Intellectual Property Theft Laws, Charges And Statute Of Limitations

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Intellectual property (IP) is one of four different things:

  1. Copyright, which covers original literary and artistic authored works.
  2. Patent, which covers inventions of machines, processes, and other useful objects.
  3. Trademark, which relates to symbols used commercially.
  4. Trade secret, which covers information that is confidential and commercially valuable.

IP Theft Laws

There are numerous laws and acts that cover IP theft. They include the:

  1. U.S. Constitution’s Copyright and Patent Clause, through which copyright can be secured
  2. Commerce Clause, which secures trade secrets and trademarks
  3. Copyright Act
  4. Lanham Act
  5. 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:

  1. 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.
  2. Under the Lanham Act, competitors are prevented from using counterfeit trademarks or from falsely using any information that could suggest affiliation with the trademark.
  3. 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.

IP 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.

IP 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.

IP 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.

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
Geoffrey Nathan, Esq.

About Geoffrey Nathan, Esq.

Geoffrey G Nathan is a top federal crimes lawyer and Chief Editor of FederalCharges.com. He is a licensed attorney in the Commonwealth of Massachusetts since 1988, admitted to practice in both Federal and State courts. If you have questions about your federal case he can help by calling 877.472.5775.