Prepared Remarks for Attorney

General Alberto R. Gonzales at the U.S.

Chamber Of Commerce "Stop’ing the
Fakes" Anti-counterfeiting Summit
Washington, DC
November 10, 2005
Good morning, Ladies and Gentlemen.

As we know, the strength of the American economy is dependent on the creative

and entrepreneurial spirit of our citizens. At the heart of that spirit is the dedicated
protection of intellectual property – and the innovations, jobs, and productivity that
flow from it.

Even in an age of rapidly changing technology, this is not a new concept. The
Founding Fathers recognized the connection between intellectual property and
economic security when they wrote specific safeguards for these exclusive rights
into our Constitution – with the express purpose of promoting “the Progress of
Science and useful Arts.” And Congress has consistently enforced this founding
principle for more than 200 years.

Today, the protection of intellectual property is as important as it was during the

early moments of our national experiment. As such, it is a high priority for the
Department of Justice, the Bush Administration, the Congress, and the government
at every level… as well as American businesses and the public. The U.S. Chamber
of Commerce clearly understands this.

The Chamber's Coalition Against Counterfeiting and Piracy and its strategy to
protect America's intellectual property through education, enforcement and
international initiatives is an important component in the fight against intellectual
property crime. We applaud the Chamber’s efforts, and we at the Department of
Justice are working closely with the Coalition to address this rising problem.

It’s an indication of an important fact: We must work together. That is what the
STOP initiative is all about. The Strategy Targeting Organized Piracy is a
comprehensive effort across the government and private sector to crack down on the
growing global trade in counterfeit and pirated goods.
A challenge such as this one requires a commitment from every stakeholder:
government agencies, small businesses, international partners, law enforcement
officials, independent organizations, and many, many more.

Because of this cooperation, we’re attacking the problem in a number of ways –

through enforcement, prevention, education, awareness, and legislation. And we’re
targeting illegal activity at every stage of the process – from creation to reproduction
to distribution.

I am proud of the work we’ve been able to accomplish as a team during the first
year of the Administration’s STOP initiative. The Department of Justice has been
working closely with our partner agencies across the federal government to bring a
coordinated and aggressive strategy to fight the global problem of counterfeiting
and piracy.

For instance, we have worked very closely with our counterparts within the
Administration including Chris Israel, the Coordinator for International IP
Enforcement. And I am pleased to announce today that our partnership will be
further strengthened by the appointment of Arif Alikhan, a senior Justice
Department official handling intellectual property issues, who will serve as the new
Deputy Coordinator of the Administration's International IP Enforcement Office.

In addition to the significant role the Department has played in the international
outreach and educational efforts conducted through the STOP initiative, we have
also made great strides in one of the most important areas of all – bringing
intellectual property thieves to justice. We have brought many significant
enforcement actions over the past year, and I look forward to discussing some of
them with you in a moment. But first, I have a very important announcement to
share with you today. I’m pleased to announce that we’ve just sent to Congress
important legislation to address the problem of intellectual property crime: the
Intellectual Property Protection Act of 2005. This is a comprehensive legislative
package designed by the Department of Justice to help overhaul and update
America’s intellectual property statutes. It is a reflection of the sustained
commitment on the part of the Department and the Administration to ensure that we
are doing everything we can to combat this problem.

This legislative package, if enacted, would strengthen penalties for repeat copyright
criminals, expand criminal intellectual property protection, and add critical
investigative tools for both criminal and civil enforcement.

For example, our legislative proposals implement broad reforms that ensure the
ability to forfeit property – including illicit proceeds – derived from or used in the
commission of criminal intellectual property offenses. We also propose to
strengthen restitution provisions for victim companies and rights holders, in order to
provide maximum protection for those who suffer most from these crimes. And we
propose to make clear that exporting infringing goods is the same as importing
them…and should be punished accordingly. Every member of the global economy
has a responsibility to keep counterfeit goods out of the global market.

Rapid technological advancements have made the reproduction and distribution of

counterfeit goods and pirated materials easier than ever in our history. Our policy-
making efforts must advance along with modern technologies if we’re going to keep
pace with this evolving area of criminal activity. This proposed legislative package
is a good way to ensure that our laws are in step with the changing nature of
intellectual property crimes.

Of course, this proposed legislation is just one piece of our ongoing commitment to
combat counterfeiting and piracy. As part of the STOP initiative, the Department of
Justice created a Task Force on Intellectual Property to strengthen the Department’s
protection of the Nation’s valuable intellectual resources. A year ago, the Task
Force issued a comprehensive report detailing more than 25 separate
recommendations for how to improve our efforts in this area. In February of this
year, I renewed the Department’s commitment to the IP Task Force and to
implementing its recommendations, including the expansion of Computer Hacking
and Intellectual Property Units in prosecutor’s offices throughout the country.

Through this task force, we’ve designed programs focused on awareness and
prevention, and devoted considerable prosecutorial resources to enhance our ability
to aggressively pursue crimes and protect the intellectual property rights of our
citizens and industries.

