Progress Report of the 

department of justice’s 

Task force on 

intellectual property 

JUNE 2006


Progress Report of the 

department of justice’s 

Task force on 

intellectual property 

JUNE 2006
 

Task Force Members
 

D. Kyle Sampson, Chairman 

Chief of Staff 

Office of the Attorney General 

Arif Alikhan, Vice Chairman 

Senior Counsel 

Office of the Deputy Attorney General 

Thomas O. Barnett 

Assistant Attorney General 


Antitrust Division 


Michael Battle 

Director 

Executive Office of 


United States Attorneys 


Rachel L. Brand 

Assistant Attorney General 

Office of Legal Policy 

Paul D. Clement 

Solicitor General 

Office of the Solicitor General 

Alice S. Fisher 

Assistant Attorney General 

Criminal Division 

Neil M. Gorsuch 

Principal Deputy Associate 


Attorney General 


Office of the Associate 


Attorney General 


Peter D. Keisler 

Assistant Attorney General 

Civil Division 

William E. Moschella 

Assistant Attorney General 

Office of Legislative Affairs 

Debra Wong Yang 

United States Attorney 

Central District of California 

Chair, Subcommittee on Cyber &
 

Intellectual Property,
 

Attorney General’s Advisory Committee
 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 

Task Force Members
 

TASK FORCE EXECUTIVE STAFF
 

Arif Alikhan Paul Hahn 

Executive Director U.S. Attorneys’ Office Liaison 

Trent W. Luckinbill Thomas G. Hungar 

Deputy Executive Director Appellate Counsel 

Asheesh Agarwal Gerald F. Masoudi 

Civil Counsel Antitrust Counsel 

Frederick S. Ansell Amy K. Olson 

Legal Policy Counsel International Counsel 

Kathleen Blomquist Brian Roehrkasse 

State & Local Government Liaison Public Affairs Coordinator 

Leslie K. Bryant Stacey L. Stout 

FBI Representative Legislative Counsel 

Michael DuBose Eugene M. Thirolf 

Criminal Enforcement Counsel Consumer Litigation Counsel 

Elena J. Duarte 

CHIP Unit Advisor 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 

Task Force Members
 

ADDITIONAL CONTRIBUTORS
 

Scott Augenbaum 


Ryan W. Bounds 


Stuart Chemtob 


Jennifer M. Dixton 


John Fargo 


Scott Garland 


Theodore Hirt 


Kenneth Jost 


Eric Klumb 


Frances E. Marshall 


Scott McIntosh 


Christopher S. Merriam 


Jeffrey L. Oldham 


Martha M. Pacold 


Evan Peterson 


Christopher P. Sonderby 


Hill B. Wellford 


Progress Report of the Department of Justice’s Task Force on Intellectual Property 

Table of Contents 

Preface ..........................................................................................................................................................i


Message from the Chairman ..........................................................................................................................iii


I. Introduction ..........................................................................................................................................1


II. What Is Intellectual Property?................................................................................................................5


III. What Laws Protect Intellectual Property? ..............................................................................................9


IV. Why Is Protecting Intellectual Property Rights Important?..................................................................13
 

V. What Principles Should Apply to Intellectual Property Enforcement? ................................................15


VI. How Has the Department of Justice Enforced and Protected Intellectual Property Rights? ................17


A. Interagency Efforts – STOP Initiative and NIPLECC ..............................................................17


B. Criminal Enforcement Efforts ..................................................................................................18


1. Computer Crime and Intellectual Property Section ............................................................18


2. Computer Hacking and Intellectual Property Program ......................................................19


3. Office of Consumer Litigation ............................................................................................21


4. Federal Law Enforcement Agencies ....................................................................................22


5. Victim-Industry Partnerships ..............................................................................................23


6. Statistical Accomplishments ................................................................................................24
 

7. Intellectual Property Prosecution Highlights ......................................................................24


C. Legislative Efforts ......................................................................................................................29


D. Civil Enforcement Efforts – Civil Division ..............................................................................33


E. Antitrust Enforcement Efforts – Antitrust Division ..................................................................33


F. International Efforts – Free Trade Agreements ..........................................................................34


VII. What is the Status of the Intellectual Property Task Force’s Recommendations? ................................37


A. Criminal Enforcement Recommendations ................................................................................37


B. International Cooperation Recommendations ..........................................................................52


C. Civil Enforcement Recommendation ........................................................................................58


D. Antitrust Enforcement Recommendations ................................................................................64


E. Prevention Recommendations ..................................................................................................67
 

Conclusion..................................................................................................................................................72


Appendices..................................................................................................................................................73


A. 2004 Recommendations of the Task Force on Intellectual Property ..........................................73


B. Department of Justice Guide to Reporting Intellectual Property Crime ....................................81


Progress Report of the Department of Justice’s Task Force on Intellectual Property 

Preface
 

Attorney General Alberto R. Gonzales with the 2004 Report of the 

Department of Justice’s Task Force on Intellectual Property. The Attorney 

General charged the Task Force with fully implementing all of the recommendations contained in the 2004 Report. Photo by Monica Goodling. 

Intellectual property theft is a rising threat 

against our Nation’s economic security. In response 

to this rising threat, on March 31, 2004, thenAttorney General John Ashcroft established the 

Department of Justice’s Task Force on Intellectual 

Property (the “Task Force”). The Attorney General 

directed the Task Force to examine all of the 

Department of Justice’s intellectual property 

enforcement efforts and to explore ways for the 

Department of Justice to increase its protection of 

valuable intellectual property resources. The 

Attorney General formed a team of legal experts 

with a diverse range of experience and expertise to 

examine this important area of the law.
 

The Task Force undertook this effort and,
 

after a comprehensive examination, issued the
 

Report of the Department of Justice’s Task Force
 

on Intellectual Property (the “2004 Report”) in 

October 2004 with extensive recommendations for the Department of Justice’s intellectual property enforcement, protection, and education programs. The Task Force analyzed existing resources and proposed significant improvements in the following areas: Criminal Enforcement; International Cooperation; Civil 

Enforcement; Antitrust Enforcement; Legislation; and Prevention. The 2004 Report contained numerous 

short- and long-term recommendations in these areas, designed to provide a sustained commitment to protecting intellectual property rights. 

In February 2005, Attorney General Alberto R. Gonzales renewed the Department of Justice’s commitment to protecting intellectual property rights. He appointed new members to the Task Force and directed 

the Task Force to fully implement the recommendations in the 2004 Report. Since that time, the Task Force 

and its Executive Staff have worked diligently to meet the Attorney General’s challenge and implement all of 

the 2004 Report’s recommendations. The Task Force now submits to the Attorney General this Progress 

Report on the status of each recommendation and on the Department of Justice’s accomplishments in protecting intellectual property rights. 

Progress Report of the Department of Justice’s Task Force on Intellectual Property i

Message from the Chairman
 

“Theft of intellectual property threatens America’s 

economic prosperity and the health, safety, and 

security of its citizens.” 

- D. Kyle Sampson, Chairman, 

Intellectual Property Task Force 

Intellectual Property T ask Force Chairman, 

D. Kyle Sampson 

Intellectual property is America’s competitive advantage in the global economy of the 21st century. From music and movies to pharmaceuticals and software, intellectual property touches every aspect 

of our lives. Theft of intellectual property threatens America’s economic prosperity and the health, 

safety, and security of its citizens. Accordingly, the Bush Administration has launched the most aggressive, ambitious, and far-reaching law enforcement effort ever taken against intellectual property crimes 

and related civil misconduct. 

This Progress Report of the Department of Justice’s Task Force on Intellectual Property sets forth 

the significant accomplishments of the Department of Justice in this unprecedented law enforcement 

effort. The accomplishments were made possible by the support of President Bush and Attorney 

General Gonzales, both of whom recognize the importance of intellectual property and have committed new resources to its protection. And these achievements are also the result of the dedicated 

efforts of career investigators, civil enforcers, and criminal prosecutors who combat misappropriation 

and intellectual property offenses every day. 

I express thanks to the members and executive staff of the Task Force, as well as to the other contributors, for their work in preparing this Progress Report. They are leading the charge to protect intellectual property and keep our Nation safe and prosperous. 

D. Kyle Sampson 

Chairman 

Progress Report of the Department of Justice’s Task Force on Intellectual Property iii

I. Introduction 

Counterfeit products and the theft of intellectual property have real-world consequences. Not only is 

intellectual property theft a threat to our economy, but it also can be a serious threat to our health and safety. Counterfeit batteries can explode, counterfeit car parts can fail to perform, and counterfeit pharmaceuticals can lack the ingredients necessary to cure deadly diseases. 

The Department of Justice takes the problem of intellectual property theft very seriously. The Attorney 

General has made protecting and enforcing intellectual property rights one of the Department of Justice’s 

highest priorities, and implementing the recommendations in the 2004 Report has been an urgent mission. 

(A listing of all of the recommendations can be found in Appendix A). The Department of Justice is proud to 

announce that it has implemented all of the recommendations contained in the 2004 Report, including: 

�	 Increasing the number of prosecutors in the field by creating five additional 

Computer Hacking and Intellectual Property (“CHIP”) Units in: 

	 the District of Columbia 

	 Nashville, Tennessee 

	 Orlando, Florida 

	 Pittsburgh, Pennsylvania 

	 Sacramento, California 

�	 Deploying an experienced federal prosecutor as an Intellectual Property Law 

Enforcement Coordinator (“IPLEC”) to southeast Asia and obtaining funding 

for an IPLEC in Eastern Europe to handle regional efforts to enforce and protect intellectual property; 

�	 Dismantling international criminal organizations that commit intellectual 

property offenses; 

�	 Expanding international training and technical assistance efforts; 

�	 Increasing the number of extradition and mutual legal assistance treaties that 

include intellectual property offenses; 

�	 Prosecuting intellectual property cases involving a threat to public health and 

safety; 

�	 Carefully monitoring and vigorously protecting the right of victims to pursue 

intellectual property cases in civil courts; 

�	 Organizing victims’ conferences on intellectual property awareness; and 

�	 Creating innovative intellectual property educational programs for America’s 

youth. 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 1
United States Department of Justice
 

The Department of Justice did not stop at simply implementing the recommendations of the Task Force. 

Instead, the Department of Justice went well beyond the recommendations by taking these additional steps: 

�	 Creating seven additional CHIP Units in: 

 Austin, Texas 

 Baltimore, Maryland 

 Denver, Colorado 

 Detroit, Michigan 

 Newark, New Jersey 

 New Haven, Connecticut 

 Philadelphia, Pennsylvania 

�	 Increasing the number of defendants prosecuted for intellectual property 

offenses by 98 percent; 

�	 Transmitting to Congress the President’s Intellectual Property Protection Act 

of 2005; 

�	 Providing training and technical assistance to over 2,000 foreign prosecutors, 

investigators, and judges regarding intellectual property investigations and 

prosecutions; 

�	 Working with the United States Trade Representative to improve language 

regarding intellectual property protections in Free Trade Agreements and other 

international treaties; 

�	 Publishing a nearly 400-page comprehensive resource manual on prosecuting 

intellectual property crimes; 

�	 Filing 13 amicus, or “friend of the court,” briefs in the Supreme Court in cases 

involving intellectual property disputes; and 

�	 Partnering with the United States Patent & Trademark Office to dedicate 

$900,000 over three years for piracy prevention efforts with non-profit educational institutions. 

As can be seen from these achievements, the Department of Justice has made intellectual property enforcement and protection a high priority. The following Progress Report chronicles these achievements and important goals. 

2 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
I. Introduction


Attorney General Alberto R. Gonzales at the United States Capitol in 

Washington, DC. Photo by Craig Crawford. 

“[W]e recognize our responsibility to vigorously enforce IP laws–and 

develop a culture of respect for IP rights–in order to harness America’s 

creative energy and ingenuity for the future of our economy.” 

- Attorney General Alberto R. Gonzales, March 22, 2006 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 3

II. What is Intellectual Property? 

America is built upon human innovation and creativity. People, inspired by artistic visions or new ideas, 

create movies for us to watch, music for us to hear, and books for us to read. Inventors and creators develop 

products that improve our lives. Whether they produce music, design fashion, or develop chemical compounds, inventors and creators contribute their intellect and ideas for our Nation’s benefit. 

Just as the law grants ownership rights over our material possessions, such as a home or an automobile, it 

also grants individuals ownership rights over intangible property, such as an idea or an invention. When a person creates something novel and unique, our laws recognize its value and grant the creator the respect and 

integrity of ownership. 

The Constitution itself recognizes that intellectual property protection is an important factor in fostering 

innovation and creativity. Article I, Section 8 states that Congress shall have the 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. 

U.S. Const. Art. I, § 8. Reflecting the diversity of intellectual property, there are distinct areas of the law 

that protect it: copyrights; trademarks, service marks, and certification marks; trade secrets; and patents. 

Copyrights 

Books, music, movies, artwork, and plays, among other creative works, can all be protected by copyrights. 

With certain exceptions, the owner of a copyright holds exclusive control over various rights associated with 

his or her works, such as the rights to reproduce, publicly distribute, publicly display, publicly perform, rent, 

record, or adapt the work. The protection lasts for a limited period of time, usually 70 years after the author’s 

death. 

Copyrights protect any creative work that is original and tangibly expressed. Although the physical expression 

of an idea is protected, the actual idea is not. Thus, facts presented in a work are freely available to the public, so 

long as the exact manner of expression is not copied. This allows society to benefit from the accessibility of facts 

and ideas themselves, while still protecting the original creative works that present those facts and ideas. 

Copyright protection applies as soon as the work is expressed in a concrete form, without any need for 

the creator to apply for a copyright. A copyright owner, however, can register the work with the United States 

Copyright Office to create a public record of the creation. 

Trademarks, Service Marks, and Certification Marks 

In addition to protecting creative works, intellectual property law protects trademarks, service marks, and 

certification marks. A trademark is any trait used to identify and distinguish a product or its producer. A servProgress Report of the Department of Justice’s Task Force on Intellectual Property 5 
6 Progress Report of the Department of Justice’s Task Force on Intellectual Property 

United States Department of Justice 


ice mark is any trait used to identify and distinguish a service. For example, McDonald’s golden arches design
 

is a commonly recognized service mark and the Nike “swoosh” is a well-known trademark; both immediate­
 

ly identify the companies they represent. A certification mark is a mark used to certify regional or other ori­
 

gin, material, mode of manufacturer, quality, accuracy or other characteristics of goods or services. An exam­
 

ple of a certification mark includes Underwriters Laboratories’ “UL” mark, which certifies the safety standards
 

of electrical equipment.
 

Trademarks and service marks convey the integrity
 

and uniqueness of a product or service by allowing a con­
 

sumer to distinguish one product or service from anoth­
 

er. The mark may be part of the item or its packaging,
 

and may include a distinctive symbol, word, name, sign,
 

shape, or color. Even sounds and smells may be part of a
 

mark. Generic terms like “soap,” however, do not qualify
 

as marks.
 

Manufacturers that have developed a good brand image and a reputation of high quality should be able
 

to rely on their marks to prevent others from capitalizing on their success, and to ensure that customers can
 

easily identify and purchase their products or services. Trademarks and service marks, therefore, contribute to
 

fair competition in the marketplace. Consumers, in turn, rely on trademarks and service marks to differenti­
 

ate between products and services, and select those associated with reputations they trust.
 

Registering a mark with the United States Patent and Trademark Office (“USPTO”) confers important
 

advantages on the mark owner. For example, the owner can obtain the exclusive right to use the mark in the
 

United States and can exclude others from using the mark, or a comparable mark, in a way that would con­
 

fuse consumers. Marks also are protected by anti-dilution laws, which ensure that a famous mark’s distinc­
 

tiveness cannot be blurred by the commercial actions of others, even if those actions fall just short of causing
 

confusion. Federal trademark and service mark registration is necessary for federal criminal prosecutions for
 

trafficking in counterfeit goods or services.
 

In order to register a trademark with the USPTO, the applicant must demonstrate that (1) the mark is
 

distinctive, and (2) the mark will be used, or is intended for use, in interstate or foreign commerce. A trade­
 

mark, service mark, or certification mark generally does not expire as long as it continues to be used.
 

Trade Secrets 

A trade secret is any confidential information used by a business that has some independent economic
 

value and that is kept secret by those who possess it. The recipes for Coca-Cola and Pepsi, for example, are
 

protected trade secrets. Trade secrets include scientific, technological, or business information, such as mar­
 

keting strategies, and even information on “what-not-to-do,” such as failed or defective inventions. When the
 

once-secret information is obtained through legitimate means, however, it can be freely used. For example,
 

trade secret protection does not prevent a scientist who reverse-engineers a product and discovers how it is
 

assembled from legally using that information to re-create the product. Furthermore, trade secret protection
 
II. What is Intellectual Property?


applies only while secrecy is maintained. After the trade secret is publicly disclosed, it loses its legal protection 

against future disclosure. 

Patents 

The final major category of protected intellectual property is patents. From the composition of a new drug 

to the latest time-saving gadget, patents protect the world of inventions. They provide an exclusive right to 

the fruits of an invention for 20 years from the date the patent application is filed. In return, the patent applicant must agree to publicly disclose the basis for the invention, so that other members of the public may use 

the information freely to develop new products or ideas. The patent statutes do not necessarily permit all 

inventions to be patented; for instance, a patent will not be awarded for discoveries that are not novel or that 

are obvious. Laws of nature and natural phenomena, such as gravity and acceleration, also are not eligible for 

patent protection because they are not human creations. The United States has numerous international agreements with foreign countries to protect patents and, although there are no federal criminal laws prohibiting 

the infringement of patents, federal civil laws allow owners of patents to file lawsuits in United States courts. 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 7

“Our effort to combat the growing trend of high-tech 

crimes includes a robust enforcement of the laws protecting intellectual property.”
 

- Attorney General Alberto R. Gonzales,
 

March 22, 2006
 

III. What Laws Protect Intellectual Property? 

Since Congress enacted the first criminal law protecting copyright in 1897, the federal government’s role 

in enforcing intellectual property rights has evolved to reflect the changing technologies and media of expression and distribution. The Internet and other technologies have revolutionized the ability to misappropriate 

information and have made intellectual property infringement a global problem affecting all nations. 

At the same time as intellectual property has become increasingly more critical for the economic security 

of the United States, misappropriating intellectual property has become easier. Unfortunately, the consequences have become more devastating: people are deceived, property is stolen, and businesses are harmed. 

Federal laws that criminalize violations of intellectual property rights, just like other criminal laws that aim to 

protect property, deter fraud, and encourage market stability, are important to the safety and prosperity of 

America and its citizens. 

As noted above, federal law protects four categories of intellectual property: copyrighted works; trademarks, service marks, and certification marks; trade secrets; and patents. A summary of the federal laws protecting these types of intellectual property follows. 

Protection of Copyrighted Works 

Federal criminal copyright law protects against the unauthorized use of copyrighted works. Prohibited 

uses include the unauthorized copying and distribution of copyrighted works, such as books, films, musical 

compositions, sound recordings, software programs, and artistic works. A business that willfully makes and 

sells unauthorized copies of copyrighted motion pictures, for example, is committing a federal crime. 

Many copyrighted works contain technology intended to hinder the copying of the work by persons not 

authorized to do so. Federal criminal copyright law prohibits willfully creating or selling technology to circumvent such protections. Disabling embedded codes that protect computer software from unauthorized 

copying, for example, may violate federal law. In certain circumstances, it is also a violation of federal criminal law to willfully distribute goods or services, for commercial purposes, that disable those defenses. 

Federal law provides additional protection 

for copyrighted works that falls outside criminal copyright law. For example, trafficking in 

counterfeit labels that are, or are designed to be, 

attached to copyrighted works is prohibited.


Additionally, copyright owners may sue copyright infringers under federal copyright law. 

Protection of Trademarks, Service Marks, and Certification Marks 

Federal criminal law protects trademarks, service marks, and certification marks against infringement. 

For instance, it is a federal crime to knowingly traffic in goods or services that bear a counterfeit mark if the 

actual mark has been properly registered. This law protects not only mark owners, but also consumers, who 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 9 
10 Progress Report of the Department of Justice’s Task Force on Intellectual Property 

United States Department of Justice
 

might otherwise be led to pay a premium for goods or services they think are from a reputable mark owner 

only to receive imitations of lesser quality. Some counterfeit goods can create serious risks to consumer health 

and safety, such as counterfeit pharmaceuticals that have a chemical composition or purity different than the 

genuine drug. In addition, an electrical cord bearing a counterfeit UL certification mark may be substandard 

and catch fire. 

Mark owners may also bring private lawsuits under federal law for infringement, even if the Department 

of Justice does not file criminal charges. 

Protection of Trade Secrets 

Federal criminal laws also protect trade secrets. It is thus a federal crime to misappropriate intentionally a 

trade secret for the purpose of benefitting a foreign government or for economic gain. For example, federal 

law may prohibit an employee of a soft drink company from providing to a competitor the secret recipe for 

his employer’s product. Likewise, an engineer might commit a federal offense if he were to provide his company’s confidential research results to a competitor or foreign power. 

Patents 

Federal law protects patents by providing for their exclusive registration by the USPTO and by providing 

patent owners with a civil cause of action to enjoin future infringement and to recover damages for past 

infringement. Federal law also provides for the plaintiff in a patent case to recover three times the damages 

suffered for past infringement in some circumstances. 

A developer of intellectual property often has a choice of whether to protect an invention by patenting it 

or by deeming it a trade secret. Each of these forms of intellectual property has advantages and disadvantages. 

For instance, although patents convey a range of benefits, patents require that the applicant disclose to the 

public the elements of the patented invention, and a patent lasts for only 20 years. By contrast, a trade secret, 

by definition, is not disclosed and may last indefinitely. In addition, while stealing a trade secret may violate 

federal criminal statutes, there are no criminal laws regarding patent infringement. 

Other Laws 

Various other laws protect intellectual property in particular situations. For instance, federal criminal law 

prohibits knowingly recording live musical performances and copying and distributing those recordings for 

profit. In addition, it is a federal offense to willfully infringe a copyright by distributing without authorization, over publicly-available computer networks, certain copyrighted works–including movies, software, and 

music–before their release date. Federal laws can also be violated when devices are manufactured or distributed that permit the interception of cable or satellite television signals or the descrambling of satellite television signals. Moreover, several international agreements exist to coordinate copyright and other intellectual 

property protections. 
III. What Laws Protect Intellectual Property? 


FEDERAL CRIMINAL LAWS PROTECTING INTELLECTUAL PROPERTY
 

Copyright 

17 U.S.C. § 506(a)(1)(A) [(formerly § 506(a)(1))] 17 U.S.C. § 1204 


& 18 U.S.C. § 2319(b) 
 Technology to Circumvent Anti-Piracy Protections 

Copyright Infringement for Profit (Felony) Digital Millennium Copyright Act (“DMCA”) 

Statutory maximum penalty of 5 years in prison and Statutory maximum penalty of 5 years in prison and a 

a $250,000 fine or twice the gain/loss for an indi­ $500,000 fine or twice the gain/loss for an individual 

vidual first-time offender (10 years for second and corporate first-time offender. Statutory maximum 

offense); $500,000 fine or twice the gain/loss for a penalty of 10 years in prison for a second offense and 

corporate offender. Civil and criminal forfeiture a $1 million dollars fine or twice the gain/loss. No foravailable. feiture available. 

17 U.S.C. § 506(a)(1)(B) [(formerly § 506(a)(2))] 18 U.S.C. § 2318 


& 18 U.S.C. § 2319(c) 
 Counterfeit/Illicit Labels and Counterfeit DocumentLarge-Scale Copyright Infringement Without Profit ation and Packaging for Copyrighted Works 

Motive (Felony) 

Statutory maximum penalty of 5 years in prison and a 

Statutory maximum penalty of 3 years in prison and $250,000 fine or twice the gross gain/loss for an indi­

$250,000 fine or twice the gain/loss for an individual vidual; $500,000 fine or twice the gain/loss for a corfirst-time offender (6 years for second offense); porate offender. Criminal and civil forfeiture available. 

$500,000 fine or twice gain/loss for corporate offender. Civil and criminal forfeiture available. 18 U.S.C. § 2319A 

Bootleg Recordings of Live Musical Performances 

17 U.S.C. § 506(a)(1)(C) & 18 U.S.C. § 2319(d) 

Distribution of Pre-Release Copyrighted Works or Mat­ Statutory maximum penalty of 5 years in prison and 

erial over Publicly-Accessible Computer Network a $250,000 fine or twice the gain/loss for an individual first-time offender (10 years for second 

If infringement is effected for commercial purpose: offense); $500,000 or twice the gain/loss for a corStatutory maximum penalty of 5 years in prison and a porate offender. Civil and criminal forfeiture avail­

$250,000 fine or twice the gross gain/loss for an indi­ able. 

vidual first-time offender (10 years for second offense); 

$500,000 fine or twice the gain/loss for a corporate 18 U.S.C. § 2319B 

offender. Civil and criminal forfeiture available. Camcording 

If infringement is not effected for commercial pur­ Statutory maximum penalty of 3 years in prison and 

pose: Statutory maximum penalty of 3 years in $250,000 fine or twice the gain/loss for an individ­ prison and $250,000 fine or twice the gain/loss for ual first-time offender (6 years for second offense); an individual first-time offender (6 years for second $500,000 fine or twice the gain/loss for a corporate offense); $500,000 fine or twice the gain/loss for a offender. Criminal forfeiture available. 

corporate offender. Civil and criminal forfeiture 


available. 


