Prepared Remarks for Attorney General Alberto R. Gonzales at the U.S.

Chamber Of Commerce "Stop’ing the Fakes" Anti-counterfeiting Summit
Washington, DC November 10, 2005
Good morning, Ladies and Gentlemen. As we know, the strength of the American economy is dependent on the creative and entrepreneurial spirit of our citizens. At the heart of that spirit is the dedicated protection of intellectual property – and the innovations, jobs, and productivity that flow from it. Even in an age of rapidly changing technology, this is not a new concept. The Founding Fathers recognized the connection between intellectual property and economic security when they wrote specific safeguards for these exclusive rights into our Constitution – with the express purpose of promoting “the Progress of Science and useful Arts.” And Congress has consistently enforced this founding principle for more than 200 years. Today, the protection of intellectual property is as important as it was during the early moments of our national experiment. As such, it is a high priority for the Department of Justice, the Bush Administration, the Congress, and the government at every level… as well as American businesses and the public. The U.S. Chamber of Commerce clearly understands this. The Chamber's Coalition Against Counterfeiting and Piracy and its strategy to protect America's intellectual property through education, enforcement and international initiatives is an important component in the fight against intellectual property crime. We applaud the Chamber’s efforts, and we at the Department of Justice are working closely with the Coalition to address this rising problem. It’s an indication of an important fact: We must work together. That is what the STOP initiative is all about. The Strategy Targeting Organized Piracy is a comprehensive effort across the government and private sector to crack down on the growing global trade in counterfeit and pirated goods.

A challenge such as this one requires a commitment from every stakeholder: government agencies, small businesses, international partners, law enforcement officials, independent organizations, and many, many more. Because of this cooperation, we’re attacking the problem in a number of ways – through enforcement, prevention, education, awareness, and legislation. And we’re targeting illegal activity at every stage of the process – from creation to reproduction to distribution. I am proud of the work we’ve been able to accomplish as a team during the first year of the Administration’s STOP initiative. The Department of Justice has been working closely with our partner agencies across the federal government to bring a coordinated and aggressive strategy to fight the global problem of counterfeiting and piracy. For instance, we have worked very closely with our counterparts within the Administration including Chris Israel, the Coordinator for International IP Enforcement. And I am pleased to announce today that our partnership will be further strengthened by the appointment of Arif Alikhan, a senior Justice Department official handling intellectual property issues, who will serve as the new Deputy Coordinator of the Administration's International IP Enforcement Office. In addition to the significant role the Department has played in the international outreach and educational efforts conducted through the STOP initiative, we have also made great strides in one of the most important areas of all – bringing intellectual property thieves to justice. We have brought many significant enforcement actions over the past year, and I look forward to discussing some of them with you in a moment. But first, I have a very important announcement to share with you today. I’m pleased to announce that we’ve just sent to Congress important legislation to address the problem of intellectual property crime: the Intellectual Property Protection Act of 2005. This is a comprehensive legislative package designed by the Department of Justice to help overhaul and update America’s intellectual property statutes. It is a reflection of the sustained commitment on the part of the Department and the Administration to ensure that we are doing everything we can to combat this problem. This legislative package, if enacted, would strengthen penalties for repeat copyright criminals, expand criminal intellectual property protection, and add critical investigative tools for both criminal and civil enforcement. For example, our legislative proposals implement broad reforms that ensure the ability to forfeit property – including illicit proceeds – derived from or used in the commission of criminal intellectual property offenses. We also propose to strengthen restitution provisions for victim companies and rights holders, in order to provide maximum protection for those who suffer most from these crimes. And we

propose to make clear that exporting infringing goods is the same as importing them…and should be punished accordingly. Every member of the global economy has a responsibility to keep counterfeit goods out of the global market. Rapid technological advancements have made the reproduction and distribution of counterfeit goods and pirated materials easier than ever in our history. Our policymaking efforts must advance along with modern technologies if we’re going to keep pace with this evolving area of criminal activity. This proposed legislative package is a good way to ensure that our laws are in step with the changing nature of intellectual property crimes. Of course, this proposed legislation is just one piece of our ongoing commitment to combat counterfeiting and piracy. As part of the STOP initiative, the Department of Justice created a Task Force on Intellectual Property to strengthen the Department’s protection of the Nation’s valuable intellectual resources. A year ago, the Task Force issued a comprehensive report detailing more than 25 separate recommendations for how to improve our efforts in this area. In February of this year, I renewed the Department’s commitment to the IP Task Force and to implementing its recommendations, including the expansion of Computer Hacking and Intellectual Property Units in prosecutor’s offices throughout the country. Through this task force, we’ve designed programs focused on awareness and prevention, and devoted considerable prosecutorial resources to enhance our ability to aggressively pursue crimes and protect the intellectual property rights of our citizens and industries. Foremost, we recognize our responsibility to vigorously enforce IP laws – and develop a culture of respect for IP rights – in order to harness America’s creative energy and ingenuity for the future of our economy. The fact of the matter is that intellectual property crimes have become too common. Counterfeit and pirated goods are easy to access – from bootleg CDs, DVDs and games…to fake watches and sunglasses on street corners…to online file sharing. While these crimes may appear harmless to some, they actually have a measurable impact on our entire economy – and they undermine the values of competition and creativity that are important to our way of life. For instance, criminals who manufacture and sell fake merchandise steal business from honest merchants, defraud innocent customers, and illegally profit from the hard work of American workers and entrepreneurs. This underground economy costs legitimate businesses billions of dollars every year. It’s our responsibility to crack down on these activities – and we are. Just last week, a 10-count federal indictment was returned against four individuals accused of running one of the largest counterfeit wholesale operations in New England. Beginning with seizures at 13 storage units in Massachusetts, federal and State agents broke up a massive

