As part of its effort to protect U.S. intellectual property rights, the White House's new strategy released yesterday emphasizes the government's responsibility for interdicting pirated products before they make it to consumers.

"The U.S. Government will work to secure supply chains to stem the flow of infringing products through law enforcement efforts and through enhanced cooperation with the private sector," according to the 65-page 2010 Joint Strategic Plan on Intellectual Property Enforcement [1] (.pdf) released by Victoria A. Espinel, the U.S. Intellectual Property Enforcement Coordinator (IPEC) in the White House.

During the press conference yesterday announcing the 33-point plan, Vice President Joe Biden didn't mince words.

"Piracy is theft," he said, adding "It's smash and grab, no different than a guy walking down Fifth Avenue and smashing the window of Tiffany's and reaching in and grabbing what's in the window."

Biden said piracy siphons off billions of dollars in profits from American business. But counterfeit goods don't only harm American bottom lines, they also pose serious health risks to consumers.

"Whether we're talking about fake drugs that hurt instead of help the patient, or knockoff car tires that fall apart at 65 miles an hour causing injury and death, counterfeits kill,"  Biden said.

(For more on the economic effects of global IP piracy, see "Intellectual Property Piracy Harms Global Economy [2]" from the July 2009 edition of Security Management.)

To safeguard public health, the strategy calls for legislation to compel manufacturers and importers to notify the Food and Drug Administration when they discover counterfeit drugs or medical devices in their supply chains and to disclose any known risks associated with the products.

"We want a requirement that the FDA has to be notified when any company finds a counterfeit product," Biden said.

The strategy also recommends that manufacturers, wholesalers, and dispensers implement a track-and-trace system that can authenticate products and create "an electronic pedigree for medical products using unique identifiers for products." The document notes track-and-trace systems make it harder for counterfeiters to introduce their products into U.S. markets while making it easier to recall dangerous counterfeits.

Federal law enforcement, especially at the border, will play a part in stopping counterfeit products from entering the U.S. marketplace. According to the document, Espinel will work with relevant agencies, especially the Department of Homeland Security's Customs and Border Protection (CBP) and Immigration and Customs Enforcement agencies, to increase collaboration, coordination, and information sharing across agencies to interdict counterfeit goods before they cross U.S. borders.

The strategy also seeks to make it easier for importers to notify the federal government of counterfeit goods when they acquire pirated goods without prior knowledge. Currently, importers cannot voluntarily disclose customs violations to the CBP without opening themselves to government seizures and other enforcement actions. The White House advises changing the rules so importers can disclose copyright-infringing products without further hassle.

The Obama administration acknowledged securing the supply chain cannot occur solely through the government,  supporting voluntary, collaborative private sector efforts to combat piracy and counterfeiting online. The strategy cites an agreement between three major Internet search providers—Google, Yahoo, and Microsoft—to stop selling search-based ads to illegal online pharmacies as a model for other companies.

Securing the domestic supply chain was only one of six main categories outlined by the White House's aggressive strategy to fight intellectual property theft. Other actions included ensuring the federal government does not purchase counterfeit products while streamlining federal law enforcement domestically and overseas to avoid costly duplication of efforts.

"I say to those who are suffering from infringement: help is on the way," Espinel said. To those who steal American creators' work, she had another message: "We are committed to putting you out of business."

♦ Counterfeit drugs by CBP/James Tourtellotte [3]

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