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August 12, 2016

Seventh Circuit Rules on Sanctions for Vexatious and Obstructive Conduct by Attorneys for Porno-Trolling Collective

Chicago, Illinois - The Seventh Circuit ruled in the ongoing intellectual property litigation between Plaintiff Lightspeed Media Corp. and Defendants Anthony Smith et al.

Attorneys for Lightspeed Media Corp. have filed numerous lawsuits nationwide in an apparent attempt to extract quick settlements from individual users who would rather avoid litigating their pornography consumption in open court. After pushback from Defendants and their internet service providers, as well as the imposition of sanctions by the Central District of California in a similar case, the attorneys began to voluntarily dismiss some of the cases.

The litigation against Defendant Smith was one such dismissed lawsuit. After the dismissal, Smith filed a motion for attorney's fees. The Southern District of Illinois found that the Lightspeed lawsuit had been frivolous, baseless, and "smacked of bullying pretense," and imposed sanctions of $261,025.11, jointly and severally, against three lawyers for Lightspeed: Paul Hansmeier, John Steele, and Paul Duffy.

Much legal wrangling ensued. While pleading to the court an inability to pay the sanctions, Steele withdrew over $300,000 from an account that he shared with his wife. Hansmeier withdrew a similar amount from one of his accounts. Each of these transfers was apparently an attempt to conceal the funds from the court and Smith. Other actions, also apparent attempts to conceal the funds, were also taken by the attorneys. Following these actions, Hansmeier filed for bankruptcy and Duffy passed away.

The Seventh Circuit was asked to consider the appropriateness of the sanction against the three attorneys. It declined to hear the matter as to Duffy, stating that because he was deceased he was "beyond [their] jurisdiction." The appeals court dismissed the appeal as to Hansmeier, noting that, in a liquidation proceeding under Chapter 7 of the bankruptcy code, "only the trustee [of the bankruptcy estate] has standing to prosecute or defend a claim belonging to the estate."

After a review of multiple instances of discovery misconduct, the appellate court held that the district court had acted within its discretion in imposing a discovery sanction against Steele for what it called a "pattern of vexatious and obstructive conduct" and "obviously egregious behavior."

The appellate court then turned to the matter of the contempt sanction against Steele. Steele argued that the sanction was in fact criminal in nature, not civil. Thus, he contended, the district court had failed to abide by the enhanced procedural safeguards required for such a sanction.

The Seventh Circuit agreed. It held that, while "civil contempt may be imposed if proven by clear and convincing evidence, and without the full criminal procedural process," imposing criminal contempt required more. Specifically, it required that the contemnor be "afforded the protections that the Constitution requires of such criminal proceedings."

The appellate court also held that the fine, as ordered by the district court, was not "designed either to compel the contemnor into compliance with an existing court order or to compensate the complainant for losses sustained as a result of the contumacy," as was appropriate for a finding of civil contempt. Instead, the sanctions that had been levied against Steele were punitive in nature, and "meant to vindicate the authority of the court." Thus, they were properly deemed criminal sanctions.

Concluding that the procedures required under the Constitution for criminal contempt had not been applied, the Seventh Circuit vacated the contempt sanction.

Continue reading "Seventh Circuit Rules on Sanctions for Vexatious and Obstructive Conduct by Attorneys for Porno-Trolling Collective " »

May 2, 2016

Indiana Trademark Litigation: Federal Lawsuit Filed Over Use of "Co-op" Trademark

Indianapolis, Indiana - Indiana trademark attorneys for Countrymark Refining and Logistics, LLC of Indianapolis, Indiana filed a trademark lawsuit against Coop Fuels Inc. of Morrisville, North Carolina. The complaint asserts direct and contributory trademark infringement, false designation of origin, and unfair competition arising under the Lanham Act as well as claims under Indiana law.

At issue are two trademarks owned by Countrymark, U.S. Registration Nos. 2,657,529 and 2,679,308 for the CO-OP trademark, which have been registered with the U. S. Patent and Trademark Office.

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Defendant Coop Fuels is alleged to have infringed these trademarks by using "coop" to market its competing products.

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Additionally, Countrymark contends that Coop Fuels has also knowingly induced and materially contributed to its retail partners' unauthorized adoption and use of Countrymark's trademarks.

