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48–142 PDF 2009

S. HRG. 110–782 

EXAMINING U.S. GOVERNMENT ENFORCEMENT OF 

INTELLECTUAL PROPERTY RIGHTS 

HEARING 

BEFORE THE

COMMITTEE ON THE JUDICIARY 

UNITED STATES SENATE 

ONE HUNDRED TENTH CONGRESS 

FIRST SESSION 

NOVEMBER 7, 2007 

Serial No. J–110–60 

Printed for the use of the Committee on the Judiciary 

( 

(II) 

COMMITTEE ON THE JUDICIARY 

PATRICK J. LEAHY, Vermont, Chairman 

EDWARD M. KENNEDY, Massachusetts 

JOSEPH R. BIDEN, JR., Delaware 

HERB KOHL, Wisconsin 

DIANNE FEINSTEIN, California 

RUSSELL D. FEINGOLD, Wisconsin 

CHARLES E. SCHUMER, New York 

RICHARD J. DURBIN, Illinois 

BENJAMIN L. CARDIN, Maryland 

SHELDON WHITEHOUSE, Rhode Island 

ARLEN SPECTER, Pennsylvania 

ORRIN G. HATCH, Utah 

CHARLES E. GRASSLEY, Iowa 

JON KYL, Arizona 

JEFF SESSIONS, Alabama 

LINDSEY O. GRAHAM, South Carolina 

JOHN CORNYN, Texas 

SAM BROWNBACK, Kansas 

TOM COBURN, Oklahoma 

BRUCE A. COHEN, Chief Counsel and Staff Director 

STEPHANIE A. MIDDLETON, Republican Staff Director 

NICHOLAS A. ROSSI, Republican Chief Counsel 

(III) 

C O N T E N T S 

STATEMENTS OF COMMITTEE MEMBERS 

Page 

Cornyn, Hon. John, a U.S. Senator from the State of Texas ............................... 1 

Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont .................... 6 

prepared statement ................................................................................................. 127 

Specter, Hon. Arlen, a U.S. Senator from the State of Pennsylvania, opening 

statement .............................................................................................................. 145 

WITNESSES 

Bayh, Hon. Evan, a U.S. Senator from the State of Indiana ............................... 3 

Israel, Chris, U.S. Coordinator for International Intellectual Property Enforcement, Department of Commerce, Washington, D.C. ................................. 7 

Moore, Chris, Deputy Assistant Secretary for Trade Policy and Programs, 

Bureau of Economic, Energy and Business Affairs, Department of State, 

Washington, D.C. ................................................................................................. 9 

O’Connor, Kevin J., U.S. Attorney for the District of Connecticut, and Chairman, Task Force on Intellectual Property, U.S. Department of Justice, 

Washington, D.C. ................................................................................................. 10 

PRE-HEARING QUESTIONS AND ANSWERS 

Responses of Kevin O’Connor to questions submitted by Senator Coburn ......... 19 

QUESTIONS AND ANSWERS 

Responses of Chris Israel to questions submitted by Senators Leahy, Hatch 

and Coburn ........................................................................................................... 24 

Responses of Kevin O’Connor to questions submitted by Senators Leahy, 

Hatch and Coburn ................................................................................................ 33 

Questions submitted by Senator Hatch to Chris Moore (Note: responses to 

questions were not received as of the time of printing, April 1, 2009) ............ 43 

SUBMISSIONS FOR THE RECORD 

Bayh, Hon. Evan, a U.S. Senator from the State of Indiana, statement ............ 44 

Forman, Marcy M., Director, Office of Investigations, U.S. Immigration and 

Customs Enforcement, Department of Homeland Security, Washington, 

D.C., statement .................................................................................................... 49 

GAO, Intellectual Property, Strategy for Targeting Organized Piracy, Washington, D.C., report .............................................................................................. 56 

Israel, Chris, U.S. Coordinator for International Intellectual Property Enforcement, Department of Commerce, Washington, D.C., statement .............. 113 

Moore, Chris, Deputy Assistant Secretary for Trade Policy and Programs, 

Bureau of Economic, Energy and Business Affairs, Department of State, 

Washington, D.C., statement .............................................................................. 128 

O’Connor, Kevin J., U.S. Attorney for the District of Connecticut, and Chairman, Task Force on Intellectual Property, U.S. Department of Justice, 

Washington, D.C., statement .............................................................................. 134 

U.S. Trade Representative, Washington, D.C., November 2007, mission ........... 147 

Voinovich, George V., a U.S. Senator from the State of Ohio, statement ........... 149 

(1) 

EXAMINING U.S. GOVERNMENT ENFORCEMENT OF INTELLECTUAL PROPERTY 

RIGHTS 

WEDNESDAY, NOVEMBER 7, 2007 

U.S. SENATE, 

COMMITTEE ON THE JUDICIARY, 

Washington, D.C. 

The Committee met, pursuant to notice, at 2:11 p.m., in room 

SD–226, Dirksen Senate Office Building, Hon. Patrick J. Leahy, 

Chairman of the Committee, presiding. 

Present: Senators Leahy and Cornyn. 

OPENING STATEMENT OF HON. JOHN CORNYN, A U.S. 

SENATOR FROM THE STATE OF TEXAS 

Senator CORNYN. Senator Leahy has been detained, but he is en 

route and in the interest of time asked that we go ahead and get 

started. Let me start with a brief opening statement, and then I 

will turn it over to our distinguished colleague from Indiana, Senator Bayh. 

First of all, I want to express my gratitude to Senator Leahy for 

convening this important hearing on protection of intellectual property. He and I are introducing a bill today that provides additional 

tools to the Justice Department and which strengthens our anti-piracy and anti-counterfeiting laws. Our bill reflects extensive input 

from the content community as well as the Department of Justice, 

particularly the DOJ’s Task Force on Intellectual Property. 

The Leahy-Cornyn Intellectual Property Enforcement Act of 2007 

is another example of bipartisan cooperation on an issue of critical 

importance to the United States economy and U.S. consumers. This 

legislation builds on previous legislation Senator Leahy and I cosponsored, the Protecting American Goods and Services Act of 

2005, which passed the Senate during the 109th Congress. 

I am proud that the Chairman and I have been able to work together on this and other IP legislation, like the Patent Reform Act 

and the Vessel Hull Design Protection Act. I am also proud of the 

work that this Committee has done and to be able to work with another distinguished colleague on the Judiciary Committee, Senator 

Feinstein, on the Artists’ Rights and Theft Prevention, or ART, Act. 

