By Rob Calia

Recently, the UK Telegraph and Daily Mail published stories discussing a new report which claims that purchasing counterfeit goods benefits consumers and the companies whose brands are being knocked off. Not only is this journal article highly presumptuous, but it could not be farther from the truth. Counterfeiting is a global problem with enormous consequences. Criminal networks, motivated by enormous returns on investment and minimal criminal penalties, according to the OECD pass over $250 billion dollars in counterfeit merchandise into the global economy. The losses in revenue for brand owners are just the tip of the iceberg in terms of the damaging effects of counterfeiting. Global counterfeiting has lead to the losses of millions of jobs, billions of dollars in tax revenue, and has created sophisticated criminal networks that have been well-documented, particularly in Italy and Hong Kong.

Moreover, in many cases, the criminals may be producing a litany of counterfeit products. This was the case for a New York man who was recently sentenced to 37 months in prison for his role in a counterfeiting scheme that included trafficking more than one million fake Trojan condoms, luxury handbags, Barbie dolls, and comic books. The point here is that counterfeiters are not limited to producing one fake good or another–but rather emphasizes the nature of this illicit activity–counterfeiters will go to any lengths to make a profit. Dr. Wells, in this study, implies that not all counterfeiting is equal, and that the purchasing of some fakes should be allowed. But he misses the point in that all counterfeiting is criminal activity that is damaging our economy, forcing companies and small businesses to cut jobs, and providing a funnel of money for illicit activities.

by Rob Calia

Today, our nation’s capital welcomes the arrival of our trading partners for the 10th round of the Anti-Counterfeiting Trade Agreement (ACTA) negotiations. With only four months left in 2010, the U.S. Chamber’s Global IP Center has high hopes that the negotiating partners stay committed in efforts to conclude a strong ACTA in 2010. In this time of economic instability, we simply cannot afford to wait any longer.

As the GIPC has stated for quite some time now, innovation and creativity, which are both incentivized and protected by strong IP rights, are critical to creating jobs, spurring economic growth, and enhancing America’s competitiveness. This is why, IP theft—through counterfeiting and piracy—has such a detrimental effect on our economic growth, job creation, and perhaps most importantly, poses serious risks to our consumers.

Proactive policies that curb IP theft such as ACTA are absolutely necessary to ensure our continued economic recovery by protecting American innovators, consumers, and workers. ACTA promises to enhance international cooperation among nearly 40 countries by establishing a meaningful and effective framework for the protection of IP rights consistent with current laws. This will be accomplished by helping ensure that like-minded trading partners address IP theft and its damaging effects on investment, innovation and jobs. The agreement will raise the bar on enforcement, improve cooperation among like-minded partners, harmonize how we confront IP theft, and set a positive example for nations that aspire to have strong IP enforcement regimes.

To this end, the conclusion of a robust and comprehensive ACTA this year would be a major step forward in our international efforts to protect innovators, workers and consumers all around the world. We are hopeful that the 10th round of the negotiations will have ample progress and success to ensure the completion of this important agreement.

By Rob Calia

Earlier today, federal law enforcement kicked up their intellectual property (IP) enforcement efforts a notch by announcing the arrests of 11 San Francisco merchants, who have been charged with trafficking counterfeit apparel and accessories worth millions of dollars. These commendable actions by the U.S. Department of Justice (DOJ) and the U.S. Immigration and Customs Enforcement (ICE) demonstrate their commitment to combating the growing scourge of counterfeiting and piracy, which puts consumers at risk and hinders job creation and economic growth. (See CNN's coverage here) 

ICE Director John Morton stated in the announcement, “To consumers who think designer knockoffs are a harmless way to beat the system and get a great deal, ‘buyer beware.’ Trademark infringement and intellectual property crime not only cost this country much needed jobs and business revenues, but the illegal importation of substandard products can also pose a serious threat to consumers’ health and safety.”

The Organisation for Economic Co-operation and Development (OECD) estimated that the global impact of counterfeiting and piracy could have been as high as $250 billion in 2007. According to the U.S. Customs and Border Protection, there were 14,841 IPR seizures with a domestic value of $260.7 million in Fiscal Year 2009. Moreover, seizures of products violating IP rights posing potential safety and security risks increased from $27.8 million to $62.5 million. 

