Ranking Member Nadler Opening Statement for House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet Hearing on “Intellectual Property: Enforcement[...]

Today, Ranking Member Jerrold Nadler (D-NY) delivered the following opening statement, as prepared, for the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet Hearing on "Intellectual Property: Enforcement Activities by the Executive Branch":

"Mr. Chairman, intellectual property in the United States, at its core, is the right to own an idea. The power of IP is not in the individual movie, the chemical compound, or the store sign-though they certainly have value-but in the exclusive authority to reproduce that protected content. Because it is difficult to put most creations in the stream of commerce while also keeping them under lock and key, the enforcement of IP protections is key to the success of our system.

If the ideas we protect are easily stolen, then they hold no value. And if copyrights, trademarks, and patents have no value, then the American system cannot encourage innovation, protect consumers, help drive economic growth, and keep our country safe.

Responsibility for IP investigation, enforcement, and prosecution is spread across multiple agencies within the Executive Branch. The Computer Crime and Intellectual Property Section at the Department of Justice is responsible for protecting American businesses by stopping copyright piracy, prosecuting trademark violations, and preventing economic espionage.

The National Intellectual Property Rights Coordination Center, or IPR Center, within the Homeland Security Investigations branch at DHS, acts as a hub for all its enforcement activities, combining regulatory, civil, and criminal authorities to execute a mission that varies from investigation of crimes to educating the public about IP theft.

Finally, Customs and Border Protection enforces our laws at our ports of entry, inspecting packages and shipments for counterfeit goods and collaborating with other agency leads to shut down IP violators operating overseas.

Our witnesses today represent these agency departments, tasked with federal enforcement of our IP system. Their authority is clearly broad and wide-ranging, from enhancing cybersecurity and stopping copyright piracy to counterfeit enforcement and protection of trade secrets. And recent technological innovations have further complicated this already complex web of enforcement responsibilities.

The widespread availability of 3-D printing to create counterfeit goods, of artificial intelligence to replicate copyrighted works, and of advanced technology to make pirated livestreams available to living rooms around the world have all made it harder to protect Americans' creative works.

Technology innovations that allow users to evade IP protections do not mean we are in a "post-IP world." Far from it. America's leadership in AI, our flourishing research institutions, and our diverse creative communities show that strong intellectual property protections mean a healthy innovation ecosystem.

But as those who wish to take advantage of our IP system change how they do business, our approach to enforcement too must change. I am particularly looking forward to hearing from our witnesses how the shift to selling counterfeit goods on e-commerce platforms has affected their work. Over the past few years, violators have increasingly moved to e-commerce sites to ship counterfeit goods into the United States.

This has been accompanied by a related change from larger shipments to smaller parcels containing counterfeits that are easier to evade detection-between 2019 and 2022, those smaller mailings of counterfeits increased from a little over 400 million to nearly 700 million shipments.

I was glad to see recent data from the Biden Administration that HSI initiated 81 criminal investigations and conducted 94 seizures, related to its e-commerce enforcement operation in Fiscal Year 2023, preventing hundreds of thousands of dollars in counterfeit goods from reaching the market, while also securing several indictments and convictions of bad actors.

I am concerned, however, about the ongoing proliferation of counterfeit products available on E-commerce platforms, and I look forward to reintroducing my bill, the SHOP SAFE Act, with Chairman Issa soon, which will further reduce the number of dangerous counterfeits online.

While threats to Americans' intellectual property come from many different countries, including within the United States, the government of China presents a persistent threat to our IP system. This reality underscores the importance of our patents, our trademarks, and our copyrights, not just to our creators and businesses, but to our national security overall.

Over the last year, the Chairman has held multiple hearings on the IP threat from the Chinese government, and at every one, I have emphasized the importance of protecting our system from nation states seeking tactical advantage by violating our innovators' rights.

At each of these hearings, however, I have also cautioned my colleagues that recognizing a threat from a foreign government is different from treating every citizen of that country as a threat.

I was glad when the Biden Administration ended the China Initiative, which sought to target individuals based on where they were from, rather than what they were doing. This strategy ruined successful careers while yielding no meaningful results, and I am looking forward to hearing about DOJ's successful prosecutions since it changed its approach.

Finally, it is imperative that the agencies responsible for the protection of our intellectual property rights can coordinate across agencies to maximize their effectiveness. The White House Intellectual Property Enforcement Coordinator, or IPEC, is tasked with coordinating a whole-of-government approach to the enforcement of IP rights. While the office continues to do good work, the Senate has not yet confirmed President Biden's nominee for Coordinator. I sincerely hope that Ms. Robinson's nomination is considered soon, so that she can begin the important work of ensuring our IP laws are supported across the administration.

I would like to thank Chairman Issa and Ranking Member Johnson for holding this important hearing and I extend my appreciation to the witnesses for appearing before us today. I look forward to hearing how your agencies' activities fit into the larger picture of IP enforcement across the government, and what resources you need to further prevent IP violations by those who seek to take advantage of our system and our creators."

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