In this lawsuit, Indiana trademark lawyers for Countrymark list the following allegations of wrongdoing:

• Count I: Infringement of Federally Registered Marks - 15 U.S.C. § 1114
• Count II: False Designation of Origin and Unfair Competition - 15 U.S.C. § 1125(a)
• Count III: Contributory Trademark Infringement
• Count IV: Common Law Unfair Competition
• Count V: Deception - Indiana Code § 35-43-5-3(a)(6)
• Count VI: Conversion - Indiana Code § 35-43-4-3

• Count VII: Indiana Crime Victim's Relief Act- Indiana Code § 35-24-3-1

Countrymark asks the federal court for injunctive relief, actual and treble damages, attorneys' fees and costs.

Continue reading "Indiana Trademark Litigation: Federal Lawsuit Filed Over Use of "Co-op" Trademark" »

April 27, 2016

Indiana Trademark Litigation: Trademark Dispute Between Kimball and Coaster Heads to Federal Court

Evansville, Indiana - An Indiana trademark attorney for Plaintiff Kimball International, Inc. ("Kimball") of Jasper, Indiana filed an intellectual property lawsuit in the Southern District of Indiana.

Defendant COA, Inc. d/b/a Coaster Company of America ("Coaster") of Santa Fe Springs, California is accused of infringing Kimball's Trademark KIMBALL, Reg. No. 1,180,193, which has been registered with the U.S. Patent and Trademark Office, by using the trademark without authorization.

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In addition to direct trademark infringement, Kimball asserts counts of contributory trademark infringement, false designation of origin, unfair competition arising under the Lanham Act as well as violations of the statutes and common law of the State of Indiana.

In particular, Kimball asserts that some of Coaster's retail partners have infringed the KIMBALL trademark at Coaster's behest, including retail giant Sears. As an example of this alleged contributory infringement, Kimball cites Bradley Home Furnishings' website, which Kimball states features an unauthorized "Kimball Bedroom Collection" that originated from Defendant Coaster:

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Kimball indicates in the complaint that it first informed Defendant less than a month before this lawsuit was filed that it believed it held superior rights to the KIMBALL trademark but states that Coaster "continues its unlawful use of the KIMBALL Mark and continues to encourage, induce, and materially contribute to its retail partners' unlawful use of the KIMBALL Mark."

In this litigation, filed by an Indiana trademark lawyer for Kimball, the following counts are alleged:

• Count I: Infringement of Federally Registered Marks - 15 U.S.C. § 1114
• Count II: False Designation of Origin - 15 U.S.C. § 1125(a)
• Count III: Contributory Trademark Infringement
• Count IV: Common Law Unfair Competition
• Count V: Deception - Indiana Code § 35-43-5-3(a)(6)
• Count VI: Conversion - Indiana Code § 35-43-4-3

• Count VII: Indiana Crime Victim's Relief Act - Indiana Code § 35-24-3-1

Among other remedies, Kimball seeks equitable relief, actual and treble damages, costs and attorneys' fees.

Continue reading "Indiana Trademark Litigation: Trademark Dispute Between Kimball and Coaster Heads to Federal Court" »

February 17, 2016

Countering the Growing Intellectual Property Theft Threat by Enhancing Ties Between Law Enforcement and Business

In 2008, a new federal law creating stricter penalties for criminals who engaged in intellectual property theft was enacted to keep pace with globalization, e-commerce, and technology advances.

Fast forward to 2016: Technological advances continue at an even faster pace, dramatically 

 

 

Intellectual Property Theft 101

 

Intellectual property can be an idea, an invention, a design, a business process, or even a creative expression.  All are protectable under the law.

 

Once stolen, intellectual property can generate a great deal of money for the thieves.  But there are other consequences. Intellectual property theft, which includes theft of trade secrets, the trafficking of counterfeit goods, and digital piracy, results in billions of dollars in lost profits annually. Failure to protect the nation's intellectual property undermines confidence in the economy, removes opportunities for growth, erodes America's technological advantage, and disrupts fairness and competitiveness in the marketplace.

 

Some intellectual property thefts pose a more far-reaching and serious threat to the U.S. than economic loss to the rights holders. These thefts can also put public safety at risk through the sale of counterfeit pharmaceuticals, electrical components, and aircraft and automobile parts, as well as through the funding of other kinds of crime.

