites that generated $800,000 selling counterfeit software online. A ring of defendants was also guilty of selling counterfeit software on eBay
EBay
eBay Inc. is an American internet consumer-to-consumer corporation that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide...
valued at more than $25 million. Over the course of about six years, another defendant sold pirated tele-radiological software to hospitals and outpatient facilities.
The Department of Justice also reported that the FBI was able to target piracy organizations, as well as initiate the first-ever peer-to-peer trial conviction. Apocalypse Production Crew
APOCALYPSE pRODUCTION cREW
Apocalypse Production Crew was a major MP3 warez organization founded by two individuals known under the pseudonyms acid^rain and Viper in May 1997...
or “APC” was one of these music piracy groups that served as a “release group,” which are the original sources in which pirated works are distributed on the Internet. In the first peer-to-peer trial conviction, Daniel Dove was convicted as the administrator of Elite Torrents, a P2P Internet piracy group, which had over 133,000 members and facilitated the distribution of more than 17,800 titles in movies, software, music and games.
In 2010, the Justice Department’s Criminal Division also coordinated work between investigatory agencies and the International Organized Crime Intelligence and Operations Center, also referred to as IOC-2. In an attempt to close intelligence gaps between these groups, the FBI, ICE and CBP routinely contribute intellectual property data to IOC-2. The IOC-2 has also collaborated with the National Intellectual Property Rights Coordination Center
National Intellectual Property Rights Coordination Center
The National Intellectual Property Rights Coordination Center is a U.S. government center overseen by U.S. Immigration and Customs Enforcement, a component of the U.S. Department of Homeland Security. The NIPRCC coordinates the U.S. government’s enforcement of intellectual property laws.The NIPRCC...
to train personnel in the identification of intellectual property violations that involve organized crime.
In addition, in 2010, operations detected online piracy in the sale of counterfeit clothing and computer programs. At the Fisherman’s Wharf in San Francisco, California, merchants at eight shops were charged with trafficking counterfeit designer merchandise imported from China, such as clothing, handbags and shoes, all of which were valued over $100 million. In New York, a man had been trafficking NFL, NHL, NBA and MLB sports jerseys. The FBI was also able to track organized crime internationally, such as one group that was responsible for smuggling 120 pairs of counterfeit Nike
Nike, Inc.
Nike, Inc. is a major publicly traded sportswear and equipment supplier based in the United States. The company is headquartered near Beaverton, Oregon, which is part of the Portland metropolitan area...
shoes, 500,000 counterfeit Coach handbags, 10,000 pairs of Coach and Gucci
Gucci
The House of Gucci, better known simply as Gucci , is an Italian fashion and leather goods label, part of the Gucci Group, which is owned by French company PPR...
shoes and 500 counterfeit Cartier
Cartier SA
Cartier S.A., commonly known as Cartier , is a French luxury jeweler and watch manufacturer. The corporation carries the name of the Cartier family of jewellers whose control ended in 1964 and who were known for numerous pieces including the "Bestiary" , the diamond necklace created for Bhupinder...
watches through the Port of Baltimore.
The PRO-IP Act is also utilized to prevent the theft of commercial trade secrets. Many of these cases, for example, entail former employees sharing critical information with international markets. A former Bristol-Myers-Squibb employee stole trade secrets from the company, which he planned to use to establish a pharmaceutical firm in India. Valspar Corporation chemist admitted to stealing formulas and other information valued at $20 million, which he would use working for an overseas competitor. Another chemist stole information from DuPont
DuPont
E. I. du Pont de Nemours and Company , commonly referred to as DuPont, is an American chemical company that was founded in July 1802 as a gunpowder mill by Eleuthère Irénée du Pont. DuPont was the world's third largest chemical company based on market capitalization and ninth based on revenue in 2009...
on Organic Light Emitting Diodes or OLED technology used for display and lighting applications. An employee for Dow AgroSciences
Dow AgroSciences
Dow AgroSciences LLC is a wholly owned subsidiary of the Dow Chemical Company specializing in not only agricultural chemicals such as pesticides, but also seeds and biotechnology solutions. The company is based in Indianapolis, Indiana, in the United States...
in Indianapolis had a similar intent to take trade secrets to China.
In June 2010, Espinel’s Joint Strategic Plan integrated perspectives across federal agencies, such as U.S. Departments of Agriculture, Commerce, Health and Human Services, Homeland Security Justice, Office of the U.S. Trade Representative and U.S. Copyright Office. It also considered 1,600 public comments and suggestions from the American public. Under this plan, the federal government will avoid purchase or use of infringing products, support transparency in the development of enforcement policy, as well as improve coordination and thus, effectiveness of intellectual property enforcement. The plan also aims to further protect American intellectual property rights through international outreach and to improve data and information collection regarding criminal violations of intellectual property. IPEC has collected data through a Budget Data Request (BDR), in which federal agencies report the resources used and measured outcomes in intellectual property enforcement.
