Assistant Attorney General Lanny A. Breuer of the Criminal Division Speaks at the 2011 International Law Enforcement Intellectual Property Crime Conference

Thank you, Superintendent O’Grady, for that generous introduction.  I am grateful for your warm welcome, and delighted to be here with you, and with so many international law enforcement colleagues and other partners in the fight against intellectual property crime. 

I want particularly to thank the leaders of INTERPOL, EUROPOL and the Cuerpo Nacional de Policía for hosting this conference, in partnership with Underwriters Laboratories.  Last year, the Attorney General of the United States, Eric Holder, addressed you in Hong Kong, and it is my honor and privilege to represent the U.S. Department of Justice today in Madrid. 

I was here earlier this year, and it gives me great pleasure to be again in the Spanish capital.  Later today, I will have the honor of visiting with Deputy Prosecutor General Juan José Martín-Casallo Lopez, and two of his top prosecutors, Antonio Salinas and José Ramón Noreña Salto, to discuss Spanish law enforcement efforts, as well as how we can continue to cooperate in our efforts against intellectual property theft and other crimes.   There are few countries as beautiful, or as bountiful, as Spain, with as rich a history, or as strong a law enforcement relationship with the United States. 

It is reflective of the international scope of the challenges we face in fighting intellectual property crime that this conference should be held in Asia one year and Europe the next, and that it continues to bring together members of law enforcement from so many countries around the world, as well as industry stakeholders, leaders and other international partners.  Indeed, if there is one thing that we all recognize, it is that intellectual property crime is a problem of global dimension.  Technological advances have created unprecedented opportunities for businesses to market and sell their intellectual property anywhere in the world.  But these same advances also allow trademark counterfeiters, trade secret thieves, and copyright pirates to operate in an essentially borderless environment.  Victims may reside in one country, while the thieves who steal their IP hide out in another.  IP criminals in Europe may sell counterfeit products to consumers in North America, without ever needing to leave their homes.  Recognizing the potential economic rewards offered by IP crime, and perceiving – incorrectly – the risk of getting caught or facing significant penalties as minimal, transnational organized criminal enterprises have increasingly turned to IP crime to increase their illegal profits.  And the effects are felt by all of us.  In short, in our global economy, no country is immune from the scourge of IP crime, and each of us must be able to depend upon the others to catch and deter IP criminals.

For that reason, international law enforcement is only as effective at fighting IP crime as its weakest link.  In the United States – and I suspect the same is true in countries around the globe – it is not always obvious to people why we should devote significant resources to fighting IP crime – resources that could go instead to fighting violent crime, for example, or public corruption.  Conferences like this one serve the important purpose of raising global awareness about the negative consequences of IP crime, and showing those who need convincing how critically important it is that we work together to stop IP crime, and punish those who commit it.  Everyone in this room knows that counterfeit pharmaceuticals, counterfeit automotive and defense-industry parts, and other counterfeit consumer products can cause serious harm to people and endanger their lives; and that companies whose trade secrets are stolen or whose goods are counterfeited may be forced to downsize or go out of business, costing individuals their jobs.  Nevertheless, the public perception at times persists that IP crime is victimless.  It is therefore one of our important duties here this week to spread the message about the significant, and very real, costs of IP crime. 

In addition, this conference serves the important function of bringing together people from across the globe who share a common goal:  to reduce, and eventually eliminate, IP crime, in our home countries and abroad.  Today, there are representatives here from China, Sweden, the United Kingdom, Spain, Lebanon, Ghana, Nigeria, South Africa, Canada, the United States, Chile, and many other countries.  We have the unique opportunity at this gathering to strengthen relationships, share lessons learned, and set out our way forward together.

Our collective commitment to ending IP crime must begin, for each of our countries, at home.  In the United States today, IP enforcement is a top priority.  As President Obama said last year, we are determined to “aggressively protect our intellectual property” because “[o]ur single greatest asset is the innovation and the ingenuity and creativity” of our people.  And I don’t think it’s an exaggeration to say that the Obama Administration has made intellectual property enforcement a higher priority than any other U.S. Administration in recent memory.

