[Congressional Record (Bound Edition), Volume 151 (2005), Part 19]
[House]
[Pages 26362-26365]
[From the U.S. Government Publishing Office, www.gpo.gov]




   EXPRESSING SENSE OF CONGRESS THAT RUSSIAN FEDERATION MUST PROTECT 
                      INTELLECTUAL PROPERTY RIGHTS

  Mr. SHAW. Mr. Speaker, I move to suspend the rules and agree to the 
concurrent resolution (H. Con. Res. 230) expressing the sense of the 
Congress that the Russian Federation must protect intellectual property 
rights.
  The Clerk read as follows:

[[Page 26363]]



                            H. Con. Res. 230

       Whereas the protection of intellectual property is critical 
     to the Nation's economic competitiveness in the 21st century;
       Whereas Russia remains on the Special 301 Priority Watch 
     List compiled by the United States Trade Representative 
     (USTR), and the Congress is gravely concerned about the 
     failure of the Russian Federation to live up to international 
     standards in the protection of intellectual property rights, 
     a core American asset;
       Whereas the Congress wants to ensure that the Russian 
     Federation redoubles its efforts to adopt and enforce 
     aggressive laws, policies, and practices in the fight against 
     piracy and counterfeiting;
       Whereas the Congress is particularly concerned that the 
     Russian Federation is, in the words of Senate Concurrent 
     Resolution 28, a place where ``piracy that is open and 
     notorious is permitted to operate without meaningful 
     hindrance from the government'';
       Whereas, according to USTR, enforcement of intellectual 
     property rights in Russia ``remains weak and caused 
     substantial losses for the U.S. copyright, trademark, and 
     patent industries in the last year. Piracy in all copyright 
     sectors continues unabated, and the U.S. copyright industry 
     estimated losses of $1.7 billion in 2004.'';
       Whereas the Russian Federation must understand that failure 
     to adequately protect and enforce intellectual property 
     rights will have political and economic ramifications for its 
     relationship with the United States;
       Whereas accession to the World Trade Organization (WTO) 
     represents an agreement to conform one's practices to the 
     rule of law, and to international standards in the WTO 
     Agreement on Trade Related Aspects of Intellectual Property 
     Rights (TRIPS);
       Whereas notwithstanding some recent legislative 
     improvements, Russia's regime to protect intellectual 
     property rights does not conform with TRIPS standards;
       Whereas the United States can ill afford deterioration of 
     the world trading system by permitting the entry of a country 
     into the WTO that has not demonstrated its willingness and 
     ability to conform its practices to the requirements of the 
     TRIPS; and
       Whereas the leaders of the G-8, including President Putin 
     of the Russian Federation, recently pledged to reduce 
     intellectual property piracy through more effective 
     enforcement: Now, therefore, be it
       Resolved by the House of Representatives (the Senate 
     concurring),  That it is the sense of the Congress that--
       (1) the Russian Federation should provide adequate and 
     effective protection of intellectual property rights, or it 
     risks losing its eligibility to participate in the 
     Generalized System of Preferences (GSP) program; and
       (2) as part of its effort to accede to the World Trade 
     Organization, the Russian Federation must ensure that 
     intellectual property is securely protected in law and in 
     practice, by demonstrating that the country is willing and 
     able to meet its international obligations in this respect.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Florida (Mr. Shaw) and the gentleman from Maryland (Mr. Cardin) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Florida (Mr. Shaw).
  Mr. SHAW. Mr. Speaker, I yield myself such time as I may consume.
  Today I rise in strong support for H. Con. Res. 230. I commend the 
gentleman from California (Mr. Issa) for sponsoring this resolution and 
focusing congressional attention on this issue.
  Russia's copyright piracy problem ranks with China as the two most 
serious in the world, and it appears to be getting worse. Russia has 
become one of the world's largest producers and distributors of illegal 
compact discs and DVDs. Russia has the capacity to produce more than 20 
