White House pushes prison for intellectual property crimes

The White House’s top intellectual property official wants stiffer prison sentences for those found guilty of crimes such as selling counterfeit goods for military or law enforcement use, and she also wants illegal streaming of online content to be made a felony level crime when appropriate.

The recommendations were among a set of 20 suggestions Victoria Espinel made to Congress on Tuesday.

Espinel called on lawmakers to pass legislation requiring tougher sentences for organized crime groups and gangs that deal in counterfeit goods or commit other IP crimes, as well as for repeat offenders.

“Because of the high profit margin and shorter prison sentence for intellectual property crimes compared to other offenses, piracy and counterfeiting are a strong lure to organized criminal enterprises, which can use infringement as a revenue source to fund their other unlawful activities,” Espinel wrote in a blog post Tuesday.

She also wants lawmakers to enact longer sentences for people who transfer trade secrets outside of the U.S. or peddle counterfeit drugs.

Espinel — the first White House IP czar ever — added that more legislative recommendations for Congress may be on the way in the next few months.

The White House also provided recommendations for how Congress can give law enforcement agencies the tools to crack down tougher on copyright infringement.

In the report, the administration calls for making illegal streaming of content over the Web a felony “in appropriate circumstances.” It also calls for giving law enforcement the authority to seek a court order to conduct wiretaps in cases of criminal copyright and trademark offenses.

Additionally, the report asks for Congress to grant the Department of Homeland Security the authority to share with copyright holders, both before and after seizures, information about products and technology used by infringers to access copyrighted content.

Cracking down on the counterfeit drug trade has been a top priority for the IP chief’s office in recent months and the report recommended a series of legislative changes intended to further clamp down on the problem. The administration called on Congress to enact a law that requires importers and pharmaceutical companies to flag the Food and Drug Administration and other agencies when they come across counterfeit medical devices and drugs.

In a nod to the recording industry, Espinel recommended that lawmakers enact legislation that requires recording artists and music artists to be paid a performance royalty when their music is played over the radio. If that law is enacted, music labels and performers will be able to collect royalty fees from overseas, the report said.

Various U.S. industries, particularly the entertainment and pharmaceutical sectors, have been anxiously awaiting the release of Espinel’s recommendations to Congress. Companies have complained to the administration about rogue sites affecting their bottom lines and sullying their brand reputations to consumers. They have called on Congress to pass legislation that’s tough on copyright violators.

The Chamber of Commerce said it was “encouraged” to see that many of Espinel’s recommendations were similar to the list of IP policy recommendations it sent to Congress and the White House last month. The powerful business lobby also applauded the call for tougher punishment on illegal Web streaming.

“We know both the House and Senate are looking at this issue and encourage them to work closely with the administration and other stakeholders to combat this growing threat,” said Rob Calia, the senior director for counterfeiting and piracy at the Chamber’s Global IP Center.

And while advocacy group Public Knowledge has been critical of the administration’s Web seizure operation, President Gigi Sohn said the recommendations “largely address important areas of intellectual property enforcement that are often overlooked in more contentious debates at the edges of these issues.”

“While there may be room for disagreement on specific methods of implementation, Victoria Espinel has compiled a thoughtful list of targeted recommendations for enforcement,” Sohn said.

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