[Senate Hearing 112-533]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 112-533

   OVERSIGHT OF THE OFFICE OF THE INTELLECTUAL PROPERTY ENFORCEMENT 
                              COORDINATOR

=======================================================================

                                HEARING

                               before the

                       COMMITTEE ON THE JUDICIARY
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________


                              MAY 9, 2012

                          Serial No. J-112-75

                               __________

         Printed for the use of the Committee on the Judiciary












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                       COMMITTEE ON THE JUDICIARY

                  PATRICK J. LEAHY, Vermont, Chairman
HERB KOHL, Wisconsin                 CHUCK GRASSLEY, Iowa
DIANNE FEINSTEIN, California         ORRIN G. HATCH, Utah
CHUCK SCHUMER, New York              JON KYL, Arizona
DICK DURBIN, Illinois                JEFF SESSIONS, Alabama
SHELDON WHITEHOUSE, Rhode Island     LINDSEY GRAHAM, South Carolina
AMY KLOBUCHAR, Minnesota             JOHN CORNYN, Texas
AL FRANKEN, Minnesota                MICHAEL S. LEE, Utah
CHRISTOPHER A. COONS, Delaware       TOM COBURN, Oklahoma
RICHARD BLUMENTHAL, Connecticut
            Bruce A. Cohen, Chief Counsel and Staff Director
        Kolan Davis, Republican Chief Counsel and Staff Director















                            C O N T E N T S

                              ----------                              

                    STATEMENTS OF COMMITTEE MEMBERS

                                                                   Page

Grassley, Hon. Chuck, a U.S. Senator from the State of Iowa......     2
    prepared statement...........................................    75
Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont.     1
    prepared statement...........................................    81

                               WITNESSES

Espinel, Victoria A., U.S. Intellectual Property Enforcement 
  Coordinator, Office of Management and Budget...................     3

                         QUESTIONS AND ANSWERS

 Responses of Victoria A. Espinel to questions submitted by 
  Senators Grassley, Coburn, Klobuchar, Franken, Lee and Cornyn..    20

                       SUBMISSIONS FOR THE RECORD

Espinel, Victoria A., U.S. Intellectual Property Enforcement 
  Coordinator, Office of Management and Budget, statement........    60

 
   OVERSIGHT OF THE OFFICE OF THE INTELLECTUAL PROPERTY ENFORCEMENT 
                              COORDINATOR

                              ----------                              


                         WEDNESDAY, MAY 9, 2012

                                       U.S. Senate,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:13 a.m., in 
room SD-226, Dirksen Senate Office Building, Hon. Patrick J. 
Leahy, Chairman of the Committee, presiding.
    Present: Senators Leahy, Kohl, Whitehouse, Franken, Coons, 
Grassley, and Coburn.

OPENING STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR FROM 
                      THE STATE OF VERMONT

    Chairman Leahy. I apologize for being late. I try not to be 
to one of these hearings--unfortunately, I got into an 
unavoidable situation--especially when we have our Intellectual 
Property Enforcement Coordinator Victoria Espinel back here in 
the Committee. Thank you for being here. It is good to see you.
    As we move into the 21st century, intellectual property 
becomes one of America's most important assets. In fact, we had 
a report released by the Department of Commerce that shows that 
IP-intensive industries directly accounted for over 27 million 
jobs in 2010. That is one in five jobs across the country. They 
indirectly support another 12.9 million jobs. So if you want to 
protect American industry, that is not a Republican or 
Democratic idea or issue. It is a priority that benefits all of 
us.
    This is the third oversight hearing this Committee has held 
to discuss intellectual property enforcement since the 
establishment of the Intellectual Property Enforcement 
Coordinator. She knows that one of the primary roles of this 
position is to coordinate the work being done across Government 
agencies to combat intellectual property theft. So I am pleased 
to have Ms. Espinel here not only to talk about the efforts 
being made by her office, but by the numerous departments and 
agencies with which she works on a daily basis: the Department 
of Justice, the FBI, the Department of Homeland Security, and 
the U.S. Trade Representative.
    In fact, the IP Enforcement Coordinator, in collaboration 
with those agencies and others, gave us a set of legislative 
recommendations designed to strengthen our intellectual 
property laws. We have taken action on several of these. Last 
December, Senator Whitehouse and other members of this 
Committee worked to pass important legislation that will 
protect our military supply chain by increasing the penalties 
for those who sell counterfeit goods for use by the military or 
in connection with national security.
    Congress has passed legislation, originally part of the 
PROTECT IP Act, that will make it easier for Customs and Border 
Protection to determine whether products stopped at the border 
are counterfeits. This has been a particularly serious concern 
as the counterfeiting of microprocessors has become extremely 
sophisticated, and I will be glad to hear more about the 
administration's enforcement. I am glad that Congress acted on 
that.
    In March, the Senate passed the Counterfeit Drug Penalty 
Enhancement Act. That is a bill that I introduced along with 
Senator Grassley to strengthen the penalties for trafficking in 
counterfeit drugs. We passed it here, and I hope the House will 
soon vote on that bill so that it can become law.
    Now, these are practical measures which remind us that 
effective intellectual property enforcement benefits all in 
this country. Law enforcement has seized shipments of 
counterfeit smoke detectors and electronics. There is an 
example of something that the counterfeit products can endanger 
the lives of Americans. It is just one example. We have a lot 
more we can talk about.
    We are all committed to an open Internet, but that does not 
mean giving a free pass to rogue foreign websites, many from 
organized crime, that serve no purpose but to steal the hard 
work of American writers, musicians, and creators.
    So I appreciate the work that Ms. Espinel is doing. I will 
put my full statement in the record.
    [The prepared statement of Chairman Leahy appears as a 
submission for the record.]
    Chairman Leahy. In view of the time, I will yield to 
Senator Grassley.

