Department of Justice Seal

Prepared Remarks of Attorney General Alberto R. Gonzales at the
Technet Intellectual Property Event

Seattle, Washington
June 27, 2007

Good morning.

Today's global economy is based on technologies that were inconceivable a generation ago. There has been a sea change in how people and nations interact and how business gets done today. And some of you in this room, and the companies you represent, have contributed to that as much as anyone in the world.

But just as that technological revolution has made our lives different, and in so many ways better, it has also created tremendous new opportunities for criminals who mean us harm. Whether they're the predators who stalk our children from the shadows of the internet, or terrorists who use the web to further their plots, or identity thieves looking to empty your bank account – every technology or product we create can be misused.

So I appreciate the opportunity to be here today, and I want to talk about two issues in particular: intellectual property and cyber crime.

Now, I don't have to tell anyone in this audience how important these issues are to our nation and to preserving the safety and security of our citizens. At a dinner in Washington the other night, I had the opportunity to sit next to the great movie director George Lucas, and he stressed to me repeatedly how important it is to the creative community that we aggressively protect the rights of intellectual property owners.

I couldn't agree more, and I hope it is clear by now that we at the Justice Department are committed more than ever before to aggressively enforcing the law in this area and to advocating for stronger legal protections from Congress for American entrepreneurs and their products.

Intellectual Property rights are not just about fake handbags or kids downloading songs for free off the internet. These rights are integral to our economy, and they are too important to 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, aircraft and 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 also makes it relatively easy and inexpensive to peddle pirated and counterfeit products around the world.

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

In response to this growing threat, the Department created an Intellectual Property Task Force. Thanks to the hard work of our task force members, we've had substantial increases in federal investigations and prosecutions of IP violations. We are dedicating more resources than ever before to the protection of U.S. intellectual property rights, with a special emphasis on prosecuting health and safety cases.

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 medications. Or an aircraft mechanic who unknowingly buys fake parts to repair a jet engine.

Our concern is more than hypothetical. Last September, the Department 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 on honest merchants, innocent customers, and what we most value: competition and creativity. This underground economy costs legitimate businesses billions of dollars every year, and causes significant harm to our economy.

Our response must move forward on several fronts. We must strengthen our global law enforcement efforts, ensure strong intellectual property laws, increase resources devoted to IP law enforcement, and work to increase the number of international operations we conduct jointly with other countries.

Last year, the Department committed to increasing the number of IP prosecutions and improving our international cooperation and outreach efforts. Through the dedicated efforts of U.S. Attorney's Offices, our Criminal Division, and law enforcement across the country, we accomplished those goals.

For example, in 2006, we convicted 57 percent more defendants for criminal copyright and trademark offenses than in 2005. Of those convictions, the number of defendants receiving prison terms of more than two years increased even more sharply – up 130 percent.

Increased enforcement and stiffer sentences send an important message to these counterfeiters and pirates that we take their crimes seriously, and we will punish their actions.

These are complicated cases, and we need a strong nationwide network to bring good cases and to win them. We now have 230 federal prosecutors around the country who have been specially trained to handle IP investigations.

In one important case we prosecuted here in Seattle, Scott Laney obtained large quantities of software from several manufacturers at steep discounts. He then resold them at close to retail prices with false labels, certificates, and other documents. In some cases these were academic editions sold as a regular product; in others, they were altered versions of server software with licenses that authorized more users than had originally been allowed.

In the end, consumers who thought they were getting a little bit of a bargain ended up with illegitimate products, with no customer support…and manufacturers lost as much as $20 million in sales.

Laney pleaded guilty and last November he was sentenced to five years in prison and ordered to pay more than $9 million in restitution.

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 America’s 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. 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 this partnership must include a mutual commitment to enforce the intellectual property rights that form the foundation of our dynamic global economy.

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, last Friday, following one of the first extraditions ever for an IP offense, Hew Raymond Griffiths of Australia was sentenced to 51 months in prison for his part in a notorious internet software piracy group known as DrinkOrDie.

