The National Intellectual Property Law Enforcement Coordination Council Annual Report 2000

The National Intellectual Property Law Enforcement Coordination Council Annual Report 2000

Submitted to The President of the United States of America and The United States Congress by The Council:

U.S. Department of Justice (Criminal Division) (Co-Chair)

U.S. Department of State (Bureau of Economic, Business, and Agricultural Affairs)

Office of the United States Trade Representative

U.S. Customs Service

U.S. Department of Commerce (International Trade Administration)

and

U.S. Copyright Office (Advisor to the Council)

National Intellectual Property Law Enforcement Coordination Council

Year 2000 Report to Congress

TABLE OF CONTENTS

Introduction 3

Annual Report

I. Legislation 4

1. NIPLECC Established - Reporting Requirement 4

II. NIPLECC Year 2000 Meeting Schedule 6

3. Federal Register Notice #1 and Summary of Public Comments 7
4. Federal Register Notice #2 - Public Meeting 16
5. Individual Agency Reports 18

A. United States Patent and Trademark Office 18

1. U.S. Department of Justice - Criminal Division 24
2. U.S. Department of State - Bureau of Economic, Business,

and Agricultural Affairs 29

3. Office of the United States Trade Representative 31
4. U.S. Customs Service 35
5. U.S. Department of Commerce - International Trade Administration 38
6. U.S. Copyright Office 40

Appendix

Tab A. The Council 44

(Biographies of Principals and List of NIPLECC Agency Staff)

Tab B. Council Documents - Agendas and Related Background Papers 55

Tab C. Federal Register Notice #1 - Industry Responses 95

1. Bristol-Myers Squibb Company 96
2. Center for Information, Technology & Society 98
3. International AntiCounterfeiting Coalition 102
4. International Intellectual Property Alliance 113
5. International Trademark Association 123
6. Software & Information Industry Association 129
7. J.D. Sallen (individual) 134

Tab D. Federal Register Notice #2 - Public Meeting Transcript 136

Tab E. Interagency Database of IP Training 181

Tab F. USTR Special 301 List - Summary 208

Introduction

On September 29, 1999, President William J. Clinton signed into law the Treasury/Postal Appropriations Bill, Public Law No. 106-58, Section 653, which created the "National Intellectual Property Law Enforcement Coordination Council" (the Council). Subsection (e) of the law requires that "[t]he Council shall report annually on its coordination activities to the President, and to the Committees on Appropriations and on the Judiciary of the Senate and the House of Representatives." This document constitutes the Council's first Annual Report.

This Report contains all of the official documents generated by the Council and the agency staffs, and all of the written public submissions to the Council since its creation. This Report reflects the joint agency effort to define and refine the Council's mission, and to identify areas in which interagency coordination could improve the Government's performance in intellectual property law enforcement.

This Report is intended to serve as a basis on which the next Council can begin its work. The Report itself makes no specific recommendations, since the new Administration will define its own priorities in this ongoing process. However, it is hoped that the work of this first Council will demonstrate the importance of the Government's responsibilities in this area, and the need for close coordination among its lead agencies, and between the Government and the private sector.

Submitted January 2001

Editor's Note: This Report is, in large part, a collection of previously circulated documents prepared by the government or the private sector. Those documents are reproduced verbatim in the Report, including any errors, omissions, etc. present in the originals.

NIPLECC First Annual Report

I. Legislation

1. NIPLECC Established - Public Law No. 106-58, Section 653

Treasury and General Government Appropriations Act, 2000,

Pub. L. No. 106-58, 113 Stat. 430, 480-81 (1999)

An Act

Making appropriations for the Treasury Department, the United States Postal Service, the Executive Office of the President, and certain Independent Agencies, for the fiscal year ending September 30, 2000, and for other purposes.

Sec. 653.

(a) Establishment. There is established the National Intellectual Property Law Enforcement Coordination Council (in this section referred to as the "Council"). The Council shall consist of the following members--

(1) The Assistant Secretary of Commerce and Commissioner of Patents and Trademarks, who shall serve as co-chair of the Council

(2) The Assistant Attorney General, Criminal Division, who shall serve as co-chair of the Council.

(3) The Under Secretary of State for Economic and Agricultural Affairs.

(4) The Ambassador, Deputy United States Trade Representative.

(5) The Commissioner of Customs.

(6) The Under Secretary of Commerce for International Trade.

(b) Duties. The Council established in subsection (a) shall coordinate domestic and international intellectual property law enforcement among federal and foreign entities.

(c) Consultation Required. The Council shall consult with the Register of Copyrights on law enforcement matters relating to copyright and related rights and matters.

(d) Non-derogation. Nothing in this section shall derogate from the duties of the Secretary of State or from the duties of the United States Trade Representative as set forth in section 141 of the Trade Act of 1974 (19 U.S.C. 2171), or from the duties and functions of the Register of Copyrights, or otherwise alter current authorities relating to copyright matters.

(e) Report. The Council shall report annually on its coordination activities to the President, and to the Committees on Appropriations and on the Judiciary of the Senate and the House of Representatives.

(f) Funding. Notwithstanding section 1346 of title 31, United States Code, or section 610 of this Act, funds made available for fiscal year 2000 and hereafter by this or any other Act shall be available for interagency funding of the National Intellectual Property Law Enforcement Coordination Council.

2. FBI Membership

The Federal Bureau of Investigation became a statutory Member of the Council upon passage of the 2001 Justice Appropriations Bill in December 2000.

correction 1/17/01

II. NIPLECC Principals' Year 2000 Meeting Schedule

4. Federal Register Notice #1 and Summary of Public Comments

(Written Submissions Appear in the Appendix at Tab C)

United States Patent and Trademark Office

Docket No. [ ]

Request for Comments on Issues Related to Policies and Agenda for the National Intellectual Property Law Enforcement Coordination Council

AGENCIES: U.S. Department of Justice and U.S. Patent and Trademark Office,

ACTION: Notice of request for public comments.

SUMMARY: The Members of the National Intellectual Property Law Enforcement Coordination Council (the Council) seek public comment on issues associated with the Council's mission. Interested members of the public are invited to present written comments on any of the topics outlined in the Supplementary Information section of this Notice.

DATES: All comments are due by June 9, 2000.

ADDRESSES: Persons wishing to offer written comments should address those comments to Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, Box 4, Washington, D.C. 20231, marked to the attention of Elizabeth Shaw. Comments may also be submitted by facsimile transmission to (703) 305-7575, or by electronic mail through the Internet to elizabeth.shaw2@uspto.gov. All comments will be maintained for public inspection in Room 902 , Crystal Park II, 2121 Crystal Drive, Arlington, Virginia.

FOR FURTHER INFORMATION CONTACT: Elizabeth Shaw by telephone at

(703) 305-1033, by fax at (703) 305-7575, or by mail marked to her attention and addressed to Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, Box 4, Washington, D.C. 20231.

SUPPLEMENTARY INFORMATION:

On September 29, 1999, President William J. Clinton signed into law the Treasury/Postal Appropriations Bill, Public Law No. 106-58, Section 653, which created the "National Intellectual Property Law Enforcement Coordination Council" (the Council). The Council's mission is "to coordinate domestic and international intellectual property law enforcement among federal and foreign entities." The Council is required to "report annually on its coordination activities" to the President and to the Appropriations and Judiciary Committees of the House and Senate.

The statutorily designated Council Members, listed according to their order of mention in the statute, are: the Assistant Secretary of Commerce and Commissioner of Patents and Trademarks (Co-Chair) (under Public Law No. 106-113, the head of the United States Patent and Trademark Office is the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office) (The Honorable Q. Todd Dickinson); the Assistant Attorney General, Criminal Division (Co-Chair) (The Honorable James K. Robinson); the Under Secretary of State for Economic, Business, and Agricultural Affairs (The Honorable Alan P. Larson); the Deputy United States Trade Representative (Ambassador Richard Fisher); the Commissioner of Customs (The Honorable Raymond W. Kelly); and the Under Secretary of Commerce for International Trade (Acting Under Secretary Robert S. LaRussa). In addition, the statute directs the Council to "consult with the Register of Copyrights (The Honorable Marybeth Peters) on law enforcement matters relating to copyrights and related matters and rights."

