Intellectual property (IP) is one of four different things:
- Copyright, which covers original literary and artistic authored works.
- Patent, which covers inventions of machines, processes, and other useful objects.
- Trademark, which relates to symbols used commercially.
- Trade secret, which covers information that is confidential and commercially valuable.
Intellectual Property Theft Laws
There are numerous laws and acts that cover IP theft. They include the:
- U.S. Constitution’s Copyright and Patent Clause, through which copyright can be secured
- Commerce Clause, which secures trade secrets and trademarks
- Copyright Act
- Lanham Act
- Patent Act
The latter three are worth exploring in greater detail. They are all in place to stop IP theft, safeguarding the rights of the IP owner. Specifically:
- Under the Copyright Act, the owner of the copyright is the only one who can determine how the work can be displayed, publicly performed, distributed, or reproduced.
- Under the Lanham Act, competitors are prevented from using counterfeit trademarks or from falsely using any information that could suggest affiliation with the trademark.
- Under the Patent Act, patent holders can prevent other people from selling, offering, using, or making their inventions anywhere in the country.
The Lanham Act is particularly important, as it ensures that those who own “famous” tradmarks are able to take legal action against those who would attempt to dilute, blur, or tarnish an existing IP.
Intellectual Property Theft Charges
Trade secret laws are also in place. These give people the proprietary rights to formulas, designs, processes, or technologies that cannot yet be patented. This was governed by individual state laws until 1996, after which the Economic Espionage Act of 1996 was enacted by Congress. This allowed criminal penalties to be put in place for foreign and domestic entities that aimed to steal trade secrets.
Meanwhile, the Defend Trade Secrets Act of 2016 became law in November 2016. This was an amendment to the Economic Espionage Act and ensured that trade secret misappropriation could receive a federal civil remedy.
Charges can be brought when the IP owner starts a lawsuit against an offender. That said, criminal charges may also be brought by the U.S. Department of Justice, which they do in particularly serious IP infringement cases. The aim is not just to impose a harsher sentence, but also to discourage other people from violating IP laws. Sometimes, these charges will require the involvement of various different agencies. These include the:
- U.S. Customs and Border Protection Agency, which is generally responsible for seizing those counterfeit goods that are being imported into the country.
- International Trade Commission, which will determine whether unfair trade practices have taken place, specifically look at whether those goods exist due to the theft of IP.
- International Trade Administration at the U.S. Department of Commerce, the U.S. State Department, and the U.S. Trade Representative, which enforces laws on foreign and domestic trading partners to protect the rights of the IP holder.
Intellectual Property Theft Penalties
The Economic Espionage Act, Copyright Act, and Lanham Act all mention both civil and criminal provisions in terms of applicable penalties. The Patent Act, meanwhile, only offers civil remedies. If the IP owner brings an action for infringement, courts will determine the civil remedies. Should the court determine that organizations or individuals should be prosecuted, then the substantive statutes set out the imprisonment terms. The criminal fine is set in 18 U.S.C. 3571. On the other hand, the Economic Espionage Act has set the criminal fine for trade secret theft and economic espionage.
It is important to understand that, if criminal charges are brought in an IP theft case, it is possible for penalties to be imposed as a result of that, while at the same time imposing the penalties as a result of civil remedies, should the IP holder bring about such an action. If a defendant is convicted of criminal property offenses, then restitution is also be available. The government also needs to determine whether the goods in questions can be confiscated as a result of the evidence presented. Indeed, this is what will usually help them determine whether or not criminal charges should be brought against a defendant or not.
Intellectual Property Theft Statute of Limitations
In the case of IP theft, relating to copyright, the statute of limitations is three years. However, the clock does not start ticking on the day the IP theft takes place, as it would be too easy for thieves to hide for that period of time. Rather, the clock starts ticking on the day the claim first accrued. This is for civil cases only. If IP theft relating to copyright is tried criminally, then the statute of limitations is five years. The clock starts ticking on the day the action itself was initiated.
There is currently no federal statute of limitations for civil trademark infringements. However, it is common for the courts to follow the same limitations as the criminal cases would. It is also quite common for courts to use the equitable doctrine of laches to determine whether or not a case was brought forward on time. Generally speaking, however, the five year rule is applied.
For patent infringement actions, no statute of limitations has been set. However, under the Patent Act, it does say that monetary damages are only available for a period of six years after a complaint is filed.
Civil action relating to trade secret misappropriation is governed by a three year federal statute of limitations.
