S. HRG. 111–847 OVERSIGHT OF THE OFFICE OF THE INTELLEC- TUAL PROPERTY ENFORCEMENT COORDINATOR HEARING BEFORE THE COMMITTEE ON THE JUDICIARY UNITED STATES SENATE ONE HUNDRED ELEVENTH CONGRESS SECOND SESSION JUNE 23, 2010 Serial No. J–111–99 Printed for the use of the Committee on the Judiciary ( U.S. GOVERNMENT PRINTING OFFICE 64–222 PDF WASHINGTON : 2011 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) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate Nov 24 2008 14:37 Feb 10, 2011 Jkt 064222 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 S:\GPO\HEARINGS\64222.TXT SJUD1 PsN: CMORC COMMITTEE ON THE JUDICIARY PATRICK J. LEAHY, Vermont, Chairman HERB KOHL, Wisconsin JEFF SESSIONS, Alabama DIANNE FEINSTEIN, California ORRIN G. HATCH, Utah RUSSELL D. FEINGOLD, Wisconsin CHARLES E. GRASSLEY, Iowa ARLEN SPECTER, Pennsylvania JON KYL, Arizona CHARLES E. SCHUMER, New York LINDSEY GRAHAM, South Carolina RICHARD J. DURBIN, Illinois JOHN CORNYN, Texas BENJAMIN L. CARDIN, Maryland TOM COBURN, Oklahoma SHELDON WHITEHOUSE, Rhode Island AMY KLOBUCHAR, Minnesota EDWARD E. KAUFMAN, Delaware AL FRANKEN, Minnesota BRUCE A. COHEN, Chief Counsel and Staff Director MATT MINER, Republican Chief Counsel (II) VerDate Nov 24 2008 14:37 Feb 10, 2011 Jkt 064222 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 S:\GPO\HEARINGS\64222.TXT SJUD1 PsN: CMORC C O N T E N T S STATEMENTS OF COMMITTEE MEMBERS Page Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont .................... 1 prepared statement .......................................................................................... 184 WITNESSES Almeida, Paul E., President, Department for Professional Employees, AFL– CIO, Washington, DC .......................................................................................... 20 Bienstock, Caroline, President and Chief Executive Office, Carlin America, New York, New York ........................................................................................... 25 Espinel, Victoria A., Intellectual Property Enforcement Coordinator, Office of Management and Budget, Washington, DC .................................................. 3 Hirschmann, David, President and Chief Executive Office, Global Intellectual Property Center, U.S. Chamber of Commerce, Washington, DC ..................... 22 Meyer, Barry M., Chairman and Chief Executive Office, Warner Brothers Entertainment, Inc., Burbank, California .......................................................... 17 QUESTIONS AND ANSWERS Responses of Paul E. Almeida to questions submitted by Senators Coburn and Grassley ......................................................................................................... 36 Responses of Victoria A. Espinel and Caroline Bienstock to questions sub- mitted by Senators Coburn, Grassley and Hatch .............................................. 41 Responses of David Hirschmann to questions submitted by Senators Coburn and Grassley ......................................................................................................... 77 Responses of Barry M. Meyer to questions submitted by Senators Coburn and Grassley ......................................................................................................... 84 SUBMISSIONS FOR THE RECORD Almeida, Paul E., President, Department for Professional Employees, AFL– CIO, Washington, DC, statement ....................................................................... 88 Bienstock, Caroline, President and Chief Executive Office, Carlin America, New York, New York, statement ........................................................................ 97 Copyright Alliance, Patrick Ross, Executive Director, Washington, DC, letter . 108 March 24, 2010, letter ...................................................................................... 110 Report ................................................................................................................ 133 Espinel, Victoria A., Intellectual Property Enforcement Coordinator, Office of Management and Budget, Washington, DC, statement ............................... 170 Hirschmann, David, President and Chief Executive Office, Global Intellectual Property Center, U.S. Chamber of Commerce, Washington, DC, statement .. 175 Meyer, Barry M., Chairman and Chief Executive Office, Warner Brothers Entertainment, Inc., Burbank, California, statement ....................................... 186 Yates, James M., Missouri, statement ................................................................... 