Espinel hosted an Intellectual Property Health and Safety Forum at the White House, meeting with private sector leaders from American Express
American Express
American Express Company or AmEx, is an American multinational financial services corporation headquartered in Three World Financial Center, Manhattan, New York City, New York, United States. Founded in 1850, it is one of the 30 components of the Dow Jones Industrial Average. The company is best...
, eNom
ENom
eNom, Inc. is a domain name registrar and Web hosting company that also sells other products closely tied to domain names, such as SSL certificates, e-mail services, and Website building software...
, GoDaddy, Google
Google
Google Inc. is an American multinational public corporation invested in Internet search, cloud computing, and advertising technologies. Google hosts and develops a number of Internet-based services and products, and generates profit primarily from advertising through its AdWords program...
, MasterCard
MasterCard
Mastercard Incorporated or MasterCard Worldwide is an American multinational financial services corporation with its headquarters in the MasterCard International Global Headquarters, Purchase, Harrison, New York, United States...
, Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
, Neustar
NeuStar
Neustar, Inc. is a provider of clearinghouse and directory services to the global communications and Internet industries.-History:Neustar was incorporated in Delaware in 1998. It started as a business unit within Lockheed Martin Corporation...
, Visa and Yahoo!
Yahoo!
Yahoo! Inc. is an American multinational internet corporation headquartered in Sunnyvale, California, United States. The company is perhaps best known for its web portal, search engine , Yahoo! Directory, Yahoo! Mail, Yahoo! News, Yahoo! Groups, Yahoo! Answers, advertising, online mapping ,...
to take action against illegal online pharmacies, which pose a threat to health in the act of selling counterfeit drugs online. Due to interagency and cross-border efforts, the FBI was able to convict individuals selling cancer drugs that did not contain ingredients to fight cancer. The PRO-IP Act is also intended to prevent the sale of counterfeit products for use in U.S. defense and weapons systems that may possibly fail under fire, causing harm to troop missions and ultimately, public safety. In one case, a business owner was prosecuted for selling counterfeit Cisco
Cisco
Cisco may refer to:Companies:*Cisco Systems, a computer networking company* Certis CISCO, corporatised entity of the former Commercial and Industrial Security Corporation in Singapore...
products, which were intended to relay troop movement and intelligence for a U.S. Marine Corps base in Iraq.
As a result of this work, U.S. Immigration and Customs Enforcement
U.S. Immigration and Customs Enforcement
U.S. Immigration and Customs Enforcement is a federal law enforcement agency under the United States Department of Homeland Security , responsible for identifying, investigating, and dismantling vulnerabilities regarding the nation's border, economic, transportation, and infrastructure security...
(ICE HSI) opened 1,033 intellectual property cases, which resulted in 365 arrests, 216 indictments and 170 federal and state convictions.ICE HSI has identified and seized domain names facilitating the trafficking of pirated materials. Customs and Border Protection (CBP) and ICE HSI had 19,959 intellectual property seizures, which resulted in 237 civil fines and penalties totaling over $62 million.
Many have contested the legality of these seizures, suggesting that excessive shutdowns of domain names and other rogue sites is a violation of free speech. John Morton, director of Immigration and Customs Enforcement, has stated that the organization has "zero interest in limiting free speech" and that "ICE is not the police of the Internet."
In 2011, the federal government aims to shut down top illegal websites and to secure legislation that will enable funding for U.S. embassies to monitor American intellectual property internationally.For example, President Obama discussed enforcement of intellectual property rights with Chinese President Hu Jintao
Hu Jintao
Hu Jintao is the current Paramount Leader of the People's Republic of China. He has held the titles of General Secretary of the Communist Party of China since 2002, President of the People's Republic of China since 2003, and Chairman of the Central Military Commission since 2004, succeeding Jiang...
. Alongside Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
CEO Steve Ballmer
Steve Ballmer
Steven Anthony "Steve" Ballmer is an American business magnate. He is the chief executive officer of Microsoft, having held that post since January 2000. , his personal wealth is estimated at US$13.9 billion, ranking number 19 on the Forbes 400.-Early life:Ballmer was born in Detroit, Michigan to...
, Obama urged Jintao to take action against consumers who purchase Microsoft software and other counterfeit DVDs and CDs for only a fraction of the cost online or in public markets. Other European countries and Japan have also addressed this growing problem in China, where the authorities hesitate to arrest counterfeiters due to the fact that such products may possibly bolster local economies.
Since the passage of the PRO-IP Act, the National Association of Manufacturers
National Association of Manufacturers
The National Association of Manufacturers is an advocacy group headquartered in Washington, D.C. with 10 additional offices across the country...
has lobbied for further legislation, as well. In addition to identifying counterfeit and pirate products, the Association would like the legislation that compiles a “watch list” database of importers, shippers and other participants at U.S. ports. Such legislation should also increase fines, as well as develop tools to ensure that manufacturers receive timely information about acts of infringement.