million compact discs a month, providing ample supply of pirated 
material for export all over the world. Not only is the Russian 
Government failing to crack down on piracy, but officials even admit 
that several illegal plants are on Russian Government-owned classified 
sites where regular law enforcement is prohibited from visiting.
  Intellectual property rights protection is critical to the United 
States economic competitiveness. According to the United States trade 
representative, Russia's failure to enforce IPR has ``caused 
substantial losses for the United States copyright, trademark, and 
patent industries in the last year,'' estimated by the U.S. copyright 
industry to amount to $1.7 billion in losses in 2004 alone.
  Russia must understand that failure to adequately protect and enforce 
intellectual property rights will have political and economic 
ramifications. Specifically, Russia risks losing its eligibility to 
participate in the Generalized System of Preferences program, under 
which the United States provides unilateral duty-free treatment to 
imports from developing countries to encourage economic growth. In 
addition, it must ensure that intellectual property is securely 
protected in law and in practice as part of its effort to accede to the 
World Trade Organization.
  I urge Russia to take immediate and effective steps to properly 
inspect all optical media production facilities and to shut down 
illegal plants and Internet sites, strengthen border enforcement, 
combat piracy and counterfeiting, and address deficiencies in its IPR 
laws.
  I urge my colleagues to vote ``yes'' on H. Con. Res. 230 to tell 
Russia that it must be a responsible and dependable player in the 
international marketplace.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CARDIN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I am pleased that we are considering this resolution 
today. I am deeply concerned by Russia's failure to effectively 
confront piracy of DVDs, music, and software. Last year, U.S. companies 
lost $1.7 billion as a result of Russia's failure to crack down on 
piracy.
  This is not a new problem. Each year since 1997, the administration 
has cited Russia in its annual Special 301 Report for failing to 
adequately protect and enforce intellectual property rights; and, 
unfortunately the problem is getting worse rather than better.
  In 2004, Russia's illegal optical disc production capacity continued 
to increase so much so that Russia is now supplying other countries 
with pirated products. Pirated discs produced in Russia have been found 
in more than 27 countries. The largest commercial Web site of pirated 
music is also based in Russia, and the Russian prosecutors have refused 
to initiate a criminal investigation to shut it down.
  Mr. Speaker, piracy of intellectual property in Russia means lost 
jobs and opportunities here at home for American workers and 
businesses, and it must be stopped. I believe that Congress must send a 
strong message to Russia that the United States will not stand by while 
Russia robs U.S. workers and businesses of their intellectual property.
  The resolution we are considering today would put Russia on notice 
that it risks losing its preferential trade benefits under the GSP 
program if it fails to improve its protection of intellectual property 
rights. The resolution also would put Russia on notice that Congress 
takes its intellectual property rights violations seriously and will 
consider whether Russia is making meaningful progress on this issue 
when we consider whether to grant Russia Permanent Normal Trade 
Relations status.
  I urge my colleagues to join us in supporting this important 
legislation.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SHAW. Mr. Speaker, I yield such time as he may consume to the 
gentleman from California (Mr. Issa), the author of this resolution.
  Mr. ISSA. Mr. Speaker, I want to commend the chairman, the full 
committee chairman, and my cosponsor of this bill, Congresswoman 
Watson.
  We traveled to Russia earlier this year. We saw firsthand that it is 
not just about piracy; it is about a complete absence of a willingness 
to enforce that. On the main streets of Moscow, in fact, within sight 
of Red Square, one can every day see advertisements for movies, DVDs of 
movies that have not yet been released, impossible to exist, literally 
not existing in the United States; and yet they exist in Russia, 
already translated into Russian and, yes, as the chairman said earlier, 
into many other languages and exported around the world.

