Articles Posted in International Intellectual Property Law

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Washington, D.C. – The Trade Facilitation and Trade Enforcement Act provides new tools and resources to protect American innovation.

The Office of the United States Trade Representative (“USTR”) commended Congress for passing the Trade Facilitation and Trade Enforcement Act of 2015, which will bolster trade enforcement efforts.

“This bill adds new tools that we’ll use in the work we do every day to hold America’s trading partners accountable,” said U.S. Trade Representative Michael Froman. “Coming on the heels of negotiating [the Trans-Pacific Partnership (“TPP”)], the highest-standard trade agreement in history, this bill will further boost enforcement of the groundbreaking intellectual property, labor, environment, and many other fully enforceable commitments we’ve secured.”

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.

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.

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Washington, D.C. – The U.S. International Trade Commission (“USITC”) began an investigation under section 337 of the Tariff Act of 1930 regarding the importation and sale of blood cholesterol test strips that allegedly infringe a U.S. patent. The respondents are Jant Pharmacal Corp. of Encino, California; Infopia America LLC of Titusville, Florida and Infopia Co., Ltd. of the Republic of Korea.

In August 2014, Indiana patent attorneys for Plaintiff Polymer Technology Systems (“PTS”) of Indianapolis, Indiana sued respondents in the Southern District of Indiana alleging infringement of U.S. Patent No. 7,087,397, “Method for determining HDL concentration from whole blood or plasma,” which was granted by the United States Patent and Trademark Office. In the lawsuit filed in Indiana federal court, PTS also asserted that Defendants had violated the Lanham Act.

In October 2015, PTS filed a complaint with the USITC involving its point-of-care blood cholesterol testing meters, test strips, and systems containing the same naming the same three parties. PTS asks that the USITC issue an exclusion order and a cease and desist order.

No decision has yet been made on the merits of the USITC action. The matter will be assigned to an administrative law judge (“ALJ”), who will hold an evidentiary hearing. The ALJ will make an initial determination regarding whether there is a violation of section 337. That decision, in turn, is subject to review by the USITC, which then makes a final determination.

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The U.S. Copyright Office, a part of the Library of Congress, issued a final rule adopting exemptions to the provision of the Digital Millennium Copyright Act (“DMCA”) that prohibits circumvention of technological measures that control access to copyrighted works.

The DMCA was enacted in 1998 to implement various elements of copyright-related World Intellectual Property Organization treaties. Included in the DMCA was a prohibition against circumventing technological measures employed by or on behalf of copyright owners to protect access to their works. The DMCA also provided for exemptions to this prohibition, which are issued by the Librarian of Congress following a rulemaking proceeding. In the course of this proceeding, the Librarian determines which “noninfringing uses by persons who are users of a copyrighted work are, or are likely to be, adversely affected by the prohibition against circumvention in the succeeding three-year period” and, through the final rule, exempts that class from the prohibition for that three-year period.

Under the DMCA, this final rule must consider “(i) the availability for use of copyrighted works; (ii) the availability for use of works for nonprofit archival, preservation, and educational purposes; (iii) the impact that the prohibition on the circumvention of technological measures applied to copyrighted works has on criticism, comment, news reporting, teaching, scholarship, or research; (iv) the effect of circumvention of technological measures on the market for or value of copyrighted works; and (v) such other factors as the Librarian considers appropriate.”

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South Bend, Indiana – An Indiana patent attorney for Plaintiffs Never Lost Golf, LLC of South Bend, Indiana; Michael Carnell, a domiciliary of California who resides in Berlin, Germany and who does business as The Never Lost Golf Tee Saver and The Never Lost Golf Tee Saver Mat System (“NLG”); and Teresa O’Keefe and Grant Holloway, Trustees for the N.L.G. Living Trust filed a lawsuit in the Northern District of Indiana alleging infringement of NLG’s German Patent A63B 57/100, which has been filed with the German Patent Office. Patent protection for NLG has also been sought with the U.S. Patent and Trademark Office.

Three Defendants in this litigation, Maia Steinert, Chrisoph Stephan and Ralf Menwegen, are partners and/or members of Steinert & Stephan, a German law firm. Steinert has been accused by Plaintiffs of “aggregious [sic] conduct in asserting ownership interest in the NLG German patent.” Stephan and Menwegen were accused of having been “involved in the patent process.”

Carnell contends that he retained Steinert & Stephan in 2010 to represent him in filing for a German patent for the Never Lost Golf product. He adds in his complaint that any intellectual property rights obtained by these filings were supposed to accrue to him alone. Carnell asserts that, subsequent to hiring the Steinert & Stephan and utilizing their services in pursuit of a German patent, Steinert applied for a Never Lost Golf patent with the United States Patent and Trademark Office. This filing, states Carnell, includes an assertion by Steinert that she was the sole owner of the patent rights associated with the NLG product. He states that her actions demonstrate an attempt to illegally claim rights to intellectual property that she knew was not hers, both in the United States and in Germany.

