Fighting Intellectual Property Crime


Frank Lin
Trial Attorney, Computer Crime and Intellectual Property Section, U.S. Department of Justice

Intellectual property (IP) remains a critical component of the U.S. economy. According to the Department of Commerce, IP-intensive industries contribute trillions of dollars to America’s gross domestic product and support over 45 million American jobs. Consequently, when individuals and organizations infringe on IP rights, they threaten our nation’s economic well-being, and often place our national security at risk or pose a significant danger to public health and safety.

Recognizing the importance of IP, the Department of Justice (DOJ) continues to wage an expansive campaign against all forms of IP crime. DOJ’s prosecutorial efforts against criminals are carried out primarily through the Computer Hacking and Intellectual Property (CHIP) program and the Computer Crime and Intellectual Property Section (CCIPS) of the Department’s Criminal Division. Over 270 experienced and specially trained federal prosecutors who focus on computer crime and IP offenses make up the CHIP Network, and each of the 93 U.S. Attorney Offices has at least one CHIP prosecutor in its ranks. CCIPS consists of over 40 attorneys devoted to enforcing laws related to computer and IP crimes with 17 CCIPS attorneys who concentrate primarily on IP enforcement. These attorneys prosecute criminal cases, coordinate multi-district and international IP investigations, provide training to prosecutors and investigative agents both domestically and abroad, and help develop and implement DOJ’s overall IP enforcement strategy and legislative priorities.

Given the increasingly international nature of IP crime, DOJ places a high priority on fostering international cooperation and coordination of IP enforcement, particularly through the Intellectual Property Law Enforcement Coordinator (IPLEC) program. The IPLEC program deploys experienced DOJ attorneys overseas to foster relationships with foreign law enforcement through capacity building, training, outreach, and expert assistance. DOJ has stationed IPLEC attorneys in Sao Paulo, Brazil; Bucharest, Romania; Bangkok, Thailand; and Hong Kong. It also expects to place an IPLEC in Abuja, Nigeria, by mid-2017. The DOJ IPLECs work in coordination with USPTO’s IP Attachés across the globe. (See USPTO’S Intellectual Property Attaché Program: How it Can Help in the BPP 1st Edition)

Primary criminal investigative responsibility within DOJ rests with the FBI. DOJ also works closely with investigative agents from other federal agencies, including Homeland Security Investigations (HSI) and the Food and Drug Administration—Office of Criminal Investigations (FDA-OCI), both directly and through the National IP Rights Coordination Center (IPR Center). By focusing these prosecutorial and investigative resources, U.S. law enforcement have achieved notable success in cases that not only implicate damage to brand image and value, but also threaten public safety. For example, in January 2017, DOJ secured a sentence of 46 months of imprisonment against Dmitriy Melnik, who operated the largest known scheme to import and sell counterfeit and misbranded contact lenses. Melnik, who pleaded guilty to conspiracy to traffic in counterfeit goods and to introduce into interstate commerce misbranded devices, was also ordered to pay $200,000 in restitution and forfeit $1.2 million in illegally derived proceeds. As part of his scheme, Melnik imported counterfeit and misbranded contact lenses from sources in Asia and sold them online to U.S. customers. Testing of a sample of the seized contact lenses revealed that they were substandard and contaminated with potentially hazardous bacteria. Additional prosecutions targeting the online sale of hard goods, including counterfeit drugs, apparel, and media products, can be found on CCIPS’ website.

DOJ also remains committed to pursuing IP violations that occur through cyber means or otherwise contain a cyber component. One recent example includes the prosecution of the Software Slashers software piracy scheme, which has resulted in 7 guilty pleas, most recently in March 2017, and the seizure of more than $20 million in assets from conspirators, who are estimated to have sold more than $100 million of counterfeit Microsoft software to thousands of online customers. Another recent example is the July 2016 prosecution of Artem Vaulin, the alleged owner of the website Kickass Torrents, which at the time was the most-visited illegal file-sharing website responsible for distributing hundreds of millions of copyrighted movies, television shows, music, video games, and other electronic media. When appropriate, DOJ also will bring charges under the Computer Fraud and Abuse Act, such as when a defendant has stolen corporate trade secrets by accessing a protected computer system without authorization.

 As with other types of offenses, law enforcement and prosecutors rely on input from victims, who are often brand owners, to effectively investigate and prosecute IP crime. Because the victims of IP crime are frequently in the best position to detect a violation, law enforcement often cannot investigate unless the crimes are reported. Once these violations are reported, federal law enforcement authorities need to quickly identify the facts that establish jurisdiction for the potential IP offenses, such as federal copyright and trademark registration information, as well as facts concerning the extent of a victim’s potential loss, the nature of the theft, and possible suspects. To assist victims in the often-crucial hours and days after discovery of a theft, CCIPS has created a guide that identifies best practices for working with law enforcement during the investigation and prosecution of IP crimes. Its recommendations include:

  • Document all investigative steps: To avoid duplication of efforts and retracing of steps, internal investigations by the victim should seek to create a record of all investigative steps that can later be presented to law enforcement, if necessary.
  • Preserve evidence: Any physical, documentary, or digital evidence acquired in the course of an internal investigation should be preserved for later use in a legal proceeding.
  • Contact law enforcement right away: Early referral to law enforcement is the best way to ensure that evidence of IP crime is properly secured and that all investigative avenues, such as the execution of search warrants and possible undercover law enforcement activities, are fully explored. Early referral also allows for law enforcement to coordinate administrative or civil proceedings with possible criminal enforcement. The public can report IP theft on the IPR Center’s website. (See How to be a Good Victim in the BPP 1st Edition) Rights holders are also encouraged to develop a relationship with their local FBI field office before an incident occurs. (See Are You Getting Your Money’s Worth? Interactions with Federal Law Enforcement in the BPP 3rd Edition)
  • Engage prosecutors early and remain available: CHIP prosecutors and CCIPS attorneys have subject-matter expertise in IP violations. Early engagement allows the prosecution team to identify appropriate charges and value the harm from offenses. Law enforcement may call upon a victim representative or expert to examine items obtained during an investigation to determine their origin or authenticity, and, if necessary, testify at trial.
  • Share the results of internal investigations or civil lawsuits: As with any suspected crime, victims may provide law enforcement with information gathered as a result of internal investigations into instances of IP theft. In addition, unless a court has ordered otherwise, victims may generally provide law enforcement with any evidence or materials developed in civil IP-enforcement actions, including court pleadings, deposition testimony, documents, and written discovery responses.

As IP infringement and the technological means to commit it become more sophisticated, so too does DOJ’s approach to protecting IP rights. Recognizing the evolving challenges facing IP enforcement, DOJ looks forward to working with brand owners and industry members in the long-term fight against IP crime.

Frank Lin

Trial Attorney, Computer Crime and Intellectual Property Section, U.S. Department of Justice

“As with other types of offenses, law enforcement and prosecutors rely on input from victims, who are often brand owners, to effectively investigate and prosecute IP crime”