                              {time}  1300

  The Russians admit that they have more than four times as many 
optical disk producers as they could possibly justify. And although we 
often talk about DVDs and music, we also need to recognize that 
Microsoft and other major software producers are being robbed of 
countless billions in this process.

[[Page 26364]]

  Many talk of the WTO accession and whether or not it is appropriate 
for Russia to be granted that, and I certainly agree it needs to be 
withheld until there is a showing of a willingness and a proven track 
record of enforcing these laws.
  But I want to make one other closing remark here. We pay, we the 
world pay world-class prices for oil no matter where we buy it in the 
world, and today that is $60 a barrel. Russia is one of the largest 
exporters of oil to Western Europe; and yet in a time when they are 
receiving $60 a barrel on what costs them less than $2 a barrel to get 
out of the ground, they will tell you they cannot afford the 
intellectual property produced by Neil Diamond, Steven Spielberg or 
from Bill Gates' company. This is disingenuous.
  Mr. Speaker, if they want to be part of a World Trading Organization, 
they have to recognize that value is not determined by what you are 
willing to pay; value is determined by what you are willing to pay for 
the legitimate goods in an arm's length relationship. We pay world-
class prices for oil. They should pay world-class prices for 
intellectual property and not literally steal it from the inventors 
here in America and in Europe.
  Mr. CARDIN. Mr. Speaker, I yield 5 minutes to the gentlewoman from 
California (Ms. Watson), the co-author of the resolution.
  Ms. WATSON. Mr. Speaker, I rise in strong support of the resolution 
that I coauthored with the gentleman from California (Mr. Issa). It 
expresses the sense of Congress that the Russian Federation must do 
more to protect intellectual property or risk losing its participation 
in the generalized system of preferences and be prevented from joining 
the World Trade Organization.
  I want to thank my colleague, the gentleman from California (Mr. 
Issa), for his hard work in crafting this most-needed resolution and 
for being such a strong voice on the global protection of intellectual 
property assets. The resolution came about, as he described, after a 
trip that we took with other members of the International Relations 
Committee to Russia in May of this year.
  During the trip, we learned firsthand the extent of the IP piracy 
problem in Russia which has reached epidemic levels, second only to 
China in the world. Indeed, the U.S. copyright industry lost over $1.7 
billion last year due to Russian piracy and over $6 billion in the last 
5 years, and the situation is getting worse.
  When we visited in May, the number of optical disk plants was 36. Now 
it is 42 with a production capacity that far exceeds Russia's demand 
for CDs and DVDs. Even by recent Russian government accounts, 16 of 
these plants are the Russian State (owned) Restricted Access Regime 
Enterprises where regular law enforcement officials are prohibited from 
visiting. Such information is truly disturbing.
  I represent Hollywood, California, the center of the U.S. copyright 
and creative industry. My constituents inform me that because of 
corruption, inefficiency and ineptitude in Russia's justice system, 
U.S. industry complaints have been routinely dismissed. The few 
sentences that have been handed down are wholly inadequate and non-
deterrent.
  I fear that, unless Russia substantially improves IPR law and 
enforcement practices, Russian participation in the world trade system 
should be restricted.
  This is the reason why I introduced this along with Mr. Issa to 
condition Russia's accession to the World Trade Organization on the 
Russian government's demonstrated commitment in meeting its 
international obligations and protecting intellectual property rights.
  We understand that to curb the proliferation of IPR violations in 
Russia, it is not enough to focus on how many laws are passed by the 
Duma and how many raids on optical disk plants are being conducted each 
year. We have to generate a sense of urgency and motivate the political 
will of the Russian government.
  Simply put, a healthy and vibrant global trade market should not 
tolerate the ongoing systemic piracy of intellectual assets, and the 
Russian political establishment must understand that. I am pleased to 
note that over 100 Members of Congress have cosponsored this 
resolution. It will send a clear and convincing message that the United 
States Congress is looking at the issue closely and that real reform 
must happen now. Once again, I want to thank the congressman for his 
leadership on this issue. I urge my colleagues to support this critical 
resolution.
  Mr. SHAW. Mr. Speaker, I yield 4 minutes to the gentleman from 
Virginia (Mr. Goodlatte), the chairman of the Committee on Agriculture.
  Mr. GOODLATTE. Mr. Speaker, I rise in strong support of House 
Concurrent Resolution 230, expressing the sense of the Congress that 
the Russian Federation must protect intellectual property rights.
  As co-chairman of the Congressional International Anti-piracy Caucus, 
I am very concerned about the appalling levels of copyright piracy in 
Russia. Russia's copyright piracy problem is among the most serious in 
the world, and it is getting worse. In Russia, 80 percent of all motion 
pictures and 87 percent of business software are pirated. I have 
personally witnessed pirated American copyrighted works, movies, music 
and software, sold openly on the streets in Moscow, even in view of the 
Kremlin.
  Considering that the core copyright industries account for 6 percent 
of the U.S. gross domestic product and the total copyright industries 
account for approximately 12 percent of U.S. GDP, it is clear that 
America's businesses are facing a serious problem in Russia. In fact, 
the FBI estimates that U.S. businesses lose between $200 and $250 
billion a year worldwide to counterfeit goods.
  We must make sure that each nation recognizes that piracy is a global 
problem. The growth of piracy among organized crime rings is 
illustrative of its global scope.
  The combination of enormous profits and practically nonexistent 
punishments by many foreign governments makes copyright piracy an 
attractive cash cow for organized crime syndicates. Often specializing 
in optical disks and business software piracy, these crime rings are 
capable of coordinating multi-million dollar efforts across multiple 
national borders. Russia has become one of the largest producers and 
distributors of illegal media material, and the increasing number of 
optical disk plants in Russia has a production capacity that far 
exceeds Russian demand for copyrighted works.
  Another disturbing trend is the growing willingness of foreign 
governments to condone the use of, and even use, pirated materials. At 
its best, government sets the standards for the protection of rights. 
At its worst, government encourages and even participates in the breach 
of those rights.
  By recent Russian government accounts, 16 optical disk plants are on 
Russian State (owned) Restricted Access Regime Enterprises where 
regular law enforcement is prohibited from visiting. In addition, 
corruption in Russia's justice system results in the routine dismissal 
of piracy complaints or inadequate and non-deterrent sentences.
  We all must realize that copyright piracy and counterfeiting are 
serious problems that do not merely affect private companies' bottom 
lines in the short term. They also discourage investment and innovation 
in the long term which will eventually lead to fewer consumer choices, 
a repercussion that affects entire societies and economies. Government 
must work together to reward creators and punish thieves.
  In addition, counterfeit goods can pose serious risk of bodily harm 
and even death. The U.S. Chamber of Commerce estimates that trade in 
counterfeit goods makes up between 6 and 9 percent of all world trade. 
With products as essential as airplane parts and car brakes being 
faked, we must focus attention on this growing problem for the sake of 
our citizens' safety.
  In passing House Concurrent Resolution 230 today, we send a clear 
signal to the Russian Federation we will not stand idly by while our 
copyrights are infringed. The Russian Federation must make fighting 
copyright piracy a