 

Within its intellectual property rights violations program, the FBI prioritizes its investigations and focuses the majority of its resources on cases involving theft of trade secrets, counterfeit goods that pose a threat to human health and safety, and copyright and infringement matters with a nexus to national security or organized crime or that pose a significant economic impact.

 

Along with its partners at the National Intellectual Property Rights Coordination Center, the FBI also participates in several intelligence-driven national initiatives, including:

 

- Operation Chain Reaction, which focuses on counterfeit products entering the U.S. government supply chain that pose a threat to human health and safety or national security;

- Operation Engine Newity, which addresses counterfeit automotive parts that threaten safety, including airbags, brake pads, and steering systems; and

- Operation Apothecary, which focuses on counterfeit pharmaceuticals that pose a safety threat.

 

increasing the threat posed by criminals who steal trade secrets, produce and/or traffic in counterfeit products, and infringe on copyrights. One important factor in this increase is the global expansion of online marketplaces, which aids international and domestic criminal organizations in trafficking in counterfeit goods.

The Department of Justice recently announced a new strategy that involves partnering more closely with businesses in an effort to combat these types of crimes more effectively. According to Attorney General Loretta Lynch, "Through this new approach, we intend to provide information and resources to individuals and companies that will help them identify and disrupt attempts on their intellectual property, extend greater protection to American commerce as a whole, and safeguard the health and safety of individual Americans." The Federal Bureau of Investigations ("FBI"), working with its investigative partners at the National Intellectual Property Rights Coordination Center ("NIPRCC"), will play an integral part in this strategy.

The FBI has already been collaborating for years with brand owners, copyright holders, and trademark holders because in an effort to prevent the harm that intellectual property theft causes: legitimate businesses lose billions of dollars in revenue and suffer damaged reputations, consumer prices go up, the U.S. and global economies are robbed of jobs and tax revenue, product safety is reduced, and sometimes lives are even put at risk. The FBI's efforts with these businesses to date have involved shared information, aggressive criminal initiatives based on current or emerging trends, and investigations.

The FBI has now begun expanding its efforts to work with third-party entities, such as online marketplaces, payment service providers, and advertisers, that may inadvertently enable the activities of criminals.

Third-party online marketplaces draw consumers to their sites with competitive pricing and a sense of security, but criminal counterfeiters exploit these marketplaces to gain an appearance of legitimacy, access to far-reaching advertising, and efficient sales transactions.

Payment service providers, such as credit card payment processors and related payment alternatives, also give counterfeiters the appearance of legitimacy when they provide payment options that consumers mistakenly interpret to mean that the businesses they service are legitimate.

Online advertising systems and platforms enable website owners to outsource the process of monetizing their website traffic. Criminals have begun exploiting advertising as an alternative revenue stream, drawing traffic to their sites by offering counterfeit products for sale or pirated digital content for download.

The FBI finds that there are significant benefits to working with these third-party entities. According to David Farquhar, who heads up the FBI's Intellectual Property and Cyber-Enabled Crimes Unit at the NIPRCC, "We're not only broadening awareness of the crime problem, we can also obtain information about crime trends, get investigative leads that will help us identify criminals, and collect evidence of criminal activity." Farquhar added that the FBI will assist these companies with refining their own analytical tools and techniques for uncovering fraud.

Also new in its approach to intellectual property theft is an enhanced relationship between the FBI's criminal and counterintelligence personnel when working theft of trade secrets cases. A trade secrets case worked under the counterintelligence program, which occurs when the involvement of state-sponsored actors is suspected, will be referred to a criminal squad if no state sponsorship is found. And when criminal investigators begin to suspect the involvement of a state sponsor, the case will be referred to the counterintelligence squad.

February 2, 2016

Indiana Trademark Litigation: Holder of Verge Trademark Sues The Verge Group

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Indianapolis, Indiana - Indiana trademark attorneys for Plaintiff Indy Founders LLC d/b/a Verge of Indianapolis, Indiana filed a trademark infringement lawsuit with the court in the Southern District of Indiana. The lawsuit alleges that Vox Media, Inc. and The Verge Group LLC ("TVG") infringed the VERGE trademark, Registration No. 4,153,192, which has been registered by the U.S. Patent and Trademark Office.