That legislation, which was signed into law by President Bush in 

2005, criminalized the use of recording devices in movie theaters 

and provided stiff penalties for violators. 

Earlier this year, Senator Feinstein and I were alerted to the fact 

that Canadian-sourced camcordings had jumped in 2006 by 24 perVerDate Nov 24 2008 14:46 Apr 07, 2009 Jkt 048142 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\48142.TXT SJUD1 PsN: CMORC
2 

cent and Canadian theaters were suspected to be the source for 

nearly half of all illegal camcordings. It became clear to us that 

changes to the U.S. law was not enough, and we wrote to Prime 

Minister Harper and urged the Canadian Government to consider 

similar legislation. We are pleased to learn that, in June, Canada 

took a decisive step toward combating camcording-generated piracy 

by enacting legislation modeled on the ART Act. 

I know there is another area of bipartisan agreement, and that 

is the hard work that is done by our anti-counterfeiting and antipiracy experts and enforcement personnel throughout the Federal 

Government. We should endeavor to give them all the tools that 

they need to fight this growing problem. 

To its credit, the administration has devoted significant resources and personnel to fighting pirated and counterfeit goods. 

The Department of Justice’s Task Force on Intellectual Property, 

represented here today by Mr. O’Connor, is an integral part of 

these efforts and provided significant input into the legislation that 

the Chairman and I have introduced today. 

I think it is important to recognize a few of the recent accomplishments in this regard. For example, there has been a surge of 

seizures in counterfeit goods by Customs and Border Protection, 

nearly a doubling from 2005 to 2006. The Department of Justice 

has deployed more than 230 specialized intellectual property prosecutors across the country since 2004, and there has been a significant increase in the number of Federal IP prosecutions, 287 convictions in fiscal year 2007 versus 2,013 convictions in fiscal year 

2006. 

The President has launched the Anti-Counterfeiting Trade 

Agreement, which is a major new initiative with several trading 

partners, including the European Union and Japan. This accord 

aims to raise the bar on IP enforcement across the globe. 

The administration has implemented, I believe, effective and coordinated strategies to address key concerns like China and Russia. 

This administration brought the first intellectual property cases 

against China in the WTO and is leading the effort to improve intellectual property enforcement in Russia prior to that Nation joining the WTO. These are significant developments, and there is 

much more to be done. The FBI estimates that counterfeiting costs 

companies in the United States somewhere on the order of $250 

billion a year. And we must confront the fact that profits from 

counterfeiting and piracy wind up in the hands of those who may 

wish America harm. 

We know, for example, that confiscated al Qaeda training manuals have recommended the sale of counterfeit goods as a revenue 

stream for its operatives. This disturbing fact alone should motivate our work to combat counterfeiting and piracy. 

When the Founding Fathers put the protection of intellectual 

property in the Constitution, they recognized the unique and unlimited creativity of the American people and the impact that 

American innovators would have on the world in the areas of art 

and technology. It is our obligation to protect those innovations as 

well as American consumers, and I look forward to learning here 

today about the administration’s progress and the ways that Congress can continue to provide the necessary tools. 

3 

Finally, again, I want to welcome our distinguished colleague, 

Senator Bayh, who has contributed with his own intellectual property legislation, along with Senator Voinovich, which I look forward 

to learning more about this afternoon. 

Senator Bayh, let me turn it over to you. 

STATEMENT OF HON. EVAN BAYH, A UNITED STATES SENATOR 

FROM THE STATE OF INDIANA 

Senator BAYH. Thank you, Senator Cornyn. I appreciate your 

courtesy in allowing me to offer my thoughts today about an issue 

that is of great importance to businesses and workers across our 

country, and particularly in my home State of Indiana. I hope you 

will relay my thanks to the Chairman. I know the Committee has 

many pressing matters before it, including the matter you dealt 

with yesterday, the next Attorney General of the United States, judicial nominations, patent protection, among other things. And so 

I thank you and the Chairman for making intellectual property 

protection a priority by having this hearing today. 

On a personal note, I cannot help but come before your Committee with at least some nostalgia. My father served on this Committee for 18 years, and so I know firsthand about the good work 

that you do, and it is an honor to be with you again today. 

Since the founding of our Republic, innovation has been a driving 

force behind our national prosperity. As you pointed out, Senator, 

the Constitution’s Framers listed intellectual property protection as 

the eighth enumerated power of Congress in Article I, Section 8. 

It is listed even before governing imperatives like forming a court 

system. 

Consistent with our historic responsibility, members of this body 

have over time crafted a system of intellectual property rights protection that has become a successful catalyst for economic growth 

and job creation. A recent study traced 30 to 40 percent of all U.S. 

productivity gains over the last century to economic innovation. 

Further studies have found that IP-intensive industries pay wages 

almost 50 percent higher than firms that are not IP focused. 

Today however, many of our innovators are being undermined by 

countries that refuse to play by the rules of the global marketplace. 

American companies have lost almost 750,000 jobs because of intellectual property theft, making it a major impediment to employment growth. 

Consumer safety concerns are also very real. Counterfeit pharmaceuticals and auto and aviation parts have caused serious injuries and death. An estimated 2 percent of the 26 million airline 

parts installed each year are counterfeit. Fake goods account for 10 

percent of all pharmaceuticals. 

Finally, as you pointed out, Senator, there is a serious national 

security dimension to this problem. For example, the United States 

seized an al Qaeda training manual in Afghanistan that recommended the sale of counterfeit goods as a source of terrorist 

funding. And also, at the time of the first attack on the World 

Trade Center, there were reports that that attack might have been 

funded in part by the sale of counterfeit goods. So there is a pressing national security dimension to this challenge. 

4 

Earlier this year, I joined with Senator Voinovich in introducing 

S. 522, the Intellectual Property Rights Enforcement Act, to improve the Government response to this problem. The administration has taken some good first steps with its STOP initiative, but 

we are still lacking the kind of high-level coordination and accountability needed to deal effectively with this problem. 

Our legislation was crafted—welcome, Mr. Chairman, at least 

temporarily. That is all right. 

Our legislation was crafted after extensive consultations with 

private industry groups to identify the flaws with our domestic and 

international IP enforcement regime. What emerged from these 

consultations was a consensus that interagency coordination is 

lacking in a number of important areas, and international cooperation on enforcement is weak at best. 

Under our current fragmented approach, we see a stovepiping effect in which communication occurs vertically within agencies but 

not horizontally throughout the Government. As you know all too 

well, interagency coordination is critical to the success of any largescale Federal effort. 

