# Presentation: 304427

## Intellectual Property Rights: Criminal Enforcement 

- Matthew Devlin
- Assistant United States Attorney
- United States Attorney’s Office
- Austin, Texas

## Agenda

- Intellectual Property Rights Enforcement and the U.S. Department of Justice
- Intellectual Property Rights Enforcement and U.S. Law Enforcement
- What is Intellectual Property?
- Types of IP Crime
- Trademark counterfeiting
- Copyright infringement
- Theft of trade secret
- What to Do If You’re a Victim of IP Crime

## Intellectual Property Rights and the Department of Justice 

## Computer Crime & Intellectual Property Section (CCIPS)

- Created in 1996 as a Section of the Department of Justice’s Criminal Division
- DOJ’s In-house Experts on Cybercrime
- Support and Train the Nationwide Network of Cybercrime-Savvy Federal Prosecutors

## U.S. Attorneys’ Offices

- U.S. Attorneys are appointed by the President.
- The Nationwide Computer Hacking & Intellectual Property (CHIP) Coordinator Network
- 93 Offices in the U.S. and in the District of Columbia, Guam, the Marianas Islands, Puerto Rico, and the U. S. Virgin Islands.

*ADVERTISEMENT*

## Computer Hacking & Intellectual Property (CHIP) Units

- Computer Hacking and Intellectual Property Units in 13 U.S. Attorneys’ Offices
- Atlanta, Boston, Chicago, Dallas, Kansas City, Los Angeles, Miami, New York (Manhattan & Brooklyn), San Diego, San Francisco, Seattle, and Alexandria, Virginia

## U.S. History Lesson

- Copyright and patent rights are in the U.S. Constitution!

**Article 1, Section 8, Clause 8**
- The Congress shall have Power ... To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.

**Notes:**
We know its important because it’s in the Constitution.

The Constitution anticipated copyright and patent protection.

Article 1, Sec. 8, Cl. 8 states:

The reference to “Science” is patent and “Arts” is copyright. 

## Who Protects Intellectual Property in the United States?

- Majority of IP enforcement is _civil_ action undertaken by intellectual property owner. The U.S. Government is not a litigant.
- In civil enforcement, the burden is on the intellectual property owner to show infringement by a “preponderance of the evidence.”
- A successful rights-holder can collect injunctive relief; monetary damages; or extraordinary remedies.

## When Does the US Government Bring Criminal Charges?

- Criminal charges can be brought when there is _willful_ or _knowing_ infringement.
- Criminal cases require a higher burden of proof:  “Beyond a reasonable doubt”
- Remedies:  incarceration, fines, and restitution
- Common factors affecting whether to charge a criminal violation include:
- Organized Criminal Involvement
- Public Health and Safety Concerns
- Commercial Nature of Violation
- Amount of Loss & harm
- Violation of Previous judgment

## Attorney General’s Intellectual Property Task Force – October 2004

- IP rights must be enforced
- Enforcement is the collective responsibility of IP owners and the federal government
- DOJ will take lead role in prosecuting the most serious violations of IP laws
- Punish misuse of innovative technologies, not innovation itself
- Enforcement also involves coordination and cooperation of foreign governments

## Intellectual Property Rights and U.S. Law Enforcement

## IP Enforcement Is a Team Effort!

- _IP Enforcement Is a Team Effort!_

- Federal Bureau of Investigation
- US Immigration & Customs Enforcement (ICE)
- U.S. Secret Service
- U.S. Postal Inspections Service
- State and Local Authorities

## What is “Intellectual Property”? 

## Intellectual Property

- What is “intellectual property”?
- Intangible assets recognized as “property” by the state
- For example, trademarks, copyrights, patents, and trade secrets.
- What is “infringement”?
- Unauthorized use of intangible assets whose control had been exclusively granted to the owner.

## Trademarks (®) are intellectual property in a brand (such as Coke®)
Copyright law (©) is intellectual property in creative works, such as books, music, and movies (and presentations!). For example:

- Copyright law (©) is intellectual property in creative works, such as books, music, and movies (and presentations!). For example:

- _Trademark & Copyright_

- The “Happy Birthday” song was copyrighted in 1935. Until 2010, royalties must be paid if it is publicly performed.

**Notes:**
Trademark and service marks are shorthand.  When I say Nike, you get an image and association.  When I say Kodak, you get an image of camera products.  That association and reputations have been created through the money and effort of those businesses.

Consumers should be able to rely on such marks to make purchasing decisions.  In areas such as food, drugs, auto parts, the risks related to health and safety are increased.  

Third parties may also be hurt.  Fake airplane parts, as a friend has prosecuted in Florida, will not only affect the purchaser or the actual manufacturer, but also the passenger.  

