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Counterfeiting and Theft of Tangible Intellectual Property: Challenges and Solutions

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Counterfeiting and Theft of Tangible Intellectual Property: Challenges and Solutions S. HRG. 108–771 COUNTERFEITING AND THEFT OF TANGIBLE INTELLECTUAL PROPERTY: CHALLENGES AND SOLUTIONS HEARING BEFORE THE COMMITTEE ON THE JUDICIARY UNITED STATES SENATE ONE HUNDRED EIGHTH CONGRESS SECOND SESSION MARCH 23, 2004 Serial No. J–108–62 Printed for the use of the Committee on the Judiciary ( U.S. GOVERNMENT PRINTING OFFICE 98–207 PDF WASHINGTON : 2005 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001 VerDate 0ct 09 2002 08:21 Feb 07, 2005 Jkt 098207 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 S:\GPO\HEARINGS\98207.TXT SJUD4 PsN: CMORC COMMITTEE ON THE JUDICIARY ORRIN G. HATCH, Utah, Chairman CHARLES E. GRASSLEY, Iowa PATRICK J. LEAHY, Vermont ARLEN SPECTER, Pennsylvania EDWARD M. KENNEDY, Massachusetts JON KYL, Arizona JOSEPH R. BIDEN, JR., Delaware MIKE DEWINE, Ohio HERBERT KOHL, Wisconsin JEFF SESSIONS, Alabama DIANNE FEINSTEIN, California LINDSEY O. GRAHAM, South Carolina RUSSELL D. FEINGOLD, Wisconsin LARRY E. CRAIG, Idaho CHARLES E. SCHUMER, New York SAXBY CHAMBLISS, Georgia RICHARD J. DURBIN, Illinois JOHN CORNYN, Texas JOHN EDWARDS, North Carolina BRUCE ARTIM, Chief Counsel and Staff Director BRUCE A. COHEN, Democratic Chief Counsel and Staff Director (II) VerDate 0ct 09 2002 08:21 Feb 07, 2005 Jkt 098207 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 S:\GPO\HEARINGS\98207.TXT SJUD4 PsN: CMORC C O N T E N T S STATEMENTS OF COMMITTEE MEMBERS Page Biden, Hon. Joseph R., Jr., a U.S. Senator from the State of Delaware ............. 19 prepared statement .......................................................................................... 111 Cornyn, Hon. John, a U.S. Senator from the State of Texas, prepared state- ment ...................................................................................................................... 124 Hatch, Hon. Orrin G., a U.S. Senator from the State of Utah, prepared statement .............................................................................................................. 140 Leahy, Hon. Partick J., a U.S. Senator from the State of Vermont .................... 2 prepared statement .......................................................................................... 142 Specter, Hon. Arlen, a U.S. Senator from the State of Pennsylvania ................. 1 WITNESSES Buckles, Brad, Executive Vice President for Antipiracy, Recording Industry of Association of America, Washington, D.C. ..................................................... 26 Donohue, Thomas J., President and Chief Executive Officer, Chamber of Commerce, Washington, D.C. .............................................................................. 22 Dudas, Hon W., Acting Under Secretary of Commerce for Intellectual Prop- erty, and Acting Director, Patent and Trademark Office, Washington, D.C. 5 Mendenhall, James, Assistant U.S. Trade Representative for Intellectual Property, Office of the U.S. Trade Representative, Washington, D.C. ............ 9 Price, Vanessa, Intellectual Property Specialist, Burton Snowboards, Bur- lington, Vermont .................................................................................................. 27 Trainer, Timothy P., President, International AntiCounterfeiting Coalition, Inc., Washington, D.C. ......................................................................................... 29 Wayne, Earl Anthony, Assistant Secretary of State for Economic and Business Affairs, Department of State, Washington, D.C. ............................................... 12 Willard, Richard K., Senior Vice President and General Counsel, the Gillette Company, Boston, Massachusetts ....................................................................... 24 Wray, Christopher A., Assistant General, Criminal Division, Department of Justice, Washington, D.C. ................................................................................... 7 QUESTIONS AND ANSWERS Responses of Brad Buckles to questions submitted by Senator Leahy ............... 41 Responses of Jon W. Dudas to questions submitted by Senator Leahy .............. 43 Responses of James Mendenhall to questions submitted by Senator Leahy ...... 49 Responses of Vanessa Price to questions submitted by Senator Leahy .............. 51 Responses of Timothy P. Trainer to questions submitted by Senator Leahy ..... 53 Responses of Earl Anthony Wayne to questions submitted by Senator Leahy .. 80 Responses of Richard K. Willard to questions submitted by Senator Leahy ...... 92 Responses of Christopher A. Wray to questions submitted by Senator Leahy .. 