Indy Founders is in the business of creating and offering online publications and websites, as well as similar services, for startup technology entrepreneurs, investors, and collaborators. It states that it holds a federal registration on VERGE as a trademark and that the VERGE trademark has been used since at least as early as January 2011.

Defendant Vox Media is a partner and owner of Defendant TVG. Plaintiff asserts that Defendants are engaged in a business similar to Plaintiff's and that Defendants use the VERGE trademark in connection with their business, THE VERGE, and in their business' domain name, http://www.theverge.com/. Plaintiffs contend that Defendants' use of THE VERGE to identify their goods and services is unlawful.

In this Indiana trademark lawsuit, filed with the court by trademark lawyers for Plaintiff, the following claims are made:

• Count I: Trademark Infringement
• Count II: False Designation Of Origin
• Count III: Unfair Competition
• Count IV: Declaratory Judgment
• Count V: Indiana Crime Victims Act [Forgery under IC §35-43-5-2]
• Count VI: Preliminary and Permanent Injunctive Relief

• Count VII: Corrective Advertising

Indy Founders seeks a declaratory judgment, equitable relief, actual damages, treble damages, costs and attorneys' fees.

Continue reading "Indiana Trademark Litigation: Holder of Verge Trademark Sues The Verge Group" »

January 21, 2016

Reporting Computer, Internet-related or Intellectual Property Crime

Internet-related crime, like any other crime, should be reported to appropriate law enforcement investigative authorities at the local, state, federal, or international levels, depending on the scope of the crime. Citizens who are aware of federal crimes should report them to local offices of federal law enforcement.

A guide to reporting intellectual property crime:

Type of Crime

Appropriate federal investigative law enforcement agencies 

Copyright piracy (e.g., software, movie, sound recordings)

Trademark counterfeiting

Theft of trade secrets/Economic Espionage

The U.S. Department of Justice has also produced a guide, "Reporting Intellectual Property Crime: A Guide for Victims of Counterfeiting, Copyright Infringement, and Theft of Trade Secrets," available as a PDF file. This guide is contained in Appendix C of the Report of the Department of Justice's Intellectual Property Task Force (October 2004). The guide also contains the following checklists for reporting intellectual property crime to law enforcement:

Checklist for Reporting a Copyright Infringement or Counterfeit Trademark Offense (PDF)
Checklist for Reporting a Theft of Trade Secrets Offense (PDF)

Other government initiatives to combat cybercrime include:

National Intellectual Property Rights Coordination Center

The IPR Coordination Center's responsibilities include:

• Coordinating U.S. government domestic and international law enforcement activities involving IPR issues.
• Serving as a collection point for intelligence provided by private industry, as well as a channel for law enforcement to obtain cooperation from private industry (in specific law enforcement situations).
• Integrating domestic and international law enforcement intelligence with private industry information relating to IPR crime, and disseminating IPR intelligence for appropriate investigative and tactical use.
• Developing enhanced investigative, intelligence and interdiction capabilities.

• Serving as a point of contact regarding IPR law enforcement related issues.

The STOP Initiative (www.stopfakes.gov)

The stopfakes.gov website provides information to consumers and businesses on intellectual property, including information on how to report trade in fake goods.

Those with specific information regarding intellectual property crime can submit an IPR Coordination Center Complaint Referral Form.

December 7, 2015

Criminal Counterfeit Law: U.S. Marshals Selling Thousands of Bottles of Non-Counterfeit Wine of Convicted Wine Counterfeiter

Washington, D.C. - The U.S. Marshals are currently auctioning approximately 4,711 bottles of wine, deemed authentic, that belonged to Rudy Kurniawan, the man convicted of fraud in federal court in 2013 for producing and selling millions of dollars of counterfeit wine.

The wine is being sold in two online auctions, one that started November 24 and one that started December 1 at www.txauction.com. The auctions close on December 8 and December 15, respectively.

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"It may sound ironic that we are selling wine that belonged to a convicted wine counterfeiter," said Assistant Program Manager Jason Martinez of the U.S. Marshals Service Asset Forfeiture Division, "but we are duty-bound to recoup as much value from the sale of these authentic wines as possible to compensate those who were victims of his fraud."

The wine was being stored by Kurniawan in a California wine storage facility. It is believed that much of it was destined to be used in the production of fake high-end wines in his now-infamous scheme. Some of the authenticated, high-value wines that Kurniawan stored at the facility are included in the auction. Net proceeds from the sale of the wine will be made available to the court to be returned to victims in the case.

