IP CRIME
“ THE US IS OFTEN SEEN AS A LEADER WHEN IT COMES TO DEALING WITH COUNTERFEITING, AS A PIONEER IN CRIMINAL ENFORCEMENT. BUT WHILE IT IS TRUE THAT COUNTERFEITING AND PIRACY OFFENCES IN THE US CAN CARRY SEVERE PENALTIES (UP TO $2 MILLION IN FINES AND 10 YEARS’ IMPRISONMENT), IN PRACTICE, SUCH SENTENCES ARE EXTREMELY RARE.”
Tankfully perhaps, there is a difference, at least in the world of intellectual property, between something being a crime according to the statute, and it being treated as such. It would be a rare prosecutor who showed an interest in the man who sold 30 rip-off T-shirts because someone offered him a box for next to nothing, though many companies would argue that that is exactly what should happen.
At the threshold
Te US is oſten seen as a leader when it comes to dealing with counterfeiting, as a pioneer in criminal enforcement. But while it is true that counterfeiting and piracy offences in the US can carry severe penalties (up to $2 million in fines and 10 years’ imprisonment), in practice, such sentences are extremely rare.
Vaughn Volpi, chief strategy officer at brand and IP protection company PICA, explains that even in the US, where it is broadly accepted that counterfeiting should be dealt with severely, it is not always the case.
“Even here, they have thresholds,” he says. “Te US attorneys in the major cities have unwritten thresholds for economic crimes that they’re willing to prosecute. If it’s a straight up IPR crime, it oſten doesn’t meet the thresholds. It’s a sad testament to how burdened the legal systems
are around the world, but this is oſten the way it is.”
Tat said, it’s clear that IP crime is being taken ever more seriously in the US, as the government becomes uncomfortably aware that in the absence of a thriving industrial infrastructure, IP is now the nation’s key export. It is US research, not US manufacture, that keeps the country competitive on a global scale. Add to this a recognition of the links between intellectual property crime and other offences (people trafficking, terrorism, money laundering and even drugs), and it’s easy to see why the government would be concerned.
Volpi explains that IPR enforcement is “very oſten done on a state-by-state basis.” Federal laws have been in place for some time, but haven’t always been enforced. Tese state laws still include things such as wilfulness clauses, requiring proof of intent in criminal cases. No judge is likely to convict if the defendant can show that he didn’t know what he was doing. And on a federal level, the case normally needs to be worth a considerable amount of money, or linked to organised crime of some sort, for prosecutors to show any interest.
Global problem
Just as many countries have followed the US in developing their IP laws, so many face the same
22 World Intellectual Property Review March/April 2011
problems when enforcing their criminal aspects. In Europe, where there have been proposals for a new IP enforcement regulation, the spectre of disharmony hangs over enforcement attempts.
Any European-wide criminalisation of IP offences runs the risk of diverse enforcement, where a defendant in the UK might get a different deal from one in Greece. Individual European countries have their own rules and enforcement priorities at the moment, and it would be very difficult to harmonise these. In many countries, such as Italy and France, purchasing a counterfeit product is itself a crime, though that doesn’t seem to stop people doing it. Especially when the activity is on a small scale, it’s unlikely that local law enforcement will intervene.
In China, criminal prosecution is rare in the absence of serious aggravating circumstances (such as a risk to public health or a relatively high level of monetary damages). Laura Wen-yu Young, a partner at Wang and Wang, explains that proving crime is especially difficult: “Te statute has a fairly high bar on what you have to be able to prove. It’s hard to provide all the evidence that is needed all the time—for example, it’s hard to prove a counterfeiter’s illegal earnings. It’s much more likely that a case will be handled through administrative action.”
While a judge can order a criminal defendant to produce records at trial, judges oſten accept
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