STATEMENT OF HON. CHUCK GRASSLEY, A U.S. SENATOR FROM THE STATE 
                            OF IOWA

    Senator Grassley. And I will put my full statement in the 
record, too, and thank you for holding the hearing, and I thank 
Ms. Espinel for coming.
    And I will not repeat some of the statistics that you gave 
about the importance of intellectual property on our economy, 
but that data demonstrates the importance of intellectual 
property to our economy and why intellectual property should be 
protected. So it is really unfortunate that intellectual 
property theft has increased dramatically, adversely impacting 
American businesses that innovate and generate new products and 
jobs for Americans.
    In addition to the loss of jobs and adverse impact on our 
economy, intellectual property theft is a serious consumer 
protection issue. I cannot imagine that anyone intentionally 
sets out to buy unsafe or defective counterfeit goods, 
especially counterfeit pharmaceuticals. Yet unsuspecting 
consumers are scammed all the time into purchasing these 
dangerous and potentially life-threatening products. Even the 
Federal Government, including our military, is duped into 
buying harmful and sub-par counterfeit products, putting people 
at risk, and that is not acceptable. If you do not remember 
anything else in my remarks, I hope you will remember these 
last few statements.
    So it is very important for our Judiciary Committee to 
examine how industry and the Federal Government are addressing 
intellectual property crimes, what is being done to enforce 
intellectual property rights, and how the word is getting out 
that intellectual property theft hurts the U.S. economy, 
threatens our jobs, and puts people at risk. It is also 
important for us to ensure that efforts to combat 
counterfeiting and piracy do not limit freedom of expression, 
inhibit innovation, impair privacy and security, and undermine 
the Internet.
    In those statements, you have the extreme of people who 
think nothing should be done about theft because it might 
interfere with some rights of people to use certain methods of 
communication, and yet we all ought to agree, at least the 
Chairman and I agree, that we cannot tolerate theft. And we 
have had a bipartisan approach to that, and if we understand 
that theft is wrong, we ought to be able to find a way of 
accomplishing our goals to prevent that theft because nobody 
benefits when the rule of law is not respected and when theft 
is allowed and not tolerated--and tolerated, I should say. 
Thank you very much.
    [The prepared statement of Senator Grassley appears as a 
submission for the record.]
    Chairman Leahy. Thank you, Senator Grassley.
    Victoria Espinel is the Nation's first Intellectual 
Property Enforcement Coordinator. That is a position she has 
held since she was confirmed by the Senate in 2009, and I would 
note confirmed unanimously. She is well qualified for this 
position. She previously served as Assistant U.S. Trade 
Representative for Intellectual Property Innovation. She is the 
Chief Trade Negotiator for the U.S. on intellectual property 
issues. She was a professor at George Mason University School 
of Law, an adviser to several committees of Congress, including 
this one. She received her undergraduate and law degrees from 
Georgetown--always delighted to see somebody else who has a law 
degree from Georgetown--and a Master of Law degree from the 
London School of Economics.
    Ms. Espinel, please go ahead, and then we will take turns 
asking questions.

     STATEMENT OF THE HONORABLE VICTORIA A. ESPINEL, U.S. 
   INTELLECTUAL PROPERTY ENFORCEMENT COORDINATOR, OFFICE OF 
                     MANAGEMENT AND BUDGET