Currently, there is no plan for how agencies should work together on this problem. Current reporting requirements to Congress merely show what agencies are doing individually, not collectively as part of the united force. There is no indication of which 

organizations will provide the overall framework for oversight and 

accountability. 

Last November, the GAO released a study that echoes this critique of the shortcomings of our current approach. With the Chairman’s permission, I would like to enter this GAO report into the 

record, along with my statement. 

Chairman LEAHY. Without objection. 

Senator BAYH. Thank you, Mr. Chairman. 

I hope that members of the Committee will review this report 

and promptly move legislation to the floor, because there are many 

systemic problems in our Government’s approach to IP rights enforcement that require immediate corrective action. Our legislation 

requires a permanent strategy that addresses some of these flaws. 

It requires U.S. Government agencies to unify as part of an intellectual property enforcement network. It would vest responsibility 

for IP enforcement with a Senate-confirmed Government official— 

the Deputy Director for Management of the OMB. The Deputy Director would be responsible for submitting to Congress a strategic 

plan that includes objectives for IP enforcement, means for measuring results, and how agencies are to work together. 

Currently, Congress plays no meaningful role in IP enforcement 

other than appropriating funds and asking for briefings from administration officials. American workers, businesses, and taxpayers 

have the right to expect that we will take more of a leadership role 

in the face of a serious problem affecting our national economy and 

so many of our constituents. 

The OMB is uniquely situated to address the flaws in our current approach. Curbing global IP theft involves criminal prosecutions, border enforcement, trade policy, and international relations. 

Setting priorities and budgets for such a broad multi-agency effort 

is outside the scope of the Department of Justice, Homeland SecuVerDate Nov 24 2008 14:46 Apr 07, 2009 Jkt 048142 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\48142.TXT SJUD1 PsN: CMORC
5 

rity, or the U.S. Trade Representative alone. We need a stronger 

management presence to ensure that separate agencies are part of 

a single mission, thereby increasing overall efficiency and effectiveness. 

Our approach would also establish an international task force of 

concerned countries to track and identify IP criminals. The task 

force would be modeled on a similar international team that fights 

money laundering and other black market crimes. The task force 

will grant membership solely to countries with adequate IP protection laws and a track record of enforcing those laws. Today, international cooperation in many organizations is hampered by the 

worst global actors being part of those organizations. Our legislation envisions the United States sharing information on criminal 

activity and even engaging in joint enforcement operations. Such a 

close-knit arrangement can only flourish among trusted allies. 

A broad coalition of interests dissatisfied with the current approach supports our legislation. More than 500 companies, labor 

groups, and other organizations as diverse as the U.S. Chamber of 

Commerce, the AFL–CIO, the National Association of Manufacturers, and United Auto Workers have endorsed our strategy. 

Mr. Chairman, time is of the essence on this issue. The STOP 

program expires when the President leaves office. Our legislation 

will ensure that robust IP protection is a permanent priority regardless of the politics of the moment. 

In closing, Mr. Chairman, I would simply say this: The heart of 

America’s competitive advantage lies in the economy of tomorrow, 

an economy that is being invented and discovered each and every 

day. Until we take more aggressive action to curtail IP theft, we 

will continue to be robbed of profits, jobs, and legal protection for 

our best ideas. A stronger and more effective approach is needed 

to prevent the United States from losing its most valuable asset in 

the global marketplace—our innovators and entrepreneurs. 

Mr. Chairman, I want to take this opportunity to thank you for 

making this subject a priority—I know how busy the Committee 

is—and for your courtesy in allowing me to share my thoughts with 

you today. 

Thank you. 

Chairman LEAHY. Well, thank you, Senator Bayh. I also want to 

thank Senator Cornyn for stepping in. He has been a partner with 

me on so much of this material where we tried to demonstrate to 

the Senate that it is not a partisan matter. We have passed, I 

think, the PIRATE bill three times, John, in the Senate? And we 

have reintroduced it again this morning to allow the Department 

of Justice the authority to prosecute copyright violations and civil 

wrongs, and we will continue to support that. 

I know you have to be at other places, Senator Bayh, so you are 

welcome to stay, but you are welcome to leave, too. 

John, do you have anything? 

Senator CORNYN. No. Thank you. 

Senator BAYH. Thank you very much, Mr. Chairman. 

Thank you, Senator Cornyn. 

[The prepared statement of Senator Bayh appears as a submission for the record.] 

6 

STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR 

FROM THE STATE OF VERMONT 

Chairman LEAHY. You know, I was going to say earlier that intellectual property—our copyrighted works, our trademarked goods, 

our patented inventions—is the engine that drives our U.S. economy. Intellectual property, I am told, accounts for around 40 percent of our Nation’s exports. At a time when the dollar is sliding 

so precipitously against other currencies, we have to increase our 

exports. 

We also consume it voraciously here at home. IP is the medicine 

that cures us, the movies that thrill us, the music that inspires us, 

the software that empowers us, the technology that aids us. It is 

everywhere in our lives, and it is very important in our economy. 

Unfortunately, the piracy and counterfeiting of intellectual property is at an unprecedented high, certainly way beyond anything 

I saw when I first came to the Senate. Copyright infringement 

alone costs the U.S. economy at least $200 billion and also 750,000 

jobs each year. Not only does piracy infringe these rights, but it 

can also endanger our health and safety when there is counterfeiting of things that we depend upon for our health or our safety— 

fake drugs that look just like the real thing or tainted infant formula sold to unsuspecting parents, electrical appliances that have 

shoddy insulation, automobile parts that fail under stress—like 

brakes. These kinds of goods are proliferating. They are often difficult to distinguish from the real ones. 

I have worked for years to strengthen our laws and to give our 

law enforcement the powers they need. We passed in the last Congress the Stop Counterfeiting in Manufactured Goods Act, which 

expanded the prohibition on trafficking in counterfeit goods to include trafficking in labels or similar packaging with knowledge 

that a counterfeit mark had been applied to those goods. I have 

regularly authored amendments to the State Department’s appropriations bill. My amendments have provided millions to the Department in order to send staff overseas specifically to combat piracy in countries that are not members of the Organization for Economic Co-Operation and Development, or OECD. 

In the current Congress, there are a number of other bills along 

with Senator Cornyn’s and my PIRATE Act. Senator Bayh introduced a bill focused on interagency coordination. Senator Biden recently introduced omnibus crime legislation that has many provisions suggested by the Department of Justice. There are bound to 

be more. 

I worry that anything like this, if it is addressed piecemeal, could 

be a mistake. It is far too important to be addressed piecemeal. To 

have the greatest change, we have to examine enforcement efforts 

from the top down. So in our second panel—and I would invite you 

to come forward. I will first let the people who actually make this 

place run, the staff, put up the names. 

