[Congressional Record Volume 144, Number 138 (Tuesday, October 6, 1998)]
[Senate]
[Pages S11586-S11588]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 SENATE CONCURRENT RESOLUTION 124--EXPRESSING THE SENSE OF CONGRESS ON 
                    INTELLECTUAL PROPERTY PROTECTION

  Mr. LAUTENBERG (for himself, Mr. Hatch, Mr. Graham, Mr. Grassley, Mr. 
Helms, Mrs. Boxer, Mr. Bingaman, and Mr. Mack) submitted the following 
concurrent resolution; which was referred to the Committee on Finance:

                            S. Con. Res. 124

       Whereas intellectual property-dependent industries include 
     businesses that depend on protection of trademarks, trade 
     secrets, trade names, copyrights, and patents;
       Whereas intellectual property-dependent industries have 
     become primary drivers of the United States economy, 
     contributing over $500,000,000,000 to the United States 
     economy in 1997;
       Whereas the foreign sales and exports of United States 
     intellectual property-dependent goods totaled at least 
     $100,000,000,000 in 1997, exceeded sales of every other 
     industrial sector, and helped the United States balance of 
     trade;
       Whereas international piracy of United States intellectual 
     property, which the Department of Commerce estimates costs 
     United States companies nearly $50,000,000,000 annually, 
     poses the greatest threat to the continued success of United 
     States intellectual property-dependent industries;
       Whereas goods from many developing countries receive 
     preferential duty treatment under the Generalized System of 
     Preferences even though those countries do not protect 
     intellectual property rights of United States persons;
       Whereas piracy of United States intellectual property is so 
     rampant in some developing countries that receive benefits 
     under the Generalized System of Preferences that it 
     effectively prevents United States intellectual property-
     dependent industries from selling products in those 
     countries;
       Whereas the Agreement on Trade-Related Aspects of 
     Intellectual Property Rights requires its signatories to 
     provide a minimum of essential protections to the 
     intellectual property of citizens from all signatory nations;
       Whereas the United States has fully implemented its 
     obligations under the Agreement on Trade-Related Aspects of 
     Intellectual Property Rights, and in fact in many cases 
     offers stronger protection of intellectual property rights 
     than required in the Agreement;
       Whereas it appears that at the current rate many developing 
     countries that receive benefits under the Generalized System 
     of Preferences may not be in compliance with their 
     obligations under the Agreement on Trade-Related Aspects of 
     Intellectual Property Rights on January 1, 2000, as required; 
     and

[[Page S11587]]

       Whereas many of the developing countries that receive 
     benefits under the Generalized System of Preferences and that 
     are not on track in complying with their obligations under 
     the Agreement on Trade-Related Aspects of Intellectual 
     Property Rights are responsible for substantial trade losses 
     suffered by United States intellectual property-dependent 
     industries: Now, therefore, be it
       Resolved by the Senate (the House of Representatives 
     concurring), That it is the sense of Congress that--
       (1) the United States should not give special trade 
     preferences to goods originating from a country that does not 
     adequately and effectively protect United States intellectual 
     property rights, particularly a developing country that has 
     not met its obligations under the Agreement on Trade-Related 
     Aspects of Intellectual Property Rights by January 1, 2000;
       (2) Congress should monitor the progress of developing 
     countries in meeting their obligations under the Agreement on 
     Trade-Related Aspects of Intellectual Property Rights by 
     January 1, 2000; and
       (3) Congress should consider legislation that would deny 
     the benefits of the Generalized System of Preferences to 
     developing countries that are not in compliance with their 
     obligations under the Agreement on Trade-Related Aspects of 
     Intellectual Property Rights beginning on January 1, 2000.

