Unveils Program to Protect American Products : U.S. Taking Hard Line on Counterfeiters

The Reagan Administration on Monday announced a concerted program to protect U.S. products from patent, trademark and copyright infringement abroad and proposed legislation to make it easier to block imports of counterfeits of American-made goods.

Commerce Secretary Malcolm Baldrige and Clayton Yeutter, the U.S. trade representative, said they will step up action to press countries with lax patent standards to enact tougher laws and tighten enforcement or face the loss of U.S. trading privileges, such as lower tariffs. Taiwan, Singapore, Hong Kong and South Korea are among those countries, they said.

Several times in recent months, Baldrige and Yeutter have spoken publicly about the need to improve international enforcement of patent, trademark and copyright laws. On Monday, the officials said they will continue to press for coordinated action by trading partners to set tougher international standards.

Baldrige, saying that “people all over the world are dancing to counterfeit tapes,” called the problem of worldwide infringement of property rights a pervasive and growing threat to U.S. trade at a time when the nation is running record trade deficits.

“Counterfeiting, in its many forms, has cost the United States anywhere from $8 billion to $20 billion in sales,” Baldrige said, adding that estimates of lost jobs range from 130,000 to 750,000.

At a news conference, Baldrige displayed three U.S. products side by side with imported counterfeits--or “knockoffs”--that differ only slightly from the U.S. goods. He exhibited a jar of Cheseboro-Ponds Vaseline next to a seemingly identical imported imitation, a Union Carbide Eveready battery beside a “Realready” look-alike and a Prince Matchabelli Inc. bottle of Cachet perfume next to a similar bottle of “Camet” perfume.

Baldrige cited pharmaceuticals and computer software as two areas in which U.S. technological leadership is being threatened by foreign copies sold at low prices--”not because they make it cheaper but because we bear the full cost of development.”

Drop ‘Injury’ Requirement

The legislation disclosed Monday is aimed solely at blocking import of such products, which is already illegal but often difficult to stop because of past court decisions, antitrust considerations and technicalities in existing laws.

For example, a U.S. manufacturer trying to block imported counterfeits of a new product under existing trade laws must prove “injury” from the imported product in addition to establishing that the import is, in effect, stolen property.

The new legislation would drop the requirement that the victim company prove “injury” as well as patent infringement.

“Robbery is robbery and piracy is piracy and it shouldn’t be a question of the victim having to prove injury,” Yeutter said. “We must wonder why we’re so accommodative to thieves.”

In addition, the measure would clarify antitrust laws to make it easier for a patent-holder to market his product through license arrangements.

The legislation would apply only to counterfeit goods coming into the United States. Baldrige and Yeutter made it clear that the larger problem of dealing with patent infringements worldwide would depend either on international agreements yet to be negotiated or bilateral talks now under way.

Yeutter noted that his office has been negotiating with several source countries of counterfeit products and has had some success. Taiwan, he said, has begun cracking down on its wide-open trade in counterfeit computers and software, designer jeans, pirate recordings and videotapes. He said that parallel negotiations with Singapore and Mexico also are under way.