The full Council and their staffs have met on several occasions to begin shaping the Council's agenda. This Request for Public Comment is intended to give intellectual property rights owners (and other interested parties) an opportunity to recommend steps in furtherance of the Council's mission.

Interested members of the public are invited to present written comments on issues relevant to the policy-related objectives listed below. This forum is not intended to serve as an opportunity for the public to air individual case-related complaints unless they are relevant to broader law enforcement policy issues.

3. Guidelines for Written Comments

Written comments should include the following information:

Parties offering written comments should also provide their comments in machine-readable (electronic) format. Such submissions may be provided via Internet electronic mail or on a 3.5" floppy disk formatted for use in either a Macintosh or MS-DOS based computer. Machine-readable (electronic) submissions should be provided as unformatted text (e.g., ASCII or plain text) or as formatted text in one of the following formats: Microsoft Word (Macintosh, DOS, or Windows versions); or WordPerfect (Macintosh, DOS, or Windows versions).

Information provided pursuant to this notice will be made part of a public record and may be made available via the Internet. In view of this, parties should not submit information that they do not wish to be publicly disclosed or made electronically accessible. Parties who rely on confidential information to illustrate a point are requested to summarize, or otherwise submit, the information in a way that will permit its public disclosure.

Dated: ____________, 2000 ____________________________________

Q. Todd Dickinson

Under Secretary of Commerce for Intellectual Property and

Director of the United States Patent and Trademark Office

____________________________________ James K. Robinson

Assistant Attorney General for the Criminal Division

United States Department of Justice

DEPARTMENT OF COMMERCE 3510-16

United States Patent and Trademark Office

Extension of Deadline on Request for Comments on Issues Related to Policies and Agenda for the National Intellectual Property Law Enforcement Coordination Council

AGENCY: U.S. Patent and Trademark Office, Co-Chair, National Intellectual Property Law Enforcement Coordination Council.

ACTION: Extension of deadline on notice of request for public comments.

SUMMARY: On Monday, June 5, 2000, the Members of the National Intellectual Property Law Enforcement Coordination Council (the Council) published a Notice seeking public comment on issues associated with the Council’s mission (65 Fed. Reg. 35611 (2000)). Interested members of the public were invited to present written comments on the topics outlined in the Supplementary Information section of the Notice by June 20, 2000. This Notice extends the deadline for submission of comments to July 7, 2000.

DATES: All comments are due by July 7, 2000.

ADDRESSES: Persons wishing to offer written comments should address those comments to Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, Box 4, Washington, D.C. 20231, marked to the attention of Elizabeth Shaw. Comments may also be submitted by facsimile transmission to (703) 305-7575, or by electronic mail through the Internet to elizabeth.shaw2@uspto.gov. All comments will be maintained for public inspection in Room 902 , Crystal Park II, 2121 Crystal Drive, Arlington, Virginia.

FOR FURTHER INFORMATION CONTACT: Elizabeth Shaw by telephone at

(703) 305-1033, by fax at (703) 305-7575, or by mail marked to her attention and addressed to Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, Box 4, Washington, D.C. 20231.

Dated: ____________, 2000

____________________________________

Q. Todd Dickinson

Under Secretary of Commerce for

Intellectual Property and Director of the

United States Patent and Trademark Office

NIPLECC Federal Register Notice Industry Response Summary

August 4, 2000

In general, respondents favor a clear distinction between enforcement-related operational issues, clearly the province of the enforcement agencies (DOJ, FBI, USCS), and broader policy and support activities, such as training and coordination with international organizations, that could be improved through interagency efforts among all NIPLECC Members. The chart below divides the responses into Domestic and International Issues, and further subdivides them into substantive categories, such as Legislation, Training, and Industry Outreach. Finally, next to each recommendation is the combined staff's opinion regarding who should address the recommendation. All references to specific respondents have been deleted, and references to particular rights have been deleted where the recommendation should apply equally to copyrights and trademarks (no respondents addressed patent issues).

Key: Department of Justice (DOJ); Federal Bureau of Investigation (FBI); U.S. Customs Service (USCS); State Department (DOS); Commerce Department (DOC); U.S. Trade Representative (USTR); U.S. Patent and Trademark Office (USPTO); Copyright Office (LOC); Intellectual Property (IP); DOJ/FBI/USCS IP Enforcement Initiative (IP Initiative); Individual Agency or Interagency Effort (X); Not appropriately addressed at this time and/or in this forum (---).

IV. Federal Register Notice #2 - Public Meeting

FEDERAL REGISTER

Vol. 65, No. 198

Notices

DEPARTMENT OF COMMERCE (DOC)

United States Patent and Trademark Office (USPTO)

Notice of Meeting of the National Intellectual Property Law Enforcement Coordination Council

65 FR 60619

DATE: Thursday, October 12, 2000

ACTION: Notice of meeting.

SUMMARY: The National Intellectual Property Law Enforcement Coordination Council (Council) will be holding a public meeting. Interested members of the public are invited to attend the meeting.

DATES: The public meeting will be held on Monday, November 27, 2000, beginning at noon and ending no later than 2 P.M. Those wishing to attend the meeting must pre-register by close of business on Friday, November 17, 2000.

ADDRESSES: The November 27, 2000, meeting will be held in the Main Auditorium at the U.S. Department of Commerce, Herbert C. Hoover Building, 14th Street and Constitution Avenue, NW., Washington, DC. Those interested in attending should pre-register by submitting their name and telephone contact number either by electronic mail through the Internet to Elizabeth.Shaw2@uspto.gov or by facsimile sent to the attention of Elizabeth Shaw at 703-305-7575.

Transcripts of the meeting will be available after January 5, 2001, and will be maintained for public inspection in the Executive Library of the USPTO, Crystal Park Two, Room 900A, 2121 Crystal Drive, Arlington, Virginia.

FOR FURTHER INFORMATION CONTACT: Elizabeth Shaw by telephone at 703-305-1033; by facsimile at 703-305-7575; by electronic mail at elizabeth.shaw2@uspto.gov; or by mail addressed to Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, Box 4, United States Patent and Trademark Office, Washington, DC 20231.

SUPPLEMENTARY INFORMATION: On Monday, June 5, 2000, the Council published a Notice of Request for Public Comments (65 FR 35611 (2000)) regarding issues related to the Council's policies and agenda. The November 27, 2000, meeting will introduce the Council to the public and give those who submitted comments (respondent industry speakers) regarding the issues identified in the notice an opportunity to elaborate on their responses.

I. Issues To Be Discussed

Respondent industry speakers have been invited to address the Council regarding law enforcement and policy issues related to the Council's mission and how the Council and the intellectual property industries can work together to improve intellectual property law enforcement in the U.S. and abroad.

The Government speakers will discuss the Council's activities and the individual agencies' current and future intellectual property law enforcement-related activities.

II. Meeting Format

The Council will provide a brief overview of its activities and introduce its Members and other affiliated agencies. Each agency will then have an opportunity to make a brief presentation on its law enforcement-related efforts. Respondent industry speakers will be given up to fifteen (15) minutes to present their remarks. The exact duration of each presentation will depend upon the final number of speakers. A question and answer session will follow the final industry presentation. The public is invited to be present for the entire program; however, only Council Members and respondent industry speakers may participate orally in the program.* Industry speakers may provide a written copy of their testimony for inclusion in the record of the proceedings. These remarks should be provided in electronic format no later than November 27, 2000.

A schedule providing the approximate starting time for each Government and industry speaker will be distributed the morning of the day of the hearing. Speakers are advised that the schedule for testimony will be subject to change during the course of the hearing. Information that is provided pursuant to this notice will be made part of a public record and may be available via the Internet. In view of this, parties should not submit information that they do not wish to be publicly disclosed or made electronically accessible. Parties who would like to rely on confidential information to illustrate a point are requested to summarize or otherwise submit the information in a way that will permit its public disclosure.

