Cody Linderholm

Deputy District Attorney, Multnomah County District Attorney’s Office, Oregon

IP prosecutions in Multnomah County have remained fairly dormant for years. MCDA, as well as agencies like Portland Police Bureau, are facing staffing and resource issues which have led to shifting the focus on other crimes that are rampant throughout our jurisdiction—person crimes and some property crimes like stolen cars and organized retail theft. Recently, we have been presented cases concerning IP — area agencies are working from a grant that allows for resources to be put toward IP cases. All of that to say, I do not have any benchmarks for what has worked with IP prosecutions recently. However all felonies in our jurisdiction/county have to be presented to a grand jury for indictment. Invariably, grand juries have indicted the trademark counterfeiting felonies and misdemeanors that have been presented to them with relation to “M” being trademarked.

Ed Jacobs

Associate Vice President of Brand Protection, Investigations and Data Analytics, Recom

I have often seen that without attributing a monetary value to damages (per infringement), one may fail to receive appropriate compensation for damages (if any), even if the “legal outcome” is favorable. For example, if a movie is priced at $9.99 on VOD services and data is obtainable showing it was illegally downloaded a million times, $9,990,000 should be specified as a minimum when claiming damages. Some types of damages can be harder to quantify, like damage to reputation (e.g. when prosecuting someone selling materially different or counterfeit goods), however this can be quantified using various methods, i.e. calculating a decrease in a company’s market capitalization based on stock price or calculating the difference between projected earnings and actual earnings.

Christopher Merriam

Senior Counsel, CCSIPs, U.S. Department of Justice

Some promising cases have stalled on the criminal side in the past because of different perceptions of the role of law enforcement between victim companies and prosecutors. Issues such as the level of expert support from a company required to successfully prove a criminal offense, the sharing of corporate information with authorities, or the level of control available to a company when a case has been accepted for prosecution can all derail an otherwise successful investigation. Through the information in our article in this edition, we hope to present some of the issues up front and avoid the potential for inconsistent expectations.

Andrew Masterson

Detective Sergeant, Police Intellectual Property Crime Unit, City of London Police

Historically law enforcement have not always highlighted the wider links to organized crime, the financial gains made across the criminal network, or the impact to the workers in the industry. Cases would be presented on a singular basis and offending not connected, due to fraud investigations tending to spider out, appropriate use of the Fraud Investigation Model is key to identify the key areas of investigation targeting the highest harm offending and providing support to victims. A significant awareness is placed on the serious offenses around exploiting vulnerable individuals associated with IP crime.

Michael Christin

Trial Attorney CCSIPs, U.S. Department of Justice

Perhaps the greatest challenge in IP prosecutions is obtaining meaningful deterrent penalties following a conviction. Courts may be predisposed to think of IP crimes as civil infractions and proving financial harm to a victim in the manner required for criminal sentencing can be difficult. Unlike fraud or bank robbery, which generally involve specific dollar amounts connected to the defendant’s conduct, financial harm in IP matters involves estimates of future harm, potential for sales, and other gauges of impact. By anticipating these issues, prosecutors and victim companies can educate courts and juries about the necessity for criminal enforcement and present a compelling explanation for the financial harm caused by a defendant’s conduct.

John Zacharia

Founder, Zacharia Law PLLC

What hasn’t worked as well as it should in IP prosecutions has been the prosecution of so-called repackaging cases. More accurately, courts have made the prosecution of repackaging cases more difficult. The federal government cannot prosecute someone for criminal trademark counterfeiting for repackaging genuine goods unless such repackaging was intended to deceive or confuse. However, at least one federal circuit court of appeals reversed certain counts of conviction against defendants who altered and repackaged genuine goods, even though those defendants intended to deceive their customers. Although new legislation is one solution, in reality, the current legislation should suffice. A better solution would be new, worthy prosecutions of repackaging cases in different circuits to further highlight the importance of these prosecutions . . . and demonstrate that one bad, outlier judicial opinion cannot deter these prosecutions.

JamesJack” Costello

Assistant State’s Attorney in Cook County, Illinois

The single biggest impediment to successful IP prosecutions is a lack of communication between the brand holder, the investigators, and the prosecutor.  As in most prosecutions, clear and early communication that sets out goals, realistic outcomes, and evidentiary burdens is key to achieving a ‘guilty’ at the end of the case. Getting the parties together and discussing all of the variables and requirements out in front of everyone from the beginning is essential.