    Ms. Espinel. Chairman Leahy, Ranking Member Grassley, 
members of the Committee, thank you for your continued 
leadership on this important issue.
    In June 2010, I issued the administration's first strategy 
for intellectual property enforcement, the Joint Strategic 
Plan, and just over a month ago, on March 30th, I sent to you 
and to the President the 2011 annual report. The good news is 
that we are making some progress, but I know that we still have 
an enormous challenge on our hands.
    As President Obama said in this year's State of the Union, 
``It is not right when another country lets our movies, music, 
and software be pirated'' He knows that protecting our 
innovative technology is critical to our future, and we know 
that our workers are the most productive on Earth and that, if 
the playing field is level, American will always win. A level 
field means protecting the value of American intellectual 
property around the world.
    Last year, I told you that we were working with the 
Department of Commerce on an economic report to identify the 
sectors of the U.S. economy that produce intellectual property 
and the number of jobs and exports from those sectors. And last 
month, I was joined by Commerce Secretary John Bryson, U.S. 
Chamber of Commerce President Thomas Donohue, and President of 
the AFL-CIO Richard Trumka to announce the issuance of that 
report.
    As Chairman Leahy and Senator Grassley noted, the report 
makes clear that intellectual property is a key driver of our 
economy, and in 2010 alone, the IP-intensive industries 
accounted for $5 trillion in value-added, or nearly 35 percent 
of our GDP.
    U.S. law enforcement continues to aggressively fight those 
who seek to steal American creativity and innovation. There 
have been dramatic increases in law enforcement in key areas, 
including FBI investigations of trade secret cases, up 29 
percent; seizures of counterfeit safety and critical technology 
goods are up 44 percent; FBI investigations of health and 
safety cases are up almost 90 percent; and DHS seizures of 
counterfeit drugs are up almost 200 percent. The number of 
cases prosecuted by the Department of Justice in which 
defendants received a prison sentence of more than 5 years has 
doubled.
    My office continues to be focused on making sure that we 
are using taxpayer dollars as efficiently as we can, and to 
that end, last year Federal law enforcement took a very modest 
5-percent increase in spending and turned that into a 33-
percent increase in law enforcement operations.
    DOJ has awarded nearly $11 million in grants to State and 
local law enforcement agencies. That $11 million yielded 
seizures of infringing goods that were valued in excess of $200 
million, so a roughly 18 times return on investment of the 
original grants.
    As you know, in March of last year, I submitted to you a 
white paper with 20 legislative recommendations. Since then, 
several bills have been introduced that incorporated 
recommendations from our white paper, and two of those 
recommendations have become law. A bill introduced by Senator 
Whitehouse and cosponsored by Senators Coons, Graham, McCain, 
Blumenthal, Klobuchar, Hatch, Kyl, Schumer, and Chairman Leahy 
enhanced penalties for selling counterfeit goods to our 
military and became the basis for an amendment to the NDAA. 
Also included in the NDAA was an amendment that I know is of 
concern to many on this Committee, including Chairman Leahy, 
giving Customs the authority to share information with right 
holders. Moving forward, I will continue to work with Congress 
on the remaining recommendations that we made.
    As we said in the Joint Strategic Plan, we will vigorously 
investigate and prosecute criminal activity. However, we know 
that we cannot do it alone. We need to have the private sector 
working cooperatively with us.
    Since this strategy was issued, I have engaged with 
Internet service providers, credit card companies, domain name 
registrars, online advertisers, and others on a voluntary, non-
regulatory approach to reduce infringement. We need to 
quarantine the bad actors and make the business of infringement 
as difficult as possible. We believe that legitimate companies 
do not want to support illegal activity. It is critical that 
any voluntary agreements or best practices be practical, that 
they be effective, that they be consistent with protecting 
legitimate uses of the Internet, and with our commitment to the 
principles of due process, competition, free speech, fair use, 
and privacy.
    Dialogue with stakeholders has led to several sets of 
voluntary best practices. As I reported to you last year, in 
December 2010 several prominent payment processors and Internet 
intermediaries announced that they would form a nonprofit group 
to combat fake online pharmacies. In June 2011, American 
Express, Discover, MasterCard, PayPal, and Visa developed 
voluntary best practices to withdraw payment services from 
sites that are selling counterfeit and pirated goods. And in 
July 2011, a voluntary agreement was finalized among several 
Internet service providers and music labels and movie studios 
to reduce online piracy.
    I told you last year that we were working with advertisers 
to develop a voluntary pledge that ads not support infringing 
sites. Last week, the Association of National Advertisers and 
the American Association of Advertising Agencies issued a 
statement of best practices to address online infringement. I 
appreciate the efforts of those groups and the efforts of 
Senators Whitehouse and Hatch who sent letters to these groups 
requesting that they cut off advertising revenue from rogue 
websites.
    I believe that, together with law enforcement efforts, 
private sector voluntary actions can reduce online infringement 
and change the enforcement paradigm. However, we know that 
there is no single approach that will solve the problem, so we 
will continue to simultaneously pursue a variety of tactics, 
including increased law enforcement, supporting the development 
of voluntary best practices by other industry sectors, 
encouraging other countries to increase their enforcement, 
educating the public on the dangers of infringement, and 
supporting the development of authentic alternatives for 
consumers.
    Last year's accomplishments were the collective effort of 
people working across the Government, including the leadership 
of Attorney General Holder, Secretary Napolitano, FBI Director 
Robert Mueller, and ICE Director John Morton. As the world's 
leader for innovation, we must set an example for citizens and 
for the international community and make clear that the U.S. 
Government will be vigorous in protecting intellectual property 
and will do so in a manner that respects due process, privacy, 
fair use, and transparency. The future of America's economic 
condition rests squarely on the shoulders of our ability to 
protect the American worker, creator, and innovator.
    I look forward to working closely with this Committee on 
improving our protection of American intellectual property, and 
I would be happy to take any questions that you have.
    Thank you.
    [The prepared statement of Ms. Espinel appears as a 
submission for the record.]
    Chairman Leahy. Thank you very much.
    I would also welcome a member of your family here to this 
hearing. I recall him being here for your confirmation hearing, 
too.
    Last year, the Justice Department secured the conviction of 
a Chinese national, a man who had sold counterfeit versions of 
the weight loss drug Alli through a website based in the United 
States. Now, it is one thing selling these, but in this case, 
this counterfeit version caused at least one victim to have a 
stroke. Because the website was based in the United States, we 
could do something about it. Law enforcement could move in. The 
defendant was sentenced to 7 years in prison, and the website 
was shut down. Now, that is a good result, but I think you and 
I are both concerned about those people who evade the law 
because their domain names are registered overseas. In fact, 
somebody could look for that same weight loss drug, go on a 
website, find one that looks very accurate, takes credit cards 
from here, but it is operating outside the U.S. so it falls 
into a loophole. And the danger to the health of Americans is 
still the same.
    Will you continue not only to work with Congress but with a 
lot of the parties involved to try to address this problem? And 
it is not just weight loss things. It is heart medications. It 
is somebody on a fixed income looking for a way to save money 
and finding what looks like a legitimate website, and they buy 