Mr. Chris Israel is the United States Coordinator for International Intellectual Property Enforcement, serving as head of the 

National Intellectual Property Law Enforcement Coordination 

Council. Is it true that it is called NIPLECC? 

Mr. ISRAEL. Yes. We did not name it, Senator. 

7 

Chairman LEAHY. I know you did not. But what it does, it includes the Departments of Commerce, Justice, State, and Homeland Security, and the U.S. Trade Representative. Before becoming 

the U.S. Coordinator, Mr. Israel was Deputy Chief of Staff first to 

Commerce Secretary Donald Evans, then to the current Commerce 

Secretary, Carlos Gutierrez. 

Chris Moore is the Deputy Assistant Secretary of State for Trade 

Policy and Programs in the Bureau of Economic, Energy, and Business Affairs, and oversees the State Department’s activities to 

strengthen intellectual property rights protection. Prior to the 

State Department, he served in both the Office of the U.S. Trade 

Representative and the Department of Commerce. 

Kevin O’Connor currently serves as United States Attorney for 

the District of Connecticut, as Chief of Staff to the United States 

Attorney General, as Chairman of the Department of Justice Task 

Force on Intellectual Property, and was a partner before that in the 

law firm of Day, Berry & Howard. I believe you served in the Securities and Exchange Commission, too. Is that correct, Mr. O’Connor? 

Mr. O’CONNOR. That is correct, Senator. 

Chairman LEAHY. Mr. Israel, why don’t we begin with you, sir. 

STATEMENT OF CHRIS ISRAEL, U.S. COORDINATOR FOR 

INTERNATIONAL INTELLECTUAL PROPERTY ENFORCEMENT, U.S. DEPARTMENT OF COMMERCE, WASHINGTON, D.C. 

Mr. ISRAEL. Thank you, Chairman Leahy. I am pleased to join 

you today to discuss the U.S. Government’s intellectual property 

enforcement efforts. 

As the U.S. Coordinator for International Intellectual Property 

Enforcement, it is the task of my office to leverage the capabilities 

and resources of the U.S. Government to promote effective global 

enforcement of intellectual property rights. Today I would like to 

discuss the ongoing leadership and prioritization of the Bush administration regarding IP enforcement, provide an account of some 

of the progress we have made, and, finally, give some insight on 

how we are coordinating our efforts. 

The reasons for the administration’s leadership on IP enforcement and for its prioritization are clear. 

Few issues are as important to the current and future economic 

strength of the United States as our ability to create and protect 

intellectual property. U.S. IP industries account for over half of all 

U.S. exports. They represent 40 percent of our economic growth 

and employ 18 million Americans, who earn 40 percent more than 

the average U.S. wage. This growth in prosperity is put in jeopardy, however, by rampant theft of intellectual property. Quite simply, a secure and reliable environment for intellectual property is 

critical to the strength and continued expansion of the U.S. economy. Therefore, the protection of intellectual property is a major 

trade, economic, health, and safety issue for the Bush administration. We seek every opportunity at every level to engage our trading partners, strengthen our enforcement capabilities, and collaborate with industry. 

As this Committee understands, the problem of global piracy and 

counterfeiting confronts many industries, exists in many countries, 

8 

and demands continuous attention. With finite resources and seemingly infinite concerns, how we focus our efforts is crucial. A critical 

element of our overall coordination is the Strategy Targeting Organized Piracy, or STOP! Initiative, launched by the administration 

in October of 2004. STOP is built on five key principles: 

First, empowering innovators to better protect their rights at 

home and abroad; 

Second, increasing efforts to seize counterfeit goods at our borders; 

Third, pursuing criminal enterprises involved in piracy and counterfeiting; 

Fourth, working closely and creatively with industry; 

And, fifth, aggressively engaging our trading partners to join our 

effort. 

STOP is a broad interagency effort led by the White House that 

draws upon the capabilities of the Department of Commerce, the 

Department of Justice, USTR, the State Department, the Department of Homeland Security, and FDA. The principles of STOP are 

essentially our combined action plan. They are the things that this 

administration is committed to expanding, coordinating, and executing in order to protect American IP and demonstrate leadership 

around the world. 

On a number of fronts, our efforts have brought meaningful results. We have provided useful tools and information that has 

reached thousands of American rights holders. As you will hear 

from Mr. O’Connor, criminal enforcement has increased dramatically, and Justice is leading our effort to promote even stronger domestic IP laws. U.S. seizures of counterfeit goods doubled from 

2005 to 2006, in total over 50,000 since 2002. Finally, we are leading an aggressive effort around the world to promote IP enforcement. We have launched a major new initiative, the Anti-Counterfeiting Trade Agreement, with the EU, Japan, Korea, Mexico, Canada, New Zealand, and Switzerland, to create a global gold standard for IP enforcement. We have also established strong IP enforcement programs with the EU, the G–8, and through the Security 

and Prosperity Partnership with Canada and Mexico. 

To confront major concerns, we have filed the first complaint 

with the WTO regarding China’s failure to enforce intellectual 

property rights and made IP enforcement a major premise for our 

support of Russia’s accession to the WTO. 

To achieve these results, we have established a permanent and 

comprehensive U.S. Government strategy that draws upon multiple 

agencies and spans the globe. We have utilized the statutory National Intellectual Property Law Enforcement Coordination Council 

as a cornerstone for implementing our key priorities, and we have 

taken steps to be more transparent and accountable, such as 

through our quarterly IP enforcement updates and an improved annual report to the President and Congress. 

These are significant steps in a very long and difficult journey to 

combat global IP theft. Piracy and counterfeiting is an expanding 

global business led by sophisticated and organized criminals. Mr. 

Chairman, we are dedicated to stopping intellectual property theft 

and providing businesses with the tools they need to flourish in the 

global economy. We look forward to working with this Committee 

9 

to promote strong intellectual property rights protection for American businesses and entrepreneurs around the world. 

Thank you very much, and I welcome your questions. 

[The prepared statement of Mr. Israel appears as a submission 

for the record.] 

Chairman LEAHY. Thank you very much. I think we will have 

each one of you testify and then ask some questions. So, Mr. 

Moore? 

STATEMENT OF CHRIS MOORE, DEPUTY ASSISTANT SECRETARY FOR TRADE POLICY AND PROGRAMS, BUREAU OF 

ECONOMIC, ENERGY, AND BUSINESS AFFAIRS, U.S. DEPARTMENT OF STATE, WASHINGTON, D.C. 