Protecting IP and job creation go hand in hand and in this economic downturn, we simply cannot afford to allow these crimes to stall our economic recovery and eat away at our jobs.  The U.S. Chamber of Commerce is pleased to learn of these arrests and will continue to support strengthened IP enforcement efforts in the future.

By Chris Connelly

Today, the GIPC is pleased to unveil our newest video, highlighting the importance of intellectual property to America’s job growth and economic prosperity. This video showcases the important facts about IP, such as—IP-dependent industries represent 40% of America's economic growth, account for more than $5 trillion of the gross domestic product, and comprise more than half of all exports. Additionally, 18 million Americans work in IP-intensive industries. These jobs often pay better and are expected to grow faster over the next decade than the national average.

The video also makes clear the need for enhanced IP protection and enforcement measures. As Internet speed and access expands, and with it accelerating the pace of online counterfeiting and piracy—the need to protect the ideas that drive the American spirit of innovation and entrepreneurism is more important than ever before.

Out of every recession in America’s history, new ideas and innovations have helped energize our economy. And that is exactly what we need today. Across our country, in laboratories, studios, and research hubs, America’s entrepreneurs, artists, and innovators are working hard to turn their ideas into products and services that will benefit the consumers, create jobs, and more importantly, help America reclaim its place as the leading innovation nation.  If we want to achieve our nation’s number one priority—create jobs and grow our economy—we must work to protect these American ideas, hard work, and ingenuity here at home and abroad. 

I hope you enjoy our video.

Chris Connelly is GIPC’s Senior Director of Communications and Research. 
 

By Dr. John Spink, Michigan State University

On June 23, the United States took a very significant and important step in its efforts to fight against counterfeiting and piracy by presenting the Nation’s first Joint Strategic Plan to Congress. This plan—crafted by the U.S. Intellectual Property Enforcement Coordinator (IPEC) with assistance from relevant federal agencies—brings coordination between a wide range of government enforcement agencies to enhance and advance IP enforcement efforts. However, the success of the IPEC and this plan hinges on political support and appropriations needed to accomplish this exhausting task. 

The theft of intellectual property (IP)—in forms of counterfeiting and piracy—is often misunderstood by the public at large to be a harmless and victimless crime. This assertion is far from the truth. In fact, consumers are being cheated more frequently and to a greater degree by phony merchandise—a practice that is now prevalent on the Internet. We know from case studies and seizures that product counterfeiting poses a real public health and economic risk with severe impacts. There are many examples of successful international, complex, and extremely intricate criminal cases including what the DOJ referred to as “one of the largest counterfeit goods prosecutions in U.S. history” when a federal grand jury  convicted two New York handbag importers in Richmond, VA. The DOJ said the defendants imported more than 300,000 knockoff luxury handbags and wallets valued at more than $100 million.

The IPEC’s Joint Strategic Plan raises some important points as to what needs to be considered moving forward for the Administration, Congress, industry, and academia:

• There is a need to further develop a methodology quantifying the economic impact of counterfeiting. This is complex given the clandestine nature of this crime. The counterfeiters are seeking financial gain from fraud while at the same time violating the IP of rights holders. Scholars agree that quantifying the impact is very complex due to the nature of the data and the data generators—though we are working on it. We know what we seized but it is impossible to know what we didn’t seize.
• There have been important steps in expanding the engagement of local law enforcement in dealing with IP theft. Such efforts must continue in order to advance our enforcement efforts. 
• The IPEC must play a role in international policy to support many of the delicate negotiations already underway. For example, I serve as Chair of the U.S. Technical Advisory group for the International Standards Organization (ISO)—the international technical committee that covers product counterfeiting. The efforts of the ISO have also created great momentum by first focusing on areas where there is general agreement, specifically on fraud. 

While the U.S. Government has established the Joint Strategic Plan, it is clear that protecting IP rights will lie in the hands of all of us—government agencies, industry, trade associations, academics, and consumers. The need for expanded public-private partnerships cannot be underestimated. As emerging risks are understood, the next area of emphasis is the natural shift of managing and emerging risk from intervention and response (reactive) to prevention (proactive). We can’t incarcerate our way to safety.