The Marshals contracted for the wine authentication and appraisal. The contract was awarded to Stephanie Reeves, of Houston, who worked with a team that included Michael Egan of Bordeaux, France. Egan was involved in the Kurniawan federal court case as the principal expert witness for the prosecution at trial. Specifically, Egan inspected the bottles with the most risk of being counterfeit, and he uncovered a quantity of counterfeit bottles that were removed from the collection being sold.

Kurniawan, 39, was sentenced to 10 years in prison and is serving his sentence at Taft Correctional Institute in California.

The Department of Justice Asset Forfeiture Program is a key component of the federal government's law enforcement efforts to combat major criminal activity by disrupting and dismantling illegal enterprises, depriving criminals of the proceeds of illegal activity, deterring crime and restoring property to victims. The U.S. Marshals Service plays a critical role by efficiently managing and selling assets seized and forfeited by DOJ. Proceeds generated from asset sales are used to operate the Asset Forfeiture Program, compensate victims and support various law enforcement and community initiatives.

Practice Tip: For more information on the case, see:

www.fbi.gov/news/stories/2014/september/rare-wine-dealer-sentenced-in-counterfeiting-scheme

www.fbi.gov/newyork/press-releases/2014/prominent-wine-dealer-rudy-kurniawan-sentenced-in-manhattan-federal-court-to-10-years-in-prison-for-selling-millions-of-dollars-of-counterfeit-wine

November 30, 2015

Criminal Copyright Law: Operator of Second-Largest Music Piracy Website in the U.S. Sentenced to 3 Years for Criminal Copyright Infringement

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Norfolk, Virginia - District Judge Rebecca Beach Smith of the Eastern District of Virginia sentenced copyright infringer to prison.

Rocky P. Ouprasith, 23, of Charlotte, North Carolina, was sentenced recently to 36 months in prison for reproducing and distributing without permission millions of infringing digital copies of copyrighted works, including copies of popular songs and albums before they were commercially available. Ouprasith was also sentenced to two years of supervised release, ordered to pay restitution in the amount of $45,288.62, and to forfeit $50,851.05.

This case represents the first criminal copyright infringement sentence imposed for a cyberlocker operator in the United States.

"Ouprasith operated the second largest online file sharing site in the United States, averaging nearly 4.5 million visits per month and resulting in an estimated collective loss of more than $10 million per month to the rightful owners," said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia. "I believe this sentence reflects the seriousness of the crime and will promote greater respect for the law and property rights of others."

"HSI is responsible for enforcing federal regulations that exist to protect American businesses from unfair trade practices and intellectual property theft," said Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement's Homeland Security Investigations ("HSI"). "Online piracy has a serious financial impact to business, which is felt at every level of a transaction - from the producer to the point-of-sales clerk."

Ouprasith pleaded guilty on Aug. 21, 2015. According to court documents, between May 2011 and October 2014, Ouprasith operated RockDizMusic.com, a website originally hosted on servers in France and later in Canada, from which Internet users could find and download infringing digital copies of popular copyrighted songs and albums. Ouprasith admitted that he obtained digital copies of copyrighted songs and albums from online sources, and that he encouraged and solicited others, referred to as "affiliates," to upload digital copies of copyrighted songs and albums to websites, including RockDizFile.com, that were hosted on servers in Russia, France and the Netherlands, and that hosted hyperlinks to content being offered for download on RockDizMusic.com. Ouprasith further admitted that to encourage such activity, he agreed to pay the affiliates based on the number of downloads from his website.

According to the Recording Industry Association of America, in 2013, RockDizFile.com was the second-largest online file sharing website specializing in the reproduction and distribution of infringing copies of copyrighted music in the United States. Ouprasith admitted that in 2013 and 2014, he either ignored or pretended to take remedial action in response to complaints from copyright holders and their representatives that the website contained links to infringing copies protected songs and albums.

In October 2014, federal law enforcement authorities shut down RockDizMusic.com and RockDizFile.com, and law enforcement authorities in the Netherlands and France seized file-hosting servers utilized by Ouprasith.

According to court documents, the market value of Ouprasith's illegally pirated material was more than $6 million.

