The federal government has unveiled a wide-ranging new strategy to combat intellectual property theft, piracy and counterfeit goods selling. How will the new enforcement measures work to protect genuine products at home and abroad?

The production and distribution of counterfeit goods has long been a threat to the financial security of businesses in a wide range of industries. In the digital age, theft of intellectual property has facilitated the ongoing problem through online piracy, which poses a hazard to the industrial sector, particularly in terms of supply chain vulnerability. Now, federal enforcement agencies are launching a sweeping new effort to cut down on intellectual property violations and curb the sale of counterfeit products domestically and internationally.

Last week, several government agencies released the 2010 Joint Strategic Plan on Intellectual Property Enforcement, a comprehensive outline for protecting the rights of U.S. businesses and individuals.

“Enforcement of intellectual property rights is a critical and efficient tool we can use, as a government, to strengthen the economy, support jobs and promote exports,” the report explains. “Intellectual property supports jobs across all industries, and in particular where there is a high degree of creativity, research and innovation: good jobs, with high wages and strong benefits.”

The report asserts that defending intellectual property rights is a key factor in American competitiveness, as it provides economic growth opportunities, strengthens national and financial security, builds consumer trust and promotes a culture of innovation and creativity in production fields.

Beyond hindering innovation and economic growth, counterfeiting also poses safety and health risks that must be addressed.

“Counterfeit products can pose a significant risk to public health, such as toothpaste with dangerous amounts of diethylene glycol (a chemical used in brake fluid), military systems with untested and ineffective components to protect U.S. and allied soldiers, auto parts of unknown quality that play critical roles in securing passengers and suspect semiconductors used in life-saving defibrillators,” the joint report cautions.

To reduce the flow of counterfeit goods, officials will increase monitoring of imports, which will also likely aid in the government’s recently announced plan to double American exports through tougher enforcement of trade laws. Part of the challenge will be working to curb overseas piracy and counterfeiting.

“China, which consistently makes the U.S. Trade Representative’s list of intellectual-property rights offenders, looms large in the strategy,” the Wall Street Journal reports. “The government is focusing on China’s market in its effort to help U.S. businesses gain entry and enforce their intellectual-property rights.”

Although U.S. businesses have long struggled to find ways to protect their intellectual property rights in China and elsewhere, government efforts have been limited until now, with companies having to rely mostly on their own defensive measures. However, this may change as U.S. trade officials begin to take a more aggressive approach to rights protection.

“[T]here are some recommendations here that could have teeth,” the Los Angeles Times’ Company Town blog reports. “For example, [U.S. intellectual Property Enforcement Coordinator Victoria] Espinel advocates adding law enforcement personnel with backgrounds in intellectual property theft to countries ‘in which intellectual property enforcement is a priority.’ In other words, send more bodies to China and Russia.”

Other key steps in the new enforcement strategy include the following:

• Establish a supervisory group to prevent U.S. government agencies from mistakenly purchasing counterfeit goods;
• Improve transparency in intellectual property policy-making and international negotiations;
• Identify foreign pirate Web sites through the Special 301 process;
• Track and report enforcement activities;
• Enhance communications to strengthen Section 337 enforcement;
• Improve the effectiveness of personnel stationed overseas to combat intellectual property infringement;
• Enhance foreign law enforcement cooperation;
• Penalize exporters of infringing goods;
• Review existing laws to spot needed legislative changes; and
• Support U.S. businesses in overseas markets.

Should the initiative succeed in reducing intellectual property rights infringement by even a fraction of the total, the corresponding gains in sales and business activity could yield major benefits, particularly to firms operating internationally or with overseas clients.

“Manufacturers lose billions of dollars each year due to counterfeiting and IP theft,” the National Association of Manufacturers (NAM) said in a statement praising the new strategy. “Aggressive enforcement of IP laws and regulations both here in the United States and around the world is key to U.S. global competitiveness and the success of manufacturers in the U.S.

“The strategy highlights the need to ensure that global supply chains are secured and protected and that IP can continue to be a driver of the U.S. economy through innovation and the creation of manufacturing jobs,” NAM said.

Earlier

Counterfeit Parts Infiltrate Aerospace Industry

Shoring up Supply Chain Security

White House Launches Export-Redoubling Strategy

Resources

2010 Joint Strategic Plan on Intellectual Property Enforcement
Executive Office of the President, June 2010

U.S. Sets Coordinated Response to Intellectual-Property Threats
By Tom Barkley, Jared A. Favole
The Wall Street Journal, June 23, 2010

White House Touts Anti-Piracy Strategy
by Richard Verrier
Company Town (The Los Angeles Times), June 22, 2010

Manufacturers Welcome National IP Enforcement Strategy
National Association of Manufacturers, June 22, 2010