Dated: October 5, 2000.

Q. Todd Dickinson,

Under Secretary of Commerce for Intellectual Property and Director of the United

States Patent and Trademark Office.

[FR Doc. 00-26182 Filed 10-11-00; 8:45 am]

*At the meeting, the public was invited to address the panel.

THE NATIONAL INTELLECTUAL PROPERTY

LAW ENFORCEMENT COORDINATION COUNCIL (NIPLECC)

PUBLIC MEETING

Monday, November 27, 2000

U.S. Department of Commerce Auditorium

FINAL AGENDA (Meeting Transcript at Tab D)

12:00 - 12:05 – Welcome, Introductions, NIPLECC Overview - NIPLECC Co-Chairs:

The Honorable Q. Todd Dickinson - Under Secretary of Commerce for Intellectual Property and

The Honorable Kevin V. DiGregory - Deputy Assistant Attorney General for the Criminal Division,

12:05 - 12:45 – Individual Agency Presentations - 5 minutes each - in alphabetical order:

12:05 – 12:10 – Department of Commerce - Principal Deputy Under Secretary Timothy J. Hauser

12:10 – 12:15 – Copyright Office - The Honorable Marybeth Peters, Register of Copyrights

12:15 – 12:20 – Customs Service - Commissioner Raymond Kelly (Assistant Commissioner John Varorone)

12:20 – 12:25 – Department of Justice - Deputy Assistant Attorney General Kevin DiGregory

12:25 – 12:30 – Federal Bureau of Investigation - Deputy Assistant Director Thomas Kubic

12:30 – 12:35 – United States Patent and Trademark Office - Under Secretary Q. Todd Dickinson

12:35 – 12:40 – Department of State - Assistant Secretary E. Anthony Wayne, Economic and Business Affairs

12:40 – 12:45 – Office of the United States Trade Representative - John Desrocher, Director, Office of Services,

Investment, and Intellectual Property

12:45 – 12:50 - Breakdown/Set-up

12:50 - 1:40 – Industry Presentations - 10 minutes each - in alphabetical order:

12:50 - 1:00 - International Anti-Counterfeiting Coalition - Mr. Timothy P. Trainer, President

1:00 - 1:10 - International Intellectual Property Alliance -

Ms. Maria Strong, Vice-President and Associate General Counsel, accompanied by

Mr. Stevan Mitchell, VP, Intellectual Property Policy Interactive Digital Software Association

Mr. Michael Huppe, Anti-Piracy Counsel, Recording Industry Association of America

1:10 - 1:20 - International Trademark Association - Mr. Maxim H. Waldbaum, Salans, Hertzfeld & Heilbronn

1:20 - 1:30 - Pharmaceutical Researchers and Manufacturers of America (on behalf of Bristol-Myers Squibb and the

Ms. Susan Kling Finston, Assistant Vice President for Intellectual Property, International Division

1:30 - 1:40 - Software and Information Industry Association -

Mr. Mark Bohannon, General Counsel and Vice President for Government Affairs

1:40– 1:55 – NIPLECC to Industry Questions and Industry to NIPLECC Questions

1:55 – 2:00 – Final Agency Comments and Wrap-up (USPTO and DOJ)

V. Individual Agency Reports

1. United States Patent and Trademark Office

1. Summary of USPTO Mission

Public Law 106-113, which was signed by the President on November 29, 1999, established the United States Patent and Trademark Office (USPTO) as a performance-based organization under the policy direction of the Secretary of Commerce. As an agency responsible for promoting industrial and technological progress in the United States, and strengthening the national economy, the USPTO’s mission is to (1) administer the patent and trademark laws, (2) advise the President, through the Secretary of Commerce on national and certain international intellectual property policy issues, and (3) advise Federal departments and agencies on matters of intellectual property policy in the U.S. and intellectual property protection in other countries.

In addition, the USPTO provides guidance, as appropriate, to foreign governments and international intergovernmental organizations on matters of intellectual property protection. The agency also has authority to conduct programs, studies, exchanges, or services regarding domestic and international intellectual property law, and the effectiveness of intellectual property protection domestically and throughout the world.

The USPTO employs over 5,000 full time equivalent (FTE) staff to support its major functions -- the examination and issuance of patents and the examination and registration of trademarks - and, at present, 30 people in the Office of Legislative and International Affairs as well as numerous people in our Solicitor's Office deal with the broad range of international issues.

2. Activities in IPR Enforcement

(a). USPTO International Enforcement-Monitoring and Compliance Program

The USPTO monitors the implementation of bilateral, regional and multilateral international agreements with a view to an effective IP enforcement system. We want to make sure that any IP enforcement system incorporates the minimum civil, administrative, border and criminal requirements of the Agreement on Trade Related Aspects of Intellectual Property Rights, or TRIPS.

As part of this monitoring program, the USPTO works closely with various U.S. Government (USG) agencies and industry groups to determine whether a country’s laws incorporate the minimum enforcement standards as required by bilateral and multilateral agreements (MOU’s, NAFTA, TRIPS, etc.), and whether IP owners are, in practice, receiving the levels of protection and enforcement for which the laws provide. The USPTO also provides technical advice to the USTR regarding IP enforcement compliance, and regularly supports the USTR in its bilateral negotiations by providing IP enforcement expertise. January 1, 2000 was the deadline for compliance with TRIPS for approximately 70 developing member countries.

In response to the increased global need, the USPTO is increasing its monitoring efforts to assist countries in complying with the systemic enforcement requirements of TRIPS. Comparatively, enacting laws to comply with the Agreement’s substantive provisions is the easy part - creating an effective IP enforcement system to that gives practical value to IP rights is a much more complex and difficult task.

Part of our compliance program includes assisting countries to design IP enforcement programs that use existing infrastructures and laws to meet TRIPS compliance. Toward that end, the USPTO has developed extensive questionnaires and other techniques for assuring that it gains the fullest picture of present IP protection and enforcement efforts in any given country. Since monitoring compliance with TRIPS necessitates a substantive review of a country’s domestic trademark, patent, copyright and trade secret laws, its civil and criminal codes, and any customs codes, the USPTO is able to bring its expertise to bear on such critical issues as transparency of law, and enforcement infrastructure requirements.

(b). IP Enforcement Training

In addition to its enforcement-monitoring program, the USPTO conducts and participates in numerous international enforcement training programs.

Interagency

On the interagency level, the USPTO has worked with the State Department - INL, EB, and Public Diplomacy sections, Commerce Department (CLDD), USAID, the Copyright Office and DOJ, FBI, and Customs, to assist in training foreign law enforcement officials to meet the systemic enforcement requirements of TRIPS. These programs provide high-level government and law enforcement officials with an in-depth review of TRIPs’ substantive and enforcement provisions, a primer on the characteristics of an effective IP enforcement system, and practical advice on implementing effective enforcement programs for both hard goods and in the digital environment. Over the past year, the USPTO has worked with other agencies and with industry to develop and conduct programs in China, Taiwan, Mexico, Panama, Brazil, Italy, Oman, and Nepal.

World Intellectual Property Organization Training

The USPTO also has worked extensively with the World Intellectual Property Organization (WIPO), an intergovernmental organization headquartered in Geneva, Switzerland. As one of the 16 specialized UN agencies, WIPO is responsible for promoting the protection of intellectual property throughout the world through cooperation among member States.

WIPO also administers various multilateral treaties dealing with the legal and administrative aspects of intellectual property.

In addition to representing the U.S. government at WIPO’s Standing Committee on Trademarks and at other meetings, in the enforcement area, the USPTO partners with the WIPO Worldwide Academy to provide high-level policy makers and other government officials from developing countries with technical assistance and training on creating a TRIPS-compliant intellectual property enforcement regime. The training programs assist government officials understand the components of creating an integrated enforcement system to combat counterfeiting and piracy in the physical world and tackle the enforcement challenges posed by the Internet. The USPTO also partners with WIPO’s Cooperation for Development Bureaus to provide technical assistance and training on developing a TRIPS-compliant legal system and enforcement regime to high-level government officials from specific regions of the world, including Africa and Asia.

