As stated in response to an item under EC question 7, calculation of damages is based on the evidence provided by the parties. Publicly available legal treatises discuss damages in detail in relation to each form of intellectual property, citing and quoting from relevant cases. See, for example, regarding copyright, Nimmer on Copyright, Melville B. Nimmer and David Nimmer, published by Matthew Bender; The Law of Copyright, Howard B. Abrams, Clark Boardman Callaghan publisher; regarding trademarks, McCarthy on Trademarks and Unfair Competition, Third Edition, Thomas McCarthy, Clark Boardman Callaghan; Trademark Protection and Practice, Gerome Gelson and Jeffrey M. Samuels, Matthew Bender; regarding patents and industrial designs, Lipscomb's Walker on Patents, 3rd Edition, Ernest Bainbridge Lipscomb III, Clark Boardman Callaghan; Chisum on Patents, Donald S. Chisum, Matthew Bender; and regarding trade secrets, Milgrim on Trade Secrets, Roger M. Milgrim, Matthew Bender; Trade Secrets Law, Melvin T. Jager, Clark Boardman Callaghan.

The statutes notified by the United States pursuant to Article 63.2 indicate the conduct by the infringer that must be demonstrated as a condition for the award of damages. Regarding copyright, see 17 U.S.C. § 504; for trademarks, including certification marks, see 15 U.S.C. § 1117; for patents and industrial designs, see 35 U.S.C. § 284; for integrated circuit layout-designs, see 17 U.S.C. § 911; and for trade secrets, see § 3 of the Uniform Trade Secret Act, on which most state laws are based.

The equitable doctrine of laches applies to actions for the enforcement of intellectual property in the United States as it does to other assertions of rights against another through court action. Judges have discretion to bar relief in the event unreasonable and inexcusable delay by a plaintiff in filing suit results in material prejudice to the defendant. The doctrine is more flexible than a statute of limitations and requires an assessment of the facts in each case regarding the reasonableness of the delay and the prejudice to the defendant. Prejudice to the defendant can occur if the passage of time decreases a defendant’s ability to vindicate itself because of the death of witnesses, fading memories, or stale evidence; or because changes in the circumstances or relationships of the parties make it unfair to let a suit go forward. See 15 U.S.C. § 1115(b)(8). In addition, statutes of limitations in regard to damages apply in connection with several forms of intellectual property. See 17 U.S.C. § 507(b); 35 U.S.C. § 286; 17 U.S.C. § 911 (d); and § 6 of the Uniform Trade Secret Act, on which most state trade secret laws are based.

The statutes notified by the United States pursuant to Article 63.2 indicate the "appropriate circumstances". With respect to copyrights, see 17 U.S.C. § 505; for trademarks, including certification marks, see 15 U.S.C. § 1117; for patents and industrial designs, see 35 U.S.C. § 285; for integrated circuit layout-designs, see 17 U.S.C. § 911(f); for trade secrets, see § 4 of the Uniform Trade Secret Act, on which most state laws are based.

Where the party claiming an award of attorney's fees establishes entitlement in accordance with the statute, such fees will be awarded.

The European Communities' question is again based not upon facts, but upon unsupported assertions. All United States patents are subjected to a rigorous, comprehensive examination prior to issuance. There is no basis for the suggestion that patents in the United States are not entitled to the presumption of validity provided by 35 U.S.C. 282. The legal presumption of validity of patents has been part of US patent statute since 1 January 1953, when the preceding judicial doctrine was codified. The purpose of the presumption of validity is to place the burden of proof on the party asserting invalidity of a patent, rather than requiring patentees to provide evidence demonstrating the validity of their patents in every enforcement action, which is difficult, time-consuming and unnecessary. The presumption of validity is a sensible approach shared by many countries that provides for substantive examination of patents. The presumption also ensures that a patentee has notice of a defendant's intention to challenge the patent, prior to trial. It should go without saying that providing a legal presumption of validity for patents can only serve to lessen the complexity of patent litigation. The concern expressed by the delegation of the European Communities over the "clear and convincing evidence" standard is likewise misplaced. This standard lies between the legal standards of "preponderance of the evidence" and "beyond a reasonable doubt". It recognizes that the patent has already been subjected to a rigorous search and examination before the US Patent and Trademark Office. While higher than the "preponderance of the evidence" standard, the standard does not prejudice the accused infringer. Once a prima facie case of invalidity is presented by the party challenging a patent's validity, the patent owner must come forward with evidence to counter that showing. If the fact-finder concludes that the prima facie case is established and not overcome by the patent owner, the patent, or the particular claims challenged, will be declared invalid by the court. Finally, while patents are by law presumed valid, courts given evidence challenging validity never find that a patent is "valid". They find either that the patent is "invalid", or "not invalid". The latter finding allows subsequent defendants to contest the validity of the patent. On the other hand, once a court holds a patent (or more properly, specific claims in the patent) to be invalid, those claims cannot thereafter serve as the basis of a challenge against other parties. We believe that this balance of rights between patentee and potential defendants is fully consistent with Article 41.2 of the TRIPS Agreement.

