Global Innovation Policy Center

New legislation and international agreements are set to fight the threat from counterfeiters – yet still more can be done to harmonize IP laws and enforcement practices.

A robust system of IP laws and rights is one of the most effective drivers of innovation, and the global economy owes much to international laws and norms that safeguard these incentives. In the United States, IPbased industries account for over $5 trillion of gross domestic product and drive more than half of all exports. Meanwhile, experts in Europe have made clear that if the European Union is to achieve the goals set forth in the Lisbon Agenda, the protection of trademarks and other IP rights is a prerequisite. However, the IP segments of both economies are increasingly under attack from counterfeiting and piracy – crimes that cost businesses billions in lost earnings, governments billions in lost revenue and society millions in lost jobs.

This notwithstanding, certain public policy proposals – such as those calling for the plain packaging of tobacco products or the additional labelling of soft drinks and fast foods – disregard trademark law and other established international IP norms that are a cornerstone of corporate identity and consumer information. Current initiatives along these lines in Canada, Australia, the United Kingdom and the European Union would increase global counterfeiting activities (by making counterfeits harder to identify), and empower illicit traffickers at the expense of legitimate business activity and consumer confidence. These proposals also constitute an unequivocal violation of international trade and IP agreements, while threatening jobs in small and medium-sized enterprises throughout the supply chain.

Due to this international threat, the United States, the European Union and other trading partners are negotiating a new plurilateral treaty to combat this growing scourge. The Anti-counterfeiting Trade Agreement (ACTA) has the potential to enhance international cooperation in fighting IP theft and contains a number of effective measures and new standards for enhancing and better enforcing IP rights.

In addition, over the past year the Global Intellectual Property Centre (GIPC) and the Coalition Against Counterfeiting and Piracy have worked closely with the US Congress to enact the PRO-IP Act. This sweeping legislation, approved overwhelmingly by lawmakers in both political parties, toughens civil and criminal laws against counterfeiting and piracy, provides for enhanced IP enforcement and prosecutorial resources, and improves IP coordination across executive branch agencies by establishing the unique position of the US intellectual property enforcement coordinator (IPEC) within the executive office of the president.

The new IPEC will assume the challenging task of developing and implementing a first ever national strategy to address the full range of IP issues facing US industries, workers and consumers. The role will make a significant contribution to the enforcement and promotion of IP laws both in the United States and abroad.

IP seizures in the United States increased by 9.7% from 2007 to 2008, with 14,992 seizures recorded at a domestic value of over $270 million – an increase of over 38%. Therefore, the GIPC has also worked to pass the Customs Facilitation and Trade Enforcement Reauthorization Act of 2009. This measure recognizes the need to reshape the Bureau of Customs and Border Protection (CBP) to protect the innovation and creativity of US industry from the tsunami of counterfeit and pirated goods that engulfs US borders each year, mostly from China and other countries with weak IP laws and/or enforcement.

The customs bill, which was introduced by Senators Max Baucus and Chuck Grassley, sets out three key courses of action:

• Establish high-level government leadership that will prioritize IP enforcement – the bill combines the international and commercial offices of the CBP under a single assistant commissioner and formally authorizes the National Intellectual Property Coordinating Centre under an assistant director at US Immigration and Customs Enforcement (ICE).
• Increase IP resources with better training for those in the field – the bill requires an assessment of the optimal allocation of personnel to ensure that both CBP and ICE are effectively enforcing intellectual property, while ensuring that CBP personnel are adequately trained to detect and identify imported goods that violate IP laws.
• Enhance the enforcement capabilities of CBP and ICE – the bill calls for the development of a joint strategic plan that addresses IP enforcement while establishing individual national targeting and analysis groups to assist port inspectors. The bill also calls for a list of previous offenders as well as trustworthy partners; lowers administrative barriers to information sharing between rights holders and the CBP; and launches information campaigns educating travellers on the consequences of transporting goods that violate IP laws.

 

This legislation could significantly reduce counterfeiting and piracy. The GIPC has also put forth additional suggestions for Congress to strengthen this bill, such as:

• authorizing the establishment of a one step process for registering and recording trademarks with CBP;
• granting CBP officers explicit authority to prevent counterfeit and pirated goods from being released in US markets, while giving rights holders access to the counterfeit products; and
• requiring customs entry forms to include a declaration stating that a person is not knowingly bringing (illegal) IP-infringing goods into the United States.

 

IP crimes are growing as the resources, sophistication and creativity of counterfeiters and pirates increase. While the legislative proposals offer powerful new tools in the fight against IP theft, the key to success is a concerted effort by the European Union, the United States and their trading partners to improve their own laws and enforcement, while enhancing cross border cooperation and coordination.

Swift passage of ACTA will be an important step forward, but the United States and the European Union can set the bar higher by building compatible institutions, harmonizing their IP laws and enforcement efforts, promoting strong IP rights in multilateral forums in Geneva and elsewhere, and elevating IP issues to the highest levels of public awareness and political attention. WTR

Dr. Mark T. Esper is executive vice president of the US Chamber of Commerce’s Global Intellectual Property Centre; www.theglobalipcenter.com