WASHINGTON, Oct. 19 (UPI) -- U.S. Attorney General John Ashcroft on Tuesday called for more aggressive U.S. action in combating intellectual property theft and counterfeit products.
Ashcroft, speaking at a roundtable at the U.S. Chamber of Commerce, said that the U.S. Department of Justice plans to work both internationally and domestically to fight piracy and counterfeiting, but added that companies needed to help the DOJ enforce IP protection laws by discouraging IP violations.
Ashcroft noted that progress had been made, including an operation in August during which more than 40 terabytes of pirated material -- equal to 60,000 movies or 10.5 million songs -- was seized. However, he added, "There is much more to be done."
Ashcroft reiterated many of the recommendations contained in a DOJ report on IP crimes released last week. The study recommends updating extradition agreements to help the United States locate and extradite IP criminals overseas; providing adequate resources and help to victims of IP theft; charging and prosecuting for intellectual property crimes whenever such charges are applicable, even when investigations focus on other offenses; and expanding youth education programs that encourage respect for intellectual property rights.
Ashcroft scoffed at the roguish, Robin Hood-like image many "peer-to-peer" file swappers seem to enjoy among their fans. "They're not some sort of romantic figures ... they're thieves," he said.
To fight IP crimes, in addition to the 13 Computer Hacking and Intellectual Property (CHIP) units already deployed in U.S. attorney offices, Ashcroft said that additional units will be deployed in five U.S. cities this year: Pittsburgh, Penn., Orlando, Fla., Sacramento, Calif., Nashville, Tenn., and Washington, D.C.
CHIP units address copyright and trademark violations, trade secret theft, computer intrusions, computer and high-tech component theft, and Internet fraud. In 2003, the first year that all CHIP units were operating, the CHIP Program filed charges against 46 percent more defendants than they had averaged in each of the four years prior to the formation of the units, Ashcroft said.
Specially trained U.S. federal prosecutors and FBI agents will also be sent to Budapest, Hungary and Hong Kong, China, to combat large IP crime and counterfeiting networks operating in Central Europe and Asia, he said.
The United States is also working with the 25 members of the European Union on updating extradition agreements to include IP crime as extraditable offenses.
Earlier this month, in another move to fight global trade in pirated and counterfeit goods, the DOJ, in conjunction with the Office of the U.S. Trade Representative and the Departments of Commerce and Homeland Security announced a government-wide initiative, the Strategy Targeting Organized Piracy (STOP).
"Trade in fake goods is growing, cheating American innovators and producers out of billions of dollars and threatening consumers all over the world with low quality and often unsafe products," said U.S. Trade Representative Robert Zoellick. "The message to the IPR pirates and counterfeiters is simple: we will do everything we can to make their life miserable. We will stop their products at our border; we will name and shame your company; we will ratchet up the penalties; and we will coordinate with our trading partners to prevent third-country trafficking."
According to the DOJ, IP industries make up 6 percent of the U.S. gross domestic product, provide jobs for more than 5 million people, and contribute $626 billion to the U.S. economy. IP crimes cost the U.S. economy more than $250 billion and about 300,000 jobs last year, Ashcroft said.
To get countries to crack down on IP theft and counterfeit products, Ashcroft suggested putting pressure on countries that seek memberships in economic organizations such as the World Trade Organization, which helps countries attract trade and investment. The United States already does this to some degree with its Special 301 report, released each year by the Office of the U.S. Trade Representative, which examines the state of intellectual property rights protection in several countries around the world. The United States already levies $75 million in sanctions annually against products from Ukraine because of the IPR violations, and notes that Ukraine may also have trouble getting into the WTO and may have trouble attracting trade and investment as a result.
IP crimes pose a direct physical threat to people's safety as well as to the economy, Ashcroft said, citing some particularly dramatic examples. In one case, counterfeit batteries exploded in a mobile phone, causing a fire. In another example, a drug manufacturer discovered that some people taking the drug were actually receiving a counterfeit version made up of floor wax and yellow, lead-based paint used to mark highways.
The bottom line is that innovators "must be given the opportunity to succeed in an environment where enterprise, creativity and innovation are respected and where there is a marketplace that offers potential reward for their efforts," Ashcroft said.
"If the environment in this country is not conducive to creativity and innovation, the innovators will find an environment elsewhere that is. And that is an outcome our nation cannot afford," he warned.
Indeed, a recent survey released by the Business Software Alliance found that almost 25 percent of 1,500 professionals in the accounting, architecture, engineering, financial services and graphic design industries said that they knew their offices used at least some pirated commercial software. In fact, a study the BSA released on global software piracy in July of this year showed that 22 percent of software being used in the United States is unlicensed.
But the BSA also made it clear that such violations come at a price. Concurrent with the release of its piracy survey, the BSA also announced it had received more than $2.2 million in legal settlements with 25 companies nationwide over the use of pirated software.