In 2009, for example, President Obama appointed Victoria Espinel as the first U.S. Intellectual Property Enforcement Coordinator, or IPEC, to coordinate the federal government’s activities in enforcing our intellectual property laws.  The Justice Department works closely with Ms. Espinel’s office on a range of issues, including the development of legislative recommendations aimed at addressing gaps in our legislative authority and improving IP enforcement government-wide.  These recommendations, which were unveiled in March of this year, include proposals for enhanced criminal penalties for economic espionage and trade secret theft, drug counterfeiting offenses, and other IP crimes.  They also include a recommendation for creating a felony offense for streaming copyrighted works, and giving law enforcement the authority to seek wiretaps in criminal copyright and trademark cases, so that we can stop IP thieves in their tracks.

We also work closely with the National Intellectual Property Rights Coordination Center, or IPR Center, which has developed into a critical resource for law enforcement, using the expertise of its many member agencies, including U.S. Immigration and Customs Enforcement, U.S. Customs and Border Protection, and the Federal Bureau of Investigation, as well as law enforcement from Mexico and Canada, to coordinate IP law enforcement actions.  I am sure you will hear more about the great work of the IPR Center from my colleague John Morton, when he speaks with you tomorrow.

Most significantly, from my perspective, under Attorney General Holder’s leadership, IP enforcement has become one of the Justice Department’s signature priorities, with the Department leading the government’s charge in enforcing the nation’s IP laws.  Last year, the Attorney General announced the formation of a new Justice Department Task Force on Intellectual Property, whose mission is to coordinate the Department’s overall response to the growing threat of IP crime.  

The Department’s response has many facets.  It includes the recovery of civil penalties from importers of counterfeit goods; the award of grants to state, local, and tribal law enforcement partners to help improve their capacity to address IP crime; and, of course, it includes vigorous criminal enforcement. 

Over the past two-and-a-half years, as Assistant Attorney General of the Justice Department’s Criminal Division, I have had the privilege of leading nearly 600 lawyers in enforcing the nation’s criminal laws.  Our prosecutors bring cases in areas ranging from Medicare fraud and money laundering to international narcotics trafficking, gang violence and public corruption.  And one of our key areas of focus is the investigation and prosecution of intellectual property crime. 

Together with the 94 federal prosecutors’ offices around the country – which we refer to as U.S. Attorneys’ Offices – the Criminal Division’s Computer Crime and Intellectual Property Section, or CCIPS, is at the forefront of these efforts. 

CCIPS has over 40 highly-specialized prosecutors and computer forensics experts, who prosecute cases around the country, and who work closely with a network of over 260 specially trained Computer Hacking & Intellectual Property, or CHIP, prosecutors located in the U.S. Attorneys’ Offices.     

Together, CCIPS and CHIP prosecutors aggressively investigate and prosecute IP crimes.  This year, we have prosecuted significant cases in our key enforcement areas.  In March, for example, in the area of trade secret theft, the U.S. Attorney’s Office in Manhattan secured a 97-month sentence for a former computer programmer at the investment bank Goldman Sachs for stealing valuable, proprietary computer code belonging to the bank.  During the sentencing proceeding, the judge remarked that the defendant’s conduct was “audacious – motivated solely by greed, and  . . . characterized by supreme disloyalty to his employer.” 

In the area of health and safety, we have continued to pursue cases against counterfeiters of pharmaceuticals and medical devices, and built upon “Operation Network Raider,” an international law enforcement initiative targeting the illegal manufacture and distribution of counterfeit network hardware, including hardware intended for use by the U.S. military.   When it was announced last year, the operation had resulted in more than 30 felony convictions and more than 700 seizures of counterfeit Cisco network hardware and labels with an estimated retail value of more than $143 million.  Indeed, 11 days ago, following a three-week trial earlier this year, a Virginia woman was sentenced to five years in prison for trafficking in counterfeit Cisco goods and labels manufactured in China.

In the area of piracy and counterfeiting, we also have been aggressive.  On the Monday after the U.S. holiday of Thanksgiving last year – so-called “Cyber Monday”– Attorney General Holder announced a coordinated law enforcement effort known as “Operation in Our Sights II,” during which we seized 82 domain names of websites used to promote the sale and distribution of counterfeit goods and illegal versions of copyrighted works.  And less than two weeks ago, we charged five individuals for their involvement in a website called NinjaVideo.net, which allegedly provided millions of visitors with the ability to illegally download infringing copies of copyright-protected movies and television programs in high-quality format. 