To improve IP enforcement training programs and work more effectively with developing countries to identify weaknesses in their legal framework and enforcement regimes, the USPTO and WIPO are spear-heading a project to change IP enforcement training from a lecture-based to a more interactive problem-solving approach. In this effort, the USPTO has worked with other USG agencies to develop materials utilizing a fact-pattern approach that can be used in multi-disciplinary training programs and in train-the-trainer programs that will be key to regional training efforts. We recently completed phase one of the project and will focus on expanding its uses.

Regional IP Enforcement Training

The USPTO also cooperates with various regional entities to conduct training programs, including APEC, ASEAN, and the UN/Economic Commission for Europe's IP Advisory Group.

The conferences and seminars hosted by APEC and its member countries on implementing the Agreement on Trade-Related Aspects of Intellectual Property (TRIPS), include both substantive and enforcement-related IP issues.

Another example is our work with the UN/ECE, a United Nations organization designed to foster dialogue and cooperation on economic and other issues between its members, which includes countries of North America, Western, Central and Eastern Europe, and Asia. The USPTO represents the U.S. in the UN/ECE’s Advisory Group on the Protection and Implementation of Intellectual Property Rights for Investment. The IP Advisory Group is a public-private sector partnership, which was created to assist the transitional economies of Central and Eastern Europe and the Commonwealth of Independent States (CIS), through training programs and other technical assistance, create an effective IP legal framework and enforcement regime. The USPTO has supported their efforts in Latvia, Lithuania, and Estonia, and will support their upcoming efforts in Poland, Russia and Ukraine.

3. Protecting IP in the Digital Age

Protecting intellectual property in the Digital Age presents added challenges that must be addressed - yesterday. This is a difficult time for the industries most ravaged by IP crimes on the Internet. As more and more of the world's population uses the Internet, the growth of IP crimes will threaten the economic viability and the very existence of our industries.

In addition to our domestic legislative work in this area, we are attacking this problem globally through our training programs. In all of our programs, we address the need for creating an international legal framework by emphasizing the need for ratification of the WIPO Copyright Treaty and the WIPO Performers and Phonogram Treaty. Our programs also address the practical issues raised by enforcing intellectual property on the Internet, by including presentations by FBI, DOJ, and Customs Service and industry Internet crime experts.

During 2000, the USPTO began assisting developing countries to create effective IP enforcement systems to protect IP rights in the Digital Era. We partnered with WIPO to cosponsor regional seminars focusing on Internet enforcement for countries in Sub-Saharan West Africa and for countries in the Asia-Pacific Region. Closer to home, in September 2000, the USPTO hosted the "Symposium of the Americas: Protecting Intellectual Property in the Digital Age" in which several NIPLECC agencies participated.

The Symposium concentrated on cutting-edge issues policy in the protection of IP on the Internet and in other digital environments and provided an opportunity for high-ranking government intellectual property officials and members of the business and intellectual property communities in the Western Hemisphere to discuss and formulate an agenda for cooperation in the critical area of intellectual property enforcement.

In the Spring of 2001, we will conduct a similar program for all of Europe - this program will be cosponsored by the UN/ECE IP Advisory Group, and in cooperation with the U.K. Industrial Property Office. We will include USG and industry representatives in that program as well.

4. Domestic IP Enforcement-Related Activities

Domestically, the USPTO has supported our sister NIPLECC agencies by contributing substantive experts and expertise to law enforcement agencies' training programs and initiatives.

We have participated in Customs Service and FBI programs for agents, and we supported the Department of Justice's quest for increased sentencing in IP criminal cases, and the USG's efforts to persuade the G8 to focus its attention on global IP crime. We look forward to future opportunities to work with our law enforcement counterparts on appropriate legislative, training, and other initiatives.

5. USPTO and the Future of IP Enforcement

The USPTO will continue to conduct training abroad and will work independently and in partnership with other USG agencies, with our industries, and with international organizations to improve the quality and effectiveness of our training programs. To that end, we will add personnel to our Office of Legislative and International Affairs who will be dedicated to developing and assisting in the delivery of training programs.

We will work to develop standardized enforcement curricula for international training - meaning training that will emphasize an integrated systems approach – civil, administrative, and criminal enforcement. We will stress the need for (1) developing training materials in different media and different languages, (2) for expanding the base of trainers by developing programs for USG, foreign, and industry trainers, and (3) for identifying competent private sector trainers (domestic and international) who can be drawn into more active roles in curriculum development and training delivery.

In addition, the USPTO was charged by the Inspector General of the Commerce Department with developing methods for measuring the effectiveness and impact of training, including working with industry to develop programmatic follow-up activities to test the commitment and capability of trained officials.

The USPTO and the USG have been able to accomplish quite a bit over the past few years, but we're just getting started. The USPTO commits to the activities I described and to better USG coordination through the State Department-chaired Committee and through other means, bringing together the crucial expertise of all of our agencies and industries to better assist our trading partners in developing and maintaining effective enforcement regimes.

1. Summary of DOJ Mission

The Department of Justice is charged with investigating and prosecuting criminal laws protecting three types of intellectual property: copyrighted works, trademarks, and economic proprietary information. Primary investigative and prosecutorial responsibility within the Department rests with the U.S. Attorney’s Offices and the Federal Bureau of Investigation (FBI), with the support and coordination of the Criminal Division’s Computer Crime and Intellectual Property Section. In addition to enforcing traditional laws protecting intellectual property, the Department also has played a pivotal role in the development and application of more contemporary laws protecting rights holders, such as the Economic Espionage Act (EEA), which criminalizes the theft of trade secrets, and the No Electronic Theft (NET) Act, criminalizing not-for-profit, unlawful reproduction and distribution of copyrighted works.

In addition to investigating and prosecuting IPR crimes, the Department of Justice, along with the Customs Service, Patent & Trademark Office, U.S. Trade Representative, and Copyright Office, participates in training investigators and prosecutors domestically and abroad; participates in the USTR’s Special 301 process of evaluating the adequacy of our trading partners’ IPR criminal laws and enforcement regimes; participates in the cataloguing and review underway of the U.S. government’s IPR training programs abroad; evaluates the need for legislative changes to its key statutes and the Federal Sentencing Guidelines and proposes legislation to fill inadequacies or gaps; and undertakes a number of international activities to promote cooperative enforcement efforts and to boost our trading partners’ efforts to improve their substantive laws and enforcement regimes.

2. Major Programmatic Activities in IPR Enforcement

The continuing growth of the information industries and their significance to the U.S., and global economy, coupled with increasing volume and sophistication of counterfeiting and piracy crimes, prompted the Attorney General to develop a comprehensive approach to enforcing laws protecting intellectual property rights. The Intellectual Property Rights Enforcement Initiative was announced on July 23, 1999, and has both domestic and international components.

(a). Domestic Enforcement Initiative

Domestically, the initiative builds upon the primacy of the United States Attorney’s Offices role as enforcers of federal criminal law, by designating seven leadership district to comprise the Initiative. The current seven districts are the Eastern and Southern Districts of New York, the Districts of New Jersey and Massachusetts as well as the Southern District of Florida and the Northern and Central Districts of California. These Districts, working cooperatively with the Department of Justice, CCIPS, the FBI and the Customs Service, are dedicated to making criminal intellectual property enforcement a priority.

The major objectives of the domestic initiative (described in detail at www.cybercrime.gov/ip.html.) are to: increase the number and quality of criminal IP investigations and prosecutions; increase specialized intellectual property training courses for investigators and prosecutors through various venues such as the National Advocacy Center, the FBI Academy, as well as assisting in developing training programs for state and local officials in conjunction with the National Cybercrime Training Partnership; streamline the victim-industry referral process and develop relationships with the affected industry to better co-ordinate and broad based response to intellectual property infringement; and vigorously enforce the law through use of forfeiture provisions and fix the inadequate Sentencing Guidelines for intellectual property crimes.