[[Page 26365]]

priority for the country and law enforcement authorities. And, if 
Russia's accession to the World Trade Organization is to be approved by 
Congress, Russia must make meaningful progress against piracy now.
  I urge my colleagues to join me in voting for this important 
resolution. I commend the gentleman and gentlewoman from California on 
this issue.
  Mr. SHAW. Mr. Speaker, I yield 3 minutes to the gentleman from Texas 
(Mr. Gohmert).
  Mr. GOHMERT. Mr. Speaker, I want to thank my colleagues from 
California for pushing this forward.
  The abuses of intellectual property are not only harmful 
economically, but they can be harmful to our physical well-being and 
safety, and not just here but also in the Russian Federation.
  When Russian companies steal products that are patented, copyrighted 
or trademarked, but they do not adhere to the proper safety standard 
such as electrical wiring, car parts and hair driers, consumers can be 
physically harmed. So there are really two prongs why we must urge 
Russia to shape up their intellectual property enforcement.
  First, because of the harm to our creators and artists; and, second, 
to the threats to safety since oftentimes the goods that infringe are 
substandard.
  Copyright piracy abroad hurts our economy here and the high-tech 
industry, since it is such a strong driving force behind our economy, 
piracy stifles its growth and productivity. Copyright holders should be 
protected to ensure that we continue to innovate and advance technology 
both at home and abroad.
  Local industries have been crippled when high-quality pirated 
versions of their products are sold abroad. This can also result in 
lost tax revenues and lost jobs here at home. The Russian Federation 
must also work to protect and enforce intellectual property rights for 
its own good as well.
  For example, if the intellectual property rights that encourage 
innovation and invention are not protected, incentives will be lost, 
the innovations and inventions will cease; therefore, the Russian 
Federation as well as the rest of the world will lose out on these 
life-enhancing innovations.
  Nonenforcement of intellectual property rights because of either 
neglect or greed will figuratively as well as literally kill the goose 
that is laying the life-enhancing golden eggs.
  Mr. CARDIN. Mr. Speaker, I urge my colleagues to support this very 
important resolution, and I yield back the balance of my time.
  Mr. SHAW. Mr. Speaker, I want to compliment Ms. Watson and Mr. Issa 
for bringing this most important resolution to the floor in a very 
fine, but too often rare, bipartisan effort. I urge all Members to vote 
for it.
  In the last 25 years, our relationship with Russia has warmed up 
considerably and we are enjoying good relations with the Russian 
Federation. However, to extend this into full trade, we need to be able 
to respect each other's intellectual property rights. Therefore, I ask 
for a ``yes'' vote on this resolution, and I hope the Russian 
Federation is listening to the United States Congress.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Culberson). The question is on the 
motion offered by the gentleman from Florida (Mr. Shaw) that the House 
suspend the rules and agree to the concurrent resolution, H. Con. Res. 
230.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of 
those present have voted in the affirmative.
  Mr. SHAW. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this question will 
be postponed.


                             General Leave

  Mr. SHAW. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their remarks 
and include extraneous material on the subject of the resolution under 
consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Florida?
  There was no objection.

                          ____________________