In many instances, our prosecutions have benefited from cooperation with international law enforcement.  Three weeks ago, for example, an individual from Massachusetts pleaded guilty to economic espionage for providing his company’s trade secrets to an undercover agent posing as an Israeli intelligence officer.  The Israeli government provided important cooperation on the case.   And last year, we announced economic espionage charges against a research scientist for Dow AgroSciences LLC, who allegedly misappropriated and transported the company’s trade secrets to China and Germany.  German authorities provided us with essential assistance in this investigation.

These cases, which are just two examples of many in which we coordinate with our foreign law enforcement partners, are reminders that IP crime so frequently transcends national borders.  At the Justice Department, we are acutely aware that IP crime is an international problem.  We live in a world where new technologies offer almost limitless opportunities for businesses – both large and small – to market and distribute their goods and digital content to consumers around the world.  Unfortunately, these same technologies are exploited by individuals and organized criminal enterprises to create high-quality knock-offs and perfect digital copies for global distribution.  Trademark counterfeiters often choose to make their illegal goods in one country and then smuggle them for sale into our own, rather than to manufacture them where they’re sold.  And websites that offer pirated copies of new or even pre-release movies, music, software, or games often operate internationally.  The reason is simple:  not every country treats IP enforcement as a top priority, or has the expertise to prosecute IP cases effectively.   

In the United States, we are working hard with our foreign law enforcement allies to reduce the global supply of pirated and counterfeit goods, and to strengthen IP enforcement capacity internationally.  Last October, for example, after addressing this conference in Hong Kong, Attorney General Holder traveled to China to meet with senior law enforcement officials, including the Minister of Public Security, and work with the Chinese to improve bilateral cooperation on IP enforcement.  And later this month, for the first time, the FBI will station an agent at the U.S. Embassy in Beijing to focus exclusively on criminal IP enforcement.

We have also been working to build strong relationships with our law enforcement partners by participating in international training programs.  Indeed, over the past six years, the Justice Department has participated in IP enforcement training and education programs for more than 12,000 prosecutors, investigators, judicial officers, and other officials from over 30 countries.  Strengthening the enforcement capacity of other nations not only helps to provide them with the tools they need to stop IP criminals who target other countries; it also sends a strong message to would-be criminals that there will be no safe havens for IP crime.  

Another aspect of our international outreach work is the Department’s Intellectual Property Law Enforcement Coordinator, or IPLEC, program.  Through the IPLEC program, we send experienced federal prosecutors overseas to take the lead on our IP protection efforts in key spots around the globe.  These prosecutors work closely with law enforcement authorities abroad to share information and evidence regarding joint investigations and to enhance IP enforcement training programs.  We currently have one IPLEC stationed in Bangkok, Thailand, who manages our IP protection efforts in Southeast Asia, and until recently we had a second IPLEC stationed in Sofia, Bulgaria, who was managing our efforts in Eastern Europe.

These prosecutors are critical to our international outreach and enforcement efforts.  So much so that President Obama has asked the United States Congress, in his 2012 budget request, to fund a new Justice Department program that would place six International Computer Hacking and Intellectual Property coordinators, or “ICHIPs,” in key locations around the world.

IP crime is a serious threat.  It jeopardizes the health and safety of consumers.  It stifles innovation and creativity.  And it has negative effects on the global economy.  As the United States has stepped up its IP enforcement, other countries have as well.  Countries around the globe recently worked together with the United States to finalize the text of the Anti-Counterfeiting Trade Agreement; Mexico, the Philippines, and Russia all enacted important IP legislation; and right here in Spain, the government enacted new legislation to provide a mechanism for rights holders to remove or block access to infringing content online.

These are important steps.  But we have a great deal left to do, and many challenges ahead.  President Obama, Attorney General Holder, and other U.S. government leaders are committed to aggressive IP enforcement.  As the head of the Justice Department’s Criminal Division, I am personally committed to vigorously enforcing our criminal IP statutes, and bringing trade secret thieves, counterfeiters, intellectual property pirates, and others to justice.  By your presence here, I know that you are as well.  The problem of IP crime stretches across territorial boundaries.  Effective enforcement starts in each of our home countries, and gathers strength through international coordination and cooperation.  Let us continue moving forward in this fight, united by our common purpose to protect our respective nations’ intellectual property and hold IP criminals to account for their conduct.  Thank you.