MARCH 2011

A DMINISTR AT ION’S W HITE PA PER 

ON INTELLECT UA L PROPERT Y 

ENFORCEMENT LEGISLAT IV E 

RECOMMENDATIONS

★ 1 ★

INTRODUCTION

On June 22, 2010, the U.S. Intellectual Property Enforcement Coordinator (IPEC) issued the 

Administration’s first Joint Strategic Plan on Intellectual Property Enforcement (Strategy), which was 

developed in coordination with many Federal agencies, including the Departments of Commerce, 

Health and Human Services, Homeland Security (DHS), Justice (DOJ), and State, and the U.S. Trade 

Representative. As part of the Strategy, the Administration undertook to review existing laws to ensure 

that they were effective and to identify deficiencies that could hinder enforcement. Based on that 

review, this White Paper identifies specific recommended legislative changes, designed to increase the 

effectiveness of U.S. enforcement efforts. We will, of course, continue to assess existing legislation and 

recommend any further changes to the law as the need arises.

Piracy and counterfeiting in the online environment are significant concerns for the Administration. They 

cause economic harm and threaten the health and safety of American consumers. Foreign-based and 

foreign-controlled websites and web services raise particular concerns for U.S. enforcement efforts. We 

are aware that members of Congress share our goal of reducing online infringement and are considering measures to increase law enforcement authority to combat websites that are used to distribute or 

provide access to infringing products. We look forward to working with Congress on those efforts and 

the recommendations contained in this paper in the coming year.

Turning to the specific recommendations, the Administration recommends increasing the statutory 

maxima for the following offenses:

1. Increase the statutory maximum for economic espionage (18 U.S.C. § 1831) from 15 years in 

prison to at least 20 years in prison; and

2. Increase the statutory maxima for drug offenses under the Federal Food, Drug and Cosmetic 

Act (FFDCA), particularly for counterfeit drug offenses.

The Administration recommends that Congress: (1) direct the U.S. Sentencing Commission to increase 

the U.S. Sentencing Guideline range for intellectual property offenses; (2) require the U.S. Sentencing 

Commission to consider five specific categories of changes to the Guidelines; and (3) require the U.S. 

Sentencing Commission to act within 180 days of such legislation being adopted (including issuing a 

report explaining why it has not adopted any of the specific recommendations). The five categories of 

specific recommendations for the U.S. Sentencing Commission are:

1. Increase the U.S. Sentencing Guideline range for the theft of trade secrets and economic espionage, including trade secrets transferred or attempted to be transferred outside of the U.S.;

2. Increase the U.S. Sentencing Guideline range for trademark and copyright offenses when 

infringing products are knowingly sold for use in national defense, national security, critical 

infrastructure, or by law enforcement.

3. Increase the U.S. Sentencing Guideline range for intellectual property offenses committed by 

organized criminal enterprises/gangs;
★ 2 ★

ADMINISTRATION’S WHITE PAPER ON INTELLECTUAL PROPERTY ENFORCEMENT LEGISLATIVE RECOMMENDATIONS

4. Increase the U.S. Sentencing Guideline range for intellectual property offenses that risk death 

or serious bodily injury and for those offenses involving counterfeit drugs (even when those 

offenses do not present that risk); and

5. Increase the U.S. Sentencing Guideline range for repeat intellectual property offenders.

The Administration recommends three legislative changes to give enforcement agencies the tools they 

need to combat infringement:

1. Clarify that, in appropriate circumstances, infringement by streaming, or by means of other 

similar new technology, is a felony;

2. Authorize DHS, and its component U.S. Customs and Border Protection (CBP), to share preseizure information about, and samples of, products and devices with rightholders to help DHS 

to determine whether the products are infringing or the devices are circumvention devices; and

3. Give law enforcement authority to seek a wiretap for criminal copyright and trademark offenses.

The Administration recommends two legislative changes to allow DHS to share information about 

enforcement activities with rightholders:

1. Give DHS authority to notify rightholders that infringing goods have been excluded or seized 

pursuant to a U.S. International Trade Commission (ITC) order; and

2. Give DHS authority to share information about, and samples of, circumvention devices with 

rightholders post-seizure.

