In today’s global economy, American businesses — both large and small — face the greatest competition our nation has ever seen. Expanded trade and globalization have given American companies exciting opportunities to reach new markets throughout the world. At the same time, these companies must also compete with products produced by global businesses that do not shoulder the same burdens faced by American companies, including increasing healthcare and regulatory costs.

In the increasingly competitive marketplace, innovation, creativity and rising productivity have allowed our nation to retain its competitive edge. Today, that advantage is being threatened by criminals and thieves — the pirates of the 21st century — through the theft of intellectual property (IP) and counterfeiting.

IP theft is no longer limited to knock-off handbags and pirated DVDs. Counterfeit medicine, baby formula, airplane parts and brake pads infiltrate store shelves and put Americans at risk every day. It seems that almost weekly there is another news story about fake products being sold to unwitting consumers. Just last week, news reports indicated that counterfeit
Colgate toothpaste, which contained small traces of the same chemical used in antifreeze, was sold to unsuspecting American consumers.

In addition to threatening the health of American consumers, IP theft is a substantial and growing economic threat.
American companies lose an estimated $250 billion a year to IP theft, and American workers have been impacted by the loss of an estimated 750,000 jobs.

The cost to our nation is real and significant. Ford Motor Co., a symbol of American ingenuity, has reported that IP theft
costs about $1 billion a year. Overall, an estimated $3 billion in phony auto parts are sold in the U.S. each year. The Department of Commerce estimates that the U.S. auto and auto parts industries could hire more than 200,000 additional workers if we put a stop to such counterfeit trade.

As the Senate continues to consider energy legislation, senators should remember that the revenues Ford and our other auto companies are losing to IP theft are dollars that are not being invested in the next generation of more efficient and environmentally friendly automobiles. Equally as important, it is likely that some of the manufacturing jobs that have left Ohio and other manufacturing states could have been saved if more was done to protect American IP rights from these global pirates. Countries such as China, Brazil and Russia lack the basic legal respect for IP rights.

China is one country whose practices with regard to the protection of IP rights are of particular concern. While China has become a significant U.S. trade partner, it is vital that the United States encourage China to protect IP rights. Unfortunately, recent Department of Homeland Security statistics indicate that more than 80 percent of the 2006 IP seizures at our borders originated from China — up from roughly 46 percent in 2001. The trend is clear and, unfortunately, it shows that China is not getting the message about protecting IP rights.

As a result of our concern over the rampant theft of America’s IP and the need for a coordinated international approach, Sen. Evan Bayh (D-Ind.) and I have introduced S. 522, the Intellectual Property Rights Enforcement Act. This important legislation is designed to expand upon and improve the existing IP coordination and enforcement efforts.

In addition, S. 522 initiates an approach to international IP enforcement that would have the United States set standards and partner with like-minded countries, resembling the government’s successful effort to police money laundering and other black-market crimes. Our bipartisan bill takes a common-sense approach to improving our nation’s efforts at protecting one of our last great competitive advantages.

American businesses and labor groups have come together to support our efforts because these groups know the importance of acting now. In February, representatives from Ford and the United Auto Workers joined Sen. Bayh and me at a press conference in support of our legislation. Since that time, groups as diverse as the U.S. Chamber of Commerce and the AFL-CIO have weighed in to support our bill. In total, over 30 different industry and labor groups support this legislation.

America was founded on a wealth of ideas, innovation, creativity and ingenuity. We cannot secure our future unless we ensure that our ideas are protected. I urge the Senate to recognize the need to protect American IP and take action on the Intellectual Property Rights Enforcement Act. Nothing less than our future is at stake.


Voinovich is a member of the Senate Foreign Relations Committee.