Mr. MOORE. Thank you, Chairman Leahy. Thank you for this opportunity to speak today about the State Department’s work to 

combat counterfeiting and piracy and enforce intellectual property 

rights around the world. 

A strong intellectual property rights regime has made the United 

States economy one of the most innovative and competitive on 

Earth, and the administration is working aggressively to combat 

counterfeiting and piracy and to strengthen intellectual property 

enforcement at home and abroad using all available tools. 

The United States was instrumental in building a robust worldwide legal infrastructure for innovation and creativity through the 

WTO Agreement on Trade-Related Aspects of Intellectual Property 

Rights. This administration has built on the strong legal protections in the WTO by including groundbreaking IPR provisions that 

improve on the TRIPS foundation in a dozen free trade agreements 

reached with 17 countries since 2001, and we have brought new 

tools and partnerships to our work in this critical area through 

STOP, the administration’s Strategy Targeting Organized Piracy 

Initiative. 

In close coordination, agencies across the Federal Government 

are successfully engaging our partners around the world to promote 

full implementation of the IPR protections in America’s trade 

agreements and to strengthen laws and take other steps to improve 

enforcement. The State Department plays a vital role in supporting 

and complementing the enforcement activities of other Federal 

agencies with lead responsibilities in this area. Secretary Rice is a 

strong champion of intellectual property protection, and top Department officials regularly press their overseas counterparts to 

improve enforcement. 

In 2005, at the request of Congress, the State Department established its first Office of International Intellectual Property Enforcement. This office is marshalling and leveraging the full range of 

often unique tools and resources at our disposal to achieve real results for American innovators and creative artists. 

Through the State Department’s network of more than 260 embassies, consulates, and missions around the world, America’s Ambassadors, consul generals, and economic officers are playing a 

powerful role in advancing and implementing the administration’s 

global IPR enforcement policies and activities, acting as first responders for U.S. right holders facing counterfeiting and piracy 

challenges abroad, engaging regularly and successfully with foreign 

10 

government officials to secure tougher enforcement, and promoting 

full implementation of trade agreement commitments. 

Capitalizing on our central role in negotiations leading to annual 

G–8 leaders meetings, the State Department is leading work 

among the industrialized nations of the world to prioritize and 

build a common agenda for IPR enforcement. Through this work, 

G–8 leaders are giving priority to substantially reducing global 

trade in counterfeit and pirated goods. 

Thanks to your leadership, Mr. Chairman, and to the leadership 

of Representative Diane Watson and others in Congress, the State 

Department has significantly increased the funding available for its 

IPR law enforcement training programs from less than $1 million 

in fiscal year 2003 to $3 million in fiscal year 2007, and we are 

working to ensure these funds are effectively managed and deployed to maximum impact around the world. 

Our training programs are delivering real results. In Indonesia, 

for example, we support two full-time U.S. advisors who have 

helped the Indonesian Government launch a recent series of largescale enforcement actions. 

Finally, the State Department is utilizing its extensive global 

public diplomacy tools to help build public understanding of the 

value of IPR and public support for stronger enforcement in countries around the world. 

In closing, I would like to thank you, Mr. Chairman, and the 

other members of this Committee for your continued leadership, 

focus, and engagement on this vital issue and for emphasizing the 

need for stronger intellectual property enforcement with foreign 

government officials, legislators, and media in your overseas travel. 

Our trading partners pay close attention to what Members of Congress say, and your actions play a big part in helping us to effectively meet the challenge of global counterfeiting and piracy. 

Thank you again, Mr. Chairman, for the opportunity to testify 

today. I look forward to answering any questions you or other 

members of the Committee may have. 

[The prepared statement of Mr. Moore appears as a submission 

for the record.] 

Chairman LEAHY. Thank you very much, Mr. Moore. 

Mr. O’Connor, please go ahead. Is your microphone on? 

The little red button there. 

STATEMENT OF KEVIN J. O’CONNOR, UNITED STATES ATTORNEY FOR THE DISTRICT OF CONNECTICUT, AND CHAIRMAN, 

TASK FORCE ON INTELLECTUAL PROPERTY, U.S. DEPARTMENT OF JUSTICE, WASHINGTON, D.C. 

Mr. O’CONNOR. Chairman Leahy, good afternoon, and thank you 

for the opportunity to discuss the Department of Justice’s role in 

the coordinated effort to protect intellectual property rights. 

Today the Department is dedicating more energy and resources 

than ever before to the protection of intellectual property. As part 

of President Bush’s Strategy Targeting Organized Piracy, or the 

‘‘STOP,’’ initiative, the Department created a task force that you 

previously referred to on intellectual property, which conducted a 

thorough review of the Department’s IP enforcement efforts and 

11 

implemented numerous recommendations, 31 in all, to improve 

those efforts. 

At the core of that task force’s mission is enforcement, specifically increasing our criminal prosecutions of those who violate our 

IP laws. We have done just that. Through the dedicated efforts of 

U.S. Attorney’s Offices, our Criminal Division, and law enforcement 

across the country, the Department has convicted and sentenced 

287 defendants on intellectual property charges in this past fiscal 

year, which is a 35-percent increase over the prior fiscal year and 

a 93-percent increase over fiscal year 2005. 

The Department is also dedicating more prosecutors to IP crime. 

In 2001, the Department had one Computer Hacking and Intellectual Property Unit, otherwise known as a CHIP Unit. Today we 

have 25 units and over 230 prosecutors in U.S. Attorney’s Offices 

across the country dedicated exclusively to prosecuting IP and 

other computer crimes. In fiscal year 2007, those CHIP units successfully convicted and sentenced 80 percent more defendants than 

they did last year. 

Time does not allow me to cover all the prosecutions listed in my 

written testimony, but I would like to take a moment to highlight 

a recent case from the District of Connecticut, where I am proud 

to serve as the U.S. Attorney. 

Recently, an individual by the name of Eli El was sentenced to 

30 months’ imprisonment for conspiracy to distribute over the 

Internet more than 20,000 copies of pirated software. His conviction arose from an undercover investigation targeting an underground Internet community specializing in cracking and distributing copyrighted works online. 

I cite this case not only because it is from Connecticut, but also 

because this prosecution exemplifies the Department’s strategy 

against the growing global threat of online software piracy. We 

were attacking the high end of the supply chain and prosecuting 

the sources and first suppliers of the pirated material so widely 

available online. We hope Mr. El’s 30-month sentence will send the 

message that this type of conduct will not be tolerated. 

