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Attorneys

Intend To Infringe = Go To Jail

November 15, 2005

By Scott Hervey

Intend to infringe – go to jail. That’s what the United States Attorney General proposed at a recent anti-piracy summit hosted by the U.S. Chamber of Commerce. United States attorney general Alberto Gonzales said the Department of Justice recently submitted to Congress the Intellectual Property Protection Act of 2005 aimed at toughening up intellectual-property enforcement.

Under current law, criminal copyright liability is applicable where a person infringes a copyright willfully, either for purposes of commercial advantage or private financial gain, or where that person reproduces or distributes by any means, one or more works with a total retail value of over $1,000 during any 180-day period. Willfulness has been held to mean that the defendant’s act was a voluntary, intentional violation of a known legal duty. As such, where the defendant raises bona fide issues concerning fair use or a lack of substantial similarity, while infringement may be found, the defendant may lack the required scienter for criminal liability.

The new bill would increase the scope of criminal copyright liability to include conduct that comprises an "intent to infringe" a copyright. The way in which the proposed language reads, the willful element would also apply to intent to infringe liability.

In Gonzales’ speech at the U.S. Chamber of Commerce’s Anti-counterfeiting Summit, he praised the proposed bill as toughening penalties for repeat criminal copyright offenders and overall strengthening copyright protection. "We also propose to strengthen restitution provisions for victim companies and rights holders, in order to provide maximum protection for those who suffer most from these crimes. And we propose to make clear that exporting infringing goods is the same as importing them…and should be punished accordingly" Gonzales said. Every member of the global economy has a responsibility to keep counterfeit goods out of the global market."

The proposed legislation also expands the scope and breadth of property that is subject to forfeiture and destruction. Under the current law, the court has the discretion of ordering the forfeiture and destruction of certain infringing works. The proposed legislation appears to take away the court’s discretion in ordering forfeiture and now mandates forfeiture of those same infringing works. In addition, the new law appears to require the forfeiture of "any property constituting or derived from any proceeds obtained directly or indirectly" for the criminal copyright infringement, as well as "any property used, or intended to be used, in any manner or part, to commit or facilitate the commission of a violation" including "electronic, mechanical, or other devices for manufacturing, reproducing, or assembling such copies". In addition, the proposed law would require convicted criminal infringers to pay restitution to the copyright owner as well as "any other victim of the offense."

The bill would also modify the requirement that a copyright holder file a copyright application prior to the institution of criminal action for infringement. Under current law, section 411 of the Copyright Act requires a copyright registration as a prerequisite for any type of infringement action, be it civil or criminal. The new law would allow the DOJ to prosecute criminal infringers without the copyright owner first having to register the work.

In his speech, Attorney General Gonzales argued that the DOJ has a "responsibility to vigorously enforce IP laws – and develop a culture of respect for IP rights – in order to harness America’s creative energy and ingenuity for the future of our economy." "While these crimes may appear harmless to some," Gonzales continued, "they actually have a measurable impact on our entire economy – and they undermine the values of competition and creativity that are important to our way of life."