 Mr. LAUTENBERG. Mr. President, today I submit a resolution 
expressing the sense of the Congress that the United States should not 
extend preferential duty-free treatment on products to countries who do 
not comply with their treaty obligations regarding the protection of 
intellectual property.
  The United States leads the world in the production of intellectual 
property. Intellectual property-based industries, including those that 
rely on patents, copyrights, trademarks, trade secrets, and trade 
names, contribute over $500 billion annually to the U.S. economy. 
However, the current global reach of information is making it much 
easier for pirates to gain access to intellectual property. It is 
vitally important that we take adequate steps to discourage, and 
ultimately prevent, other nations from allowing the rampant piracy of 
the work of Americans.
  Members of the World Trade Organization signed an agreement on Trade-
Related aspects of Intellectual Property Rights, or TRIPS, in 1995. 
That agreement establishes minimum standards of intellectual property 
protection and requires the signatory developing nations to be 
compliant with their TRIPS obligations by January 1, 2000. Regardless 
of this, piracy continues in GSP beneficiary nations and around the 
world, costing the U.S. intellectual property-dependent industries 
approximately $50 billion a year.
  The United States has recognized the importance of protecting 
American intellectual property and encouraging the growth of its 
related industries. The Administration has actively pressed other 
nations to engage in adequate protections, particularly through the use 
of the Special 301 ``watch'' list. However, this is not enough. We need 
to do more to remove the incentives for piracy. Linking GSP benefits to 
TRIPS obligations is an important first step, and a powerful way to 
send a clear message to these and other nations that there is a price 
to pay for continuing to permit rampant piracy of American-made 
products.
  Mr. President, this sense of the Congress does send an important 
message to these countries that the United States is watching, and that 
legislation to implement the denial of duty-free treatment is imminent 
unless they take the necessary steps to respect and protect the 
intellectual capital of Americans.
  At this point, Mr. President, I ask unanimous consent that letters in 
support of this resolution be inserted into the Record.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:


                 International Intellectual Property Alliance,

                                  Washington, DC, October 1, 1998.
     Hon. Orrin Hatch,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
     Hon. Frank Lautenberg,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senators Hatch and Lautenberg: On behalf of the 
     International Intellectual Property Alliance and its members 
     (listed below), we convey our strong support for your ``Sense 
     of the Congress'' resolution designed to warn developing 
     countries around the world that they cannot expect 
     preferential trade benefits under the Generalized System of 
     Preferences (GSP) program while, at the same time, condoning 
     the theft of U.S. intellectual property (in our case, movies, 
     business and entertainment software, music and sound 
     recording, and books and journals--products protected by 
     copyright laws).
       Your resolution rightly sets, as the minimum standard of IP 
     protection, the TRIPS agreement negotiated during the Uruguay 
     Round and set to go into effect for most developing countries 
     on January 1, 2000. It warns these countries that they must 
     bring their statutory laws and, most importantly, their 
     enforcement systems into compliance with those standards if 
     they expect to receive these trade benefits. While the 
     current GSP provisions give the President discretion to deny 
     such benefits where U.S. intellectual property is 
     inadequately protected, we welcome the message you are 
     sending--that the Congress will consider tougher legislation 
     which would increase the risk of these benefits being denied 
     if these countries do not bring their IPR regimes into 
     compliance with their international obligations.
       Piracy levels in developing countries often hover at or 
     above 90% of the marketplace. Rates at these levels simply 
     deny our copyright-based industries the ability to enter and 
     survive in many of these markets effectively. In total, IIPA 
     estimates that the copyright industries lose over $20 billion 
     to piracy worldwide, with a significant portion of this loss 
     coming from developing countries. IIPA and the Administration 
     have been working diligently to lower these piracy levels and 
     global losses and to a great extent we have achieved success 
     in obtaining improved legislation, the first step in this 
     process. Now we face the challenge of improving enforcement 
     systems and we welcome your resolution in the fight to meet 
     this next objective.
       We also applaud the resolution's acknowledgment of the 
     importance of the intellectual property industries to the 
     U.S. economy and to our international trade. As we announced 
     last May before Senator Hatch's Judiciary Committee, the 
     copyright industries accounted for $278.4 billion in value 
     added to the U.S. economy, or approximately 3.65% of the 
     Gross Domestic Product (GDP) in 1996 (the last year for which 
     complete data is available). With respect to employment and 
     job growth, the core copyright industries grew at more than 
     twice the annual growth rate of the U.S. economy as a whole 
     between 1977 and 1996 (5.5% vs. 2.6%). Employment in the core 
     copyright industries grew at nearly three times the 
     employment growth in the economy as a whole between 1977 and 
     1996 (4.6% vs. 1.6%). More than 6.5 million workers were 
     employed by the total copyright industries in 1996, about 
     5.15% of the total U.S. work force. In 1996, the core 
     copyright industries achieved foreign sales and exports of 
     $60.18 billion, a 13% gain over the $53.25 billion generated 
     in 1995, for the first time leading all major industry 
     sectors including agriculture, automobiles and auto parts and 
     the aircraft industry. In the future, the copyright 
     industries will assume ever greater importance to revenue 
     growth, job creation and international trade. Your resolution 
     is right on target to ensure that these industries continue 
     to remain healthy and vibrant.
       Thank you for your attention to these important matters. 
     Again, the nearly 1,400 companies represented by IIPA members 
     strongly support this resolution.
           Sincerely,
                                                    Eric H. Smith,
     President.
                                  ____