Intellectual Property Theft Laws By State
Intellectual property theft involves the unauthorized use or reproduction of someone else’s intellectual property, such as patents, trademarks, copyrights, or trade secrets. The laws and penalties for intellectual property theft vary by state:
Under Code of Alabama Section 13A-8-100:
- Intellectual property theft is a Class C felony, punishable by 1 to 10 years in prison and fines up to $15,000.
Under Alaska Stat. Section 45.50.910:
- Intellectual property theft is a Class C felony, with penalties including up to 5 years in prison and fines up to $50,000.
Under Arizona Revised Statutes Section 44-1453:
- Intellectual property theft is a Class 5 felony, punishable by up to 2.5 years in prison and significant fines.
Under Arkansas Code Section 4-75-601:
- Intellectual property theft is a Class D felony, punishable by up to 6 years in prison and fines up to $10,000.
Under California Penal Code Section 350:
- Intellectual property theft is punishable by up to 3 years in state prison and fines up to $100,000.
Under Colorado Revised Statutes Section 18-4-401:
- Intellectual property theft is a Class 4 felony, punishable by 2 to 6 years in prison and fines up to $500,000.
Under Connecticut General Statutes Section 53a-125e:
- Intellectual property theft is a Class D felony, punishable by up to 5 years in prison and fines up to $5,000.
Under Delaware Code Title 11, Section 932:
- Intellectual property theft is a Class G felony, with a potential sentence of up to 2 years in prison and fines up to $2,500.
Under Florida Statutes Section 812.081:
- Intellectual property theft is a first-degree felony, punishable by up to 30 years in prison and fines up to $10,000.
Under Georgia Code Section 10-1-761:
- Intellectual property theft is a felony, with penalties up to 15 years in prison and fines up to $250,000.
Under Hawaii Revised Statutes Section 708-891:
- Intellectual property theft is a Class C felony, which includes a potential 5-year prison sentence and fines up to $10,000.
Under Idaho Code Section 18-2202:
- Intellectual property theft is a felony, punishable by up to 14 years in prison and fines up to $5,000.
Under Illinois Compiled Statutes 720 ILCS 5/16-7:
- Intellectual property theft is a Class 2 felony, with penalties of 3 to 7 years in prison and fines up to $25,000.
Under Indiana Code Section 35-43-5-3:
- Intellectual property theft is a Level 6 felony, punishable by 6 months to 2.5 years in prison and fines up to $10,000.
Under Iowa Code Section 716.8:
- Intellectual property theft is an aggravated misdemeanor, punishable by up to 2 years in prison and fines up to $6,250.
Under Kansas Statutes Section 21-5807:
- Intellectual property theft is a severity level 8 felony, which could result in 7 to 23 months in prison and fines up to $100,000.
Under Kentucky Revised Statutes Section 365.720:
- Intellectual property theft is a Class D felony, punishable by 1 to 5 years in prison and fines up to $10,000.
Under Louisiana Revised Statutes Section 14:67.12:
- Intellectual property theft is a felony, punishable by up to 10 years in prison and fines up to $10,000.
Under Maine Revised Statutes Title 17-A, Section 354:
- Intellectual property theft is a Class C crime, punishable by up to 5 years in prison and fines up to $5,000.
Under Maryland Code, Criminal Law Section 7-104:
- Intellectual property theft is a felony, punishable by up to 15 years in prison and fines up to $25,000.
Under Massachusetts General Laws Chapter 266, Section 30:
- Intellectual property theft is punishable by up to 5 years in prison and fines up to $25,000.
Under Michigan Compiled Laws Section 752.1052:
- Intellectual property theft is a felony, with a maximum penalty of 5 years in prison and fines up to $25,000.
Under Minnesota Statutes Section 609.527:
- Intellectual property theft is a felony, punishable by up to 20 years in prison and fines up to $100,000.
Under Mississippi Code Section 97-23-93:
- Intellectual property theft is a felony, punishable by up to 5 years in prison and fines up to $10,000.
Under Missouri Revised Statutes Section 570.030:
- Intellectual property theft is a Class C felony, punishable by 3 to 10 years in prison and fines up to $10,000.
Under Montana Code Annotated Section 45-6-317:
- Intellectual property theft is punishable by up to 20 years in prison and fines up to $50,000.
Under Nebraska Revised Statutes Section 28-511:
- Intellectual property theft is a Class IV felony, with a penalty of up to 2 years in prison and fines up to $10,000.
Under Nevada Revised Statutes Section 205.300:
- Intellectual property theft is punishable by up to 10 years in prison and fines up to $10,000.
Under New Hampshire Revised Statutes Section 638:6:
- Intellectual property theft is a Class A felony, punishable by up to 15 years in prison and fines up to $100,000.