the medication, and then they end up either very ill or even 
dying as a result of it.
    Ms. Espinel. Absolutely. Clearly, for sites that are based 
overseas, our law enforcement jurisdiction is limited. There 
are a few things that we can do and that we are doing. One of 
those is to press foreign law enforcement to do more, and we 
are doing that in a variety of ways, including trying to ensure 
that we have more U.S. personnel on the ground to build 
relationships with law enforcement overseas and using very high 
level diplomatic pressure to encourage countries to do more. 
But we know realistically that there are certain countries 
where it is going to be very difficult to have robust law 
enforcement cooperation for many, many years. So we will 
continue to press on that, but we are aware of the limitations 
of that as well.
    We believe that the private sector can do a lot to help us 
here. When U.S. companies are interacting with sites that are 
based overseas, they will work cooperatively with us to try 
to--to not be engaging with those sites and not lending their 
legitimate services to their sites. We think that can go a long 
way in helping address the problem. But it is a very, very 
serious problem, and we would, of course, want to work very 
closely with you, Mr. Chairman, and with this Committee as a 
whole on how to address it.
    Chairman Leahy. Let me go into an area, some would call it 
the area of ``patent trolls'' When we passed the Leahy-Smith 
America Invents Act last year, we wanted to greatly improve--
and I believe we did--patent quality in the coming years. But 
there are many patents still in the system, and people who own 
them greatly exaggerate how broadly the patent applies, and 
this is stifling innovation, whether it is in Delaware or 
Minnesota or Wisconsin, Vermont, or anywhere else.
    Have you considered whether the assertion of a monopoly 
right that is broader than the patent right is anticompetitive?
    Ms. Espinel. Well, we have certainly been hearing concerns. 
First, I should say I think the America Invents Act was a great 
step forward in terms of reforming our patent system. That 
said, we are continuing to hear concerns about patents and 
about the ways that patents are being used in certain 
circumstances.
    Clearly, the point of the patent system is to support 
innovation, to reward innovation, and to motivate innovation, 
so that is key to the system, and we need to make sure that we 
have a system that does that well, and we would work closely 
with you on looking to see if there are ways that our system 
needs to be adjusted to try to address it.
    Chairman Leahy. Let us work on that because I am afraid 
just because somebody wants to make some money on something 
that really does not apply, they end up stifling innovation. In 
fact, another area on the escalating tech patent wars where 
patents are issued essential to technology that might make 
different kinds of products interoperable, Senator Kohl and I 
wrote to the Justice Department about this issue. Senator Kohl 
and I noted that when patent holders agree to license standard 
essential patents on reasonable terms to any interested party, 
it may be anticompetitive for them to then use the 
International Trade Commission to enjoin competitors from using 
that standardized technology.
    Now, if there is infringement, of course, you pay 
royalties, but if you are doing it to prevent even the use of 
the technology, well, that can harm consumers and can stifle 
innovation and so on.
    So are you working with antitrust authorities to ensure 
that patents on these technologies where owners agree to 
license any willing company are not being misused for 
anticompetitive purposes?
    Ms. Espinel. I would be happy to reach out to the 
Department of Justice on that and would look forward to working 
with you closely on that as well.
    Chairman Leahy. Thank you.
    Senator Kohl.
    Senator Kohl. Thank you.
    Ms. Espinel, many of us were troubled, as I am sure you 
were, too, when the Second Circuit Court of Appeals overturned 
the conviction of a former Goldman Sachs programmer who stole 
valuable computer code worth many millions of dollars from the 
company. The court ruled that he did not violate the Economic 
Espionage Act because the stolen computer code was not a 
product intended for sale, as required by the statute.
    Is this ruling a major setback for prosecutors' ability to 
go after the theft of trade secrets under the Economic 
Espionage Act? Does it give a free pass to anyone out there who 
wants to steal a company's proprietary and highly valuable 
computer codes? How urgent is it for the Congress to try to fix 
this problematic decision?
    Ms. Espinel. So, first, I would say yes, we are concerned 
about the decision and the implications of that decision. DOJ, 
the Department of Justice, is right now actively considering 
that decision and what our next steps are from here. And if we 
determine that a legislative fix is what would be most helpful 
there, we would very much want to work with you on that.
    Senator Kohl. As you know, we are looking into ways to 
address this problem, and we would appreciate your continued 
cooperation.
    Ms. Espinel, nearly 2 years ago, we raised concerns about 
the small number of prosecutions and investigations conducted 
in the 15 years since the Economic Espionage Act was passed. 
Now, to its credit, the Justice Department has increased 
outreach to the community, resulting in a 29-percent increase 
in investigations, and has pursued many more prosecutions. When 
you appeared before the Committee last year, you assured us 
that DOJ had sufficient resources to increase enforcement of 
the Economic Espionage Act.
    Given the influx of investigations and the ever-growing 
threat to American businesses, jobs, and the economy, of 
course, we need to be sure that there is a cop on the beat in 
every case. Do you still have the needed resources to continue 
to increase investigations and prosecutions? I think you 
addressed this to some extent in your statement.
    Ms. Espinel. Well, I can certainly tell you that the 
Department of Justice and the FBI have made this a top 
priority, so they have been putting resources and that is 
reflected in the fact that you are seeing increases in 
investigations and increases in prosecutions.
    As to whether or not they feel they have additional 
resources, I know one of the things the Department of Justice 
is interested in--and it has been in the President's budget--is 
to try to have more Department of Justice personnel stationed 
overseas to try to increase foreign law enforcement 
cooperation.
    As you know, one of the big problems we have with trade 
secret theft is trade secrets that are being taken from U.S. 
companies and then are being transferred overseas. So having 
law enforcement personnel overseas that can work with foreign 
law enforcement to help try to increase the prosecutions and 
investigations of those cases I think would be very valuable.
    Senator Kohl. As you know, many of us on the Committee 
share a concern about enforcement of the Act, and we will be 
paying close attention to the progress that you will be making.
    Finally, recently, high-level U.S. and Chinese officials 
met to discuss economic issues important to both countries, 
including protection of intellectual property. China agreed to 
increase enforcement against criminals who steal trade secrets 
from foreign countries, including the U.S. This is a step in 
the right direction, but as we all know, the problem continues 
to grow. Intellectual property theft by China poses a serious 
threat to our economy and to the global competitiveness of 
American businesses.
    What specific commitments are you hoping to receive from 
China?
    Ms. Espinel. So, first, I want to note that last week at 
the Strategic and Economic Dialogue in Beijing, China did make 
the commitments that you referred to to increase enforcement of 
trade secret theft. That is the first time that they have made 
that commitment that forcefully, so I think that is a 
significant positive step.
    However, as we all know, commitments are commitments. 
Commitments need to be followed through if they are going to be 
effective. So I think it is--I am very pleased that China has 
now publicly committed to increase enforcement of trade secret 
theft, has now publicly acknowledged that this is a problem 
that we are facing, but we will be working vigilantly--with 
great dedication and commitment to ensure that China follows 
through. And I can also tell you that this issue of trade 
secret theft has been raised with the Chinese Government by 
