Judging strictly from news reports and government releases, the multi-agency, multistate, internationally coordinated “Operation Holiday Hoax” looks to have been a big success.

From The Blog of the Legal Times:

A six-day enforcement sting combating the importation and distribution of counterfeit and pirated goods has netted seven arrests and the seizure of merchandise worth more than $26 million in the United States, federal officials announced today.

Lanny Breuer, assistant attorney general for the Justice Department’s Criminal Division, was on hand in Arlington, Va., today to announce the sting – dubbed “Operation Holiday Hoax.” The seized goods included Christmas ornaments, DVDs, CDs, clothing, shoes, handbags, perfume, stationery, phones and pharmaceuticals. In Mexico, the authorities seized an additional 272 tons of counterfeit goods. [Mas aqui]

“Consumers are entitled to rely on a marketplace that provides them with safe and legitimate products,” Breuer said in a prepared statement. “Consumers deserve to know that the goods and services they buy are what they say they are.”

Other sites included the D.C. Farmers Market on Florida Avenue, NE, where nearly 12,000 counterfeit items were taken with a street value of almost $1.5 million.

Immigration and Customs Enforcement issued a news release summarizing the six-day operation, “Joint operations in 41 cities, Puerto Rico and Mexico seized tons of counterfeit holiday ornaments, DVDs, CDs, clothing, electronics, cosmetics, phones and pharmaceuticals.”

Also, a joint release came from the Motion Picture Association of America and Recording Industry Association of America, “RIAA, MPAA Join Federal Agencies to Announce Nationwide Holiday Enforcement Action Against Counterfeiting.”

• Frank Vargo, NAM’s vice president for international economic affairs, testified last Wednesday before the House Committee on Oversight and Government Reform at its Subcommittee on Government Management, Organization, and Procurement’s hearing, “Protecting Intellectual Property Rights In A Global Economy.” His conclusion:

If we are to allow counterfeiting and piracy to run unabated, the risks to the American economy are obviously very serious. However, if we are to invest in protecting our nation’s consumers, workers and businesses from IP thieves, the rewards will come back to us six-fold. According to a report commissioned by the Coalition Against Counterfeiting and Piracy (CACP) – which the NAM helped found – investing in stopping counterfeiting is sound economic policy. Authored by Laura Tyson, former Chair of the National Economic Counsel, the report entitled “An Economic Analysis of the Proposed CACP Anti-Counterfeiting and Piracy Initiative” concluded that:

• For every dollar invested, federal tax revenues would increase significantly with an intermediate range of $4.9 to $5.7;
• Each dollar would increase U.S. economic output approximately between $64 and $75;
• The increase in output would result in the creation of between 174,000 and 348,000 new jobs during the third year of the program; and
• State and local governments can expect to receive incremental revenues between $1.25 billion and $1.50 billion, in present value terms over three years.

The Report also concludes that by aggressively going after counterfeiters and pirates as laid out by the PRO-IP Act and recommendations included in S. 1631, Congress’ efforts could reasonably be expected to reduce losses attributable to piracy and counterfeiting somewhere between five and ten percent over three years.

S. 1631 is Customs Facilitation and Trade Enforcement Reauthorization Act.

The National Association of Manufacturers has signed a letter from a coalition of original equipment manufacturers (OEMs), intellectual property organizations and other business groups asking U.S. Sens. Patrick Leahy, D-Vt., and Jeff Sessions, R-Ala., chairman and ranking member of the U.S. Senate Committee on the Judiciary, respectively, to oppose S. 1368, the Access to Repair Parts Act.

The groups also oppose H.R. 3059, the House companion. The letter states:

Manufacturers of unlicensed automobile parts have to meet only one basic threshold, to produce a copy that looks similar to an original part. Those who produce such parts incur no costs attributable to original design, research and development and most importantly, product safety testing. Accordingly, the manufacturer of the original product for whom such unlicensed replacement parts are made does not know how these parts will perform and how their use will impact the quality and integrity of the original product. Automotive collision repairers are very concerned about the quality of replacement crash parts. Permitting this intellectual property infringement also exposes consumers to significant safety, performance or durability risks.