scheme to sell more than 30,000 counterfeit luxury goods – including handbags, wallets, sunglasses, coats, shoes, and necklaces. In addition, agents found the materials to manufacture at least 20,000 more counterfeit items. Even at the predatory prices these items get on the street, the seizure was valued at more than 1.4 million dollars. Conviction for these alleged counterfeit goods trafficking and money laundering charges could result in maximum imprisonment terms of 10- and 20-years, respectively. We're also targeting illegal counterfeit prescription drugs. Just last August, a Washington man was indicted for allegedly importing and distributing counterfeit and misbranded pharmaceutical drugs including Viagra, Cialis, and Lipitor. His indictment and arrest were the result of a joint investigation between U.S. Immigration and Customs Enforcement and police authorities in China, where officials arrested 11 more individuals and seized 4.3 million dollars in counterfeit drugs. Our message to criminals who seek to profit from the intellectual property of honest and hard-working American citizens and businesses is clear: There is nothing fake about our commitment to prosecute counterfeiters and pirates. However, we cannot do this important enforcement work alone. In the past 18 months, the Department has successfully led the two largest international enforcement actions ever undertaken against online piracy. Operation FastLink and Operation Site Down together involved more than 16 countries across five continents. These U.S.-led operations synchronized the execution of more than 200 search warrants, the confiscation of hundreds of computers and illegal online distribution hubs, and the removal of more than 100 million dollars worth of software, games, movies, and music from illicit distribution channels. Of the 32 people charged with felony copyright infringement so far, 20 have been convicted and the rest are awaiting entry of plea or trial. The list of countries partnering in these efforts is long, but the Department is committed to building on these successes and achieving even greater global participation in the future. In the increasingly connected global economy, nothing short of a global effort will suffice. That’s one reason I am traveling to China next week to seek new opportunities for better cooperation and coordination among our respective law enforcement agencies. I will be meeting with senior law enforcement ministers in China, and I plan to call on them for increased criminal enforcement of China’s laws protecting the intellectual property rights of businesses in the U.S. and around the world. Of course, there is also plenty of work we can do at home to encourage even better international cooperation. For instance, in November 2003 the President transmitted to the Senate the Council of Europe Convention against Cybercrime, which provides important tools that could enhance our ability to protect America’s intellectual property overseas. The Convention was unanimously approved by the Foreign Relations Committee in July of this year and is currently before the full

Senate. The IP Task Force specifically recommended ratification of this Convention to strengthen enforcement efforts both in the United States and around the world, and I recently sent a letter to the Senate leadership urging swift approval of this important international convention. *** The products Americans use every day – many of them manufactured and distributed by the people in this room – are tangible reminders of the principles of creativity, fairness, and honest competition that characterize our economy – the largest in the world. But they can also be a reminder that everything is not always as it seems. Counterfeit goods – whether they are fake batteries or impostor handbags – undermine those principles we hold most important to our success and quality of life. We will not tolerate crimes that harm American businesses and consumers. That is a message that I look forward to sharing with our international partners – especially when I travel to China next week. It’s a message I hope our Congress will embrace as they take up new legislation to clarify and toughen our laws protecting intellectual property. And it’s a message that I hope is reassuring to America’s creative minds, research specialists, entrepreneurs, and small business owners. We will protect their work… so they can continue to provide the vital spark to the engine that drives our economy and provides the quality of life we’ve come to enjoy and expect in the greatest country in the world. Our ability to promote and secure an effective and predictable environment for intellectual property rights in America will have a significant impact on our future economic growth, global competitiveness and economic national security. I look forward to working together to make it happen. Thank you for hosting this summit and for your continued efforts in this important area. May God bless you and your families, and may He continue to bless the United States of America. ###