Progress Report of the Department of Justice’s Task Force on Intellectual Property 11 
12 Progress Report of the Department of Justice’s Task Force on Intellectual Property 

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FEDERAL CRIMINAL LAWS PROTECTING INTELLECTUAL PROPERTY cont.
 

Trademarks, Service Marks, and Certification Marks 	 Trade Secrets 

18 U.S.C. § 2320 	 18 U.S.C. § 1831 

Counterfeit Trademarks, Service Marks, and Certifi­ Economic Espionage to Benefit a Foreign Government 

cation Marks 

Statutory maximum of 15 years in prison and a 

Statutory maximum penalty of 10 years in prison and $500,000 fine or twice the gain/loss for an individa $2 million fine or twice the gain/loss for an individ­ ual offender, $10 million fine or twice the gain/loss 

ual first-time offender; $5 million fine or twice the for a corporate offender. Criminal forfeiture is availgain/loss for corporate offender. For second-time able. 

offenders statutory maximum penalty of 20 years in 

prison and a $5 million fine or twice the gain/loss for 18 U.S.C. § 1832 

an individual; $15 million fine or twice the gain/loss Commercial Theft of Trade Secrets 

for corporate offender. Civil and criminal forfeiture 

available. 	 Statutory maximum penalty of 10 years in prison 

and a $250,000 fine or twice the gain/loss for an 

individual first-time offender (10 years for second 

offense); $5 million fine or twice the gain/loss for a 

corporate offender. Criminal forfeiture available. 
IV. Why is Protecting Intellectual Property Rights Important? 

In our 21st century economy, intellectual property is one of the most valuable forms of property that exists. 

Whether it is the copyright of a blockbuster film, a patent on a breakthrough drug, a trade secret relating to an innovative product, or a trademark on one of the world’s most valuable brands, intellectual property is a significant 

source of the growth of the American economy and a key driver of global economic activity. As America and more 

countries around the world move from an industrial to an information-based economy, the importance of protecting intellectual property will only continue to increase. 

The negative effects of Intellectual property 

theft make clear the need to protect intellectual 

property. First, to the extent that piracy diminishes 

incentives to create new forms of intellectual property, fewer new products will be created, and businesses and consumers will enjoy fewer options in 

the marketplace. Second, intellectual property 

theft hits the Nation’s most innovative economic 

sectors the hardest, and it is those sectors that are 

increasingly responsible for ensuring America’s 

continuing prosperity and competitiveness. Third, theft of intellectual property can threaten public health and safety by introducing dangerous counterfeit products into the marketplace. Finally, the sizeable profits that can be generated at relatively low risk through intellectual property theft can invite additional criminal activity. 

The economic impact of intellectual property theft is enormous. According to the Office of the United States 

Trade Representative (“USTR”), intellectual property theft costs American corporations $250 billion every year. 

Among those affected are manufacturers, distributors, retailers, employees, artists, consumers, and governments. 

These crimes also harm the economy through lost profits, taxes, and wages, and the loss of hundreds of thousands 

of jobs. 

The costs of intellectual property theft are 

not solely economic. Intellectual property theft 

also affects the public’s health and safety in costly ways. For instance, intellectual property

thieves can make enormous profits from selling 

cheap counterfeit versions of products whose safety and reliability are essential–including pharmaceuticals, auto­


motive parts, and electrical equipment. 


In addition to serious consequences for the 

economy and public health and safety, intellectual property theft is a concern because it can fund 

other criminal activities. Modern technology has 

increased the innovativeness of companies and the amount of new intellectual property being created, but it has also 

made intellectual property theft easier and more anonymous. Computer technology and the Internet generate inexpensive and far-flung opportunities for piracy and distribution. Such ease and profitability attract organized criminal enterprises to these offenses, and some of those enterprises may even have ties to terrorist organizations. 

“[T]he strength of the American economy is dependent 

on the creative and entrepreneurial spirit of our citizens. At the heart of that spirit is the dedicated protection of intellectual property – and the innovations, 

jobs, and productivity that flow from it.” 

- Attorney General Alberto R. Gonzales, 	

March 22, 2006 

The United States Customs and Border Protection estimates that 

750,000 American jobs have been lost due to counterfeiting. 

According to Business Week, counterfeit airplane parts played 


a role in at least 166 U.S.-based accidents or mishaps during 


a recent 20-year period. 


Progress Report of the Department of Justice’s Task Force on Intellectual Property 13
14 Progress Report of the Department of Justice’s Task Force on Intellectual Property 

United States Department of Justice
 

Because of the serious consequences of intellectual property theft, combating these crimes is an important priority of the Department of Justice. In order to ensure a vibrant, innovative, and safe marketplace for all, the 

Department of Justice will continue to prosecute individuals and organizations that criminally infringe on intellectual property rights and vigorously protect the right of victims to pursue intellectual property cases in civil courts. 

“Our ability to promote and secure an effective and predictable environment for intellectual property rights in 

America will have a significant impact on our future economic growth, global competitiveness, and economic 

national security.” 

- Attorney General Alberto R. Gonzales, 

November 10, 2005 

Attorney General Alberto R. Gonzales addresses victims of intellectual property theft at the U.S. Chamber of 

Commerce’s Anti-Counterfeiting and Piracy Summit. Photo by Ian Wagreich. 
V. What Principles Should Apply to Intellectual Property Enforcement? 

The Department of Justice has developed a comprehensive, multi-dimensional strategy to fight intellectual property crime. This strategy addresses the many different, yet essential, aspects of intellectual property 

enforcement: criminal enforcement; international cooperation; civil and antitrust enforcement; and prevention. While the perspective and focus of each of these areas differ, they nonetheless are all united by underlying values that form the foundation of the Department of Justice’s intellectual property efforts. The Task Force 

continues to adhere to these key principles that drive and shape the Department of Justice’s intellectual property enforcement efforts, and provide a basis for recommending further actions. These principles are set forth 

below: 

�	 The laws protecting intellectual property rights must be enforced. 

The Nation’s economic security depends on the protection of valuable intellectual resources. The Department of Justice has a responsibility to enforce the 

criminal laws of the Nation that are designed to protect its economic security 

and the creativity and innovation of entrepreneurs. 

�	 The federal Government and intellectual property owners have a collective 

responsibility to take action against violations of federal intellectual property 

laws. 

The federal Government has the primary responsibility for prosecuting violations of federal criminal laws involving intellectual property. The owners of 

intellectual property have the primary responsibility of protecting their creative works, marks, and trade secrets, and of pursuing civil enforcement 

actions. 

�	 The Department of Justice should take a leading role in the prosecution of the 

most serious violations of the laws protecting copyrights, marks, and trade 

secrets. 

The Department of Justice has historically placed–and should continue to 

place–the highest priority on the prosecution of intellectual property crimes 

that are complex and large in scale, and that undermine our economic national security or threaten public health and welfare. The Department of Justice 

should continue to focus on these areas and enforce federal intellectual property laws as vigorously as resources will allow. 

�	 The federal Government should punish the misappropriation of innovative 

technologies rather than innovation itself. 

The Department of Justice should enforce federal intellectual property laws in a 

manner that respects the rights of consumers, technological innovators, and content providers. The Department of Justice should prosecute those who misappropriate innovative technology or use technology to commit crimes, while 

ensuring that such enforcement efforts do not chill legitimate innovation. 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 15
16 Progress Report of the Department of Justice’s Task Force on Intellectual Property 

United States Department of Justice
 

�	 Intellectual property enforcement must include the coordinated and cooperative efforts of foreign governments. 

Violations of intellectual property laws are increasingly global in scope and 

involve offenders in many nations. Enforcement measures must therefore confront and deter foreign as well as domestic criminal enterprises. This requires 

the informal assistance of foreign governments and their law enforcement 

agencies, active enforcement of their own intellectual property laws, and formal international cooperation through treaties and international agreements. 
VI. How Has the Department of Justice Enforced and 

Protected Intellectual Property Rights? 

The Department of Justice comprehensively enforces and protects intellectual property rights through a 

number of divisions, sections, and agencies. Each of these important components has highly-trained attorneys, law enforcement agents, and staff who specifically address intellectual property issues, ranging from 

criminal prosecutions to antitrust concerns. In addition, the Bush Administration has developed a comprehensive, interagency initiative to combat intellectual property theft and address international enforcement 

issues. The Bush Administration’s interagency campaigns and the Department of Justice’s specific efforts are 

explained below. 

A. Interagency Efforts – STOP Initiative and NIPLECC 

The Department of Justice has the lead criminal enforcement role in the United States Government’s protection of intellectual property rights here and abroad. The Department of Justice also coordinates with other 

government agencies on numerous domestic and international policy matters relating to intellectual property protection. It does so through a variety of means, including daily contact with other government agencies 

responsible for the many facets of intellectual property protection in the United States, as well as formal mechanisms such as the Bush Administration’s Strategy Targeting Organized Piracy (“STOP”) initiative and the 

National Intellectual Property Law Enforcement Coordination Council (“NIPLECC”). 

The Department of Justice has participated in the STOP initiative since its inception in 2004. STOP is 

a Bush Administration initiative that includes, among others, the Departments of Justice, Commerce, and 

Homeland Security, the Office of the United States Trade 

Representative, the USPTO, and the Food and Drug 

Administration. Through this initiative, the Bush Administration has sought to implement a government-wide plan 

to reduce counterfeiting and piracy throughout the world. 

The Department of Justice has made important contributions to this broad mission through the work of the Task 

Force and, more specifically, through implementation of the 

Task Force’s detailed recommendations set forth in 2004 

Report. The Department of Justice also has coordinated 

closely with other STOP agencies on numerous international and domestic policy issues; joined STOP agencies in visits 

to the European Commission, France, Germany, Hong 

Kong, Korea, and the United Kingdom in April and June of


2005; participated in a series of round table discussions,


seminars, and other business outreach efforts; and helped


develop greater public awareness of how federal criminal


laws protect the owners of intellectual property. 


President George W. Bush speaks about the STOP Initiative 

and the importance of protecting intellectual property during ceremonies at the Eisenhower Executive Office 

Building, March 16, 2006. Looking on are, from the left: 

Attorney General Alberto R. Gonzales; U.S. Rep. Jim 

Sensenbrenner (R-Wis); and U.S. Rep. Bobby Scott (D-Va.).


Photo by Arif Alikhan.


Progress Report of the Department of Justice’s Task Force on Intellectual Property 17 
18 Progress Report of the Department of Justice’s Task Force on Intellectual Property 

“The Administration is leading an initiative called 

STOP–Strategy Targeting Organized Piracy. Nine federal agencies are coming together in this initiative, 

including the Department of Justice, which has 

launched the most aggressive effort in American history to prevent intellectual property violations.”	

- President George W. Bush, March 16, 2006 

United States Department of Justice


The Department of Justice has also co-chaired 

NIPLECC since its creation by Congress in 1999. 

NIPLECC’s mission is “to coordinate domestic 

and international intellectual property law 

enforcement among federal and foreign entities.” 

Joining the Assistant Attorney General for the 

Criminal Division as co-chair of NIPLECC is the 

Under Secretary of Commerce for Intellectual 

Property and Director of the USPTO. Other 

NIPLECC members include the Under Secretary 

of State for Economic, Business, and Agricultural Affairs; a Deputy United States Trade Representative; the 

Commissioner of Customs; the Under Secretary of Commerce for International Trade; and, in a consulting 

capacity, a representative from the United States Copyright Office. In July 2005, President Bush named 

Commerce Department official Chris Israel to the newly-created post of Coordinator of International 

Intellectual Property Enforcement, with responsibility for coordinating NIPLECC activities. Arif Alikhan, 

Senior Counsel to the Deputy Attorney General at the Department of Justice, serves as Deputy Coordinator. 

Together, Israel and Alikhan coordinate NIPLECC’s international work and the overall implementation of the 

Bush Administration’s STOP initiative. 

NIPLECC helps ensure that the Bush Administration’s intellectual property priorities are clear to 

Congress and the American public. In its annual report to Congress, NIPLECC describes the activities and 

actions taken by all NIPLECC members to improve the protection of intellectual property rights. NIPLECC 

also details the Department of Justice’s enforcement strategy and priorities and highlights many of its most 

significant intellectual property prosecutions for that year. In addition, the Department of Justice works 

through NIPLECC to coordinate its international training and outreach efforts with other federal agencies. 

B. Criminal Enforcement Efforts 

1. Computer Crime and Intellectual Property Section 

The Department of Justice has developed an effective nationwide anti-piracy and anti-counterfeiting 

effort anchored by the Criminal Division’s Computer Crime and Intellectual Property Section (“CCIPS”). 

CCIPS is a highly specialized team of 35 attorneys focused on computer crime and intellectual property 

offenses. With the support of Congress, CCIPS has nearly doubled in size over the past six years, and it now 

has 14 attorneys devoted exclusively to prosecuting intellectual property crimes and implementing the 

Department of Justice’s intellectual property enforcement program. These attorneys prosecute intellectual 

property cases, assist prosecutors in the field, and help develop and implement the Department of Justice’s 

overall anti-piracy strategy and legislative priorities. In addition to prosecuting their own cases, which have 

increased more than eight-fold in the last four years, CCIPS attorneys are available to agents and Assistant 

United States Attorneys (“AUSAs”) on a 24-hour basis to provide advice and guidance. 

CCIPS also places a high priority on fostering international cooperation and coordination in its intellectual property enforcement efforts. Building relationships between American law enforcement and our counterparts overseas is the most effective method of ensuring success in multi-national cases. These relationships 

are built through international casework as well as through training and outreach. Last year, CCIPS attorneys 
VI. How Has the Department of Justice Enforced and Protected Intellectual Property Rights?


met with more than 2,000 prosecutors, investigators, judges, and intellectual property experts from 94 countries to provide training and technical assistance on intellectual property enforcement. 

2. Computer Hacking and Intellectual Property Program 

As with all federal crime, primary responsibility for the prosecution of federal intellectual property offenses falls to the 94 United States Attorneys’ Offices across America. Under the CHIP Program, created by thenAttorney General Ashcroft in 2001, experienced and highly-trained federal prosecutors in the field aggressively address computer crime and intellectual property matters. 

“The CHIP Program is a vital part of the 

Department of Justice’s efforts to address the growing threat of cyber crime and intellectual property 

theft.” 

-Attorney General Alberto R. Gonzales, 

December 2, 2005 

a. CHIP Coordinators 

Prior to the creation of the CHIP Program, in

1995 the Department of Justice created the Computer 

& Telecommunications Coordinator (“CTC”) program to address concerns about the rising tide of computer crime. The United States Attorneys’ Offices designated at least one AUSA in each district as a CTC; 

depending on the needs of the particular region, some 

districts designated more than one prosecutor. In addition, a number of components and divisions within

the Department of Justice, such as the Tax Division, also designated CTCs for their respective organizations. 

In October 2004, the Task Force recommended that the Department of Justice change the CTC designation to “CHIP Coordinator” to clarify that intellectual property offenses were included within the responsibilities of these AUSAs and to align all 94 United States Attorneys’ Offices with the Attorney General’s 

CHIP Program. Identifying a CHIP Coordinator in each United States Attorney’s Office ensures that a prosecutor with training and experience in intellectual property crimes is available wherever and whenever an 

offense occurs. 

Under the CHIP Program, prosecutors are assigned four areas of responsibility: (1) prosecuting computer crime and intellectual property offenses; (2) serving as a technical advisor for other prosecutors and law 

enforcement agents; (3) assisting other CHIP Coordinators in multi-district investigations; and (4) providing 

training and community outreach regarding computer-related issues. 

b. CHIP Units 

In July 2001, the Department of Justice created ten CHIP Units to address the increasing threat of cyber 

crime and intellectual property offenses in specific regions of the country. CHIP Units are teams of speciallytrained AUSAs concentrated in a particular region. The CHIP Program was created to augment the number 

of prosecutors designated as CHIP Coordinators. The Department of Justice provided districts with additional funding to hire prosecutors and support personnel to form CHIP Units and to focus on fighting intellectual property and cyber offenses. The program was expanded in 2002 and 2004, including the effort in 

2004 to align the CTC program with the CHIP Program described above. There are currently more than 230 

CHIP Coordinators and CHIP Unit AUSAs within the Department of Justice. 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 19 
20 Progress Report of the Department of Justice’s Task Force on Intellectual Property 

United States Department of Justice


CHIP Unit AUSAs focus on prosecuting intellectual property offenses such as trademark violations, copyright infringement, and thefts of trade secrets. In addition, they prosecute high-technology offenses, including computer hacking, virus and worm proliferation, Internet fraud, and other attacks on computer systems. 

In addition to prosecuting cases, CHIP Unit AUSAs are also involved actively in training other prosecutors and federal agents on high-tech investigations, and they work closely with potential victims of intellectual property theft and cyber crime on prevention efforts. 

The first CHIP Unit was created in February 2000, in the United States Attorney’s Office in San Jose, 

California, to address cyber crime and intellectual property cases in the Silicon Valley area. Based on the success of the CHIP Unit in San Jose, in 2001 and 2002, then-Attorney General Ashcroft expanded the program 

to include the following 11 additional cities: 

� Alexandria, Virginia 

� Atlanta, Georgia 

� Boston, Massachusetts 

� Chicago, Illinois 

� Dallas, Texas 

� Kansas City, Missouri 

� Los Angeles, California 

� Miami, Florida 

� New York, New York (Brooklyn and Manhattan) 

� San Diego, California 

� Seattle, Washington 

In October 2004, the Task Force recommended that the Department of Justice create five more CHIP 

Units in: 

� Nashville, Tennessee 

� Orlando, Florida 

� Pittsburgh, Pennsylvania 

� Sacramento, California 

� Washington, D.C. 

In response, the Department of Justice subsequently provided additional funding to the United States 

Attorneys’ Offices in these cities to hire additional prosecutors to create the CHIP Units. 

In January 2005, the Department of Justice provided additional, full-time funding for three AUSAs to 

serve as CHIP Unit AUSAs in San Jose and Los Angeles, California. The creation of these three additional 

CHIP positions, as well as the creation of five additional CHIP Units in October 2004, implemented two of 

the recommendations of the 2004 Report. 
VI. How Has the Department of Justice Enforced and Protected Intellectual Property Rights?


c. Additional Accomplishment – Creation of Seven New CHIP Units in 2006 

The Task Force has recognized the success of the CHIP Program and determined that the Department of 

Justice should increase the number of CHIP Units and place them in additional regions. Accordingly, the Task 

Force recommended to the Attorney General that the Department of Justice create seven new CHIP Units in 

the following cities where cyber crime and intellectual property offenses are significant problems: 

� Austin, Texas 

� Baltimore, Maryland 

� Denver, Colorado 

� Detroit, Michigan 

� Newark, New Jersey 

� New Haven, Connecticut 

� Philadelphia, Pennsylvania 

The Attorney General has adopted this recommendation and initiated the creation of these seven new 

units. With the addition of these new CHIP Units the total number of CHIP Units will soon be 25. 

3. Office of Consumer Litigation 

The Civil Division’s Office of Consumer Litigation (“OCL”) is a team of specialized attorneys who handle criminal and civil cases involving intellectual property laws that protect public health and safety. For example, OCL attorneys enforce and defend the consumer protection programs of the Food and Drug 

Administration (“FDA”), the Federal Trade Commission, the Consumer Product Safety Commission, and the 

Department of Transportation’s National Highway Traffic Safety Administration. 

One particular area of concern to the protection of intellectual property rights and consumer safety is the 

regulation of drugs by the FDA. FDA officials have testified before Congress that the quality of drugs in this 

country is high and that the public can continue to have confidence that the drugs sold in the United States 

are authentic. To maintain this level of confidence, however, any allegations or information regarding the 

counterfeiting or adulteration of drug products must be taken very seriously. The use of counterfeit drugs can 

pose a direct threat to human health. Counterfeit drugs frequently contain less active material ingredient than 

claimed, wrong ingredients, or no active ingredient at all, which makes them less effective and possibly toxic. 

Even when the product in question contains the represented amount of the drug’s active ingredient, the situation can be dangerous because of factors such as quality control, distribution, and inventory control, all of 

which endanger the effectiveness of the drug. When the counterfeit product is relied upon to sustain life, a 

lack of effectiveness may result in deaths. In addition, increased drug resistance also can arise when counterfeit antibiotics lead doctors to increase dosages or otherwise misunderstand the nature of the drug they are 

administering. The potential dangers posed by counterfeit drugs may multiply in a health emergency; for 

example, in a flu pandemic, the opportunity for criminal counterfeiting may be significant. The demand for 

flu vaccine could vastly exceed legitimate supply and counterfeit flu vaccine could be sold over the Internet 

to unwary consumers in the United States. 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 21 
22 Progress Report of the Department of Justice’s Task Force on Intellectual Property 

United States Department of Justice


“The World Health Organization estimates that 10% of all available 

pharmaceuticals worldwide are counterfeit.” 

For more than 30 years, OCL attorneys have been involved in prosecuting purveyors of counterfeit drugs 

and medical devices. The Department of Justice’s recent efforts are reflected in prosecutions involving unlawful diversion of prescription drugs and the importation of counterfeit pharmaceuticals and drugs that are not 

manufactured according to approved standards. United States Attorneys’ Offices that receive these counterfeit cases often contact OCL to obtain advice and assistance, and OCL serves valuable functions in such matters. First, OCL helps ensure that federal prosecutors do not overlook important policy or factual concerns 

that frequently affect litigation under federal statutes. Second, OCL ensures that those prosecutors do not 

have to “reinvent the wheel” in conducting litigation, because OCL has jury instructions, briefs, and other 

pleadings to share. 

4. Federal Law Enforcement Agencies 

A number of federal law enforcement agencies work to safeguard intellectual property rights in the United 

States. The Federal Bureau of Investigation’s (“FBI”) intellectual property enforcement program is implemented and overseen by the Cyber Crime Fraud Unit (“FBI-CCFU”) in its Cyber Division in Washington, 

D.C. The FBI-CCFU focuses on intellectual property crimes having the most impact on national and economic security–including theft of trade secrets, Internet piracy, and trafficking in counterfeit goods. The FBICCFU’s goals include: 

� Increasing the number of intellectual property undercover operations and use 

of other sophisticated investigative techniques; 

� Developing new investigations through relationships with industry contacts 

and foreign law enforcement agencies; 

� Encouraging FBI field offices to utilize task forces with state and local law 

enforcement agencies to enhance cyber crime and intellectual property investigations; and 

� Continuing to educate and train domestic and foreign law enforcement agencies on intellectual property enforcement. 

In addition to overseeing implementation of the intellectual property program in the 56 FBI field offices 

nationwide, the FBI-CCFU also plays a central and coordinating role in intellectual property undercover 

operations that have multi-district and international targets. In these operations, FBI-CCFU provides administrative oversight and additional resources to ensure the coordination of international and domestic enforcement actions. Examples of such enforcement initiatives were Operations Fast Link and Site Down, referenced 

below. The FBI-CCFU also provides guidance and assistance to field agents and foreign legal attachés’ offices 

on intellectual property investigations generally, especially those targeting organized groups engaged in the 

large-scale manufacture and distribution of pirated software and other copyrighted materials over the Internet. 
VI. How Has the Department of Justice Enforced and Protected Intellectual Property Rights?


FBI Intellectual Property Indictments 

Fiscal Years 2003-2005 

140 

120 127 

100 

80 92 95 

60 

40 

20 

0 

2003 2004 2005 

FISCAL YEAR 

NUMBER OF INDICTMENTS 

The FBI’s intellectual property enforcement program 

has resulted in more investigations and more indictments in 

recent years. For instance, between Fiscal Year 2003 and 

Fiscal Year 2005, the number of open intellectual property 

investigations increased 22 percent, from 304 to 372 investigations per year, while the number of undercover investigations increased 87 percent. In addition, during the same 

time period, the number of indictments filed from intellectual property investigations increased 38 percent, from 92 

to 127. 

Apart from the FBI, other government agencies have jurisdiction to investigate certain intellectual property offenses, 

including the Department of Homeland Security’s United 

States Immigration and Customs Enforcement (“ICE”) and 

United States Customs and Border Protection (“CBP”). ICE 

and CBP, in conjunction with the National Intellectual 

Property Rights Coordination Center, work to identify and address growing intellectual property rights issues and 

criminal trends, particularly in shipments through ports of entry into the United States. ICE distributes that information to federal and state law enforcement through outreach and training as well as to foreign government and 

international law enforcement officials and prosecutors. Over the past few years, ICE investigators have seen an 

increase in the level of sophistication associated with the laundering and movement of money derived from the sale 

of counterfeit merchandise. In direct response to this growing problem, since 2001, ICE and CBP have initiated 

more than 31,000 seizures of counterfeit products with an estimated retail value in excess of $482 million. In addition, during that same five-year period, ICE has initiated more than 870 arrests for trafficking in counterfeit goods 

and related crimes that resulted in more than 455 federal criminal indictments and more than 495 convictions. 

Finally, in addition to the FBI, ICE, and CBP, a number of other federal agencies investigate intellectual 

property offenses, whether on their own or as part of task forces, including the United States Postal Service 

and the United States Secret Service. The FDA’s Office of Criminal Investigations has primary responsibility 

for all criminal investigations conducted by the FDA, which include investigations of suspected tampering 

incidents and suspected counterfeit products. For instance, its agents investigate cases involving counterfeit, 

misbranded, and adulterated pharmaceuticals in violation of federal drug laws. 

