Is IP theft as big a menace to society as drug dealing? David Israelite, who was appointed in the spring to head up the Department of Justice's Intellectual Property Task Force believes so, as he explained to Edward Fennell.

Intellectual property industries contribute approximately five percent to the US gross domestic product, employ millions of people and represent the fastest growing sector of the US economy. Yet the scale of IP theft is now so serious that officials from US Department of Justice (DOJ) describe it as a threat to national security that could, if it continues to increase at this rate, lead to economic disaster. Attorney General John Ashcroft’s response has been to set up an IP task force that he says will ‘look at the ways the department can strengthen and improve our efforts to combat theft of intellectual property’.

Chaired by David Israelite, the task force includes DOJ criminal division chief, Christopher Wray, FBI general counsel Valerie Caprioni and deputy solicitor general, Paul Clement. It is based on the Corporate Fraud Task Force, set up after the Enron Corp scandal, which secured 250 convictions in its first year.

Edward Fennell (EF): How serious is the problem of IP theft?
David Israelite (DI): The threat posed by IP crime has been massively upgraded in recent months, because the challenge has now reached epidemic proportions and is causing widespread financial loss. It is affecting the economy as a whole, from emerging technologies to trademark violations. That is why the subject was discussed recently by justice ministers at the recent G8 conference. And the task force is not only concerned by the ever-upwards trends, but also by the kind of people who are now behind the business. It would be easy to underestimate the sellers knocking-off fashion items or DVDs. The return on IP theft can be as high as the return on drugs, and the penalties are much lower. That is why IP theft is increasingly attractive to criminal networks.

EF: What are your personal credentials for leading the Task Force?
DI: I qualified as a lawyer and, before joining Bryan Cave Attorneys, I worked with the team of John Ashcroft when he was Missouri Governor. I then came with Mr Ashcroft to Washington, when he was appointed Attorney General, to work at the Department of Justice. I am now a senior member of his staff and chief counsellor.

EF: What is the Task Force doing?
DI: The Task Force was established in March. At the moment, we are taking evidence and representations from all sides and consulting with Michael Garcia, the Assistant Secretary of Homeland Security for Immigration & Customs Enforcement. We have set up five working groups, which are looking at how criminal laws, civil laws, international treaties, legislative and regulatory responses and public awareness can contribute to the reduction of IP theft. We will be compiling a full report for the Attorney General in the autumn. After that he must decide how to take matters forward, probably be at the end of the year.

The scale of IP theft is now so serious that officials from US Department of Justice (DOJ) describe it as a threat to national security that could, if it continues to increase at this rate, lead to economic disaster.

EF: Given the scale and ease of IP theft how much do you think can be achieved?
DI: It’s such a large problem that one must not be unrealistic about what can be done. It requires a global solution and cooperation from a number of countries, including jurisdictions with whom we don’t necessarily have the best relations. I would compare it to the drugs problem. At this stage we are aiming to take a first step.

EF: And what about IP owners and their attorneys? What can they do?
DI: This is not a problem that the US government can solve on its own. In particular, the challenges and issues raised by the use of information technology are considerable. Private industry has to face the fact they must do more to protect themselves directly. More secure systems have to be introduced by companies so that, for example, software is not accessible to so many. And corporations must also enforce their own rights. In-house counsel will have to be more vigilant and vigorous in following up cases. One outcome I would expect is the emergence of lawyers who focus entirely in this field.

EF: What about the public who buy knock-off goods?
DI: Above all we need to communicate more to the public about exactly what is involved here. I think that a lot of people still do not understand – or take seriously – the fact that this is a wrong thing to do.

To find out more about US action against IP crime, and the activities of the task force, visit the US Department of Justice’s website at www.usdoj.gov/criminal/cybercrime/ip.

This article first appeared in IP Review, issue 8

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