The Administration recommends six legislative changes to improve U.S. enforcement efforts involving 

pharmaceuticals, including counterfeit drugs:

1. Require importers and manufacturers to notify the Food and Drug Administration (FDA) and 

other relevant agencies when they discover counterfeit drugs or medical devices, including the 

known potential health risks associated with those products;

2. Extend the Ryan Haight Act’s definition of “valid prescription” (and its telemedicine exemption) 

to the FFDCA to drugs that do not contain controlled substances;

3. Adopt a track-and-trace system for pharmaceuticals and related products;

4. Provide for civil and criminal forfeiture under the FFDCA, particularly for counterfeit drug 

offenses;

5. As noted above, increase the statutory maxima for drug offenses under the FFDCA, particularly 

for counterfeit drug offenses; and

6. As noted above, recommend that the U.S. Sentencing Commission increase the U.S. Sentencing 

Guideline range for intellectual property offenses that risk death and serious bodily injury, and 

for those offenses involving counterfeit drugs (even when those offenses do not present that 

risk).
INTRODUCTION

★ 3 ★

The Administration recommends three legislative changes as to CBP’s administrative penalties:

1. Permit relief when someone who unknowingly and unintentionally acquires infringing products 

voluntarily discloses them to CBP before becoming aware of any CBP enforcement action (or a 

law enforcement investigation);

2. Give CBP authority to issue penalties for infringing exports; and

3. Strengthen CBP’s authority to issue penalties for infringing imports discovered during audits 

of company records.

Finally, the Administration recommends a legislative change to provide a right of public performance 

that will improve international enforcement efforts:

1. Create a right of public performance for copyright owners for sound recordings transmitted by 

over-the-air broadcast stations which, in part, will allow copyright owners to obtain overseas 

royalties that are now denied to them.
★ 4 ★

Increase Existing Criminal Penalties

Increase Intellectual Property Statutory Maxima

Increase the Statutory Maximum for Economic Espionage: Economic espionage is one of the most 

serious intellectual property crimes. A defendant committing that offense, however, faces a statutory 

maximum sentence of only 15 years in prison. 18 U.S.C. § 1831(a). We recommend that Congress raise 

that statutory maximum given the severity of the conduct inherent in the offense. Other non-intellectual 

property offenses that have higher statutory maxima include mail fraud (20 years; 18 U.S.C. § 1341), bank 

fraud (30 years; 18 U.S.C. § 1344), smuggling goods into the U.S. (20 years; 18 U.S.C. § 545), and counterfeit U.S. currency offenses (20 years; 18 U.S.C. §§ 471, 472, 473). Moreover, under the U.S. Sentencing 

Guideline that applies to economic espionage, U.S. Sentencing Guideline (USSG) § 2B1.1, an offense with 

a statutory maximum sentence of 20 years or more in prison triggers a base offense level of seven, as 

opposed to the base offense level of six triggered by an offense with a statutory maximum sentence of 

less than 20 years in prison. USSG §§ 2B1.1(a)(1),(a)(2). Increasing the statutory maximum to at least 20 

years in prison, thereby triggering the higher base offense level, is appropriate for this serious offense.

Recommendation: The Administration recommends that Congress increase the statutory maximum 

sentence for economic espionage to at least 20 years in prison.

Increase the Statutory Maxima under the FFDCA: The FFDCA prohibits, among other offenses, 

adulterated, misbranded, and counterfeit pharmaceuticals. Most criminal violations of the FFDCA, 

however, are subject to statutory maxima of no more than three years in prison. For example, counterfeit pharmaceutical cases prosecuted under 21 U.S.C. § 331(i) are generally misdemeanors, 21 U.S.C. 

§ 333(a)(1), unless the government proves that the defendant committed the offense with the intent 

to defraud or mislead, 21 U.S.C. § 333(a)(2). In such circumstances, the offense becomes a felony, but 

one subject only to a statutory maximum sentence of three years in prison. Id. This contrasts with the 

10-year statutory maximum for the sale of products with counterfeit trademarks (including for drugs) 

under 18 U.S.C. § 2320. The Administration recommends that Congress increase the statutory maxima 

for drug offenses under the FFDCA, particularly for counterfeit drug offenses.

Recommendation: The Administration recommends that Congress increase the statutory maxima under 

the FFDCA, particularly for counterfeit drugs.

Legislation Requiring the U.S. Sentencing Commission to Consider Increases to the Guideline 

Range Based on Aggravated Offense Conduct in Intellectual Property Cases 

According to DOJ’s 2009 and 2010 PRO-IP Act reports to Congress, from Fiscal Year 2004 through 2010 

— a period of seven years — less than half (762) of the defendants sentenced for intellectual property 
★ 5 ★

Increase Existing Criminal Penalties

crimes (1,469) received prison time as part of their sentence. To help ensure that the penalties for 

intellectual property crimes match the harm caused by those offenses, the Administration considered 

a number of increases to intellectual property crime statutory maxima based on aggravated offense 

conduct. The Administration believes that Congress can effectively address the harm caused by this 

conduct by directing the U.S. Sentencing Commission to amend the theft of trade secret and economic 

espionage U.S. Sentencing Guideline (USSG § 2B1.1) and the copyright and trademark infringement 

Guideline (USSG § 2B5.3).

