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Report Claims Major Accomplishments in IPR Protection Over Past Three Years

Monday, June 24, 2013
Sandler, Travis & Rosenberg Trade Report

The White House released this week an updated joint strategic plan on intellectual property enforcement that it said illustrates a number of “major accomplishments” since the inaugural plan was issued in 2010. The report also sets forth new and expanded initiatives to improve IPR enforcement that will be pursued over the next three years and requests public input on several issues.

Achievements. The report points out that over the past three years law enforcement against IPR infringement has increased. U.S. Immigration and Customs Enforcement and Homeland Security Investigations have seen a 71% rise in new cases, a 159% gain in arrests and a 103% increase in convictions. U.S. Customs and Border Protection has registered 53% more seizures of infringing imports and seized 75 shipments of circumvention devices. The Federal Bureau of Investigation recorded a 308% jump in health and safety-focused investigations along with a 286% increase in arrests and a 39% rise in new trade secret cases.

Internationally, the IPR Center now has 21 federal and international law enforcement partners and has de-conflicted nearly 5,000 investigations to ensure that law enforcement efforts are coordinated and not duplicative. U.S. embassies in 17 countries have established working groups to ensure that embassy personnel from different home agencies are working together and have developed work plans with concrete coordinated goals. The U.S. Patent and Trademark Office has launched a publicly available database to help share training materials and avoid duplicative programs.

The Obama administration has worked with Congress to enact seven of the initial report’s legislative recommendations: increased penalties for counterfeits sold to the military or national security apparatus, trafficking in counterfeit drugs and economic espionage; direction to the U.S. Sentencing Commission to consider increasing offense levels for trade secret crimes and counterfeit drugs; authority for U.S. Customs and Border Protection to share information about suspected counterfeit goods with trademark owners to assist in making infringement determinations; and authority for the Food and Drug Administration to destroy counterfeit drugs imported in small packages and to require pharmaceutical manufacturers to report when a drug has been counterfeited or stolen. In addition, the Theft of Trade Secrets Clarification Act of 2012 closed a loophole that had allowed the theft of valuable proprietary source code to go unpunished.

Other achievements include the February 2013 release of the administration’s Strategy to Mitigate the Theft of U.S. Trade Secrets, the launch of a number of voluntary private sector initiatives to reduce online infringement, and actions by Baidu (a large Chinese search engine), Taobao (a large Chinese online marketplace) and others to reduce distribution of infringing goods following the publication of reports from the Office of the U.S. Trade Representative highlighting notorious overseas markets and Web sites.

Goals, Challenges and Request for Input. The strategy states that the administration is expanding on several action items and adding new ones so that over the next three years efforts will include the following.

- The Office of the Intellectual Property Enforcement Coordinator will chair an interagency working group that will work to issue within six months recommendations on ways to improve CBP’s enforcement of exclusion orders issued by the International Trade Commission in section 337 IPR infringement proceedings.

- In response to anecdotal reports that poor and dangerous working conditions, sometimes involving child labor, are found to exist in facilities where counterfeit and pirated goods are being manufactured overseas or in illicit distribution networks, the State Department will begin an examination of the relationship between unacceptable labor condi­tions and the manufacture and distribution of counterfeit goods in certain countries. Further actions will be considered depending on the outcome of that examination.

- CBP will (a) increase its focus on counterfeits shipped through international mail by working to obtain advance data from international post operators and express carrier companies to improve targeting, using lessons learned from the Air Cargo Advanced Screening program; (b) increase its analysis of enforcement, investigative and trade data to proactively target shipments of pharmaceuticals, electronics and textiles; and (c) propose regulations that would authorize it to provide affected companies with post-seizure samples of circumvention devices and importer information under streamlined bonding requirements.

- CBP and the State Department will continue to support the World Customs Organization’s development of a cargo targeting system that can be integrated into existing import and export operations management systems maintained by partner foreign governments.

- IPEC is coordinating an interagency effort to release sometime this year a strategy on counterfeits in the U.S. government supply chain.

- IPEC will chair an interagency working group to identify and advance new and innovative technologies to improve enforcement capabilities at the border, including the ability to identify shipments of authentic goods without inspection. In addition, law enforcement agencies will look for ways to engage outside technology experts and Internet engineers to increase expertise on online enforcement approaches.

- The U.S. Copyright Office and the U.S. Patent and Trademark Office are considering alternative adjudicatory processes for hearing small claims cases brought by copyright and patent holders.

Intellectual Property Enforcement Coordinator Victoria Espinel added in a blog post that public input is being sought on how to improve the efficiency and transparency of enforcing patents at the border as well as the best way for the USPTO to assess whether voluntary private sector initiatives are working well and having a positive impact on reducing online infringement.

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