Department of Justice Seal

Remarks Prepared for Delivery by Attorney General Michael B. Mukasey at the Tech Museum of Innovation

San Jose, CA
Friday, March 28, 2008 - 10:00 A.M.

Good morning. The technological advances that have occurred over the last few years, and the ways in which those changes have affected our lives, are incredible. It's a pleasure to be in a room with some of the people responsible for those changes, and I want to thank you for being here today.

But while we celebrate the positive contributions of technology, we can't forget that there's a dark side to almost every innovation. Every new technology we create can be abused -- whether it's a common identity thief looking for a new way to steal your bank account information, or an international terrorist looking to advance a murderous plot.

So this morning I want to talk to you for a few minutes about what the Department of Justice is doing in this area. But before I do that, I want to make one point very clear - the Department is committed to enforcing intellectual property rights. As proof of our commitment, I'm pleased to announce today that Mark Filip, the new Deputy Attorney General and number two official at the Department, will be chairman of the Department's Intellectual Property Task Force. This will give the task force even more prominence, and will ensure that IP related issues remain on our radar screen.

That is not to suggest that we've been standing idly by before now. Yesterday, for example, I met with entertainment industry leaders in Los Angeles, where I participated in a roundtable discussion focused on IP issues and enforcement strategies. Earlier this morning, I had a similar roundtable discussion with leaders from Silicon Valley.

While it may be stating the obvious, it's worth noting that patented inventions, copyrighted software code, and trademarks are precious commodities. And as intellectual property becomes ever more valuable, its theft poses an ever greater threat.

First, there's the obvious economic threat -- I suspect that you in this room are far too familiar with this part of the problem.

Second, counterfeiting and piracy generate huge profits, much of it flowing to organized crime. Criminal syndicates, and in some cases even terrorist groups, view IP crime as a lucrative business, and see it as a low-risk way to fund other activities. A primary goal of our IP enforcement mission is to show these criminals that they're wrong.

And third, in many cases IP crime can also pose a serious threat to health and safety. Fake products of all kinds erode consumer confidence in the marketplace, but the counterfeiting of products like pharmaceuticals and medical devices, auto and airplane parts, or electronics that go into our nation's critical infrastructure, can present a real and direct danger to the public.

To put it simply, the continuing worldwide escalation of counterfeiting and piracy poses a threat to both our economy and public safety. Since that threat comes from so many different directions, our response has to proceed on several fronts. We need strong and coordinated law enforcement efforts, both at home and abroad; we need robust intellectual property laws; and we need adequate resources devoted to IP law enforcement.

The mission of the Department of Justice is clear: whether it's a complex international narcotics ring, a corrupt public official abusing his office, or some scam-artist selling counterfeit software, our job is to enforce the law and bring to justice those who perpetrate these crimes.

In order to do that, the Department has dedicated substantial resources to combating IP crime here in the United States, through our Intellectual Property Task Force, the Computer Crime and Intellectual Property Section of our Criminal Division, and approximately 230 federal prosecutors around the country in our Computer Hacking and Intellectual Property, or CHIP, network.

The strength of this broad network in the field is that if a prosecutor in one district comes across a scheme that leads him to evidence in another district, we have the flexibility to prosecute wherever we can make the strongest case. No turf battles over who found it first, just what's best for the case.

Using this approach, over the past few years the Department has steadily increased the number of IP prosecutions. In fiscal year 2007, the Department filed 217 IP cases, which represents a seven percent increase over the previous year, and 33 percent more than 2005.

We're devoting more resources and more personnel to IP crime, and we're sending the important message that we take these crimes seriously, and we will punish the actions of counterfeiters and pirates whenever we can.

For example, in August, here in San Jose, two leaders of a software piracy ring were each sentenced to more than three years in prison as a result of an investigation that netted almost half a million counterfeit music, movie, and software discs.

In another case, completed in February, we prosecuted four men from Florida for illegally selling pirated business software online. The men sold millions of dollars worth of counterfeit software from companies including Adobe Systems, Autodesk, and Macromedia over a number of different Websites. For their crimes, they were sentenced to prison terms of up to six years, and forfeited more than a million dollars in proceeds from their illegal activities. But strong domestic enforcement is not enough -- IP crime is a global problem, and we need global solutions. International borders pose little hindrance to criminals, so we've been working to make sure those borders don't pose an obstacle to effective enforcement.

In the past month I've been to Canada and to several countries in Europe talking with my counterparts in those governments about the need for greater law enforcement cooperation across the board, including cyber crime. It's a concern we all share, and I'm glad to say it's one that's being taken seriously by our partners abroad.