Our enforcement strategy is not and cannot, however, be confined to our borders. Recently, in a joint investigation with the FBI, 

China’s Ministry of Public Security arrested 25 individuals and 

seized more than half a billion dollars of counterfeit software and 

another $7 million in assets. This case, known as ‘‘Operation Summer Solstice,’’ dismantled one of the largest international piracy 

syndicates. To continue to promote these types of joint international investigations, the Department established an IP Law Enforcement Coordinator for Asia. This week, a second Coordinator 

for Eastern Europe just began work in Bulgaria. These seasoned 

prosecutors with experience in IP prosecutions will coordinate our 

joint investigations in those parts of the world and promote training and outreach efforts with our foreign counterparts. 

Just last month, with assistance from our colleagues with the 

State Department and the U.S. Patent and Trademark Office, we 

hosted the first IP Crime Enforcement Network in Bangkok. This 

conference brought together key law enforcement officials from 12 

nations in Asia with the aim of developing an international network targeting large-scale intellectual property crimes. 

12 

While the Department is pleased with its record, more work remains. In May, the Department transmitted to Congress comprehensive legislation to provide prosecutors with additional tools 

to combat organized piracy and hacking networks. This legislation 

would strengthen sentences for repeat copyright offenders, increase 

the penalties for counterfeiters whose actions threaten public 

health and safety, and create a new crime for attempting to commit 

copyright infringement. I want to thank the Committee and your 

staffs for continuing to work with the Department toward enactment of as many of these bills’ provisions as possible. 

Finally, Mr. Chairman, despite the divergent roles played by 

many of the Government agencies involved in STOP, coordination 

has not been a significant problem. In fact, thanks in no small part 

to the leadership of my colleague Chris Israel, support and cooperation amongst the agencies involved in this effort and important endeavor has been outstanding and has produced unprecedented results. 

Thank you for the opportunity to highlight this afternoon the Department’s role and achievements in the coordinated U.S. Government effort to protect intellectual property rights. I am pleased to 

answer any questions you may have. 

[The prepared statement of Mr. O’Connor appears as a submission for the record.] 

Chairman LEAHY. Thank you, and I am glad to hear you speaking of the cooperation and how that works. I want to get into this 

a little bit. 

It was interesting during the days when I was a prosecutor, and 

you worried about people who stuck a gun in the face of a bank 

teller or something like that and off you would go. And here you 

are talking about somebody who may be doing the stealing and 

could be a thousand miles away from where they stole it and be 

selling it thousands of miles away from there. It is an entirely different situation. And we know that the way it is going, we are always going to have more battles to fight, and we are always going 

to have a finite amount of resources to use. 

So let me ask you this, and I will ask each of you: What pirates 

and counterfeiters do the most harm? And what kind of enforcement targets, assuming you could use whatever you wanted, would 

be best to bring them down? Mr. Israel? And I realize there are all 

kinds of people out there. Who causes the most harm? 

Mr. ISRAEL. Well, Mr. Chairman, that is a very insightful question, obviously, and I think we are seeing—with the deployment of 

technology around the world, I think the Internet has become a 

very efficient and preferred platform for a variety of different types 

of IP crimes. I think you obviously see the quick-to-market type of 

applications when it comes to movies and music and really moving 

those products globally very quickly. And it has changed dramatically the entire business model of a number of industries. 

One thing that is certainly alarming is the trend in the sophistication, moving upscale in terms of the sophistication of the types 

of products that we see—electronics, pharmaceutical products. If 

you look into the Customs’ seizure data over the last couple of 

years, you see a pretty dramatic uptick in the number of seizures 

they are making of IT products—consumer electronics, pharmaVerDate Nov 24 2008 14:46 Apr 07, 2009 Jkt 048142 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\48142.TXT SJUD1 PsN: CMORC
13 

ceuticals. So higher value-added, more sophisticated products I 

think is a trend that clearly is drawing a tremendous amount of 

attention from the enforcement resources within the Federal Government and from industry itself. 

Chairman LEAHY. And what would be the targets? 

Mr. ISRAEL. The targets are clearly the products that have high 

brand-name recognition. 

Chairman LEAHY. But would the people that we want to bring 

down, are they in this country? Are they outside of this country? 

Or both? 

Mr. ISRAEL. It is going to be both. You are going to see distribution mechanisms that are set up within this country using direct 

mail, using a variety of different methods to get product to consumers who are demanding it. That is a piece of this we need to 

address, too, the demand side. 

But you see a large sourcing of these products in Asia; 80 percent 

of the counterfeit goods coming to this country that we seize come 

from China. So, clearly, that is the nexus of the production for a 

vast majority of the counterfeit goods in the world. 

Chairman LEAHY. Thank you. You know, it is interesting. We 

had another matter. We had people who made movies in the digital 

age, very easy to copy, and the man who had spent a considerable 

amount of his life to produce the movie ‘‘Ray’’ about Ray Charles. 

He talked about how he had mortgaged his home, had done all 

these other things to raise the money, and was so proud when it 

opened in New York. And he is walking up the street the day after 

it opens and admiring it on the marquee, walks around the corner 

and somebody is trying to sell him a counterfeit copy of ‘‘Ray.’’ 

Mr. Moore. 

Mr. MOORE. Thank you, Mr. Chairman. I think as we look out 

at this challenge globally, what we find most alarming are the examples of organized and sophisticated transnational groups that 

are involved in counterfeiting and piracy. Where we see organizations that are counterfeiting and pirating goods on a commercial 

scale, who are causing those goods to be distributed around the 

world, these are the companies or the organizations that tend to be 

one of the largest problems for us. They are the companies and the 

organizations that are causing significant damage to many of our 

small businesses. Oftentimes, our small businesses are not aware 

that if you have a website, you are a global company today. And 

so we have instances of counterfeiters and pirates in China basically looking at the product lists that they have on their website, 

downloading that product list, reproducing the items that are there 

to quite a high and sophisticated quality level, and then distributing those products in many countries around the world, undermining the market and value of— 

Chairman LEAHY. Gorilla Glue. 

Mr. MOORE. I am sorry? 

Chairman LEAHY. Gorilla Glue is one. 

Mr. MOORE. Yes, exactly. And so that is one of the key challenges 

that I think we see. 

In terms of solutions to that, I think it underscores the need for 

us to continue to engage aggressively with our trading partners 

around the world. When you are talking about transnational counVerDate Nov 24 2008 14:46 Apr 07, 2009 Jkt 048142 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 S:\GPO\HEARINGS\48142.TXT SJUD1 PsN: CMORC
14 

terfeiting and piracy, the production of these goods in one country 

and the distribution through others and finding markets in still 

third countries, we need to be working aggressively with our partners so that— 

Chairman LEAHY. Well, and in that regard, if you take China, 

which has been a very significant problem—it is a very significant 

problem in legal goods, as we have found with lead in children’s 

toys—something that every parent or every grandparent is looking 

at especially as the holiday seasons are coming up. But China is 

a country that if they really wanted to bring a stop to that, could. 