President Obama himself repeatedly, by Vice President Biden, by 
Secretary Clinton, by Attorney General Holder, by the most 
senior levels of our administration, and we will continue to 
press on that.
    If I may, I would like to mention one other commitment that 
came out of last week's Strategic and Economic Dialogue which I 
think is of interest, which is that China committed to create 
an environment to increase the sales of legitimate IP-intensive 
products in line with its status as a global player in the 
world economy. That is, again, the first time they have ever 
agreed to a commitment along those lines, and we will be 
working to make sure that we follow through on that.
    Senator Kohl. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Leahy. Thank you, Senator Kohl.
    Senator Coons.
    Senator Coons. Thank you. I had expected Senator Franken 
next in order. Forgive me.
    If I might, Ms. Espinel, first, just thank you for your 
very strong leadership and the compelling report and what I 
think is a renewed and needed focus on coordination of IP 
enforcement across so many different activities in our Federal 
Government.
    Let me followup first, if I could, on the Commerce report 
you referenced in your opening statement, which I think is an 
important way to sort of frame and focus our conversations on 
it. It did not use trade secrets as one of the elements to 
appraise the total value of IP-intensive products in the United 
States. How might it have been a different report and what 
conclusions might it have reached differently if it had 
included trade secrets as a vital part of our IP ecosystem?
    Ms. Espinel. That is a great question. The report was an 
ambitious report. It was the first time we have ever even 
attempted to do this type of analysis. It is the first time I 
am aware of that anyone has attempted to analyze the importance 
of trademarks to our economy, and the report demonstrates that 
the brands and trademarks are incredibly important to the U.S. 
economy. But it is true that we did not attempt to measure 
trade secrets.
    I can tell you, as I hope the report and the discussion so 
far has made clear, trade secret theft is an enormous priority 
for us, and I think it is clear that the contribution that 
trade secrets make and, perhaps said another way, the negative 
economic implications for our ability to compete globally when 
we lose trade secrets, either through trade secret theft, 
through forced tech transfer, for economic espionage, when our 
trade secrets of our innovative companies walk out the door, 
the consequences of that for our economy and for our future are 
very significant.
    I would be happy to go back and talk to the economists at 
the Department of Commerce and at USTR and the President's 
Council of Economic Advisers and the other agencies that we 
worked with to see whether or not it is possible to gather some 
data on trade secret theft. But I can tell you sitting here 
today that we know how important trade secrets are, and that is 
reflected--that is why you have seen us putting such a big 
priority on this issue over the past year.
    Senator Coons. And I look forward to working with Senator 
Kohl and with your office on strengthening our trade secret 
protections, the Economic Espionage Act issues that he referred 
to and you discussed, whether there is a legislative fix there 
or in other areas, and would welcome a more sort of robust 
assessment of its total contribution.
    Cyber crime is something that has been a real topic of 
discussion on this Committee and other committees in the House 
and the Senate, and I am just wondering if you think we have 
the right cops on the beat, the right structure in terms of 
protection and enforcement, and if you have got any advice or 
input for us as we stand at the edge of potentially legislating 
on cyber protection. How big a threat do you see in terms of 
the loss of IP through cyber threat? And how seriously do you 
take the Chinese commitment to be actively engaged, not just in 
public acknowledgment but in action to reduce the extent of 
trade secret and other theft of IP?
    Ms. Espinel. So I think the threat of cyber crime is a very 
real one and one that our company should take very, very 
seriously. I think if you look at where we are losing trade 
secrets and where we are losing data, cyber, cyber hacking, is 
only part of that at this point. So a lot of trade secret theft 
is lost--or a lot of trade secrets are being lost or 
compromised either through human assets or through forced 
technology transfer coming from China. That said, the threat 
from cyber crime I think is an enormous one and is likely to 
grow.
    In terms of ways that we can address it, again, I would say 
I think having additional law enforcement personnel on the 
ground overseas, in particular in China, I think will be 
helpful in doing that. But, you know, what you said about the 
commitments that the Chinese Government has made, I think what 
is really key here and what I can assure you will happen is 
that the Chinese Government is made keenly aware of how 
important this issue is to the United States and how much 
importance we attach to them following through on greater 
enforcement of trade secret theft.
    Senator Coons. Good. That is something I look forward to 
working with the Chairman and with you on.
    Two of the things you mentioned that have already moved 
forward out of the report and previous testimony was allowing 
CBP to communicate explicitly with rights holders, but the 
rule, if I understand it right, does not address copyright and 
circumvention devices, and I wondered if that was an area you 
thought that rule might be strengthened or expanded to include 
copyright infringement.
    Ms. Espinel. So our original recommendation has applied it 
to all intellectual property rights, including copyright and 
circumvention devices. I think the rule that is in place now is 
an interim rule, as you may or may not be aware. So there will 
be a process during which, if anyone, any stakeholder that is 
interested in this, feels like there is a problem with how it 
is being implemented or the actual practice on the ground or 
the scope of the rule, there will be a process through which 
they can make recommendations for how it should be changed.
    Senator Coons. The last question. You opened by referencing 
the President's comments in the State of the Union about the 
importance of protecting IP, and he cited pirated movies, 
music, and software, which are a very large part of our IP-
intensive exports. But I am also, just to echo the Chairman's 
first question, concerned about pharmaceuticals. You have had 
great success working in voluntary collaboration with a lot of 
private sector partners in shutting down websites and in 
strengthening our protections against counterfeit drugs. I 
think it is important for the average American to realize that 
that is a vital part of what we are talking about here, is 
keeping our pharmaceutical supply safe and free of the very 
widespread counterfeiting that is occurring in other parts of 
the world where it can be as much as 20 or 30 percent of the 
drug supply, particularly in the developing world.
    What next steps do you expect, what more resources might 
your office need to be more successful in this ongoing fight 
against counterfeiting in drugs in particular?
    Ms. Espinel. Well, with respect to our overall efforts, the 
President also said in the State of the Union that there would 
be more inspections at our border to keep out counterfeit and 
unsafe products, and counterfeit drugs will be a big focus of 
that.
    There are other things that we are doing as well. Part of 
that is working foreign law enforcement. Counterfeit 
pharmaceuticals is actually an area where we have had pretty 
good cooperation with foreign law enforcement, and there was 
recently an enormous sort of global coordinated sweep focused 
on counterfeit drugs, which 81 countries participated in. So 
there has been good movement, I think, in terms of foreign law 
enforcement cooperation on counterfeit drugs. This is not to 
say we do not still have a problem, but that is an area where 
there has been more receptivity.
    I think the voluntary efforts that you referred to are 
absolutely critical. I think there is a big education gap here. 
I think consumers are unaware of some of the dangers that they 
are facing when they are buying from sites that are not 
pharmacies in a sense, that are criminal enterprises that are 
masquerading as pharmacies. So I think that there is more that 
we can do and will be doing in terms of consumer education. And 
in terms of capacity building, the State Department is now 