A copy of the letter is here.

The Automotive Service Association has more details on the legislation here and here.

President Obama gave a speech in Tokyo Saturday announcing the Administration’s plans to engage with the Trans Pacific Partnership countries to shape a regional agreement, an engagement that could produce real benefits for U.S. exporters and manufacturers. The Asia-Pacific region is the world’s fastest growing both in terms of trade and in the number of trade agreements being negotiated.  The NAM has long called for a trans-pacific trade agreement that would open up the region to U.S. exports.  America’s manufacturers cannot afford to be on the outside of an Asian trade wall looking in.

Reacting to the President in a statement, U.S. Trade Representative Ron Kirk made the case that a high-standard regional trade agreement under the Trans Pacific Partnership could help generate American jobs and economic prosperity.  (USTR fact sheet.) Exports will be the driver of U.S. economic recovery, but only if they have open access to world markets.

Strong U.S. leadership will be necessary to achieve a regional Pacific agreement that includes the highest standards already incorporated in U.S. bilateral agreements.  The United States currently has bilateral agreements with four of the seven Trans Pacific partners – Australia, Chile, Peru, and Singapore. (The others are New Zealand, Brunei, and Vietnam.) None of the gains for American manufacturers that were negotiated in those agreements should be abridged in any way, including intellectual property and investment protections and market access commitments. 

We were also pleased to see President Obama’s urging other nations to join the United States in demanding an ambitious and balanced Doha agreement, “not any agreement, but an agreement that will open up markets and increase exports around the world.”  This is the only road to success for the Doha Round.

The President’s focus on trade and trade agreements highlighted in his Asian trip should not, however, push other trade priorities off the table. On the contrary, they should produce a concerted effort to resolve any last issues with the three pending trade agreements – Colombia, Korea, and Panama – so these can be sent to Congress for approval.

News coverage…

• Associated Press, “APEC urges new growth model, climate pact progress“
• Reuters, “Obama pledges greater US engagement in Asia“
• Radio New Zealand, “Free trade deal may be in place in two years, says PM“

Frank Vargo is Vice President, International Economic Affairs, National Association of Manufacturers

The House Oversight and Government Reform Committee has postponed a subcommittee hearing scheduled Wednesday, “Protecting Intellectual Property Rights in a Global Economy: Current Trends and Future Challenges.” NAM Executive Vice President Jay Timmons was scheduled to testify.

No new date set yet.

An addition to the Dispatch from the Front’s weekly schedule, a joint release from USDA, Commerce and the U.S. Trade Representative’s office, “Commerce Secretary Gary Locke and USTR Ronald Kirk Convene 20th Session of U.S.-China Joint Commission on Commerce and Trade in Hangzhou, China“:

WASHINGTON, October 21, 2009 — U.S. Secretary of Commerce Gary Locke and U.S. Trade Representative Ron Kirk will serve as co-chairs with Chinese Vice Premier Wang Qishan of the 20th session of the U.S.-China Joint Commission on Commerce and Trade (JCCT) held on Wednesday, October 28th and Thursday, October 29th in Hangzhou, China. U.S. Secretary of Agriculture Tom Vilsack will join this effort to address key U.S. trade and economic priorities. The 2009 JCCT marks the first time three Obama cabinet officials have traveled together to a key economic summit abroad.

The JCCT, established in 1983, is the main forum for addressing bilateral trade matters and promoting commercial opportunities between the United States and China.

“The first JCCT under the Obama Administration provides an important opportunity to engage China on trade concerns impacting American companies,” Secretary Locke said. “It is critical that we make progress on several priority issues, including intellectual property rights protection and enforcement, clean energy, medical devices and pharmaceuticals.”