The Department of Justice has successfully prosecuted a number of significant intellectual property rights cases, with more cases now being investigated or awaiting prosecution than at any previous time. The 1999 Attorney General’s Accountability Report to Congress indicates that during Fiscal Year 1999, 108 cases were filed against 161 separate defendants charging felony violations of the criminal copyright and trademark statutes. These do not include a number of cases that have been charged under the economic espionage statute.

The Department of Justice expects figures in all categories (copyright/ trademarks/trade secrets) to increase for Fiscal Year 2000. The FBI reports, for example, that as of October 2000, it had 529 intellectual property cases open for investigation, whereas it had 179 cases under investigation in October 1997. Between July 23 (the date of the announcement) and October 31, 2000, 354 new IP-related investigative matters have been opened by the Bureau. These figures reflect nationwide efforts, and are not confined to progress made by the seven key jurisdictions. Further, there were 117 indictments in IP cases in FY 2000, more than double the number of convictions in FY 1999. There were 82 convictions in FY 2000, up from 63 in FY 1999.

Effective May 1, 2000, with the support of the Department of Justice, the applicable Sentencing Guideline (§2B5.3) was overhauled to substantially increase penalties for criminal copyright infringement and trademark counterfeiting. In most cases, the sentencing court can now use the retail value of the infringed-upon (legitimate) item to calculate loss. The new guideline also includes enhancements for offenses involving the manufacture, importation, or uploading of infringing items, and permits upward departure for offenses committed in connection with national or international organized criminal enterprises. The Department anticipates that the ability to seek greater penalties will result in increased prosecutions in this area.

 

(b). International Efforts

Realizing the significant international aspects of intellectual property enforcement, the Department of Justice has concentrated its international efforts to boost the visibility and attention given to IPR enforcement in four important areas: coordinating international training efforts to address specific enforcement-related issues; identifying bilateral and multilateral fora to promote investigative cooperation; coordinating its efforts with other agencies charged with promoting effective IPR enforcement regimes; and integrating the latest empirical data and trends involving transborder IP crime into the Department’s programmatic activities and into the USG’s threat assessments undertaken as part of the international crime control strategy.

In bilateral and multilateral settings, the Attorney General and Deputy Attorney General have consistently urged their law enforcement counterparts to address this growing threat by updating substantive criminal laws, dedicating appropriate, well-trained resources, and working with industry to stay abreast of latest trends. Where appropriate, the U.S. government has encouraged our foreign counterparts to create specialized units devoted to investigating and prosecuting IP crime. For example, the Department of Justice and FBI have joined with the participated in various Department and U.S.T.R.-sponsored bilateral meetings with the Government of Mexico to encourage the passage of deterrent penalties for IPR crimes and the dedication of adequate resources to combat them.

In addition to these political efforts, the Department of Justice has joined with the State Department, Customs Service, FBI, USPTO, the Commerce Department’s Commercial Law Development Program, and the private sector to develop and deliver quality training programs to all relevant enforcement components in the targeted countries. Further, the Department, including the FBI, has participated in the Special 301 process in order to ensure that concerns of the Justice Department and law enforcement are reflected in the review.

The Department of Justice continues to support the State Department’s on-going efforts to identify existing IP programs and coordinate future programs. With each of its sister law enforcement agencies and the substantive IP agencies, the Department is urging the development of multiple methods for delivery of training programs and materials, and seeking the inclusion of intellectual property enforcement in curricula at international training academies, including the International Law Enforcement Academies (ILEAs), and in training provided by inter-governmental organizations.

As noted, the Department is committed to addressing the myriad of international aspects of intellectual property crime. In September, 2000, the U.S. (DOJ, FBI, and Customs) hosted the G8 Lyon Group Law Enforcement Experts Meeting on Trafficking in Counterfeit and Pirated Merchandise, which focused on the threat to public health and safety posed by such products and the involvement of organized criminal activity and groups trafficking in these products. At the Senior Law Enforcement Experts Meeting on Transnational Organized Crime (Lyon Group) meeting in Hiroshima in November, 2000, the Lyon Group unanimously agreed to explore having G8 countries share strategic intelligence information, and to sponsor an annual review of trends in the field.

3. Major Achievements

In addition to the highlights previously listed, the Department would briefly note the following achievements in the area of intellectual property enforcement. The Department of Justice has and continues to investigate and prosecute many significant intellectual property cases ranging from international sound recording piracy cases to prosecution of defendants for trademark counterfeiting of fraudulently-obtained baby formula. Additionally, the Department has conducted successful prosecutions under the No Electronic Theft Act as well as obtaining over twenty convictions for violations of the Electronic Espionage Act.

To educate and assist federal prosecutors working on IP cases, the Computer Crime and Intellectual Property Section produces training materials and provides IP training as part of its annual Computer and Telecommunications Coordinator (CTC) conference for Assistant U.S. Attorneys from across the nation. This year, CCIPS completed an updated and improved version of the prosecution manual, Prosecuting Intellectual Property Crimes, for distribution to all U.S. Attorney’s Offices. The manual addresses alternative prosecution theories, asset forfeiture, Internet piracy, and numerous other emerging issues. It is available at www.cybercrime.gov/ipmanual.html.

Beginning this year, additional training courses on IP investigation and prosecution have been offered at the National Advocacy Center (NAC). The NAC is developing an IP Crime Seminar that is designed for Assistant United States Attorneys. In addition, IP issues were included as part of the Internet Fraud seminar offered at the NAC beginning in FY 2000.

Finally, the FBI has elevated IP crime as one of its white collar priorities, thus ensuring that investigative resources will be devoted to such crimes. To ensure that its agents are prepared to investigate these relatively new crimes, the FBI has, during the last two years, significantly increased the amount of IP crime training for its agents. Furthermore, in recognition of the international scope of this crime problem, the FBI has increased the amount of international training it does in the area of IP crime. For example, in September, 2000, the FBI sponsored a one-week IP crime conference in Hanoi, Vietnam for 125 Vietnamese law enforcement officials. The FBI hosted a similar one-week IP crime conference in Panama City, Panama for more than 40 Panamanian law enforcement officers in April, 2000. The FBI has incorporated IP crime training into the white collar crime curriculum at the International Law Enforcement Academies (ILEAs). The FBI trained more than 50 law enforcement officers from nine countries at the Bangkok, Thailand ILEA in early 2000. Additionally, the FBI assisted the Patent and Trademark Office and the United States Trade Representative in training government officials in IP enforcement in the Czech Republic and Italy during FY 2000.

5. Industry Outreach

The Department of Justice relies on the information and expertise of the copyright and trademark industries, and of individual rights holders, to help accomplish its core mission in enforcing criminal statutes protecting intellectual property rights. Industry often is the source of referrals for potential criminal cases and provides evidence and witnesses to support investigative and prosecutorial activities. Industry also is in a position to share information on trends in counterfeiting and piracy, particularly in view of the sweeping technological changes affecting the copyright and trademark industries. In addition, industry is critical to law enforcement in the provision of training to investigators and prosecutors, both in the United States and in training programs involving our trading partners’ law enforcement personnel. The Department also looks to industry to provide country-specific information that is valuable in preparing for bilateral and multilateral law enforcement meetings. Finally, industry views are helpful in informing the Department’s views on pending legislation, including legislation the Department may propose to fill gaps in the statutes available to prosecute IPR crimes.

To ensure that industry makes a meaningful contribution in each of these vital aspects of the Department’s domestic and international missions, DOJ attorneys and FBI agents are in regular contact with industry representatives and trade associations. Department attorneys, FBI agents, and Customs agents met with industry prior to the launch of the domestic enforcement initiative in July, 1999, and have had regular contact since then.

