Despite the passage by Congress this weekend of the controversial Prioritizing Resources and Organization for Intellectual Property, or PRO-IP Act, there is still not enough being done to protect Intellectual Property Rights (IPR). The potential profit from trafficking in counterfeit goods continues to outweigh the penalties and enforcement resources presently in place that act as deterrence.

When I was selected to be the Special Agent in Charge of the Office of Investigations for Immigration and Customs Enforcement of the Department of Homeland Security in New York City in 2003, I was briefed on all the significant investigations in the office. One of the cases I was briefed on was Operation Panda. Operation Panda was a multi-agency investigation of Asian criminal gang activity in Flushing (NY) and the Chinatown    section of Manhattan. It ultimately resulted in multiple federal criminal arrests and significant civil seizures.

I was not surprised by the scope of criminal activity being conducted by this criminal organization. I expected narcotics, extortion, theft, robberies, murder, prostitution – crimes usually associated with “gang”
activity. I was surprised by the amount of trafficking in counterfeit goods they were involved in — literally millions of dollars of fake clothing, handbags, sneakers, sunglasses, watches, fragrances, etc.

And why not counterfeiting ? It makes a lot of sense from a dollars and cents versus riskpoint of view. Sophisticated criminal organizations identify and exploit targets of opportunity. They will commit crimes in areas where they believe they can turn a profit, particularly if the criminal/civil penalties involved (and resources dedicated to enforce them) are not large enough to act as a deterrent. Trafficking in counterfeit goods is and continues to be one of those areas.

Intellectual property is estimated to drive the U.S. economy by $3.5 trillion, accounting for 18 million jobs and half of all U.S. exports. Counterfeiting is estimated to be a $600 billion a year industry, up from $5.5 billion in 1982. In this time of “economic downturn”, counterfeiting is estimated to cost the United States 750,000 jobs.

You can do the math here…. Someone will always be involved in counterfeiting, but until we treat this criminal activity as seriously as other crimes that damage our society and way of life, it will continue to flourish.