Department of Justice Seal

Prepared Remarks of Attorney General Alberto R. Gonzales
to Members of the Brazilian Business Community on
International Intellectual Property Rights

Rio de Janeiro, Brazil
February 9, 2007

Good afternoon.

I am glad to be here with you in Rio de Janeiro and to have had the opportunity yesterday and today to speak with my Brazilian colleagues about the many issues that connect our two countries. This is my first trip to this unique city, and in my short time here I have begun to understand how it earned its reputation for spectacular beauty.

Over the past two days I have had fruitful and candid discussions with government officials and civic leaders, and I am pleased that we share a common understanding of so many issues of importance to the people of Brazil and the United States.

One of those issues, the one I'm here to talk about today, is the protection of intellectual property rights.

As everyone here today knows, IP protection is undeniably an international concern. It requires cooperation and 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.

I want to talk a little today about the nature of the issue as I see it; what we've seen working, in both Brazil and the United States; and what I think we can do next, together. We are at a critical time in the history of international IP rights enforcement. Global changes, both economic and technological, have created unprecedented challenges to this task. It is therefore paramount that we continue to work together to protect intellectual property. IP helps drive our economies, and it has too great an effect on the health and safety of our citizens to be ignored.

People around the world enjoy the fruits of the hard work of our creative communities -- be it in movies, music, business software, computer games, clothing, automobile parts, or even medicines. Modern technology gives IP 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 peddle pirated and counterfeit products around the world. Resourceful criminals can use the Internet to violate both trademark and copyright laws by creating and selling products, such as software, that appear to be legitimate, but are not.

And criminal organizations benefiting from IP theft have become more sophisticated and more organized. They hide in the economic shadows to exploit any weakness in our enforcement efforts, and then use the proceeds of their theft to finance other criminal enterprises.

While crimes like IP theft may appear harmless to some, the reality can be terrible. Criminals who manufacture and sell counterfeit products can pose a substantial risk to the health and safety of our citizens. Imagine a heart patient undergoing emergency surgery at a hospital that unknowingly purchased substandard counterfeit surgical equipment. Or a truck driver who buys counterfeit brake pads that jeopardize his ability to avoid an accident. Or worse yet, an aircraft mechanic who unknowingly buys fake parts to repair a jet engine.

Our concern is more than hypothetical. In one case last September, the Department of Justice announced the indictment of eleven individuals and an Atlanta-based company on charges related to a scheme to sell fake drugs over the internet. According to the indictment, the defendants in that case marketed approximately 24 different drugs through spam email advertisements. While customers expected to get safe and authentic generic versions of these vital drugs, they instead got adulterated fakes that had been crudely made in an unsanitary house in Belize.

We have seen the real and tangible consequences of IP theft as it steals business from honest merchants, defrauds innocent customers, and undermines 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 Brazil.

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 laws, increase resources devoted to IP law enforcement, and work to increase the number of joint U.S.-Brazil operations.

I know that everyone here understands the importance of these efforts and I would like to commend the Brazilian government, and especially the CNCP, for their hard work and dedication in combating intellectual property crime. Improving enforcement, raising awareness, and changing public perception and behaviors all take time and perseverance. There is much work to be done, but I am heartened by the progress that has been made so far.

Seizures of infringing copyrighted materials at the borders have been high, public seminars on anti-piracy awareness are numerous, training continues, and there is growing cooperation between Brazilian law enforcement authorities at the federal and state levels. I am especially glad to see a substantial amount of cooperation between the copyright private sectors and the CNCP. All of these are signs of a government that takes IP law enforcement seriously.

And we are not without examples of joint enforcement work between the United States and Brazil. Recent cooperative efforts highlight how, working together, we can dismantle criminal organizations engaged in intellectual property crime on both American continents.

During one operation, the FBI discovered that a Brazilian citizen was illegally copying and posting to the internet the software of a small U.S. company. Utilizing Brazilian law enforcement contacts developed during bilateral IP consultations, the Department of Justice and FBI were able to supply detailed information that resulted in a raid, search, and arrest of the Brazilian citizen.

This type of joint law enforcement operation helps send a clear message that neither Brazil nor the United States will tolerate intellectual property crime anywhere in the world.

