Transcript of Attorney General Alberto

R. Gonzales
at the U.S. Chamber of Commerce on
Intellectual Property Rights
Washington, D.C.
June 20, 2006
1:10 P.M. EDT

MR. FOX: Ladies and gentlemen, if you'd like to take the seats, I know we have a
very busy meeting today. The Chamber and the Coalition Against Counterfeiting
and Piracy are clearly delighted to host Attorney General Gonzales this afternoon.

It only seems literally a few minutes ago since it was last November when the
Attorney General addressed the IP Summit here in Washington, and I think that
probably set the stage for what was to come. I think there is no doubt that for the
first time we have an Attorney General who is willing to stand up and provide true
leadership on the issue of intellectual property.

I know it's a team effort, and he's very clear that he has a very dedicated team
against intellectual property, but every fight and every battle, and this is truly a
global battle against intellectual property abuse, requires leaders. And I'm delighted
that the Attorney General plays that role.

Judge Gonzales was sworn in as the nation's 80th Attorney General on February the
3rd, 2005. He has served as counsel to President George W. Bush, a justice on the
Texas Supreme Court, and in other offices in the Texas state government.

Before entering public service, he practiced law in Houston, Texas. Judge Gonzales
was born in San Antonio and raised in Houston. He is an Air Force veteran who
attended the Air Force Academy. He is a graduate of Texas public schools, Rice
University and Harvard Law School.

I know like the Coalition, he has a passion to make the world a miserable place for
those who traffic in counterfeit and pirated drugs. For those people who know me,
you know that I have been screaming from whatever podium that I'm on that
counterfeiting and piracy are not victimless crimes. With the leadership that the
Attorney General has shown, I am sure that some of those victims will be the
counterfeiters and the pirates themselves. We want to see them be truly serious
victims of their own crime. And I think with the leadership that we've seen and the
package, the enforcement package that Justice is trying to prepare right now, we'll
see that the crime will certainly suit the punishment.

So, Attorney General, it gives me great pleasure to welcome you here today.

(Applause.)

ATTORNEY GENERAL GONZALES: Thank you, Paul, for that introduction. And
many thanks to you and to the Chamber's Coalition Against Counterfeiting and
Piracy for all the great work. It really, in my judgment, it's been a great partnership
between the Department, not just the Department, but the other agencies within the
Bush Administration and the Chamber and members of the Chamber about this
issue.

Two hundred and fifty billion dollars in annual losses and 750,000 lost jobs. These
are among the many costs intellectual property theft to American businesses and
families. And I'm sure that all of, many of you certainly can give an example after
example of the damage that counterfeiting, trademark infringement, copyright
violations and unauthorized disclosure of trade secrets has meant for your
companies.

And even these staggering figures do not cover the cost of intellectual property theft
to our economy and everyone involved in it, from consumers to workers to
stockholders. Our research edge in world competition suffers when American
research and development budgets shrink because products are readily counterfeited.

A shoddy substitute will damage the reputation and the profitability of a sought-
after trademark's original. Counterfeit airplane or car parts may fail. Fraudulent
electronic appliances may explode, and in the case of fake pharmaceuticals, such as
cholesterol medication or antibiotics, patients will suffer and even die.

Intellectual property, patented inventions of all sorts, copyrighted material,

trademarked goods, and trade secrets painstakingly developed is the life blood of
our strong economy and the source for making it even stronger.

As rich as America's natural resources are, and as strong as our labor force is, it is
our creativity and innovation and entrepreneurship that have been the great engine
of our growth.

At the Department of Justice, we understand that a key law enforcement objective is

to protect the ingenuity of the artist and of the inventor. Whether a creative mind
designs clothing or software, that person's rights must be respected. Those who
would counterfeit and pirate their way to wealth must be deterred or otherwise
stopped.

The magnitude of the challenge we face can be seen in the case of Danny Ferrer, an
admitted software pirate. Just last week, Ferrer, one of the largest commercial online
distributors of pirated software in the country, pleaded guilty to copyright
infringement. Some of the trinkets he obtained from his thievery, and he has now
forfeited, include three airplanes, including two Cessnas, a helicopter, and a flight
simulator, a boat, and several cars, including a Hummer, three Corvettes, a
Lamborghini, and an ambulance.

(Laughter.)

ATTORNEY GENERAL GONZALES: Obviously, he did very well for himself

until he was identified by the FBI and prosecuted by the Department of Justice.
Ferrer's website sold almost $2.5 million worth of copyrighted software before the
FBI shut it down last October. His sales resulted in losses of nearly $20 million to
the rightful owners of copyrighted products. Ferrer faces a maximum sentence of
ten years in prison and a $500,000 fine.

To address intellectual property crimes such as this, in March of 2004, the

Department of Justice established a task force on intellectual property. This task
force includes high level officials who were given the job of reviewing how the
Department enforced and protected intellectual property rights.

Late that year, the task force issued a comprehensive report that made 31 substantive
recommendations to improve the Department's efforts to protect and enforce
intellectual property rights through criminal, civil, and antitrust enforcement,
international cooperation, legislative efforts, and prevention programs.

When I became Attorney General, I recognized the importance of continuing the

work of the task force and appointed several new members. I also charged the task
force with the important responsibility of implementing all of the recommendations
contained in the task force report as soon as possible. And today I'm proud to
announce the Department of Justice has achieved this goal.

By implementing these recommendations, we have increased our capacity to address

intellectual property theft and preserve the rights of intellectual property owners.
For example, we have increased the number of prosecutors in the field by creating
new computer hacking and intellectual property or CHIP units in five new cities:
The District of Columbia; Nashville, Tennessee; Orlando, Florida; Pittsburgh,
Pennsylvania; and Sacramento, California.