We can make a significant step against product counterfeiting, but there will be no magic bullet or single enforcement type action that will stop the tide. IP criminals are intelligent, resilient, efficient, and very well funded. However, if this 2010 Joint Strategic Plan is supported, we can make great strides in beating back IP theft. 

John Spink, Ph.D. is the Assistant Professor of Anti-Counterfeit Strategy and Associate Director of the Anti-Counterfeiting and Product Protection Program (A-CAPPP) in the School of Criminal Justice at Michigan State University.

By Judge Paul R. Michel

Most new jobs and economic growth are created by innovative start-up companies that rely upon venture capital for funding. The majority of the managers of these funds will invest only after the grant of patents can assure a return on investment. So the faster patents are granted, the faster the increase in jobs and growth.

But over 1.2 million patent applications are now stalled in the US Patent & Trademark Office. Three-quarters of those applications sit unread in a warehouse. It now takes 3 years for a patent application to be approved; in some technologies, that process can take 5 to 8 years. Owing to these delays, the technology proposed in the patent application is sometimes no longer cutting edge or marketable by the time the patent is granted. In the meantime, competitors have had ample opportunity to pirate the innovations, owing to a requirement imposed by Congress in 1999 that most patent applications be published within 18 months of submitting the patent application.

Congress has also siphoned off nearly $1 billion in patent user fees and diverted these funds to other projects. This has left the PTO -- which is entirely dependent on user fees as its sole source of revenue -- grossly under-funded. The PTO lacks sufficient office space, sufficient numbers of patent examiners, pay levels high enough to retain experienced examiners, and a modern computer system.  

A recent article in the Harvard Business Review calls the PTO “the greatest job creator you never heard of.”  And so it is. Why then has Congress not assured adequate funding for the PTO? Perhaps it is unaware of the terrible consequences of its failure. They include:

• 80% of examiners (mostly young engineers) have been on the job less than 3 years.
• On average, examiners have only 20 hours to process an application.
• Thousands of young examiners must work at home, because the PTO has no offices for them.
• Experienced examiners are departing faster than new ones can be hired, so the total number of examiners is actually decreasing, as is their experience level.

Congress should immediately restore the $1 billion in patent user fees it diverted from the PTO. It could consider tapping the $862 billion stimulus fund. It should also increase user fees, set 25 years ago, and allow the PTO to keep all user fees received. Finally, Congress should authorize the PTO to open offices outside the Washington DC area.

The question is: how can intellectual property professionals get Congress to listen? The answer is they can inform the business and media leaders that the Congress will listen and respond to.

** Editorial Note: Want to learn more about the importance of restoring America's innovation infrastructure to foster innovation and creativity and restore our nation's competitive advantage? Join us next Wednesday, July 21, at 9:30 a.m., to hear Chief Judge Paul Michel speaks out about this topic.  Register here.

By Dr. Mark Esper

Join us next Wednesday (July 21, at 9:30 a.m.) to hear Judge Paul R. Michel, recently retired Chief Judge of the federal court that decides all patent appeals, speaks out about America's patent system. Having served the past 22 years on the U.S. Court of Appeals for the Federal Circuit as part of a distinguished 44-year career in public service (including 7 years on Capitol Hill as a legislative aide and chief of staff), Judge Michel is well placed to provide a fair and balanced view of our nation’s patent system and what we can all do to make it the engine of growth for a robust economy. He will offer his prescription for a revitalized patent system and innovation infrastructure, which he sees as a critical national challenge today.

Here's a preview of Judge Michel's speech:

"The American economic recovery has stalled, and investments in manufacturing and hiring have faded. The innovations that could help spur economic renewal and strong job growth are instead trapped in a warehouse outside Washington DC, awaiting review by the swamped and under-funded US Patent & Trademark Office. Nearly 750,000 patent applications sit in that warehouse, while another 400,000 are at the USPTO. Congress, meanwhile, has siphoned off nearly $1 billion of the PTO’s funds -- all user fees paid by patent applicants and owners -- by diverting these much-needed patent user fees to subsidize other pet projects. How did this happen and how do we fix it?" 