Note: The Federal Bureau of Investigation became a statutory Member of the NIPLECC in December 2000.

correction 1/17/01

C. U.S. Department of State - Bureau of Economic, Business, and Agricultural Affairs

1. Summary of State Department Mission

The Department of State has long been engaged on crosscutting issues related to the protection of intellectual property rights, trade policy and IPR enforcement. The Office of Intellectual Property (IPC) in State's Bureau of Economic and Business Affairs (EB) and the Bureau for International Narcotics and Law Enforcement Affairs (INL) have the lead on these issues. By direction of the President, the Departments of Justice, State and Treasury jointly issued the 1998 Crime Control Strategy, instructing U.S. agencies to, "protect intellectual property rights by enhancing foreign and domestic law enforcement efforts to curtail the flow of counterfeit and pirated goods, and by educating consumers." State's enforcement mission is to combat intellectual property theft worldwide and to help create predictable legal and economic environments overseas so American business interests can prosper. State utilizes its established contacts within the international law enforcement community, working with the FBI, the Customs Service, and the Justice Department, to accomplish these objectives.

Pursuant to the Foreign Assistance Act of 1961, Congress designates funding for "anti-crime" purposes (including intellectual property theft) to be distributed at the direction of State's Bureau of International Narcotics and Law Enforcement Affairs. State relies on a number of indicators for guidance on where to direct funds for intellectual property protection. These include the adequacy of a country's intellectual property laws, its willingness to implement intellectual property reform, input from U.S. Embassies, interagency input through State's Intellectual Property Working Group, and a country's status on USTR's Special 301 Report. In the past, State has directed funds to the Justice Department for training of Russian judges and prosecutors, to the FBI for training investigators in Vietnam and Central America, and to the Commerce Department's Commercial Law Development Program in-country training programs. State also has funded other comprehensive programs such as the International Law Enforcement Academies (ILEA) in Budapest and Bangkok.

2. Activities in IPR Enforcement

The Bureau of Economic and Business Affairs and the Bureau of International Narcotics and Law Enforcement Affairs co-chair an interagency Intellectual Property Working Group. The objective of the Working Group is to coordinate all USG-funded intellectual property training. State's role in the Working Group has been to present to the participating agencies the international economic and political ramifications that might affect the choice of training priorities and to determine whether the training proposals meet the foreign policy objectives of the U.S. State personnel at over 200 embassies and consulates overseas provide an invaluable service by communicating to foreign governments the importance the USG places on protection of intellectual property and the specific steps a government might have to take to comply with its international obligations. Embassies also communicate to the Working Group objective "on-the-ground" assessments of the IP climate in a particular countries.

The IP Working Group establishes priorities for countries in need of USG-funded training and technical assistance by analyzing the information provided by embassies, the U.S. private sector, and participating USG agencies. The group also considers the decision criteria developed for the Special 301 and TRIPs reviews. For those countries designated to receive funded training and technical assistance, the Working Group develops responsive and tailored programs to address both enforcement problems and other TRIPs-related trade policy concerns.

The Working Group covers country-specific issues, international programs and specific project proposals. State maintains a database of past and on-going training conducted by USG agencies and the U.S. private sector. The Working Group serves as an invaluable forum for information sharing and creative problem solving. Because of EB's responsibilities in the area of trade policy and INL's longstanding relationship with the law enforcement community, the group is uniquely positioned to coordinate all U.S. government sectors engaged in international intellectual property matters and to ensure that all efforts are complimentary and consistent.

1. Summary of USTR Mission

Unlike other NIPLECC members, USTR is neither a law enforcement nor a training organization. Nonetheless, the U.S. Trade Representative plays a lead role in intellectual property rights enforcement on the international stage via the Special 301 process. Pursuant to Section 182 of the Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act of 1988 and the Uruguay Round Agreements Act of 1994, under Special 301 provisions, the USTR must identify those countries that deny adequate and effective protection for intellectual property rights or deny fair and equitable market access for persons that rely on intellectual property protection. Countries that have the most onerous or egregious acts, policies or practices and whose acts, policies or practices have the greatest adverse impact (actual or potential) on the relevant U.S. products must be designated as "Priority Foreign Countries."

Priority Foreign Countries are potentially subject to an investigation under the Section 301 provisions of the Trade Act of 1974. USTR may not designate a country as a Priority Foreign Country if it is entering into good faith negotiations or making significant progress in bilateral or multilateral negotiations to provide adequate and effective protection of IPR.

The USTR must decide whether to identify countries each year within 30 days after issuance of the National Trade Estimate Report. In addition, the USTR may identify a trading partner as a Priority Foreign Country or remove such identification whenever warranted.

The USTR has created a "Priority Watch List" and "Watch List" under Special 301 provisions. Placement of a trading partner on the Priority Watch List or Watch List indicates that particular problems exist in that country with respect to IPR protection or enforcement or market access for persons relying on intellectual property. Countries placed on the Priority Watch List are the focus of increased bilateral attention concerning the problem areas.

2. Activities

On May 1, United States Trade Representative Charlene Barshefsky announced the results of the 2000 "Special 301" annual review which examined in detail the adequacy and effectiveness of intellectual property protection in over 70 countries. Ambassador Barshefsky also announced that, as a result of this year=s Special 301 review, she will initiate World Trade Organization (WTO) dispute settlement consultations with Argentina and Brazil. This brings to 14 the number of intellectual property-related WTO complaints filed by the United States since 1996. Consultations about implementation of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) also may be initiated with other countries in the near future. The Special 301 report also addresses significant concerns in such trading partners as Ukraine, Italy, Israel, Malaysia, India, Korea, Poland, and the West Bank and Gaza, as well as progress in economies such as UAE, Sweden, Mexico, and Macau.

In this year=s review, USTR devoted special attention to proper and timely implementation of the TRIPS Agreement by developing country WTO members, which was required as of January 1, 2000. In addition, USTR continued to focus on two other critically important issues: preventing the production of unauthorized copies of "optical media" such as CDs, VCDs, DVDs, and CD-ROMs, and ensuring that government ministries use only authorized software. Considerable progress has been made over the past year by many developing countries in implementing their TRIPS obligations. USTR also has achieved success again this year in encouraging our trading partners to implement optical media controls and appropriate software management programs. While progress also has been made on improving enforcement in many countries, the unacceptably high rates of piracy and counterfeiting of U.S. intellectual property around the world require on-going vigilance.

Under the Special 301 provisions of the Trade Act of 1974, as amended, Ambassador Barshefsky identified 59 trading partners that deny adequate and effective protection of intellectual property or deny fair and equitable market access to United States artists and industries that rely upon intellectual property protection.

3. Country-Specific Activities

(a). Ukraine

In this year=s report, the USTR identified Ukraine for potential Priority Foreign Country designation. Ambassador Barshefsky stated that the United States has worked with Ukrainian officials over the past several years in an effort to reduce alarming levels of copyright piracy and to improve Ukraine=s overall intellectual property regime. According to estimates from our copyright industry, Ukraine is the single largest source of pirate CDs in the Central and East European region. In June, President Clinton and President Kuchma signed the U.S.-Ukraine Joint Action Plan to Combat Optical Media Piracy in the Ukraine. Regrettably, the Ukraine has failed to live up to the terms of the Plan; the U.S. Government currently is engaged with the Government of Ukraine in an intense effort to resolve this problem. However, Ukraine will be identified as a Priority Foreign Country if it fails to make substantial progress toward eliminating pirate optical media production by year=s end.

Copyright piracy in Ukraine is extensive and enforcement is severely lacking, resulting in increasing unauthorized production and export of CDs and CD-ROMs. U.S. industry estimates that losses to the music industry alone are $210 million. The United States urges the Government of Ukraine to take stronger measures on an urgent basis to address this problem through the implementation of effective optical media production controls and other available means. In addition, a number of Ukraine=s intellectual property laws, especially trademark, patent and copyright, fall short of compliance with the minimum standards set out in the TRIPS Agreement and the 1992 U.S.-Ukraine bilateral trade agreement. It is unclear whether Ukraine protects pre-1973 copyrighted works; it does not provide retroactive protection for sound recordings.

(b). China

For more than a decade, the United States and China have engaged in detailed discussions regarding the improvement of China=s protection of intellectual property rights and market access for products with IPR protection. Although China improved the legal framework for IPR protection based on the 1992 bilateral agreement, enforcement of those laws remains deficient in many areas, causing large losses to U.S. right-holders.