Recommendation: The Administration recommends that Congress direct the U.S. Sentencing Commission 

that it shall: (1) amend the theft of trade secret and economic espionage U.S. Sentencing Guideline (USSG 

§ 2B1.1) and the copyright and trademark infringement Guideline (USSG § 2B5.3) to increase the Guideline 

ranges applicable to those offenses, so as to more effectively address the substantial harm caused by 

intellectual property crimes; (2) consider, among other possible increases, the following five categories of 

recommended increases to the Guidelines (described below); and (3) complete its consideration/review 

within 180 days of the date of enactment of the legislation and, if it chooses not to adopt any of the specific 

recommendations, within that 180 days, the U.S. Sentencing Commission shall issue a report explaining 

why it has not adopted the recommendation(s).

Increase in the Offense Level for Theft of Trade Secrets and Economic Espionage: There is currently a 

two-level enhancement for economic espionage: “If the offense involved misappropriation of a trade 

secret and the defendant knew or intended that the offense would benefit a foreign government, foreign 

instrumentality, or foreign agent, increase by 2 levels.” USSG § 2B1.1(b)(5). The Administration recommends that Congress adopt legislation requiring the U.S. Sentencing Commission to consider three 

changes to this Guideline. First, the two-level enhancement should apply to the simple misappropriation 

of a trade secret (the Guideline at issue is a general fraud Guideline and does not otherwise account for 

the theft of trade secrets). Second, an additional two-level enhancement should apply if the defendant 

transmits or attempts to transmit the stolen trade secret outside of the U.S., or an additional three-level 

enhancement should apply if the defendant instead commits economic espionage, i.e., he/she knew 

or intended that the offense would benefit a foreign government, foreign instrumentality, or foreign 

agent. Third, when a defendant transmits trade secrets outside of the U.S. or commits economic espionage, that defendant should face a minimum offense level.

These three changes will help make the sentences for the theft of trade secrets — particularly those 

involving economic espionage — more appropriately reflect the harm caused by the criminal conduct. 

Moreover, adopting a two-level enhancement for the theft of trade secrets would make the offense level 

(absent other aggravated conduct) the same for trade secret, copyright, and trademark offenses. That is 

so, because trade secret offenses start with a two-level lower base offense level under USSG § 2B1.1(a)(2) 

(six) than do copyright and trademark offenses under USSG § 2B5.3(a) (eight).

We note that we have only recommended an additional one-level enhancement when a defendant steals 

trade secrets to commit economic espionage, as opposed to transfers of trade secrets outside of the U.S. 

We recommend only an additional one-level enhancement, rather than a two-level increase because, 
★ 6 ★

ADMINISTRATION’S WHITE PAPER ON INTELLECTUAL PROPERTY ENFORCEMENT LEGISLATIVE RECOMMENDATIONS

if Congress adopts our recommendation to increase the statutory maximum for economic espionage 

to at least 20 years in prison, the base offense level for economic espionage will be one level higher 

(seven) than for the theft of trade secrets (six). Accordingly, with an additional one-level enhancement for 

economic espionage, someone committing that offense would actually have an offense level two levels 

higher than someone who stole trade secrets and transferred or attempted to transfer them outside of 

the U.S. We, thus, believe that the additional, one-level enhancement addresses the aggravated harm 

from economic espionage (over and above the theft and transfer or attempt to transfer trade secrets 

outside the U.S.).

Finally, we have recommended that, when a defendant transmits or attempts to transmit trade secrets 

outside of the U.S. or commits economic espionage, that defendant should face a minimum offense 

level. The Guideline at issue (USSG § 2B1.1) is largely based on loss, with a significant prison sentence 

resulting when the loss or intended loss from the theft of the trade secret is significant. But, even where 

there is little loss or the government is unable to prove a significant loss, there is inherent aggravated 

harm in transferring or attempting to transfer trade secrets outside of the U.S. or in committing economic 

espionage. Without a minimum offense level, even with the changes above, a first time offender, with 

no other aggravated conduct and taking into account acceptance of responsibility, will face a Guideline 

range of only: (1) 0-6 months in prison for transferring or attempting to transfer trade secrets outside 

the U.S.; and (2) 6-12 months in prison for economic espionage. These Guideline ranges do not properly 

account for the aggravated harm inherent in such offense conduct. The Administration, thus, recommends that the U.S. Sentencing Commission study and adopt an appropriate minimum offense level 

for this conduct.

Recommendation: The Administration recommends that Congress direct the U.S. Sentencing Commission 

to consider providing: (1) a two-level enhancement for theft of trade secrets; (2) an additional two-level 

enhancement if the defendant transmits or attempts to transmit trade secrets outside of the U.S. or an 

additional three-level enhancement if the defendant instead commits economic espionage; and (3) a 

minimum offense level when the defendant transmits or attempts to transmit trade secrets outside of the 

U.S. or commits economic espionage.