By Dr. Mark Esper

Today, the U.S. Immigration and Customs Enforcement (ICE) and the U.S. Attorney for the Southern District of New York (SDNY) announced the launch of "Operation In Our Sites," a new initiative aimed fighting counterfeiting and piracy over the Internet. These actions should be commended as they will play a pivotal role in cracking down on the internet piracy that is harming our economy and costing American jobs.

Online piracy, or the digital theft of movies, music, books and other content, is a job-killing crime. There are thousands of rogue websites--many of them overseas--that take part in this illegal activity. Studies indicate that every year global music piracy leads to a loss of over 71,000 jobs, $12.5 billion in economic growth, and $2.7 billion in workers' earnings. The U.S. entertainment software industry estimated losses of over $3 billion in 2007 due to piracy. And piracy contributed to a loss of $18.2 billion in the global film industry in 2005. Unless something is done to address online piracy, these numbers will only get exponentially worse as Internet access expands and broadband speeds increase.

Stopping on-line theft is a major component of the Obama Administration’s National IP Enforcement Strategy, and “Operation In Our Sites” is an example of the kind of initiatives we would like to see from the implementation of this plan.

by Mark Esper

Today, the U.S. Chamber of Commerce’s Global Intellectual Property Center (GIPC) joined BUSINESSEUROPE and the International Intellectual Property Protection Forum of Japan in calling for the conclusion of a strong Anti-Counterfeiting and Trade Agreement (ACTA). In a Tri-lateral Statement issued today, European, Japanese and American business voices called for a strong agreement that "results in more effective enforcement of IP rights," while strengthening the global economy, creating jobs and protecting consumers from dangerous products. The Statement coincides with this week’s ACTA negotiations in Lucerne, Switzerland.

Intellectual property theft—in the form of counterfeiting and piracy—is a global problem. This Tri-lateral Statement reflects the unified efforts of businesses of all sizes in the United States, Europe and Japan to protect intellectual property rights and support actions to fight counterfeiting and piracy around the world. The international business community has clearly signaled that a swift conclusion to a strong ACTA is needed, and a focus on both traditional streams of commerce and Internet theft is paramount to any successful agreement.

In part, the statement noted that "ACTA promises to enhance international cooperation among nearly 40 countries by establishing a meaningful and effective framework for the protection of IP rights. Without changing U.S., EU, or Japanese law, the agreement will help ensure that like-minded trading partners address counterfeiting and piracy and its damaging effects on investment, creation, innovation, and jobs." The agreement would do so by "raising the bar on enforcement, improving cooperation among partners, harmonizing how we confront IP theft, addressing IP theft online, and setting a positive example for nations that aspire to have strong IP enforcement regimes."

Click to read this Tri-lateral Statement it in its entirety. (PDF)

By Dr. Mark T. Esper

You have to go back a long way – perhaps to the invention of the printing press, or the automobile – to find a technological advancement that has had as big an impact on the world as the personal computer (PC). Not just the big ones that NASA employed to get man to the moon in the 1960s, but the ones too that can be found in nearly every American home. Today, PCs are as prolific as television sets; some believe the computer will one day replace the TV. 

But it has been the marrying of hardware and software—with the latter diversifying and expanding in more ways than we can imagine—that has transformed every aspect of our lives.  People now have more ways to social network and build communities; businesses are far more productive and economies more prosperous; health and safety techniques are far more effective; our nation’s security is stronger than ever before; and new forms of entertainment are created every day. From work to play and everything in between, this technology has revolutionized the world we live in… and continue to do so this very moment.

Great innovations like computer hardware and software have immense value and potential. And it extends to the manufacturing sector in terms of efficiencies – whether it is the steel mill or the auto plant that employs American workers. Years of hard work, long hours of effort, millions of dollars invested, and extraordinary research by brilliant people go into inventing them. Because of their extraordinary value, others—from criminal organizations to governments—want to steal these innovations for their own gain or profit. That’s where intellectual property (IP) rights come in. These legal protections—whether they are patents, trademarks, or copyrights—safeguard these ideas from theft. The enforcement of these rights by governments is critical to defending the integrity of an innovation lifecycle that incentivizes future investment and research, and leads to tomorrow’s discoveries. Yet despite our best efforts, IP theft is increasing and doing great harm to our most innovative sectors.   