5. Victim-Industry Partnerships 

The Department of Justice recognizes that a successful and comprehensive plan of attack against intellectual property theft requires the formation of partnerships with the victims and potential victims of intellectual 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 23 
24 Progress Report of the Department of Justice’s Task Force on Intellectual Property 

“Without the assistance of victims, it is difficult, 

if not impossible, for the Department of Justice 

to enforce the law and apprehend offenders.” 

- Intellectual Property Task Force Vice 

Chairman Arif Alikhan, April 27, 2006 	

United States Department of Justice
 

property theft. Without the assistance of victims, it is difficult, if not impossible, for the Department of Justice to 

enforce the law and apprehend offenders. Consequently, 

the Department of Justice has formed important partnerships with various organizations that have joined the 

fight against intellectual property theft. The Chamber of 

Commerce has formed a broad-based “Coalition Against 

Counterfeiting and Piracy” (“CACP”), which works with 

Congress and the Bush Administration to raise awareness 

about the negative impact of counterfeiting. The Department of Justice has 

formed a constructive partnership with the CACP to address intellectual property 

concerns and sponsor awareness events. 

The Department of Justice has also formed important partnerships with 

other groups that represent victims and potential victims of intellectual property theft, including the Motion Picture Association, the Recording Industry 

Association of America, the Business Software Alliance, the Electronic Software 

Association, pharmaceutical industry associations, and many other organizations. In addition, the Department of Justice has formed a close partnership 

with Court TV, which has filmed and broadcast several Department of Justice events regarding intellectual 

property. These organizations provide important insight into the problems of intellectual property theft and 

have joined the Department of Justice in sponsoring prevention and awareness events throughout the Nation. 

To assist these victims and others in reporting intellectual property crimes, the Department of Justice 

developed “A Guide for Victims of Counterfeiting, Copyright Infringement, and Theft of Trade Secrets,” 

which is set forth in Appendix B. 

6. Statistical Accomplishments 

The impact of the increased efforts by the Department of Justice to protect intellectual property rights can be 

seen not only by the breadth of its programs and by the aggressive focus on this issue, but also by the impressive 

results in Department of Justice prosecutions. The Department of Justice has prosecuted significantly more defendants for intellectual property offenses since the issuance of the Task Force’s Report in October 2004. During Fiscal 

Year 2005, 350 defendants were charged with intellectual property offenses, nearly double the 177 defendants 

charged in Fiscal Year 2004–representing a 98 percent increase. A similar increase occurred in districts with CHIP 

Units, where the number of charged defendants climbed from 109 in Fiscal Year 2004 to 180 in Fiscal Year 2005–a 

65 percent increase. In addition, the number of cases filed and defendants charged in all districts between Fiscal 

Years 2001 and 2005 has steadily risen over time, as depicted in the accompanying graph on the following page. 

These results reflect, in a meaningful way, that the Department of Justice is committed to protecting intellectual 

property rights. 

7. Intellectual Property Prosecution Highlights 

As the preceding statistical analysis demonstrates, the Department of Justice has brought many significant prosecutions against intellectual property thieves since the Task Force issued its report in October 2004. The cases 
VI. How Has the Department of Justice Enforced and Protected Intellectual Property Rights?


All Districts 

2001 2002 2003 2004 2005 0 

50 

100 

150 

200 

250 

300 

350 

400 

FISCAL YEAR 

NUMBER OF CRIMINAL CASES/DEFENDANTS

152 

201 

131 

217 

162 

245 

129 

177 169 

350 

CASES 

DEFENDANTS 

Districts with Computer Hacking and 

Intellectual Property Units ("CHIP" Units) 

CASES 

DEFENDANTS 

20 

60 

80 

100 

120 

160 

180 

200 

NUMBER OF CRIMINAL CASES/DEFENDANTS 

40 

140 

2001 2002 2003 2004 2005 

FISCAL YEAR 

0 

62 

61 

105 

88 

77 

128 

75 

109 

80 

180 

These graphs include data on any and all criminal cases/defendants where 

the following charges were brought as any charge against a defendant: 

17 U.S.C. 1201 to 1205 (circumvention of copyright protection systems); 

18 U.S.C. 1831 (economic espionage); 18 U.S.C. 1832 (theft of trade secrets); 

18 U.S.C. 2318 (counterfeit labeling); 18 U.S.C. 2319 (criminal copyright infringement); 18 U.S.C. 2319A (live musical performance infringement); 

18 U.S.C. 2320 (trafficking in counterfeit goods); or 47 U.S.C. 553 and 605 

(signal piracy). However, the statutes were run together to eliminate any 

double counting of cases/defendants where more than one of the statutes 

was charged against the same defendant. This chart may not include criminal cases/defendants involving these offenses where the charges filed included only a conspiracy to violate any of the identified offenses. In addition, 

the data does not include month of September 2005 information for the 

Eastern District of Louisiana due to Hurricane Katrina. 

Source: Executive Office for United States Attorneys 

Source: Executive Office for United States Attorneys 

include prosecutions of defendants trafficking in counterfeit pharmaceuticals, of unauthorized distribution of 

copyrighted material, and of violations of the federal 

trademark laws. Some of the more notable cases include: 

Counterfeit Pharmaceuticals 

Cholesterol Medication – The Department of Justice 

obtained convictions against eight people for selling 

counterfeit Lipitor tablets, a drug widely used to reduce cholesterol, and 13 people are awaiting trial in 

Kansas City, Missouri, for their alleged participation 

in a $42 million conspiracy to sell counterfeit, illegally imported, and misbranded Lipitor and other drugs. 

More than $2.2 million has been forfeited. 

Antibiotics – In May 2005, the Department of 

Justice obtained the conviction of a former president 

of an Italian drug firm for violating the Federal Food, 

Drug, and Cosmetic Act by introducing an unapproved copy of the antibiotic Cefaclor. The defendant 

was sentenced to a year in confinement, fined 

$16,481,000, and required to forfeit $300,000. The 

corporate defendant pleaded guilty and paid criminal 

and civil penalties of more than $33 million. 

The Center for Medicines in the Public Interest projects 

that counterfeit pharmaceutical revenues could grow from 

$35 billion in 2004 to $75 billion worldwide by 2010. 

Viagra and Cialis – In February 2006, the Department of Justice obtained a conviction in Houston 

against a United States citizen for importing from 

China counterfeit pharmaceuticals bearing the Viagra 

and Cialis trademarks. ICE Special Agents conducted 

an undercover operation in Beijing, China, involving 

the Internet site bestonlineviagra.com. The Internet 

site was owned and used by the defendant to distribute bulk quantities of counterfeit Viagra and Cialis 

manufactured in China. Chinese officials cooperated 

in the investigation, and 11 additional individuals in 

China were arrested by Chinese authorities for manufacturing and distributing counterfeit drugs. 

Chinese officials seized 600,000 counterfeit Viagra 

labels and packaging, 440,000 counterfeit Viagra and 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 25 
26 Progress Report of the Department of Justice’s Task Force on Intellectual Property 

United States Department of Justice


“Our message to criminals who seek to profit 

from the intellectual property of honest and 

hard-working American citizens and businesses 

is clear: There is nothing fake about our commitment to prosecute counterfeiters and

pirates.” 

- Attorney General Alberto R. Gonzales, 

November 10, 2005 

Cialis tablets, and 260 kilograms of raw materials

used to manufacture counterfeit pharmaceuticals. 

Viagra – In January 2005, the Department of 

Justice obtained the conviction of a Los Angeles 

man for manufacturing, importing, and distributing over 700,000 counterfeit Viagra tablets, valued 

at more than $5.5 million, over a four-year period. 

Terrorism and Organized Crime 

Terrorist Financing – In March 2006, a federal indictment was unsealed in Detroit charging 19 individuals with operating a racketeering enterprise that supported the terrorist organization Hizballah. The 

defendants are alleged to have financed their criminal enterprise by trafficking in counterfeit Viagra, by 

trafficking in counterfeit Zig-Zag papers and contraband cigarettes, and by producing counterfeit cigarette tax stamps. 

Organized Crime – Yi Ging Organization – In April 2006, the Department of Justice obtained convictions against two Chinese nationals as part of a crackdown against a violent criminal group in New York 

known as the Yi Ging Organization. These defendants had been included, along with 39 others, in a 

September 2005 indictment charging racketeering offenses, including extortion, witness tampering, trafficking in counterfeit DVDs and CDs, money laundering, operating a large-scale illegal gambling business, and drug trafficking. The Yi Ging Organization allegedly generated millions of dollars in profits 

from their counterfeit DVD and CD business. Gang members traveled to China to obtain illegal copies 

of American and Chinese DVDs, which they then smuggled into the United States, copied, and sold 

along with pirated music CDs at stores the gang controlled in Manhattan and other parts of New York 

City. 

Organized Crime – Operation Smoking Dragon – In Los Angeles, the Department of Justice obtained 

indictments against 30 defendants in August 2005 for allegedly, among other things, trafficking in counterfeit cigarettes and pharmaceuticals as part of Operation Smoking Dragon. 

Software, Movie, and Music Piracy 

International Enforcement Operations – The Department of Justice led the largest ever international 

enforcement efforts against organized online piracy in Operation FastLink and Operation Site Down. Each of 

these undercover operations by the FBI, involved coordinated law enforcement action among 12 countries and 

targeted elite, criminal organizations,

known as “warez release groups,” which are 

the first to provide pirated works on the 

Internet. Law enforcement agents conducted more than 200 searches and arrested 

numerous people worldwide, seized hundreds of thousands of pirated works conservatively valued at more than $100 million, 

“We will not be stopped by international borders in our 

vigorous pursuit of the technological pirates who steal products and profits from hard-working Americans.” 

- Assistant Attorney General for the Criminal Division, 

Alice S. Fisher, October 25, 2005 
VI. How Has the Department of Justice Enforced and Protected Intellectual Property Rights?


and eliminated more than 20 major online distribution centers. To date, the Department of Justice has obtained 

convictions against 60 people in the United States on criminal copyright infringement charges. 

Illegal Manufacturing of DVDs in China – In the first joint criminal intellectual property investigation 

by the United States and China, known as Operation Spring, the Department of Justice obtained a conviction against the ringleader in a conspiracy to import 2,000 counterfeit DVDs of motion pictures. The 

defendant was convicted in China, along with three other co-conspirators, for selling more than 133,000 

pirated DVDs to customers in more than 20 countries. After returning to the United States, the defendant was convicted again in Mississippi, sentenced to 45 months in prison, and ordered to forfeit more 

than $800,000. 

Optical Disc Piracy – Operation Remaster – On April 3, 2006, the Department of Justice obtained convictions against two California men who pleaded guilty to conspiracy to mass-produce pirated music and 

software CDs. The two men were among five arrested as part of an undercover investigation targeting 

large-scale suppliers of pirated music and software. Agents seized nearly half a million pirated CDs and 

5,500 high-speed, high-quality stampers used to make bootleg products. The recording industry called 

Operation Remaster the largest music manufacturing piracy seizure in United States history. 

Online Music Piracy – On May 19, 2006, the Department of Justice obtained sentences of up to 15 

months for three members of pre-release music piracy groups. Two of the defendants belonged to the 

Internet piracy group Apocalypse Crew, also known as “APC,” and the third to the group Chromance, 

also known as “CHR.” Both groups sought to acquire digital copies of songs and albums before their commercial release in the United States, which they would then prepare for distribution to secure computer 

servers throughout the world. The stolen songs were then distributed globally and, within hours, filtered 

down to peer-to-peer and other public file-sharing networks. 

Peer-to-Peer Piracy – Operation Gridlock – In January 2005, the Department of Justice obtained the 

first-ever criminal convictions for piracy through peer-to-peer networks when two operators of Direct 

Connect distribution centers pleaded guilty in Washington, D.C., to charges of conspiracy to commit 

criminal copyright infringement. Four defendants were convicted as a result of this FBI undercover investigation, code-named Operation Gridlock. 

In 2004, the Business Software Alliance estimates that the 

United States lost over $6.5 billion due to software piracy. 

Counterfeit Software – In December 2005, 

the Department of Justice obtained convictions against a California man in Alexandria, 

Virginia, for selling copies of copyrighted software through his website, www.ibackups.net, and through the United States mail. The man sold, at prices 

substantially below the suggested retail price, more than $25 million in software products that were manufactured by Adobe Systems Inc., Macro-media, Inc., Microsoft Corporation, Sonic Solutions, and 

Symantec Corporation. He is believed to be the most prolific online commercial distributor of pirated 

software ever convicted in the United States. 

First Federal Camcording Conviction – In June 2005, a jury convicted a former Hollywood, California, 

resident of eight federal criminal charges, including three counts of copyright infringement, related to his 

use of a video camcorder to covertly film the motion pictures “The Core,” “8 Mile,” and “Anger ManageProgress Report of the Department of Justice’s Task Force on Intellectual Property 27 
28 Progress Report of the Department of Justice’s Task Force on Intellectual Property 

United States Department of Justice


ment” at private screenings for the purpose of making money. The defendant fled from the custody of his 

attorney on the evening of his last scheduled trial in 2003 and remained a fugitive for 16 months until 

the United States Marshals Service apprehended him in Florida. 

Movie Piracy – Operation Copycat – On April 6, 2006, the Department of Justice obtained charges 

against five individuals who were “first-providers” of stolen movies on the Internet. Operation Copycat, a 

San Jose-based FBI undercover investigation, was one of three investigations contributing to Operation 

Site Down. The Department of Justice has obtained charges against 36 individuals and convicted 28, 

including the first convictions under the newly enacted Family Entertainment and Copyright Act for 

camcording movies and distributing pre-release works on the Internet. 

“By stealing the creative product of talented people, 

this form of piracy deprives artists of the rewards they 

deserve. If left unchecked, such crime would drain the 

incentive to create that enriches our lives.” 

- Deputy Attorney General Paul J. McNulty, 

February 28, 2006 

Trafficking in Pirated Movies – Operation 

Western Pirates – On November 23, 2005, 

two men were convicted by a Puerto Rico jury 

for copyright infringement and trafficking in 

pirated motion pictures. The convictions

resulted from Operation Western Pirates, an

FBI movie piracy investigation in which

approximately 50,000 pirated motion pictures 

in DVD and VHS format were seized from

more than 25 locations in western Puerto Rico, including 23 video rental stores and three laboratories 

where employees manufactured the pirated movies. Agents also seized more than $125,000 in currency and 

approximately 450 pieces of computer and other electronic equipment. 

Satellite Signal Theft 

DMCA Prosecution – In June 2005, the Department of Justice obtained the conviction of a New York 

man who violated the Digital Millennium Copyright Act (“DMCA”) and mail fraud statutes by reprogramming Smart Cards to steal satellite programming from DISH Network. DISH Network electronically “scrambles” its satellite transmissions to prevent unauthorized viewing of its programming and, in 

order to receive services, its customers must purchase or lease satellite equipment that include Smart Cards 

inserted into the satellite receiver. The defendant sold approximately $308,000 of reprogrammed Smart 

Cards to others across the United States. 

Luxury Goods 

Trafficking in Counterfeit Hard Goods – In November 2005, the Department of Justice obtained 

indictments against four Massachusetts residents for laundering money and trafficking in more than 

30,000 counterfeit luxury handbags and wallets, as well as the materials needed to make the counterfeits, 

worth more than $1.4 million. The defendants were alleged to have used 13 self-storage units in 

Massachusetts as the home base for one of New England’s largest counterfeit goods operations, and they 

allegedly sold the counterfeit wallets and handbags at flea markets and to smaller gatherings at approximately 230 “purse parties” throughout the state. 
VI. How Has the Department of Justice Enforced and Protected Intellectual Property Rights?


Trade Secrets 

Ohio Theft of Trade Secrets: The Department of Justice obtained convictions against an executive of an 

Ohio hydraulic pump manufacturer and a subsidiary of a South African competitor who stole the Ohio 

company’s trade secrets. While still an employee of the Ohio company, the executive secretly assisted the 

South African subsidiary company by sharing financial and other confidential information in order to 

assist the competitor in establishing United States operations. The executive held clandestine meetings 

with representatives of the competitor in South Africa and elsewhere, and gave them surreptitious and 

unauthorized tours of the victim company’s manufacturing facility. 

Kentucky Theft of Trade Secrets: In April 2006, the Department of Justice obtained a 48-month prison 

sentence against a Kentucky man for conspiring to steal and sell trade secrets belonging to Corning, Inc. 

The defendant, while a Corning employee, stole drawings of Corning’s Thin Filter Translator Liquid 

Crystal Display (“LCD”) glass and sold the drawings to a corporation based in Taiwan that intended to 

compete with Corning in the production of LCD glass. 

C. Legislative Efforts 

Since the Task Force issued its report in October 2004, the Department of Justice has worked diligently 

with the Congress to enact legislation to further protect intellectual property rights. The 2004 Report listed 

several principles regarding legislation and, in several instances, Congress adopted those principles in drafting 

legislation. In addition, the Department of Justice developed a legislative package that was sent by the 

Administration to the Congress to further enhance intellectual property enforcement and protection. Set 

forth below are the three new laws passed since October 2004, and details of the legislative package proposed 

by the Administration. 

Intellectual Property Protection and Courts Amendments Act of 2004 (H.R. 3632) 

The Department of Justice supported the passage of the Intellectual Property Protection and Courts 

Amendment Act (H.R. 3632), which advanced the goal, set forth in the 2004 Report, of thwarting the distribution of counterfeit products and authorizing the seizure of the materials and equipment used to make 

them. The legislation expanded a previous law, which prohibited trafficking in counterfeit labels for copyrighted works, to also prohibit the trafficking in genuine but unauthorized labels. In addition, the legislation 

allowed the government to seize the equipment used in producing the counterfeit and illicit labels. The Bush 

Administration supported the legislation and offered suggestions for its improvement. The President signed 

the legislation on December 23, 2004. 

Family Entertainment and Copyright Act of 2005 (S. 167) 

In 2005, Congress enacted the Family Entertainment and Copyright Act of 2005 (S. 167). This legislation amended the federal criminal code to prohibit the knowing or attempted use of a video camera, or other 

audio-visual recording device, to make or transmit a copy of a motion picture or other copyrighted audiovisual work from a performance of such work in a movie theater or similar venue without authorization. The 

law established a maximum sentence of three years in prison for a first offense. The legislation also required 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 29 
30 Progress Report of the Department of Justice’s Task Force on Intellectual Property 

United States Department of Justice


the court to order the forfeiture and destruction of all unauthorized copies of the motion picture and any 

equipment used to carry out the violation. With reasonable cause, the owner, lessee, or employee of a theater 

is authorized to detain, in a reasonable manner for a reasonable time, suspected violators for questioning or 

to contact law enforcement. 

In addition, this legislation established criminal penalties for the act of willful copyright infringement through 

distribution of certain copyrighted works being prepared for commercial distribution–including movies, software, 

games, and music–by making them available on a computer network accessible to members of the public, if the 

person knew, or should have known, that the work was intended for commercial distribution. Finally, the legislation directed the United States Sentencing Commission to review and potentially amend its guidelines for intellectual property crimes. 

This legislation, and the related amendments to the United States Sentencing Guidelines, furthered two 

key principles identified in the 2004 Report: (1) the passive sharing of copyrighted works for unlawful distribution should be treated as the distribution of those works and should, where appropriate, be subject to 

prosecution; and (2) copyright law should recognize the premium value of a copyrighted work before the work 

is released for sale to the general public. A copy of a copyrighted work is more valuable before it can be legitimately obtained by anyone else. In such situations, not only is the “pre-release” copy more valuable, but it 

can also permit the holder to distribute copies as early as–or before–the copyrighted work’s legitimate owner. 

As a result, although pre-release copies of a copyrighted work may not have a quantifiable retail value, they 

can be the most valuable copies of all, and their distribution can severely damage the rights holder. 

The President signed the Family Entertainment 

and Copyright Act into law in April 2005. As a 

result, the United States Sentencing Commission 

amended the United States Sentencing Guidelines 

to provide for an added penalty in cases involving a 

pre-release copyrighted work. The Bush 

Administration supported the passage of this legislation and the Department of Justice provided technical assistance to the Congress and the United 

States Sentencing Commission. 

Stop Counterfeiting in Manufactured Goods Act (H.R. 32) 

Based on the principles set forth in the 2004


Report, the Stop Counterfeiting in Manufactured


Goods Act (H.R. 32) modified the federal criminal 

law relating to the trafficking in counterfeit goods and 

services by prohibiting trafficking in labels, documents, or packaging that bear counterfeit marks 

intended for goods or services. The legislation also 

expanded the definition of “trafficking” to include distribution of counterfeits for a wider variety of comPresident George W. Bush signs H.R. 32, the Stop Counterfeiting in 

Manufactured Goods Act, during ceremonies March 16, 2006, in the 

Eisenhower Executive Office Building. Looking on are, from left: 

Secretary Carlos Gutierrez, Department of Commerce; Secretary 

Elaine Chao, Department of Labor; Attorney General Alberto R. 

Gonzales, Department of Justice; U.S. Rep. Jim Sensenbrenner (RWis.); U.S. Rep. Joe Knollenberg (R-Mich.), and U.S. Rep. Bobby 

Scott (D-Va.). White House photo by Kimberlee Hewitt. 
VI. How Has the Department of Justice Enforced and Protected Intellectual Property Rights?


“I will sign a bill that protects the hard work of


American innovators, strengthens the rule of law,


and helps keep our families and consumers safe.”


- President George W. Bush,


March 16, 2006


“This legislative package, if enacted, would 

strengthen penalties for repeat copyright criminals, expand criminal intellectual property protection, and add critical investigative tools for 

both criminal and civil enforcement.” 

- Attorney General Alberto R. Gonzales, 

November 10, 2005 

mercial purposes than was covered previously. Moreover,


the legislation criminalized the possession of counterfeits

with intent to distribute, as well as the importation and

exportation of counterfeit goods. Finally, the statute subjected to forfeiture any article that bears or consists of a


counterfeit mark, and any property derived from proceeds 

or used in the commission of the violation. The legislation 

was signed into law by President Bush on March 16,


2006.


Intellectual Property Protection Act 

In addition to the three already-enacted legislative

packages relating to intellectual property, the Department of Justice has developed draft legislation, known as 

the Intellectual Property Protection Act of 2005, to further the goals established in the 2004 Report. This proposed legislation is designed to advance three general

objectives. First, it would toughen penalties for intellectual property crimes by: 

�

Progress Report of the Department of Justice’s Task Force on Intellectual Property 31 
32 Progress Report of the Department of Justice’s Task Force on Intellectual Property 

United States Department of Justice


Third, the bill would add needed investigative tools for criminal and civil enforcement by: 

� Amending civil copyright law to parallel civil trademark law by permitting civil litigants to obtain ex parte seizure orders for records or evidence in civil cases; and 

� Amending 18 U.S.C. § 2516 to include, as predicate offenses necessary to obtain 

wire or oral intercepts, the crimes of economic espionage to benefit a foreign 

government, criminal copyright infringement, and trafficking in counterfeit 

goods or services. 

The Intellectual Property Protection Act is an important legislative effort because it encourages the adoption of vital principles set forth in the 2004 Report, including the following: 

� As with other laws involving intellectual property, an attempt to violate the 

criminal copyright statute should be a violation without regard to whether it is 

successful. 

Unlike the federal criminal trademark statute, the criminal copyright statute 

presently does not criminalize attempted violations. It is a general tenet of 

criminal law, however, that those who attempt to commit a crime are as morally culpable as those who succeed in doing so. 

� Law enforcement officers should have access to the full range of accepted law 

enforcement tools when they investigate intellectual property crimes that pose 

a serious threat to public health or safety. 

A federal court may issue an order authorizing the use of a wire or voice intercept, otherwise known as a “wiretap,” in the investigation of many federal 

crimes, including the theft of interstate shipments, but not for intellectual 

property crimes. Although there are good reasons to restrict the use of wiretaps 

in deference to individual privacy rights, some intellectual property crimes 

present a serious danger to public health or safety. Trademark violations, for 

instance, may involve the distribution of counterfeit goods that are defective 

and prone to causing widespread consumer injuries. 

The Department of Justice’s Task Force recommends that the Congress enact the Intellectual Property 

Protection Act at its earliest opportunity. 

International Treaties 

With the globalization of the economy and the rise of digital commerce, intellectual property crimes have 

crossed international borders with increasing frequency. To account for this trend, the United States has signed 

two treaties that currently are pending before the Senate: The United Nations Convention Against 

International Organized Crime, and the Council of Europe Convention on Cybercrime. These treaties would 

facilitate international cooperation in halting some of the most egregious crimes involving intellectual property. To further international cooperation and enforcement efforts, the Department of Justice supports the rat-
VI. How Has the Department of Justice Enforced and Protected Intellectual Property Rights?


ification of these treaties, but the Senate has not yet voted on them. The Task Force continues to recommend 

the expeditious ratification of both treaties. 

D. Civil Enforcement Efforts – Civil Division 

The Department of Justice combats intellectual property theft most visibly through enforcement of the 

Nation’s criminal laws. The successful defense of intellectual property rights, however, also requires vigorous 

enforcement by the owners of intellectual property through the civil justice system. 

The Department of Justice has filed numerous briefs, known as “amicus” or “friend-of-the-court” briefs, 

in the Supreme Court and lower courts supporting the maintenance and implementation of robust intellectual property rights. The Department of Justice also intervenes in appropriate cases to become a party in the 

litigation, thus promoting legal precedents that enforce intellectual property rights fairly and consistently. In 

these ways, the Department of Justice plays a vital role in promoting a legal environment that protects creativity and innovation. The Civil Division employs 14 lawyers devoted solely to intellectual property, as well 

as numerous appellate attorneys who assist with amicus filings as needed. 