This sentencing is related to the many efforts being undertaken by the Department of Justice Task Force on Intellectual Property ("IP Task Force"). The IP Task Force supports prosecution priorities, promotes innovation through heightened civil enforcement, enhances coordination among federal, state, and local law enforcement partners, and focuses on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders.

Practice Tip: To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce.

Continue reading "Criminal Copyright Law: Operator of Second-Largest Music Piracy Website in the U.S. Sentenced to 3 Years for Criminal Copyright Infringement" »

October 15, 2015

DOJ Announces New Strategy to Combat Intellectual Property Crimes

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Washington, D.C. - The Justice Department has announced a new approach to combat intellectual property crimes. Grants to state and local law enforcement agencies totaling more than $3.2 million were also announced.

Attorney General Loretta E. Lynch stated recently that the Justice Department will launch a new collaborative strategy to partner more closely with businesses in intellectual property enforcement efforts. Additionally, over $3.2 million will be awarded to ten jurisdictions to support state and local task forces in the training, prevention, enforcement and prosecution of intellectual property theft and infringement crimes.

"The digital age has revolutionized how we share information, store data, make purchases and develop products, requiring law enforcement to strengthen our defenses against cybercrime - one of my top priorities as Attorney General," said Attorney General Lynch. "High-profile instances of hacking - even against large companies like Sony and Target - have demonstrated the seriousness of the threat all businesses face and have underscored the potential for sophisticated adversaries to inflict real and lasting harm."

The new FBI collaborative strategy builds upon the work previously done by the department while also working with industry partners to make enforcement efforts more effective. As part of the strategy, the FBI will partner with third-party marketplaces to ensure that they have the right analytical tools and techniques to combat intellectual property concerns on their websites. The bureau also will serve as a bridge between brand owners and third-party marketplaces in an effort to mitigate instances of the manufacture, distribution, advertising and sale of counterfeit products. This new strategy will help law enforcement and companies better identify, prioritize and disrupt the manufacturing, distribution, advertising and sale of counterfeit products. Crimes will then be investigated by the FBI and other partners of the National Intellectual Property Rights Coordination Center and finally prosecuted by the Justice Department.

Further, the Office of Justice Program's Intellectual Property Enforcement Program ("IPEP") will award $3.2 million in grants to aid state and local law enforcement in addressing intellectual property crimes.

Local award recipients announced included the following:

City of Austin Police Department: $400,000

City of Hartford Police Department: $399,545

Cook County State Attorney's Office: $400,000

Baltimore County Police Department: $120,174

North Carolina Department of Secretary of State: $367,076

New Jersey State Police: $269,619

City of Phoenix Police Department: $253,129

City of Portland Police Department: $373,569

Virginia State Police: $253,128

City of San Antonio Police Department: $400,000

Since IPEP's establishment in 2009, the department has invested nearly $14.8 million for 41 task forces across the country. These grants have supported the arrests of 3,522 individuals, the dismantling of 1,882 piracy or counterfeiting organizations and the seizure of $266,164,989 in counterfeit property, other property and currency in conjunction with IP enforcement operations.

The department also launched a new intellectual property website http://www.justice.gov/iptf to serve as a both a resource to companies facing intellectual property challenges as well as a mechanism to educate the public on how intellectual property theft is a growing threat to the country's public safety and economic well-being.

Practice Tip: Intellectual property theft refers to the violation of criminal laws that protect copyrights, patents, trademarks and other forms of intellectual property and trade secrets both in the United State and abroad. Faulty and counterfeit products are often sold to unsuspecting consumers and can pose a significant threat to their health and safety. In a few circumstances, these activities are used to fund dangerous or violent criminal enterprises or organized crime networks.

October 14, 2015

Indiana Patent and Trademark Litigation: Global Archery Sues Seattle-Based Company for Infringement

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Fort Wayne, Indiana - An Indiana intellectual property attorney for Global Archery Products, Inc. of Ashley, Indiana commenced litigation in the Northern District of Indiana alleging trademark and patent infringement by Jordan Gwyther d/b/a Larping.org and UpshotArrows.com of Seattle, Washington.