Increase in the Offense Level for Infringing Products Knowingly Sold for Defense, Military, Law 

Enforcement, or Other Critical Uses:  There is currently no Guideline enhancement if a defendant sells 

infringing products to, or for use by, the military or law enforcement or for use in critical infrastructure.  

This criminal conduct, however, jeopardizes the safety of those serving in the U.S. military, those serving 

in law enforcement, and the public as a whole.  This significantly aggravated criminal conduct deserves a 

significantly increased criminal sentence.  The Administration recommends that Congress direct the U.S. 

Sentencing Commission to consider adopting the following enhancement:  “If the defendant knew the 

offense involved a critical infrastructure or product sold for use in national defense or national security 

or by law enforcement, increase by four levels.  If the resulting offense level is less than level 14, increase 

to level 14.”  With a minimum offense level of 14, a first-time offender with no criminal history will face 
Increase Existing Criminal Penalties

★ 7 ★

at least a 10-16 month Guideline range without any other aggravated conduct (taking into account a 

reduction for acceptance of responsibility).

The Administration also recommends adding an application note to the provision to ensure that sales 

that only indirectly impact national defense or security, law enforcement functions, or critical infrastructure are not swept into the provision.  Thus, a sale of counterfeit semiconductors for use in a military 

system qualifies for the enhancement; the sale of a counterfeit toner cartridge for a computer printer 

used at military headquarters would ordinarily not.  

Recommendation: The Administration recommends that Congress direct the U.S. Sentencing Commission 

to consider providing a four-level enhancement (and a minimum offense level of 14) for copyright and 

trademark offenses involving products knowingly sold for use in critical infrastructure, national defense, 

national security, or by law enforcement.

Increase in the Offense Level for Intellectual Property Crimes Involving Gangs/Organized Criminal 

Enterprises: Intellectual property infringement is a strong lure to organized criminal enterprises, which 

could use infringement as a revenue source to fund their other unlawful activities. That is so, because 

intellectual property infringement can involve a potentially high profit margin while risking a shorter 

prison sentence than other criminal offenses, such as trafficking drugs. U.S. Sentencing Guideline Section 

2B5.3 does not currently provide an enhancement if the offense was committed by, or for the benefit of, 

organized criminal enterprises, although it does suggest that an upward departure may be appropriate if “[t]he offense was committed in connection with, or in furtherance of, the criminal activities of a 

national, or international, organized criminal enterprise.” USSG § 2B5.3 comment. (n.4(B)). Similarly, the 

Guidelines suggest that an upward departure may be appropriate if the offense involved violent criminal 

street gangs. USSG § 5K2.18. Rather than provide optional departures, the Administration recommends 

that Congress direct the U.S. Sentencing Commission to consider up to a four-level enhancement

 “[i]f the offense was committed in connection with, or in furtherance of, the criminal activities of a local, 

national, or international organized criminal enterprise.” We believe that this recommendation more 

appropriately reflects the significant aggravated harm in such circumstances.

Recommendation: The Administration recommends that Congress direct the U.S. Sentencing Commission 

to consider providing up to a four-level enhancement for intellectual property offenses involving gangs/

organized criminal enterprises.

Increase in the Offense Level for Counterfeit Drug Cases and Cases Presenting a Serious Risk to 

Health: The sale of counterfeit pharmaceuticals is a significant problem, including the sale of counterfeit 

drugs containing potentially dangerous chemicals or lacking the ingredients needed to treat serious 

medical conditions. U.S. Sentencing Guideline Section 2B5.3(b)(5) provides: “If the offense involved 
★ 8 ★

ADMINISTRATION’S WHITE PAPER ON INTELLECTUAL PROPERTY ENFORCEMENT LEGISLATIVE RECOMMENDATIONS

(A) the conscious or reckless risk of death or serious bodily injury; or (B) possession of a dangerous 

weapon (including a firearm) in connection with the offense, increase by 2 levels. If the resulting offense 

level is less than level 14, increase to level 14.” The Administration recommends two changes to this 

existing Guideline.

First, where there is a “conscious or reckless risk of death or serious bodily injury,” that significantly 

aggravated conduct should warrant a significantly increased sentence. The Administration, thus, recommends increasing the current enhancement by two levels when there is “conscious or reckless risk of 

death or serious bodily injury,” such that there would be a four-level enhancement. The Administration 

recommends retaining the current minimum offense level of 14.