I mean, you have got as controlled a distribution system and economy and law enforcement and so on there. And you have to assume 

that in many instances there is a blind eye being turned to this. 

Am I correct? 

Mr. MOORE. Well, I think we have seen— 

Chairman LEAHY. I do not want to get you on the carpet when 

you get back to the office, but isn’t that a fact? 

Mr. MOORE. What I think we have seen in China is certainly 

some will to have additional raids and crackdowns. As a result of 

our bilateral engagement, they have taken certain other steps that 

have been helpful. But I think what they are looking at, what we 

are looking at, is a systemic problem. It is not enough to have raids 

and crackdowns if that is not followed up by effective prosecution 

and enforcement, if it is not followed up by deterrent penalties, including criminal penalties, if the market is not open to legitimate 

copyrighted and trademarked items. 

And so all of these things added together, I think they are looking at a systemic problem, but they are dealing with just one piece 

of that. 

Chairman LEAHY. And when you have instances like you have a 

factory that is basically controlled by the military, and when pressure is brought, they will bring counterfeit goods out in the parking 

lot in front and run some kind of a crushing machine over it for 

all the cameras rolling, and out the back door there are large tractor-trailers filling up with the same product being shipped out, I 

think that raises a real concern. 

Mr. O’Connor, your view on this? 

Mr. O’CONNOR. I do not want to, Senator— 

Chairman LEAHY. You are coordinating with U.S. Attorneys 

around the country. I mean, what pirates and counterfeiters are 

doing the most harm? 

Mr. O’CONNOR. Well, I would agree with and echo the comments 

of my colleagues here today in the sense that obviously the organized criminal syndicates, whether they are the ‘‘warez scene’’ that 

we have seen in Connecticut and across the country, they probably 

are the biggest threat because they can do the most harm and do 

it most efficiently, because they are organized, they are extensive, 

they use the Internet to distribute stuff in seconds that would otherwise take months or years. And so they pose the biggest threat. 

But I must say, in fairness to the victims of these crimes, they 

are probably less concerned whether it is an organized criminal 

syndicate or somebody sitting behind their computer by themselves. I mean, it still has affected them as any defendant would 

feel. 

15 

So we have to be sure to balance our efforts to go after organized 

criminal syndicates with also the ability to prosecute what you 

might call ‘‘Lone Rangers,’’ and that is, you know, the balance we 

are trying to strike. 

Chairman LEAHY. Well, let me just followup on that a little bit, 

and then I will yield to Senator Cornyn, if he is able to come back. 

But let me just followup a little bit on this. Let’s look at it from 

the view of state and local law enforcement. I look at my little 

State of Vermont. We have only got 650,000 people, but on a per 

capita basis, we are the largest exporting state in the country. We 

have a great deal of intellectual property that is sent out, computer 

software and so on. I remember years ago, when he was first starting, the man who began Burton Snowboards—it is now worldwide—Jake Burton—I was getting on a plane in Chicago with him, 

and we were both kind of squeezed into—those of us who are large 

enough know how uncomfortable some of these seats are way back 

in steerage, and Jake and I were squished in with a third person 

in a row in the back, and he said, ‘‘See that guy who is going in 

first class? ’’ I said, ‘‘Yes.’’ He said, ‘‘He is a pirate.’’ I said, ‘‘What 

do you mean? ’’ He said, ‘‘We just spent a fortune designing a new 

boot for our snowboards. He just took it over to China. They are 

copying it, and they are underselling us. He gets to fly first class.’’ 

Now, Jake has done well enough that—I still ride in those seats 

in the back. I will wave to him as he goes up front. But you see 

what I am getting at. 

Now, I was thinking, okay, he has got a business in Burlington, 

Vermont. What can the State do? I mean, how do local prosecutors 

or even up to the level of the Federal prosecutor within a district, 

or in our case the district is the whole State, what do they do? How 

do they go after this? 

Mr. O’CONNOR. Well, I would think in most States in situations 

like that, they would work very closely with Federal authorities, 

particularly if there is an international element to the offense. You 

know, the State and locals generally do not have the amount of resources the Federal level does. They do not have the ability to do 

international or multi-State investigations. 

That being said, in many States, including Connecticut, and I am 

sure Vermont, they are doing great work on the local level on other 

computer crimes, whether it is tracking child predators—so it is a 

question of, I think if you are a U.S. Attorney and this is a problem, you should have a very close working relationship with your 

State’s authority or local DA and be sharing information and utilizing the laws that fit the situation best. 

In some States, they may have—I doubt it as a general rule, but 

they may have strong IP laws, and in that case it might make 

sense to help out federally, but let the case be prosecuted by the 

State. 

Chairman LEAHY. In other words, if they put together a good 

law, but there may be one assistant or one half of an assistant, as 

it sometimes is in a local prosecutor’s office, if the Feds can come 

in and help them make the case, then prosecute it under State law. 

Mr. O’CONNOR. Yes, that is what we do, whether it is Project 

Safe Neighborhoods, Project Safe Childhood, you can oftentimes 

use the Federal resources to leverage State pleas. At the end of the 

16 

day, I think we are less concerned where the person pleads guilty 

than that they are held accountable in some court of law. 

Chairman LEAHY. Mr. Israel has the job of coordinating efforts, 

and notwithstanding the acronym, but what does that mean, we 

support each other, we complement each other, whether it is the 

State Department or Justice Department? Each agency seems to 

conduct its own training seminars on IP enforcement. Give me actual cases of how across agencies you are actually supporting each 

other. 

Mr. ISRAEL. Sure. Thank you, Mr. Chairman. I will give you two 

examples that indicate a good deal of cooperation with the number 

of agencies, and I will leave the questions of actual tactical law enforcement engagement to Mr. O’Connor. 

Just 2 weeks ago, in China, our U.S. Ambassador there, Ambassador Randt, has the sixth of his annual IP enforcement 

roundtables, which was a product organized by the State Department, put together in large measure with a U.S. Patent and Trademark Office IP Attache who has been posted in Beijing now for 

about 3 years; our U.S. Trade Representative’s Office participated, 

as did ICE, Customs and Protection, and the Department of Justice. So we had literally every Federal agency that has a role to 

play in IP enforcement present at this day-long session in Beijing 

hosted by the Ambassador that listened for the entire day to U.S. 

industry and the concerns they have got and some of the specific 

cases that we are going to try to— 

Chairman LEAHY. Well, what comes of that? 