Two patents are at issue in this lawsuit: U.S. Patent No. 8,449,413 (the "`413 Patent") and U.S. Patent No. 8,932,159 (the "`159 Patent"). Both are entitled "Non-Lethal Arrow." Also at issue are U.S. Trademark Registration No. 4,208,867 and 4,208,868 for ARCHERY TAG for use in connection with non-lethal arrows. The patents and trademarks have been registered by the U.S. Patent and Trademark Office.

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Global contends that Jordan Gwyther d/b/a Larping.org ("Larping") is selling and offering for sale several products including a "Crossbow Bolt," a "Flat Tip Larp Arrow," a "Glow in the Dark Larp Arrow" and a "Round Tip Larp Arrow." These arrows are marketed at www.upshotarrows.com. Global asserts that Larping is violating Global's trademark rights by, inter alia, using the ARCHERY TAG trademark on advertising and as a paid "key word" on one or more search engines in connection with the marketing of these products. Global also claims that Larping's products infringe upon two of Global's patents.

In addition to patent infringement and trademark infringement, Global asserts various additional claims against Larping. The counts listed in this federal lawsuit are as follows:

• Count I: Infringement of the '413 Patent by Larping
• Count II: Infringement of the '159 Patent by Larping
• Count III: Infringement of Federal Trademarks
• Count IV: False Designation of Origin/Unfair Competition
• Count V: False Advertising
• Count VI: Tortious Interference with Contractual Relations
• Count VII: Tortious Interference with Business Relationships
• Count VIII: Criminal Mischief

• Count IX: Deception

Global seeks equitable relief along with damages, including punitive damages, costs and attorney fees.

Continue reading "Indiana Patent and Trademark Litigation: Global Archery Sues Seattle-Based Company for Infringement" »

August 24, 2015

Introduction to Criminal Copyright Infringement - Fourth Element: Commercial Advantage or Private Financial Gain

The fourth element of a criminal prosecution for copyright infringement requires that the 

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government prove that the defendant engaged in an act of copyright infringement "for purposes of commercial advantage or private financial gain." It is unnecessary that a profit be made as a result of the infringing activities. This interpretation was intended to exclude from criminal liability those individuals who willfully infringe copyrights solely for their own personal use, although those individuals may still be pursued by the copyright holder in civil court.

It is a common misconception that if infringers do not charge subscribers a monetary fee for infringing copies, they cannot be found guilty of criminal copyright infringement. While evidence of discrete monetary transactions (i.e., the selling of infringing goods for a particular price) provides the clearest evidence of financial gain, such direct evidence is not a prerequisite for the government to prosecute.

Instead, the government gives a broader interpretation to the requirement of a "commercial or financial purpose." The Department of Justice's interpretation of the phrase "for purposes of commercial advantage or private financial gain" does not require the payment in money for infringing works. Instead, payment by trading anything of value for infringing copies could constitute seeking a "commercial advantage or private financial gain." Thus, "bartering" (i.e., the practice of exchanging infringing works for other infringing works) that results in the unauthorized dissemination of infringing product can trigger criminal prosecution.

August 17, 2015

Introduction to Criminal Copyright Infringement - Third Element: Willfulness

The third element of a criminal prosecution for copyright infringement requires that the 

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government establish that the defendant possessed criminal intent to infringe the holder's copyrighted work. Courts generally agree that a "willful" act must be "an act intentionally done in violation of the law."

However, in defining willfulness when it comes to copyright infringement, courts differ in their interpretations of which of the two acts - copying or infringing - requires willful intent. The minority view, endorsed by the Second and Ninth Circuits, holds that "willful" means only intent to copy, not intent to infringe. The majority view, however, looks for intent to infringe rather than merely intent to copy, thus, requiring the government to demonstrate a voluntary, intentional violation of a known legal duty.

This construction provides a rare but significant exception to the maxim that "ignorance of the law is no excuse." Indeed, under this construction, were a defendant to satisfy the finder of fact either that he was not aware of laws prohibiting copyright infringement, or that he did not believe his acts to be infringing, such might constitute a defense to the criminal charge. It would not constitute a defense to a civil lawsuit for copyright infringement, however, as civil infringement remains a strict liability wrongdoing.