putting a third of all of its training funds toward counterfeit 
drugs, which is a demonstration of the importance they place on 
it. And I should say that in this regard Under Secretary Robert 
Hormats has been a tremendous ally here. Counterfeit drugs is 
something he is very concerned about, and he has been putting 
his energy and the resources of the State Department behind 
that.
    Senator Coons. Thank you.
    Chairman Leahy. Unfortunately, organized crime used to 
think they could just do small scams or protection rackets. Now 
it is a lot easier to do much, much bigger ones through these.
    Senator Franken, I want to thank you for your courtesy in 
letting Senator Coons go ahead of you, and I would call on you 
now. I know this is an issue that you have expressed a great 
deal of concern in these hearings. Go ahead.
    Senator Franken. Well, thank you.
    Chairman Leahy. And, Senator Coons, thank you. When I think 
of all the corporations that are registered in your State of 
Delaware that are being hit by some of these things, there is a 
lot of attention here, Ms. Espinel, from--it goes way beyond 
parochialism on this Committee.
    Senator Franken.
    Senator Franken. Thank you, Mr. Chairman.
    Ms. Espinel, before I begin, I want to thank you for all 
your work over the last 3 years to bring greater attention to 
the problem of intellectual property, or IP, theft in this 
country.
    When people think of intellectual property or copyright, 
they rarely think of what IP issues mean to jobs, but they 
should. Minnesota is one of those States with the highest 
patent-intensive employment in the country, and that is why I 
have been encouraging the U.S. Patent and Trademark Office to 
open a satellite office in the Twin Cities.
    The Minnesota companies that create and build medical 
devices, electric circuits, industrial coatings and films, and 
advanced microprocessors all provide thousands of great jobs to 
Minnesotans, but those companies are only able to hire more 
people to help them innovate if we are successful at protecting 
the products that they develop.
    According to an FBI agent in Minnesota, trade secret theft 
costs Minnesota businesses hundreds of millions of dollars. We 
need to be doing everything we can to stop this, and I am 
pleased at your efforts to increase prosecution of these 
crimes.
    I have been impressed with your ability to push companies 
to voluntarily adopt policies to reduce online theft of 
intellectual property. I remain convinced that this is a 
serious problem and think we need to be doing as much as 
possible to encourage companies to be aggressive about 
monitoring their systems to stop this type of theft.
    Now that Internet service providers, the advertising 
community, and payment processors have all stepped up, what 
other industries do you think need to step up and adopt 
voluntary best practices?
    Ms. Espinel. Well, let me mention three areas where I think 
it would be helpful, and there are more than this, but I will 
just highlight a few.
    First, as I mentioned, the advertisers--the ANA, so the 
online advertisers and the ad agencies, issued a statement of 
best practices last week, and we very much welcome that. We 
would like us to continue working with the ad brokers, the 
technology companies that actually place the ads online, to 
develop a set of voluntary best practices there that are as 
effective as they possibly can be. Those companies know how 
their systems work. If they are committed to working with us, I 
think we can make some real headway there.
    I would also note, you know, the domain name registrars 
with whom we have had some very good cooperation, I think there 
is much that they can do. Cyber lockers, in fact, and in the 
wake of the Megaupload case, we have seen cyber lockers 
voluntarily taking steps to try to address infringement that 
was going on in their sites. So I think that is another area.
    But beyond specific industry sectors, two other things that 
I would like to mention are the following:
    First, we think this is a very good model for other 
countries, so we would really like to see other governments 
start talking to their companies to try to encourage similar 
things, and we have been already talking to the U.K., to 
France, and to the European Commission about how they could--in 
fact, some of those governments have come to us expressing 
interest and asking what our advice would be on how they could 
move this forward. And I think this is a global problem, I 
think it goes without saying. So it would be much more 
effective if it was not just U.S. companies that were involved 
in this but also companies that are based overseas. So that 
will be a focus for this year, and I really hope we see some 
progress there.
    The second thing or the last thing I would mention is we 
think voluntary best practices could be very helpful in the 
physical supply chain as well, so most of our efforts have been 
focused--or up to this point, they have been focused on the 
online world. I think in the physical world, there is a lot of 
progress that could be made here, too. I think with respect to 
the issue of trade secret theft, I think working with companies 
on voluntary best practices to try to tighten their supply 
chains to keep counterfeit and pirated goods from getting into 
their supply chains, to keep trade secrets from leaking out of 
their supply chains, I think there is a lot of progress that 
could be made there.
    There are groups like Create.org that are starting to work 
on this, but, again, we really need to be working very closely 
with the companies. They know how their distribution chain 
works. They know how their supplier contracts work. They, I 
think, if they are committed to working with us, can do a lot 
to try to ensure that the supply chains stay as clean as 
possible.
    Senator Franken. Thank you for that answer.
    As you may know, I am concerned that ICANN, or the Internet 
Corporation for Assigned Names and Numbers, plans to expand 
top-level domains, and those plans may make it even harder for 
law enforcement to halt online piracy and cyber squatting.
    Is this an issue that you are monitoring? And what do you 
think we should be doing to make sure that these new top-level 
domains do not become a breeding ground for rogue sites?
    Ms. Espinel. So we have also heard those concerns. My 
office has heard those concerns directly and has been talking 
to right holders about them. Larry Strickling, who is the head 
of the NTIA, the National Telecommunications Information 
Administration, has also been talking to right holders about 
those concerns. So those concerns are being heard.
    You know, I think this is an area where domain name 
registrars could do a lot. That was actually what was in my 
mind when I mentioned them a few moments ago. But I think it is 
critical that it be not just domain name registrars in the 
United States, but domain name registrars around the world. I 
think there are things that they could do to try to reduce 
infringement and try to alleviate some of the concerns that are 
being raised by this.
    The last thing I would note is that when the application 
process is closed, NTIA will run a process of review of the new 
top-level domain names that have been applied for, and so there 
will be an opportunity during that review to raise objections 
to certain names if they exist. But moving beyond, you know, or 
speaking beyond just sort of the particular application process 
that is going on now, I do think it is very important to have 
the domain name registrar community actively engaged on and 
thinking cooperatively with us on what they can do on a 
voluntary basis to try to reduce infringement.
    Senator Franken. Well, I hope they.
    Mr. Chairman, my time is up. Thank you.
    Chairman Leahy. I thank you and Senator Coons and Senator 
Kohl and Senator Whitehouse for the attention you have given to 
this.
    Senator Whitehouse, before you came in, I mentioned your 
legislation to go after counterfeit equipment sold to our 
military. Thank you for that. I am going to have to step out 
for a minute, but I will yield to Senator Whitehouse.
    Senator Whitehouse. Thank you, Mr. Chairman, and thank you 
for your attention to this important effort. And thank you, Ms. 
Espinel, for being here and for your hard work on this.
    We obviously had a significant legislative failure recently 
trying to help protect the intellectual property on which so 
many American businesses rely. It is frustrating for many of us 
that this is a crime that is being conducted in plain view. 
Anybody can go to the websites and see the criminals in action 