“The Department of Justice takes intellectual property issues seriously, and we are doing something 

about them, both criminally and civilly.” 

- Associate Attorney General Robert D. 

McCallum, Jr., March 2, 2006 

Through these components, the Department of

Justice also monitors civil enforcement developments 

that may hamper the ability of victims of intellectual 

property theft to use the civil courts effectively to defend 

themselves. For example, the Department of Justice 

actively consults with the USPTO and the United States 

Copyright Office about intellectual property cases. The 

Department of Justice also regularly reviews intellectual property trade publications, such as the Bureau of 

National Affairs’ Patent, Trademark, and Copyright Journal, and the United States Patents Quarterly’s advance 

sheets, to determine if any private lawsuits merit involvement by the Department of Justice. 

Since October 2004, the Department of Justice has filed 13 amicus briefs in the Supreme Court in cases 

involving intellectual property rights, and more than a dozen amicus briefs and Statements of Interest in lower 

courts. These filings occurred in cases that affect numerous high-tech industries, including pharmaceuticals, 

biotechnology, and online commerce. In many of these cases, courts have adopted the arguments made by the 

Department of Justice and consequently expanded protections for owners of intellectual property rights. 

Detailed explanations of these cases are set forth below in the Civil Recommendation section of this Progress 

Report. 

E. Antitrust Enforcement Efforts – Antitrust Division 

The Antitrust Division of the Department of Justice, the component charged with enforcing the federal 

antitrust laws, does not directly enforce intellectual property rights. But intellectual property plays an increasingly important role in the Department of Justice’s antitrust merger and non-merger civil investigations. 

Intellectual property is an asset that can be bought, sold, and leased or licensed in much the same fashion as 

any other property. The Department of Justice therefore applies antitrust principles that give the same respect 

to intellectual property as to other forms of tangible or intangible property, taking into account special characteristics of intellectual property, such as the ease with which it can be misappropriated. Using this approach, 

the Department of Justice avoids creating intellectual property-specific rules that could conflict with normal 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 33 
34 Progress Report of the Department of Justice’s Task Force on Intellectual Property 

United States Department of Justice


business expectations, lead to marketplace uncertainty, or erode the value of intellectual property rights over 

time. 

“Our systems of effective antitrust enforcement and 

strong intellectual property rights protection complement each other—they each foster dynamic competition that generates lower prices, greater innovation, and wider choice, which makes consumers 

better off.” 

- Assistant Attorney General for the 

Antitrust Division, Thomas O. Barnett, 

May 15, 2006 

The Department of Justice promotes respect for 

intellectual property rights in the administration of 

antitrust law through international competition advocacy, as explained later in this Progress Report. 

Domestically, the Department of Justice engages in 

competition advocacy through public hearings, workshops, speeches, research, and academic publishing by 

its attorneys and economists (in the Antitrust Division’s 

Economic Analysis Group), and through participation 

in court cases as amicus curiae. 

Since the issuance of the 2004 Report, the United States has appeared as amicus in numerous antitrust 

cases involving intellectual property. The Supreme Court followed the recommendation of the United States 

in two such cases: Illinois Tool Works, Inc. v. Independent Ink, Inc., 126 S. Ct. 1281 (2006), and Monsanto Co. 

v. McFarling, 125 S. Ct. 2956 (2005), which are described in more detail later in this Progress Report in the 

Civil Recommendation section. 

The Department of Justice continues to participate as amicus in cases where the interplay of intellectual 

property and antitrust law presents an opportunity to strengthen or clarify intellectual property rights. In 

addition, the Department of Justice routinely reviews and comments on proposed legislation that involves 

issues at the intersection of antitrust and intellectual property, or that may influence incentives to engage in 

competition or innovation. 

The Antitrust Division also provides trade associations and other business organizations a business review 

procedure to receive guidance from the Department of Justice regarding the scope, interpretation, and application of the antitrust laws to proposed conduct, including activities involving intellectual property rights. 

Under that procedure, persons concerned, for example, about whether a particular proposed standard-setting 

activity is legal under the antitrust laws may ask the Department of Justice for a statement of its current 

enforcement intentions with respect to that conduct. When sufficient information and documents are submitted to the Department of Justice, it will make its best effort to resolve the business review request within 

60 to 90 days. In this way, the Department of Justice can protect competition while at the same time facilitating efficient business arrangements that enable intellectual property owners to protect their rights. 

F. International Efforts — Free Trade Agreements 

Since the 2004 Report was issued, the Department of Justice has worked closely with the United States 

Trade Representative (“USTR”) on interagency development of trade policy issues affecting competition and 

intellectual property rights and on participation in negotiations concerning Free Trade Agreements (“FTAs”) 

with foreign trading partners. The most recent negotiations concerned FTAs with Australia, South Korea, and 

Thailand. To enhance the Department of Justice’s involvement in the process, Department of Justice attorneys in the Antitrust, Civil, and Criminal Divisions have undertaken a comprehensive review of existing FTAs 
VI. How Has the Department of Justice Enforced and Protected Intellectual Property Rights?


and proposed a series of recommendations to USTR to strengthen support for intellectual property rights 

enforcement in the intellectual property rights chapters of FTAs and other trade pacts. After a series of discussions, USTR adopted several of the Department of Justice’s recommendations, including: (1) revising language to ensure that foreign courts have the authority to order infringers to provide intellectual property owners with access to information relevant to an infringement; (2) adding language to ensure that FTA partners 

adopt policies or guidelines that encourage their courts to impose penalties, including sentences of actual 

imprisonment, at levels sufficient to constitute a deterrent to intellectual property theft; (3) expanding language to ensure that FTA partners provide for presumptions in civil, criminal, and administrative proceedings 

that intellectual property rights are valid and enforceable; (4) ensuring that foreign courts have the authority 

to order the infringer to pay the intellectual property rights holder’s attorney’s fees and other litigation costs; 

and (5) restricting the ability of FTA partners to order compulsory licensing of patents and clarifying that 

patents should not be presumed to create antitrust market power. The Department of Justice recognizes the 

importance of strengthening intellectual property rights through international agreements, and it will continue to work closely with USTR on an ongoing basis. 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 35 

VII. What is the Status of the Intellectual Property Task Force’s 

Recommendations? 

Immediately after the 2004 Report was released in October 2004, the Department of Justice began implementing the recommendations of the Task Force. For example, the Department of Justice immediately distributed the funding necessary to create five new CHIP Units and to supplement the prosecutors in the 

Central and Northern Districts of California. In addition, the Department of Justice began implementing 

many of the long-term recommendations, including drafting a package of legislative proposals consistent with 

the principles set forth in the 2004 Report. 

In February 2005, Attorney General Alberto R. Gonzales renewed the Department of Justice’s commitment to the Task Force by appointing new members. Importantly, he announced that the Department of 

Justice would implement all of the 2004 Report’s recommendations and would continue to enforce aggressively federal intellectual property laws. As of this publication, the Department of Justice has implemented all 

31 of the recommendations contained in the 2004 Report. 

The Task Force formed an Executive Staff of experts from throughout the Department of Justice to implement the recommendations and draft this Progress Report. The following sections set forth each of the recommendations and indicate their status as follows: 

� IMPLEMENTED – the Department of Justice has fully implemented the recommendation. 

� IMPLEMENTED AND ONGOING – the Department of Justice has implemented the 

recommendation, which requires an ongoing commitment and action. 

A. CRIMINAL ENFORCEMENT RECOMMENDATIONS 

Enforcement of the criminal intellectual property laws is one of the Department of Justice’s highest priorities. The Attorney General has stated on several occasions that criminal enforcement is an important and 

essential effort in the fight against intellectual property theft. 

The Department of Justice prosecutes criminal cases involving the theft of copyrighted works, trademark 

counterfeiting, and thefts of trade secrets. Many divisions and offices of the Department of Justice participate 

in the enforcement of intellectual property laws, including federal prosecutors located throughout the Nation. 

These prosecutors work closely with local, State, and federal law enforcement agents to identify criminals and 

prosecute them in accordance with the law. While the Department of Justice has successfully prosecuted 

numerous intellectual property cases over the past several years, the Task Force concluded that additional success was possible. Accordingly, the Task Force made recommendations to further expand and strengthen the 

fight against intellectual property crime. Those recommendations and their status are set forth below. 

(1) Create five additional Computer Hacking and Intellectual Property (“CHIP”) Units 

in regions of the country where intellectual property producers significantly contribute 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 37 
United States Department of Justice
 

to the national economy. These areas are the District of Columbia; Sacramento, 

California; Pittsburgh, Pennsylvania; Nashville, Tennessee; and Orlando, Florida; 

STATUS: IMPLEMENTED 

(2) Reinforce and expand existing CHIP Units located in key regions where intellectual 

property offenses have increased, and where the CHIP Units have effectively developed 

programs to prosecute CHIP-related cases, coordinate law enforcement activity, and promote public awareness programs; 

STATUS: IMPLEMENTED 

(3) Designate CHIP Coordinators in every federal prosecutors’ office and make the coordinators responsible for intellectual property enforcement in that region; 

STATUS: IMPLEMENTED 

(4) Examine the need to increase resources for the Computer Crime and Intellectual 

Property Section of the Criminal Division in Washington, D.C., to address additional 

intellectual property concerns; 

STATUS: IMPLEMENTED 

(5) Recommend that the FBI increase the number of Special Agents assigned to intellectual property investigations, as the Department of Justice itself increases the number of 

prosecutors assigned to intellectual property enforcement concerns; 

STATUS: IMPLEMENTED AND ONGOING 

(6) Recommend that the FBI increase the number of personnel assigned to search for 

digital evidence in intellectual property cases; 

STATUS: IMPLEMENTED AND ONGOING 

(7) Dismantle and prosecute more nationwide and international criminal organizations 

that commit intellectual property crimes; 

STATUS: IMPLEMENTED 

(8) Enhance programs to train prosecutors and law enforcement agents investigating 

intellectual property offenses; 

STATUS: IMPLEMENTED 

38 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
VII. What is the Status of the Intellectual Property Task Force’s Recommendations?
 

(9) Prosecute aggressively intellectual property offenses that endanger the public’s health 

or safety; 

STATUS: IMPLEMENTED AND ONGOING 

(10) Emphasize the importance of charging intellectual property offenses in every type 

of investigation where such charges are applicable, including organized crime, fraud, and 

illegal international smuggling; 

STATUS: IMPLEMENTED AND ONGOING 

(11) Enhance its program of educating and encouraging victims of intellectual property 

offenses and industry representatives to cooperate in criminal investigations. 

Recommended enhancements include: 

(A) Encouraging victims to report intellectual property crime to law enforcement agencies; 

STATUS: IMPLEMENTED AND ONGOING 

(B) Distributing the new “Department of Justice Guide to Reporting Intellectual 

Property Crime” to victims and industry representatives regarding federal intellectual 

property offenses; and 

STATUS: IMPLEMENTED AND ONGOING 

(C) Hosting a conference with victims and industry representatives to educate participants on how they can assist in law enforcement investigations; and 

STATUS: IMPLEMENTED 

(12) Issue internal guidance to federal prosecutors regarding how victims can assist prosecutors in intellectual property cases. 

STATUS: IMPLEMENTED 

CRIMINAL ENFORCEMENT RECOMMENDATION #1 

Expand the CHIP Program by Adding Five New Units 

RECOMMENDATION: The Department of Justice should create five additional CHIP 

Units in regions of the country where intellectual property producers significantly contribute 

to the national economy. These areas are (1) the District of Columbia; (2) Sacramento, 

California; (3) Pittsburgh, Pennsylvania; (4) Nashville, Tennessee; and (5) Orlando, Florida. 

STATUS: IMPLEMENTED 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 39
United States Department of Justice
 

EXPLANATION: In 2005, the Department of Justice funded five new CHIP Units in: the 

District of Columbia; Sacramento, California; Pittsburgh, Pennsylvania; Nashville, Tennessee; 

and Orlando, Florida. A total of ten new AUSA positions were allocated to these Units. This 

fully implemented the Task Force’s recommendation. 

CHIP prosecutors focus on copyright and trademark violations, theft of trade secrets, computer intrusions, theft of computer and high-tech components, and Internet fraud. In addition, CHIP Unit prosecutors develop public awareness programs and provide training to other prosecutors and law enforcement agencies regarding high-tech issues. During the 2003 fiscal year, the first full year after all 13 of 

the CHIP Units became operational, the offices with CHIP Units filed charges against 46 percent 

more defendants than they had averaged in the four fiscal years prior to the formation of the units. 

Similar improvement and results are forecast for the five new Units created in 2004. 

SUPPLEMENTAL RECOMMENDATION FOR NEW CHIP UNITS: Recognizing the success of 

the CHIP Unit program, the Task Force has recommended to the Attorney General the creation of additional CHIP Units in areas where intellectual property theft and cyber crime are significant problems. 

After reviewing submissions from various United States Attorneys’ Offices and analyzing resource needs, 

the Department of Justice recently created seven new CHIP Units in the following cities: 

 Austin, Texas 

 Baltimore, Maryland 

 Denver, Colorado 

 Detroit, Michigan 

 Newark, New Jersey 

 New Haven, Connecticut 

 Philadelphia, Pennsylvania 

With the addition of these seven new Units, which are well above the number recommended by the 

Task Force in October 2004, the total number of CHIP Units nationally will be 25. To ensure consistency with the national CHIP Program, the Department of Justice has issued guidance to all United 

States Attorneys in districts with new and existing CHIP Units regarding expectations for the use of 

CHIP Program resources. 

CRIMINAL ENFORCEMENT RECOMMENDATION #2 

Reinforce and Expand CHIP Units in Key Regions 

RECOMMENDATION: The Department of Justice should reinforce and expand existing CHIP 

Units located in key regions where intellectual property offenses have increased, and where the CHIP 

Units have effectively developed programs to prosecute CHIP-related cases, coordinate law enforcement activity, and promote public awareness programs. 

STATUS: IMPLEMENTED 

40 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
VII. What is the Status of the Intellectual Property Task Force’s Recommendations?
 

EXPLANATION: In January 2005, the Attorney General provided additional, full-time funding for 

a total of three AUSAs to serve as CHIP prosecutors in the Central and Northern Districts of 

California. 

The Central and Northern regions of California historically have had especially heavy intellectual 

property caseloads. Los Angeles, for example, has approximately 18 million people, hosts the largest 

seaport in the world, and is home to a thriving entertainment industry, numerous high-tech businesses, and universities. San Jose is the center of the intellectual property-based economy of Silicon 

Valley. Both the San Jose and Los Angeles regions have a large economic base and numerous actual 

and potential victims of intellectual property theft. Moreover, the existing CHIP Units in these districts have been the most productive in the country in terms of intellectual property prosecutions. 

Accordingly, these districts were provided additional prosecutors to cope with the high incidence and 

severe regional impact of intellectual property crimes. 

CRIMINAL ENFORCEMENT RECOMMENDATION #3 

Designate CHIP Coordinators in Every Federal Prosecutor’s Office in the Nation 

RECOMMENDATION: The Department of Justice should designate CHIP Coordinators in every 

federal prosecutor’s office and make the coordinators responsible for intellectual property enforcement 

in that region. 

STATUS: IMPLEMENTED 

EXPLANATION: In 1995, the Department of Justice created the Computer and Telecommunications (“CTC”) Program, which designated at least one federal prosecutor to prosecute cyber crime 

within each district. CTCs were made responsible for providing technical advice to fellow prosecutors, assisting other CTCs in multi-district investigations, and coordinating public awareness efforts. 

In October 2004, the Department of Justice re-designated all CTCs as CHIP Coordinators to better align all 94 United States Attorney’s Offices with the Attorney General’s CHIP Unit Program, 

announced in 2001, as well as the enforcement mission of CCIPS in Washington, D.C. The addition of “Intellectual Property” in the title helped clarify the CHIP Coordinator’s responsibility to 

prosecute intellectual property offenses and coordinate public awareness and training efforts on 

intellectual property crime within the district. 

The Department of Justice has increased overall CHIP attorney numbers by nearly 30 percent in 

the past four years to approximately 230 nationally, with at least one, and frequently more than one, 

CHIP Coordinator in every United States Attorney’s Office. Moreover, the Department of Justice 

has issued guidance to all United States Attorneys clarifying the role of CHIP Coordinators in prosecuting both computer crime and intellectual property offenses. 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 41
United States Department of Justice
 

CRIMINAL ENFORCEMENT RECOMMENDATION #4 

Examine the Need to Increase CCIPS Resources 

RECOMMENDATION: The Department of Justice should examine the need to increase resources 

for the Computer Crime and Intellectual Property Section of the Criminal Division in Washington, 

D.C., to address additional intellectual property enforcement concerns. 

STATUS: IMPLEMENTED 

EXPLANATION: The Department implemented this recommendation by formally seeking funding 

for two additional prosecutor positions in the Criminal Division’s CCIPS for the 2007 budget year. 

The President has forwarded the request to Congress as part of the Bush Administration’s Fiscal Year 

2007 Budget submission. 

The past four years have seen a marked evolution in the Criminal Division’s intellectual property 

rights enforcement efforts. CCIPS has made the investigation and prosecution of large-scale, multinational intellectual property cases a top priority, and has increased its intellectual property caseload 

by nearly 800 percent, from 23 pending cases and investigative matters at the beginning of Fiscal Year 

2002, to 203 cases and investigations at the beginning of Fiscal Year 2006. In addition to prosecuting 

cases, CCIPS develops Department of Justice programs and policies to address important aspects of 

intellectual property enforcement, and it provides legislative advice to lawmakers. 

Currently, there are 14 prosecutors in CCIPS dedicated to the enforcement of intellectual property 

rights. In light of CCIPS’s proactive prosecution strategy and its markedly increased workload, the 

Department of Justice recognized that CCIPS both needed and deserved additional resources. The 

Task Force recommends that the Congress fully fund the President’s Fiscal Year 2007 request for additional prosecutors for CCIPS. 

CRIMINAL ENFORCEMENT RECOMMENDATION #5 

Increase the Number of FBI Agents Assigned to Intellectual Property Investigations 

RECOMMENDATION: The Department of Justice should recommend that the FBI increase the 

number of Special Agents assigned to intellectual property investigations, as the Department of Justice 

itself increases the number of prosecutors assigned to intellectual property enforcement. 

STATUS: IMPLEMENTED AND ONGOING 

EXPLANATION: The FBI has proven its tremendous investigative and technical capabilities in 

numerous complex intellectual property cases prosecuted by the Department of Justice, including 

multi-district investigations and technically sophisticated enforcement actions. In addition, FBI 

agents are on the front line of criminal investigations, and they are typically the first responders when 

trade secret thefts or other intellectual property crimes are reported. 

42 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
VII. What is the Status of the Intellectual Property Task Force’s Recommendations?
 

Since the 2004 Report was issued, 

the FBI has revised its Cyber National Strategy and made investigating intellectual property crimes a 

top priority of the Cyber Division. 

Moreover, the FBI has increased 

its domestic and international 

training programs for FBI Special 

Agents and task force members. 

For example, in February 2006, 

the FBI hosted a seminar for more 

than 100 FBI Special Agents on 

intellectual property investigations. The seminar included presentations from numerous victimindustry groups, such as represen- Pictured at a press conference is Attorney General Alberto R. Gonzales and FBI 


tatives from the pharmaceutical, Director Robert S. Mueller . Photo by Lonnie D. T ague. 


luxury goods, motion picture, 


software, and automotive manufacturing industries. The training included methods for investigation 


of intellectual property cases and legal instruction. 


The FBI has increased the number of personnel assigned to investigating intellectual property violations by frequently assigning Supervisory Special Agents and Investigative Analysts from FBI 

Headquarters in Washington, D.C., to FBI field offices throughout the country. These speciallytrained personnel have been temporarily deployed to major cities such as Atlanta, Georgia; Chicago, 

Illinois; Los Angeles and San Francisco, California; as well as smaller cities including Oklahoma City, 

Oklahoma and Richmond, Virginia. These agents and analysts provide significant guidance, analytical support, and investigative assistance in complex intellectual property matters. 

The FBI also provides law enforcement training to numerous international partners on intellectual 

property issues. From January 2005 through May 2006, FBI Special Agents have traveled to Brazil, 

Cambodia, China, India, Iceland, Italy, and the United Kingdom to train law enforcement officers on 

intellectual property investigations. The FBI has also provided, in the United States, training to 

numerous international visitors in conjunction with the USPTO. 

While the FBI has produced numerous cases with limited resources, it is constantly reviewing methods to increase the number of Special Agents assigned to intellectual property crime. Through 

increased training and the hard work of its Special Agents, the FBI has increased the number of indictments involving intellectual property offenses by 38 percent in Fiscal Year 2005, and it will continue 

to pursue aggressively investigations involving intellectual property offenses. 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 43
United States Department of Justice
 

CRIMINAL ENFORCEMENT RECOMMENDATION #6 

Increase FBI Personnel Assigned to Search for Digital Evidence 

RECOMMENDATION: The Department of Justice should recommend that the FBI increase the 

number of personnel assigned to search for digital evidence in intellectual property cases. 

STATUS: IMPLEMENTED AND ONGOING 

EXPLANATION: Digital evidence is often the foundation of successful intellectual property prosecutions, particularly in online piracy investigations. The Department of Justice’s ability to locate and 

interpret this evidence is therefore a critical factor in obtaining convictions and identifying other criminals. Information found on computers and other digital devices, such as cell phones and personal digital assistants, is also essential evidence in many intellectual property prosecutions. Timely computer 

forensic examinations are necessary to identify the offenders, analyze the stolen materials, and determine whether additional evidence is needed before criminal charges can be filed. Consequently, 

increasing the number of personnel who can examine digital evidence is critical to ensuring swift 

investigations and prosecutions. 

To respond effectively to the increased sophistication of intellectual property theft, the FBI has 

increased the amount of FBI personnel available to review forensic evidence and to maintain its advantage over high-tech intellectual property criminals in the following three ways: 

1. Case Agent Investigative Review (“CAIR”) Program 

Since the issuance of the 2004 Report, the FBI has increased its efforts to explore methods to streamline the computer forensic examination process. One method that the FBI has expanded to its 56 field 

offices is the CAIR program. Based on a pilot program in FBI Field Offices in Los Angeles and 

Washington, D.C., the FBI has trained approximately 1,000 Special Agents and other investigators to 

review evidence seized from computers. In addition to the case agents reviewing computer evidence, 

specially-trained Computer Analysis Response Team (“CART”) forensic examiners analyze and examine computer evidence that is seized during the course of a criminal investigation. These highlytrained examiners assist the case agents in the CAIR process and also perform independent analyses 

and examinations. 

2. CART Storage Area Network (“CARTSAN”) 

Another method for increasing the number of personnel equipped to review computer evidence is 

through the CARTSAN program. This program involves a network of computers that specially-trained 

FBI agents use to review–from their desktops–copies of seized computer evidence. There are 23 systems 

in the CARTSAN program, and 15 FBI field offices have the ability to share computer evidence with 

each other. CARTSAN speeds up the initial review of seized digital evidence and helps maximize the productive use of existing CART resources by allowing more FBI personnel to review the critical evidence 

that is often found on seized computers. 

44 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
VII. What is the Status of the Intellectual Property Task Force’s Recommendations?
 

3. Regional Computer Forensic Laboratories (“RCFLs”) 

The FBI’s third method to increase the number of personnel available to examine digital evidence is 

through the RCFL program. An RCFL is a regional lab for examining computer evidence seized during criminal investigations by various State, local, and federal law enforcement agencies. It is a fullservice forensics laboratory and training center devoted to examining digital evidence in support of 

FBI criminal investigations–including investigations of theft of intellectual property, terrorism, child 

pornography, violent crimes, Internet crimes, and fraud. 

RCFLs exist in the following cities: 

 Chicago, Illinois 

 Dallas, Texas 

 Denver, Colorado 

 Hamilton, New Jersey 

 Houston, Texas 

 Kansas City, Missouri 

 Menlo Park, California 

 Portland, Oregon 

 Salt Lake City, Utah 

 San Diego, California 

Four additional RCFLs are scheduled to open by the end of 2006 in Buffalo, New York; Dayton, 

Ohio; Louisville, Kentucky; and Philadelphia, Pennsylvania. This will bring the total number of 

RCFLs to 14. 

CRIMINAL ENFORCEMENT RECOMMENDATION #7 

Target Large, Complex Criminal Organizations That Commit Intellectual Property Crimes 

RECOMMENDATION: The Department of Justice should dismantle and prosecute more nationwide and international criminal organizations that commit intellectual property crimes. 

STATUS: IMPLEMENTED 

EXPLANATION: Since the inception of the Task Force in April 2004, the Department of Justice has 

led the two largest international enforcement efforts ever undertaken against organized online piracy. 

Operations FastLink and Site Down each involved coordinated law enforcement action among 12 

countries and attacked the highest levels of the criminal groups–known as “warez release groups”–that 

act as first-providers of pirated software, movies, games, and music to the Internet. Together, these 

operations resulted in approximately 210 searches or arrests worldwide; the seizure of hundreds of 

thousands of pirated works conservatively valued at more than $100 million; the elimination of more 

than 20 major online distribution centers; and, to date, convictions of 60 individuals on criminal 

copyright infringement charges. 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 45
United States Department of Justice
 

The Department of Justice’s enforcement efforts against organized criminal groups have not been limited 

to online piracy. In the past two years, the Department of Justice has conducted a number of investigations 

and prosecutions of organized crime groups that traffic in counterfeit manufactured goods. 