Foremost, we recognize our responsibility to vigorously enforce IP laws – and

develop a culture of respect for IP rights – in order to harness America’s creative
energy and ingenuity for the future of our economy.

The fact of the matter is that intellectual property crimes have become too common.
Counterfeit and pirated goods are easy to access – from bootleg CDs, DVDs and
games…to fake watches and sunglasses on street corners…to online file sharing.

While these crimes may appear harmless to some, they actually have a measurable
impact on our entire economy – and they undermine the values of competition and
creativity that are important to our way of life.

For instance, criminals who manufacture and sell fake merchandise steal business
from honest merchants, defraud innocent customers, and illegally profit from the
hard work of American workers and entrepreneurs. This underground economy
costs legitimate businesses billions of dollars every year. It’s our responsibility to
crack down on these activities – and we are. Just last week, a 10-count federal
indictment was returned against four individuals accused of running one of the
largest counterfeit wholesale operations in New England. Beginning with seizures at
13 storage units in Massachusetts, federal and State agents broke up a massive
scheme to sell more than 30,000 counterfeit luxury goods – including handbags,
wallets, sunglasses, coats, shoes, and necklaces. In addition, agents found the
materials to manufacture at least 20,000 more counterfeit items.

Even at the predatory prices these items get on the street, the seizure was valued at
more than 1.4 million dollars. Conviction for these alleged counterfeit goods
trafficking and money laundering charges could result in maximum imprisonment
terms of 10- and 20-years, respectively.

We're also targeting illegal counterfeit prescription drugs. Just last August, a
Washington man was indicted for allegedly importing and distributing counterfeit
and misbranded pharmaceutical drugs including Viagra, Cialis, and Lipitor. His
indictment and arrest were the result of a joint investigation between U.S.
Immigration and Customs Enforcement and police authorities in China, where
officials arrested 11 more individuals and seized 4.3 million dollars in counterfeit
drugs. Our message to criminals who seek to profit from the intellectual property of
honest and hard-working American citizens and businesses is clear: There is
nothing fake about our commitment to prosecute counterfeiters and pirates.
However, we cannot do this important enforcement work alone. In the past 18
months, the Department has successfully led the two largest international
enforcement actions ever undertaken against online piracy.

Operation FastLink and Operation Site Down together involved more than 16
countries across five continents. These U.S.-led operations synchronized the
execution of more than 200 search warrants, the confiscation of hundreds of
computers and illegal online distribution hubs, and the removal of more than 100
million dollars worth of software, games, movies, and music from illicit distribution
channels. Of the 32 people charged with felony copyright infringement so far, 20
have been convicted and the rest are awaiting entry of plea or trial. The list of
countries partnering in these efforts is long, but the Department is committed to
building on these successes and achieving even greater global participation in the
future. In the increasingly connected global economy, nothing short of a global
effort will suffice.

That’s one reason I am traveling to China next week to seek new opportunities for
better cooperation and coordination among our respective law enforcement
agencies. I will be meeting with senior law enforcement ministers in China, and I
plan to call on them for increased criminal enforcement of China’s laws protecting
the intellectual property rights of businesses in the U.S. and around the world.

Of course, there is also plenty of work we can do at home to encourage even better
international cooperation. For instance, in November 2003 the President transmitted
to the Senate the Council of Europe Convention against Cybercrime, which
provides important tools that could enhance our ability to protect America’s
intellectual property overseas. The Convention was unanimously approved by the
Foreign Relations Committee in July of this year and is currently before the full
Senate. The IP Task Force specifically recommended ratification of this Convention
to strengthen enforcement efforts both in the United States and around the world,
and I recently sent a letter to the Senate leadership urging swift approval of this
important international convention.

***

The products Americans use every day – many of them manufactured and
distributed by the people in this room – are tangible reminders of the principles of
creativity, fairness, and honest competition that characterize our economy – the
largest in the world.

But they can also be a reminder that everything is not always as it seems.
Counterfeit goods – whether they are fake batteries or impostor handbags –
undermine those principles we hold most important to our success and quality of
life.

We will not tolerate crimes that harm American businesses and consumers. That is a
message that I look forward to sharing with our international partners – especially
when I travel to China next week. It’s a message I hope our Congress will embrace
as they take up new legislation to clarify and toughen our laws protecting
intellectual property.

And it’s a message that I hope is reassuring to America’s creative minds, research
specialists, entrepreneurs, and small business owners. We will protect their work…
so they can continue to provide the vital spark to the engine that drives our
economy and provides the quality of life we’ve come to enjoy and expect in the
greatest country in the world.

Our ability to promote and secure an effective and predictable environment for
intellectual property rights in America will have a significant impact on our future
economic growth, global competitiveness and economic national security.

I look forward to working together to make it happen.

Thank you for hosting this summit and for your continued efforts in this important
area.

May God bless you and your families, and may He continue to bless the United
States of America.

###