August 14, 2015

Introduction to Criminal Copyright Infringement - Second Element: Infringement

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The second element of a criminal prosecution for copyright infringement requires that the government prove that the defendant infringed upon the holder's rights in its copyrighted intellectual property. Although the term "infringement" itself is not specifically defined in the copyright statute, 17 U.S.C. § 501(a) provides that: "[a]nyone who violates any of the exclusive rights of the copyright owner as provided by [17 U.S.C. §§ 106 to 118] . . . is an infringer of the copyright." Thus, the concept of infringement is defined by reference to the exclusive rights conferred on a copyright owner by 17 U.S.C. § 106. Those exclusive rights include the right to display or perform the work publicly, as set forth in 17 U.S.C. § 106(4)-(5), along with the right to reproduce and distribute copies of the work, as set forth in 17 U.S.C. § 106(1) and (3). The unauthorized exercise of these rights will constitute an act of infringement and will give rise to a civil infringement claim by the copyright holder and perhaps prosecution by the government.

Generally, infringement is established by evidence of copying. However, because copying often cannot be directly attributed to the defendant, copying can be established indirectly through evidence that the defendant had access to the original copyrighted work, and that the defendant's work is substantially similar to it.

With regard to prosecution for alleged infringement of copyrighted computer programs, a court must also decide separately whether or not the copies at issue were lawfully made under 17 U.S.C. § 117, which authorizes such duplication in certain circumstances. Thus, unlike copies of other types of copyrighted works, copies of computer programs are not automatically presumed to be unauthorized.

The concept of infringement includes a host of statutory exceptions to the exclusive rights created by copyright law, many of which involve conduct that is already specifically exempted from criminal liability by the heightened proof requirements of 17 U.S.C. § 506(a) and 18 U.S.C. § 2319. Other limitations, such as the fair use doctrine and the first sale doctrine, may also apply to criminal cases.

August 7, 2015

Introduction to Criminal Copyright Infringement - First Element: Existence of a Valid Copyright

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The first element of a criminal prosecution for copyright infringement under 17 U.S.C. § 506(a) requires proof that the copyright at issue is a valid copyright. This may be established by demonstrating that the formal requirements of copyright registration have been satisfied. Although registration of a copyrighted work is not necessary to obtain copyright protection, it is usually required before prosecuting a copyright defendant in criminal court.

Registration of a copyright is typically proven by obtaining a certificate of registration from the Register of Copyrights. Under 17 U.S.C. § 410(c), a certificate of registration "made before or within five years after the first publication of the work shall constitute prima facie evidence of the validity of the copyright. . . ." If the defendant contests the validity of the copyright at issue as a defense in a criminal prosecution, the government would need to make an independent evidentiary showing that the copyright is valid. This would involve showing that the copyright was not obtained by fraud and the registration certificate is genuine.

July 31, 2015

Criminal Copyright Infringement - 17 U.S.C. § 506(a) and 18 U.S.C. § 2319

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The principal criminal statute protecting copyrighted works is 17 U.S.C. § 506(a), which provides that "[a]ny person who infringes a copyright willfully and for purposes of commercial advantage or private financial gain" shall be punished as provided in 18 U.S.C. § 2319. Section 2319 provides, in pertinent part, that a 5-year felony shall apply if the offense "consists of the reproduction or distribution, during any 180-day period, of at least 10 copies or phonorecords, of 1 or more copyrighted works, with a retail value of more than $2,500." 18 U.S.C. § 2319(b)(1).

The 1992 amendments to section 2319 have made it possible to pursue felony-level sanctions for violations relating to all types of copyrighted works, including computer software and other works written, stored or transmitted in a digital format, if the other elements of the statute are satisfied. Felony penalties attach only to violations of a victim's rights of reproduction or distribution in the quantity stated. A misdemeanor shall apply if the defendant does not meet the numerical and monetary thresholds, or if the defendant is involved in the infringement of the other rights bestowed upon the copyright holder, including the right to prepare derivative works, or the right to publicly perform a copyrighted work.

There are four essential elements to a charge of criminal copyright infringement: (1) that a valid copyright; (2) was infringed by the defendant; (3) willfully; and (4) for purposes of commercial advantage or private financial gain. Attempts to infringe are prohibited to the same extent as the completed act. Conspiracies to violate the Copyright Act can be prosecuted under 18 U.S.C. § 371. A minority of courts also require that the government prove the absence of a first sale, and refer to this as a fifth element of a section 506(a) offense. However, the majority position is that the absence of a first sale is an affirmative defense.

The elements of criminal copyright infringement will be discussed in upcoming blog posts.