Progress has clearly been made. For example, Chinese authorities have shut down over 100 illegal CD, CD-ROM and VCD production facilities. This effort changed China from an exporter of pirated material to being the import target for pirated product from other countries in the region. Other economies in the region, including Hong Kong, Macau, Singapore and others have faced an increase in piracy as production moved from China to other locations. As a result, the Administration's enforcement efforts have also concentrated on these economies.

Chinese enforcement of copyrights and trademarks is still uneven from province to province. Of concern is the unauthorized use of software by private enterprises (end user piracy). Piracy rates of entertainment software (game compact discs) and other audiovisual products are also very high. Although strong steps have been taken to address the production of pirated software, CDs and VCDs, pirated product remains available at the retail level.

The U.S. Government has also been pressing China about the growing major problem of trademark counterfeiting, particularly in the area of consumer goods, protection for unregistered well-known trademarks and effective enforcement against counterfeiters. U.S. companies report that the counterfeiting of their products by Chinese companies has increased dramatically.

No single Chinese government entity has been coordinating anti-counterfeiting enforcement efforts nation-wide. Such coordination is urgently needed. We were pleased that the Chinese government announced on October 26 a nation-wide campaign of this nature. However, we are concerned that it is scheduled to end on January 1, 2001. Moreover, right-holders complain that Chinese administrative penalties are too low and the threshold for initiating criminal investigations against counterfeiting is too high for either to serve as an effective deterrent. The U.S. Government is following this matter very closely.

4. Country Designations

Ambassador Barshefsky again designated Paraguay and China for "Section 306 monitoring" to ensure both countries comply with the commitments made to the United States under bilateral intellectual property agreements. Special concern was expressed that Paraguay=s efforts have not been sufficient in recent months, and further consultations will be scheduled.

Ambassador Barshefsky placed 16 trading partners on the "Priority Watch List": Argentina, the Dominican Republic, Egypt, the European Union, Greece, Guatemala, India, Israel, Italy, Korea, Malaysia, Peru, Poland, Russia, Turkey, and Ukraine. She also placed 39 trading partners on the "Watch List." Countries that were not mentioned in the report last year but are on the Watch List this year include: Armenia, Azerbaijan, Kazakhstan, Latvia, Lithuania, Moldova, Tajikistan, Turkmenistan, and Uzbekistan.

On November 8, 2000, the USTR announced the results of out-of-cycle reviews of Italy and El Salvador. USTR also announced resolution of TRIPS implementation concerns in Poland and Ireland. Italy was moved from the Priority Watch List to the Watch List as a result of its passage of a new anti-piracy law. USTR decided not to place El Salvador on the Watch List in recognition of its stepped up IPR enforcement efforts. Poland was moved from the Priority Watch List to the Watch List because of amendments to its copyright law which brought that country into compliance with its TRIPS obligations regarding sound recordings. Ireland was removed from the Watch List after it adopted new copyright legislation.

1. Summary of Customs Service Mission

The United States Customs Service, established in 1789, is a law enforcement agency of the Department of the Treasury. Customs is the primary enforcement agency protecting the Nation’s borders and as such is charged with enforcing the laws of the United States, safeguarding the revenue and fostering lawful international trade and travel. For example, in addition to combating the flow of illegal narcotics, Customs provides the Nation with its second largest source of revenue, returning $22.1 billion to the U.S. Treasury in 1999.

As a law enforcement agency within the Department of the Treasury, Customs is vested with the powers of search, seizure and arrest. As such, Customs is charged with enforcing criminal laws pertaining to trademark and copyright infringement. However, in addition to its law enforcement powers, U.S. Customs is an administrative agency with the legal authority, under the Tariff Act of 1930, the Lanham Act of 1946 and the Copyright Act of 1976, to make infringement determinations regarding federally registered trademark and copyrights. Although Customs has no legal authority to make determinations relative to patent infringement, it does have the authority to exclude from entry into the U.S. goods that the U.S. International Trade Commission has determined infringe a valid and enforceable U.S. patent.

Through its enforcement powers combined with its administrative authority to make trademark and copyright infringement determinations, Customs is able to combat the flow of counterfeit and piratical goods into the United States. Customs may on its own accord initiate enforcement actions to detain or seize infringing merchandise, or alternatively, may proceed on the basis of information supplied by rights owners. Enforcement actions represent the combined efforts of many disciplines within Customs. In some instances, IPR enforcement actions may also be undertaken in cooperation with other government agencies.

Rights owners who so wish can record their trademarks and copyrights with Customs. Customs’ IPR recordation system, as embodied in its electronic IPR database, was designed to make IPR information relating to imported merchandise readily available to Customs personnel. While Customs enforces both recorded and non-recorded trademarks and copyrights, Agency policy mandates that resources be focused primarily on recorded rights.

2. Major Programmatic Activities

Customs’ commitment to combating IPR violations is reflected in the Agency’s annual seizure statistics. In the past three fiscal years (FY 97-99) Customs has made over 9,000 seizures with an estimated domestic value of over $228 million. The most commonly seized items during this period were media (e.g., software, music and video CDs), computers and parts thereof, wearing apparel and toys and video games. In fiscal year 2000, there were 3,244 seizures with an estimated domestic value of $45.3 million. The major commodity seized, as a percentage of value, was media (17%), followed respectively by toys and electronic games (13%), computers and computer parts (10%), wearing apparel (10%), cigarettes (9%) and watches (9%). More detailed enforcement statistics are available on the U.S. Customs website at www.customs.gov.

In order to identify and stop shipments of IPR infringing merchandise from entering the U.S., Customs conducts annually, a number of targeted IPR "interventions." Intervention initiatives focus on specific enforcement issues. For example, in fiscal year 2000, Customs conducted interventions targeting: handbags; identifying elements (rivets, labels, hang tags, buttons, boxes, etc.); certain smaller ports of entry identified as having a significant level of imports at risk for IPR infringement; and U.S. addresses known or suspected to be harboring IPR violators.

The creation of the National Intellectual Property Rights Coordination Center (IPR Center) is the U.S. government's latest initiative in the fight against IPR crime. The IPR Center, opened in February 2000, is a multi-agency center located at the U.S. Customs Headquarters in Washington, D.C. Investigative and analytical personnel from Customs and the Federal Bureau of Investigation provide the core staffing. The IPR Center coordinates the efforts of all federal agencies actively involved in the investigation of IPR violations.

The Center’s responsibilities include: serving as a clearinghouse for information and investigative leads provided by the general public and industry, as well as being a channel for law enforcement to obtain cooperation from industry; integrating domestic and international law enforcement intelligence with industry information relating to IPR crime; disseminating IPR intelligence for appropriate investigative and tactical use; and developing enhanced investigative, intelligence and interdiction capabilities. Particular emphasis is placed on investigating major criminal organizations and those using the Internet to facilitate IPR crime.

Another recent U.S. Customs initiative that targets IPR crimes is the Customs CyberSmuggling Center (C3). U.S. industries, particularly in the areas of computer software, motion pictures and sound recordings, are increasingly at risk from cyber-pirates. Accordingly, Customs established the C3 in order to focus the Agency’s resources more effectively on Internet crimes, including IPR violations.

Another major Customs IPR initiative in 2000 was the publication of an IPR Handbook. The Handbook is a compendium of information and procedures on IPR matters and is designed to promote uniformity in the border enforcement of intellectual property rights. Intended as a guide for Customs port personnel, the Handbook includes, among other things, a general overview of Customs’ role in IPR enforcement, pertinent Customs Directives, sections on penalties and seizures, and information on targeting, enforcement evaluation teams and counterfeiting techniques. It is anticipated that a public version of the IPR Handbook will be made available via the Customs web site in 2001.

Customs has conducted or participated in international IPR border enforcement training sponsored by a number of U.S. Government Agencies and international organizations including the Department of State’s Bureau of International Narcotics and Law Enforcement, the Commerce Department’s Commercial Law Development Program, APEC, and the World Customs Organization, among others.