More …

• USTR blog post, “Weekly Trade Focus: Joint Commission on Commerce and Trade“
• Dow Jones, “US To Press China On Intellectual Property Rights, Trade“
• Bloomberg, “China Talks Showing ‘Good Progress’ Before Meeting, Locke Says“
• AFP, “US seeks progress in high level trade talks with China”
• People’s Daily Online, “Protectionism may be key component to trade summit“

The World Trade Organization (WTO) sided with the United States Wednesday and slapped China for its restrictions on selling copyrighted U.S. films, music, books and other media. (WTO report.) China has been forcing companies to route imports through Chinese state-owned or controlled enterprises, while restricting reading material and music. The U.S. argues that this opens the door to the vast amount of Chinese counterfeiting in these media. And we’re talking about real money for U.S. producers –$3.6 billion lost sales in China of legitimate media in just 2008 alone.

A very important case filed by the U.S. and the European Union in June of this year against China for restricting exports of raw materials is still in the early stages. The U.S. is concerned that the Chinese export restraints hurt U.S. “downstream producers” of goods by limiting access and raising world market prices for the raw materials, while lowering the prices that domestic Chinese producers have to pay. The case covers nine materials: bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus and zinc. (USTR news release.)

The National Association of Manufacturers has long supported the use of WTO cases as a legitimate trade enforcement tool after negotiations fail. The seven cases brought against China since it joined the WTO in 2001 have produced results in areas like semiconductors, foreign financial information suppliers, packaging paper and auto parts. Although it is always preferable to avoid a litigation process, the use of WTO cases doesn’t mean the U.S.-China trade relationship is crumbling - it’s the way trade disputes between mature trading partners are settled – without a costly trade war.

More …

• USTR news release, “World Trade Organization Report Upholds U.S. Trade Claims Against China“
• Motion Picture Association of America news release, “MPAA’s Dan Glickman Hails WTO Decision“
• National Journal, “WTO Rules Against China On Copyrights“
• WSJ Law Blog, “WTO Ruling a Possible Boon to U.S. Copyright Holders“
• Agence France Presse, “China may appeal WTO order on films, music“

(Pat Mears is the NAM’s Director for International Commercial Affairs)

A late entry today, very late. Consider it our “Midnight Follies,” rushed through at the last minute as favor to big business John Peel’s fans.

It’s the 30th anniversary of the great, great punk-era song, Teenage Kicks by the Undertones.

Which isn’t really that funny or follies-related. But the version by the Ukulele Orchestra of Great Britain is.

Ah, you think, how middle aged self-indulgent. And the Buzzcocks had more staying power.

But there’s an intellectual property rights angle, of great interest to manufacturers. Feargal Sharkey, the singer who defined the Undertones sound, is now a music executive in the U.K. And he’s in the news.

Former Undertones frontman Feargal Sharkey will launch a new organisation later today  (October 27th) aimed safeguarding the future of the music industry.The UK Music body will call on the government to address the problem of illegal file sharing, as well as extend the copyright term afforded to artists, which is currently limited to fifty years.

The organisation represents a wide range of music bodies, including, BPI, the British Academy of Composers and Songwriters, and the Music Managers Forum.

“The thing we all realised is that we all agree with each other 95% of the time. It’s looking at where the industry is going to be three, four or five years from now,” Sharkey told the Guardian newspaper.

Wanna hold ya, wanna hold ya, wanna hold ya tight, get teenage-kicks and property rights! All right!

P.S. Wow. Everybody covers Teenage Kicks. A copyright violation?

</Start Rant>

Amongst the many erudite thoughts to drip from the quill of Thomas Jefferson, only one has ever gotten me hot under the collar:

He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.

Well, that’s all fine and dandy if your estates keep you rolling in tobacco so you can crank out political philosophy all day (lifted, by the way, from the likes of Locke, Rousseau and Machiavelli), but if you’re the taper-maker, you’re going to be a little miffed if someone’s knocking off your products to the point that you’ve got to lay off your workers and people are suing you blind because fugazi tapers with your logos are burning down houses.

