One of the most interesting legal career developments to come out of the global economic crisis is the explosion of international intellectual property issues moving center-stage, including a new U.S. law on IP enforcement, a new multilateral anti-counterfeiting trade agreement, stepped-up foreign patent and trademark filings, two very pro-active international organizations, an increase in Section 337 cases before the U.S. International Trade Commission, and some very ominous trademark infringement litigation in China, among a host of issues that affect national and multinational business.? All of this is very good news for attorneys who want to forge a career in international IP law.
Implementing the Pro-IP Act
The Prioritizing Resources and Organization for Intellectual Property Act of 2008 ("PRO-IP Act"), Pub. L. 110-403 was a milestone in U.S. efforts to combat both domestic and international IP piracy and counterfeiting.? Both have surged over time to the point where they seriously affect the American economy and U.S. companies both at home and abroad.?
The Act increased criminal and civil penalties for trademark and copyright infringement, established an Office of the Intellectual Property Enforcement Coordinator in the White House?s Office of Management and Budget, and expanded the number of attorneys and other IP professionals serving in embassies and consulates abroad charged with monitoring IP violations and taking steps to reduce them and punish violators (700+ such positions currently exist).? The Act also bolstered Justice Department and FBI resources to investigate and prosecute IP crimes.
Prompted by the new law, the Justice Department created an IP Task Force to coordinate departmental efforts.? Despite Congress? failure to appropriate funds for the state and local law enforcement grants authorized by the Act, the Justice Department is offering competitive grants for this purpose from another appropriation.
Assessment
As is often the case with new and innovative legislation, it looks great on paper and in the telling, accompanied by the usual pats-on-the-back that the sponsors and signers accord each other.? Implementation is another story.? Perhaps that point is best made by this fact: the Office of the Intellectual Property Enforcement Coordinator has two full-time employees, plus a handful of individuals detailed from other agencies, such as the U.S. Patent and Trademark Office, for short-term assignments.? Given that experts estimate that IP piracy and counterfeiting is at least a $1 trillion a year ?industry,? the resources devoted to combatting it are, to date, pathetic.
Another fact.? There are now two federal employees in China whose job it is to combat the rampant IP fraud and theft occurring in and coming out of that country.? That represents a 100 percent increase over last year.
True, some other agencies have stepped up their commitment in personnel and money.? Chief among these are the Office of the United States Trade Representative and two Department of Homeland Security agencies, Immigration and Customs Enforcement and Customs and Border Protection. ??
The resources devoted thus far to federal IP enforcement probably do not equal the cost of a rivet holding together parts of the F-35 Strike Fighter aircraft.? This despite the fact of the barrage of congressional and administration lip service to the national security and economic threat of IP counterfeiting and piracy.? Not to mention the millions of jobs lost due to IP theft and rip-offs.
The government has a very long way to go and will not be able to limp along forever, doing just enough to convince the public that something is actually being done.? The threat is too great and the positive results of combatting it are enormous.? I am optimistic that soon, our leaders will wake up and realize that the return on investment in IP enforcement can be huge.
The Anti-Counterfeiting Trade Agreement
Earlier this year, the U.S, Australia, Canada, Japan, Morocco, New Zealand, Singapore, and South Korea signed the Anti-Counterfeiting Trade Agreement, targeting IP piracy.? Twenty-two European Union (EU) member states have since signed on to the accord.? This is a good thing as far as it goes.? Unfortunately, it won?t make a dent in the problem because China, the Big Kahuna of IP counterfeiting and piracy, is not a signatory and not likely to become one anytime soon.
The accord is open for signing until May 2013.? It is a highly unusual agreement because, on its face, it appears to be an attempt to impose the U.S. IP enforcement regime on participating nations.? The key provisions:
- Governments must make it unlawful to market devices that circumvent copyright, which is akin to a provision of the Digital Millennium Copyright Act in the U.S., where the law is used by Hollywood studios to block the marketing of DVD-copying technology.
- Participating nations must maintain extensive seizure and forfeiture laws with respect to trademarked or copyrighted counterfeited goods.?
- Countries must implement a legal system where victims of IP theft may be awarded an undefined amount of monetary damages.
Because this is an Executive Agreement, it does not require Congressional approval.
Some EU countries are unhappy about the agreement?Germany and Poland have backed away from the treaty?and have asked the EU?s highest court?the European Court of Justice?to rule on its legality, arguing that it will stifle free expression on the Internet, an argument that resonated recently with Congress, causing the demise of the Stop Online Piracy Act legislation.? .
Look for the agreement to generate the most job creation in companies that have the most to gain from its enforcement and expansion to future signatories, their outside law firms, and the U.S. government, particularly the Departments of State, Justice and Commerce, the Office of the U.S. Trade Representative, and the Office of the IP Enforcement Coordinator.
Foreign Filings Increase
Patent and trademark filings in foreign countries by U.S. companies are on the rise.? See ?Creative Destruction? in Legal Jobs VI ? IP Law: Overview and Patents for a detailed discussion of this topic.? This means more job opportunities for patent and trademark attorneys.