                              Intellectual Property Committee,

                                  Washington, DC, October 1, 1998.
     Hon. Frank R. Lautenberg
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senator Lautenberg: The Intellectual Property 
     Committee (IPC), whose members represent the broad spectrum 
     of private sector intellectual property interests, strongly 
     endorses the concurrent resolution on worldwide intellectual 
     property protection that you are about to introduce.
       The concurrent resolution demonstrates a clear 
     understanding that strong worldwide protection of U.S. 
     intellectual property is critical to the continued 
     competitiveness of U.S. industry and to our nation's ability 
     to create good jobs here in the United States. The 
     intellectual property (TRIPS) agreement, which developing 
     country members of the World Trade Organization (WTO) will be 
     required to implement on January 1, 2000, provides 
     international standards of protection and enforcement across 
     a broad range of intellectual property elements.
       The concurrent resolution expresses the sense of Congress 
     that the United States should not give special trade 
     preferences, under the U.S. Generalized System of Preferences 
     (GSP), to goods originating from countries that will have 
     failed to meet their obligations on January 1, 2000 under the 
     TRIPS Agreement. It also expresses the sense of Congress that 
     Congress should consider legislation that would deny GSP 
     benefits to developing countries that will not be in 
     compliance with their TRIPS obligations beginning on January 
     1, 2000.
       Through such linkage, your concurrent resolution and the 
     legislation that it envisages will provide the United States 
     with the leverage necessary to ensure that GSP-beneficiary 
     countries will live up to their WTO obligations. (These 
     countries have had a five year transition period to comply 
     with their WTO intellectual property obligations; the 
     transition period will expire as of January 1, 2000.) In the 
     absence of this type of leverage, the United States will face 
     real difficulty in achieving the critical goal of improved

[[Page S11588]]

     worldwide intellectual property protection in a timely 
     manner. In addition, your concurrent resolution will 
     underscore the importance of adequate and effective 
     intellectual property protection in stimulating economic 
     growth in GSP-beneficiary countries, which will lead to 
     expanded export opportunities for U.S. goods and services.
       The IPC commends your continued efforts on behalf of strong 
     intellectual property protection and economic growth in the 
     United States.
           Sincerely,
     Charles S. Levy,
                                                          Counsel.
     Jacques J. Gorlin,
     Director.
                                  ____

