Administration's White Paper on Intellectual Property Enforcement Legislative Recommendations

INTRODUCTION

On June 22, 2010, the U.S. Intellectual Property Enforcement Coordinator (IPEC) issued the

Administration's first Joint Strategic Plan on Intellectual Property Enforcement (Strategy), which was

developed in coordination with many Federal agencies, including the Departments of Commerce,

Health and Human Services, Homeland Security (DHS), Justice (DOJ), and State, and the U.S. Trade

Representative. As part of the Strategy, the Administration undertook to review existing laws to ensure

that they were effective and to identify deficiencies that could hinder enforcement. Based on that

review, this White Paper identifies specific recommended legislative changes, designed to increase the

effectiveness of U.S. enforcement efforts. We will, of course, continue to assess existing legislation and

recommend any further changes to the law as the need arises.

Piracy and counterfeiting in the online environment are significant concerns for the Administration. They

cause economic harm and threaten the health and safety of American consumers. Foreign-based and

foreign-controlled websites and web services raise particular concerns for U.S. enforcement efforts. We

are aware that members of Congress share our goal of reducing online infringement and are considering measures to increase law enforcement authority to combat websites that are used to distribute or

provide access to infringing products. We look forward to working with Congress on those efforts and

the recommendations contained in this paper in the coming year.

Turning to the specific recommendations, the Administration recommends increasing the statutory

maxima for the following offenses:

1. Increase the statutory maximum for economic espionage (18 U.S.C. § 1831) from 15 years in

prison to at least 20 years in prison; and

2. Increase the statutory maxima for drug offenses under the Federal Food, Drug and Cosmetic

Act (FFDCA), particularly for counterfeit drug offenses.

The Administration recommends that Congress: (1) direct the U.S. Sentencing Commission to increase

the U.S. Sentencing Guideline range for intellectual property offenses; (2) require the U.S. Sentencing

Commission to consider five specific categories of changes to the Guidelines; and (3) require the U.S.

Sentencing Commission to act within 180 days of such legislation being adopted (including issuing a

report explaining why it has not adopted any of the specific recommendations). The five categories of

specific recommendations for the U.S. Sentencing Commission are:

1. Increase the U.S. Sentencing Guideline range for the theft of trade secrets and economic espionage, including trade secrets transferred or attempted to be transferred outside of the U.S.;

2. Increase the U.S. Sentencing Guideline range for trademark and copyright offenses when

infringing products are knowingly sold for use in national defense, national security, critical

infrastructure, or by law enforcement.

3. Increase the U.S. Sentencing Guideline range for intellectual property offenses committed by

organized criminal enterprises/gangs;★ 2 ★

ADMINISTRATION'S WHITE PAPER ON INTELLECTUAL PROPERTY ENFORCEMENT LEGISLATIVE RECOMMENDATIONS

4. Increase the U.S. Sentencing Guideline range for intellectual property offenses that risk death

or serious bodily injury and for those offenses involving counterfeit drugs (even when those

offenses do not present that risk); and

5. Increase the U.S. Sentencing Guideline range for repeat intellectual property offenders.

The Administration recommends three legislative changes to give enforcement agencies the tools they

need to combat infringement:

1. Clarify that, in appropriate circumstances, infringement by streaming, or by means of other

similar new technology, is a felony;

2. Authorize DHS, and its component U.S. Customs and Border Protection (CBP), to share preseizure information about, and samples of, products and devices with rightholders to help DHS

to determine whether the products are infringing or the devices are circumvention devices; and

3. Give law enforcement authority to seek a wiretap for criminal copyright and trademark offenses.

The Administration recommends two legislative changes to allow DHS to share information about

enforcement activities with rightholders:

1. Give DHS authority to notify rightholders that infringing goods have been excluded or seized

pursuant to a U.S. International Trade Commission (ITC) order; and

2. Give DHS authority to share information about, and samples of, circumvention devices with

rightholders post-seizure.

The Administration recommends six legislative changes to improve U.S. enforcement efforts involving

pharmaceuticals, including counterfeit drugs:

1. Require importers and manufacturers to notify the Food and Drug Administration (FDA) and

other relevant agencies when they discover counterfeit drugs or medical devices, including the

known potential health risks associated