Good morning, Ladies and Gentlemen.
This is my second trip to China, and both have come as part of an official visit… first when I was General Counsel to then Texas Governor George Bush and now as Attorney General. These trips - I might add -are always too short and rarely allow for the time to fully explore. I’m reminded of Marco Polo’s famous declaration in response to those skeptical of his fantastical stories from the East: “I have only told the half of what I saw.”
I feel as if the reverse is true during these official visits: “I have only seen the half of what I’m told.” The richness of the culture, the beauty of the countryside, the vast natural treasures… As you can imagine, I’d very much like to return someday as a tourist to better examine China’s unique heritage.
Given that Polo’s tales from the Silk Road made him a best-selling author, I think you could also argue that he was just protecting his intellectual property with his famous epitaph. It was more than 700 years ago that Marco Polo traveled here to Beijing, but his experiences can still inform our joint efforts today.
While it might be a stretch - okay, it definitely is a stretch - to connect Marco Polo to intellectual property rights… his service in the Court of the Great Khan is a good model for a modern partnership between China and the United States - a partnership that bridges cultural and geographic distances to achieve common goals for our citizens and our economies. And I am here to say that this partnership must include a mutual commitment to enforce the intellectual property rights that form the foundation of our dynamic global economy. We are at a critical time in the history of international intellectual property rights enforcement. Many global developments, both economic and technological, have created unprecedented challenges to this task. As you know, the intellectual capital of the United States and China are among our respective countries’ greatest resources - and most valuable assets - and it has also become a significant source of trade between our two nations.
In addition, people around the world enjoy the fruits of the hard work of our creative communities - be it movies, music, business software, computer games, clothing, automobile parts, or even pharmaceutical products. Today, modern technology gives intellectual property owners unprecedented opportunities to distribute their works to a worldwide audience.
But as demand for these products increases, criminals will attempt to profit from the hard work and creativity of others. And the same technology that allows for legitimate widespread distribution to consumers has also made it relatively easy and inexpensive to illegally peddle pirated and counterfeit products around the world. For instance, resourceful criminals can use the Internet to violate both trademark and copyright laws simultaneously by creating and selling products, such as software, that appear legitimate to the average consumer, but are not.
The fact of the matter is that intellectual property crimes have become too common. Counterfeit and pirated goods are too 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, nothing could be further from the truth.
Criminals who manufacture and sell fake merchandise steal business from honest merchants, defraud innocent customers, illegally profit from the hard work of employees and entrepreneurs, and undermine our values of competition and creativity. This underground economy costs legitimate businesses billions of dollars every year - and causes significant harm to the economies of both the United States and China.
What can our respective law enforcement authorities do about this problem? In my view, our work must proceed on several fronts. We must strengthen our global enforcement efforts, ensure strong intellectual property rights laws, increase law enforcement resources devoted to intellectual property enforcement, and work to increase the number of joint U.S.-China operations.
Intellectual property crime is now undeniably global in nature. The digital age has created a borderless world for large criminal conspiracies - so our law enforcement efforts must be global and borderless as well. Every member of the global economy has a responsibility to keep counterfeit goods out of the global market.
One of the fastest growing challenges is Internet-based, commercial-scale IP crime. As FBI Assistant Director Louis Reigel stated during his visit to China last week, almost 40 percent of the 500 commercial piracy cases now under investigation by the FBI have ties to China. The range of pirated and counterfeit products originating here stretches across a wide range of industries, including counterfeit pharmaceuticals, cigarettes, handbags and clothing, and pirated digital works, such as movies, music, software, and computer games.
To combat this growing threat, law enforcement agencies from China and the United States must work together to develop and prosecute international piracy cases. Individually, we must both have strong domestic enforcement, and I support China’s efforts to increase its capacity in this area. But we cannot work alone. Yesterday, I personally urged my counterparts here in China to continue China’s growing cooperation with U.S. law enforcement in combating intellectual property crime.
In the United States, we have made the protection of intellectual property rights a law enforcement priority, and we are waging an aggressive and successful campaign against intellectual property crime on multiple fronts.