Mr. ISRAEL. We are putting together as a result of that—it essentially formulates the action strategy for the U.S. Embassy’s IP enforcement efforts in Beijing for the coming year. From that will 

come the specific projects and the followup that they will do with 

our industry, and some of those things are diplomatic relationship 

issues with the Chinese. There are some specific law enforcement 

activities that will come as a result of that. So really there I think 

you see the coming together of just about every agency involved in 

China. 

Chairman LEAHY. But if China just ignores you, there is not 

much you can do in China. 

Mr. ISRAEL. We every day have to deal with the challenge of getting and sustaining the attention of the Chinese and— 

Chairman LEAHY. And I do not mean that dismissively saying 

that. I have dealt with the Chinese. I know how difficult that is. 

But— 

Mr. ISRAEL. We are constrained certainly by the attention and 

the focus of the Chinese, and we will keep trying to work on that. 

A second quick example I would cite is the ACTA Agreement 

that Ambassador Schwab announced about 2 weeks ago. That is 

really the result of about a year’s worth of discussion and dialogue 

with all the member countries that are involved in that, and that 

was truly an interagency, U.S. interagency process. The things we 

are talking about doing with these countries go well beyond just 

trade enforcement and operating under the WTO. They involve law 

enforcement cooperation, establishing networks of law enforcement 

officials across all these countries to work with each other, share 

information, work on operations that could lead to law enforcement 

17 

activities. Customs is involved in that. Our Patent and Trademark 

Office is involved in that effort, as is the State Department. So that 

really was about a year-long process that involved a number of 

agencies and culminated in what we think is a pretty cutting-edge 

agreement with some very relevant nations that the Ambassador 

announced 2 weeks ago. 

Chairman LEAHY. Thank you. 

Mr. Moore, would you like to add anything to that? 

Mr. MOORE. Sure. I will just give you a couple of examples from 

the different areas that I mentioned in my prepared testimony. 

Chris has already mentioned the ways that our embassies can be 

very supportive, talking about the Ambassador’s roundtable in Beijing. Our embassies around the world play a vital role in supporting the enforcement actions and monitoring of our trade agreements that are done by the Commerce Department and by USTR, 

helping to advise in those issues, helping to conduct on the ground 

what is needed to support the activities here in Washington. 

Through our training programs, my colleague from the Department of Justice talked about some work that we are doing in Eastern Europe, through the intellectual property law enforcement. Oftentimes, the programs that are done by DOJ and by some of the 

other agencies are funded through our training programs, and so 

we help to support those. 

In our international efforts, we are also helping to build global 

coalitions through our work in the G–8 and other international forums. 

Chairman LEAHY. Are you getting cooperation there? 

Mr. MOORE. We are. We are getting very good cooperation there. 

Chairman LEAHY. I would think that some of these countries, 

while they may think, gosh, they could make a short-term gain by 

kind of ignoring us, especially as they become more technically 

adept themselves, and many of them have equal technical abilities 

as we do, in the long term it is going to hurt them. 

Mr. MOORE. One of the things that has been most striking about 

our engagement with other countries through these international 

forums is the degree to which they are seeing many of the same 

challenges that we are with global counterfeiting and piracy, the 

trade in counterfeit and pirated goods. They are looking to cooperate with us. They want to cooperate with us. And so I think we are 

getting a good response in the forums and— 

Chairman LEAHY. And when you think of some of the countries 

that have large pharmaceuticals, countries that are beginning to go 

if not to the degree we do but into the entertainment world, whether music, movies, or software, and how that goes. We have it with 

manufactured goods. We have it with computers, telephones, automobiles, and replacement parts for automobiles, which is a significant aftereffect of having sold you—the car may have been made 

in Germany or France or elsewhere. But they also want to make 

sure, if they are going to have replacement parts, that they know 

where they come from. 

Mr. MOORE. Exactly, and it is on that basis, I think, they are seeing some of the economic damage that we are. They are concerned 

about the public health and safety, the implications of counterfeit 

18 

and pirated goods. And so all of those are areas where we have 

seen good cooperation. 

Chairman LEAHY. And, Mr. O’Connor, you get the last word on 

this, because what I am going to do after you finish, I am going 

to place in the record, without objection, a statement by Senator 

Specter, and I am going to leave the record open for questions others might have. What we are trying to do is prepare enough of a 

record for legislation that we will keep trying to get through before 

we get out of here. 

Mr. O’CONNOR. At the risk of delaying things, I will simply say 

that— 

Chairman LEAHY. Take all the time you want, Mr. O’Connor. I 

am actually fascinated by this, so go ahead. 

Mr. O’CONNOR. Thank you, Mr. Chairman. I think from the Department’s perspective, perhaps the biggest benefit to us from 

working with State and Commerce in particular is State is really 

our bridge to our foreign counterparts who we must work with in 

light of the international aspects of this problem very closely. And 

they can open up doors to help establish good working relationships, whether it is China, India, Russia, or anywhere else. 

I would say with respect to Commerce, they are our bridge, but 

our bridge to the industry, those victimized the most by these 

crimes. They understand the industry. They know the key players 

in the industry, and they are always the vehicle by which we are 

able to set up forums, including, I believe, one in Vermont not too 

long ago, to discuss this in— 

Chairman LEAHY. I was there. 

Mr. O’CONNOR. I know you were. I was supposed to be, but could 

not be, but I know we did have a Department of Justice— 

Chairman LEAHY. You had Department representation there, and 

we have gotten nothing but great feedback from the people, and we 

went from IBM, which, of course, has all sorts of worldwide—connect down to people, a three- or four-person business, but making 

a very, very unique product that has been copyrighted and 

trademarked and everything else and terrified about somebody else 

just duplicating it. 

Mr. O’CONNOR. And those forums are key for us as prosecutors 

because that is where we learn not only, you know, the impact on 

the victims. I think we are fairly sensitized to that by now. But it 

is really how we learn about the tools of the trade because the victims are usually the ones who first discover the newest techniques, 

whether it is by the Internet or elsewhere, that they are victimizing people. So they are tremendous, useful forums, and our 

friends in the Commerce Department have always been very good 

about including us, and I expect in the future we will continue to 

play a role in that. 

Chairman LEAHY. Well, the Committee will stand in recess, and 

I thank you very much. 

[Whereupon, at 3:06 p.m., the Committee was adjourned.] 

[Questions and answers and submissions follows.] 

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