Federal Crime of the Week – Theft of Intellectual Property

Intellectual property (IP) refers to creations of the mind for which property rights are recognized.  These “creations” include  copyrights, trademarks, patents on inventions, and trade secrets.  The United States has created enforceable property rights in these “intangible” property rights, and, just like regular personal property that you can see, it is possible for it to be stolen.  If you steal someone’s IP you could get into both civil and criminal trouble. 
 
How can you “steal” intellectual property? 
There are many ways to infringe on or steal intellectual property.  If you download pirated music or movies, you have stolen someone’s intellectual property.  We have discussed bootlegging DVDs, and that is a form of intellectual property theft.  If you sell clothing or other items with fake brand names on it, you have possibly stolen intellectual property.  If you work for one company, and then go to work for that company’s competitor with the company’s “secret formula,” you have stolen intellectual property.
  
What are some federal laws that prohibit theft of intellectual property?   
  • Counterfeit Trademarks:  The Trademark Counterfeiting Act at 18 U.S.C. § 2320(a) states that if you intentionally traffic or attempt to traffic in goods and services, or use a counterfeit mark on goods or services, you can be punished by jail time of up to ten years and a fine of up to two million dollars.
  • Counterfeit Labeling:  Trafficking in counterfeit labeling or packaging designed to be affixed to records, tapes, CDs, DVDs, and computer programs is illegal under 18 U.S.C. § 2318, and can get you up to five years in jail and up to a $250,000.00 fine.
  • Copyright Infringement:  If you copy or distribute at least 10 copies of a copyrighted work with a total retail value of $2500.00 within a 180-day period, you have committed a felony under 17 U.S.C. § 506 and 18 U.S.C. § 2319, and if convicted you face up to three years in federal prison and up to a $250,000.00 fine.  This penalty is increased to five years if you did it for “purposes of commercial advantage or personal financial gain.”
  • Theft of Trade Secrets:  “Trade secrets” are defined broadly under these laws, meaning any information which someone has taken measures to keep private, and which may have independent economic value.  If you steal trade secrets for the benefit of a foreign government or agent, under the Economic Espionage Act you face up to 15 years imprisonment and a $500,000.00 fine.  If you steal trade secrets for commercial reasons (you copy someone’s secret sauce recipe), you face up to ten years imprisonment and up to a $250,000.00 fine.

Most disputes over intellectual property are resolved in civil courts.  In other words, if someone believes their idea or trademark has been stolen, they can bring a civil suit against the offending person to get them to stop using the idea, and they possibly can collect monetary damages based on the unlawful use.  As I’ve mentioned before, when I am not doing criminal defense I also get involved with civil litigation, and I have been on both sides (plaintiff and defense) of some intellectual property litigation.  This is a very specialized area of law, and I have a good friend who is an intellectual property specialist (and one of the few licensed patent lawyers in Mississippi) that helps me with these lawsuits (or I help him).

But a criminal prosecution for theft of intellectual property is different, and you will need a lawyer that is familiar with both intellectual property law and federal criminal defense if you are under investigation or are indicted.  These tend to be very complex cases, but they are defensible.  If you are accused of any type of theft crime give me a call.  I am here to help.