In the waning weeks of the Obama administration, U.S. Intellectual Property Enforcement Coordinator Daniel H. Marti, colloquially known as the “IP czar,” released the latest U.S. Joint Strategic Plan on Intellectual Property Enforcement for FY 2017-19. The IP czar is a cabinet-level position established by the PRO-IP Act to help coordinate IP enforcement action from various federal agencies, including the Department of State, Department of the Treasury, Department of Justice, Department of Homeland Security, Department of Commerce, and the Office of the U.S. Trade Representative. The Plan, much like its predecessors, outlines the federal government’s IP enforcement policy and national strategy over the next 3 years.
The Plan focuses heavily on addressing the unlawful exploitation of IP theft as it manifests in the forms of counterfeiting and piracy. Our patent, copyright, and trademark colleagues here at Fish no doubt find vindication in the Plan for the important work they do every day on behalf of our clients. This includes the serious impacts counterfeiting and piracy have on fair trade, consumer health and safety, labor, the environment, and domestic and international security. The Plan further reports estimates that the total magnitude of counterfeiting and piracy worldwide in all forms approached—if not surpassed—the trillion dollar mark in 2016.
The Plan also addresses the critical role that trade secrets play in the U.S. economy—the value of which is estimated at approximately $5 trillion—and the urgent need to protect them from theft and exploitation. And even more so than in plans past, the inescapable overlay of cyber-enabled threats to IP and to U.S. interests generally—especially with regard to trade secret theft, copyright piracy, and the attendant malware (used as both vector and payload)— receives some well-deserved attention.
An overview of the Plan is as follows:
Section 1 establishes the global scale of IP theft and the threat of its exploitation to U.S. national interests.
Section 2 proposes frameworks and approaches to “promote a safe and secure internet” by:
targeting the flow of money and illicit proceeds to criminals profiting from counterfeit and pirated goods;
reviewing strategies in countering the exploitation of domain name hopping;
reducing online piracy and counterfeiting;
addressing the counterfeiting and IP infringement challenges raised by 3D printing; and
addressing cyber-enabled trade secret theft.
Section 3 recommends a number of strategies to enhance Customs and Border Protection’s enforcement to intercept counterfeit and pirated goods bound for the U.S. market, as well as to coordinate with global partners to curb the movement and trade of counterfeit and pirated goods around the world. This includes improving the administration of ITC exclusion orders that currently stop infringing goods from being imported into the U.S.
Section 4 promotes frameworks to improve IP enforcement—domestically and internationally—through diplomacy, trade policy, norm-building, interagency coordination, technology, research, and education.
Takeaway 1: Cyberthreats Are Everywhere
The theme of cybersecurity pervades throughout. Given how online markets and platforms have become entrenched in domestic and cross-border trade, cyber-enabled threats play an outsized role in facilitating and exacerbating illegal IP exploitation. The Plan at times delves into substantial detail discussing and proposing action items in response to:
Cyber-enabled trade secret theft, an issue that has only grown more dire given the increased connectivity of businesses and academic research institutions, as well as the rise of state-sponsored espionage of trade secrets for economic purposes.
Illicit mobile apps, which flourish due to low cost barriers and allow online criminals to make revenue from illegal streaming of unlicensed content; counterfeit content such as antivirus, browsers, and games; or even direct insertion of harmful malware.
Illegal piracy sites, which not only disseminate and profit from infringing third-party content, but also use stolen content to lure customers in order to infect their computers with malware and further augment illicit revenue streams, including spam and phishing campaigns, accessing PII, malvertising, and pop-up ads.
Misleading and deceptive domain names, which can deceive consumers into visiting counterfeit e-commerce channels and purchasing counterfeit goods.
Relatedly, domain name hopping presents “whack-a-mole” challenges to law enforcement, given the ease with which criminals can register domain names with different registrars.
Takeaway 2: Norm-Building, Coordination, and Multi-Angled Approach Are Key
The sophistication of unlawful business models that exploit the theft of IP calls for a comprehensive response that attacks and disrupts every part of the financing, supply, operation, and payment chain. To that end, the Plan calls for participation from the private sector and government agencies to enhance transparency and sharing as well as coordinate to develop benchmarks, standards, and channels against which each industry can guard against illicit actors. The Plan also advocates for the U.S. to use its leverage and collaborate with foreign governments to develop peacetime norms and IP frameworks that would affirm responsible state behavior and enhance global IP enforcement.
For example, in the area of trade secret theft, the Plan recognized the bi-lateral commitments made by the U.S. and China that neither state would engage in the cyber-enabled theft of intellectual property for commercial gain, which was then expanded into an affirmation of this norm by the leaders of the G-20 at the 2015 Antalya Summit and subsequent bilateral commitments amongst other nations. The Plan also noted that opportunities for federal agencies to work together to implement the Cybersecurity National Action Plan released in 2016, and advocated greater education for business owners on economic espionage and the protection of trade secrets.
Takeaway 3: Will Any of This Matter?
While the PRO-IP Act passed with broad bipartisan support back in 2008, the new Trump administration brings with it a host of uncertainty, including President Trump’s plans about the Plan. As of this post, the Plan is unavailable on whitehouse.gov, where it was previously hosted, though an archived copy continues to be available. President Trump has yet to nominate Marti’s successor as IP czar. His recent and emphatic withdrawal from the Trans Pacific Partnership (TPP)—which contained significant provisions dedicated to IP protections and standardizing IP norms, such as copyright terms—left swirling questions as to whether (or what) he will seek in its place. On the other hand, the President had consistently during his campaign signaled his intent to take aggressive action on cybersecurity, and moreover ran on his experience and skillset as a businessman, not the least of which is his undisputed command of media, television, and entertainment. We’ll stay tuned.
The opinions expressed are those of the authors on the date noted above and do not necessarily reflect the views of Fish & Richardson P.C., any other of its lawyers, its clients, or any of its or their respective affiliates. This post is for general information purposes only and is not intended to be and should not be taken as legal advice. No attorney-client relationship is formed.