196 (III) VerDate Nov 24 2008 14:37 Feb 10, 2011 Jkt 064222 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 S:\GPO\HEARINGS\64222.TXT SJUD1 PsN: CMORC VerDate Nov 24 2008 14:37 Feb 10, 2011 Jkt 064222 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 S:\GPO\HEARINGS\64222.TXT SJUD1 PsN: CMORC OVERSIGHT OF THE OFFICE OF THE INTEL- LECTUAL PROPERTY ENFORCEMENT COOR- DINATOR WEDNESDAY, JUNE 23, 2010 U.S. SENATE, COMMITTEE ON THE JUDICIARY, Washington, DC. The Committee met, pursuant to notice, at 10:05 a.m., Room SD– 226, Dirksen Senate Office Building, Hon. Patrick J. Leahy, Chair- man of the Committee, presiding. Present: Senators Whitehouse, Klobuchar, Franken, Hatch, Grassley, and Coburn. OPENING STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR FROM THE STATE OF VERMONT Chairman LEAHY. There are many things going on on the Hill, but this whole area of intellectual property is one of great concern not only to me, but to many here. Intellectual property fuels the American economy and creates jobs. The Chamber of Commerce estimates that American intellectual property accounts for more than $5 trillion. IP-intensive industries employ more than 18 million workers, many of them in my own State of Vermont. Just as intellectual property is crucial to our economy, counter- feiting and piracy of that American intellectual property slows our growth. We recognize the value and importance of IP throughout our Nation’s history. It is actually included in our Constitution; a strong, but balanced system for protecting intellectual property is not uniquely a Demo- cratic or Republican priority. It is something that joins both par- ties. The pro-IP bill enacted last Congress was co-sponsored by 22 Senators, 11 Democrats, 11 Republicans, and it passed the Senate unanimously. Patent reform legislation is another shining example of our bipartisan work in this area. Along with Senators Hatch, Sessions and Kyl, we forged bipar- tisan consensus, legislation to improve the economy and create jobs and not add to the deficit. It shows what we can do when we work together. Today’s hearing is the first oversight hearing with the Intellec- tual Property Enforcement Coordinator. It is her first appearance before this panel since her confirmation hearing before this Com- mittee last November. And we welcome Victoria Espinel back to (1) VerDate Nov 24 2008 14:37 Feb 10, 2011 Jkt 064222 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\64222.TXT SJUD1 PsN: CMORC 2 the Committee to discuss the joint strategic plan for intellectual property enforcement. She testified here in her confirmation hearing, got a unanimous vote out of the Judiciary Committee, and was confirmed unani- mously on the floor of the Senate. Congress created the IP enforcement coordinator position in re- sponse to concerns of numerous agencies within the government sharing responsibility for protecting intellectual property who were not sharing information and coordinating as well as they should. In order to enforce the laws, we have to have it as efficient and effective as possible. And intellectual property crime takes so many different areas. It could be a counterfeit, an inferior semiconductor that then finds its way into one of our military aircraft. It could be the counterfeit and unsafe pharmaceutical products used to treat an illness, pirated software. Mob-run Cyberlockers subscription service has stolen American movies, as Reuters re- ported just yesterday. In all these forms, it hurts our economy, results in the loss of hundreds of thousands of jobs, and billions in tax revenues. But it can also put our health and safety in jeopardy here in this country and put the health and safety of our troops fighting abroad in jeop- ardy. So the first important task for the enforcement coordinator was to create a joint strategic plan, and I applaud Ms. Espinel for the way she has worked on that and the openness of it. I am concerned that increasingly the Internet is being used to steal intellectual property from books and journal articles, soft- ware, movies, music. This is no longer an emerging nuisance, but a very real threat to our economy. The AFL–CIO recently cited studies estimating that digital theft of just movies and music cost more than 200,000 jobs. That is unac- ceptable under any economic climate, and it is devastating today. So I wish to work with Senator Hatch, Senator Whitehouse and others on legislation that is going to target those that profit di- rectly from taking American property. I thank Ms. Espinel for appearing before the committee. And something we normally do not do in this committee, if there is good news to report from the U.S.-Algeria World Cup match, I will re- port it. [Laughter.] Chairman LEAHY. I have been on this Committee for a third of a century and I think that is the first time such an announcement has been made. Ms. Espinel, of course, had previously served as the Assistant U.S. Trade