Section 526 of the Tariff Act of 1930 authorizes the Secretary of the Treasury to seize goods bearing a trademark owned by a citizen of, or by a corporation or association created or organized within, the United States. Section 1124 of title 15 of the United States Code provides similar authority with respect to trademarks of any manufacturer or trader located in any foreign country which, by treaty, convention, or law, affords similar privileges to citizens of the United States. The TRIPS Agreement would qualify as such a convention. The US Customs Service has a single set of regulations implementing the two sections of law. Because authority to seize goods infringing US trademarks registered by foreign entities already existed, it was not felt necessary to amend Section 526 when implementing the obligations of the TRIPS Agreement. As explained in the preceding paragraph, Section 526 of the Tariff Act of 1930 authorizes the Secretary of the Treasury, not US courts, to seize goods that bear unauthorized trademarks. Section 1118 of title 15, United States Code, gives judges authority to order disposition or destruction of goods that infringe trademarks.

The amendments to Customs regulations providing for ad hoc application procedures mentioned in the US response to item 16 of the Checklist of Issues on Enforcement 5 are being reviewed prior to approval. Notwithstanding the status of the amendments, the US Customs Service, as a matter of policy and based on the authority provided in 18 U.S.C. §§ 2318 and 2320, does intervene on a case by case basis at the request of a right holder. The amendments will clarify Customs' policy and practice.

[Follow-up question from the EC] In response to question 5 submitted by the European Communities and their Member States, the United States has stated that US customs regulations will be amended to "clarify" US Customs policy and practice with respect to ad hoc application procedures, as set forth in the US response to question 16 of the Checklist of Issues on Enforcement.5 Please clarify the timing for amending the customs regulations to bring them into conformity with Article 51.

Section 1499 of title 19, United States Code, requires the US Customs Service to determine within five days (excluding weekends and holidays) whether merchandise presented for examination will be released or detained. Customs must issue a notice of detention no later than five days after the decision to detain merchandise. Customs must make a final determination on the admissibility of detained merchandise within 30 days of the date on which the merchandise was presented for examination. Failure to decide within that period is treated as a decision to exclude the merchandise, against which the importer may file a protest.

See table 1 in the response to question 1 for the number of law suits that have been filed annually in connection with copyrights, patents and trademarks since 1993. As noted in response to question 1, cases are not tracked individually and so it is not possible to determine the average length from filing to final judgment.

Statistics on the number of injunctions issued are not compiled separately for intellectual property cases. Injunctions can be enforced by Federal marshals pursuant to 28 U.S.C. § 566. In order to provide information responsive to this request, the US Government asked US industry groups for information regarding civil actions. The following chart summarizes the information received in response to that request. US COPYRIGHT ENFORCEMENT STATISTICS: FEDERAL CIVIL ACTIONS (1996 AND 1997 (JANUARY-30 JUNE 1997)) [Part of the response is in Table format]

See the reply to question 1. As noted in reply to question 2, the figures in table 2 in the reply to question 1 indicate that right holders make frequent use of temporary restraining orders, preliminary injunctions, ex parte seizures and other provisional remedies in intellectual property enforcement cases, so that only a small percentage of cases filed proceeds to final judgment.

