Intellectual Property Rights Violations: Federal Civil Remedies and Criminal Penalties Related to Copyrights, Trademarks, Patents, and Trade Secrets
Released: 2016-05-27T00:00:00

Summary:
This report provides information describing the federal civil remedies and criminal penalties that may be available as a consequence of violations of the federal intellectual property laws: the Copyright Act of 1976, the Patent Act of 1952, the Trademark Act of 1946 (conventionally known as the Lanham Act), and the Economic Espionage Act of 1996. The report explains the remedies and penalties for the following intellectual property offenses:
17 U.S.C. §501 (copyright infringement); 17 U.S.C. §506(a)(1)(A) and 18 U.S.C. §2319(b) (criminal copyright infringement for profit); 17 U.S.C. §506(1)(B) and 18 U.S.C. §2319(c) (criminal copyright infringement without a profit motive); 17 U.S.C. §506(a)(1)(c) and 18 U.S.C. §2319(d) (pre-release distribution of a copyrighted work over a computer network); 17 U.S.C. §1309 (infringement of a vessel hull or deck design); 17 U.S.C. §1326 (falsely marking an unprotected vessel hull or deck design with a protected design notice); 17 U.S.C. §§1203, 1204 (circumvention of copyright protection systems); 18 U.S.C. §2319A (bootleg recordings of live musical performances); 18 U.S.C. §2319B (unauthorized recording of films in movie theaters); 15 U.S.C. §1114(1) (unauthorized use in commerce of a reproduction, counterfeit, or colorable imitation of a federally registered trademark); 15 U.S.C. §1125(a) (trademark infringement due to false designation, origin, or sponsorship); 15 U.S.C. §1125(c) (dilution of famous trademarks); 15 U.S.C. §§1125(d) and 1129 (cybersquatting and cyberpiracy in connection with Internet domain names); 18 U.S.C. §2318 (counterfeit/illicit labels and counterfeit documentation and packaging for copyrighted works); 35 U.S.C. §271 (patent infringement); 35 U.S.C. §289 (infringement of a design patent); 35 U.S.C. §292 (false marking of patent-related information in connection with articles sold to the public); 28 U.S.C. §1498 (unauthorized use of a patented invention by or for the United States, or copyright infringement by the United States); 19 U.S.C. §1337 (unfair practices in import trade); 18 U.S.C. §2320 (trafficking in counterfeit trademarks); 19 U.S.C. §1526(e), 15 U.S.C. §1124 (importing merchandise bearing counterfeit marks),18 U.S.C. §2320(h) (transshipment and exportation of counterfeit goods); 18 U.S.C. §1831 (trade secret theft to benefit a foreign entity); and 18 U.S.C. §1832 (theft of trade secrets for commercial advantage).

paragraphs: T his report summarizes the federal civil remedies and criminal penalties that may be available for violations of the rights granted by the federal intellectual property laws: the Copyright Act of 1976, the Patent Act of 1952, the Trademark Act of 1946 (conventionally known as the Lanham Act), and the Economic Espionage Act of 1996.
subsections: section_title: Introduction
paragraphs: Intellectual property (IP) law has four major branches, applicable to different types of subject matter: copyright (original artistic and literary works of authorship), patent (inventions of processes, machines, manufactures, and compositions of matter that are useful, new, and nonobvious), trademark (commercial symbols), and trade secret (confidential, commercially valuable business information). The source of federal copyright and patent law originates with the Copyright and Patent Clause of the U.S. Constitution, which authorizes Congress "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." By contrast, the Commerce Clause provides the constitutional basis for federal trademark law and trade secret law.
The Copyright Act, Patent Act, and Lanham Act provide legal protection for intellectual property against unauthorized use, theft, and other violations of the rights granted by those statutes to the IP owner. The Copyright Act provides copyright owners with the exclusive right to control reproduction, distribution, public performance, and display of their copyrighted works. The Patent Act grants patent holders the right to exclude others from making, using, offering for sale, or selling their patented invention throughout the United States, or importing the invention into the United States. The Lanham Act allows sellers and producers of goods and services to prevent a competitor from
(1) using any counterfeit, copy, or imitation of their trademarks (that have been registered with the U.S. Patent and Trademark Office), in connection with the sale of any goods or services in a way that is likely to cause confusion, mistake, or deception, or
(2) using in commercial advertising any word, term, name, symbol, or device, or any false or misleading designation of origin or false or misleading description or representation of fact, which: (a) is likely to cause confusion, mistake, or deception as to affiliation, connection, or association, or as to origin, sponsorship, or approval, of his or her goods, services, or commercial activities by another person, or (b) misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities.
