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.

On Friday, President Obama nominated Victoria A. Espinel to serve as U.S. Intellectual Property Enforcement Coordinator, Office of Management and Budget. From manufacturers’ perspective, protection of intellectual property is a priority in trade and international law enforcement. The White House summary:

Victoria A. Espinel is the founder and President of Bridging the Innovation Divide, a not-for-profit foundation focused on addressing the “innovation divide” and empowering all Americans to obtain the full benefit of their creativity and ingenuity. From 2007-2009, Ms. Espinel was a Visiting Assistant Professor at the George Mason University School of Law. Her areas of teaching and research were intellectual property and international trade. She has acted as advisor on intellectual property issues to the staff of the Senate Judiciary Committee, Senate Finance Committee, House Judiciary Committee and House Ways and Means Committee. She also served as an advisor to Romulus Global Issues Management and is a member of the Brain Trust of the Global Innovation Forum. In 2005, Ms. Espinel was asked to serve as the first ever Assistant United States Trade Representative for Intellectual Property and Innovation at the Office of the U.S. Trade Representative, serving as the chief U.S. trade negotiator for intellectual property and innovation. She testified on numerous occasions before the House Judiciary Committee and the Senate Committee on Homeland Security and Governmental Affairs. Ms. Espinel also served as Deputy Assistant USTR for Intellectual Property and as Associate General Counsel at USTR. Before joining USTR, Ms. Espinel was with the law firms of Covington & Burling in London and Washington, D.C., and Sidley, Austin, Brown & Wood in New York. She holds an LLM from the London School of Economics, a JD from Georgetown University Law School, and a BS in Foreign Service from Georgetown University’s School of Foreign Service.

The U.S. Government Accountability Office on Monday released a report assessing the impact of the U.S. free trade agreements that were negotiated and went into effect with Singapore, Chile, Jordan and Morocco, “International Trade: Four Free Trade Agreements GAO Reviewed Have Resulted in Commercial Benefits, but Challenges on Labor and Environment Remain.”

While varying in details, the FTAs have all eliminated import taxes, lowered obstacles to U.S. services such as banking, increased protection of U.S. intellectual property rights abroad, and strengthened rules to ensure government fairness and transparency. Overall merchandise trade between the United States and partner countries has substantially grown, with increases ranging from 42 percent to 259 percent. Services trade, foreign direct investment, and U.S. affiliate sales in the largest partners also rose.

The U.S. trade agreements with Panama, Colombia and South Korea will also eliminate import taxes, lower obstacles to U.S. services, increase protection for U.S. intellectual property rights abroad and strengthen rules to ensure government fairness and transparency. History, in the form of a GAO report, tells us those changes bring substantial economic benefits.

Oh, but challenges remain!

Challenges always remain. That’s their nature. Members of Congress who always point to remaining challenges do so to support continued inaction. And as the GAO study proves, inaction is bad for the United States. FTAs have accomplished what they were meant to accomplish: improved access for U.S. products, more exports and economic growth for the United States.

The United States is in a recession, free trade agreements stimulate economic growth and jobs, and yet Congress refuses to act on the Panama, Colombia and South Korea. Challenges remain, but here’s one that Congress can speedily overcome: Enact the agreements.

Warning: Clip Contains Profanity, Irony

Rap Rock/Southern Rock/Country Rock/Nu Metal aficionados will appreciate the Detroit Cowboy’s special attention to the moral health of American kids.  Intellectual property holders will cherish his satirical take on the crisis of counterfeiting and piracy afflicting the nation, if not his colorful language.

UPDATE:  Humorless software execs, angry fashion designers, seen headed towards Michigan.  Check back often for breaking news.

Following on the Institute for Policy Innovation’s homage to “Talk Like a Pirate Day” and their timely press release on the protection of intellectual property rights, is there not a better day than today to blast away at the scourge of counterfeiting and piracy?

American manufacturers have been taking a hammering due to piracy, to the tune of over $250 billion a year in lost revenues and an estimated loss of up to 750,000 jobs so far.  The House jumped to the rescue, passing the PRO-IP Act by a vote of 410-11, and now the Senate is trying to do the same.  Note the operative word, “trying.”

The “Enforcement of Intellectual Property Rights Act of 2008,” (S. 3325) will go a long way to help shore up IP rights of manufacturers.  But it’s not just about manufacturers, it’s about workers and consumers.  Oh, and let’s not forget the economy, either.  Unfortunately, the Senate IP bill is hitting some snags on the GOP side of the aisle, even though this is truly a bi-partisan bill.  And that’s the sad part, as this is something that everyone agrees needs to be fixed.

The Senate IP bill is definitely the last, best chance this year to help aforementioned workers, consumers and economy.  If we don’t get it done in the next week, the tides won’t be right for this for probably another two years, what with the new Congress and Administration focusing on bigger fish to fry. And that’s going to hurt a lot of folks.

Specifically, workers are going to be hurt because counterfeit junk displaces the quality products that US workers make (and are often unwittingly bought by consumers).  A study by economics firm LECG figured that cutting piracy by even 5-10% would create at least 174,000 new tax-paying jobs a year, after 3 years.  In case you didn’t know, pirates don’t pay taxes.  I guess that’s the allure of being a brigand, although I don’t know if scurvy factors in on the downside.

Consumers are going to be hurt because a critical check on counterfeit auto parts, airplane parts, food, medical devices, electrical supplies and pharmaceuticals will be missing.  And don’t forget the economy.  LECG also estimates that cutting piracy by 10% would increase the overall US economic output by at least $27 billion, as domestic production would reclaim the market from pirate imports.

You’d think that in the face of all the harm that piracy has done to the US economy, American workers and consumers, Congress would try to find a way around the minor roadblocks and, paraphrasing H.L. Mencken, “spit on their hands, haul up the black flag and start slitting throats.”

The Senate Judiciary Committee held a hearing today on the consumer benefits of protecting intellectual property. Two NAM-member companies were represented by witnesses, who offered testimony:

From Mr. Thurnau’s testimony:

Counterfeit parts and components for cars, trucks, buses and commercial vehicles pose a critical problem to the American economy and the supplier industry because of the wide range of counterfeit products manufactured and trafficked worldwide. Counterfeit goods cost motor vehicle suppliers at least $3 billion in the United States and $12 billion globally in lost sales. These losses correlate to at least 250,000 fewer motor vehicle supplier manufacturing jobs nationwide. Please note that these are conservative numbers based on a 1997 Federal Trade Commission study.

About 80 percent of all pirated goods seized at U.S. borders originate in China. And while it is clear in our industry that more pirated parts come from China than any other nation, we do face significant challenges from Russia, India and many other nations. The temptation might be to criticize the Chinese government for lack of intellectual property enforcement but our experience would say that is inaccurate and counterproductive. The counterfeiters that we deal with are for the most part rogue operators, criminals. The Chinese government pursues those criminals when our company presents evidence of our trademarks being violated. Enforcement issues are often caused by a lack of resources, particularly at the provincial and city level.

Wang Qishan, vice premier of the State Council of the People’s Republic of China, has an op-ed in today’s Wall Street Journal, “No More Chinese Knock-Offs,” detailing the government’s efforts to protect intellectual property rights. There’s a lot of work to do, that’s for sure.