For instance, in November 2004, federal agents in New York arrested 28 individuals who were members of 

criminal organizations allegedly engaged in attempted murder, loan sharking, alien smuggling, narcotics 

distribution, gambling, and trafficking in counterfeit clothing accessories. The arrests included members of 

two Asian criminal enterprises operating in Manhattan’s Chinatown and in Flushing, Queens. Twelve of 

the gangs’ members were charged federally with criminal racketeering, and 24 individuals connected with 

the criminal enterprises have since pleaded guilty to numerous federal charges. These criminal organizations’ illegal activities included selling counterfeit Chanel, Gucci, and Coach accessories at stores they 

owned in Midtown Manhattan, as well as distributing the counterfeit apparel to other retail outlets. 

As reflected in these cases and others, organized crime in intellectual property theft and counterfeiting cases 

is a global enforcement problem. In the past two years, the Department of Justice has successfully dismantled and prosecuted more of these criminal groups than ever before. The increase in such prosecutions is 

reflected in case statistics from Fiscal Year 2003 through Fiscal Year 2005, which show a general rise in the 

number of defendants being charged per case. In Fiscal Year 2003, 245 defendants were charged in 162 

cases, for an average of 1.51 defendants per case; in Fiscal Year 2004, 177 defendants were charged in 129 

cases, for an average of 1.37 defendants per case; and in Fiscal Year 2005, 350 defendants were charged in 

169 cases, for an average of 2.07 defendants per case. 

Continued success in this area will take a sustained commitment. To that end, the Department of Justice 

issued guidance to all United States Attorneys encouraging them to prosecute more nationwide and international criminal organizations that commit intellectual property crimes. 

CRIMINAL ENFORCEMENT RECOMMENDATION #8 

Enhance Training Programs for Prosecutors and Law Enforcement Agents 

RECOMMENDATION: The Department of Justice should enhance programs to train prosecutors 

and law enforcement agents investigating intellectual property offenses. 

STATUS: IMPLEMENTED 

EXPLANATION: Law enforcement must be able to adapt its methods to the changing nature of 

intellectual property crime, and there must be a sufficient number of trained prosecutors to respond 

to this growing threat. Counterfeiters and copyright infringers rapidly adapt to new security measures, 

swiftly modify communication techniques and distribution channels in response to enforcement 

actions, and constantly create novel methods to advance their criminal activities. 

In the past year, the Department of Justice has enhanced its programs to train prosecutors and law 

enforcement agents investigating intellectual property offenses. For example, in January 2006, the 

Department of Justice conducted a five-day annual training conference for approximately 200 CHIP 

prosecutors in Albuquerque, New Mexico; a significant portion of that training conference was devoted 

46 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
VII. What is the Status of the Intellectual Property Task Force’s Recommendations?
 

to improving intellectual property prosecutions. Three months later, the Department of Justice conducted a three-day Intellectual Property Seminar for approximately 50 AUSAs and federal agents at the 

National Advocacy Center in Columbia, South Carolina. For the first time ever, a large portion of the 

course was devoted to hands-on network and technology training for online investigations. 

Recognizing the importance of these training conferences and seminars, the Department of Justice has 

issued guidance to all United States Attorneys setting forth the training responsibilities of CHIP prosecutors and CHIP Units. The guidance stressed the responsibility of each United States Attorney and CHIP 

prosecutor to ensure that CHIP Coordinators maintain their expertise by attending conferences and seminars sponsored by the Department of Justice’s Office of Legal Education, especially the annual CHIP conference and Intellectual Property Seminar. In addition, CHIP AUSAs were encouraged to conduct inoffice legal training to keep other AUSAs apprised of critical search and seizure law applicable to obtaining electronic evidence and conducting electronic surveillance. Finally, CHIP prosecutors, especially those 

in CHIP Units, were directed to enhance regional training on intellectual property enforcement for federal and state agents, and to continue to conduct outreach to the high-tech industry and rights-holder sector to foster the sharing of information critical to effective prosecutions. 

In June 2006, the Department of Justice also published a comprehensive resource manual on prosecuting intellectual property crimes. This nearly 400-page manual is an invaluable training resource for federal prosecutors and agents nationwide. It presents comprehensive descriptions and analysis on all the 

federal criminal intellectual property laws, including copyright, trademark, theft of trade secrets, and 

counterfeit labeling. It improves on earlier versions by adding broader and more in-depth coverage of all 

areas; fully identifying recent changes to the case law, statutes, and sentencing guidelines; and adding new 

chapters on the Digital Millennium Copyright Act, patent law, and victim issues. 

The Department of Justice’s training efforts have not been limited to the United States. Intellectual property theft and counterfeiting are global problems that require a strong and coordinated global enforcement response. Building relationships between American law enforcement and its counterparts overseas 

is essential to ensuring continued success in multi-national cases. Therefore, the Department of Justice 

has increased and improved its international training efforts as well. For example, in the last year alone, 

Department of Justice prosecutors met with more than 2,000 prosecutors, investigators, judges, and 

intellectual property experts from 94 countries to provide training and technical assistance in intellectual property enforcement. These types of bilateral and multilateral outreach efforts help develop greater 

enforcement capacity in other countries, while also developing cooperative law enforcement contacts for 

better coordination on international protection of intellectual property rights. 

CRIMINAL ENFORCEMENT RECOMMENDATION #9 

Prosecute Intellectual Property Offenses That Endanger the Public’s Health or Safety 

RECOMMENDATION: The Department of Justice should prosecute aggressively intellectual property offenses that endanger the public’s health or safety. 

STATUS: IMPLEMENTED AND ONGOING 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 47
United States Department of Justice
 

EXPLANATION: Intellectual property crime can 

pose a serious health and safety risk to the public, 

from faulty electrical cords to fake medicines and 

pesticides that can harm unsuspecting consumers. Although the Department of Justice has 

long prioritized the prosecution of intellectual

property cases that place the public at risk, this 

prioritization had not previously been formally 

emphasized at the highest levels of the Department of Justice. Accordingly, the Department of 

Justice has issued guidance to all United States 

Attorneys emphasizing the importance of aggressively prosecuting intellectual property offenses


that endanger the health and safety of the public.
 

The Department of Justice has also continued to 

work with federal, State, and local agencies that 

encounter these products at the Nation’s borders 

and in the marketplace, and it has continued to 

prosecute those who endanger the public through 

intellectual property offenses. For example, in

January 2005, a 58-year-old California man was 

convicted of conspiracy to import into the

United States at least 50,000 counterfeit Viagra 

tablets manufactured in China, and conspiracy to 

manufacture another 700,000 tablets of counterfeit Viagra. The counterfeit Viagra was valued at 

over $5.6 million. 

In August 2005, 11 individuals and three businesses were indicted in Missouri for participating 

in a $42 million conspiracy to sell counterfeit, 

illegally imported, and misbranded cholesterol 

medication (Lipitor) and other drugs and for 

participating in a conspiracy to sell stolen drugs. 

Angeles, California. Photo by Dept. of Homeland Security,
 

Immigration and Customs Enforcement.
 

Counterfeit (left) and genuine batteries (right) discovered by 

United States Customs and Border Protection inspectors in Los 

Corroded counterfeit batteries seized in Los Angeles, California 

by Special Agents of the United States Immigration and Customs 

Enforcement agency in June 2005. Photo by Dept. of Homeland 

Security, Immigration and Customs Enforcement. 

In September 2005, as part of an ICE investigation known as Operation Ocean Crossing, a 

Washington man was indicted on charges of importing and distributing counterfeit pharmaceuticals 

from China. These charges arose from information provided by the ICE liaison in Beijing, China, 

regarding the online Internet site “bestonlineviagra.com.” The defendant owned and operated the 

Internet site in order to distribute bulk quantities of counterfeit Viagra and Cialis manufactured in 

China. In conjunction with the investigation of the defendant in the United States, agents assisted 

officials from the Ministry of Public Security and Public Security Bureau in China in determining the 

source of the counterfeit pharmaceutical drugs. The joint investigation resulted in Chinese authori48 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
VII. What is the Status of the Intellectual Property Task Force’s Recommendations?
 

ties’ arresting 11 individuals in China for manufacturing and distributing counterfeit Viagra, Cialis, 

and Lipitor. In February 2006, the defendant pleaded guilty in Houston to trafficking in counterfeit 

pharmaceuticals in violation of federal drug laws. 

On May 25, 2006, the Department of Justice obtained a jury verdict against a licensed Texas pharmacist on charges of conspiring to import counterfeit drugs from China bearing the trademarks 

Viagra and Cialis, without authorization of the manufacturers and owners of those marks, Pfizer and 

Eli Lilly, and thereafter distributing the fake drugs to the public; trafficking in counterfeit goods; and 

misbranding and mislabeling drugs in violation of federal drug laws. 

CRIMINAL ENFORCEMENT RECOMMENDATION #10 

Emphasize Charging of Intellectual Property Offenses 

RECOMMENDATION: The Department of Justice should emphasize the importance of charging 

intellectual property offenses in every type of investigation where such charges are applicable, including organized crime, fraud, and international smuggling. 

STATUS: IMPLEMENTED AND ONGOING 

EXPLANATION: Many crimes involve intellectual property offenses. When the focus of the investigation centers on another serious offense, however, the intellectual property offenses are often not 

emphasized and sometimes not charged. For example, defendants who commit organized crime or 

fraud offenses that involve counterfeiting are usually charged with racketeering or fraud violations, 

sometimes without additional intellectual property charges. The Task Force recommended that the 

Department of Justice emphasize that intellectual property offenses should always be charged when 

appropriate, and that Department of Justice prosecutors should seek to convict defendants involved 

in intellectual property offenses regardless of whether the focus of the investigation is on another serious offense. 

To implement this recommendation, the Department of Justice has issued guidance to all United States 

Attorneys that, among other things, emphasizes the importance of using the intellectual property 

statutes “to combat the burgeoning trade in counterfeit and infringing goods and digital property.” The 

guidance directs that, whenever possible, United States Attorneys should charge and convict offenders 

of readily provable violations of the following core intellectual property statutes: criminal copyright 

infringement, 18 U.S.C. § 2319; trademark (counterfeit product) offenses, 18 U.S.C. § 2320; circumvention of copyright control systems in violation of the Digital Millennium Copyright Act, 17 

U.S.C. §§ 1201-04; satellite signal piracy, 47 U.S.C. §§ 553, 605; economic espionage and theft of 

trade secrets, 18 U.S.C. §§ 1831-32; counterfeit labeling, 18 U.S.C. § 2318; live music infringement, 

18 U.S.C. § 2319A; unauthorized recording of motion pictures, 18 U.S.C. § 2319B; and counterfeit 

drug offenses in violation of the Food, Drug and Cosmetic Act, 21 U.S.C. § 331(i). 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 49
United States Department of Justice
 

CRIMINAL ENFORCEMENT RECOMMENDATION #11 

Enhance Victim Education Programs and Increase Cooperation 

RECOMMENDATION: The Department of Justice should enhance its program of educating and 

encouraging victims of intellectual property offenses and industry representatives to cooperate in 

criminal investigations. Recommended enhancements include: 

(1) Encouraging victims to report intellectual property crime to law enforcement agencies; 

(2) Distributing the new “Department of Justice Guide to Reporting Intellectual Property Crime” to 

victims and industry representatives regarding federal intellectual property offenses; and 

(3) Hosting a conference with victims and industry representatives to educate participants on how 

they can assist in law enforcement investigations. 

STATUS: IMPLEMENTED 

EXPLANATION: Combating intellectual property crime often requires cooperation among law 

enforcement, prosecutors, and victims of intellectual property theft. Information-sharing and prompt 

reporting by victims can be essential to the success of an investigation or prosecution; victims are often 

in the best position to detect immediately when their intellectual property has been stolen. 

Accordingly, in the past 18 months, the Department of Justice has taken a number of measures to 

encourage victim reporting and enhance cooperation. 

First, the Department of Justice has been proactive in its outreach to industry and victims to encourage reporting of intellectual property crime. The Department of Justice has sought opportunities to 

partner with other federal agencies to educate and inform rights holders. For example, the 

Department of Justice participated in a series of six conferences organized by the USPTO on intelState and Federal intellectual property prosecutors at 

Victims’ Conference in New York City on April 27, 2006. 

From the left: Asst. D.A. Gregory Pavlides (Queens 

D.A.’s Office); Asst. U.S. Attorney Jed Davis (Eastern 

Dist. of New York); Vice Chairman, Intellectual Property 

Task Force Arif Alikhan (U.S. Dept. of Justice); Asst. U.S. 

Attorney Joseph DeMarco (Southern Dist. of New York); 

Asst. D.A. Jeff Levinson (Manhattan D.A.’s Office); Asst. 

D.A. Richard Baker (Bronx D.A.’s Office); Asst. D.A. 

Tiana Walton (Manhattan D.A.’s Office); and Trial 

Attorney Matthew Bassiur (U.S. Dept. of Justice). Photo 

by Susan Butler. 

50 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
VII. What is the Status of the Intellectual Property Task Force’s Recommendations?
 

lectual property basics for small- and medium-size businesses, entrepreneurs, and independent inventors. These two-day “Conference[s] on Intellectual Property in the Global Marketplace” were held in 

Austin, Texas; Miami, Florida; Phoenix, Arizona; San Diego, California; Salt Lake City, Utah; and 

Columbus, Ohio. They were designed to assist small business owners in learning about their rights 

and the new realities of intellectual property counterfeiting and piracy in the global marketplace. At 

each of these national conferences, local CHIP prosecutors gave presentations on federal criminal 

intellectual property enforcement, criminal statutes, case development, and cooperation with victims. 

Copies of the “Department of Justice Guide to Reporting Intellectual Property Crime” were distributed to small business owners and industry representatives in attendance. 

Second, the Department of Justice was also proactive in organizing two of its own victim education 

conferences, each entitled “Counterfeit Goods: The Danger, The Crimes, The Victims.” These oneday conferences in Los Angeles and New York City brought together private investigators from the 

manufacturing industry, company representatives, federal and State prosecutors, and federal, State, 

and local agents. Topics included how criminal cases are investigated and the types of evidence most 

useful to those investigations. A particular focus of the conferences was educating industry representatives and their investigators on the laws, regulations, Department of Justice directives, and rules of 

professional conduct that are implicated when victim companies offer assistance or seek to donate 

resources in connection with federal investigations. 

CRIMINAL ENFORCEMENT RECOMMENDATION #12 

Issue Internal Guidance to Federal Prosecutors Regarding How Victims Can Assist Prosecutors in Intellectual 

Property Cases 

RECOMMENDATION: The Department of Justice should issue internal guidance to federal prosecutors regarding how victims can assist prosecutors in intellectual property cases. 

STATUS: IMPLEMENTED 

EXPLANATION: Prosecutions of intellectual property crime often depend on cooperation between 

victims and law enforcement. Without information from victims, prosecutors cannot enforce the 

intellectual property laws as effectively. Many industry groups and victims of intellectual property 

theft are eager to assist law enforcement in finding intellectual property offenders and bringing them 

to justice. Certain types of assistance, however, such as the donation of funds, property, or services by 

outside sources, can raise legal and ethical issues. In order to maintain the Department of Justice’s 

independence and integrity, federal rules and regulations place limitations on the types of assistance 

victims and outside sources can provide to law enforcement authorities. 

Additionally, the Department of Justice’s newly published 400-page resource manual on “Prosecuting 

Intellectual Property Crimes” contains an in-depth section on offers of assistance from victims and 

related parties in intellectual property investigations and prosecutions. The manual advises 

Department of Justice prosecutors on applicable laws and regulations relating to the acceptance of 

gifts; the distinction between “gifts” and “assistance”; professional responsibility issues; and case-related concerns. 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 51
United States Department of Justice 

B. INTERNATIONAL COOPERATION RECOMMENDATIONS 

The Task Force continues to believe that 

“[T]he protection of intellectual property is among the pow- international cooperation is critical to stemers expressly delegated to Congress by Article I of the ming the tide of global intellectual property 

Constitution in 1789. Those benefits are undermined, how- crime. Foreign governments must themselves 

ever, when other nations permit, whether overtly or tacitly, prosecute intellectual property criminals and infringement on intellectual property rights.” assist the United States in gathering evidence 

and prosecuting those who violate American - Associate Attorney General, intellectual property laws. Accordingly, in 

Robert D. McCallum, Jr., March 2, 2006 2004, the Task Force recommended that the 

Department of Justice adopt the following recommendations regarding international cooperation. The status of each recommendation is set forth below. 

(1) Deploy federal prosecutors to Hong Kong and Budapest, Hungary, and designate them as 

“Intellectual Property Law Enforcement Coordinators” (“IPLECs”) to coordinate intellectual 

property enforcement efforts in those regions; 

STATUS: IMPLEMENTED AND ONGOING 

(2) Recommend that the FBI co-locate Legal Attachés with intellectual property expertise to 

Hong Kong and Budapest, Hungary, to assist the newly assigned IPLECs in investigative efforts; 

STATUS: IMPLEMENTED AND ONGOING 

(3) Direct prosecutors and agents to increase the use of alternative channels of communication, 

such as “law enforcement-to-law enforcement” contacts, to collect information and evidence 

quickly in foreign investigations; 

STATUS: IMPLEMENTED AND ONGOING 

(4) Enhance its intellectual property training programs for foreign prosecutors and law enforcement investigators in coordination with the Department of State; 

STATUS: IMPLEMENTED 

(5) Prioritize treaty negotiations for legal assistance agreements with foreign governments where 

intellectual property enforcement is a significant problem; 

STATUS: IMPLEMENTED AND ONGOING 

(6) Ensure that intellectual property crimes are included in all extradition treaties and prioritize 

negotiations with foreign countries according to intellectual property enforcement concerns; and 

STATUS: IMPLEMENTED AND ONGOING 

52 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
VII. What is the Status of the Intellectual Property Task Force’s Recommendations?
 

(7) Emphasize intellectual property enforcement issues during discussions with foreign governments. 

STATUS: IMPLEMENTED AND ONGOING 

Additional information regarding each of the recommendations and its status is set forth below. 

INTERNATIONAL COOPERATION RECOMMENDATION #1 

Deploy Intellectual Property Law Enforcement Coordinators to Asia and Eastern Europe 

RECOMMENDATION: The Department of Justice should deploy federal prosecutors to the United 

States consulate in Hong Kong and embassy in Budapest, Hungary, and designate them “Intellectual 

Property Law Enforcement Coordinators” (“IPLECs”) to coordinate intellectual property enforcement efforts in those regions. 

STATUS: IMPLEMENTED AND ONGOING 

EXPLANATION: The 2004 Report correctly forecast the expanding challenge of combating intellectual property crimes throughout the world and recommended that the Department of Justice 

deploy Intellectual Property Law Enforcement Coordinators (or “IPLECs”) in Asia (Hong Kong) and 

Eastern Europe (Budapest, Hungary). In January 2006, a new Department of Justice attaché was 

assigned to the United States Embassy in Bangkok, Thailand. The Department of Justice used this 

existing resource to designate an IPLEC for the region. The attaché is an experienced intellectual 

property prosecutor who formerly led the CHIP Unit in Northern California. Since being designated the IPLEC for Asia, he has been successful in advancing the Department of Justice’s regional intellectual property goals. 

Since January 2006, the IPLEC has participated in intellectual property rights enforcement seminars 

and meetings in China, Hong Kong, Cambodia, Thailand, Taiwan, the Philippines, Indonesia, and 

Malaysia, and has additional visits planned to Korea, Japan, and Singapore. These meetings, whose 

participants have included foreign judges, prosecutors, investigators and other intellectual property 

officials, have allowed the Department of Justice to establish valuable contacts with regional counterparts and gather information about the unique intellectual property rights enforcement challenges 

confronting individual Asian countries. In presentations at these meetings, the IPLEC has highlighted the Department of Justice’s successes in combating intellectual property crime, the benefits of specialized intellectual property prosecutorial and investigative units (e.g., CHIP units and CCIPS), and 

the importance of international cooperation and coordinated, cross-border prosecutions. In the near 

future, the IPLEC will play an important role in programs to increase criminal enforcement of intellectual property laws in both China and India, two countries with enormous capacity to produce 

counterfeit and pirated goods and a history of damaging United States rights-holders by manufacturing infringing goods. 

The IPLEC is also developing an Intellectual Property-Prosecution and Investigation Network (“IPPIN”) comprised of key intellectual property prosecutors and investigators from countries in the 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 53
United States Department of Justice
 

region. Intellectual property officials from several countries have already committed to participate in 

the network, which will better enable the sharing of information and strategies, help identify regional training opportunities, and facilitate coordinated prosecutions. The Department of Justice plans to 

host an IP-PIN conference within the next six to nine months to strengthen these important law 

enforcement relationships. 

Recognizing that effective prosecution of intellectual property crime depends heavily on cooperation 

between victims and law enforcement authorities, the IPLEC has regularly met with regional industry representatives with extensive experience in intellectual property rights enforcement in Asia, 

including representatives from the Motion Picture Association and the Business Software Alliance, as 

well as pharmaceutical and other “hard good” industries. The IPLEC has also improved regional 

awareness of the Department of Justice’s efforts to combat intellectual property crime by addressing 

the American Chamber of Commerce in Asian countries and by collaborating closely with representatives from the Departments of Commerce and State to promote interagency cooperation and better 

achieve the goals of the Bush Administration’s STOP Initiative. 

The Department of Justice has also secured agreement in principle from the Bureau for International 

Narcotics and Law Enforcement Affairs at the Department of State (subject to Congressional approval 

and approval of a budget and work plan) to provide start-up costs to support a full-time IPLEC for 

Eastern Europe for one year. The Department of Justice will begin interviewing experienced intellectual property prosecutors for the new IPLEC position in the next month. The Department of Justice 

will be responsible for the Eastern European IPLEC position after Fiscal Year 2007. The Department 

of Justice will work with the Department of State to identify an appropriate location for the IPLEC 

in the region. 

INTERNATIONAL COOPERATION RECOMMENDATION #2 

Deploy FBI Legal Attachés To Assist IPLEC Investigative Efforts 

RECOMMENDATION: The FBI should co-locate Legal Attachés with intellectual property expertise to Hong Kong and Budapest, Hungary, to assist the newly assigned IPLECs in investigative efforts. 

STATUS: IMPLEMENTED AND ONGOING 

EXPLANATION: The Department of Justice has designated its legal attaché in Bangkok, Thailand, 

as the IPLEC to oversee the entire Asian region. Similarly, the FBI has a Legal Attaché and an Assistant 

Legal Attaché posted in Bangkok and attachés in Eastern Europe. Although these agents are assigned 

to investigate all FBI matters, they are available to assist the IPLEC in any intellectual property matters. The FBI also has personnel assigned in Beijing and Hong Kong, China; Kuala Lumpur, Malaysia; 

Manila, Philippines; Seoul, South Korea; Singapore; and Tokyo, Japan. In addition, the FBI has personnel assigned throughout Eastern Europe including in Bulgaria, Latvia, Romania and Russia. If 

additional resources are necessary for intellectual property investigations in these areas, FBI 

Headquarters is dedicated to providing agent support through temporary assignments as needed. 

54 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
VII. What is the Status of the Intellectual Property Task Force’s Recommendations?
 

INTERNATIONAL COOPERATION RECOMMENDATION #3 

Increase the Use of Informal Contacts to Gather Evidence from Foreign Countries 

RECOMMENDATION: Direct prosecutors and agents to increase the use of alternative channels of 

communication, such as “law enforcement-to-law enforcement” contacts, to collect information and 

evidence quickly in foreign investigations. 

STATUS: IMPLEMENTED AND ONGOING 

EXPLANATION: As noted in the 2004 Report, international cooperation in the area of intellectual 

property crime often requires immediate action or the evidence may be lost. The Department of Justice 

continues to increase its network of worldwide contact points to allow for quick and direct communication in fast-moving investigations. Where appropriate, the Department of Justice encourages using 

informal channels of communication, outside formal Mutual Legal Assistance Treaties, to obtain information from overseas. One example of the Department of Justice’s progress in this area is the increased 

emphasis on a “24/7 network” for immediate international assistance in computer crime cases. Each of 

the 43 countries that participates in this international network has designated a point of contact who 

can be reached in an urgent case at any hour. This 24/7 network is especially useful to preserve information and evidence stored on a computer in a foreign country that may disappear without quick 

action by foreign authorities. Building upon the success of the 24/7 network for the investigation of 

computer-based crimes, the Department of Justice is developing and updating an international directory of law enforcement officials with the authority to criminally enforce intellectual property laws. 

The Department of Justice has also issued guidance to all United States Attorneys’ Offices encouraging use of all available tools and informal federal law enforcement channels–including federal investigative agencies’ foreign legal attachés stationed in-country–to establish communication and cooperation with our foreign counterparts. 

INTERNATIONAL COOPERATION RECOMMENDATION #4: 

Increase International Law Enforcement Training on Intellectual Property 

RECOMMENDATION: Enhance its intellectual property training programs for foreign prosecutors 

and law enforcement investigators in coordination with the Department of State. 