For instance, in Germany, Justice Minister Brigitte Zypries told me that intellectual property enforcement is a high priority of her office. As you may know, manufacturing remains a crucial part of Germany's economy, and the sector has been hard hit by counterfeiting. She cited the dramatic example of chainsaws manufactured by Stihl, a company based in Germany, that's facing a problem with counterfeit spare parts. I realize this example is at the other end of the technological spectrum from the products many of your companies produce, but think for a minute about the threat to health and safety - literally life and limb -- posed by an inferior knock-off chainsaw guard or chain.

It's in part because these other countries are dealing with their own specific problems and trends related to IP theft at home that the Justice Department has been able to build strong international relationships over the past few years. We've worked through multilateral organizations like the European Union, and through bilateral meetings, and we see the benefits of those relationships every day.

One ongoing case resulted from years of diplomatic work with law enforcement in China, and an extensive investigation involving Chinese authorities and the FBI. Last July, China's Ministry of Public Security arrested 25 Chinese nationals and seized more than half a billion dollars worth of counterfeit software in the largest joint investigation ever conducted by the FBI and the People's Republic of China.

In another case announced just a few weeks ago, FBI agents teamed up with the Royal Canadian Mounted Police in an initiative targeting the distribution of counterfeit Cisco computer networking equipment manufactured in China. So far we've had more than 400 seizures of counterfeit hardware and labels with an estimated retail value of more than $76 million -- and the investigation is still ongoing.

We've working to limit the ability of criminals who exploit technology to commit not only IP crime, but other crimes as well. We've signed important agreements on information sharing, including the Convention on Cybercrime, which will become the gold standard for international cooperation on cyber crime. That agreement has increased our ability to share information with other countries, and to collaborate in bringing criminals to justice.

A number of recent investigations begun in the U.S. have resulted in successful prosecutions in foreign countries long considered to be so-called "hacker havens." For example, based on close cooperation between the Department, the FBI, and Romanian authorities, prosecutors from that country's Directorate for Investigating Organized Crime and Terrorism arrested eleven Romanian citizens on fraud and identity theft charges last November.

They were part of a criminal organization that specialized in "phishing" information from computer users, imprinting credit and debit card information onto counterfeit cards, and then using those cards to obtain cash from ATMs and Western Union locations. Romanian police officers executed 21 search warrants and seized computers, card reading and writing devices, blank cards, and other equipment.

It's imperative that countries work together on cases like these to ensure strong enforcement worldwide. To enhance that kind of cooperation, Justice Department lawyers have provided training and technical assistance to thousands of foreign prosecutors, investigators, and judges in more than a hundred countries.

We've placed IP Law Enforcement Coordinators in Bangkok, Thailand, and in Sofia, Bulgaria, to help us target our training activities in these vital regions. They've met with more than 1,500 prosecutors, investigators, and law enforcement officials in Asia and Eastern Europe during the past 12 months, and are providing training and assistance to address developing trends in IP crime. And we've worked to create an IP Crimes Enforcement Network in Asia to ensure that law enforcement officers there have the tools and the means of communication needed to fight international IP crime. Building these connections and maintaining a presence around the world yields law enforcement dividends extending far beyond IP crimes. That's because it's part of the nature of these crimes that they tend to overlap with many other activities of organized criminal operations.

A Russian mobster selling fake handbags through a middleman in New York may also be selling pirated DVDs in London, counterfeit AIDS medicine in Africa, and child pornography over the internet. We can take advantage of these multiple crimes and multiple jurisdictions to go after the criminal wherever the opportunity to disrupt his illegal activity is greatest. There's more than one way to skin a cat, and our international contacts give us more options to do what needs to be done.

That said, in order for us to have as many options as possible at home, as well as to meet the global challenges of IP crime, our laws have to be up to date.

Last year, the Department submitted to Congress a comprehensive IP protection package to equip law enforcement with the tools necessary to fight these crimes and protect property owners. That legislation would toughen penalties for counterfeiting crimes that threaten public health and safety, and for repeat offenders. It would criminalize attempted copyright infringement, and add important investigative tools such as granting courts the authority to issue wiretap orders in criminal counterfeiting and piracy investigations.

Currently there are a few competing bills in the Senate and the House, each of which includes some of these provisions, and each of which has some other things we think could impede our ability to do our jobs in this field. The Department is working with Congress to make sure that whatever legislation they pass helps us maintain the progress we've made and allows us to do what needs to be done in the future.

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 intellectual property. We want to work with businesses groups and with leaders of key industries like those you represent. This kind of cooperation is not merely helpful to effective criminal enforcement, it's essential.

We've had a lot of success together, and by building on that success we can turn the tide in our struggle against these crimes and the criminal organizations that profit from them.

Thank you.