An ongoing, but vital element of Customs IPR enforcement plan, is the recordation of federally registered trademarks and copyrights in Customs’ electronic IPR database. The database now contains over 23,000 records.

3. Industry Outreach

U.S. Customs supports increased cooperation with industry in both the domestic and international arenas with regard to the border enforcement of intellectual property rights. In the international arena, for example, U.S. Customs, as a member of the World Customs Organization, participates in a joint WCO Customs/Business training program, the aim of which is to enhance the effectiveness of Customs Administrations in combating intellectual property rights violations.

As a general matter, Customs works with industry on an ongoing basis to combat IPR violations. For example, in March 2000, Customs met with various industry associations involved in the IPR field, including the Recording Industry of America, the Business Software Alliance, the Motion Picture Association of America, the Software Industry Association, the Coalition to Advance the Protection of Sports Logos, and the Imaging Suppliers Coalition. In addition to meeting with rights owners, Customs meets regularly with associations representing the importing community, such as the American Free Trade Association and the American Association of Exporters and Importers.

U.S. Customs routinely includes industry in conducting domestic and international training initiatives relative to the border enforcement of intellectual property rights. For example, in addition to the associations listed above, Customs has worked with companies and organizations such as Microsoft and Underwriters’ Laboratories in conducting international IPR border enforcement training. Customs values the participation of rights owners in its training activities. In response to industry’s concerns - which Customs shared - Customs recently streamlined the process for participation in the agency’s domestic training IPR initiatives. Customs trusts that these changes will prove mutually beneficial.

1. Summary of ITA Mission

The International Trade Administration (ITA) helps U.S. businesses participate fully in the growing global marketplace. The ITA provides practical information to help U.S. businesses export goods and services; ensures that businesses have access to international markets as required by trade agreements; and safeguards businesses from unfair competition from dumped and subsidized imports. ITA is headed by the Under Secretary for International Trade who oversees the operations of ITA's four units: the Commercial Service is the primary point of contact for businesses throughout the United States and the world. A global network of Commercial Officers are prepared to offer assistance at every stage of the exporting process. Trade Development is the government's link to American industry. Industry sector specialists help businesses identify trade opportunities for specific products or services. Import Administration impartially enforces U.S. unfair trade laws, ensuring that businesses face a level playing field in the domestic marketplace. Market Access and Compliance keeps world markets open to products, and includes country specialists and the Trade Compliance Center (TCC). Country specialists can help businesses benefit from our trade agreements with other countries. The TCC monitors and analyzes foreign compliance with 300 + trade agreements and standards of conduct. In working with Commerce country desk officers and other U.S. Government agencies, the TCC helps U.S. firms identify and develop strategies to overcome market access barriers, including the lack of intellectual property rights.

2. Activities in IPR Enforcement

(a). Programmatic Activities

The TCC, in particular, has the coordinating role within Commerce on multilateral and bilateral efforts to promote effective worldwide protection and enforcement for intellectual property rights. The TCC represents Commerce at the meetings of the TRIPS (Trade Related Aspects of Intellectual Property Rights Agreement) Council at the World Trade Organization. The TCC works closely with the Office of the U.S. Trade Representative, the U.S. Patent & Trademark Office of the Commerce Department, State Department’s Intellectual Property and Competition Policy Division, the U.S. Copyright Office, and the private sector in developing and implementing a comprehensive strategy for addressing bilateral and multilateral IP programs. Such programs include the annual Special 301 Review for which the TCC has the responsibility of coordinating Commerce’s position on the status of countries.

The TCC plays a key role in the Industry Consultations Program, sponsored by the U.S. Department of Commerce and the Office of the U.S. Trade Representative (USTR), that includes over 500 industry executives who provide advice and information to the U.S. Government on trade policy matters. The advice received from committees has helped to strengthen the international trading system, and has assisted U.S. Government officials negotiating multilateral and bilateral trade agreements with our trading partners. The program includes sector and functional advisory committees, including the Intellectual Property Rights committee (IFAC 3), which the TCC administers. Membership on the functional committee is made up of industry representatives and representatives from product sector committees. USTR, USPTO and Commerce staffs do a substantial amount of the briefing for the IFACs.

IFAC 3 plays an active role in advising the U.S. Government on intellectual property negotiating objectives and priorities. Advice has been sought on the Free Trade of the Americas Agreement (FTAA); the Asia-Pacific Economic Cooperation; the U.S.-EU TransAtlantic Economic Partnership; and bilateral negotiations and consultations with Korea, Vietnam, and South Africa. Finally, IFAC 3 provides advice to the U.S. Government on negotiating objectives for WTO accessions, and identifies IP concerns in countries that are eligible beneficiaries under the Generalized System of Preference program. The priorities of the IFAC 3 committee include advising the U.S. negotiators on WTO Members’ implementation and compliance of the WTO TRIPS Agreement. In particular, the committee provides advice on WTO TRIPS Council compliance reviews and WTO dispute settlement cases. In addition, IFAC 3 plays an important role in channeling private sector advice into the implementation of the Special 301, particularly with respect to Section 301 investigations on China and Paraguay.

(b). Operational Activities

Operational activities of the TCC include its Compliance Liaison Program and trade compliance hotline. In the Compliance Liaison Program, over 60 trade associations have appointed a representative to serve as a liaison between their members and the TCC. The liaison solicits complaints on market access barriers and agreement compliance problems from members, and notifies the TCC for action. Representatives from the Motion Picture Association, Recording Industry Association of America, Business Software Alliance and American Film Marketing Association are part of the Compliance Liaison Program. The TCC also administers a hotline for U.S. firms to contact when faced with trade barriers. Advice has been provided to several U.S. firms that have faced problems concerning the infringement of intellectual property in China, Taiwan, Israel, Korea, Slovak Republic, and Japan, to name a few. While the parties involved in the intellectual property complaints have generally been private entities as opposed to government actors, the information provided by the compliance program has enabled several of these firms to pursue litigation to enforce their rights under the intellectual property laws of the respective countries.

By statute (Public Law No. 106-58, Section 653(c)), the National Intellectual Property Law Enforcement Coordination Council (NIPLECC) is required to consult with the Register of Copyrights on law enforcement matters relating to copyrights and related matters.

1. Summary of Copyright Office Mission

Generally, the Copyright Office consults with and provides expert assistance to Congress on intellectual property matters and related matters. In this function, the Copyright Office is often responsible for analyzing and assisting in drafting copyright legislation and legislative reports, mediating discussions between interested private parties, testifying in Congressional hearings, and undertaking Congressionally requested studies on copyright and related questions.

Internationally, the Copyright Office advises Congress on compliance with multilateral intellectual property agreements, provides technical expertise in negotiations for international intellectual property agreements and provides technical assistance to other countries developing their own copyright laws.

In addition, the Copyright Office consults with and advises many different Federal agencies, including the Office of the United States Trade Representative and the State Department, on copyright and related matters.

Administratively, the Copyright Office sets copyright policy through rule-making and the administration of compulsory licenses contained in the copyright law.

Specifically, the Copyright Office has a statutory mandate to: (1) Advise Congress on national and international issues relating to copyright, other matters arising under [U.S.C. Title 17], and related matters; (2) Provide information and assistance to Federal departments and agencies and the Judiciary on national and international issues relating to copyright, other matters arising under this title, and related matters; (3) Participate in meetings of international intergovernmental organizations and meetings with foreign government officials relating to copyright, other matters arising under this title, and related matters, including as a member of United States delegations as authorized by the appropriate Executive branch authority; (4) Conduct studies and programs regarding copyright, other matters arising under this title, and related matters, the administration of the Copyright Office, or any function vested in the Copyright Office by law, including educational programs conducted cooperatively with foreign intellectual property offices and international intergovernmental organizations; and (5) Perform such other functions as Congress may direct, or as may be appropriate in furtherance of the functions and duties specifically set forth in [U.S.C. Title 17]."

2. Activities in IPR Enforcement</