INSIGHT: US govt & industry escalate piracy fight

By Joe Kamalick

WASHINGTON (ICIS news)--The US government and private industry are stepping up their battle against worldwide counterfeiting and product piracy, with both sectors bringing new intelligence-gathering assets to the fight.

The US Chamber of Commerce, a large independent trade group, said this week it is launching the second year of its campaign to protect intellectual property rights (IPR) by hiring its own “intelligence personnel” to track and expose IPR violations globally.

Chamber president Tom Donohue said his group’s IPR action program is being significantly expanded in the face of growing piracy and counterfeiting. Donohue said the twin plagues of piracy and counterfeiting cost companies worldwide $750bn (Euro622bn) annually, with some $300bn in losses to US firms alone.

US chemical manufacturers are among major victims of global counterfeiting and piracy. In a worst-case example cited by the American Chemistry Council (ACC), an American firm built a plant in China but discovered shortly that Chinese firms who worked on the project stole the building plans and process technology to build and operate a duplicate facility in direct competition with the US firm.

David Hirschmann, senior vice president at the Chamber, said the IPR fight is one of the Chamber’s top priorities again this year, and the trade group will spend several millions of dollars in the effort. The Chamber has 3m member firms - including many US chemicals and plastics producers and processors - and an annual budget of $140m.

Part of the Chamber’s multi-million dollar IPR campaign this year will include hiring its own intelligence operatives, Donohue said, expert veterans drawn from the US intelligence community who will track IPR violations so the Chamber can alert US and foreign authorities. Donohue said the Chamber also will use its IPR violations intelligence to publicly embarrass companies responsible and countries - including the US - that don’t do enough to protect IPR.

That embarrassment factor may be the key to making progress, because it may force US policymakers to actually do something - other than wring their hands. US Attorney General Alberto Gonzales has said that US trade sanctions are possible against China over IPR violations. US Trade Representative Rob Portman similarly has warned China that its IPR failings may trigger US sanctions. In addition, a US commission charged by Congress with monitoring US-China trade has called for broad tariffs on imports to force China to act on violations.

But real US sanctions against IPR violations by China or other nations are not likely unless the Chamber and others draw the attention of Congress and the Bush administration to large and flagrant cases of piracy and counterfeiting - and shame federal officials for letting it happen. That is exactly what the Chamber now seeks to accomplish.

Hirschmann said the Chamber’s first two IPR intelligence operatives will be recruited this quarter in New York City and in Los Angeles, and that intelligence-gathering resources will be quickly expanded to other major US port cities and population centres. He said the Chamber may send intelligence-gatherers abroad as the need arises.

The Chamber’s stepped-up IPR program comes just as the US government also has escalated its fight against counterfeiting and piracy. This week the US Department of Justice (DoJ) named its first intellectual property law enforcement coordinator (Iplec), a former federal prosecutor and IPR expert. This first Iplec agent is working out of the US embassy in Bangkok, Thailand to investigate IPR violations throughout Asia and to coordinate US and foreign prosecutions.