Two additional Defendants, Markus Schumann and Harribert Pamp, have been named as co-conspirators. Plaintiffs contend that they conspired with Steinert to commit fraud and perjury in support of Steinert’s assertion of ownership in NLG’s German patent.

Defendants seek equitable relief along with damages, costs and attorney fees.

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On October 4, 2015, Ministers of the 12 Trans-Pacific Partnership (“TPP”) countries – Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam – announced conclusion of their negotiations. The result is an agreement that has been promoted as enhancing economic growth; supporting the creation and retention of jobs; enhancing innovation, productivity and competitiveness; raising living standards; reducing poverty; and promoting transparency, good governance, and enhanced labor and environmental protections.

TPP’s chapter regarding intellectual property (“IP”) covers patents, trademarks, copyrights, industrial designs, geographical indications, trade secrets, other forms of intellectual property, and enforcement of intellectual property rights, as well as areas in which participating countries agree to cooperate. The IP chapter will make it easier for businesses to search, register, and protect IP rights in new markets, which is particularly important for small businesses.

The chapter establishes standards for patents, based on the World Trade Organization’s (“WTO”) agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”), and international best practices. On trademarks, it provides protections of brand names and other signs that businesses and individuals use to distinguish their products in the marketplace. The chapter also requires certain transparency and due process safeguards with respect to the protection of new geographical indications, including for geographical indications recognized or protected through international agreements. These include confirmation of understandings on the relationship between trademarks and geographical indications, as well as safeguards regarding the use of commonly used terms.

San Francisco, California – Overly-broad intellectual property (“IP”) laws in Russia, Colombia, and Pakistan – which U.S. trade regulators say aren’t tough enough – stifle access to innovation and threaten artists, students, and creators around the globe with prison, censorship, and state prosecution, the Electronic Frontier Foundation (“EFF”) said in a new report released recently.

EFF’s “Special 404 Report” is a response to the “Special 301 Report.” The latter report, which EFF called biased and “a deeply flawed annual assessment of international intellectual property rights policies,” was released in April by the Office of the U.S. Trade Representative (“USTR”). The Special 301 Report is used to pressure countries to adopt IP laws supported by some powerful business interests.

In a first-of-its-kind analysis countering what EFF called the USTR’s “name and shame” tactics, EFF argues that the Special 301 Report paints a one-sided picture of IP rights and fails to disclose the damaging results of draconian IP policies. Examples include a human rights activist in Russia who was targeted by prosecutors using criminal copyright law, a biologist in Colombia who faces prison for sharing research, and students in Pakistan who struggle to exercise their rights under local law to study academic papers.

Los Angeles, California – Chinese professors have been accused of having stolen valuable technology from Avago Technologies and Skyworks Solutions to benefit a university in the People’s Republic of China.

On May 16, 2015, Tianjin University Professor Hao Zhang was arrested upon entry into the United States from the People’s Republic of China (“PRC”) in connection with a recent superseding indictment in the Northern District of California, announced Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Melinda Haag of the Northern District of California and Special Agent in Charge David J. Johnson of the FBI’s San Francisco Division.

The 32-count indictment, which had previously been sealed, charges a total of six individuals with economic espionage and theft of trade secrets for their roles in a long-running effort to obtain U.S. trade secrets for the benefit of universities and companies controlled by the PRC government.

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Washington, D.C. – The U.S. Department of Commerce’s United States Patent and Trademark Office (“USPTO”) recently announced that the United States has deposited its instrument of ratification to the Geneva Act of the Hague Agreement Concerning the International Registration of Industrial Designs (“Hague Agreement”) with the World Intellectual Property Organization (“WIPO”) in Geneva, Switzerland. This marks the last step in the membership process for the United States to become a Member of the Hague Union. The treaty will go into effect for the United States on May 13, 2015.

Currently, U.S. applicants wishing to pursue protection for industrial designs in multiple jurisdictions must file individual applications in each of the respective jurisdictions where industrial design rights are desired. When the Hague Agreement enters into force for the United States, it will be possible for U.S. applicants to file a single international design application either with WIPO in Geneva, Switzerland, or the USPTO to obtain protection in multiple economies. The Hague system for the protection of industrial designs provides a practical solution for registering up to 100 designs in over 62 territories with the filing of one single international application.

“U.S. accession to the Geneva Act of the Hague Agreement will provide applicants with the opportunity for improved efficiencies and cost savings in protecting their innovative designs in the global economy,” said Deputy Under Secretary for Commerce for Intellectual Property and Deputy Director of the USPTO Michelle K. Lee. “We are extremely excited about joining the Hague Union and contributing to the continued expansion and development of the Hague system which facilitates protection of industrial designs in design registration and examination systems alike.”

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