US Attorney General In China Talks Tough, Blurs Line, On IP

United States Attorney General Eric Holder today called on other governments to join in intensifying the fight against intellectual property infringement, on the theme that, “intellectual property crimes are not victimless.” But his law enforcement argument may need finessing to reach all stakeholders.

In prepared remarks, available here, at a 19-21 October international intellectual property summit led by Interpol in Hong Kong, he detailed initiatives in the US, saying, “For too long, these illegal activities have been perceived as ‘business as usual.’ But not anymore.”

Holder said partnerships are vital to stopping the scourge of unauthorised products flowing around the world. “Until every nation makes a commitment, and takes action, to ensure aggressive IP enforcement – we will not solve the challenges that now bring us together,” he said.

He confirmed that IP rights enforcement is a “top priority” of the Obama administration, including as part of its organised crime strategy. He acknowledged, “Like many of your own governments, the Obama administration recognises that our nation’s economic prosperity is increasingly tied to industries – like software or life sciences – that rely on strong IP enforcement. That is why we have created a new framework, and called for an increased level of activity, to better protect intellectual property rights.”

Perhaps weakening his case with stakeholders who are concerned with safeguarding the flow of legitimate information and goods, he delivered almost intact the standard lines from industry about product safety (brakes, drugs, job losses, huge software industry lost sales) aimed at triggering concern around every kitchen table.

But he also tied IP infringement to organised crime, saying, “global criminal networks increasingly fund their illicit activities through intellectual property crimes.” He referenced a wide range of activities such as copyright piracy, fake clothing and electronics, and even corporate espionage.

Holder also seemed to blur the legal distinction between “counterfeit” and “substandard” or “fraudulent” medicines, which is the subject of hot debate in Geneva. In international IP trade law, “counterfeit” refers strictly to trademark violation, meaning a fake with identical packaging to the real thing.

But he said, “Recently, the Justice Department has made significant and encouraging progress in prosecuting individuals, and international criminal organisations, that traffic in counterfeit pharmaceuticals.” He then gave an example of successfully prosecuting someone who was selling fake cancer medicine over the internet, marketing it as a “rare, experimental treatment.” This presumably means it was not a trademark violation (not packaged as an existing trademarked product) but rather just a fraudulent claim by the seller, so therefore technically not a counterfeit in international IP law.

He then gave a second example of the Justice Department winning a conviction in a case involving more than $100 million in counterfeit luxury goods, which is a typical example of counterfeit trademark violation.

Large emerging economies have been making the charge in international institutions like the World Health Organization and World Trade Organization that developed country pharmaceutical industry and governments have been confusing the IP legal principle of counterfeit with broader concerns about substandard or fraudulent medicines. Their concern is that the confusion is intended to have a negative impact on trade in legitimate generic drugs that compete with brand-name products.

Holder said he heads to Beijing next for bilateral meetings, with the message that: “I hope we can work to identify the most pressing, and perilous, gaps in our enforcement mechanisms – and begin taking the steps required to close these gaps, strengthen IP protections, and fulfil the most critical obligations of public service: ensuring opportunity, fostering prosperity, and protecting the safety and health of our people.”

It could be interesting to see if China is ready yet to catch the US enthusiasm for IP enforcement. But if it isn’t, it won’t likely be because of China’s love for the free flow of of knowledge and information.