[Part of the response is in Table format] Source countries for the largest total domestic value over the period include the following countries: [Part of the response is in Table format]

The Executive Office of United States Attorneys (EOUSA) in the US Department of Justice is charged with compiling statistics regarding cases referred to the Department of Justice by other federal agencies for prosecution under federal criminal laws. The statistics include only cases reported to the EOUSA and do not include cases prosecuted under state criminal laws. Those statistics also do not reflect the imposition of criminal fines which can either supplement or substitute for imprisonment. Copyright-related Criminal Provisions Three Federal crimes, 18 U.S.C. §§ 2318, 2319 and 2319A, relate to copyright infringement. In fiscal years 1996 and 1997, the reported statistics indicate that a total of 146 defendants were prosecuted under these statutes, with 67 being convicted after a plea or trial. Of those convicted, 20 received jail sentences. The following tables contain reported statistics for fiscal year 1996 and 1997, segregated by statutory provision, and preceded by a brief description of each offence. Title 18, United States Code, Section 2318 (18 U.S.C. § 2318) – Trafficking in Counterfeit Labels for Phonorecords, and Copies of Motion pictures or Other Audiovisual Works. Offence: knowingly trafficking in a counterfeit label affixed or designed to be affixed to a phonorecord or a copy of a motion picture or other audiovisual work. [Part of the response is in Table format] Title 18, United States Code, Section 2319 (18 U.S.C. § 2319) – Criminal Infringement of a Copyright. Offence: willful infringement of a copyright for purposes of commercial advantage or private financial gain. [Part of the response is in Table format] Title 18, United States Code, Section 2319A (18 U.S.C. § 2319A) – Unauthorized Fixation of and Trafficking in Sound Recordings and Music Videos of Live Musical Performances. Offence: without the consent of the performer, knowingly and for purposes of commercial advantage or private financial gain, fixing the sounds or sounds and images of a live musical performance, reproducing copies of such a performance from an unauthorized fixation, transmitting the sounds or sounds and images to the public, or distributing, renting, selling, or trafficking (or attempting the preceding) in any copy of an unauthorized fixation. [Part of the response is in Table format] In order to provide some information regarding fines and monetary restitution, information not maintained by EOUSA, the Government of the United States requested the assistance of copyright industry groups. The following charts contain information supplied by those industry groups, as well as information on state criminal actions. US COPYRIGHT ENFORCEMENT STATISTICS: FEDERAL CRIMINAL ACTIONS Fines and Monetary Restitution (1996 and 1997 (January – 30 June 1997)) [Part of the response is in Table format] US ENFORCEMENT STATISTICS: STATE CRIMINAL ACTIONS (1996 and 1997 (January – June 30, 1997)) [Part of the response is in Table format] Trademark-related Criminal Provision: Reported information regarding criminal actions in connection with trademark rights are summarized in the table below, following the description of the relevant criminal law. Title 18, United States Code, Section 2320 (18 U.S.C. § 2320) – Trafficking in Counterfeit Goods or Services. Offence: intentionally trafficking or attempting to traffic in goods or services and knowingly using a counterfeit mark on or in connection with such goods or services. [Part of the response is in Table format]

EOUSA does not maintain statistics on quantity or value of property seized pursuant to criminal prosecution or information on whether forfeited property has been destroyed.

For copyright, see 17 U.S.C. § 504; for trademarks including certification marks, see 15 U.S.C. § 1117; for patents and industrial designs, see 35 U.S.C. § 284; for integrated circuit layout designs, see 17 U.S.C. § 911; for trade secrets, reference would be made to the appropriate state law. Calculation of damages is based on the evidence provided by the parties.

For copyright, see 17 U.S.C. § 505; for trademarks, including certification marks, see 15 U.S.C. § 1117; for patents and industrial designs, see 35 U.S.C. § 285; for integrated circuit layout-designs, see 17 U.S.C. § 911; and for trade secrets, refer to the appropriate state law. As with damages, calculations are based upon the evidence presented by the parties.

Attorney's fees can be reimbursed in accordance with the sections of law cited above. Fees would be calculated based upon the evidence presented by the parties.

In connection with some forms of intellectual property, judicial authorities have such authority and with others such authority is limited. See above-referenced provisions of law. Such damages would be calculated based upon the evidence presented by the parties.