[Congressional Record Volume 143, Number 155 (Friday, November 7, 1997)]
[Senate]
[Pages S12015-S12017]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LAUTENBERG:
  S. 1426. A bill to encourage beneficiary developing countries to 
provide adequate protection of intellectual property rights, and for 
other purposes; to the Committee on Finance.


the rights of intellectual property owners fairness facilitation act of 
                                  1997

  Mr. LAUTENBERG. Mr. President, I rise today to introduce legislation 
I believe will encourage many of our trading partners to improve their 
protection of American intellectual property rights. This is not an 
insignificant matter, Mr. President. It is estimated that American 
companies lose approximately $50 billion every year from intellectual 
property violations. This theft not only affects a company's bottom 
line, it means losses to America's competitiveness, and, most 
importantly, it means loss of American jobs.

  The ``Rights of Intellectual Property Owners Fairness Facilitation 
Act of 1997,'' or RIP-OFF, will require participants in the Generalized 
System of Preferences program to expedite their implementation of the 
intellectual property agreement contained in the Uruguay Round of the 
General Agreement on Tariffs and Trade. In addition, to continue as a 
GSP beneficiary, a country must fully comply with the terms of any 
bilateral or other multilateral intellectual property agreement it has 
with the United States.
  Mr. President, the Agreement on the Trade-Related Aspects of 
Intellectual Property Rights, known as TRIPS, requires signatories to 
improve and better enforce the rights of intellectual property holders. 
Unfortunately, too many countries are able to delay implementation of 
TRIPS for an inordinately long period of time. Developing countries 
have until 2000 and least developed countries are permitted to delay 
some TRIPS requirements for as long as 2006. The United States simply 
cannot afford to permit piracy to continue unabated for such a lengthy 
period.
  The GSP program enables certain products from developing countries to 
be exported to the United States duty-free. Through the years, Congress 
has conditioned the receipt of these tariff preferences on such factors 
as whether a country enforces arbitral awards in favor of US citizens, 
whether it affords internationally recognized worker rights to its 
workers, and whether it harbors terrorists. Although GSP beneficiaries 
are supposed to provide 'adequate and effective' intellectual property 
protection, it is an amorphous standard that has only been used a 
handful of times against countries, and then, only for a limited period 
of time, and with limited success. By tying the GSP program to 
expedited implementation of TRIPS and full compliance with agreements 
they have negotiated with the U.S., countries will know what they must 
do and by when to continue receiving GSP benefits. It also demonstrates 
our commitment to protecting American intellectual property rights 
overseas.
  My legislation conforms to current law, which provides the President 
with the discretion, via a waiver, to continue or extend GSP benefits 
to a country that does not comply with the requirements of this bill by 
allowing a waiver. The President has every right to determine that 
designating a country as a GSP beneficiary is in the national economic 
interest of the United States. I thought it was important to maintain 
the existing flexibility in this program. My bill will also enable our 
government to provide support and technical assistance to countries 
having difficulty meeting their intellectual property protection 
requirements.
  The GSP program provides countries with a benefit, not a right. 
Congress continues to downsize the federal government. Resources are 
scarce. In this climate, it is inappropriate to provide GSP benefits to 
countries that do not uphold our intellectual property rights. 
Industries reliant upon strong intellectual property protection, 
pharmaceutical, telecommunications, and motion picture companies, for 
example, are among this country's most competitive. We should be 
fostering this competitiveness by using appropriate tools to protect 
our innovators. Mr. President, this legislation will accomplish this 
goal.
  This legislation is very similar to a bill I introduced several years 
ago with Senator Roth. The modifications I have made account for the 
time countries have already had to commence changes to their 
intellectual property laws and regulations. Additionally, the bill 
clarifies that the standards provided in TRIPS should be the floor for 
intellectual property agreements, and that our government should 
continue seeking stronger protection for American intellectual property 
owners.
  Mr. President, I urge my colleagues to support this legislation and 
ask unanimous consent that the text of the bill be inserted into the 
Record along with letters of support.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1426

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Rights of Intellectual 
     Property Owners Fairness Facilitation Act of 1997''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) United States industry loses billions of dollars each 
     year to countries that do not provide adequate protection of 
     intellectual property rights.
       (2) According to the Department of Commerce, United States 
     companies lose approximately $50,000,000,000 annually as a 
     result of violations of intellectual property rights by 
     foreign countries.

[[Page S12016]]

       (3) It is in the interest of the United States to leverage 
     its foreign policy to achieve certain trade policy 
     objectives, such as adequate, effective, and timely 
     protection of intellectual property rights.
       (4) Several countries that qualify under the generalized 
     system of preferences provisions have been identified under 
     section 182 of the Trade Act of 1974 (19 U.S.C. 2242) as 
     countries that do not provide adequate and effective 
     protection of patents, copyrights, and trademarks or deny 
     fair and equitable market access to United States persons 
     that rely on intellectual property rights protection.
       (5) Several countries that receive United States foreign 
     assistance also have been identified under section 182 of the 
     Trade Act of 1974 as countries that do not provide adequate 
     and effective protection of patents, copyrights, and 
     trademarks or deny fair and equitable market access to United 
     States persons that rely on intellectual property rights 
     protection.

