[Congressional Record Volume 148, Number 89 (Friday, June 28, 2002)]
[Extensions of Remarks]
[Page E1178]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                THE INTELLECTUAL PROPERTY PROTECTION ACT

                                 ______
                                 

                          HON. LAMAR S. SMITH

                                of texas

                    in the house of representatives

                        Thursday, June 27, 2002

  Mr. SMITH of Texas. Mr. Speaker, today is world Anti-Counterfeiting 
day.
  Countries around the globe will highlight the growing problem of 
counterfeiting and the efforts by law enforcement and private industry 
to combat intellectual property theft.
  Today I introduced a bill to address counterfeiting and copyright 
piracy. The Intellectual Property Protection Act will help protect 
American innovation and creativity.
  The Intellectual property industry employs 4.3 million Americans, 
making it one of the largest sectors of the American economy--and a 
sector threatened everyday by copyright piracy.
  Copyright piracy is illegal and puts Americans at risk of losing not 
just their jobs and economic well-being, but their safety, as well. The 
profits seized by these criminals are often used to fund other illegal 
activities, including terrorism.
  News stories have revealed that terrorist organizations receive 
hundreds of millions of dollars through pirate operations. For example, 
police in Argentina and Paraguay uncovered a pirate CD business that 
has used its profits to underwrite terrorist activities for Hezbollah. 
The more we crack down on piracy, the more we dry up financial 
resources for terrorist operations.
  Under current law, we can prosecute someone for trafficking in fake 
labels for a computer program, but we cannot prosecute someone for 
faking the hologram used by the software maker to verify that the 
software is genuine.
  For instance, if a person manufactures fake covers for counterfeit 
CDs, he or she can be prosecuted. However, if that same person creates 
fake holograms to make buyers believe that the CDs are authentic, there 
is no recourse.
  We have criminalized trafficking in counterfeit documentation and 
packing of software programs, but not music and other products.
  The Intellectual Property Protection Act will criminalize the 
counterfeiting of authentication features, like holograms. In addition, 
the bill will expand criminal law, which currently only criminalizes 
trafficking in counterfeit documentation and packaging for software 
programs, to include documentation and packaging for music, motion 
pictures, and other audiovisual works.
  This bill also will provide relief for victims of intellectual 
property crimes. Many of these crimes go unprosecuted today, leaving 
victims of these thefts without a way to recover their losses.
  Last year, the retail software industry lost $1.8 billion and the 
business software industry lost $11 billion in revenue because of 
piracy. The motion picture industry lost $3 billion in potential 
worldwide revenue and the recording industry lost $4.3 billion 
worldwide due to piracy. These are staggering figures--especially 
considering there is no way to recover this lost revenue.
  The legislation provides a private cause of action with a 3-year 
statute of limitations for victims to recover damages in federal court. 
In addition, if a person violates the anti-counterfeiting laws a second 
time within three years, treble damages will be available.
  We must protect and encourage American originality and innovation. 
This bill goes a long way towards doing that.

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