## Defined at 18 U.S.C. 1839:
all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if ...”

- all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if ...”

- _Trade Secrets_

## The owner has taken reasonable measures to keep such information secret (§ 1839(3)(A))
The information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, the public (§ 1839(3)(B))

- The information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, the public (§ 1839(3)(B))

- _Trade Secrets_

- The formula for Coke is a trade secret.  It has been protected for over 100 years!

## Commonly Infringed Intellectual Property

## Why Enforce Intellectual Property Rights? 

## Why is IP Enforcement Important?

- Harm legitimate producers (artists, musicians, and companies), retailers, distributors (local, importers, and exporters) and exhibitors of intellectual property

**Intellectual Property Violations Can:**

- Pirated creative works include books, software, music, and movies.

- Software

- Music

- DVD/Video

## Why is IP Enforcement Important?

- Threaten public health and safety:

**Intellectual Property Violations Can:**

- Counterfeit Airplane Parts

- Defective Batteries

## Why is IP Enforcement Important?

- Foster growth of a lawless underground economy that escapes accountability (such as paying taxes on sales)
- Provide funding for violent domestic and foreign-based organized crime syndicates

**Intellectual Property Violations Can:**

## Why is IP Enforcement Important?

- Enforcing IP Rights Can:
- Improve product-related health and safety
- Foster growth of economic industries (software, high tech, etc.)
- Foster creativity
- Create incentive for investment
- Fulfill international treaty obligations

## Types of IP Crime 

## Criminal Infringement of a Copyright (18 U.S.C. § 2319 & 17 U.S.C. § 506) - Up to 5 yrs (10 yrs for repeat offenders)
Trafficking in Counterfeit Labels for Software & Music (18 U.S.C. § 2318) - Up to 5 yrs
Trafficking in Recordings/Videos of Live Musical Performances (18 U.S.C. § 2319A) - Up to 5 yrs (10 yrs for repeat offenders)
Circumvention of Copyright Protection Systems (17 U.S.C. §§ 1201-1205 - Up to 5 yrs (10 yrs for repeat offenders)
Unauthorized Reception of Cable Services (47 U.S.C. § 553) - Up to 6 mos (individual use) / 2 yrs (commercial gain) / 5 yrs (repeat offenders)

- Trafficking in Counterfeit Labels for Software & Music (18 U.S.C. § 2318) - Up to 5 yrs
- Trafficking in Recordings/Videos of Live Musical Performances (18 U.S.C. § 2319A) - Up to 5 yrs (10 yrs for repeat offenders)
- Circumvention of Copyright Protection Systems (17 U.S.C. §§ 1201-1205 - Up to 5 yrs (10 yrs for repeat offenders)
- Unauthorized Reception of Cable Services (47 U.S.C. § 553) - Up to 6 mos (individual use) / 2 yrs (commercial gain) / 5 yrs (repeat offenders)

- _Copyrighted Works_

**Notes:**
The elements are pretty straight forward.  

“Traffic” is defined under 2320(e)(2) as transport, transfer, or dispose of as consideration for anything of value.

There are some snags in the application of the statute however.

## Trademarks

- Trafficking in Counterfeit Goods & Services (18 U.S.C. § 2320) - Up to 10 yrs (20 yrs for repeat offender)

**Notes:**
The “counterfeit mark” issue poses some interest issues for the prosecution.  The dictionary defines a “spurious mark” as lacking validity or authenticity.  This is no help.

Must be an registered for those goods and services.

And the use much be likely to cause confusion, to cause mistake or deceive.

For example, the most recognizable trademark there is...

## Trade Secrets

- Economic Espionage (18 U.S.C. § 1831) - Up to 15 yrs
- Theft of Trade Secrets (18 U.S.C. § 1832) - Up to 10 yrs (corporate offender - up to $5M fine)
- Confidentiality- Protective orders and other actions authorized (18 U.S.C. § 1835)

**Notes:**
The “counterfeit mark” issue poses some interest issues for the prosecution.  The dictionary defines a “spurious mark” as lacking validity or authenticity.  This is no help.

Must be an registered for those goods and services.

And the use much be likely to cause confusion, to cause mistake or deceive.

For example, the most recognizable trademark there is...

## What to Do If You’re a Victim of Intellectual Property Crime

## If You’re a Victim of IP Crime 

- Contact law enforcement as soon as possible
- Thoroughly document any internal investigation
- Record all investigative activities
- Carefully preserve all evidence
- Assist law enforcement as much as possible
- Identify stolen intellectual property
- Share results of internal investigations or civil lawsuits
- Explore confidentiality measures

**Notes:**
At the same time, computers are making the copying of such material that much easier and the Internet is making distribution of this material that much simpler.

It is also making copying and distribution in violation of copyright more prevalent. 

## DOJ cybercrime website: