House Passes IP Enforcement Legislation

With strong support from U.S. industry, the House of Representatives has approved legislation that would give federal law enforcement officials new tools to combat the theft of U.S.-owned intellectual property (IP) such as pharmaceuticals, manufactured goods, and artistic works.

The Prioritizing Resources & Organization for Intellectual Property Act (H.R. 4279), which the House passed by the overwhelming margin of 410-11 on May 8, would increase criminal and civil penalties for piracy and counterfeiting. It would also establish an IP enforcement division within the Department of Justice (DOJ) and create a high-level IP "czar" who would be responsible for coordinating efforts among federal law enforcement agencies.

"IP is among the key issues that will determine American competitiveness in the 21st century," said House Judiciary Committee Chairman John Conyers Jr. (D-Mich.), the bill's chief sponsor, on the House floor.

The strong House vote "is a step in the right direction for IP enforcement and the economy," added Rep. Lamar Smith (R-Texas), the committee's ranking Republican member and a cosponsor of the legislation.

Smith said DOJ filed only 217 cases for IP violations in the last fiscal year, less than 1% of the total number of criminal cases filed in fiscal 2007 "The more cases brought, the greater the deterrent effect and the stronger the economy will be," he remarked.

The Senate has not taken any action on the issue, although various members have introduced several different IP-related bills. Senate Judiciary Committee Chairman Patrick J. Leahy (D-Vt.) has agreed to hold a hearing, but it has not been scheduled yet.

Pushing the legislation is the Coalition Against Counterfeiting & Piracy, a 550-member organization led by the U.S. Chamber of Commerce, the nation's largest business federation. Members of the coalition range from drugmakers to movie studios to industrial manufacturers.

The House-passed bill would "ensure America's innovation industries continue creating jobs and crossing new scientific and technological frontiers," says U.S. Chamber of Commerce President and Chief Executive Officer Thomas J. Donohue. The bill's tougher penalties also "send an important message that IP theft will not be tolerated," he adds.

Jay Timmons, executive vice president of the National Association of Manufacturers, says IP theft in the U.S. is responsible for more than $250 billion per year in lost sales and the loss of a significant number of high-paying manufacturing jobs.

But the impact of piracy and counterfeiting on consumers poses a far greater concern, Timmons notes. "Counterfeiting often poses serious health and safety risks to the general public through substandard pirated products, including automobile parts, food, medical devices, and pharmaceuticals, to name but a few," he says.