CBP and Others Discuss IPR Penalties, Enforcement at Senate Hearing
On June 22, 2011, the Senate Judiciary Committee held an oversight hearing on intellectual property law enforcement efforts. At the hearing, U.S. Customs and Border Protection and other Administration officials discussed recent efforts to improve IP enforcement, including CBP’s efforts to improve penalty collection and overseas enforcement of intellectual property rights.
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Highlights of the witnesses’ written statements include:
CBP Takes Action to Improve IPR Penalty Collection
In fiscal year 2010, CBP assessed 514 IPR penalties and collected $2,114,519 in fines. When collecting civil penalties, CBP states that it is challenged by the fact that businesses who knowingly import counterfeit and pirated goods operate with minimal assets. It is often more efficient for these businesses to shut down their operations and re-open under a new name rather than to pay a fine or penalty.
CBP states that it is implementing a number of actions to address this challenge and ensure that the expenses that CBP must incur in order to collect the penalties do not exceed the amount collected.
Penalize those who assist in counterfeit imports. To enhance deterrence of IP theft, CBP is implementing new procedures for issuing civil penalties under 19 USC 1526(f). Currently, these penalties are usually issued to the U.S. importer or consignee. Under new guidelines, CBP will penalize persons who direct, assist financially or otherwise, or who aid and abet the importation of merchandise seized for bearing a counterfeit mark to the full extent allowed under the law.
Penalties to be issued concurrently with seizure. CBP is changing its IPR penalty process so that it issues the penalties concurrently with the seizure of the counterfeit goods rather than wait for the forfeiture proceeding to be complete, which can delay the issuance of penalties for up to two years.
CBP working with DOJ to enhance quality of IPR penalty cases. In a corresponding effort, CBP is collaborating with the Department of Justice (DOJ) to identify ways to enhance the quality of IPR penalty cases and to ensure that CBP’s IPR penalty cases are referred to DOJ for judicial action.
Increased Overseas IPR Staff and Enforcement
The Administration’s IPR Coordinator testified that in the fiscal year 2012 budget, the DOJ requested funds to place six International Computer Hacking and Intellectual Property Coordinators in strategic global locations to strengthen international intellectual property efforts.
As of September 2010, Immigration and Customs Enforcement had a full time agent in China dedicated to IPR issues. The Federal Bureau of Investigation (FBI) is also preparing to assign a person to China later in 2011 who will work exclusively on IP issues.
In May 2011, the ICE Director signed a Letter of Intent with China’s Ministry of Public Safety on law enforcement cooperation and a Memorandum of Understanding (MOU) on law enforcement cooperation with the China General Administration of Customs (GACC). In May, CBP worked with the GACC to increase opportunities for information-sharing for both sides. CBP also signed a MOU with the Ministry of Public Safety (MPS), which will lay the groundwork for information-sharing and collaboration between the two agencies.
Giving U.S. Business Strategies to Solve IPR Problems Abroad
The IPR Coordinator also noted in her testimony that the International Trade Administration’s Office of Intellectual Property Rights (OIPR), through its Trade Agreements and Compliance Program, continued to work with other U.S. Government agencies to help U.S. businesses by suggesting strategies they can take to evaluate IPR problems encountered abroad. Since June 2010, 60 cases were initiated on behalf of U.S. rights holders. Fifteen barriers in 14 countries were removed. OIPR also launched a number of additional tools and services to help U.S. businesses protect and enforce their IPR abroad which are now available through www.stopfakes.gov, including a new Transatlantic Intellectual Property Rights Resource Portal launched in December 2010.
(See ITT’s Online Archives or 04/26/11 news, 11042622, for BP summary of CBP’s discussion at two April 2011 trade events on recent IPR activities and its future plans.
See ITT’s Online Archives or 03/04/11 news, 11030428, for BP summary of the IPR Coordinator’s testimony on the Administration’s IP activities.)
Hearing materials, including witness written testimony and link to hearing webcast available here