SOME ACTIONABLE GUIDANCE SO YOU DON’T MISS YOUR SHOT

James “Jack” Costello
Assistant States Attorney, Public Corruption/Financial Crimes Unit, Cook County, Illinois

The Questions

Anytime that I am at a meeting with representatives from companies that are affected by Intellectual Property Crimes (IPR), I get some variation of the following question: “How do I, as the holder of a trademark, get the criminal justice system to take my case with the seriousness that it deserves?” Oftentimes, this question is directed specifically at the prosecutorial side of the justice system. This article will attempt to provide actionable guidance on this question.

One of the first things to consider will be: “Should I be contacting local authorities, or is this something that the federal government would be interested in prosecuting?” Generally speaking, this can be answered by determining “What is the size and scope of the crime?”  

It practically goes without saying that the federal government is almost always going to be better positioned to address massive, multi-jurisdictional instances of IPR. However, because these cases are so large in scale, the federal government will necessarily be able to take fewer of them. In other words, if a company has become aware of a producer of counterfeit products and the accompanying distribution network spanning multiple states, federal law enforcement entities (e.g., the FBI, HSI, etc.) are likely your best bet for first contact, though I will leave an in-depth discussion of taking a case to those with more experience; some of whom are contributors to this edition of the BPP.  

But what if federal prosecutors are not, for whatever reason, willing to take the case that is brought to them? Or, what if a brand holder has become aware not of a massive criminal conspiracy, but rather a smaller, regional distributor of counterfeit goods? In either case, it is likely worth considering working with local law enforcement.  

While the federal government has a robust and uniform legal framework for addressing IPR, the 50 “laboratories of democracy” all have vastly different statutes addressing this issue. I am lucky enough to practice in a jurisdiction that has a broad criminal statute. Moreover, the sentencing provisions reflect the seriousness with which the legislature addressed the enforcement of the statute¹. That being said, from conversations I have had with counterparts that prosecute IPR in other states, such a powerful legal framework should not be assumed to be the norm. 

Taking it Local

Once the decision to attempt to take a case local has been made, the next step is to determine which investigative agency should be contacted. Is it the local municipal police department? The county’s Sheriff’s Department? The State Police? The in-house police department for the Secretary of State? Depending on the jurisdiction, the answer could be any one of these, or all of them. Once this question is addressed, the next issue is determining what local prosecutor will be referred the finished investigation for prosecution. Nine times out of ten, it will either be the local District Attorney’s Office or the state Attorney General’s Office. Note depending on the state, this office may also be known as the State’s Attorney’s Office, the Commonwealth Prosecutor’s Office, County Attorney’s Office, etc. In an ideal world, the local investigators will have a firm grip on what kind of evidence the prosecutors will want in order to proceed with the case. However, in most jurisdictions, knowing exactly what kind of evidence and participation are required is something that a brand holder can determine ahead of time. Talking to the local prosecutor’s office and having this information from the onset of the investigation will greatly increase the chances of the case being accepted for prosecution.       

The Evidence

With the disclaimer that all jurisdictions will have slightly different requirements, several pieces of evidence will always be necessary. First, is there a registered trademark that is being used by the counterfeiters? If not, there may not be a prosecutable crime. Second, what is the Manufacturer‘s Suggested Retail Price (“MSRP”) of the items that are being sold, had they been authentic? The victim company will always have the best access to this information, which is likely  necessary to obtain  before any case is charged. Third, is the victim able to demonstrate the negative repercussions they experienced because of the crime? This can take many forms, from lost profits and lower taxes rendered to local government to lost jobs and canceled corporate expansion. Finally, who will be available as a witness to testify to both (a) the unauthorized nature of the trademarks counterfeited, as well as (b) identify to the judge or jury what makes each particular offending item counterfeit? Having answers to these questions at the initiation of the investigation is far better than the alternative.

The PI Advantage  

Finally, there comes the matter of bringing the case to the authorities. For the foreseeable future, the chances are relatively high that when a victim company reaches out to a local police department, it will be the first time they take on an investigation of this nature. In my experience, the brands that have retained private investigators to work on their behalf have an advantage in getting their cases charged. Having a private investigator who is credentialed and/or certified for a certain brand solves the vast majority of the issues from the previous paragraph. Additionally, having someone with a working knowledge of the local justice system from an investigative perspective greatly cuts down on potential pushback from local investigators, as the PI can act as a guide to similar previous cases. Lastly, having one individual who can effectively communicate with all of the affected brands greatly helps the prosecutor. To put it in perspective, ask yourself which of the following is more likely to lead to criminal charges: the one that is initiated by a call from a corporate office in another jurisdiction, or the one that is initiated by a PI with experience testifying in the local jurisdiction, walking up to a desk sergeant with reports containing an identified target, photographic evidence, and documenting undercover buys? 

I will conclude with one final tip. If a company has brought a case to local law enforcement in the past, and it went nowhere, DO NOT assume that that door is forever closed. Awareness of IPR crimes spreads more and more each year, and police and prosecutors are always changing personnel and policies. A jurisdiction that scoffed at such cases five years ago may now be actively seeking to prosecute such cases. Or, as the cliché goes, you miss 100% of the shots you don’t take.      

The views expressed in this article are his own, and do not necessarily reflect the views of the Cook County State’s Attorney’s Office.

¹ Counterfeit Trademark Act, 720 Ill. Comp. Stat. § 1040/8 (2010). By way of example, if an individual were to be found guilty of possessing with intent to sell either 2,000 items bearing counterfeit trademarks, or doing the same with items that possess a MSRP of over $500,000, had they been authentic, that individual would be sentenced as a non-probationable Class 1 felony, with a sentencing range of between 4 and 15 years in the Illinois Department of Corrections.