STATUS: IMPLEMENTED AND ONGOING 

EXPLANATION: The Department of Justice has taken an active role in providing training and expertise 

to develop effective criminal intellectual property enforcement regimes around the world. With funds provided by the State Department’s International Narcotics and Law Enforcement Bureau for intellectual 

property training, the Department of Justice has organized and participated in more than 20 international 

programs in fiscal years 2005 and 2006. Programs have included: the development of manuals for prosecutors and investigators in intellectual property cases (in Panama and Paraguay); programs designed to 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 55
United States Department of Justice
 

increase cooperation between law enforcement agencies (in Mexico and Brazil); and regional programs 

addressing specific problems, such as the production and distribution of counterfeit optical media (Hong 

Kong). In the last year, Department of Justice prosecutors have met with more than 2,000 prosecutors, 

investigators, judges, and intellectual property experts from 94 countries to provide training and technical 

assistance in intellectual property enforcement. Department of Justice prosecutors also regularly support 

United States Embassy programs on intellectual property, typically working with Economic Bureau Officers 

or Department of Justice Resident Legal Advisors to provide in-country training on intellectual property 

enforcement. Through these types of bilateral and multilateral efforts, the Department of Justice seeks to 

develop greater enforcement capacity in these countries while also developing necessary law enforcement 

contacts to better coordinate international protection of intellectual property rights. 

INTERNATIONAL COOPERATION RECOMMENDATION #5 

Prioritize Negotiations for Legal Assistance Treaties 

RECOMMENDATION: The Department of Justice should prioritize treaty negotiations for legal 

assistance agreements with foreign governments where intellectual property enforcement is a significant problem. 

STATUS: IMPLEMENTED AND ONGOING 

EXPLANATION: The Department of Justice is pleased to report progress in the area of treaty negotiations since the publication of the 2004 Report. Significantly, more than a dozen countries have ratified the Council of Europe Convention on Cybercrime, with ratification pending in over two dozen 

other countries. This Convention is the first international treaty that specifically addresses the subject 

of computer crime. Among its provisions is a requirement that countries criminalize intellectual property infringement. The Convention will strengthen intellectual property law enforcement by allowing 

the United States to better protect its intellectual property rights in an international environment. The 

United States Senate Committee on Foreign Relations has approved the Convention and ratification 

by the full Senate is pending. The Task Force continues to recommend that the full Senate ratify the 

Convention on Cybercrime as soon as possible. 

The 2004 Report identified Asia as a region relevant to many United States intellectual property investigations. On April 7, 2006, the United States Senate gave its advice and consent to a new Mutual 

Legal Assistance Treaty with Japan. Negotiations with Japan on this treaty lasted over 10 years, ending in early 2003. The treaty was signed in August 2003. The Department of Justice is currently in 

treaty negotiations with other countries in Asia where intellectual property is a concern. In treaty 

negotiations, the Department of Justice deliberately raises intellectual property as an issue of significant importance. 

In addition to treaties with Asian countries, extradition and mutual legal assistance agreements with 

the European Union that were signed in June 2003 are now closer to implementation. As anticipated, following signature of the agreements, technical negotiations took place between the United States 

and the European Union countries to conform the agreements to the terms of existing bilateral treaties 

56 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
VII. What is the Status of the Intellectual Property Task Force’s Recommendations?
 

“The list of countries cooperating in these efforts is 

long, but the Department is committed to building 

on these successes and achieving even greater global participation in the future. In the increasingly 

connected global economy, nothing short of a global effort will suffice.” 

- Attorney General Alberto R. Gonzales, 

November 10, 2005 

and to address the situation in which there is no 

bilateral mutual legal assistance treaty in force. 

The United States-European Union agreements 

will enter into force when the bilateral instruments between the United States and all 25 

European Union countries have been completed, 

signed, and approved by the United States 

Senate. The Department of Justice has executed 

these bilateral agreements to implement obligations of United States-European Union Mutual 

Legal Assistance and Extradition Agreements 

that ensure cooperation regarding intellectual property crimes with Austria, Belgium, Cyprus, the 

Czech Republic, Denmark, Estonia, Germany, Greece, Finland, France, Hungary, Ireland, Italy, 

Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, Spain, Sweden, 

and the United Kingdom; and has completed negotiations with the remaining country of Poland. Like 

the treaty with Japan, these agreements with the European Union should improve cooperation in 

intellectual property and other criminal investigations. 

INTERNATIONAL COOPERATION RECOMMENDATION #6 

Prioritize Negotiations and Include Intellectual Property Crimes in Extradition Treaties 

RECOMMENDATION: The Department of Justice should ensure that intellectual property crimes 

are included in all extradition treaties and prioritize negotiations with countries according to intellectual property enforcement concerns. 

STATUS: IMPLEMENTED AND ONGOING 

EXPLANATION: It is important to have effective international extradition treaties that include intellectual property offenses in order to promote global cooperative efforts. In treaty negotiations with 

countries where intellectual property crime is a concern, the Department of Justice specifically raises 

intellectual property rights to ensure that the treaty will cover this type of crime. Each year, the 

Department of Justice prioritizes treaty negotiations with countries according to law enforcement concerns, including intellectual property. As mentioned previously, the United States is progressing 

toward implementation of a new extradition agreement with the European Union and the 

Department of Justice continually seeks to enter into new treaties or update existing treaties with other 

countries. Accordingly, the Department of Justice has implemented this recommendation and continues to seek additional opportunities to engage foreign partners on intellectual property issues. 

INTERNATIONAL COOPERATION RECOMMENDATION #7 

Emphasize Intellectual Property Enforcement During Discussions with Foreign Governments 

RECOMMENDATION: The Department of Justice should emphasize intellectual property enforcement issues during discussions with foreign governments. 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 57
United States Department of Justice
 

During an official visit to Beijing, China, Attorney General Alberto R. Gonzales 

meets with Chinese Communist Party Official, Luo Gan, on November 18, 2005, 

where he discusses the importance of intellectual property rights and enforcement. 

Photo by Carolyn Nelson. 

STATUS: IMPLEMENTED AND 

ONGOING 

EXPLANATION: The Department of 

Justice holds regular high-level meetings 

with foreign governments, both in 

Washington and abroad. In these meetings, Department of Justice officials discuss international cooperation in criminal 

matters, including intellectual property 

crime. For example, intellectual property 

law enforcement was a primary topic at 

the annual United States/China Joint 

Liaison Group on Law Enforcement 

(“JLG”) meeting in June 2006 in Washington, D.C., and talks are continuing to 

establish an expert working group on 

intellectual property law enforcement 

within the JLG framework. Moreover, the 

Attorney General raised intellectual property issues directly with his Chinese counterparts during his trip to China in 

November 2005. He also discussed intellectual property with Germany’s Minister of Justice, Brigitte 

Zypries, in Washington, D.C., in April 2006. Minister Zypries has taken an aggressive stance in Germany 

against the theft of intellectual property. In addition, the Attorney General has raised intellectual property 

law enforcement in high-level meetings with Pakistan, which has aggressively pursued the producers of 

pirated optical media, and Canada, which played a significant role combating online piracy in Operation 

Site Down. 

The Department of Justice has also pursued many opportunities to address and emphasize the importance of intellectual property enforcement through the International Visitors program administered 

by the Department of Justice’s Office of Overseas Prosecutorial Development, Assistance, and 

Training. 

C. CIVIL ENFORCEMENT 

The Department of Justice fights against the theft of intellectual property most visibly through its enforcement of the Nation’s criminal laws. The successful defense of intellectual property rights, however, also 

requires vigorous enforcement by the owners of intellectual property through the civil justice system. In 2004, 

the Task Force made the following recommendation regarding the Department of Justice’s efforts to protect 

intellectual property rights in the civil courts. Following are the recommendation and its status. 

58 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
VII. What is the Status of the Intellectual Property Task Force’s Recommendations?
 

CIVIL ENFORCEMENT RECOMMENDATION 

Support Civil Enforcement of Intellectual Property Laws by Owners of Intellectual Property Rights 

RECOMMENDATION: The Department of Justice should assist private parties in enforcing civil 

laws that protect intellectual property owners against theft by supporting an effective statutory framework for such enforcement. When a court decision or lawsuit threatens the civil remedies available 

under federal law, the Department of Justice should defend in court all appropriate intellectual property protections and vigorously defend Congress’s authority in protecting intellectual property rights. 

STATUS: IMPLEMENTED AND ONGOING 

EXPLANATION: In October 2004, the Task Force recommended that the Department of Justice 

support civil enforcement of intellectual property laws by victims of intellectual property theft and 

defend in court all appropriate intellectual property protections. 

Since the adoption of the recommendations by the Attorney General, the Department of Justice has 

filed numerous amicus briefs in matters in which the United States was not a party but desired to 

express its opinion in the Supreme Court and in appellate courts. In these ways the Department of 

Justice consistently supported the maintenance and implementation of robust intellectual property 

rights. The Department of Justice also intervened in appropriate cases to become a party to the litigation. These briefs and interventions promote legal precedents that enforce intellectual property 

rights fairly and consistently. By filing briefs in civil cases, the Department of Justice plays a vital role 

in promoting a legal environment that protects creativity and innovation. 

Since October 2004, the Department of Justice has filed 13 amicus briefs in the Supreme Court in 

cases involving intellectual property rights, and more than a dozen amicus briefs and Statements of 

Interest (which are filed at the trial court and appellate court level) in such cases. These filings encompass all types of intellectual property, from pharmaceuticals to music and movies. In many of these 

cases, courts have adopted the arguments made by the Department of Justice and, consequently, 

expanded protections for owners of intellectual property rights. A description of some of these matters follows. 

A. Supreme Court Cases 

� Metro-Goldwyn-Mayer Studios Inc. v. Grokster, 125 S. Ct. 2764 (2005): 

In recent years, many individuals have used “file-sharing” software, such as “Grokster,” to copy and 

distribute copyrighted music, movies, and software over the Internet without the authorization of the 

copyright owners. In this case, the Supreme Court addressed whether Grokster and other software 

providers could be held secondarily liable for copyright infringement. 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 59
United States Department of Justice
 

The Department of Justice’s amicus brief argued that the Court should examine Grokster’s business 

plan and knowledge of likely infringement to determine whether Grokster could be liable for actively 

inducing users to infringe copyrights on its peer-to-peer network. The Department of Justice focused on 

evidence that Grokster intended to use the enticement of illegally copied music to generate advertising 

revenue. 

The Supreme Court ultimately ruled against the software providers and adopted a liability standard 

that closely followed one of the standards proposed by the Department of Justice. This decision will help 

victims of intellectual property theft protect the value of their property from unauthorized online distribution by allowing lawsuits against those who may be secondarily liable for infringing the owner’s rights. 

� eBay Inc. v. MercExchange, LLC, 2006 WL 1310670 (May 15, 2006): 

The eBay case was the subject of considerable press commentary about the role of intellectual property enforcement as it relates to innovation and, in particular, the standards that judges must use to grant a 

permanent injunction against a patent infringer. 

On March 10, 2006, the Department of Justice filed an amicus brief regarding these standards. The 

Department of Justice argued in favor of a permanent injunction against the patent infringer and advocated a set of principles that should apply in such cases. On May 15, 2006, the Supreme Court issued a 

decision that adopted much of the Department of Justice’s reasoning. 

� Illinois Tool Works, Inc. v. Independent Ink, Inc., 126 S. Ct. 1281 (2006): 

The Nation’s antitrust laws prohibit companies from using a monopoly in one market to establish a 

monopoly in another market, or in other words, from “tying” the sale of one product to the sale of another product. Oftentimes, a company will sue a patent holder under the antitrust laws and claim that the 

patent holder illegally “tied” the sale of another product to the patented product. As part of this claim, 

the company alleges that the patent’s existence gives the patent holder an economic monopoly, or “market power,” in a particular market. 

In this case, the U.S. Court of Appeals for the Federal Circuit held that Supreme Court precedent 

established a rebuttable presumption that the defendant has such market power if the tying product is 

patented. The Supreme Court granted review, and the United States filed an amicus brief arguing both 

that controlling precedent did not mandate a presumption that patents confer market power and that such 

a presumption would conflict with the procompetitive policies of the antitrust laws. In a unanimous decision, the Supreme Court rejected the presumption and, as the United States had urged, vacated the 

Federal Circuit’s judgment and remanded the case for further proceedings in the district court to determine, among other things, whether the defendant had market power. 

� McFarling v. Monsanto Co., 125 S. Ct. 2956 (2005): 

In this case, a licensee had claimed that a patent owner committed patent misuse or related antitrust violations when it refused to permit the saving and replanting of second generation genetically-modified agricultural seeds. The Federal Circuit rejected the licensee’s claim. On petition for certiorari before the U.S. Supreme 

60 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
VII. What is the Status of the Intellectual Property Task Force’s Recommendations?
 

Court, the United States, as amicus, stated that it is well-settled that “[a] patentee . . . does not engage in patent 

misuse when it merely invokes its core right to refuse to license its patented invention,” and therefore, there 

was no need for the Supreme Court to review the Federal Circuit’s decision. The Court agreed, denying the 

petition in June 2005. 

� Laboratory Corp. of America v. Metabolite Laboratories, Inc., No. 04-607: 

The patent laws preclude patent protection for principles of nature, such as electricity and magnetism. 

Biotechnology inventions, however, often employ such discovered principles in methods of diagnosis. 

In an amicus brief, the Department of Justice discussed the USPTO’s recent guidelines regarding the 

circumstances in which the principles-of-nature doctrine will bar patent protection. The brief counseled 

the Court to exercise caution before broadly reviewing the principles-of-nature doctrine. As the brief 

argued, an overly broad application could jeopardize protection for a number of valuable patents on methods used to detect and treat various diseases. The brief also suggested a number of narrower rationales for 

resolving this particular case. A decision by the Supreme Court is expected in June 2006. 

� MedImmune, Inc. v. Genentech, Inc., No. 05-608: 

The Declaratory Judgment Act generally permits parties having concrete disputes to obtain a judicial 

determination of their rights without having to run the risks that might flow from breaching a contract 

or infringing a patent. However, the Federal Circuit has required a party to face a reasonable apprehension of an infringement suit in order to challenge a patent through a declaratory judgment action. The 

court has further held that a licensee who pays royalties under protest cannot file a declaratory judgment 

action because it lacks an apprehension that it will be sued. In an amicus brief, the Department of Justice 

has argued that the Federal Circuit’s rule for patent cases is at odds with the general principles underlying 

the Declaratory Judgment Act, and that it impairs competition by prohibiting the party that may have 

the most interest in challenging a patent (a licensee) from bringing an action to have the patent declared 

invalid unless the licensee also breaches the license and incurs substantial risks. We expect that this case 

will be heard in the fall of 2006. 

� KSR International Co. v. Teleflex, Inc., No. 04-1350: 

In this case, the Supreme Court has been asked to reverse a decision of the United States Court of 

Appeals for the Federal Circuit (“Federal Circuit”) on the meaning of Section 103(a) of the patent laws 

and the use of prior art. That section prohibits patentability of an invention “if the differences between 

the subject matter sought to be patented and the prior art [i.e., the preexisting state of knowledge in the 

relevant field] are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.” Prior art 

includes knowledge available to those skilled in the art through prior publications, patents, and products 

that have been sold or publicly used more than one year before the filing of a patent application. The 

Federal Circuit reversed a summary judgment that an adjustable automobile pedal patent was invalid 

because, in its view, the district court had not pointed to a specific suggestion in the prior art to combine 

features of two prior art devices. The petitioner contends that the suggestion test adds an element not conProgress Report of the Department of Justice’s Task Force on Intellectual Property 61
United States Department of Justice
 

tained in the statutory test for obviousness and is inconsistent with prior Supreme Court precedent. The 

Supreme Court has asked the Department of Justice for its views regarding the case. 

� Apotex Inc. v. Pfizer, Inc., No. 05-1006: 

This case involves the circumstances in which companies that seek to market generic equivalents of 

patented brand-name drugs will be permitted to challenge the patents on the brand-name drug. In this 

case, the Court of Appeals held that a prospective generic drug manufacturer could not sue a patent holder to obtain a judicial ruling that its generic drug would not infringe the patent, because there was no risk 

that the patent holder would sue for infringement in the near future. Petitioner contends that it should 

be permitted to obtain judicial confirmation that its generic drug would not infringe the patents in order 

to facilitate government approval. The Supreme Court has asked the Department of Justice for its views 

regarding this complex case. 

� Empresa Cubana del Tabaco d/b/a Cubatabaco v. Culbro Corp., 399 F.3d 462 (2d Cir. 2005): 

In trademark law, the “famous marks doctrine” permits a foreign trademark owner to establish certain 

rights if the trademark has achieved a certain level of consumer recognition from sales in other countries. 

In this case, the court considered whether the Cuban embargo prevented a Cuban company from acquiring the rights to the COHIBA trademark by operation of the famous marks doctrine. 

In an amicus brief, the Department of Justice argued that the embargo prevented the Cuban company from acquiring the mark, but did not prevent it from cancelling the United States mark that was previously awarded to another entity in the United States but was cancelled based on the Cuban entity’s use 

of the mark abroad. A federal court of appeals agreed with the Department of Justice’s analysis under the 

embargo, but disagreed that the Cuban entity could obtain a cancellation of the mark. The Supreme 

Court invited the Department of Justice to file a brief expressing the views of the United States, which 

was filed on May 19, 2006. 

B. Lower Court Cases 

� DMCA subpoena litigation: 

Unfortunately, some Internet users illegally distribute copyrighted material over the Internet. The Digital 

Millennium Copyright Act (“DMCA”) authorizes copyright owners to subpoena Internet Service Providers 

(“ISPs”) to learn the identity of the ISPs’ subscribers. In several lawsuits, however, ISPs have argued that the 

DMCA does not apply to them if they merely serve as “conduits” to transmit infringing material, such as copyrighted music, and that if the DMCA does apply to them, it violates the Constitution. 

In a number of cases, the Department of Justice intervened to defend copyright owners’ use of civil subpoenas. The Department of Justice argued that the DMCA was constitutional and that it applied to ISPs 

who act as conduits. To date, courts generally have found that the DMCA does not reach conduit ISPs. 

Nevertheless, the Department of Justice continues to support the federal government’s authority to enable 

private companies to combat copyright infringement by participating in appeals in these matters and intervening in lower court cases. 

62 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
VII. What is the Status of the Intellectual Property Task Force’s Recommendations?
 

�	 KISS Catalog v. Passport Int’l Productions, Inc., No. 03-CV-08514 (C.D. Cal. Dec. 21, 2005): 

In this case, the rock band KISS sued a company for distributing an unauthorized recording of a 1976 concert. The Department of Justice intervened in the lawsuit and argued that an anti-bootlegging statute barred 

the company’s unauthorized distribution. In its brief, the Department of Justice argued that the anti-bootlegging statute was valid because it fell outside the domain of the Copyright Clause’s time limits on copyright protection, which apply to “writings” of an author. The court agreed with the Department of Justice’s position, and 

held that the anti-bootlegging statute addresses live performances and unauthorized recordings rather than the 

“writings” of an author and serves to complement, rather than violate, the Copyright Clause. The court’s decision expands the scope of intellectual property protection. 

�	 Aharonian v. Gonzales, No. 04-5090 (District Court), No. 06-15361 (on appeal in the Ninth 

Circuit Court of Appeals): 

The plaintiff, a computer programmer, sued the Department of Justice to block the enforcement of 

copyright laws against persons who copy computer source code. The plaintiff argues that the copyright 

laws are unconstitutionally vague as applied to source code. The plaintiff also argues that patent law, rather 

than copyright law, is the sole source of protection for intellectual property in computer programs. The 

Department of Justice is defending the suit on the ground that copyright laws clearly apply to computer 

programs and are not unconstitutionally vague. The district court ruled in the Department’s favor, and 

the Department is now defending the district court’s decision on appeal. 

�	 Elektra Entertainment Group, Inc. v. Barker, No. 05-CV-7340 (S.D.N.Y.): 

In this case, a peer-to-peer system user allegedly posted copies of recorded songs online and, thus, 

transferred those copies when they were downloaded by other system users. The defendant argued that 

electronically transferring a copy of a song was not the same thing as “distributing” the song within the 

meaning of the relevant statute. On April 21, 2006, the Department of Justice filed a Statement of Interest 

arguing that when a peer-to-peer system user electronically transfers a copy of a copyrighted file without 

authorization, that user infringes the copyright owner’s distribution right. The Department of Justice’s 

position, which comports with a number of court decisions, serves as a basis for many of the Department 

of Justice’s criminal copyright infringement prosecutions. A decision is pending on the defendant’s motion 

to dismiss. 

�	 Fonovisa, Inc. v. Alvarez, No. 06-CV-011 (N.D. Tex.): 

This case, like Elektra Entertainment, also involved a claim of peer-to-peer transfer of copyrighted 

works in which the defendant raised the same argument that an electronic transfer of a song did not constitute an infringing “distribution.” On May 16, 2006, the Department of Justice filed a Statement of 

Interest advancing the same arguments as it did in the Elektra Entertainment case. 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 63
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D. ANTITRUST RECOMMENDATIONS 

The Antitrust Division’s mission is to enforce federal antitrust laws. However, intellectual property plays 

an increasingly important role in the Antitrust Division’s merger and civil non-merger investigations, and the 

Department of Justice bears in mind that the antitrust and intellectual property laws share the common purpose of promoting innovation and enhancing consumer welfare. The Department of Justice recognizes that 

enforcing antitrust laws in a way that condemns beneficial uses of intellectual property rights could undermine pro-competitive incentives. 

Given the importance of antitrust enforcement to the protection of intellectual property rights, the Task 

Force made the following recommendations listed below. The status of each recommendation is also indicated below. 

(1) Support the rights of intellectual property owners to decide independently whether to 

license their technology to others. 

STATUS: IMPLEMENTED AND ONGOING 

(2) Encourage trade associations and other business organizations seeking to establish industry 

standards for the prevention of intellectual property theft to use the Department of Justice’s 

business review procedure for guidance regarding antitrust enforcement concerns. 

STATUS: IMPLEMENTED AND ONGOING 

(3) Continue to promote international cooperation and principled agreement between nations 

on the proper application of antitrust laws to intellectual property rights. 

STATUS: IMPLEMENTED AND ONGOING 

Detailed background information and an explanation of the status of each recommendation is 

set forth below. 

ANTITRUST RECOMMENDATION #1 

Support the rights of intellectual property owners to determine independently whether to license their 

technology. 

RECOMMENDATION: The Department of Justice should support the rights of intellectual property owners to decide independently whether to license their technology to others. 

STATUS: IMPLEMENTED AND ONGOING 

64 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
VII. What is the Status of the Intellectual Property Task Force’s Recommendations?
 

EXPLANATION: As its primary implementation of this recommendation, the Department of Justice 

ensures that its own antitrust enforcement efforts do not impair the important right of intellectual 

property owners to decide whether to license that property. In addition, the Department of Justice 

advocates frequently, before both domestic and international audiences, that this policy should exist 

throughout the world. The Department of Justice’s Assistant Attorney General for Antitrust delivered 

a keynote address at the European Union Competition Workshop in June 2005 in which he stressed 

the importance of licensing freedom, tracing the development of this principle through United States 

Supreme Court precedent and comparing it to developing doctrines of law in the European Union. 

In addition, the Department of Justice has argued to uphold this principle in amicus briefs in several 

civil cases, as explained previously in this Progress Report. 

Given the many Supreme Court cases indicating that the right to exclude is a fundamental right 

embodied in the grant of a patent, the Department of Justice has concluded that the right of intellectual property owners to unilaterally, unconditionally refuse to license a valid patent is clear. The 

Department of Justice will continue to focus on international advocacy, particularly in foreign jurisdictions that adopt a contrary view, for its future implementation of this recommendation. 

ANTITRUST RECOMMENDATION #2 

Encourage the use of the Justice Department’s business review procedure. 

RECOMMENDATION: The Department of Justice should encourage trade associations and other 

business organizations seeking to establish industry standards for the prevention of intellectual property theft to use the Justice Department’s business review procedure for guidance regarding antitrust 

enforcement concerns. 

STATUS: IMPLEMENTED AND ONGOING 

EXPLANATION: The Department of Justice promotes the use of its business review procedure 

through individual contact with interested parties and through various outreach efforts, including 

Internet resources. The Department of Justice maintains an Internet site that explains the business 

review procedure in detail (www.usdoj.gov/atr/public/busreview/procedure.htm) and provides searchable 

copies of business review letters issued since 1992. In addition, since the issuance of the 2004 Report, 

Department of Justice representatives, including the Assistant Attorney General for Antitrust, have 

encouraged industry to use the business review process through more than a dozen speeches and presentations that discuss the Task Force’s recommendations. 

Several intellectual property owners, both individually and as members of trade associations or other 

organizations, have begun preliminary discussions with the Department of Justice about the antitrust 

implications of their planned efforts to protect intellectual property rights, and may submit business 

review requests in the future. The Department of Justice treats pending business reviews as ongoing 

investigations and therefore does not recount the specifics of such requests to the public. 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 65
United States Department of Justice
 

ANTITRUST RECOMMENDATION #3 


Promote international cooperation on the application of antitrust laws to intellectual property rights. 

RECOMMENDATION: The Department of Justice should continue to promote international 

cooperation and principled agreement between nations on the proper application of antitrust laws to 

intellectual property rights. 

