"Protecting Intellectual Property in the 21st Century-A Vital Mission", Remarks by Thomas J. Donohue, President and CEO, U.S. Chamber of Commerce

"Protecting Intellectual Property in the 21st Century-A Vital Mission"

Fourth Annual Anti-Counterfeiting and Piracy Summit
Remarks by Thomas J. Donohue
President and CEO, U.S. Chamber of Commerce

Washington, DC
October 3, 2007

Introduction

Thank you for joining us for the second day of our annual anti-counterfeiting and piracy summit.

As you know, this is the fourth year of our conference-it is a good time to measure our progress, reassess the global landscape, and chart a new course forward. Four years ago, the U.S. Chamber got involved in this issue for a simple reason-our members demanded it.

Fake products-from brake pads to medical equipment to airplane parts to pharmaceuticals were putting innocent lives in danger all over the world. Sophisticated criminals with modern production techniques and equipment were destroying brand names and making a mockery of patent and copyright laws. Legitimate businesses were being severely damaged.

Counterfeiting and piracy was costing $250 billion annually and had wiped out 750,000 jobs in the United States alone. It was exacting a high toll in lives, public health and safety, and national security. So we rolled up our sleeves and got to work. We helped form one of the world's largest coalitions, the Coalition for Anti-Counterfeiting and Piracy.

We devoted significant Chamber resources to addressing the problem. We involved affected businesses in the IP supply chain-from auction sites, search engines, retailers, internet services providers, and others-to find new ways to protect intellectual property. We have stormed the Hill, worked the media, and expanded our program around the globe. And we've gotten results.

We have won legislation that closes loopholes that allowed counterfeiters to avoid prosecution. We have submitted an unprecedented, cross-industry legislative package to Capitol Hill that would improve and make permanent the way federal government agencies protect IP, increase resources to stop fakes at our borders, and give new tools to prosecutors to put these criminals away. And we need to tie this problem to a problem that it helps support, and that's terrorism.

Enforcement efforts have been beefed up, with encouraging results. For example, in August, the Los Angeles Police Department-working in conjunction with the Chamber and others-seized more than $10 million in fake products and arrested 5 vendors in that city's infamous Santee Alley.

We have agents helping the enforcement people find the source of this activity. It's a test program and if it works, we'll do a lot more of it.

Our efforts abroad have resulted in:

• the training of government and law enforcement officials in two key provinces in China;
• a ground-breaking consumer study in Brazil that made their government think twice when they realized how much tax revenue they were losing;
• a partnership with Interpol that has created a world-wide intelligence capability;
• and adding the issue of IP protection to the agendas of multilateral organizations such as the G8, the EU, and APEC.

Perhaps one of our most important achievements has been reframing the debate. We are dragging this issue out from behind the shadows and into the light of day. More companies have willingly gone public about the threat of counterfeiting and IP theft to their brands and to the product themselves.

For a long time, these crimes were a dirty little secret that everybody knew about but few wanted to talk about out of fear of damaging their reputation and frightening their consumers. With more companies coming forward, more consumers, lawmakers, and media are learning about the costs involved.

This is not only an issue of dollars and cents, but of life and death, and we have helped provide thousands of businesses with practical tools they can use to detect and combat fake goods and protect their IP.

Why We Must Do More

While our progress has been encouraging, we can come to no other conclusion than this: it hasn't been enough. We must do more.

Why? Because anti-IP forces are nimble, resolute, and adept at manipulating and causing multilateral institutions to slow down, get out of their way, and let them conduct their business. Additionally, technological progress makes IP theft and counterfeiting easier and more profitable.

We have to get governments to understand that the single biggest commodity that business everywhere needs to protect is ideas, intellectual property, and products.

The people with no regard for intellectual property are not about to lie down because we're having conferences. We need to figure out a way to make this much more expensive, much more difficult, and much more dangerous for them as well.

When you stop and think about it-and you've got to be careful in how you talk about this-if you consider that there are pharmaceuticals coming into the U.S. that are fake, and that there are parts in the airplanes we fly that are fake, that's a little scary. This gives us a new argument to get an emotional reaction from people who don't get excited about a cheap purse on a city street in New York.

Regular property theft in the U.S. is about $16 billion. What's going on with the theft of IP and counterfeiting is a quarter of a trillion dollars. Does that make any sense? We have the smallest amount of assets against the biggest amount of problem.

In a major new thrust and direction for our IP program, we will focus on governments, NGOs, and others around the world which themselves have chosen to challenge the sanctity of IP.

The Global Intellectual Property Center

To address all these challenges, today I am announcing a major expansion of our current IP and anti-counterfeiting initiative. We are launching the new Global Intellectual Property Center to build on our current efforts.

With adequate funding and strong support from across a wide spectrum of industries, the U.S. Chamber will put money, people, research, programs, and strong political action around a sustained, long-term campaign to protect and defend intellectual property at home and around the globe.

Our Center will mobilize grassroots to drive a domestic understanding of these serious challenges-while using our international division, our American Chambers of Commerce abroad, our bilateral business councils, and our work with key multilateral organizations-to advance our agenda.