In the digital age, the software industry has become a giant driver of jobs and economic growth. In 2007, 1.7 million people were directly employed in the U.S. software and related services industry. The average salary was $85,600 per year—an amazing 195% increase over the national average per capita income of $43,900. 

As an industry, software companies contributed more than $261 billion to America’s GDP (almost 2 percent) and generated a commensurate amount in sales, income, payroll and corporate taxes to federal, state and local governments. This colossal economic force generated a $36 billion surplus for the United States’ balance of trade in 2008. One has to wonder where our economy would be if it were not for this industry, and conversely, where would we be if IP theft was not hurting this important cog in the American economic machine.

The software industry is facing a growing and acute threat from piracy—whether illegally  making or distributing  copies of  software, unlicensed use in enterprises or  illegally downloading the software over the Internet. According to the Business Software Alliance (BSA)—the “voice of the world’s business software industry”—one in every five copies of software in the U.S. is stolen, a loss valued at more than $9.1 billion as of 2008. Globally, more than one out of every three copies of software in use is stolen, attributing to a revenue loss of nearly $53 billion. And this is taking its toll on American jobs. In China, for example, BSA’s preliminary conservative estimate is that the U.S. job losses due to piracy number at least 25,000 direct jobs, and that doesn’t include the very significant multiplier effects on jobs in other sectors of the economy. 

In some countries, software piracy can be upwards of 70-80%. Not only does this do great harm to software companies who are being ripped off on a massive scale, there is a double whammy for the U.S. economy and our global competitiveness. When foreign companies steal business software designed to make them more efficient and effective, they also gain an unfair advantage over American firms by avoiding the costs our companies incur by actually purchasing their software. Less cost allows them to under-bid U.S. firms, spend more on R&D, or even pay their workers more. It simply is not fair, and it all goes back to the underlying crime of IP theft. 

With a staggering national unemployment rate of nearly 10%, and a trade in goods and services deficit of $40.3 billion, the problem of IP theft needs to be addressed immediately. An environment that defends innovation will not only save jobs and help our struggling economy, it will foster economic growth and a renewed spirit of creativity; lack of serious enforcement will do just the opposite. America cannot afford the latter.  But we have a choice:  either confront the growing crime of IP theft and create good jobs, or stand by and watch them disappear. To me, this is a no-brainer.  

This week, the U.S. Intellectual Property Enforcement Coordinator delivered to Congress America’s first-ever National IP Enforcement Strategy. This plan has the potential to strengthen our enforcement efforts in safeguarding America’s ideas, protecting our innovative and creative industries and growing our economy in the process. This plan is long overdue, but a bipartisan Congress did the right thing by mandating it in 2008, and the Administration did a good job in delivering it this week. Now it is time for action, for moving forward on this plan and implementing it while Congress, the executive branch and industry continue to fine tune it.  There is too much at stake to wait any longer.

Great innovations like the computer (both its hardware and software) always lead to new opportunities and novel discoveries. But the technology has transformed the human race and civilization in positive ways too numerous to list.  If we want this change and innovation to continue, then we need to work to stop the explosion of software piracy that is occurring all around us, on the Internet, by end-users, and by enterprises. The White House’s new national strategy promotes coordination of programs and resources across the Federal government, provides a renewed focus on these challenges and promises real progress. Working closely with Congress, our trading partners, and the private sector, success is possible. After all, it’s our only option. 

by David Hirschmann

Today Victoria Espinel, the Obama administration's U.S. Intellectual Property Enforcement Coordinator delivered the White House's National Intellectual Property (IP) Enforcement Strategy to Congress. In doing so the United States government took a historic and very meaningful step towards fighting intellectual property theft worldwide, standing up for American workers, innovators, creators, and the 18 million American jobs that directly rely on the protection of IP rights. If fully implemented by the administration and Congress, the first-ever National IP Enforcement Strategy could dramatically improve our nation's ability to combat counterfeiting and piracy. 
 