WIPO and WTO Loom Larger
The World Intellectual Property Organization (WIPO) and the World Trade Organization (WTO), both located in Geneva, Switzerland, are expanding their staffs to cope with the increase in Patent Cooperation Treaty filings and their many other global IP responsibilities.? WIPO has a complex bureaucracy encompassing numerous aspects of international IP concerns.? A breakdown of their IP organizational structures follows:
WIPO
Office of Legal Counsel
- Administrative Law Section
- Legal and Constitutional Affairs Section
- Contracts and General Legal Section
PCT (Patent Cooperation Treaty) and Patents Mediation and Arbitration Center and Global Intellectual Property Issues
PCT Legal Publication Section
PCT Legal Affairs Section
PCT Knowledge Management Section
PCT Information Services Section
PCT Outreach and User Relations Section
PCT Seminar Coordination Section
- PCT International Cooperation Division
- WIPO Arbitration and Mediation Center
Domain Name Dispute Resolution Section
Legal Development Section
Global IP Issues Division
Technical Cooperation Section
Institutional Relations Section
- Copyright and Related Rights Sector
Office of the Deputy Director General
Copyright Law Division
Copyright E-Commerce Technology and Management Division
Copyright Collective Management and Related Issues Division
Enforcement and Special Projects Division
- Sector of Trademarks, Industrial Designs and Geographical Indications
Office of the Assistant Director General
International Registrations Department
International Registration Systems Legal Service?????
Law and International Classifications Division
- Office of Strategic Use of Intellectual Property for Development
Small and Medium-Sized Enterprises Division
Intellectual Property and New Technologies Division
Intellectual Property and Economic Development Division
Creative Industries Division
Division for Public Policy and Development
Office of the Ombudsman
Procurement and Contracts Division
Industrial Property Law Division
- Trademark Law Section
- Geographical Indications and Special Projects Section
- Industrial Property Law Enforcement Section
- Industrial Property Implementation Section
WTO
Secretariat
- Intellectual Property Division
- Legal Division
WTO Appellate Body
- Appellate Body Secretariat
General Council
- Dispute Settlement Body
- Trade Policy Review Body
Section 337 Cases
?Section 337? investigations conducted by the U.S. International Trade Commission (USITC) pursuant to 19 USC 1337 are increasing in number and are the fastest growing type of case before the USITC.? There were 69 Section 337 investigations in 2011, up from 46 in 2010 and only nine in 2000.? Meanwhile, the other major areas of USITC concern?antidumping and countervailing duty cases?have been largely static over the last 15 years.? Eleven new Section 337 investigations have already been opened in the first two months of 2012.
Section 337 cases primarily involve claims regarding IP rights, including allegations of patent infringement and trademark infringement by imported goods. ?These cases typically allege one or more of the following:
- Infringements of patents, registered and common law trademarks.
- Infringement of registered copyrights.
- Misappropriation of trade secrets.
- False advertising.
- Antitrust claims relating to imported goods.
The primary remedy is an exclusion order that directs U.S. Customs and Border Protection to stop infringing imports from entering the United States. ?The Commission may also issue cease and desist orders against named importers and other persons engaged in unfair acts that violate Section 337. ?Expedited relief in the form of temporary exclusion orders and temporary cease and desist orders may be granted in certain exceptional circumstances (The USITC?s own 2010 survey shows that exclusion orders not very effective.).
Section 337 investigations, which are conducted under the Administrative Procedure Act, include trial proceedings before administrative law judges and review by the Commission.?
Section 337 generates attorney and law-related jobs with corporations and their law firms that appear before the USITC in these cases, and within the USITC itself.
The China Syndrome
IP in all of its manifestations and permutations has gone global.? It is no longer possible to consider its impact and implications in a purely national context.
A great example of this is what is going on at present with respect to Apple?s IPad trademark in Chinese courts:? In January 2012, a Shenzhen court rejected Apple?s claim of ownership of the IPad trademark, holding that Proview Technology Shenzhen Company Limited, a Taiwanese enterprise listed on the Hong Kong Stock Exchange since 1997, had prior registration of the IPAD trademark.? From 2000 to 2004, Proview, a flat screen manufacturer, attempted to sell its own line of tablet computers worldwide and secured registration of the IPad trademark in various jurisdictions, including the EU, Mexico, South Korea, Singapore and Indonesia. ?In 2001, long before the launch of Apple?s iPad tablet in China, Proview registered the IPad mark in China. ?In 2006, Proview sold its IPad trademark as a global trademark to IP Application Development for US $55,000. ?IP Application Development acted as a "secret agent" for Apple in effecting the deal. ?The parties failed to reach agreement on whether China should be included in the sales contract. ?Subsequently, Apple filed an application?to register the?IPad mark in China, and its application was rejected due to the prior mark owned by Proview.? Apple then filed a lawsuit in 2010 against Proview for infringement, arguing that its earlier agreement with Proview should be controlling, and that Proview?s registered IPAD trademark should have been transferred to Apple.? Apple's claim was rejected by the court and Apple is appealing.
Complicating the matter, Proview is now going after Apple for $1.6 billion for trademark infringement in two additional Chinese cities as Apple began selling IPads in China early last year.? The cases were heard a few weeks ago and are now awaiting decision.
Proview last week added to Apple?s China troubles, threatening Chinese retailers, transporters and distributors with trademark infringement suits if they participate in selling any IPads, including the newly released IPad3.? It is unlikely that this will affect gray market vendors, who thrive in China?s largely unregulated IP market.
The China case is the tip of the iceberg, a portent of litigation to come involving U.S. and Chinese companies.? Compounded by the blatant counterfeiting and piracy that goes on in China, job opportunities in protecting IP should abound.
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