Second, there are inherent risks associated with counterfeit drugs that are not accounted for under 

this Guideline and that warrant an enhanced sentence even where a defendant does not recklessly risk 

serious bodily injury. Accordingly, a defendant selling counterfeit pharmaceuticals should automatically 

receive a two-level enhancement (even where there is no conscious or reckless risk of death or serious 

bodily injury). Where a defendant has no other aggravated conduct (taking into account a reduction for 

acceptance of responsibility), this two-level increase does not actually raise the Guideline range: It is 0-6 

months in prison with a base offense level of 8 (minus two points for acceptance of responsibility) and 

after the two-level enhancement (10 minus those same two points). Accordingly, the Administration 

recommends that the U.S. Sentencing Commission consider a minimum offense level of 12 for offenses 

involving counterfeit drugs. With that minimum offense level, a first-time offender with no criminal history will face a 6-12 month Guideline range without any other aggravated conduct (taking into account 

a reduction for acceptance of responsibility).

Recommendation: The Administration recommends that Congress direct the U.S. Sentencing Commission 

to consider providing: (1) a four-level enhancement for offenses involving the conscious or reckless risk of 

death or serious bodily injury; and (2) a two-level enhancement, and a minimum offense level of 12, for 

offenses involving counterfeit pharmaceuticals (where there is no conscious or reckless risk of death or 

serious bodily injury).

Increase in the Offense Level for Recidivist Intellectual Property Offenders: U.S. Sentencing Guideline 

Section 2B5.3 does not currently provide an enhancement to a defendant who committed a second or 

subsequent intellectual property offense, even though Congress has doubled the statutory maximum 

for recidivist intellectual property offenders. See, e.g., 18 U.S.C. §§ 2319(b)(2),(c)(2),(d)(3),(d)(4) (doubling 

the statutory maxima for recidivist copyright offenses); 18 U.S.C. § 2320(a)(1) (doubling the statutory 

maximum for recidivist trademark offenses). Some other Guideline provisions take recidivist conduct 

into account when calculating the offense level. See USSG § 2N2.1(b)(1) (four-level enhancement for 

a conviction under 21 U.S.C. § 331 if the defendant had a previous conviction under that section); see 

also USSG §§ 2D1.1(a)(1),(a)(3) (increased base offense level where, among other factors, the defendant 

committed the offense “after one or more prior convictions for a similar offense”); § 2L1.1(b)(3) (enhancements for smuggling, transporting, or harboring aliens when the defendant had previous immigration 
Increase Existing Criminal Penalties

★ 9 ★

convictions); § 2L2.1(b)(4) (similar); § 2L2.2(b)(2) (similar), § 4B1.5 (increased offense level for repeat sex 

offenders).1 To appropriately increase the punishment for recidivist intellectual property offenders, we 

recommend that Congress direct the U.S. Sentencing Commission to consider imposing a two-level 

enhancement when a defendant has a previous intellectual property conviction (either under Federal 

or state law, whether the conviction was a misdemeanor or a felony, and regardless of the type of the 

previous intellectual property offense).

Recommendation: The Administration recommends that Congress direct the U.S. Sentencing Commission 

to consider providing a two-level enhancement for defendants with a previous conviction for an intellectual property offense.

1. See USSG § 2B1.5(b)(5) (enhancement for pattern of misconduct involving cultural heritage resources); 

§ 2G2.2(b)(5) (enhancement for pattern of sexual abuse or exploitation of minors); § 2Q2.1(b)(1)(B) (enhancement for 

pattern of wildlife offenses); see, e.g., USSG §§ 2K1.3(a)(1),(a)(2) (increased base offense level for explosive material 

offenses if the defendant had prior convictions for crimes of violence or controlled substances); §§ 2K2.1(a)(1)-

(a)(4) (increased base offense level for firearm offenses if the defendant had prior convictions for crimes of violence 

or controlled substances), § 2L1.2(b) (enhancements for aliens illegal returning to the U.S. after being deported and 

sustaining various convictions), § 4B1.1 (increased offense level for career offenders), § 4B1.4 (similar).
★ 10 ★

Providing Enforcement Agencies 

the Tools They Need to Discover 

and Combat Infringement

Ensure Felony Penalties for Infringement By Streaming and by Means of Other New Technology: It is 

imperative that our laws account for changes in technology used by infringers. One recent technological 

change is the illegal streaming of content. Existing law provides felony penalties for willful copyright 

infringement, but felony penalties are predicated on the defendant either illegally reproducing or 

distributing the copyrighted work.2 Questions have arisen about whether streaming constitutes the 

distribution of copyrighted works (and thereby is a felony) and/or performance of those works (and 

thereby is a not a felony). These questions have impaired the criminal enforcement of copyright laws. 