95 SUBMISSIONS FOR THE RECORD Buckles, Brad, Executive Vice President for Antipiracy, Recording Industry of Association of America, Washington, D.C., prepared statement ................. 117 Donohue, Thomas J., President and Chief Executive Officer, Chamber of Commerce, Washington, D.C., prepared statement .......................................... 126 Dudas, Hon W., Acting Under Secretary of Commerce for Intellectual Prop- erty, and Acting Director, Patent and Trademark Office, Washington, D.C., prepared statement .............................................................................................. 135 (III) VerDate 0ct 09 2002 08:21 Feb 07, 2005 Jkt 098207 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 S:\GPO\HEARINGS\98207.TXT SJUD4 PsN: CMORC IV Page Mendenhall, James, Assistant U.S. Trade Representative for Intellectual Property, Office of the U.S. Trade Representative, Washington, D.C., pre- pared statement ................................................................................................... 145 Price, Vanessa, Intellectual Property Specialist, Burton Snowboards, Bur- lington, Vermont, prepared statement ............................................................... 154 Trainer, Timothy P., President, International AntiCounterfeiting Coalition, Inc., Washington, D.C., prepared statement ...................................................... 157 Vargo, Franklin J., Vice President, International Economic Policy, Wash- ington, D.C., prepared statement and attachments .......................................... 164 Wayne, Earl Anthony, Assistant Secretary of State for Economic and Business Affairs, Department of State, Washington, D.C., prepared statement ............ 184 Willard, Richard K., Senior Vice President and General Counsel, the Gillette Company, Boston, Massachusetts, prepared statement ................................... 196 Wray, Christopher A., Assistant General, Criminal Division, Department of Justice, Washington, D.C., prepared statement ................................................ 201 VerDate 0ct 09 2002 08:21 Feb 07, 2005 Jkt 098207 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 S:\GPO\HEARINGS\98207.TXT SJUD4 PsN: CMORC COUNTERFEITING AND THEFT OF TANGIBLE INTELLECTUAL PROPERTY: CHALLENGES AND SOLUTIONS TUESDAY, MARCH 23, 2004 UNITED STATES SENATE, COMMITTEE ON THE JUDICIARY, Washington, DC. The Committee met, pursuant to notice, at 2:38 p.m., in Room 226, Dirksen Senate Office Building, Hon. Arlen Specter, presiding. Present: Senators Hatch, Specter, Leahy, and Biden. Senator SPECTER. Good afternoon, ladies and gentlemen. The hearing of the Committee on the Judiciary will now proceed. Sen- ator Hatch, the Chairman, has asked me to preside. Senator Hatch is recovering from back surgery from last week, but he is on the premises today, but is taking it just a little easier. The first question I want to address today is one which is on many minds in this room, and that is what happened to me. I was walking down Market Street in Philadelphia, the 200 block, after dinner on Saturday night, and I tripped on a defect in the side- walk, and customarily there is a reflex action to put your hands out. Well, I did not do that, and the first contact was my nose and the cement. And I am pleased to report that I am fine, although bruised, and the cement is cracked. [Laughter.] Senator LEAHY. Mr. Chairman, if I might, I am glad you made the explanation because I know that it sometimes gets contentious in the Judiciary Committee, and I did not want anybody thinking, insofar as Senator Specter and I have been friends for more than a quarter of a century, I did not want the wrong impression to be here. Senator SPECTER. Senator Leahy and I have had no tough mo- ments in the 24 years I have been here. He has been here 6 years longer. Our paths first crossed at a National District Attorneys As- sociation meeting in Philadelphia, when he was the district attor- ney of Burlington, Vermont, and I was the DA of Philadelphia. In those days, we had important jobs. That is a laugh line. [Laughter.] OPENING STATEMENT OF HON. ARLEN SPECTER, A U.S. SENATOR FROM THE STATE OF PENNSYLVANIA Senator SPECTER. Today, we are going to proceed with our hear- ing on intellectual property theft and counterfeiting, a subject of really great importance in the United States today and growing. A (1) VerDate 0ct 09 2002 08:21 Feb 07, 2005 Jkt 098207 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\98207.TXT SJUD4 PsN: CMORC 2 broad range of American industries are affected, including pharma- ceuticals, automotive, music, movies, software and virtually every type of consumer product. There are enormous lost corporate reve- nues and profits, lost tax revenues, lost American jobs in the hun- dreds of thousands and a genuine threat to public safety from counterfeit drugs, foods, airplane and car parks. The International Chamber
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