The Center's goals are threefold. First, to prove to policymakers of both parties in the United States and to foreign governments that failure to protect IP undermines innovation and critical investment, erodes living standards, and endangers public health.

Second, to build a grassroots army to confront and defeat anti-IP activists whose actions are destroying patents and copyrights and frustrating economic and human progress. And, convince lawmakers to strengthen IP protections across the board, from domestic legislation to enforcement to free trade agreements.

And third, attract and leverage the assets of like-minded allies around the world.

Let me briefly describe how we intend to achieve these goals.

Educating and Communicating

Despite our best efforts, the defenders and protectors of IP are still losing the public debate.

Due to the Global Anti-Counterfeiting and Piracy Initiative, some U.S. consumers are just now beginning to understand the devastating impact of IP theft on the economy and public health. But far too many still perceive such crimes as "victimless."

There is a growing chorus of anti-IP NGOs and governments who claim that intellectual property is no longer a key to economic development. They view this as an outdated and unfair 20th century idea. They argue that rather than rewarding research and innovation, we should quickly share all IP to spur economic development.

At the APEC meetings in Australia last month, I told the Thai prime minister personally that if the government there continues to mistreat pharmaceutical patents as it's been doing, we're going to put real serious heat on Thailand and its participation in global organizations. Under our new initiative, you can expect to see more of this direct communication with various governments who are thinking about jumping on the bandwagon of disrespect for basic patents.

Putting a credible body of facts on the table and gaining widespread agreement on those facts is a critical first step to forging consensus and forcing action. The studies being released at this summit by Gallup and the Institute for Policy Innovation are a good first step, but we have a long way to go.

The Institute will also develop a comprehensive global communications campaign, backed by solid research, to do the following:

• More effectively tell the story of how protecting IP benefits consumers, attracts investment, and creates jobs while expanding access to medicines, technology, and content;
• Quantify the direct economic benefits of private sector innovation, and what would happen in the absence of strong IP protections;
• And prove how IP theft deeply impacts key industries that benefit citizens around the world.

Grassroots and Advocacy

To accomplish that, we will need an aggressive, well organized army of grassroots activists.

Anti-IP forces are pressing their attacks in the U.S. Congress, in a growing number of key nations, and in multilateral forums like the World Trade Organization, the World Health Organization, and the World Intellectual Property Organization. The loose network of anti-IP NGOs are increasingly well funded and better coordinated, frequently using electronic networking and mobilization tools to overwhelm industry efforts to protect IP.

The Global Intellectual Property Center will assemble and mobilize a coalition of innovators, students, labor unions, and think tanks to vigorously challenge anti-IP activists.

Our goal is to exert pressure at all levels of government, foreign and domestic.

At the state and local levels, we will identify, target, and vigorously lobby lawmakers from key congressional districts and in the states themselves. Our goal is simple: drive home the devastating impact the erosion of IP protections are having on their own constituents, including local businesses and workers.

In addition, we will begin shaping the opinions of students through partnerships with National Geographic and Weekly Reader. These partnerships have the potential to reach hundreds of thousands of young people through the wide dissemination of materials and a series of in-school presentations.

We need to do something, not only for the short run that gives us a piece of legislation that we can cheer about, but we also need to do something we can hang onto for a long time.

We are going to get in the trade negotiation business a little more vigorously. That's a sensitive issue and we've got to have some tradeoffs with the White House. You want our help, we need your help.

Leveraging Like-Minded Allies

The United States cannot do this alone. Intellectual property theft is like global warming. 30% of our problem with global warming is someone else's pollution. A lot of our problem with IP theft is around the world.

So our Center will build global alliances with like-minded, developed countries such as Switzerland, Japan, Canada, and Australia to squeeze others who are stealing our property and hurting our countries. We will draw on existing collaborative relationships on IP issues with the U.S.-EU IP Working Group and the Security and Prosperity Partnership. We will also reach out to sister organizations in Europe, Japan, and other OECD members to promote similar efforts by them.

Conclusion

Why is the Chamber launching this Center and devoting these resources to it when there are so many other pressing issues facing the business community?

Because it doesn't make any sense to us to have people hurt by others who are sticking cash in their pocket by stealing a quarter of a trillion dollars out of the American economy. How smart do you have to be to think that's important?

Because we believe that IP protection is among a handful of issues that will determine America's competitiveness in the 21st century. If we lose our ability to create, innovate, and generate the best artistic, technological, and knowledge-based intellectual property, then our economic formula for success in the global economy will fail. And, it will affect our national defense.

We must recommit ourselves to build on the things we've done, to up the ante, to double down, and to send a message to our adversaries. We respect people who want to participate legally in the economy and beat the hell out of each other on a competitive basis. We don't respect people that are stealing our IP and ripping off Americans for a quarter of a trillion dollars. We have every intention of causing them a good deal of discomfort and looking for some place to lock them up.

Thank you very much.

View The Competitiveness Agenda