                                               Interactive Digital


                                         Software Association,

                                  Washington, DC, October 1, 1998.
     Hon. Orrin Hatch,
     U.S. Senate, Russell Office Building, Washington, DC.
     Hon. Frank Lautenberg,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senators Hatch and Lautenberg: I write to thank you 
     for your leadership on the issue of protecting intellectual 
     property, and in particular to express the support of the 
     Interactive Digital Software Association (IDSA), which 
     represents the United States entertainment software 
     publishers, for your decision to introduce a ``Sense of the 
     Congress'' resolution on this issue. The IDSA believe this 
     resolution will provide developing nations an incentive to 
     meet pre-existing obligations to offer adequate and effective 
     protection to intellectual property rights (IPR), and in 
     particular to take all necessary steps to implement the 
     Agreement on Trade-Related Aspects of Intellectual Property 
     Rights (TRIPs Agreement.) Because the United States leads the 
     world in intellectual property production and experiences a 
     tremendous positive balance of trade in this area, better 
     global protection for IPR will directly benefit the United 
     States economy.
       Piracy of intellectual property is a severe problem for 
     U.S. industries. In 1997, the U.S. entertainment software 
     industry, which had revenues of $5.6 billion in the United 
     States, experienced global piracy losses of approximately 
     $3.2 billion (not including online piracy losses.) Perhaps 
     more troubling, $894 million of those losses occurred in 
     developing nations that receive special trade preference from 
     the U.S. under the Generalized Systems of Preferences (GSP) 
     program. As a result, the U.S. provides special trade 
     preferences to the goods of nations whose inadequate 
     protection for IPR effectively bars many U.S. companies from 
     doing business therein.
       Piracy losses in GSP beneficiary nations continue to mount 
     though many of these nations have signed the TRIPs Agreement 
     and are required to meet its obligations by January 1, 2000. 
     In fact, many of these nations have yet to begin the long 
     process of passing legislation to implement the TRIPs 
     Agreement, much less to demonstrate a willingness to enforce 
     such laws once enacted. Due to this lack of progress, it 
     appears that the vast majority of developing nations will not 
     be in full compliance with the TRIPs Agreement as required on 
     January 1, 2000.
       Your resolution will, in a variety of ways, help to address 
     the problem of inadequate protection for IPR rights by 
     developing nations. Your resolution will send a powerful 
     message that the United States Congress places a high 
     priority on global IPR protection. By expressing a 
     congressional willingness to deny GSP benefits to nations 
     that do not meet their TRIPs Agreement obligations, your 
     resolution will provide developing nations a powerful 
     incentive to get serious about TRIPs Agreement 
     implementation. Furthermore, your resolution will supplement 
     and support the efforts of the United States Government, 
     particularly the Office of the United States Trade 
     Representative (USTR), and United States intellectual 
     property owners to convince developing nations to provide at 
     least the minimum of IPR protection required under the TRIPs 
     Agreement.
       Therefore, I again express the full support of the IDSA for 
     your resolution, and offer any assistance we may provide in 
     seeing this resolution to passage.
           Sincerely,
                                                  Doug Lowenstein,
     President.
                                  ____



         Pharmaceutical Research and Manufacturers of America,

                                  Washington, DC, October 6, 1998.
     Hon. Frank Lautenberg,
     U.S. Senate, Washington, DC.
       Dear Senator Lautenberg: I am writing to express PhRMA's 
     support for the Concurrent Resolution regarding GSP and 
     intellectual property you are introducing today. The denial 
     of intellectual property rights protection abroad is one of 
     the American research-based pharmaceutical industry's most 
     serious challenges. Billions of dollars are lost annually to 
     patent pirates in such countries as Argentina, India, Egypt, 
     and many others.
       By withholding GSP privileges from countries that refuse to 
     respect the intellectual property rights of American 
     biomedical inventors, your Resolution sends an important 
     signal to the world trading community. American foreign trade 
     policy is based on the fundamental principle of reciprocity, 
     and denial of intellectual property rights is, in fact, a de 
     facto denial of market access since the innovator cannot 
     enjoy the limited period of marketing exclusivity granted by 
     a patent. Since many pirating countries on the one hand deny 
     market access to American companies, but on the other hand 
     enjoy not only market access but GSP treatment on trade with 
     the United States, your Resolution is quite appropriate and 
     necessary.
       PhRMA is pleased to offer its support for the Concurrent 
     Resolution expressing the sense of the Senate that GSP 
     benefits should be withheld from developing countries that 
     violate American intellectual property rights.
           Respectfully,
                                                Barry H. Caldwell,
     Vice President.

                          ____________________