In addition, the Lanham Act grants to owners of "famous" trademarks the right to seek injunctive relief against another person's use in commerce of a mark or trade name if such use causes dilution by blurring or tarnishment of the distinctive quality of the famous trademark.
An alternative to patent law protection may be found in trade secret law, which grants inventors proprietary rights to particular technologies, processes, designs, or formula that may not be able to satisfy the rigorous statutory standards for patentability. Until 1996, trade secret protection was primarily governed by state law. Congress enacted the federal Economic Espionage Act of 1996 to provide criminal penalties (and authorize the Attorney General to seek injunctive relief) for the theft of trade secrets by domestic and foreign entities, in certain circumstances. The Defend Trade Secrets Act of 2016 amended the Economic Espionage Act to provide private parties with a federal civil remedy for trade secret misappropriation.
Enforcement of IP rights may be accomplished by the IP owner bringing a lawsuit against an alleged infringer. The U.S. Department of Justice may also criminally prosecute particularly egregious violators of the IP laws in order to impose greater punishment and possibly deter other would-be violators. In certain circumstances, a variety of federal agencies may become involved in IP rights enforcement: for example, the U.S. Customs and Border Protection agency has the power to seize counterfeit goods upon their attempted importation in the United States; the International Trade Commission may investigate and adjudicate allegations of unfair trade practices due to the importing of goods that were produced as a result of trade secret theft or that infringe U.S. patents, trademarks, or copyrights; and the U.S. Trade Representative, the U.S. Department of Commerce's International Trade Administration, and the U.S. State Department are all involved in promoting and seeking IP rights enforcement by trading partners and other foreign countries.
In copyright cases, the statute of limitations for initiating a civil action is within three years after the claim accrued, while a criminal proceeding must be commenced within five years after the cause of action arose. Although there is no express federal statute of limitations for civil trademark infringement claims, federal courts generally follow the limitations period for the most analogous state-law cause of action from the state in which the claim is heard; courts have also applied the equitable doctrine of laches (unreasonable, prejudicial delay in commencing a lawsuit) to determine whether a trademark infringement claim is untimely. One federal appellate court has determined that criminal trademark infringement prosecutions are governed by the general five-year statute of limitations for non-capital offenses under Title 18 of the U.S. Code. Although there is no statute of limitations in patent infringement actions, the Patent Act specifies a time limit on monetary relief for patent infringement claims: damages are available only for infringement that occurs within the six years prior to the filing of the complaint or counterclaim for patent infringement. Finally, federal law provides a three-year statute of limitations period for a civil action involving the misappropriation of a trade secret.
The Lanham Act, Copyright Act, and Economic Espionage Act have criminal and civil provisions for violations of their respective provisions, while the Patent Act only provides civil remedies in the event of patent infringement. Federal courts determine the civil remedies in an action for infringement brought by the IP owner. If the federal government chooses to prosecute individuals or organizations for IP violations, the imprisonment terms are set forth in the substantive statutes describing the particular IP crime, while the criminal fine amount for violations of the trademark and copyright laws is determined in conjunction with 18 U.S.C. Section 3571 (which specifies the amount of the fine under Title 18 of the U.S. Code). In comparison, the criminal fine amount for economic espionage or trade secret theft is specified in the Economic Espionage Act itself.
Information regarding the civil remedies and criminal penalties for violations of the copyright, trademark, patent, and trade secret laws is presented on the following pages in table-format. These penalties may be imposed upon conviction of the defendant in the case of a criminal prosecution, and the civil remedies follow a judgment of infringement reached by a federal judge or jury in a civil action. (Certain injunctive relief may be available prior to final judgment, such as temporary injunctions or impounding of infringing articles.) For any offense that provides forfeiture penalties, criminal forfeiture is available upon the conviction of the owner of the offending property; civil forfeiture is available if the government establishes that the infringing goods are subject to confiscation by a preponderance of the evidence. Restitution is available when the defendant is convicted of a criminal property offense.
section_title: Civil Remedies
subsections: section_title: Copyright
section_title: Trademark
section_title: Patent
section_title: Unfair Competition
section_title: Trade Secrets
section_title: Criminal Penalties
subsections: section_title: Copyright
section_title: Trademark
section_title: Trade Secrets
paragraphs: .