     SEC. 3. COUNTRIES INELIGIBLE FOR GSP TREATMENT.

       (a) In General.--
       (1) Implementation of agreement on trips and other 
     agreements relating to intellectual property rights.--Section 
     502(b)(2) of the Trade Act of 1974 (19 U.S.C. 2462(b)(2)) is 
     amended--
       (A) by inserting immediately after subparagraph (G) the 
     following new subparagraphs:
       ``(H) Such country is not implementing parts I, II, and III 
     of the Agreement on TRIPS--
       ``(i) beginning on the date that is 1 year after the date 
     of enactment of the Rights of Intellectual Property Owners 
     Fairness Facilitation Act of 1997; or
       ``(ii) by January 1, 2000, in the case of a least-developed 
     beneficiary developing country.
       ``(I) Beginning on the date that is 90 days after the date 
     of enactment of the Rights of Intellectual Property Owners 
     Fairness Facilitation Act of 1997, such country is not 
     implementing--
       ``(i) article 70(9) of part VII of the Agreement on TRIPS; 
     or
       ``(ii) any bilateral or multilateral agreement (other than 
     an agreement described in subparagraph (H) or clause (i)) to 
     protect and enforce intellectual property rights entered into 
     with the United States.''.
       (B) in the last sentence, by striking ``(D), (E), (F), and 
     (G)'' and inserting ``(D), (E), (F), (G), (H), and (I)''.
       (2) Conforming amendment.--Section 507 of such Act (19 
     U.S.C. 2467) is amended by adding at the end the following 
     new paragraph:
       ``(6) Agreement on trips.--
       ``(A) TRIPS.--The term `Agreement on TRIPS' means the 
     Agreement on Trade-Related Aspects of Intellectual Property 
     Rights entered into as part of the Uruguay Round Agreements.
       ``(B) Uruguay round agreements.--The term `Uruguay Round 
     Agreements' means the trade agreements resulting from the 
     Uruguay Round of multilateral trade negotiations under the 
     auspices of the General Agreement on Tariffs and Trade.''.
       (b) Designation as Eligible GSP Country.--Section 502 of 
     such Act (19 U.S.C. 2462) is amended by adding at the end the 
     following new subsection:
       ``(g) Designation Where Country Adheres to the Agreement on 
     TRIPS and Other Intellectual Property Rights Agreements; 
     Annual Reports.--
       ``(1) Designation as beneficiary developing country.--A 
     country--
       ``(A) which has been denied designation as a beneficiary 
     developing country on the basis of subsection (b)(2)(H) or 
     (I), or
       ``(B) with respect to which such designation has been 
     withdrawn or suspended based on subsection (b)(2) (H) or (I),

     may be designated as a beneficiary developing country under 
     this title, if the President determines that the country is 
     fully implementing parts I, II, III and article 70(9) of part 
     VII of the Agreement on TRIPS, and any other agreement 
     entered into with the United States that relates to 
     intellectual property rights, and reports the determination 
     to Congress.
       ``(2) Reports.--
       ``(A) Annual reports.--Not later than the date that is 1 
     year after the date of enactment of the Rights of 
     Intellectual Property Owners Fairness Facilitation Act of 
     1997, and annually thereafter, the President shall determine 
     whether each country designated as a beneficiary developing 
     country under this title is fully implementing parts I, II, 
     and III of the Agreement on TRIPS and shall report such 
     findings to Congress.
       ``(B) Other reports.--Not later than 90 days after the date 
     of enactment of the Rights of Intellectual Property Owners 
     Fairness Facilitation Act of 1997, and annually thereafter, 
     the President shall determine whether each country designated 
     as a beneficiary developing country under this title is fully 
     implementing article 70(9) of part VII of the Agreement on 
     TRIPS and any other agreement entered into with the United 
     States that relates to intellectual property rights and shall 
     report such determination to Congress.''.

     SEC. 4. COORDINATION OF TRADE POLICY AND FOREIGN POLICY.

