Concrete Steps Congress Can Take to Protect America's Intellectual Property

The Obama Administration issued 20 legislative recommendations to Congress, designed to improve intellectual property enforcement. These legislative recommendations exemplify the Administration’s commitment to protect and grow jobs and exports, as well as to safeguard the health and safety of our people.

The Administration recommends increasing the statutory maxima for the following offenses:

• Increase the statutory maximum for economic espionage (18 U.S.C. § 1831) from 15 years in prison to at least 20 years in prison; and
• Increase the statutory maxima for drug offenses under the Federal Food, Drug and Cosmetic Act (FFDCA), particularly for counterfeit drug offenses.

The Administration recommends that Congress: (1) direct the U.S. Sentencing Commission to increase the U.S. Sentencing Guideline range for intellectual property offenses; (2) require the U.S. Sentencing Commission to consider five specific categories of changes to the Guidelines; and (3) require the US Sentencing Commission to act within 180 days of such legislation being adopted (including issuing a report explaining why it has not adopted any of the specific recommendations).

The five categories of specific recommendations for the U.S. Sentencing Commission are:

• Increase the U.S. Sentencing Guideline range for the theft of trade secrets and economic espionage,
• including trade secrets transferred or attempted to be transferred outside of the U.S.;
• Increase the U.S. Sentencing Guideline range for trademark and copyright offenses when
• infringing products are knowingly sold for use in national defense, national security, critical
• infrastructure, or by law enforcement.
• Increase the U.S. Sentencing Guideline range for intellectual property offenses committed by
• organized criminal enterprises/gangs
• Increase the U.S. Sentencing Guideline range for intellectual property offenses that risk death or serious bodily injury and for those offenses involving counterfeit drugs (even when those offenses do not present that risk); and
• Increase the U.S. Sentencing Guideline range for repeat intellectual property offenders.

The Administration recommends three legislative changes to give enforcement agencies the tools they need to combat infringement:

• Clarify that, in appropriate circumstances, infringement by streaming, or by means of other similar new technology, is a felony;
• Authorize DHS, and its component U.S. Customs and Border Protection (CBP), to share pre-seizure information about, and samples of, products and devices with rightholders to help DHS to determine whether the products are infringing or the devices are circumvention devices; and
• Give law enforcement authority to seek a wiretap for criminal copyright and trademark offenses.

The Administration recommends two legislative changes to allow DHS to share information about enforcement activities with rightholders:

• Give DHS authority to notify rightholders that infringing goods have been excluded or seized pursuant to a U.S. International Trade Commission (ITC) order; and
• Give DHS authority to share information about, and samples of, circumvention devices with rightholders post-seizure.
• The Administration recommends six legislative changes to improve U.S. enforcement efforts involving pharmaceuticals, including counterfeit drugs:
• Require importers and manufacturers to notify the Food and Drug Administration (FDA) and other relevant agencies when they discover counterfeit drugs or medical devices, including the known potential health risks associated with those products;
• Extend the Ryan Haight Act’s definition of “valid prescription” (and its telemedicine exemption) to the FFDCA to drugs that do not contain controlled substances;
• Adopt a track-and-trace system for pharmaceuticals and related products;
• Provide for civil and criminal forfeiture under the FFDCA, particularly for counterfeit drug offenses;
• As noted above, increase the statutory maxima for drug offenses under the FFDCA, particularly for counterfeit drug offenses; and
• As noted above, recommend that the U.S. Sentencing Commission increase the U.S. Sentencing Guideline range for intellectual property offenses that risk death and serious bodily injury, and for those offenses involving counterfeit drugs (even when those offenses do not present that risk).

The Administration recommends three legislative changes as to CBP’s administrative penalties:

• Permit relief when someone who unknowingly and unintentionally acquires infringing products voluntarily discloses them to CBP before becoming aware of any CBP enforcement action (or a law enforcement investigation);
• Give CBP authority to issue penalties for infringing exports; and
• Strengthen CBP’s authority to issue penalties for infringing imports discovered during audits of company records.
• Finally, the Administration recommends a legislative change to provide a right of public performance that will improve international enforcement efforts:
• Create a right of public performance for copyright owners for sound recordings transmitted by over-the-air broadcast stations which, in part, will allow copyright owners to obtain overseas royalties that are now denied to them.