STATUS: IMPLEMENTED AND ONGOING 

EXPLANATION: The Department of Justice promotes sound intellectual property and competition 

policy through a variety of efforts under the coordination of its Antitrust Division’s Foreign 

Commerce Section, assisted by the National Criminal Enforcement, Appellate, and Legal Policy 

Sections of the Antitrust Division and other Department of Justice components as appropriate. These 

efforts fall within several categories, including: 

Intellectual Property Working Groups. Since the issuance of the 2004 Report, the Department of 

Justice has continued to engage in a number of intellectual property working groups, as well as more 

informal consultations, with the antitrust agencies of major United States trading partners. These 

agencies include the Japanese Fair Trade Commission, the Korean Fair Trade Commission, the 

Canadian Competition Bureau, and the Federal Competition Commission of Mexico. Throughout 

2005 and 2006, the Department of Justice held meetings with representatives of the People’s Republic 

of China, Chinese academics, and United States and Chinese business persons regarding China’s 

efforts to enact its first general antitrust statute. In those meetings and in subsequent discussions, the 

Department of Justice has recommended that China’s new law reflect the importance of ensuring that 

intellectual property rights are respected in order to foster the investment in innovation necessary for 

a competitive and dynamic market. The Department of Justice also meets on a frequent, informal 

basis with representatives of European nations and the European Union, including the Competition 

Directorate General of the European Commission, to discuss particular investigations and general 

principles involving competition law and intellectual property. In each of these efforts, the 

Department of Justice has worked jointly with the Bureau of Competition of the United States Federal 

Trade Commission. 

Competition Advocacy through Multinational Organizations, Policy Forums, and Direct 

Training of Foreign Competition Agencies. The Department of Justice incorporates the promotion 

of sound intellectual property principles into its participation in numerous international conferences 

devoted to competition policy and economic growth. The Department of Justice helped found the 

International Competition Network (“ICN”) in 2001 to promote effects-based competition laws 

worldwide and the principled convergence of antitrust analysis. The Department of Justice emphasized the protection of intellectual property rights at the June 2005 and May 2006 meetings of the 

ICN. The Department of Justice chairs the Working Party on Competition and Enforcement of the 

Competition Committee of the Organization for Economic Cooperation and Development and has 

advocated sound intellectual property policy in that forum throughout various meetings in 2005 and 

2006. The Department of Justice regularly promotes the view that intellectual property and antitrust 

laws are complementary in speeches to public-private forums around the globe. In addition, it fre66 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
VII. What is the Status of the Intellectual Property Task Force’s Recommendations?
 

quently provides guidance to foreign antitrust authorities seeking to create or revise their own intellectual property and antitrust enforcement policies and guidelines. Moreover, the Antitrust Division 

has had an active technical assistance program for many years through which it has advised governments in the process of adopting competition laws and new competition agencies on a wide range of 

antitrust issues, including the interplay between competition policy and intellectual property. In 

2005-06, the recipients of such missions included Egypt, India, Russia, and several Latin American 

and Southeast Asian nations. Of particular interest, the current Assistant Attorney General for 

Antitrust visited authorities in China in June 2005, and the Antitrust Division’s Deputy Assistant 

Attorney General for International Enforcement, Appellate, and Legal Policy visited China in May 

2005 and March and May 2006. In many of these efforts, the Department of Justice coordinated its 

intellectual property policy and competition advocacy efforts with the Bureau of Competition of the 

United States Federal Trade Commission, and in some cases the Department of Justice also coordinated its efforts with the Competition Directorate General of the European Commission. 

E. PREVENTION RECOMMENDATIONS 

Education is a key tool in Department of Justice’s mission to promote intellectual property protection. 

Protecting intellectual property is a collective effort of all citizens and therefore the public must be aware of 

their individual responsibilities. Therefore, the Department of Justice is constantly exploring opportunities to 

educate the public about intellectual property laws and the role that the Department of Justice plays in 

enforcement of those laws. In addition, the Department of Justice continues to form partnerships with victims of intellectual property theft in common educational initiatives. The Department of Justice has forged 

important, long-term partnerships with federal agencies, nonprofit educational institutions, and network television, with the goal of educating students and adults about the importance of protecting creativity through 

the development of educational programs and materials for classroom use. Accordingly, the recommendations 

set forth below were designed to increase the Department of Justice’s effectiveness in preventing intellectual 

property crimes from occurring and raising public awareness. The status of each recommendation is set forth 

below. 

(1) Develop a national education program to prevent intellectual property crime. 

(A) Developing materials for student educational programs; 

STATUS: IMPLEMENTED AND ONGOING 

(B) Creating partnerships with non-profit educational organizations to promote public 

awareness regarding intellectual property crimes; 

STATUS: IMPLEMENTED AND ONGOING 

(C) Developing a video to teach students about the negative consequences of intellectual 

property theft; and 

STATUS: IMPLEMENTED AND ONGOING 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 67
(2) Educate the public regarding the Department of Justice’s policy on peer-to-peer networks. 

STATUS: IMPLEMENTED 

(3) Promote authorized use and awareness of the FBI’s new anti-piracy seal and warning. 

STATUS: IMPLEMENTED AND ONGOING 

PREVENTION RECOMMENDATION #1 

Develop a National Education Program to Prevent Intellectual Property Crime 

RECOMMENDATION: The Department of Justice should develop a national program to educate 

students about the value of intellectual property and the consequences of committing intellectual 

property crimes by: (A) developing materials for student educational programs, (B) creating partnerships with non-profit educational organizations to promote public awareness regarding intellectual 

property crime, (C) developing a video to teach students about the negative consequences of intellectual property theft, and (D) encouraging federal prosecutors handling intellectual property crime cases 

throughout the nation to promote the Department of Justice’s public awareness programs. 

STATUS: IMPLEMENTED AND ONGOING 

EXPLANATION: The Department of Justice has developed strategic partnerships with non-profit 

educational organizations and other federal agencies to create and fund development of educational 

curricula, conduct educational events for students to learn interactively, and fund long-term teacher 

training programs. 

National Educational Prevention Teacher Training Initiative 

In a joint venture, the USPTO and the Department of Justice are funding a three-year, $300,000 annual program with three national nonprofit educational organizations: Street Law, i-Safe, and the Constitutional 

Rights Foundation. The program will focus on training teachers (who in turn will train other teachers) about 

intellectual property, the laws protecting it, and the responsibilities of citizens to respect it. The program will 

select major cities across the country to develop teacher-training seminars where teachers will be instructed 

about intellectual property by education experts, a network of local professional volunteer lawyers, federal 

investigators; federal prosecutors, and curriculum developers. Teachers will take their experience and knowledge back into the classroom and, with the curriculum developed by the nonprofit educational organization 

i-Safe, students will be taught about intellectual property and the importance of respecting it. The program 

also contemplates developing a website with free downloadable materials, games, and links to other 

Department of Justice intellectual property educational and outreach activities. 

United States Department of Justice 


68 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
VII. What is the Status of the Intellectual Property Task Force’s Recommendations?
 

Activate Your Mind: Protect Your Ideas 

In October 2004, the Department of Justice formed an educational 

partnership with Street Law, i-Safe, and Court TV, with the goal of developing a national campaign aimed at educating students about intellectual property protection. One part of the national campaign involved creating a series 

of educational events entitled “Activate Your Mind: Protect Your Ideas” 

(“AYM”). The AYM campaign conducted a series of educational events 

throughout the country involving students, teachers, high-level government 

representatives, and victims of intellectual property theft. The AYM events 

were filmed by Court TV and broadcast on their educational series entitled 

“Choices and Consequences,” which targets thousands of middle school and 

high school students across the country. The Court TV footage also served as 

material for an educational DVD to be used in conjunction with curriculum 

materials and public awareness events. The weeks leading up to the event created an opportunity for i-Safe and Street Law to introduce a curriculum to the 

participating students of the AYM events in an effort to educate and raise the 

student’s level of awareness about intellectual property. 

Attorney General Alberto R. Gonzales participates in the second installment of Court 

TV’s “Activate Your Mind: Protect Your Ideas” program on April 28, 2005 at UCLA 

with over 120 high school students to discuss movie and television piracy and the 

importance of protecting creativity. Photo courtesy of Court TV. 

The first AYM event was held in 

October 2004 in Washington, D.C., at the 

Department of Justice and involved 100 area 

high school students. With a focus on music 

piracy, the event included presentations by 

songwriters, Department of Justice officials, 

victim representatives, a convicted intellectual property felon, on the impact of piracy. 

On April 28, 2005, Attorney General 

Gonzales participated in the second installment of the AYM program at UCLA, with 

over 120 high school students, to discuss 

movie and television piracy and the importance of protecting creativity. The Attorney 

General led students in a question and answer 

session and students also heard from a convicted intellectual property offender, Assistant 

United States Attorneys, FBI agents, actors, 

stuntmen, and the President of the Motion 

Picture Association of America. 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 69 
United States Department of Justice 


The third AYM event was held in March 

2006 in San Jose and involved 100 middle 

school children. The Department of Justice 

partnered with the USPTO, Court TV, and 

Web Wise Kids (child internet safety experts), 

to discuss intellectual property. Focusing on 

software piracy, the educational partners used 

computer tools and programs to teach the 

students about intellectual property. The students then designed their own intellectual 

property software. An Assistant United States 

Attorney also educated the children about 

intellectual property laws. The students heard 

from, and interacted with, the Attorney 

General, the Director of the USPTO, and victim-industry representatives from the 

Electronic Software Alliance. tion. Photo courtesy of Court TV. 

Attorney General Alberto R. Gonzales greets cheering students at the Windmill 

Springs Middle School on March 30, 2006 in San Jose, California where he 

participated in an educational event focused on intellectual property protecIntellectual Property Forum 

In October 2005, Attorney General Gonzales joined Commerce Secretary Carlos Gutierrez, Senator John 

Cornyn, and Congressman Lamar Smith at the University of Texas Law School in Austin, Texas, to discuss 

intellectual property with legal scholars and high-tech industry leaders. The panelists discussed the importance 

of the criminal and civil enforcement of 

intellectual property for future economic 

growth and innovation. This event was 

filmed by Court TV and incorporated into 

its educational programming that aired as 

part of its “Choices and Consequences” 

series. Copies of the program will be disseminated in conjunction with the Department 

of Justice’s educational package for classrooms. 

International Outreach 

European countries have expressed in­


terest in the efforts of the Department of 


Justice to prevent intellectual property theft 


through education. Department of Justice 


officials have traveled to various countries to 

participate in, and showcase, the strategies 

behind the efforts of the Department of 

Justice. Italy invited the Department of 

Justice and its educational partners to share, 

al property protection in the high-tech industry at the University of Texas Law 

School in Austin, Texas on October 31, 2005. Photographed from left to right 

are: Secretary Carlos Gutierrez, Department of Commerce, Attorney General 

Alberto R. Gonzales, U.S. Senator John Cornyn (R-Texas), and U.S. Rep. Lamar 

Smith (R-Texas). Photo courtesy of Court TV. 

U.S. government officials joined together to discuss the importance of intellectu70 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
VII. What is the Status of the Intellectual Property Task Force’s Recommendations?


with high-level Italian officials, the Department of Justice’s model of private sector and public cooperation in 

educational outreach. Similarly, French government officials invited the Department of Justice to share law 

enforcement strategies on educating the public about intellectual property theft and, as a result of the 

Attorney General’s meeting with the Justice Minister of Germany, the Department is pursuing a partnership 

with German officials on intellectual property strategies for educational efforts. 

Industry Outreach 

In partnership with the United States Chamber of Commerce’s Coalition Against Counterfeiting and 

Piracy (“CACP”), the Department of Justice has developed a working group of federal, State, and local prosecutors, investigators, and law enforcement officials to address the problems facing intellectual property 

enforcement and the importance of intellectual property victim-industry referrals. This working group participated in two conferences and invited intellectual property victim-industry members to attend. The purpose of the conferences was to explain the various aspects of intellectual property investigations for federal, 

state, and local enforcement and develop a better understanding among intellectual property victims of how 

to refer an intellectual property theft to law enforcement. The first conference was held in Los Angeles on 

March 7, 2006, and involved participants from the Los Angeles Police Department, the Los Angeles Sheriff’s 

Office, the Los Angeles District Attorney’s Office, ICE, the FBI, and prosecutors from the United States 

Attorney’s Office for the Central District of California. 

The second conference was held in New York City in April 2006, and involved members from the New 

York Police Department’s Trademark Infringement Group, the New York County District Attorney’s office, 

the Bronx District Attorney’s office, the Queens District Attorney’s office, ICE, the FBI, United States Secret 

Service, and the United States Attorneys’ Offices for the Eastern and Southern Districts of New York. The 

conference involved over 130 law enforcement and industry participants. 

PREVENTION RECOMMENDATION #2 

Educate the Public Regarding the Department of Justice’s Policy on Peer-to-Peer Networks 

RECOMMENDATION: The Department of Justice should educate the public regarding its policy 

prohibiting the use of peer-to-peer file-sharing networks on Justice Department computer systems. 

STATUS: IMPLEMENTED 

EXPLANATION: On September 17, 2004, the Department of Justice’s Chief Information Officer 

issued a memorandum (contained in the Appendices of the 2004 Report) discussing the policy prohibiting the use of peer-to-peer software on its computer system. Since that time, the Department of 

Justice has distributed several thousand copies of the 2004 Report of the Department of Justice’s Task 

Force on Intellectual Property to the public. 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 71 
United States Department of Justice
 

PREVENTION RECOMMENDATION #3 

Promote Authorized Use and Awareness of the FBI’s New Anti-Piracy Seal and Warning 

RECOMMENDATION: The Department of Justice should promote authorized use and awareness 

of the FBI’s new Anti-Piracy Seal to deter copyright infringement and trademark offenses. 

STATUS: IMPLEMENTED AND ONGOING 

EXPLANATION: The Department of Justice has heavily promoted the use of the FBI’s Anti-Piracy 

Seal to industry associations. Currently, the FBI has written agreements with the Motion Picture 

Association of America, the Recording Industry Association of America, the Software Information 

Industry Association, and the Entertainment Software Association, which use the Anti-Piracy Seal on 

copyrighted works to serve as a visible warning of the consequences of committing intellectual property crimes. The Department of Justice will continue to promote the use of the Anti-Piracy Seal with 

industry association representatives. 

CONCLUSION 

The Department of Justice has implemented all of the recommendations contained in the 2004 Report. In addition, the Department of Justice has proposed and 

implemented additional recommendations to promote intellectual property rights. 

Notwithstanding these achievements, the Department of Justice will not cease its 

efforts. The Department of Justice will continue to increase its effectiveness in protecting the creativity and innovation that drives our Nation’s economy. As indicated 

throughout this Progress Report, and in statements by the Attorney General, the theft 

of intellectual property is a threat to our national economic security. The Department 

of Justice will continue to wage an aggressive campaign to protect the Nation’s intellectual resources. 

72 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
APPENDIX A.
 

DEPARTMENT OF JUSTICE TASK FORCE ON INTELLECTUAL PROPERTY 

SUMMARY OF RECOMMENDATIONS 

A. CRIMINAL ENFORCEMENT RECOMMENDATIONS 

The Task Force has determined that protection of intellectual property is essential to maintain the nation’s 

economic national security. Accordingly, the recommendations re-emphasize the Department of Justice’s commitment to enforce aggressively the laws against the theft of copyrighted works, trademark counterfeiting, 

theft of trade secrets, and other intellectual property offenses. Accordingly, the recommendations set forth 

below are designed to strengthen the Department’s commitment to protect intellectual property. 

(1) The Department of Justice should create five additional CHIP Units in regions of the country where intellectual property producers significantly contribute to the national economy. 

These areas are the District of Columbia; Sacramento, California; Pittsburgh, Pennsylvania; 

Nashville, Tennessee; and Orlando, Florida; 

(2) The Department of Justice should reinforce and expand existing CHIP Units located in key 

regions where intellectual property offenses have increased, and where the CHIP Units have 

effectively developed programs to prosecute CHIP-related cases, coordinate law enforcement 

activity, and promote public awareness programs; 

(3) The Department of Justice should designate CHIP Coordinators in every federal prosecutor’s office and make the coordinators responsible for intellectual property enforcement in that 

region; 

(4) The Department of Justice should examine the need to increase resources for the Computer 

Crime and Intellectual Property Section of the Criminal Division in Washington, D.C., to 

address additional intellectual property enforcement concerns; 

(5) The Department of Justice should recommend that the FBI increase the number of Special 

Agents assigned to intellectual property investigations, as the Justice Department itself increases the number of prosecutors assigned to intellectual property enforcement; 

(6) The Department of Justice should recommend that the FBI increase the number of personnel assigned to search for digital evidence in intellectual property cases; 

(7) The Department of Justice should dismantle and prosecute more nationwide and international criminal organizations that commit intellectual property crimes; 

(8) The Department of Justice should enhance programs to train prosecutors and law enforcement agents investigating intellectual property offenses; 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 73
United States Department of Justice
 

(9) The Department of Justice should prosecute aggressively intellectual property offenses that 

endanger the public’s health or safety; 

(10) The Department of Justice should emphasize the importance of charging intellectual property offenses in every type of investigation where such charges are applicable, including organized crime, fraud, and illegal international smuggling; 

(11) The Department of Justice should enhance its program of educating and encouraging victims of intellectual property offenses and industry representatives to cooperate in criminal 

investigations. 

Recommended enhancements include: 

(A) Encouraging victims to report intellectual property crime to law enforcement agencies; 

(B) Distributing the new “Department of Justice Guide to Reporting Intellectual Property 

Crime” to victims and industry representatives regarding federal intellectual property 

offenses; and 

(C) Hosting a conference with victims and industry representatives to educate participants 

on how they can assist in law enforcement investigations. 

(12) The Department of Justice should issue internal guidance to federal prosecutors regarding how 

victims can assist prosecutors in intellectual property cases. 

B. INTERNATIONAL COOPERATION RECOMMENDATIONS 

International cooperation is a critical component in stemming the tide of global intellectual property 

theft. Intellectual property thieves in foreign countries must be subject to, and prosecuted by, foreign governments. In addition, foreign governments must assist the United States in its efforts to gather evidence and 

prosecute intellectual property criminals who violate the laws of the United States. Accordingly, the following 

recommendations are designed to increase cooperation with foreign countries regarding intellectual property 

enforcement: 

(1) The Department of Justice should deploy federal prosecutors to the United States embassies 

in Hong Kong and Budapest, Hungary, and designate them as “Intellectual Property Law 

Enforcement Coordinators” (“IPLECs”) to coordinate intellectual property enforcement efforts 

in those regions; 

(2) The Department of Justice should recommend that the FBI co-locate Legal Attachés with 

intellectual property expertise to Hong Kong and Budapest, Hungary, to assist the newly 

assigned IPLECs in investigative efforts; 

74 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
Appendix A.
 

(3) Direct prosecutors and agents to increase the use of alternative channels of communication, 

such as “law enforcement-to-law enforcement” contacts, to collect information and evidence 

quickly in foreign investigations; 

(4) The Department of Justice should enhance its intellectual property training programs for 

foreign prosecutors and law enforcement investigators in coordination with the Department of 

State; 

(5) The Department of Justice should prioritize treaty negotiations for legal assistance agreements with foreign governments where intellectual property enforcement is a significant problem; 

(6) The Department of Justice should ensure that intellectual property crimes are included in 

all extradition treaties and prioritize negotiations with foreign countries according to intellectual property enforcement concerns; and 

(7) The Department of Justice should emphasize intellectual property enforcement issues during discussions with foreign governments. 

C. CIVIL ENFORCEMENT RECOMMENDATION 

The Department of Justice fights against the theft of intellectual property most visibly through its enforcement of the Nation’s criminal laws. The successful defense of intellectual property rights, however, also 

requires vigorous enforcement by the owners of intellectual property through the civil justice system. In 2004, 

the Task Force made the following recommendation regarding the Department of Justice’s efforts to protect 

intellectual property rights in the civil courts. 

(1) The Department of Justice should assist private parties in enforcing civil laws that protect 

intellectual property owners against theft by supporting an effective statutory framework for 

such enforcement. When a court decision or lawsuit threatens the civil remedies available under 

federal law, the Justice Department should defend in court all appropriate intellectual property protections and vigorously defend Congress’s authority in protecting intellectual property 

rights. 

D. ANTITRUST RECOMMENDATIONS 

The Department of Justice’s Antitrust Division is responsible for promoting and protecting the competitive process and the American economy through enforcement of antitrust laws. These laws prohibit a variety 

of practices that restrain trade, such as price-fixing conspiracies, corporate mergers likely to reduce competition, and predatory acts designed to achieve or maintain monopoly power. When these practices involve intellectual property, they can raise complex questions about the proper application of antitrust to intellectual 

property rights. The Task Force Report recognizes that intellectual property rights can promote competition 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 75
United States Department of Justice
 

by creating incentives to innovate and commercialize new ideas that enhance consumer welfare and that 

enforcing the antitrust laws in a way that condemns the beneficial use of intellectual property rights could 

undermine the incentive to create and disseminate intellectual property. The following recommendations help 

ensure that the antitrust laws are appropriately applied to intellectual property in a way that does not chill the 

exercise of legitimate intellectual property rights: 

(1) The Department of Justice should support the rights of intellectual property owners to 

decide independently whether to license their technology to others; 

(2) The Department of Justice should encourage trade associations and other business organizations seeking to establish industry standards for the prevention of intellectual property theft, 

to use the Justice Department’s business review procedure for guidance regarding antitrust 

enforcement concerns; and 

(3) The Department of Justice should continue to promote international cooperation and principled agreement between nations on the proper application of antitrust laws to intellectual 

property rights. 

E. LEGISLATIVE RECOMMENDATIONS 

The Task Force examined a number of pending bills in Congress and developed a set of general principles 

to guide pending and future legislation regarding the enforcement of intellectual property rights. 

Principles for Pending Legislation 

The circumvention of technological safeguards protecting copyrighted works should be subject to prosecution. The owners of intellectual property have the primary responsibility for protecting their creative works 

from unauthorized duplication. Technological safeguards such as digital rights management software and 

other forms of copy-protection provide means of doing so. Federal law should reinforce the use of these technological safeguards by preventing their deliberate and unauthorized circumvention. 

The distribution of counterfeit products should be thwarted by seizing, when possible, the materials and 

equipment used in making them. The distribution of counterfeit products (both goods and creative works) 

represents not only a theft of intellectual property and a potential source of consumer fraud, but a significant 

threat to public health and safety. In order to prevent the distribution of counterfeit products, the government 

should take reasonable steps to prevent their production. When law enforcement officials find materials and 

equipment that are used to create counterfeit products, the materials and equipment should be seized. Legal 

loopholes should not allow trafficking in counterfeit labels simply because they have not yet been attached to 

counterfeit goods. 

The passive sharing of copyrighted works for unlawful duplication should be treated as the distribution 

of those works and should, where appropriate, be subject to prosecution. Distributing unauthorized copies of 

copyrighted works is a criminal violation if the total retail value of the original work, multiplied by the number of unauthorized copies, reaches a certain monetary threshold. Given the minimal cost of distributing 

copyrighted works over the Internet, making such files available for others to copy is equivalent to distribut76 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
Appendix A.
 

ing them. The criminal copyright statute should therefore prohibit people from knowingly making available 

to the public a threshold number of infringing copies or exceeding a threshold value. 

Copyright law should recognize the premium value of a copyrighted work before the work is released for 

sale to the general public. A copy of a copyrighted work is more valuable before it can be legitimately obtained 

by anyone else. In such situations, not only is this “prerelease” copy rarer, but it can also permit the holder to 

distribute copies as early as – or before – the copyrighted work’s legitimate owner. As a result, although prerelease copies of a copyrighted work have no legitimate retail value, they can be the most valuable copies of 

all and their distribution can damage the rights holder. The copyright laws should reflect the premium value 

of pre-release copies, particularly at the stage of sentencing defendants for criminal violations. 

The law should provide a remedy against those who intentionally induce infringement. Owners of intellectual property have the primary responsibility for protecting their intellectual property through civil 

enforcement actions if necessary. Computer networks that facilitate the unauthorized sharing and copying of 

copyrighted works by users are some of the most dangerous threats to copyright ownership today. A copyright 

owner should have some express remedy against such networks and other businesses, to the extent that they 

depend upon and intend for their customers to violate the owner’s copyright. 

Principles for Future Legislation 

The law should prohibit not only the sale of counterfeit goods, but also the possession of counterfeit 

goods with the intent to sell them. Under current law, it is illegal to sell counterfeit goods (or to attempt to 

do so), but it is not illegal to possess even large quantities of counterfeit goods with the intention of selling 

them. As a result, someone who is caught with a warehouse full of counterfeit handbags may escape prosecution for trademark violations if there is no evidence that he has already sold or attempted to sell them. The 

Task Force recommended further consideration of a proposal to criminalize the possession of counterfeit 

goods with the intention of selling or otherwise trafficking in them. 

The law should not distinguish between selling counterfeit goods for cash and giving them away with the 

general expectation of receiving any other type of benefit in the future. Under current trademark law, it is a 

criminal violation to sell or traffic in counterfeit goods. At least one court has held, however, that it is not illegal to give away such goods where there is no agreement to get something of value from the recipient in 

return. Under that standard, the distribution of counterfeit goods as samples or as gifts to cultivate a customer’s goodwill might not be illegal. 

The Task Force recommended further consideration of a proposal to broaden the definition of the word 

“traffic” in the federal trademark law so that it would explicitly include any distribution of counterfeit goods 

from which the distributor hopes to gain something of value from any source. 

As with other laws involving intellectual property, an attempt to violate the criminal copyright statute 

should be a violation without regard to whether it is successful. Unlike the federal criminal trademark statute, 

the criminal copyright statute does not criminalize attempted violations. It is a general tenet of criminal law, 

however, that those who attempt to commit a crime are as morally culpable as those who succeed in doing so. 