To ensure that Federal copyright law keeps pace with infringers, and to ensure that DOJ and U.S. law 

enforcement agencies are able to effectively combat infringement involving new technology, the 

Administration recommends that Congress clarify that infringement by streaming, or by means of other 

similar new technology, is a felony in appropriate circumstances.

Recommendation: The Administration recommends that Congress clarify that infringement by streaming, 

or by means of other similar new technology, is a felony in appropriate circumstances.

Give DHS Authority to Share Information with Rightholders Pre-Seizure to Help Determine Whether 

Products Are Infringing or Devices Are Circumvention Devices: Obtaining the assistance of rightholders pre-seizure to help determine whether goods are infringing is important. Rightholders know their 

products better than anyone else and, thus, obtaining their assistance allows DHS, particularly its component CBP, to more effectively identify and combat infringing products. There are concerns, however, 

that sharing unredacted samples of products and its packing with a rightholder pre-seizure would 

violate the Trade Secrets Act, 18 U.S.C. § 1905. In the Joint Strategic Plan, the Administration committed to providing DHS with express authority to share such information pre-seizure. The Administration 

recommends legislation giving DHS that authority, with any appropriate safeguards for importers 

importing legitimate products.

Similarly, it is illegal to import or traffic in devices that can be used to circumvent technological measures 

that control access to copyrighted works. When DHS discovers the importation of a potential circumvention device, current law does not authorize DHS to share a sample with a rightholder to aid CBP in 

determining whether it is, in fact, a circumvention device. Allowing DHS to provide a sample would aid 

enforcement efforts. In the Joint Strategic Plan, the Administration committed to providing DHS with 

that authority and the Administration recommends legislation giving DHS that authority.

2. See 17 U.S.C. § 506(a)(1)(A) (offense), 18 U.S.C. § 2319(b)(1) (felony for specified “reproduction or distribution”); 

17 U.S.C. § 506(a)(1)(B) (“reproduction or distribution” offense), 18 U.S.C. § 2319(c)(1) (felony for specified “reproduction 

or distribution”); 17 U.S.C. § 506(a)(1)(C) (pre-release “distribution” offense), 18 U.S.C. § 2319(d)(1) (felony penalty).
★ 11 ★

Providing Enforcement Agencies the Tools They Need to Discover and Combat Infringement

Recommendation: The Administration recommends that Congress authorize DHS to: (1) share information about, or unredacted samples of, products and/or their packaging with rightholders pre-seizure to aid 

in determining whether goods are infringing (subject to any bonding requirement and any appropriate 

safeguards for importers of legitimate products); and (2) share samples of potential circumvention devices 

pre-seizure to aid in determining whether they are, in fact, circumvention devices (subject to any bonding 

requirement). 

Give Wiretap Authority for Criminal Copyright and Trademark Offenses: The Joint Strategic Plan 

committed Federal agencies to identify gaps in current intellectual property laws and ways that the 

U.S. Government could enhance enforcement. One such gap involves wiretapping authority (that is, 

authority to intercept wire, electronic, and/or oral communications). Title 18, United States Code, Section 

2516 contains an extensive list of offenses for which the U.S. Government is authorized to seek wiretap 

authority from a court to obtain evidence of those offenses, including for economic espionage (18 U.S.C. 

§ 1831) and theft of trade secrets (18 U.S.C. § 1832). See 18 U.S.C. § 2516(1)(a) (listing offenses under 

chapter 90). Omitted from this list are criminal copyright (17 U.S.C. § 506(a)(1), 18 U.S.C. § 2319) and 

criminal trademark offenses (18 U.S.C. § 2320). Wiretap authority for these intellectual property crimes, 

subject to the existing legal protections that apply to wiretaps for other types of crimes, would assist 

U.S. law enforcement agencies to effectively investigate those offenses, including targeting organized 

crime and the leaders and organizers of criminal enterprises.

Recommendation: The Administration recommends that Congress amend 18 U.S.C. § 2516 to give law 

enforcement authority to seek a wiretap for criminal copyright and trademark offenses.
★ 12 ★

Enhance Information Sharing 

About Enforcement Activity

Ordinarily, DHS is able to inform rightholders after infringing goods have been seized, which can help 

rightholders to enforce their own rights, including bringing a civil suit, if appropriate. The Administration 

has identified two areas in which DHS is not expressly authorized to share information post-seizure.

Give DHS Authority to Share Information with Rightholders About Seizures and Exclusions Pursuant 

to an ITC Order: Under 19 U.S.C. § 1337, the ITC investigates allegations regarding unfair importation 

practices, including those involving intellectual property infringement. Once the ITC finds a violation 

and issues an order barring the importation of infringing goods, DHS, through its component CBP, 

is responsible for enforcing that order at the border. DHS currently lacks express authority to notify 

rightholders that goods have been excluded or seized under an ITC order. Giving rightholders that 

information will aid them in combating infringement. In the Joint Strategic Plan, the Administration 

committed to providing DHS with authority to share this information.