We have deployed an experienced federal prosecutor to Southeast Asia to serve as

an intellectual property law enforcement coordinator, and we will be sending
another prosecutor to Eastern Europe in the coming months.
We have dismantled international criminal organizations that have stole valuable
intellectual property to fund other crimes.

We've expanded our international training and technical assistance efforts.

We have increased the number of extradition and mutual assistance treaties to

include intellectual property offenses.

We have continued to prosecute intellectual property cases that threaten public

health and safety. We have carefully monitored and vigorously protected the rights
of victims to pursue intellectual property cases in civil courts.

We've organized victims conferences with the help of the Chamber of Commerce in
Los Angeles and New York. And we have created innovative intellectual property
educational programs to educate America's children.

The Department did not stop at simply implementing the recommendations of the
task force. Instead, we went beyond the recommendations by creating seven
additional CHIP units in Austin, Texas; Baltimore, Maryland; Denver, Colorado;
Detroit, Michigan; Newark, New Jersey; New Haven, Connecticut; and
Philadelphia, Pennsylvania.

By increasing the number of defendants prosecuted for intellectual property offenses

by 98 percent. By providing training and technical assistance to over 2,000 foreign
prosecutors, investigators and judges on intellectual property investigations and
prosecutions.

By working with the U.S. Trade Representative to improve the language in free
trade agreements and other international treaties regarding intellectual property
protections.

By publishing a nearly 400-page comprehensive resource manual for federal

prosecutors on prosecuting intellectual property crimes.

And by partnering by the U.S. Patent and Trademark Office to dedicate $900,000
over three years for piracy prevention efforts with nonprofit educational institutions.

Now all of this work is presented for you in the Department's 2006 Progress Report.
We've done a lot. We have to do a lot more.

Now, of course, we're not alone in the unprecedented effort to stem the tide of
intellectual property theft. The Department is working closely with eight other
federal agencies as part of the Bush Administration's strategy targeting organized
piracy or STOP initiative, which is dedicated to eliminating piracy and stopping
counterfeits from entering our borders.

President Bush's leadership is invaluable to our progress. This March, the President
signed into law H.R. 32, the Stop Counterfeiting in Manufactured Goods Act. This
law, which I know the Chamber worked very hard to get passed, helps protect the
rights of American consumers and workers and entrepreneurs by strengthening our
laws against counterfeit labels and packaging, by increasing forfeiture penalties for
counterfeiters, and by closing loopholes in the law against trafficking in counterfeit
goods.

This tough anti-counterfeiting law will help, in the President's words, keep honest
Americans from losing business to scam artists.

And as the 2006 progress report makes clear, there is more Congress can do to
enable entrepreneurs to enjoy the fruits of their labors, and punish those who would
exploit those who work hard, invest and take risks.

In November of 2005, the Department of Justice transmitted to Congress the Bush

Administration's Intellectual Property Protection Act, which would, among other
things, add repeat offender penalties and forfeiture and recovery provisions to
existing laws.

In addition, the Council of Europe's Cybercrime Convention Treaty awaits Senate

ratification. I urge the Congress to act on this proposed legislation. And I urge the
Senate to ratify this treaty. And we would welcome the Chamber's continued
support in these efforts.

And soon after I spoke to you last November, I went literally halfway around the
world to meet with officials of the People's Republic of China. We have received
some cooperation from the PRC in tracking down intellectual property theft, but the
fact remains that many commercial piracy cases now under investigation by federal
law enforcement have a nexus to China. Accordingly, we will continue to push for
the recognition of intellectual property rights by the PRC and for increased law
enforcement cooperation.

And just last week I was in Moscow, Russia, where I spoke with my counterparts
from the G8 countries, including Russia, about our global efforts to protect
intellectual property.

Finally, let me say a word about prevention. I've had the pleasure of discussing
intellectual property with some very young audiences. Here is where the culture of
respect for intellectual property must take hold if we are to succeed in our law
enforcement mission.

To help promote a culture of respect for intellectual property, the Department of

Justice is establishing a national education program to prevent intellectual property
crime. We are working with the U.S. Patent and Trademark Office. We have
committed $900,000, as I indicated earlier, over the next three years to train teachers
and educate students about intellectual property rights.
Victims of intellectual property theft can of course help to prevent intellectual
property theft as well. You have an important role, businesses and companies, to
play, by protecting your intellectual property however you can, including in the
courts. The Department of Justice supports rightsholders to seek civil remedies
against infringers. For example, we have filed 13 amicus or friends of the court
briefs in the Supreme Court in cases involving intellectual property disputes. The
Grokster case, and more recently, last month's case in eBay Inc. v. Merc Exchange,
are examples of cases where the Supreme Court adopted the arguments made by the
Department and preserved the rights of victims to bring civil actions to protect their
intellectual property.

The Founding Fathers enshrined in our Constitution the wisdom of promoting,

quote, "the progress of science and useful arts by securing for limited times to
authors and inventors the exclusive right to their respective writings and
discoveries."

Founding Father James Madison argued that a man has property rights in his
opinions, and the free communication of them.

Another great statesman, Abraham Lincoln, argued that the American intellectual
property system added the fuel of interest to the fire of genius in the discovery and
production of new and useful things.

In the spirit of these great men and others, the Bush Administration has launched the
most aggressive effort to protect intellectual property in the history of this country.
And the Department of Justice is committed to doing its part.

I want to thank all of you for your efforts, for your help in this endeavor, and may
God continue to bless the United States of America.

Thank you very much for having me.

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