Under New Jersey Statutes Section 2C:21-2.1:
- Intellectual property theft is considered a second-degree crime, with a typical sentence range of 5 to 10 years in prison and fines up to $150,000.
Under New Mexico Statutes Section 30-16-1:
- Intellectual property theft is a third-degree felony, punishable by up to 3 years in prison and fines up to $5,000.
Under New York Penal Law Section 165.15:
- Intellectual property theft is a Class E felony, punishable by up to 4 years in prison and fines up to $5,000.
Under North Carolina General Statutes Section 14-113.20:
- Intellectual property theft is a Class H felony, punishable by up to 25 months in prison and fines up to $25,000.
Under North Dakota Century Code Section 12.1-23-05:
- Intellectual property theft is a Class C felony, with a penalty of up to 5 years in prison and fines up to $10,000.
Under Ohio Revised Code Section 2913.02:
- Intellectual property theft is a fourth-degree felony, with penalties including up to 18 months in prison and fines up to $5,000.
Under Oklahoma Statutes Title 21, Section 1730:
- Intellectual property theft is a felony, punishable by up to 5 years in prison and fines up to $10,000.
Under Oregon Revised Statutes Section 164.055:
- Intellectual property theft is classified as a Class C felony, which can result in up to 5 years in prison and fines up to $125,000.
Under Pennsylvania Consolidated Statutes Title 18, Section 3926:
- Intellectual property theft is a third-degree felony, with penalties including a maximum of 7 years in prison and fines up to $15,000.
Under Rhode Island General Laws Section 11-52-2:
- Intellectual property theft is punishable by up to 10 years in prison and fines up to $10,000.
Under South Carolina Code Section 39-15-1190:
- Intellectual property theft is a felony, punishable by up to 5 years in prison and fines up to $50,000.
Under South Dakota Codified Laws Section 22-30A-17:
- Intellectual property theft is a Class 6 felony, punishable by up to 2 years in prison and fines up to $4,000.
Under Tennessee Code Annotated Section 39-14-152:
- Intellectual property theft is a Class E felony, punishable by 1 to 6 years in prison and fines up to $3,000.
Under Texas Penal Code Section 32.51:
- Intellectual property theft is a state jail felony, punishable by 180 days to 2 years in state jail and fines up to $10,000.
Under Utah Code Section 76-6-409:
- Intellectual property theft is a second-degree felony, punishable by 1 to 15 years in prison and fines up to $10,000.
Under Vermont Statutes Title 13, Section 2535:
- Intellectual property theft is punishable by up to 10 years in prison and fines up to $1,000.
Under Virginia Code Section 18.2-152.4:
- Intellectual property theft is a Class 6 felony, punishable by up to 5 years in prison and fines up to $2,500.
Under Revised Code of Washington Section 9A.56.190:
- Intellectual property theft is a Class C felony, punishable by up to 5 years in prison and fines up to $10,000.
Under West Virginia Code Section 61-3-24:
- Intellectual property theft is a felony, punishable by up to 10 years in prison and fines up to $10,000.
Under Wisconsin Statutes Section 943.70:
- Intellectual property theft is a Class H felony, punishable by up to 6 years in prison and fines up to $10,000.
Under Wyoming Statutes Section 6-3-502:
- Intellectual property theft is a felony, punishable by up to 10 years in prison and fines up to $10,000.
References
- Time Limits for Charges: State Criminal Statutes of Limitations (n.d.). Retrieved from http://criminal.findlaw.com/criminal-law-basics/time-limits-for-charges-state-criminal-statutes-of-limitations.html
- Copyright Law of the United States. (n.d.). Retrieved from https://www.copyright.gov/title17/
- Lanham Act (n.d.). Retrieved from https://www.law.cornell.edu/wex/lanham_act
- U.S. Patent Act — 35 USCS Sects. 1 – 376 (n.d.). Retrieved from https://www.law.cornell.edu/patent/patent.overview.html
- Economic Espionage Act of 1996 – 18 U.S. Code 1831. (n.d.). Retrieved from https://www.law.cornell.edu/uscode/text/18/1831
- Defend Trade Secrets Act of 2016. (2016, November 5). Retrieved from https://www.congress.gov/bill/114th-congress/senate-bill/1890/text
- Equitable doctrine of laches. (2012, January 26). Retrieved from https://www.lexisnexis.com/legalnewsroom/estate-elder/b/estate-elder-blog/archive/2012/01/26/doctrine-of-laches-means-you-are-quot-out-of-time-quot.aspx
- 18 U.S.C. 3571. (n.d.). Retrieved from https://www.law.cornell.edu/uscode/text/18/3571