selling American products without paying the American creators 
of the product.
    It is frustrating to see American-owned search engines 
taking people to the criminal websites. It is frustrating to 
see American credit card companies having their facilities used 
to pay for the criminal websites. And it is frustrating, as 
Senator Franken noted, to see American corporations advertising 
on criminal websites. So I think it is really important that we 
continue to push back. Our economy really cannot withstand this 
kind of persistent criminal degradation.
    When you go beyond the question of what is being done in 
plain view, there is also massive intellectual property theft 
out of our tech, pharmaceutical, manufacturing, and other 
industries, usually by or on behalf of Chinese interests. And 
it has been described not just by me but by General Alexander 
and by private sector security experts like the folks at McAfee 
as the largest transfer of wealth in the history of humankind 
through theft and piracy, and we are on the losing end of it.
    So I think we really need to be very energetic about this, 
and one area in which I think we are doing good work but where 
we are, I think, way underresourced for a threat of this 
magnitude is in law enforcement. And I think we need to be 
thinking about how our law enforcement resources should be 
structured to deal with this threat, how we should be resourced 
in law enforcement to deal with this threat. I know that there 
was a very considerable role by American law enforcement in the 
takedown of the Rustock and the Coreflood botnets.
    But when you look at the amount of botnet activity that is 
out there and the extent to which computers across this country 
and across the world have been slave to different botnets, 
frankly two is not very many. We could be doing two a month. 
So, again, it took a lot of talent and initiative to get those 
two things done, but we should be resourced to be able to do a 
lot of that.
    My information is that the U.S. Government, its law 
enforcement authorities have yet to make a single case, 
criminal case, based on intellectual property theft through 
cyber. We have made intellectual property theft cases, but they 
have always involved the traditional human taking a disk or 
there has been a human link. But the pure hack, starting in 
China, going through a company's cyber guards into their 
precious intellectual property, extracting and expropriating 
that intellectual property, not one case has yet been made. And 
yet here we have other elements of the Government saying it is 
the biggest transfer of wealth in history and we are on the 
losing end.
    So I would urge you--and I am trying to work with OMB and 
with the Department of Justice to sort out how we do this. In 
the draft legislation, there are provisions we are working on 
for putting together a group to sort of brainstorm this and 
figure out where should we be. I think that if there is an 
analogy for this, it is when airplanes started flying and the 
American military had to figure out what to do about airplanes, 
and the senior military commanders who had never been on an 
airplane, were probably born in 1880 at that point, did not 
really think of this as a significant thing. But now we have a 
U.S. Air Force, and it is a pretty important part of our 
defense establishment. And it took some thinking to get us to 
where we needed to be structurally.
    I do not think we are there in law enforcement. I would 
like to have your reaction. I have used all my time on this, 
but I would like to have your reaction, and I would like to 
work with you to try to make sure we do this right. The 
business community I think would be much advantaged by being 
able to call up and say, ``We think we have a problem here'' 
and have law enforcement come in and take over. And right now 
their experience is that they cannot do that. The law 
enforcement folks who they talk to are good. There are just far 
too few of them to get their attention, considering the amount 
of crime, pilferage, and intellectual property theft that is 
going on.
    Ms. Espinel. So if I may, I want to start by responding to 
something that you said at the beginning of your remarks with 
respect to what companies in the private sector are doing, and 
I did want to make sure you are aware that the credit card 
companies that you mentioned, at least the five U.S. major 
payment processors, have stepped up and have developed a set of 
voluntary best practices that have been in operation for almost 
a year now. And my understanding, both from talking to them and 
from talking to the right holders, is that that process is 
going very well.
    I think the right holder community--and I would sort of 
call out in particular the IACC, the International Anti- 
Counterfeiting Coalition--has been working on their end to try 
to create portals and other mechanisms to make sure that things 
are going into the credit card companies in ways that are as 
efficient and streamlined as possible. So I think there has 
been some good collaboration there and some real progress 
there, and I commend those companies for that.
    On the advertiser side, in fact, just last week the online 
advertisers, the companies that advertise online and their ad 
agents, issued a statement of voluntary best practices saying 
that they would not be supporting rogue websites. There is 
still a piece of the advertising world, which is the ad brokers 
that place those ads, that we are continuing to work with on 
the voluntary best practices, and we would like to see 
something come out of that. But I think there has been some 
real progress on both the credit card and the ad side.
    To your comments on cyber crime and the----
    Senator Whitehouse. Although on that, I would have no 
trouble finding a website right now that sold pirated goods and 
had both advertisements and credit cards operating on that 
website, correct? It is a process that has begun, but it is 
certainly still a problem out there.
    Ms. Espinel. It is absolutely still a problem. I will say 
that my understanding is to the extent there are sites that are 
using U.S. payment processors and the U.S. payment processors 
are being made aware of those sites, they are working 
expeditiously and effectively to try to cut that off. I think 
those companies have told me--and I believe them--that they 
truly do not want to be engaged with this type of activity, and 
they do not want these types of sites using their services. And 
at least in the U.S., I think they have stepped up.
    As I said before, I think we need to get other countries to 
adopt the same thing. I would say in particular--and this may 
be overly ambitious--if we could get Russian payment processors 
to step up and cut off services to those sites, that would be, 
I think, a step of tremendous progress. That is, I think, a 
long-term goal, but we really need it to be a global effort if 
it is going to be effective.
    In terms of your comments on cyber crime and the 
significance of that problem, I would just say that I agree 
with you fully. In terms of the resources and how they are 
structured, I can also tell you that the Department of Justice 
and the FBI, as they have made this a priority, have been 
looking to use the resources that they do have as effectively 
and as efficiently as they can. But I will also commit to you 
that I will go back to my colleagues at OMB and the Department 
of Justice and discuss this with them.
    Senator Whitehouse. Yes, I think, Mr. Chairman, this is an 
issue that we should be sort of talking through, and I think 
right now the deadlock is that nobody in the Department of 
Justice wants to talk about anything that creates a demand for 
new resources because that violates their budget rules with 
OMB, and this is not a big priority for OMB. And so you really 
have to get OMB and the Department and somebody from the White 
House in the room and say, all right, let's have a process here 
for how we sort through what our law enforcement posture should 
look like. What should a private company that is being hacked 
be able to expect when it picks up the phone and calls the FBI? 
What do we want to do here? And I do not see that discussion 
taking place, and I would very much like to be a part of it and 
have this Committee be a part of it.
    Chairman Leahy. And I think Ms. Espinel has been very open 
to requests from this Committee for information, and we will 
continue that.
    I agree with what Senator Whitehouse says. We are in a 
sometimes rapidly changing world, but the incentives for 
criminals are always out there. And, unfortunately, it is in an 
area that can hurt Americans greatly, can hurt our national 
