Bill to beef up DHS anti-counterfeit efforts likely to hold

Legislation unlikely to move before midterm elections; if it passes next year, DHS agencies would see inspection staffs increase.

Lawmakers will likely wait until after the November elections to push a bill that would channel more resources toward Homeland Security Department counterfeit detection and enforcement efforts, a consultant for a U.S. Chamber of Commerce affiliate said Monday.

The 2006 Intellectual Property Enhanced Criminal Enforcement Act (H.R. 5921), referred to the House Judiciary Committee last month, would increase penalties for producers of counterfeit goods, whose efforts cut into corporate profits and are potentially harmful to consumers. It also would add staff to counterfeit detection agencies.

Several congressional sources have said the bill won't be pursued during this session of Congress, but could be reintroduced in 2007, said Brad Huther, a consultant for the National Chamber Foundation, in a session with reporters.

"We don't think time permits" passage of the legislation, because of an already-tight calendar for the rest of this session, Huther said. The National Chamber Foundation is a nonprofit public policy think tank in Washington affiliated with the Chamber of Commerce.

Should the bill succeed next year, DHS agencies, including Immigration and Customs Enforcement and Customs and Border Protection, would see inspection staffs increase. The measure is sponsored by Judiciary Committee Chairman Rep. James Sensenbrenner, R-Wis.

One source familiar with the committee's work said it is likely the legislation will be held up, but declined to rule out the possibility of passage this session. "There's a lot of support for [the bill]," the source said.

Despite that support, members of Congress tend to underestimate the impact of counterfeiting, said Caroline Joiner, the National Chamber Foundation's anti-counterfeiting director.

"Lawmakers are not very educated or informed" about the negative financial impact of counterfeiting, she said, which can approach $500 billion annually. She said that in a questionnaire, many legislators estimated that counterfeit goods only cost legitimate sellers $1 billion annually.

The bill's penalties cover counterfeit operations within the United States. But Huther said foreign governments' legal systems contribute to the counterfeiting problem, too, because they have failed to prove effective deterrents. He said two-thirds of counterfeited goods come from China and the penalties tend to be insignificant once a criminal knockoff manufacturer is caught.

"They're mostly administrative penalties," instead of criminal, said Jennifer Osika, the Chamber of Commerce's associate director for China.