The White House has created an interagency working group to stop counterfeit goods from entering the supply chains that support Defense Department weapons systems and private sector electronic goods, the nation's first intellectual property czar said on Tuesday.
"The implications of DoD procuring counterfeit goods are negative and obvious," said Victoria Espinel, the U.S. intellectual property enforcement coordinator at the Office of Management and Budget. "Our understanding is that this is a problem that a number of our agencies are struggling with."
Espinel made her comments at an event hosted by the nonpartisan Information Technology and Innovation Foundation, before the start of a panel discussion on strengthening enforcement of IP rights in countries that systematically extort intellectual property. Congress created the IP coordinator position in 2008, to respond to concerns that government agencies responsible for protecting intellectual property were not coordinating.
This summer, the White House issued a joint strategic plan to combat IP theft that called for establishing a governmentwide working group to study how to reduce the risk of agencies procuring counterfeit parts. The framework stated the task force should include representatives from the National Security Council, Defense, NASA, General Services Administration, Commerce Department, Small Business Administration and Homeland Security Department.
A January 2010 Commerce survey found that nearly 40 percent of entities across the procurement supply chain discovered counterfeit electronics between 2005 and 2008. The semiconductor industry has aired concerns that counterfeit chips mislabeled as military-grade can lead to fatal malfunction in military and aerospace parts, according to the White House's strategic plan.
On Tuesday, Espinel observed the IP problem is one issue where there is consensus in Congress. "I feel very lucky to be working in an area where there is great bipartisan support," she said. Democratic Sens. Tom Carper of Delaware and Sherrod Brown of Ohio in an Aug. 6 letter to Ashton B. Carter, undersecretary of Defense for acquisition, technology and logistics, http://www.govexec.com/dailyfed/0810/080910rb1.htm>expressed fear about the potential for counterfeit parts to delay military missions and seriously affect the integrity of weapons systems.
The senators' letter referenced the Commerce study and a March Government Accountability Office report that found Defense did not have specific procedures for detecting and preventing counterfeit parts from infiltrating the supply chain.
China, the country most frequently identified as the source of counterfeit items, should be treated with "a carrot-and-stick approach," Espinel said. "China is both an economically sensitive issue and a political sensitive issue."