security, can hurt individuals, and can have a crushing effect 
on job creation in this country. So we have to keep working on 
this. It is not as exciting as some of these bumper sticker 
kinds of things we see that some in Congress want to talk 
about, usually have very little effect on anything. This is a 
more serious area. It has a great deal of effect on our country 
and on our safety. One, I am glad you are there. But, second, I 
think that we do have to work very closely with the various 
parts of our Government, some of which are having a little bit 
of a difficult time adjusting to the modern world. If we have 
to find more resources, we will. There are a lot of resources 
spent on crimes that probably should--that do not really do 
much for us. We should be spending resources on those crimes 
that do.
    Do either of you gentlemen have any further questions?
    Senator Franken.
    Senator Franken. Thank you, Mr. Chairman.
    Ms. Espinel, when you were last here before the Committee, 
I spent a considerable amount of time talking about IP 
infringement in China. I am still convinced that we are not 
doing enough to stop this enormous problem and that U.S. 
companies are losing billions of dollars as a result of this 
theft.
    According to the U.S. Trade Representative, 99 percent of 
all music downloads in China are illegal. We certainly have not 
totally, entirely solved our music piracy problem here in the 
U.S. But in 2010, the music industry only collected a mere 
$64.3 million from China. This is when their population is four 
times the size of the United States' and revenues in the United 
States were more than $4 billion last year.
    I understand that China's lead search engine, Baidu--I 
think that is the name of it--signed a leasing agreement with 
Universal, Warner Music, and Sony BMG to ensure its online 
music platform does not sell pirated music. While this deal 
marks a step in the right direction, there is clearly still a 
large gap to fill in this regard.
    What are you doing to address this problem both online and 
with physical sales of DVDs and CDs?
    Ms. Espinel. So as we discussed earlier, when there is 
infringement taking place overseas, that is obviously a 
particular set of challenges for us because our law enforcement 
jurisdiction is limited there. But there are a number of things 
that we are doing. I do not mean to say that--in fact, I would 
say that we still have an enormous challenge on our hands, and 
we are aware of that. But I will mention a few of the things 
that we are doing and then would welcome having more discussion 
on this and more collaboration with this Committee on other 
things that we could do.
    One thing, which you alluded to, is last year for the first 
time USTR issued what we call the Notorious Markets List, 
basically issued a stand-alone report that was just 
highlighting Internet sites and physical marketplaces that were 
havens for counterfeiting and piracy. This is the first time 
they have done it. Baidu was one of the sites that was on the 
list. I think it got a lot of attention in a positive way as it 
sort of shone a spotlight on some of the problems that we are 
having. And after being placed on the list--and I would like to 
think at least in part because of being placed on the list--
Baidu did sign the licensing agreement that you mentioned with 
our music industry.
    USTR has now issued the second Notorious Markets List, and 
there are still many, many sites on that list, including 
Taobao, which is another large Chinese site.
    So we will continue to use tools like the special 301 
process, which is where the Notorious Markets List comes from 
and where its authority comes from, to try to both encourage 
other governments to do more, but also put pressure on some of 
the companies that we feel--international companies that we 
feel are not stepping up.
    In addition to that, I think, as I have said before, we 
need to have foreign law enforcement doing more. There is only 
so much U.S. law enforcement can do, particularly when we are 
overseas. So there are things that we can do to press foreign 
law enforcement to do more, including trying to have more 
personnel, more U.S. personnel overseas working with them. But 
I think key to that will be having other governments--and the 
Chinese Government is the focus of our concern here--understand 
how great a priority this is for the U.S. Government at this 
point. And I think, you know, in the past year the Chinese have 
heard this directly from President Obama on several occasions. 
They have heard this repeatedly and forcefully from Vice 
President Biden. They have heard from Secretary Clinton, from 
Attorney General Holder, from Secretary Geithner, from FBI 
Director Mueller, from ICE Director John Morton. They have 
heard from the most senior levels of our administration in a 
very coordinated and very clear way, and I think that is--we 
are starting to see some progress. I talked earlier about some 
of the progress that we are seeing, but we know that we need to 
continue to press, and press very, very hard, because this is 
an area that is so important to our country and where even 
where there may have been small steps of progress, there is so 
much more that needs to be done.
    Senator Franken. I have one more question, and this is 
about China as well. I am alarmed about cases of American 
companies have to disclose trade secrets in order to do 
business in China. For example, it was recently reported that 
Ford is considering giving China the intellectual property that 
supports its electric vehicle technology. And in 2007, 
Westinghouse Electric shared thousands of pages of technology 
secrets with China in exchange for the opportunity to build 
nuclear power plants there.
    What is especially alarming is that these technologies were 
developed with U.S. Government support through the Department 
of Energy.
    Are you aware of this problem? And is your office working 
with the Departments of Energy, Commerce, and other Federal 
agencies to limit when and how trade secrets are turned over to 
China, particularly where the technology was developed by U.S. 
taxpayers?
    Ms. Espinel. I am aware of the problem, and we are very 
concerned about it. We are concerned about it for all 
technology, frankly, and then where technology has been 
developed with U.S. taxpayer dollars, I think we have a 
particular interest. But this issue of forced technology 
transfer in various ways is one that we are concerned about for 
a number of our sectors. And I have spoken to and have been 
working with the Department of Energy and others inside the 
Federal Government on what we can do to try to address this. It 
can be a difficult issue in some ways because we do not want to 
hinder our companies' ability to compete in the global 
marketplace. On the other hand, we have a responsibility to the 
U.S. citizens as a whole and to our economy as a whole to try 
to do everything that we can to make sure that we are not 
losing technology, we are not losing innovation, we are not 
losing trade secrets.
    So it is something that we are engaged in a very active 
discussion on right now, in fact, and I would be happy to 
followup with you and have discussions about both our concern 
about this issue and some of the possibilities that we might be 
able to engage in in the future to try to address it. But I can 
tell you it is something that we are very aware of and very 
concerned about.
    Senator Franken. I would like to do that because this is a 
problem that I know Senator Webb has been taking a lead on, and 
if you could get back to me with information, maybe in writing, 
along with recommendations on what we could do to stop this 
from happening, I would really appreciate it. Thank you very 
much.
    Thank you, Mr. Chairman.
    Chairman Leahy. Thank you, Senator Franken.
    Senator Whitehouse.
    Senator Whitehouse. Let me just ask, I do not know, Ms. 
Espinel, if you are in a position to comment on the 
cybersecurity legislation that we are looking at, if that is an 
issue that you are prepared to take any questions on. If so, I 
will proceed. If not, then----
    Ms. Espinel. I would be happy to put you in touch with my 
colleague, Howard Schmidt, or others who could answer your 
questions on that.
    Senator Whitehouse. OK. I will take that advice.
    Chairman Leahy. With that, we thank you very, very much and 
will stand in recess.
    [Whereupon, at 11:15 a.m., the Committee was adjourned.]
    [Questions and answers and a submission for the record 
follows.]





                                 
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