       (a) Other Efforts To Improve Protection of Intellectual 
     Property Rights.--The United States Trade Representative 
     shall notify the Secretary of State, the Secretary of 
     Commerce, and the Administrator of the Agency for 
     International Development on a regular basis of any country 
     which is not fully implementing parts I, II, III and article 
     70(9) of part VII of the Agreement on TRIPS, and any other 
     agreement entered into with the United States that relates to 
     intellectual property rights.
       (b) Encouraging Implementation of Agreement on TRIPS.--The 
     Secretary of State, the Secretary of Commerce, and the 
     Administrator of the Agency for International Development 
     shall cooperate with the United States Trade Representative 
     by encouraging any country that receives foreign assistance 
     and is not fully implementing the Agreement on TRIPS or any 
     other agreement entered into with the United States that 
     relates to intellectual property rights to enact and enforce 
     laws that will enable the country to implement the Agreement 
     on TRIPS and any other intellectual property rights 
     agreement. To further this objective, the Secretary of State 
     shall instruct the head of each United States diplomatic 
     mission abroad to include intellectual property rights 
     protection as a priority objective of the mission.
       (c) Other Actions To Encourage Protection of Intellectual 
     Property Rights.--Notwithstanding any other provision of law, 
     the President is authorized to undertake the following 
     actions, where appropriate, with respect to a developing 
     country to encourage and help the country improve the 
     protection of intellectual property rights:
       (1) Provide Overseas Private Investment Corporation 
     insurance for intellectual property assets.
       (2) Require foreign assistance programs to provide support 
     for the development of national intellectual property laws 
     and regulations and for the development of the infrastructure 
     necessary to protect intellectual property rights.
       (3) Establish technical cooperation committees on 
     intellectual property standards within regional 
     organizations.
       (4) Establish, as a joint effort between the United States 
     Government and the private sector, a council to facilitate 
     and provide intellectual property-related technical 
     assistance through the Agency for International Development 
     and the Department of Commerce.
       (5) Require United States representatives to multilateral 
     lending institutions to seek the establishment of programs 
     within the institutions to support strong intellectual 
     property rights protection in recipient countries that have 
     fully implemented parts I, II, III and article 70(9) of part 
     VII of the Agreement on TRIPS, and any other agreement 
     entered into with the United States that relates to 
     intellectual property rights.
       (d) Definitions.--In this section:
       (1) Agreement on trips.--The term ``Agreement on TRIPS'' 
     means the Agreement on Trade-Related Aspects of Intellectual 
     Property Rights entered into as part of the trade agreements 
     resulting from the Uruguay Round of multilateral trade 
     negotiations under the auspices of the General Agreement on 
     Tariffs and Trade.
       (2) Developing country.--The term ``developing country'' 
     means any country which is--
       (A) eligible to be designated a beneficiary developing 
     country pursuant to title V of the Trade Act of 1974 (19 
     U.S.C. 2461 et seq.); or
       (B) designated as a least-developed beneficiary developing 
     country pursuant to section 502 of such Act (19 U.S.C. 2462).
                                  ____



         Pharmaceutical Research and Manufacturers of America,

                               Washington, DC, September 19, 1997.
     Hon. Frank Lautenberg,
     United States Senate,
     Washington, DC.
       Dear Senator Lautenberg: I am writing to express PhRMA's 
     appreciation and support for your legislation, the ``rights 
     of Intellectual Property Owners Fairness Facilitation Act of 
     1997.'' The protection and enhancement of American 
     intellectual property is fundamental to the competitiveness 
     of many U.S. industries, especially the research-based 
     pharmaceutical industry. Thanks to the support of the 
     Congress and the Executive Branch, over the years many 
     countries such as Mexico and Brazil have improved their 
     intellectual property regimes, thereby improving their 
     prospects for economic development and setting a positive 
     example for other countries around the world.
       I believe your legislation, by providing a balanced range 
     of incentives for countries to improve their protection of 
     intellectual property rights, will send a positive signal to 
     our trading partners. Please do not hesitate to contact me if 
     there is anything PHRMA can do to support the passage of your 
     legislation.
           Sincerely,
                                                   Alan F. Holmer,
     President.
                                  ____



                                             Procter & Gamble,

                                 Washington, DC, October 28, 1997.
     Hon. Frank Lautenberg,
     United States Senate,
     Washington, DC.
       Dear Senator Lautenberg: On behalf of Procter & Gamble, I 
     write in strong support of your efforts to protect U.S. 
     intellectual property rights through your bill, the ``Rights 
     of Intellectual Property Owners Fairness Facilitation Act of 
     1997.''
       Procter & Gamble now generates over half of its $35 billion 
     annual sales from international markets. America's leadership 
     to create rules-based international markets is

[[Page S12017]]

     one of our primary concerns. As we continue to build our 
     business in developing countries, we seek a ``level playing 
     field'' in the form of transparent, rules-based treatment and 
     protection of investments, including trademarks, 
     technologies, and ideas. Your bill, which requires that 
     developing countries adequately protect our intellectual 
     property rights or lose GSP benefits, represents a positive 
     step.
       We are all too familiar with what can happen overseas when 
     U.S. intellectual property rights are not adequately 
     protected. For instance, in the Persian Gulf countries, P&G 
     suffers from severe counterfeit activity. In certain other 
     nations receiving GSP preferences, we estimate that nearly 
     10% of our total sales is lost to counterfeit products. If 
     GSP can be used as an incentive for countries to implement 
     the TRIPS standards at an accelerated pace, we would avoid 
     those losses.
       Your proposed similar legislation in 1994, which we and 
     many of our trade associations such as IPO and PhRMA 
     supported. We will encourage those organizations to again 
     support this initiative.
           Sincerely,
                                                  R. Scott Miller,
                                                         Director.
                                 ______