Department of Justice Seal

Prepared Remarks of Attorney General John Ashcroft
Release of the Report of the Department of Justice's Task Force on Intellectual Property
Tuesday, October 12, 2004

     Thank you for joining me today.

     Intellectual property is one of America’s greatest resources. From the music we enjoy, to the movies we watch, to the software and technology that fuels the information age, intellectual property is found in every aspect of our lives. It represents a substantial and vital part of the American economy.

     As intellectual property’s value to our economy has become more important, however, the theft of this national resource has become epidemic. The theft of America’s intellectual property threatens our economy. Intellectual property theft threatens our citizen’s health and safety. Intellectual property theft threatens our security.

     The International Intellectual Property Alliance is an association of 1,300 U.S. companies that produce many different forms of intellectual property. A recent IIPA study reported that copyright industries alone employ more than 5 million Americans, representing 4 percent of America’s workforce. These industries contribute $626 billion to the U.S. economy. That is six percent of our nation’s Gross Domestic Product, exceeding the total GDP of such countries as Argentina, The Netherlands, and Taiwan.

     Yet the jobs intellectual property creates — from movie-set construction workers to software designers and pharmaceutical researchers — and the economic growth it generates, are increasingly imperiled by theft of the innovation and hard work of American minds and hands.

     The Motion Picture Association of America estimates that more than 2.6 billion songs, movies and software programs are illegally distributed over the Internet.

     Overall, the U.S. Trade Representative now estimates that intellectual property theft worldwide costs United States companies $250 billion annually. Theft on that scale represents a loss to the American economy of billions of dollars in tax revenues, wages, investment capital, as well as hundreds of thousands of jobs.

     These crimes also endanger the public. Intellectual property counterfeiters target items such as prescription drugs, auto parts, and food products, even baby formula. For example:

     In addition to threatening our economic and personal well being, intellectual property crime is a lucrative venture for organized criminal enterprises. And as law enforcement has moved to cut off the traditional means of fund-raising by terrorists, the immense profit margins from intellectual property crimes risk becoming a potential source for terrorist financing.

     It is for these reasons that on March 31, 2004, I announced the creation of the Department of Justice’s Task Force on Intellectual Property. The Task Force was charged with examining all Justice Department intellectual property enforcement efforts, and exploring methods for the Department to strengthen its protection of the nation’s valuable intellectual resources.

     Over the past six months, the Task Force has fulfilled its mission, consulting with the best minds inside and outside of government, including the creators of intellectual property, as well as the victims of intellectual property theft.

     Today I am releasing the Task Force’s final report and adopting the recommendations of the Task Force.

     These recommendations are a blueprint for the most aggressive, ambitious and far-reaching law enforcement effort ever taken against intellectual property crimes.

     The Justice Department has made the enforcement of intellectual property laws a high priority in recent years. We have expanded the number of resources committed to these crimes, and the results have been impressive. We have pursued and prosecuted numerous intellectual property thieves. We have dismantled organized criminal networks. We have made groundbreaking cases against the misuse of new technologies.

     But there is much more that must be done. We are building on our recent successes. We are confronting intellectual property crime with the urgency and focus such a serious threat requires.

     Let me mention just a few of the elements of this aggressive, new initiative.

     We will add significant new resources to our Computer Hacking and Intellectual Property Units, or CHIP Units. CHIP Units are comprised of specially trained prosecutors and investigators who focus on intellectual property crimes.

     In 2001 I established the national CHIP Unit network that now operates out of 13 U.S. Attorney’s Offices in regions of the country where intellectual property enforcement is especially critical, including Los Angeles.

     The results have been dramatic. In 2003, the first year all units were operational, the CHIP Program filed charges against 46 percent more defendants than they had averaged in each of the four years prior to the formation of the units.

     We will create five new CHIP Units to be based in Sacramento, California; Nashville, Tennessee; Pittsburgh, Pennsylvania; Orlando, Florida; and Washington, D.C.

     In addition, we will increase by 33 percent the number of prosecutors in two of our most active CHIP Units, here in Los Angeles and in San Francisco/San Jose.

     We will designate a CHIP Coordinator in every U.S. Attorney Office in the nation. This coordinator will be a prosecutor who specializes in intellectual property crime.

     We will recommend more FBI special agents dedicated to intellectual property investigations. And we will enhance training programs for prosecutors and investigators.

     Geographic borders do not limit intellectual property theft and counterfeiting. And borders must not limit our investigation, prosecution, and prevention efforts against such crimes.

     Eastern Europe and Asia are two regions where large, organized networks of intellectual property counterfeiters and thieves operate. Therefore we will place new federal prosecutors to focus on intellectual property crime at United States embassies in Hong Kong and Budapest, Hungary.

     To assist these prosecutors, we will recommend that the FBI deploy specially trained FBI agents at the embassies.

     We have found in the war on terrorism that direct contacts between law enforcement and prosecutors of different nations are critical to our prevention and prosecution efforts. These new overseas prosecutors and investigators will strengthen U.S. investigations and prosecutions of IP crimes both here at home and abroad.

     We must also update the legal tools that help us bring IP criminals overseas to face American justice. So we will update our nation’s Mutual Legal Assistance and extradition treaties with our trading partners. In many of our older treaties, intellectual property crimes are not extraditable offenses. In this area, we have already begun to come on line.

     Last year, representing the United States, I signed the first ever Mutual Legal Assistance and Extradition treaties with the European Union. This treaty cites intellectual property counterfeiting and theft as extraditable offenses.

     The United States is now working with each of the 25 Member States of the EU to complete the instruments that will bring the treaties into force. In fact, earlier this month at EU meetings in The Hague, I signed the first of the two implementing instruments with the Dutch and French governments.

     Finally, the prosecution — and, critically, the prevention — of intellectual property crime require cooperation from the individuals, businesses and industries that have been victimized. Victims must have the information and resources necessary to protect their hard work and innovation.

     We will expand the Department of Justice’s programs to educate and encourage a respect for intellectual property. The Task Force has developed and recommended national implementation of an education program targeting America’s young people. Every day, millions of people, many of them young people, log on to the Internet and download illegally distributed music, movies or computer games.

     The Task Force, working with nonprofit educational organizations, industry groups, and Court TV, will develop educational materials that teach young people not only about the risks of intellectual property theft, but how important intellectual property is to our nation and their future. It is a program that is adaptable for use across the country.

     The Justice Department is also ramping up its outreach to victims of intellectual property crime and industry representatives, in order to increase cooperation in criminal investigations. This includes use of a new “Department of Justice Guide to Reporting Intellectual Property Crime” which can be found in the appendix of this report.

     I have highlighted here just a few of the many elements of this initiative. There are also recommendations in the areas of civil and antitrust enforcement of intellectual property laws. In addition, the report outlines several new legislative initiatives for consideration, which, if authorized, would close loopholes that have limited law enforcement’s ability to pursue large-scale intellectual property counterfeiters and traffickers.

     I commend the efforts of the Task Force, chaired by my deputy chief of staff, David Israelite. I also thank United States Attorney for the Central District of California, Debra Yang, who served on the Task Force. The efforts of the task force have ensured that this initiative will contribute to building the strongest, most aggressive legal assault against intellectual property crime in our nation’s history.