The theft of virtually everything Americans make, create, and innovate has been facilitated by the lack of a comprehensive government strategy to put these thieves out of business. As a result of the lack of a National Strategy, the culture of 'on-line equals no crime' has prevailed on the internet, making it possible for increasingly sophisticated criminal networks to threaten the existence of some of America's most innovative and creative industries. 
 
The National Strategy, the first of its kind, will defend America's intellectual property by cracking down on the counterfeiting and piracy that are killing jobs, harming consumers, and stunting our economic recovery. We look forward to working with the White House and the Congress to quickly implement and build upon the National Strategy. In doing so, we will protect American jobs and consumers by: 

• Aggressively cracking down on the growing problem of IP theft online, by making it harder for criminals to use the Internet to distribute stolen American ideas and harm consumers;
• Making the United States and its like-minded trading partners the toughest, most capable enforcers of IP laws in the world, delivering effective consequences to those stealing others' hard work and ingenuity; and
• Protecting IP rights in the United States and abroad, particularly in the handful of capitals and multilateral fora where some are constantly trying to undermine them for their own gain.

This is an issue that unites business and labor, Republicans and Democrats. The Obama administration has been a strong advocate of IP rights. The White House has followed up its appointment of the first U.S. Intellectual Property Enforcement Coordinator with the delivery to Congress of the new National IP Enforcement Strategy. This is an important step, and we look forward to building on this initial plan. Congress and the administration must begin implementing this plan now if we are to stem IP theft and strengthen our economy. Protecting IP rights is a critical component of our economic resurgence, and vitally important to America's future; this plan can serve as a path towards both.

By Dr. Mark T. Esper

America has a well-deserved reputation for creating and producing the most cutting-edge forms of entertainment, high technology, and consumer goods in the world.  We have earned this distinction thanks in large measure to the ingenuity, hard work, and “can do” spirit that have marked our society for generations. 

Also critical to this success, however, is the fact that Americans’ ideas have long been safeguarded by strong intellectual property (IP) protections, what we know as copyrights, patents and trademarks.  These rights, which cover IP ranging from movies, music and software, to shoes, medicines, and computers, are guaranteed in the U.S. Constitution, thanks to the foresight of our Founding Fathers.

Not surprisingly, because of the great value that America’s IP-intensive industry bring to our economy—well over $5 trillion at last count—criminal organizations around the globe, and a number of countries as well, are trying to steal our “creations of the mind” for their own gain.  The United States’ creative community, whether known through Hollywood movies, New York publishing houses, or Nashville studios for example, is undoubtedly the world leader in entertainment and a tragic case in point.  The recently released 2010 Watch List by the International Congressional Anti-Piracy Caucus shows that the ideas and products of America’s artists and creators are increasingly at risk from online piracy.   

Online piracy, or the digital theft of movies, music, books and other content, is a job-killing crime. Studies by the Institute for Policy Innovation estimate that every year global music piracy leads to a loss of over 71,000 jobs, $12.5 billion in economic growth, and $2.7 billion in workers' earnings. The U.S. entertainment software industry estimated losses of over $3 billion in 2007 due to piracy. And piracy contributed to a loss of $18.2 billion in the global film industry in 2005.  These numbers will only get exponentially worse as Internet access expands and broadband speeds increase. 

If left unchecked, digital theft ultimately hurts all workers in the creative industries—from actors and writers to electricians, musicians, sound technicians, caterers, and stage crew workers. These criminal activities also affect those hard-working Americans in the legal distribution channels—such as the folks who work at ticket booths, shopping malls, book outlets, and video stores.  In short, the entire eco-system for books, movies, software and other content is harmed. 

So what can be done to address a problem that grows virulently, is becoming more sophisticated, and is aided by an Internet culture of “online = no crime”?  How can we improve a virtual marketplace where the “real world” rules against theft and shoplifting don’t seem to apply, or at least aren’t enforced?

The first step is to ensure our law enforcement agencies have the authorities, staff, and resources needed to crack down on the growing tide of IP theft online.  Congress can help on this front through its annual appropriations process, and by passing legislation to support enforcement activities. 

Second, the administration needs to finalize a pending Anti-Counterfeiting Trade Agreement (ACTA) with nearly forty other countries.  A robust and comprehensive ACTA will help raise the bar against counterfeiting and piracy, and improve cooperation among the countries involved.

