Christopher Macdonald Kindel, Michael S. McCoy, Mark N. Mutterperl and Allen E. White
October 23, 2008
On October 13, 2008, President Bush signed into law new federal legislation designed to bolster the federal government’s ability to protect and enforce intellectual property rights and intellectual property owners' ability to combat counterfeiters and infringers. The new legislation, entitled the Prioritizing Resources and Organization for Intellectual Property Act (the “PRO-IP ACT”), provides for increased federal coordination and strategic planning against counterfeiting and piracy, strengthens civil and criminal laws against counterfeiting and infringement, and increases resources for Department of Justice programs devoted to enforcing and prosecuting intellectual property theft crimes.
Sponsored by Senator Patrick Leahy (D-VT) and Senator Arlen Specter (R-PA), the PRO-IP Act had strong bipartisan support and substantial backing from the business community. The Act is being hailed by industry groups as a positive step forward in the federal government’s efforts to combat counterfeit and infringement activities both domestically and abroad.
Establishment of an Intellectual Property Enforcement Coordinator
Perhaps the most notable provision of the PRO-IP Act is its creation of a new position, the Intellectual Property Enforcement Coordinator (the “IPEC”), to be appointed by the President and confirmed by the Senate. The IPEC will have what is essentially a cabinet level position within the Executive Office of the President and will be charged with guiding the federal government’s intellectual property enforcement efforts and coordinating the efforts among the various applicable federal departments and agencies. To facilitate this task, the IPEC will chair an intellectual property enforcement advisory committee comprised of representatives of the United States Patent and Trademark Office, the United States Copyright Office, the Department of Justice, the Department of State, the Food and Drug Administration, and several other federal agencies.
In conjunction with the intellectual property enforcement advisory committee, the IPEC will be responsible for developing and implementing the federal government’s strategic plan for addressing counterfeiting and infringement. The first “Joint Strategic Plan” is to be issued within a year of the passage of the Act and subsequent plans are to be prepared every three years. The goals of the Joint Strategic Plan will be to:
- Reduce counterfeit and infringing goods in the domestic and international supply chains;
- Identify and address structural barriers and weaknesses that may be hindering the federal government’s ability to effectively challenge counterfeit and infringement activities;
- Ensure that the various applicable federal departments and agencies are able to share information and work effectively together in enforcement efforts (and are not duplicating efforts);
- Help strengthen the ability of other countries to effectively enforce intellectual property rights against infringers and counterfeiters; and
- Work with other countries to establish international policies for intellectual property enforcement (including improving the ability to exchange information for cross-country enforcement efforts).
Bolstering of Civil and Criminal Counterfeit and Infringement Claims
In addition to the focus on a coordinated federal government effort to combat counterfeiting and infringement activities, the PRO-IP Act also amends numerous provisions of the trademark and copyright laws in order to bolster civil and criminal counterfeit and infringement claims.
On the trademark side, the most notable revisions promulgated by the PRO-IP Act include:
- Enhancing civil remedies in counterfeit claims by doubling the minimum and maximum statutory damage awards from $500 and $100,000 per mark to $1,000 and $200,000 per mark. The Act also doubles the maximum statutory damage awards for claims involving the willful use of a counterfeit mark from $1,000,000 to $2,000,000.
- Expanding the treble damage provisions for counterfeit trademark cases. Courts are now required to award treble damages and attorney fees in cases where the violation at issue consists of the defendant providing goods or services necessary for the commission of a counterfeiting violation (if the defendant intends that such goods or services will be used to commit a counterfeiting violation).
- Expanding Section 42 of the Lanham Act to prohibit the export or transshipment of counterfeit goods and services (the Act previously just addressed the importation of counterfeit goods and services).
- Increasing criminal penalties for counterfeit activities that could endanger public health and safety (and result in bodily harm or death).
On the copyright side, the most notable revisions promulgated by the PRO-IP Act include:
- Relaxing the requirement that a copyright claimant have a proper copyright registration prior to asserting a federal copyright infringement claim by eliminating registration errors as a basis for dismissal (under most circumstances). Under the Act’s amendments, a copyright owner’s inclusion of inaccurate information in a copyright application will not be considered fatal to a copyright claim so long as (i) the owner did not knowingly include the inaccurate information in the application and (ii) the inaccurate information would not have caused the Register of Copyrights to refuse registration.
- Allowing for the federal government, when pursuing criminal copyright infringement claims, to seek the forfeiture of not only all infringing works at issue, but all property used by the infringer to create the infringing works, and all property derived from the proceeds obtained directly from the creation and distribution of the infringing works. With this amendment, multi-purpose computer equipment used by many parties (among other items) could theoretically be seized by the government in a criminal enforcement action against an infringer that used the equipment to generate or download infringing works.
- Expanding Section 602 of the Copyright Act to prohibit the exportation of infringing copies or phonorecords (the Act previously only addressed the importation of such items).
- Expanding on current provisions that allow copyright owners to impound infringing articles. The Act gives courts the additional authority to impound “records documenting the manufacture, sale, or receipt of things involved in” copyright infringement. This is intended to give copyright owners rights that more closely mirror the rights of trademark owners, who currently have the ability to impound records related to counterfeit marks.
- Increasing the penalties for repeat felony copyright infringers.
Increase in Funding for Department of Justice Programs for Policing IP Theft Crimes
A third significant component of the bill is its focus on increasing resources and funding available to the Department of Justice to implement and carry out programs focusing on the enforcement and prosecution of intellectual property theft crimes. Among other things, the Act establishes a program for the Department of Justice to issue grants to state and local programs designed to train personnel about intellectual property theft crimes and facilitate state and local efforts to enforce and prosecute intellectual property theft crimes. The Act also provides increased funding to the Department of Justice and the FBI in order to increase staffing and train personnel to focus enforcement efforts on counterfeiting and intellectual property theft crimes.
It will take some time before the effectiveness of the PRO-IP Act will be able to be fully evaluated (particularly with respect to the impact of the new IPEC position and the Justice Department enforcement programs). Nonetheless, the passage of the Act and its focus on a more organized, substantial federal government role in counterfeit and infringement enforcement efforts does signify a heightened federal government interest in protecting and preserving U.S. intellectual property resources.
The PRO-IP Act’s strengthening of civil counterfeiting and infringement claims should facilitate brand owners and content providers in their anti-counterfeiting and infringement efforts. The heightened statutory damages awards and the expansion of a treble damage award to cases where the violator is just providing goods and services designed for use in counterfeiting activities should, in particular, bolster brand owners’ ability to effectively challenge counterfeiters.
This article was prepared by Chris M. Kindel (email@example.com or 512 536 5652), Michael S. McCoy (firstname.lastname@example.org or 713 651 8216), Mark N. Mutterperl (email@example.com or 212 318 3183) and Allen E. White (firstname.lastname@example.org or 713 651 8464) from Fulbright's Intellectual Property and Technology Practice Group.
 Given the timing of the Act, it seems likely that the responsibility for appointing the first IPEC will fall to the next president.
 The PRO-IP Act defines intellectual property enforcement as “matters relating to the enforcement of laws protecting copyrights, patents, trademarks, other forms of intellectual property, and trade secrets, both in the United States and abroad, including in particular matters relating to combating counterfeit and infringing goods.”
Christopher Macdonald Kindel
Michael S. McCoy
Mark N. Mutterperl
Allen E. White