In the United States, we have been working hard on this issue as well. We have long recognized the importance of preserving IP rights and we have made their protection a law enforcement priority. We are waging an aggressive and successful campaign against intellectual property crime on multiple fronts.

As technology has increased the stakes, we have responded, establishing a Task Force on Intellectual Property in 2004. This Task Force includes high-level officials and is charged with reviewing how the Department enforces and protects IP rights. As a result of the Task Force's work, we have increased our capacity to address IP theft and preserve the rights of intellectual property owners in a number of ways.

We have increased the number of prosecutors across the country specially trained to handle IP crimes. Last year this resulted in a 98 percent increase in the number of defendants prosecuted for intellectual property offenses. And we've worked with our Congress to close loopholes in our IP laws and strengthen penalties for offenders.

In one important case last August, we disrupted a Florida operation running a software piracy website. Illegal sales through the site resulted in losses to the copyright owners totaling nearly $20 million. After pleading guilty in federal court, the leader of the scheme was sentenced to six years in prison and was ordered to pay restitution of more than $4 million. In addition, the operation forfeited a staggering variety of assets purchased with the profits of its crime, including three airplanes, a helicopter, a Lamborghini and other sports cars, a boat, and an ambulance.

The stiff sentence in this case shows modern-day pirates that we take these crimes seriously. We have organized victims conferences to educate the public on ways to seek help from the government; and we're targeting Americaís youth to make sure they understand that IP theft is harmful and illegal.

But strong domestic enforcement and education is not enough to effectively combat this growing global threat. It is imperative that countries work together to ensure strong enforcement worldwide. There can be no safe havens for intellectual property criminals.

To that end, our Criminal Division has worked with prosecutors throughout the United States and internationally to protect the rights of IP owners and to enforce the law. In fact, last year alone Department of Justice prosecutors provided training and technical assistance on IP investigations and prosecutions to over 3,300 foreign prosecutors, investigators, and judges in 107 countries. And we're training more every day.

In addition, over the past two years, the Department of Justice has successfully led the two largest international enforcement actions ever undertaken against online software piracy. Operation FastLink and Operation Site Down together involved more than 16 countries across five continents, including Brazil.

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. More than 80 defendants in the U.S. have been convicted of criminal copyright infringement crimes as a result of these two operations, and our efforts are continuing. The list of countries participating in these efforts is long, and we are committed to building on these successes and achieving even greater global cooperation in the future. In the increasingly connected global economy, nothing short of this type of coordinated international enforcement effort will suffice.

Developing transnational cases requires a network of law enforcement contacts on the ground. And we have seen a tremendous benefit from placing a highly trained IP prosecutor in a partner country to work with and assist foreign law enforcement counterparts in the complex and unique aspects related to protecting intellectual property.

In building international teams to fight this battle, we have deployed an experienced federal prosecutor to Southeast Asia to serve as an Intellectual Property Law Enforcement Coordinator, or IPLEC, and we will be sending another prosecutor to Eastern Europe in the coming months.

We are now also exploring ways to put another coordinator in this region in the near future to focus on IP enforcement activities throughout South America. We think that having this kind of experienced prosecutor in the region would be a great asset...as a resource for both of our governments and as a vital liaison as we continue our successful cooperative enforcement efforts.

And yesterday I pledged to work with my counterparts here in Brazil to continue their leadership efforts in focusing on the tri-border region. 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: The U.S. is devoting more of its law enforcement resources -- including Justice Department prosecutors and investigators -- than ever before to the enforcement of IP rights.

During this trip, Iíve encouraged my law enforcement colleagues in Brazil to do the same.

Individually, both the United States and Brazil must have strong domestic enforcement regimes, and I support and applaud Brazilís efforts to increase its capacity in this area. But we cannot, and must not, work alone. Our law enforcement agencies must work together to develop and prosecute international piracy cases.

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 marketplace.

By building on our successful cooperative efforts, we can turn the tide in our battle against intellectual property crime and the criminal organizations that profit from it. And we can help to ensure a just and prosperous future for both Brazil and the United States.

Thank you, again, for the opportunity to be with you today.

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