</End Rant>

This Monday, the White House signed into law the PRO-IP Act, which will go a long way in helping to curb the problem of counterfeit goods.  Unfortunately, what most folks who watch this area of the law see is a piece of legislation to loathe as much as they loathe the music industry, as something that might impede them from enjoying the media they want, regardless of whether they paid for it or not.  So whineth the pundits at Portfolio.com:

But how much will the new law, the PRO-IP Act, actually do to combat digital piracy? Is it the silver bullet the music business needs to save an industry that is shrinking by hundreds of millions of dollars per year? My answers: Not much, and no.

Nay, nay, dear heart: lift your angry eyes from your iPod and see that this legislation is much bigger than Britney.

This legislation isn’t to save the record industry; it’s to make sure the government is doing it’s job to protect consumers.  It’s to make sure that the replacement parts in your car are legit, and don’t end up causing horrific accidents.  It’s to make sure that the medications you take are legit, and don’t end up killing you.  Most importantly, it’s about saving American jobs (I put concern of country above my own personal well-being, but that’s just me).

Luckily, there are folks out there that get it.  Stephen Koff of the Cleveland Plain Dealer reminds us of the stakes:

Ohio companies including Gorman-Rupp Co., a Mansfield pump manufacturer, and Dana Corp., a Toledo maker of auto parts, could benefit if the bill stops foreign companies from stealing their engineering, packaging and sales literature.

So could Ford, Bendix and smaller companies such as Will-Burt Co. of Orville, whose sales of a lighting system in China declined from $1 million in 2001 to less than $250,000 in 2004 after a Chinese company that was supposed to market Will-Burt products there started selling Will-Burt knockoffs instead.

The bill, pushed by Ohio Republican Sen. George Voinovich for several years, grew out of complaints by businesses that found themselves competing with illegal, foreign-made products that looked just like their own — down to the UPC codes in some cases.

Well, we’re thankful for heroes like Sen. George Voinovich who are looking out for American manufacturers and workers, as well as Sens. Leahy, Specter and Bayh, who also were the original champions of the legislation.  They understand that it’s about protecting the small and medium businesses that keep our families employed and our economy going - despite the best efforts of mortgage speculators.

As for Mr. Jefferson?  Ironically enough, he was our first pirate hunter, going after the Barbary Pirates.*  So I guess he did know the value of property and commerce.

* Being a Trekkie geek from Boston, it titilates me to no end that he sent both the USS Constitution and the USS Enterprise to throw a Bean-Town beat-down on the Pasha of Tripoli.

The White House has just reported that President Bush today signed the PRO-IP bill, S. 3325, which improves the federal coordination of enforcement of intellectual property protection laws. The Administration had some objections to the legislation, so the signing is good news, indeed.

The NAM had made this a “key vote” issue in Congress. From our letter to the House:

Intellectual property (IP) is the cornerstone of our nation’s economy - U.S. IP is valued at between $5 trillion and $5.5 trillion, equivalent to approximately 45 percent of U.S. GDP. Unfortunately, IP theft in the U.S is responsible for more than $250 billion a year in lost sales and the loss of a significant number of high-paying manufacturing jobs. As such, it is a vital matter for manufacturers, as well as for U.S. workers and the government.

Moreover, the effect of piracy and counterfeiting on consumers poses a far greater concern. Counterfeiting often poses serious health and safety risks to the general public through sub-standard pirated products, including automobile parts, airplane parts, food, medical devices, electrical supplies and pharmaceuticals, to name but a few.

As a founding member of the Coalition Against Counterfeiting and Piracy, the NAM has worked closely with Congress, policymakers and stakeholders in all sectors affected by IP theft to confront this serious challenge. NAM member companies believe strongly that by improving the coordination of federal government IP enforcement resources, as well as expanding authorities and improving enforcement practices at the international, federal, state and local levels, the PRO-IP Act will strengthen our manufacturing economy.
 

UPDATE (5:10 p.m.): The White House has just e-mailed out a fact sheet highlight the Administration’s support for innovation and its efforts to combat global IP piracy and counterfeiting. It’s 5:10 p.m. on a federal holiday. Sigh.

Anyway, here it is …