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Oct 13, 2008Client Alert

President Bush Signs “PRO-IP Act”

On October 13, 2008, President Bush signed into law the "PRO-IP Act" (Prioritizing Resources and Organization for Intellectual Property Act of 2008). It is estimated by U.S. Customs and Border Protection that counterfeiting and piracy of intellectual property cost the U.S. $250 billion and 750,000 jobs per year. The PRO-IP Act is another mechanism devised by government to address this problem.

The highlights of the PRO-IP Act include the creation of a new executive office position colloquially known as the "IP Czar.” The IP Czar will be responsible for formulating a strategic plan for combating counterfeiting and piracy of intellectual property and for coordinating domestic and international intellectual property enforcement efforts. The joint strategic plan tasks the IP Czar with: reducing counterfeit and infringing goods in the domestic and international supply chain; identifying and addressing inefficiencies and weaknesses in current efforts designed to enforce and protect intellectual property; coordinating sharing of information between the Department of Justice and other departments within the administration tasked with tackling intellectual property crimes; working with other countries to improve their local intellectual property enforcement efforts; sharing information with other countries to address and attack infringement by individuals and entities across boarders; and establishing effective international standards and policies for enforcement and protection of intellectual property. The Department of Justice will also receive additional funds to administer local law enforcement grants, and provide improved recourses for investigating IP crimes.

As a result of the PRO-IP Act, penalties for civil and criminal infringement of copyrights and trademarks are enhanced. For instance, with respect to trademarks, the new law doubles the minimum and maximum statutory damage limits for trademark infringement. The new limits for statutory damages are $1,000 to $200,000 per counterfeit mark used, and up to $2,000,000 per counterfeit mark in cases where willful infringement is established. Civil remedies under the Copyright Act were amended to provide authority for the impoundment of records documenting the manufacture, sale or receipt of things involved in the copyright infringement. In the event such records are seized, the amended Act provides that the records shall be held in the court’s custody, and a protective order shall be imposed to protect the confidential nature of the information.

In addition, the Copyright Act was expanded significantly to include exportation of matter protected by copyright under section 602(a). The law currently provides only for enforcement against importing of copyrighted works. Now individuals and entities in the U.S. are also liable for exporting infringing material.

In order to bring an action for copyright infringement under the Act, a work must be registered with the U.S. Copyright Office. The Act also allows for the award of statutory damages and attorney fees in cases where the work is registered within 3 months of publication of the work or within one month of learning of the infringement, whichever is earlier. The PRO-IP Act includes an amendment to this portion of the Copyright Act that provides a safe harbor, allowing copyright applications containing inaccurate information to register, notwithstanding the inaccuracies. An exception exists for circumstances where the Register of Copyrights finds that the inaccuracy of the information, if known, would have caused the Register to refuse registration. This amendment departs from the trend of the Trademark Office, which of late has imposed more of a strict liability standard with respect to inaccuracies or false information contained in applications and other statements filed with the Office.

Michael Best’s Trademark and Copyright attorneys work regularly with clients to fight counterfeiting and piracy here in the U.S. and abroad. Contact Lori S. Meddings directly at 414.277.3464, or by e-mail at lsmeddings@michaelbest.com, or Jeffrey H. Brown directly at 312.222.5794, or by e-mail at jhbrown@michaelbest.com, to discuss your global enforcement strategy or any specific concerns relating to piracy in the U.S. or abroad.

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