In cases like this, we have worked with prosecutors throughout the United States and internationally to protect the rights of IP owners and to enforce the law. 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 order to further our international work, last year the Department placed the first-ever IP Law Enforcement Coordinator in Bangkok, Thailand. And later this year, we will be sending a second coordinator to Eastern Europe.

In the past few 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, 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.

That's why when I travel abroad and meet with my counterparts in other countries, I make sure to include IP crimes in the discussion. Just last month, at a meeting of G8 Justice and Home Affairs ministers in Germany, my counterparts and I adopted a set of principles to enhance international cooperation in fighting IP crime, and we'll continue this work over the coming year.

Throughout Central and South America, in Asia and in Europe, we're getting out the message that these are important issues that need to be taken seriously -- not just for our sake, but for the benefit of the world economy.

And more than ever before, the Department and our partners at all levels of government are working with rights holders and industry to improve the protection of IP. We are working with business groups like the U.S. Chamber of Commerce, as well as leaders of key industries such as software and biotech. You are among the victims of these crimes. You suffer the economic consequences; and we need your help and your expertise.

But in order for us to protect the intellectual property that is so important to our Nation, and to meet the global challenges of IP crime, our laws must be up to date.

Last month I sent to Congress new legislation that would provide stronger penalties for repeat offenders, and increase the maximum penalty for counterfeiting offenses if the defendant knowingly or recklessly causes serious bodily injury or death.

The bill would especially hit criminals in their wallets by strengthening restitution provisions, and making sure they forfeit all of their illicit profits as well as any property used to commit their crimes.

IP theft is not a technicality, and its victims are not just faceless corporations — it is stealing, and it affects us all. Those who seek to undermine this cornerstone of U.S. economic competitiveness believe that they are making easy money; that they are beyond the law. It is our responsibility and commitment to show them that they are wrong.

The Department of Justice recognizes that tech-savvy criminals pose a new and expanding threat to our communities. The size and speed of the internet are part of what makes fighting these crimes such a challenge. Online frauds can affect thousands of victims in less time than a traditional con artist could commit a single crime. And an attack on an important computer network could affect millions.

So beyond IP protection, I also want to talk a little today about what we're doing to fight cyber crime.

We created a Computer Hacking and Intellectual Property network and we now have more than 240 federal prosecutors involved around the country. These specially-trained attorneys work to address complex computer crime cases on a national scale.

Just this week, many of these attorneys are meeting in Florida with representatives of the computer security community for additional training on how to respond to cyber incidents.

The Department is also aggressively targeting new and emerging forms of cyber crime, such as "botnets." Through this kind of scheme, a criminal can infect a large number of computers without the victims' knowledge and take control of them. He creates a network of tens or hundreds of thousands of computers, which he can use to commit identity theft, or to illegally distribute spam, spyware, and other malicious code.

In a case brought last month by the U.S. Attorney's Office for the Western District of Washington, Robert Alan Soloway was indicted on charges related to using botnets to send tens of millions of spam emails. Investigators dubbed Soloway the "Spam King" because of the alleged scale of his operation.

In bringing cases like this one, we recognize that spam is not just an annoyance. Such hostile uses of the Internet are a very real threat, and the Department of Justice takes them very seriously.

We know that an effective strategy to combat these crimes must include cooperation between the private sector and law enforcement -- that's why we're working with industry leaders on the International Botnet Task Force. Originally convened by Microsoft in 2005, the task force has grown to include law enforcement agents from 35 countries along with 50 tech industry participants. This is an area where the private sector is a crucial partner in our efforts, since you are the most frequent victims of these crimes as well as the owners of so much of the critical infrastructure involved.

The digital age has created a borderless world for large criminal conspiracies -- so our law enforcement efforts must be coordinated and borderless as well. Every member of the global economy has a responsibility to keep counterfeit goods out of the marketplace. Everyone who benefits from the power of the internet has an interest in stopping cyber crime.

By building on our successful cooperative efforts, we can turn the tide in our battle against these crimes and the criminal organizations that profit from them. And we can help to ensure a just and prosperous future for all of us.

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