As a practical matter, individuals who attempt to commit copyright crimes are disproportionately likely to 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 77
United States Department of Justice 


have committed them in the past and to commit them again in the future (unless they have been caught and 

punished). 

The Task Force recommended further consideration of a proposal to amend the criminal copyright statute 

to outlaw attempted violations. 

Law enforcement officers should have access to the full range of accepted law enforcement tools when they 

investigate intellectual property crimes that pose a serious threat to public health or safety. A federal court may 

issue an order authorizing the use of a voice intercept, otherwise known as a “wiretap,” in the investigation of 

many federal crimes, including the theft of interstate shipments, but not for intellectual property crimes. 

Although there are good reasons to restrict the use of wiretaps in deference to individual privacy rights, some 

intellectual property crimes present a more serious danger to public health or safety. Trademark violations, for 

instance, may involve the distribution of counterfeit goods that are defective and prone to causing widespread 

consumer injuries. 

The Task Force recommended further consideration of a proposal to amend the Federal Wiretap Act to 

provide for the use of voice intercepts in investigating intellectual property crimes specifically when they 

threaten public health or safety. 

Counterfeit and stolen intellectual property should not be permitted to flow into or out of the United 

States. Under current law, it is not a violation of intellectual property laws simply to import or export unauthorized copies of copyrighted works or counterfeit goods. Given the central role that international distribution plays in intellectual property crimes and the importance of not contributing in any way to intellectual 

property violations in other countries, the shipping of infringing products across the nation’s borders should 

be expressly prohibited. 

The Task Force recommended further consideration of a proposal to criminalize the importation and 

exportation of counterfeit goods and unauthorized copies of copyrighted works into and out of the United 

States. 

Copyright law should recognize that copies of a copyrighted work are more valuable before copies of the 

work are released for sale to the general public. The criminal copyright statute often requires federal prosecutors to prove the retail value of the copyrighted work that has been stolen, both to establish that a criminal 

violation has occurred and to assess the appropriate penalty upon conviction. As explained above, however, 

copyrighted works that are stolen before they are released for sale lack an established retail value and yet are 

extraordinarily valuable. The copyright law should recognize and eliminate this tension. The Task Force recommended a proposal to assign a presumed retail value to copies of copyrighted works that have not yet been 

released for sale to the public. 

The United States should facilitate the prosecution of individuals who are accused of intellectual property violations in another country if the violations would have been crimes under American law. Given the ease 

and frequency with which perpetrators of intellectual property crimes cross international borders, it is important for the United States and other nations to cooperate whenever necessary in the prosecution of these crim78 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
Appendix A.
 

inals. Nevertheless, under current law, the United States will not extradite an individual accused of intellectual property crimes unless (1) the United States has a treaty with the nation seeking extradition and (2) that 

treaty lists intellectual property crimes as a basis for extradition. This presents a significant obstacle to international cooperation because the United States has not finalized extradition treaties with many nations, and 

many of the treaties that the United States has concluded do not list intellectual property crimes. Therefore, 

the United States is often precluded from extraditing, and thus securing the extradition of, individuals accused 

of even the most egregious intellectual property violations. 

The Task Force recommended further consideration of a proposal to permit the extradition of individuals who are accused of intellectual property violations that are criminalized under the laws both of the United 

States and of the other nation, even in the absence of a formal extradition treaty between them. 

The United States should support enhanced international enforcement of intellectual property laws. With 

the globalization of the economy and the rise of digital commerce, intellectual property crimes have crossed 

international borders with increasing frequency. The United States has signed two treaties that would facilitate international cooperation in halting some of the most egregious of these crimes: the United Nations 

Convention Against Transnational Organized Crime and the Council of Europe Convention on Cybercrime. 

The Department of Justice supports the ratification of these treaties, but the Senate has not yet voted on them. 

The Task Force recommended the expeditious ratification of both treaties. 

E. PREVENTION RECOMMENDATIONS 

Preventing crimes from occurring in the first place is a critical component to any crime-fighting program. 

Publicizing successful prosecutions is an important way to deter future crimes. In addition, educational initiatives that make clear the consequences of choices must play a key role in any solution to such a pervasive 

and complex problem. Accordingly, the Task Force examined several public awareness and prevention issues 

and recommended that: 

(1) The Department of Justice should develop a national program to educate students about the value 

of intellectual property and the consequences of committing intellectual property crimes by: 

(A) Developing materials for student educational programs; 

(B) Creating partnerships with non-profit educational organizations to promote public 

awareness regarding intellectual property crime; 

(C) Developing a video to teach students about the negative consequences of intellectual 

property theft; and 

(D) Encouraging federal prosecutors handling intellectual property crime cases throughout 

the nation to promote the Department of Justice’s public awareness programs. 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 79
United States Department of Justice
 

(2) The Department of Justice should educate the public about its policy prohibiting the use of 

peer-to-peer software on Justice Department computer systems; and 

(3) The Department of Justice should promote authorized use and awareness of the FBI’s new 

Anti-Piracy Seal to deter copyright infringement and trademark offenses. 

80 Progress Report of the Department of Justice’s Task Force on Intellectual Property 
APPENDIX B.
 

REPORTING INTELLECTUAL PROPERTY CRIME:
 

A Guide for Victims of Counterfeiting, Copyright Infringement, and
 

Theft of Trade Secrets
 

Contents 

�What Are Copyrights, Trademarks and Trade Secrets? 

�How Can Intellectual Property Be Stolen? 

�What Types of Intellectual Property Theft Constitute a Federal Crime? 

�Why Should You Report Intellectual Property Crime? 

�What Should You Do if You Are Victimized? 

�How Can You Assist Law Enforcement? 

�Checklist for Reporting a Copyright Infringement or Counterfeit Trademark Offense 

�Checklist for Reporting a Theft of Trade Secrets Offense 

The information contained in this document has been provided by the Department of Justice’s Task Force 

on Intellectual Property as a general guide for victims of intellectual property crime. This document is not 

intended to create or confer any rights, privileges, or benefits to prospective or actual witnesses or defendants. 

In addition, this document is not intended as a United States Department of Justice directive or as a document that has the force of law. 

What Are Copyrights, Trademarks and Trade Secrets? 

The United States has created enforceable rights in “intangibles” that are known as intellectual property, 

including copyrights, trademarks, and trade secrets. Copyright law provides federal protection against 

infringement of certain exclusive rights, such as reproduction and distribution, of “original works of authorship,” including computer software, literary works, musical works, and motion pictures. The use of a commercial brand to identify a product is protected by trademark law, which prohibits the unauthorized use of 

“any word, name, symbol, or device” used by a person “to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods.” 

Finally, trade secret law protects any formula, device, or compilation of information used in a business from 

being disclosed without the owner’s permission. Legal protection is only afforded, however, to those trade 

secrets that possess independent economic value and that the owner has taken reasonable measures to keep 

secret. 

Progress Report of the Department of Justice’s Task Force on Intellectual Property 81
United States Department of Justice
 

How Can Intellectual Property Be Stolen? 

Intellectual property can be stolen or misappropriated in many ways. A copyrighted work may be illegally infringed by making and selling an unauthorized copy, as with infringing computer software. A trademark 

may be infringed by selling a good with a counterfeit mark. A trade secret may be stolen from its owner and 

used to benefit a competitor. 

What Types of Intellectual Property Theft Constitute a Federal Crime? 

Although civil remedies may provide compensation to wronged intellectual property rights holders, criminal sanctions are often warranted to ensure sufficient punishment and deterrence of wrongful activity. 

Congress has continually expanded and strengthened criminal laws for violations of intellectual property 

rights to protect innovation and ensure that egregious or persistent intellectual property violations do not 

merely become a standard cost of doing business for defendants. Among the most significant provisions are 

the following: 

Counterfeit Trademarks: The Trademark Counterfeiting Act, 18 U.S.C. § 2320(a), provides penalties 

of up to ten years imprisonment and a $2 million fine, or twice the gross gain or gross loss, for a defendant who “intentionally traffics or attempts to traffic in goods or services and knowingly uses a counterfeit mark on or in connection with such goods or services.” 

Counterfeit Labeling: The counterfeit labeling provisions of 18 U.S.C. § 2318 prohibit trafficking in 

counterfeit labels designed to be affixed to, enclosing, or accompanying, or designed to be affixed to, 

phonorecords, copies of computer programs, motion pictures, audiovisual works, literary works, visual art, documentation, or packaging, as well as trafficking in counterfeit documentation or packaging 

for computer programs. Violations are punishable by up to 5 years imprisonment and a $250,000 fine 

or twice the gross gain or gross loss. 

Criminal Copyright Infringement: Copyright infringement is a felony punishable by up to 3 years 

imprisonment and a $250,000 fine under 17 U.S.C. § 506(a) and 18 U.S.C. § 2319 when a defendant willfully reproduces or distributes at least one or more copies of phonorecords or one or more 

copyrighted works with a total retail value of more than $2,500 within a 180-day period. The maximum penalty rises to 5 years imprisonment if the defendant acted “for purposes of commercial advantage or private financial gain.” Misdemeanor copyright infringement occurs where the value exceeds 

$1,000 but is equal to, or less than $2,500. 

Theft of Trade Secrets: The Economic Espionage Act contains two separate provisions that criminalize the theft of trade secrets. The first provision, 18 U.S.C. § 1831(a), prohibits thefts of the trade 

secrets for the benefit of a foreign government or agent, and is punishable by up to 15 years imprisonment and a $500,000 fine. The second, 18 U.S.C. § 1832, prohibits thefts of commercial trade 

secrets, and is punishable by up to 10 years imprisonment and a $250,000 fine. The statute broadly 

defines the term “trade secret” to include all types of information that the owner has taken reasonable 

measures to keep secret and which has independent economic value. 

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Confidentiality: Federal law also provides special protections to victims in trade secret cases to preserve the confidentiality of the information during criminal proceedings. The statute provides that 

courts “shall enter such orders and take such action as may be necessary and appropriate to preserve 

the confidentiality of trade secrets, consistent with the requirements of the Federal Rules of Criminal 

and Civil Procedure, the Federal Rules of Evidence, and all other applicable laws.” 18 U.S.C. § 1835. 

Why Should You Report Intellectual Property Crime? 

Intellectual property is an increasingly important part of the United States’s economy, representing its 

fastest growing sector. For example, in 2002, copyright industries alone contributed approximately six percent, or $626 billion, to America’s gross domestic product, and employed four percent of America’s workforce, 

according to an economic study commissioned by the International Intellectual Property Alliance. As the 

Nation continues to shift from an industrial economy to an information-based economy, the assets of the 

country are increasingly based in intellectual property. 

In recognition of this trend, the Department of Justice is waging the most aggressive campaign against the 

theft and counterfeiting of intellectual property in its history. The priority of criminal intellectual property 

investigations and prosecutions nationwide has been increased and additional resources on both the prosecutive and investigative levels have been brought to bear on the growing problem of intellectual property theft. 

Effective prosecution of intellectual property crime, however, also requires substantial assistance from its 

victims. Because the holders of intellectual property rights are often in the best position to detect a theft, law 

enforcement authorities cannot act in many cases unless the crimes are reported in the first place. Once these 

crimes are reported, federal law enforcement authorities need to quickly identify the facts that establish jurisdiction for the potential intellectual property offenses, such as federal copyright and trademark registration 

information, as well as facts concerning the extent of the victim’s potential loss, the nature of the theft, and 

possible suspects. In a digital world where evidence can disappear at the click of a mouse, swift investigation 

is often essential to successful intellectual property prosecutions. 

Accordingly, the Department of Justice has created this handbook to facilitate the flow of critical information from victims of intellectual property crimes to law enforcement authorities. The Department of 

Justice’s aim is to make it as easy as possible to report incidents of intellectual property crime to law enforcement authorities, including whom to call and what to tell them. 

Note: The guidelines set forth below seek information that, in the experience of Department of Justice 

prosecutors and investigators, is useful or even critical to the successful prosecution of the most common intellectual property crimes. These guidelines are not intended to be exhaustive, nor does the presence or absence 

of responsive information from the victim necessarily determine the outcome of an investigation. 

What Should You Do if You are Victimized? 

Victims of intellectual property crime, such as counterfeiting and theft of trade secrets, often conduct internal investigations before referring matters to law enforcement. These investigations can encompass a variety of 

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investigative steps, including interviews of witnesses, acquisition of counterfeit goods, surveillance of suspects, 

and examination of computers and other evidence. Victims can maximize the benefit of these independent investigative activities as follows: 

1. Document All Investigative Steps: To avoid duplication of effort and retracing of steps, internal 

investigations should seek to create a record of all investigative steps that can later be presented to law 

enforcement, if necessary. If a victim company observes counterfeit goods for sale online and makes a 

purchase, for example, investigators should record the name of the website, the date and time of the 

purchase, the method of payment, and the date and manner of delivery of the goods. Any subsequent 

examination of the goods should then be recorded in a document that identifies the telltale characteristics of theft or counterfeiting, such as lack of a security seal, poor quality, or the like. 

Similarly, in the case of a suspected theft of trade secrets, any internal investigation or surveillance of 

the suspect, or a competitor believed to be using the stolen information, should be recorded in writing. A record of any interviews with suspects or witnesses should be made by tape or in writing. The 

pertinent confidentiality agreements, security policies, and access logs should also be gathered and 

maintained to facilitate review and reduce the risk of deletion or destruction. 

2. Preserve the Evidence: Any physical, documentary, or digital evidence acquired in the course of an 

internal investigation should be preserved for later use in a legal proceeding. In the online theft example identified above, victims should printout or obtain a digital copy of the offending website and safely store any infringing goods and their packaging, which may contain valuable details of their origin. 

If the computer of an employee suspected of stealing trade secrets has been seized, any forensic analysis should be performed on a copy of the data, or “digital image,” to undermine claims that the evidence has been altered or corrupted. 

3. Contact Law Enforcement Right Away: Victims can maximize their legal remedies for intellectual 

property crime by making contact with law enforcement soon after its detection. Early referral is the 

best way to ensure that evidence of an intellectual property crime is properly secured and that all investigative avenues, such as the execution of search warrants and possible undercover law enforcement 

activities, are fully explored. Communication with law enforcement authorities at the onset of suspected violations also allows a victim to coordinate civil proceedings with possible criminal enforcement. Use the reporting guides set forth later in this document to organize the information you gather and provide the necessary information to your law enforcement contact. 

How Can You Assist Law Enforcement? 

Prosecutions of intellectual property crime often depend on cooperation between victims and law enforcement. Indeed, without information sharing from intellectual property rights holders, prosecutors can neither 

discern the trends that suggest the most effective overall enforcement strategies, nor meet the burden of proving the theft of intellectual property in a specific case. The following seeks to provide guidance concerning 

the types of assistance that may be offered by victims of intellectual property theft to law enforcement authorities. 

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Identify Stolen Intellectual Property: Just as in cases involving traditional theft, such as a burglary or 

shoplifting, victims of intellectual property theft may – and often must – assist law enforcement in the identification of stolen property. Thus, law enforcement may call upon a victim representative or expert to examine items obtained during an investigation to determine their origin or authenticity. In a copyright infringement or trademark investigation, for example, an author or software company may be called upon to analyze 

CDs or other media that appear to be counterfeit, while a victim representative in a theft of trade secret case 

may be asked to review documents or computer source code. Prosecutors may later seek expert testimony from 

the victims at trial. 

In certain investigations, law enforcement agents also may request a victim’s presence during the execution of a search warrant to help the agents identify specific items to be seized. In those circumstances, the victim’s activities will be strictly limited to those directed by supervising law enforcement agents. 

Share the Results of Internal Investigations or Civil Lawsuits: As with any suspected crime, victims may 

provide law enforcement with information gathered as a result of internal investigations into instances of 

intellectual property theft. In addition, unless the proceedings or information have been ordered sealed by a 

court, victims may generally provide law enforcement with any evidence or materials developed in civil intellectual property enforcement actions, including court pleadings, deposition testimony, documents, and written discovery responses. 

Participate in Law Enforcement Task Forces: Federal, state, and local law enforcement agencies and prosecutors all over the country have formed task forces to combat computer and intellectual property crime and 

to promote information sharing between government and industry. The United States Secret Service, for 

example, has created Electronic Crimes Task Forces in 13 cities, and the Federal Bureau of Investigation has 

founded more than 60 “Infragard” chapters around the country. In addition, many areas have “high-tech 

crime” task forces that investigate intellectual property theft. Members of the intellectual property industry 

are encouraged to participate in these organizations to establish law enforcement contacts that will enable 

these members to quickly respond to incidents of intellectual property and other crime. (Information on joining these organizations is available online at www.ectaskforce.org and www.infragard.net). 

Contributions of Funds, Property, or Services: Donating funds, property, or services to federal law enforcement authorities can raise potential legal and ethical issues that must be addressed on a case-by-case basis. In 

general, federal law places limitations on contributions to law enforcement authorities. 

If you or your company have become the victim of a copyright infringement or counterfeit trademark 

offense, please fill out the information indicated below and contact a federal law enforcement official to report 

the offense. 

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CHECKLIST FOR REPORTING A COPYRIGHT INFRINGEMENT OR 

COUNTERFEIT TRADEMARK OFFENSE 

Background and Contact Information: 

1.	 Victim’s Name: 

2.	 Primary Address: 

3.	 Nature of Business: 

4.	 Contact: 
 

Phone: Fax: 
 

Email: Pager/Mobile: 
 

Description of the Intellectual Property 

5. 	 Describe the copyrighted material or trademark (e.g., title of copyrighted work, identity of logo): 

6. Is the copyrighted work or trademark registered with the United States Copyright Office or the 

United States Patent and Trademark Office? ___ YES ___NO 

a. If so, please provide the following: 

i. Registration Date: 

ii. Registration Number: 

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iii. 	 Do you have a copy of the certificate of registration? 

iv. 	 Has the work or mark been the subject of a previous civil or criminal enforcement 

action? If so, please provide a general description. 

b.	 If not, state if and when you intend to register: 

7. 	 What is the approximate retail value of the copyrighted work or trademarked good? 

Description of the Intellectual Property Crime 

8.	 Describe how the theft or counterfeiting was discovered: 

9. 	 Do you have any examination reports of the infringing or counterfeit goods? 

___YES ___NO. (If so, please provide those reports to the law enforcement official). 

10. Describe the scope of the theft or counterfeiting operation, including the following information: 

a. Estimated quantity of illegal distribution: 

b. Estimated time period of illegal distribution: 

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c. Is the illegal distribution national or international? Which states or countries? 

11. Identify where the theft or counterfeiting occurred, and describe the location: 

12. Identify the name(s) or location(s) of possible suspects, including the following information: 

Name (Suspect #1): 

Phone number: 

Email address: 

Physical address: 

Current employer, if known: 

Reason for suspicion: 
Appendix B.
 

Name (Suspect #2): 

Phone number: 

Email address:
 

Physical address:
 

Current employer, if known: 

Reason for suspicion: 

13. If the distribution of infringing or counterfeit goods involves the Internet (e.g., World Wide Web, 

FTP, email, chat rooms), identify the following: 

a. The type of Internet theft: 

b. Internet address, including linking sites (domain name, URL, IP address, email): 

c. Login or password for site: 

d. Operators of site, if known: 

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14. If you have conducted an internal investigation into the theft or counterfeiting activities, please 

describe any evidence acquired: 

Civil Enforcement Proceedings 

15. Has a civil enforcement action been filed against the suspects identified above? 

___YES ___NO 

a. If so, identify the following: 

i. Name of court and case number: 

ii. Date of filing: 

iii. Names of attorneys: 

iv. Status of case: 

b. If not, is a civil action contemplated? What type and when? 

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16. Please provide any information concerning the suspected crime not described above that you believe 

might assist law enforcement. 

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CHECKLIST FOR REPORTING A THEFT OF TRADE SECRETS OFFENSE1 

If you or your company have become the victim of a theft of trade secrets offense, please fill out the information indicated below and contact a federal law enforcement official to report the offense. An insert with 

contact information for law enforcement officials in your area should be included at the end of this guide. 

NOTE ON CONFIDENTIALITY: Federal law provides that courts “shall enter such orders and take 

such action as may be necessary and appropriate to preserve the confidentiality of trade secrets, consistent with 

the requirements of the Federal Rules of Criminal and Civil Procedure, the Federal Rules of Evidence, and all 

other applicable laws.” 18 U.S.C. § 1835. Prosecutors utilizing any of the information set forth below will 

generally request the court to enter an order to preserve the status of the information as a trade secret and prevent its unnecessary and harmful disclosure. 

Background and Contact Information 

1. Victim’s Name: 

2. Primary Location and Address: 

3. Nature of Primary Business: 

4. Law Enforcement Contact: 

Phone: Fax: 

Email: Pager/Mobile: 

Description of the Trade Secret: 

5. Generally describe the trade secret (e.g., source code, formula): 

1 Special thanks to Deputy District Attorney James Sibley, Santa Clara District Attorney’s Office, for providing this checklist. 

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Provide an estimated value of the trade secret identifying ONE of the methods and indicating ONE of 

the ranges listed below: 

Method 

___Cost to Develop the Trade Secret;
 

___Acquisition Cost (identify date and source of acquisition); or
 

___Fair Market Value if sold.
 

Estimated Value: 

___Under $50,000; 
 

___Between $50,000 and $100,000; 
 

___Between $100,000 and $1 million; 
 

___Between $1 million and $5 million; or 
 

___Over $5 million.
 

Identify a person knowledgeable about valuation, including that person’s contact information: 
 

General Physical Measures Taken to Protect the Trade Secret 

6.	 Describe the general physical security precautions taken by the company, such as fencing the perimeter of 

the premises, visitor control systems, using alarming or self-locking doors, or hiring security personnel. 

7. 	 Has the company established physical barriers to prevent unauthorized viewing or access to the trade 

secret, such as “Authorized Personnel Only” signs at access points? (See below if computer stored trade 

secret.) ___YES ___NO 

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8. 	 Does the company require sign in/out procedures for access to and return of trade secret materials? 

___YES ___NO 

9. 	 Are employees required to wear identification badges? ___YES ___ NO 

10. Does the company have a written security policy? ___YES ___NO 

a.	 How are employees advised of the security policy? 

b.	 Are employees required to sign a written acknowledgment of the security policy?
 

___YES ___NO 
 

c. 	 Identify the person most knowledgeable about matters relating to the security policy, including title and contact information. 

11. How many employees have access to the trade secret? 

12. Was access to the trade secret limited to a “need to know” basis? ___YES ___NO 

Confidentiality and Non-Disclosure Agreements 

13. Does the company enter into confidentiality and non-disclosure agreements with employees and 

third-parties concerning the trade secret? ___YES ___NO 

14. Has the company established and distributed written confidentiality policies to all employees? 

___YES ___NO 

15. Does the company have a policy for advising company employees regarding the company’s trade 

secrets? ___YES ___NO 

Computer-Stored Trade Secrets 

16. If the trade secret is computer source code or other computer-stored information, how is access regulated (e.g., are employees given unique user names and passwords)? 

17. If the company stores the trade secret on a computer network, is the network protected by a firewall? 

___YES ___NO 

18. Is remote access permitted into the computer network? ___YES ___NO 

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19. Is the trade secret maintained on a separate computer server? ___YES ____NO 

20. Does the company prohibit employees from bringing outside computer programs or storage media to 

the premises? ___YES ___NO 

21. Does the company maintain electronic access records such as computer logs? ___YES ___NO 

Document Control 

22. If the trade secret consisted of documents, were they clearly marked “CONFIDENTIAL” or 

“PROPRIETARY”? ___YES ___NO 

23. Describe the document control procedures employed by the company, such as limiting access and sign 

in/out policies. 

24. Was there a written policy concerning document control procedures and, if so, how were employees 

advised of it? ___YES ___NO 

25. Identify the person most knowledgeable about the document control procedures, including title and 

contact information. 

Employee Controls 

26. Are new employees subject to a background investigation? ___YES ___NO 

27. Does the company hold “exit interviews” to remind departing employees of their obligation not to 

disclose trade secrets? ___YES ___NO 

Description of the Theft of Trade Secret 

28. Identify the name(s) or location(s) of possible suspects, including the following information: 

Name (Suspect #1): 

Phone number: 

Email address: 

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Physical address: 

Employer:
 

Reason for suspicion:
 

Name (Suspect #2): 
 

Phone number:
 

Email address:
 

Physical address:
 

Employer:
 

Reason for suspicion:
 

29. Was the trade secret stolen to benefit a third party, such as a competitor or another business? 

___YES ___NO 

If so, identify that business and its location: 

30. Do you have any information that the theft of the trade secret was committed to benefit a foreign government or instrumentality of a foreign government? ___YES ___NO 

If so, identify the foreign government and describe that information. 

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31. If the suspect is a current or former employee, describe all confidentiality and non-disclosure agreements in effect. 

32. Identify any physical locations tied to the theft of the trade secret, such as where it may be currently 

stored or used. 

33. If you have conducted an internal investigation into the theft or counterfeiting activities, please 

describe any evidence acquired: 

Civil Enforcement Proceedings 

34. Has a civil enforcement action been filed against the suspects identified above? 

___YES ___NO 

a. 	 If so, identify the following: 

i. 	 Name of court and case number: 

ii. 	 Date of filing: 

iii. 	 Names of attorneys: 

iv. 	 Status of case: 

b. 	 If not, is a civil action contemplated? 


What type and when? 


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35. Please provide any information concerning the suspected crime not described above that you believe 

might assist law enforcement. 

98 Progress Report of the Department of Justice’s Task Force on Intellectual Property