The Department of Justice has been an integral part of President Bush’s Strategy Targeting Organized Piracy, or STOP initiative. This comprehensive initiative seeks to involve all stakeholders - government agencies, small businesses, international partners, law enforcement officials, and other independent organizations - in a coordinated and aggressive strategy to fight the global problem of counterfeiting and piracy.
In addition to the significant role the Justice Department has played in the international outreach and educational efforts conducted through the STOP initiative, last week the Bush Administration sent to Congress legislative proposals developed by the Department of Justice to help strengthen and update U.S. intellectual property statutes.
This legislative package would strengthen penalties for repeat copyright criminals, expand criminal intellectual property protection, and add critical investigative tools for both criminal and civil enforcement. Those who steal the hard work and innovation of honest entrepreneurs and workers should not be allowed to enjoy the profits of such activity. This legislation would also make clear that exporting infringing goods is the same as importing them. . . and should be punished accordingly.
Our policy-making must advance along with modern technologies if we are to keep pace with this evolving area of criminal activity. The proposed legislation sent to Congress last week should help ensure that U.S. laws are in step with the changing nature of intellectual property crimes.
The Justice Department also 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 improving intellectual property enforcement efforts - and we continue our work to implement those initiatives.
Through this Task Force, we’ve designed programs focused on awareness and prevention, and devoted considerable prosecutorial resources to enhance our ability to aggressively protect the intellectual property rights of our citizens and industries. Foremost, we recognize our responsibility to 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 the global economy.
In the United States, our message to criminals who seek to profit from the intellectual property of honest and hard-working citizens and businesses is clear: There is nothing fake about our commitment to prosecute counterfeiters and pirates. The United States is devoting more of its law enforcement resources - including Justice Department prosecutors and investigators - than ever before toward the enforcement of intellectual property rights. And during this trip, I’ve encouraged my law enforcement colleagues in China to do the same. This increase in law enforcement manpower is necessary to prevent commercial scale IP crime and to dismantle the organized crime syndicates that commit such crimes around the world. In the past 18 months, the Department of Justice 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 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 cooperating in these efforts is long, and the Department is committed to building on these successes and achieving even greater global participation in the future. For instance, we hope to include Chinese enforcement authorities in these widespread international operations in the future. In the increasingly connected global economy, nothing short of this type of a global enforcement effort will suffice.
However, we are not without examples of joint enforcement work between the United States and China. Recent cooperative efforts highlight how, working together, we can dismantle criminal organizations engaged in intellectual property crime on both sides of the Pacific.
In the first-ever joint Sino-American law enforcement operation targeting intellectual property crime, Chinese authorities last year arrested and convicted an American ringleader and two Chinese associates involved in an international criminal ring responsible for pirated DVDs in more than 20 countries. Chinese authorities successfully seized hundreds of thousands of counterfeit DVDs, and located and destroyed three warehouses used to store the pirated DVDs for distribution worldwide.
That same criminal ringleader now has been extradited to the United States and, last month, was charged with criminal copyright and trademark infringement, illegally importing infringing goods, and money laundering. We are seeking forfeiture of more than one million dollars in profits he made as a result of this scheme, and the sixteen counts with which he has been charged carry maximum sentences ranging from five to twenty years each.
More recently, in another joint investigation, Chinese and American agents broke up a criminal ring operating in the United States and China that was manufacturing and distributing counterfeit and misbranded pharmaceutical drugs using the Internet. Two months ago, U.S. prosecutors indicted and arrested one American for importing and distributing counterfeit goods, and Chinese authorities arrested 11 Chinese nationals who were involved in the manufacture of the counterfeit drugs. Chinese authorities also shut down five manufacturing facilities in Tianjin and in the Henan province and seized hundreds of thousands of fake tablets and hundreds of kilograms of raw materials used to manufacture counterfeit drugs.
Neither of these successful operations would have been possible without the cooperation and hard work of investigators and prosecutors in both the United States and in China. These types of joint law enforcement operations help send a clear message that neither China nor the United States will tolerate intellectual property crime anywhere in the world.
International borders cannot stop our vigorous pursuit and prosecution of those who would steal the intellectual property produced by creative and hard-working people in our two countries. By building on these successful cooperative efforts, we can turn the tide in our battle against intellectual property crime. And we can ensure a just and prosperous future for both China and the United States.
Thank you, again, for the opportunity to be with you today.