Global piracy, domestic fraud

Carole Sloan, February 24, 2003

The survey of the domestic industry by the National Textile Association is done, and its standout finding, presented in a white paper last week, was the previously unmeasured impact of foreign infringement intellectual property rights. In a word, piracy.

Knock-offs have always been a problem. But the NTA survey found that while most U.S. companies are generally satisfied with the enforcement of their IP rights against domestic infringers, enforcing those very same rights against foreign infringers was another story altogether. And the study found that while some companies are very active in pursuing their rights against these pirates, others simply are not.

Those that have not successfully chased the perpetrators said they are increasingly frustrated by their inability to deal with foreign infringers, whose products make up an increasing percentage of the infringements, and that seem to know they can flaunt the laws and get away with their thievery. And therein lies the problem, according to the NTA — the law.

"We need to have a redefinition of what foreign infringement of intellectual property is," offered George Shuster, chairman, president and ceo of Cranston Print Works and leader of the NTA.

"There are too many American companies going offshore and coming back with off-shore products that are knock offs of domestic products," he added.

So, among the recommendations from the NTA were enhanced civil penalties for foreign-based infringers. That would necessarily include, the report said, monetary damages that might extend to triple — or even quintuple — damages, with even heavier statutory damages. "It's harder to police abroad," Shuster said. "We need higher penalties."

The white paper stated that when foreigners knock off American textiles products it is more harmful because those thefts take away American jobs.

It's a beginning. But to amount to a meaningful beginning the recommendations will need to be given teeth. As Jim Leonard, deputy assistant secretary of commerce for textiles, apparel and consumer goods, suggested last fall, the industry will need to "keep the issue visible and on the table. Propagating fraud on WTO members has to be addressed."

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