Is IP Infringement a Crime?

Intellectual property (IP) infringement is usually handled in the civil courts. In a typical scenario, one business begins selling a product that, unbeknownst to it, contains elements covered by a patent that is owned by another business. The second business sues the first business for patent infringement and the parties either settle or the case heads to IP litigation in a civil court. In some cases, however, IP infringement or theft can also be charged as a crime, with the alleged infringers or thieves being prosecuted in a criminal court. If you suspect that your IP assets are being infringed, an Alabama IP litigation lawyer can evaluate your case and help protect your rights. 

When IP Infringement Can Be Criminal 

The following types of IP infringement can be charged as crimes: 

Piracy

Piracy is arguably the most common form of criminal IP infringement with which most people are familiar. Under 17 U.S.C. § 506, it occurs where an individual willfully infringes a copyright and the infringement was committed: 

1. For the purposes of commercial advantage or financial gain; or
2. By the reproduction or distribution during any 180-day period or one or more copies of one or more copyrighted works that have a total value of more than $1,000; or
3. By the distribution of a work being prepared for commercial distribution by making it available on a computer network accessible to the public

It is also a crime to add a false copyright notice to a product or to remove a valid copyright notice. 

Counterfeiting Goods

Selling or otherwise trafficking in counterfeit goods can sometimes constitute criminal trademark infringement. Under the Trademark Counterfeiting Act, it is a crime to (1) traffic in goods or services and use a counterfeit mark on or in connection with those goods or services, and (2) traffic in labels, patches, stickers, etc., knowing that a counterfeit mark has been applied that is likely to deceive or cause confusion or mistake. 

Counterfeit Labeling 

Similar to selling counterfeit trademarked goods, counterfeit labeling of a phonorecord (i.e., CD, record, audiocassette, etc.), computer program, motion picture, literary work, or work of visual art (among others) can be charged as a form of criminal copyright infringement. 

Trade Secret Theft 

Criminal trade secret theft is handled under the Economic Espionage Act. Trade secret theft or misappropriation can be charged as a crime when: 

1. It is intended to benefit a foreign government, foreign instrumentality, or foreign agent, or
2. It is intended to benefit anyone other than the owner and the information was related to a product or service used in interstate or foreign commerce

Given that trade secrets can confer a significant competitive advantage to their holders, trade secret theft is of particular concern to large international corporations and has been the subject of increased enforcement efforts in recent years. 

Penalties for Criminal IP Infringement

The penalties for criminal IP infringement vary according to the severity of the crime. For example, piracy for financial gain can be punished by up to five years in prison and a $250,000 fine. The most serious acts of trade secret theft — economic espionage intended for the benefit of a foreign government — can carry penalties of up to 15 years in prison and a $5,000,000 fine.    The size of the entity committing the infringement is also relevant, with large corporations generally facing harsher penalties than individuals. 

Stop IP Infringement with the Help of an Alabama IP Litigation Lawyer

If you suspect that your IP rights are being infringed, you should act swiftly to hold the infringer accountable. For more information, please contact an Alabama IP litigation lawyer at AdamsIP in either our Birmingham or Huntsville office by calling 251-289-9787 or by using our online contact form.