Third, the White House needs to release and begin implementing the country’s first-ever National IP Enforcement Strategy.   The plan, which is being developed by the new U.S. Intellectual Property Enforcement Coordinator, is expected to be delivered to Congress this month.  This government-wide strategy promises to advance IP enforcement efforts by synchronizing and intensifying the work of various federal agencies in ways that will surely protect jobs and revitalize our economy.

When it comes to digital piracy in particular, a real difference can be made here; these steps can be game-changers.  An enhanced federal effort should aim to shut down “rogue” websites that are knowingly and willfully selling or distributing stolen content.  Publicly identifying these sites would also assist the private sector in doing its share to address this devastating problem.  We should also press for prosecuting these pirates and taking other actions that will put them out of business.

Key to this is Congress embracing this new strategy with the seriousness and urgency it has with other issues of such great national import.  The House and Senate should carefully review the plan, work with the White House and industry to fine tune it, and then take the proper steps to implement this strategy.   It cannot gather dust on a bookshelf. The problems of counterfeiting and piracy, and online theft in particular, are too large to ignore, and their impacts are destructive in many, many ways.  

This summer, as the movie season kicks off and critics gear up for the season’s blockbusters, we know for sure that online pirates are also gearing up to steal the creations of hard working Americans.  Too often, and increasingly so, creative people are investing a good deal of time, effort, and money to produce great works of art, only to see pirates steal the goods—be they movies, music, books or software—and then sell it to others for their own profit. 

The Global Intellectual Property Center is currently working to identify and list many of these “rogue” websites, with the intention of shining light on their illegal activities. The information we gather will then be shared with federal authorities to help enhance their enforcement efforts to crack down on these job-killing crimes. It is our hope that our work on compiling these notorious sites will complement the upcoming National IP Enforcement Strategy, and will help spur a new government wide effort to stop online piracy.  American ingenuity, the production of new forms of entertainment, and the job creation and economic growth that both bring, cannot survive long if online theft is allowed to continue the way it has for far too long.

By Kevin M. Burke

Last December, the American Apparel & Footwear Association (AAFA) hailed the Senate confirmation of the country’s first ever Intellectual Property Enforcement Coordinator (IPEC).  Charged with the paramount task of protecting America’s comparative advantage and competitive spirit through strong intellectual property (IP) enforcement, the person who was to fill this role needed to understand how IP works both at home and abroad. With her vast experience and expertise, we are hopeful that Victoria Espinel was the right choice.

Since beginning as our first IPEC, Ms. Espinel and her team have been working on a report to Congress to survey the landscape of our nation’s IP regime. With the report scheduled to be released this summer, the U.S. apparel and footwear industry is working to ensure that this report promotes a proactive plan to move brand protection and other IP concerns to the top of the agenda.

Just as in the fable about the emperor and his new wardrobe, we hope this report is not just another tailor promising to make policy for the United States which can only be appreciated by a certain few. We cannot afford to be left standing naked in the global marketplace.

IP theft is a major problem for our industry – and it’s a problem everyone can see.  For the last four years, U.S. Customs and Border Protection (CBP) has consistently seized more counterfeit footwear, fashion accessories, and apparel than any other counterfeit good imported into the United States. In 2009, CBP collected more than $140 million dollars in fake clothes, shoes, accessories. That’s more than half of all the fake goods CBP collected last year. 

Many think IP theft is a victimless crime.  If you think about it, who gets hurt when you buy a fake pair of shoes that “fell off the back of a truck?”

If you really think about it, IP theft hurts everyone. The scourge of counterfeiting steals jobs from hardworking Americans, puts customers in harm’s way when they buy dangerous products, robs U.S. brands of their brand reputations, and causes millions of dollars in lost tax revenues for the U.S. government. While federal law enforcement agencies have enhanced interagency cooperation and improved seizures of fake goods, recent successes just cover the tip of the counterfeiting iceberg. It used to be that fake goods were only found in back alley shops and illicit markets abroad.  Today, the problem continues to grow exponentially as this illegal trade moves to the Internet disguised as legitimate e-commerce, sometimes fooling customers into thinking they are buying the real thing.