Recommendation: The Administration recommends that Congress give DHS authority to notify rightholders that infringing goods have been excluded or seized pursuant to an ITC order.

Give DHS Express Authority to Share Information with Rightholders About Circumvention Devices: 

After DHS has seized a circumvention device, current law does not expressly give DHS authority to share 

that information with rightholders or to provide a sample of the device. Allowing DHS to provide both, 

however, would assist rightholders in protecting their copyrighted work by, among other possibilities: 

(1) allowing them to alter the technological control to render the circumvention devices ineffective; 

(2) assisting them in investigating infringement of their intellectual property rights; and (3) assisting 

them in bringing civil actions to enforce their intellectual property rights. In the Joint Strategic Plan, the 

Administration committed to providing DHS and its components with authority to share such information and samples, which is what DHS already does for trademark and copyright seizures.

Recommendation: The Administration recommends that Congress authorize DHS to inform rightholders 

when circumvention devices are seized and to provide samples of such devices (subject to any DHS bonding requirement).
★ 13 ★

Combat Counterfeit Drugs

Notification When Importers and Manufacturers Discover Counterfeit Drugs and Medical Products: 

Counterfeit drugs threaten public health and, when they are discovered by importers or manufacturers, the importers or manufacturers should notify the FDA and other relevant agencies, including any 

known potential health risks, thereby allowing the FDA or other agencies to take action. Members of 

the Pharmaceutical Research and Manufacturers of America (PhRMA) have already voluntarily agreed to 

provide notification to the FDA. That disclosure, however, does not include all manufacturers, nor does it 

necessarily include importers. In the Joint Strategic Plan, the Administration recognized the need for such 

notification and the Administration recommends adopting legislation providing for such notification.

Recommendation: The Administration recommends that Congress require importers and manufacturers 

to notify the FDA and other relevant agencies when they discover counterfeit drugs or medical products, 

including the known health risks associated with them.

Extend the Ryan Haight Act’s Definition of “Valid Prescription” (and Telemedicine Exemption) to 

the FFDCA to Apply to Drugs that Do Not Contain Controlled Substances: Online pharmacies that are 

least likely to enforce prescription requirements are also generally most likely to sell counterfeit drugs.

The Controlled Substances Act prohibits the distribution of controlled substances without a valid prescription and, significantly, the Ryan Haight Online Pharmacy Consumer Protection Act of 2008 (the Ryan 

Haight Act) provides, for the first time, a Federal definition of “valid prescription.” Public Law 110-425, 122 

Stat. 4820, § 2 (2008). Under that definition, a prescription is only valid if it has been issued by a practitioner who has conducted an “in-person medical evaluation” or by a covering practitioner (although an 

exemption is included in the Ryan Haight Act for prescriptions issued by a practitioner engaged in the 

legitimate practice of telemedicine). The Ryan Haight Act also codified regulatory language (21 C.F.R. 

§ 1306.04(a)) that requires the prescription to be issued for a “legitimate medical purpose in the usual 

course of professional practice.” The definition was designed to address the practice of online pharmacies that dispensed controlled substances without a prior prescription or on the basis of a purported 

review by a physician who reviewed a questionnaire.

Many online pharmacies sell prescription drugs that do not contain controlled substances. The FFDCA 

regulates such sales, requiring a “practitioner licensed by law to administer such drug.” 21 U.S.C. 

§ 353(b)(1). There is, however, no definition of what constitutes a valid prescription under this Act and, 

thus, no definition that applies to prescription drugs that do not contain controlled substances. The 

Administration recommends amending the FFDCA (21 U.S.C. § 353(b)(1)) to use the definition of valid 

prescription in the Ryan Haight Act (and also to use its exemption for prescriptions issued through the 

legitimate practice of telemedicine). By making that amendment, Congress can help reduce the number 

of online pharmacies evading prescription requirements and, in turn, selling counterfeit drugs.
★ 14 ★

ADMINISTRATION’S WHITE PAPER ON INTELLECTUAL PROPERTY ENFORCEMENT LEGISLATIVE RECOMMENDATIONS

Recommendation: The Administration recommends that Congress apply the Ryan Haight Act’s definition 

of “valid prescription” to the FFDCA to drugs that do not contain controlled substances (and incorporate an 

exemption for prescriptions issued through the legitimate practice of telemedicine).

Adoption of a Track-and-Trace System: Effective track-and-trace systems can make it more difficult to 

introduce counterfeit drugs into the U.S. market, make it easier to identify those responsible for making a 

product unsafe, and facilitate the recall of unsafe products by more quickly identifying where a product 

is located. In the Joint Strategic Plan, the Administration recommended the adoption of a track-and-trace 

system. We note the importance of addressing privacy concerns, such as deciding where the information 

resulting from this system will be housed and who will have access to it.