Thankfully, there is consensus on Capitol Hill that IP is important to America’s competitiveness in the global market. We are hopeful that Congress will follow through on that commitment and will seriously consider the solutions contained in the IPEC’s first report to Congress. 

For U.S. apparel and footwear industry, this report needs to focus on a comprehensive plan that covers all of the industries dependent on IP. As an industry that makes everywhere and sells everywhere, the U.S. apparel and footwear industry (which employs hundreds of thousands of hardworking Americans) relies on brand power and innovation to sell goods. For our continued success, the United States must be an active participant in the global IP conversation. We can create and sustain jobs by ensuring that all of our trade partners value IP just as we do and that we work in concert. 

Just like those who watch movies, listen to music, and take prescription drugs, everyone who wears clothes and shoes benefits from IP protections. This report must reflect that. 

Kevin M. Burke is the President and CEO of American Apparel & Footwear Association. www.apparelandfootwear.org

By Gina Vetere

Earlier today, I participated in a roundtable discussion with representatives from 17 diplomatic missions in Geneva, along with representatives from non-governmental organizations (NGOs), multilateral institutions, and the private sector, to discuss best practices for developing, commercializing and diffusing new products and technologies to countries most in need. The event was hosted by three Permanent Missions to the United Nations in Geneva – the United States of America’s, the United Kingdom of Great Britain and Northern Ireland’s and the Republic of Kenya’s – and was sponsored by the U.S. Chamber of Commerce, a member of the Coalition for Innovation, Employment and Development (CIED).

This event brought together a diverse group of speakers who provided valuable insights from the university, small business, NGO, and multilateral institution perspective on what it takes to innovate in a variety of sectors and to bring these innovations to markets around the world. The event helped demonstrate that innovation and meaningful technology diffusion can best be facilitated by public-private partnerships, collaborations between universities and business, stable and transparent government policies and legal frameworks, including policies that promote research and development and the protection of intellectual property (IP), and adequate local infrastructure and capacity to absorb the new technologies.

The first session of the day walked participants through the development of new products and technologies -- from an idea to a full-fledged research and development program to commercialization. Dr. Jon Soderstrom, Managing Director of Cooperative Research at Yale University, kicked off this discussion with an overview of the role played by research institutions in turning an idea into an innovation that can save lives and cure diseases. He also noted the challenges these institutions face in enticing investors, particularly in this economic climate, to invest in early stage ideas. His presentation was followed by Mary Ann Dillahunty, Vice President of Intellectual Property of a Canadian- based company, Oncolytics Biotech Inc, who described how a small company of only 17 employees is working to bring critical medicines to market. Ms. Dillahunty highlighted the importance of the strength of her company’s patent portfolio as one of the key successes to attracting investment for the clinical trials they are currently undertaking. 

Incentivizing innovation, however, is only the first step in ensuring that these innovations are made available globally. Dr. María Mendiluce, from the World Business Council for Sustainable Development, provided an excellent overview of the enabling frameworks needed to facilitate the diffusion of new technologies on a mass scale.  She also provided participants with best practices to consider for helping facilitate, in partnership with the private sector, the diffusion of technology.

One of the key elements of today’s event was that it went beyond the theoretical by providing real-world examples of how every day technologies are being deployed around the world to solve global problems.   For example, Mary Power described an exciting new public-private partnership between the World Meteorological Organization (WMO) and telecommunications company Ericsson that will utilize mobile phone technology to deliver essential weather and climate information to individual farmers and fisherman in Africa. Ms. Power’s presentation underscored the importance of not just ensuring the diffusion of technology but also of building the local capacity and knowledge of countries receiving this technology to ensure that these technologies will be effectively utilized.

This event was a great success, demonstrating the essential role of collaborations between a variety of actors in producing and ensuring the diffusion and utilization of technologies around the world. It also highlighted the importance of government policies, including the protection of IP, to facilitate economic incentives for innovators, promote development and save lives. As a member of the CIED, we look forward to continuing to promote such dialogues in Geneva to discuss important public policy issues and the role that innovation, creativity and strong intellectual property rights play in delivering real solutions to global challenges.