Recommendation: The Administration recommends that Congress adopt a track-and-trace system for 

pharmaceuticals and related products.

Provide for Forfeiture under FFDCA: Title 18, United States Code, Section 2320(b) provides for civil and 

criminal forfeiture for counterfeit trademark offenses, as provided in 18 U.S.C. § 2323. The FFDCA also 

prohibits, among other offenses, counterfeit trademark offenses involving pharmaceuticals, 21 U.S.C. 

§ 331(i), but no such forfeiture authority exists under the FFDCA. To make the FFDCA consistent 

with other criminal statutes, particularly counterfeit trademark offenses under 18 U.S.C. § 2320, the 

Administration recommends providing forfeiture authority.

Recommendation: The Administration recommends that Congress give civil and criminal forfeiture 

authority under the FFDCA, particularly for counterfeit drug offenses.

Increase the Statutory Maxima under the FFDCA: As noted above, the Administration recommends 

that Congress increase the statutory maxima sentences under the FFDCA, particularly for counterfeit 

drug offenses.

Recommendation: The Administration recommends that Congress increase the statutory maxima sentences under the FFDCA, particularly for counterfeit drug offenses.

Increase the U.S. Sentencing Guideline Range in Counterfeit Drug Cases: As noted above, the 

Administration recommends that Congress direct the U.S. Sentencing Commission to consider increasing the Guideline range for counterfeit drug offenses, including a further enhanced penalty for such 

offenses involving the conscious or reckless risk of death or serious bodily injury.
Combat Counterfeit Drugs

★ 15 ★

Recommendation: The Administration recommends that Congress direct the U.S. Sentencing Commission 

to consider increasing the U.S. Sentencing Guideline range for counterfeit drug offenses, including a further enhanced penalty for such offenses involving the conscious or reckless risk of death or serious bodily 

injury.
★ 16 ★

Increase the Effectiveness of CBP 

Administrative Penalties

Provide Relief from Penalties for Voluntary Disclosure to CBP: In the Joint Strategic Plan, the 

Administration noted that there is no existing procedure for an importer or other party who unknowingly and unintentionally imported or acquired infringing products to voluntarily disclose them to CBP 

without being subject to seizure, penalties, and/or other enforcement actions. Allowing such voluntary 

disclosure is beneficial: It increases the destruction of infringing products and will potentially aid investigations into the source of those products.

Recommendation: The Administration recommends that Congress permit relief when someone who 

unknowingly and unintentionally acquires infringing products voluntarily discloses them to CBP before 

becoming aware of any CBP enforcement action (or becoming aware of a law enforcement agency 

investigation).

Authorize CBP to Issue Penalties for Infringing Exports: CBP can seize and forfeit infringing exports, but 

is not authorized to issue administrative penalties for infringing exports. Such administrative penalties 

would help serve as an effective deterrent to those exporting infringing products. Moreover, providing 

the ability to impose penalties for exporting infringing products would improve the U.S. Government’s 

ability to advocate for other countries to impose penalties on those exporting infringing products into 

the U.S. In the Joint Strategic Plan, the Administration committed to seek legislation to give CBP such 

authority and the Administration, thus, recommends that Congress adopt such legislation.

Recommendation: The Administration recommends that Congress give CBP authority to issue penalties 

for the export of infringing products.

Give CBP Express Authority to Impose Penalties When an Examination of Records Demonstrates 

Previous Infringing Shipments: CBP has express authority to issue penalties only for infringing shipments that it seizes at the border. During post-entry audits of company records, however, CBP sometimes 

discovers evidence of infringing products previously imported into the U.S. Providing CBP express 

authority to establish violations, and thereby assess penalties, based on an examination of company 

records would help deter the importation of infringing products.

Recommendation: The Administration recommends that Congress give CBP authority to issue penalties 

for infringing imports discovered during audits of company records.
★ 17 ★

Public Performance Right 

for Sound Recordings

Ensure Copyright Owners Are Entitled to Compensation When Radio Stations Play Their Works: 

Historically, in the U.S., there has been no right of public performance for sound recordings transmitted by over-the-air broadcast stations. The absence of such a right puts U.S. copyright owners at a 

disadvantage internationally. They are not permitted to collect overseas royalties because they are 

not granted rights in the U.S. The U.S. stands alone among industrialized nations in not recognizing a 

public performance right in sound recordings. The Administration recommends legislation giving sound 

recording owners that right.

Recommendation: The Administration recommends that Congress create a right of public performance 

for sound recordings transmitted by over-the-air broadcast stations.