The Puzzle of Criminal Sanctions for Intellectual Property Infringement

Article excerpt

TABLE OF CONTENTS

I. INTRODUCTION
II. HOW THEFT BECAME CRIMINAL AND INTELLECTUAL PROPERTY INFRINGEMENT
  BECAME THEFT
III. THE PAST, PRESENT, AND POSSIBLE FUTURE OF CRIMINAL SANCTIONS IN
  INTELLECTUAL PROPERTY
  A. Criminal Sanctions in Copyright
  B. Criminal Sanctions in Trademark
  C. Criminal Sanctions for Patent-Related Offenses
  D. Proposed Sanctions in Soft Intellectual Property and
       Patents
IV. THE ROLES OF REASON AND POLITICS--UNPACKING THE CAUSES BEHIND THE
  LEGAL DISPARITIES
  A. Moral and Utilitarian Considerations
  B. Public Choice Explanation
V. CONSEQUENCES OF THE PUZZLE OUTSIDE OF PATENTS
VI. CONCLUSION

I. INTRODUCTION

Three areas dominate the universe of intellectual property law: copyright, trademark, and patent. while the owners of any of these forms of intellectual property ("IP") can seek civil remedies to protect their goods, the law imposes criminal punishments only on copyright and trademark violators, and not patent infringers. (1) Why is that? This Article argues that the disparity has arisen from both moral and utilitarian rationales and the political landscape of the patent industry. As this landscape shifts and the united states negotiates a wide variety of international agreements in the IP arena, however, political forces threaten to overpower the discourse on criminal sanctions in IP. This Article proposes an analytical and normative framework to understand the nature of these sanctions and provides guidance regarding the optimal role of such sanctions in IP law.

The disparity in the availability of criminal sanctions for different forms of IP subject matter is counterintuitive, as the following hypothetical demonstrates. Let us imagine that The Great New Media Company ("GNMC") creates a novel type of disc on which data such as movies can be recorded. The disc is more durable than existing ones because its top layer consists of a newly invented material, and GNMC obtains a patent for this disc technology. An entertainment company named Awesome Movie Makers ("AMM") decides to distribute one of its recent hit movies on the GNMC discs, and the two companies reach an agreement for this distribution. The disc with AMM's movie is sold at major outlets and becomes a commercial success. John Doe, who runs an illicit bootlegging business, manages to produce discs that contain GNMC's patented disc technology with the help of some other associates. He then copies AMM's hit movie onto a set of the discs and decides to sell them on the street. To feign legitimacy, he affixes a label on each disc that uses AMM's trademarked logo and reads "Endorsed by Awesome Movie Makers."

Doe's scheme is uncovered and the local federal prosecutor decides to pursue him criminally for his willful actions. He faces charges for criminal copyright infringement for copying and selling AMM's movie illegally. He is similarly confronted with criminal sanctions for his use of AMM's trademarked logo. The prosecutor, however, cannot charge Doe with any crimes related to his infringement of GNMC's patent. GNMC can try to recover losses through a civil patent infringement lawsuit, just as AMM can initiate civil suits for copyright and trademark infringement, but Doe's actions against GNMC will remain unpunished by the criminal law. This appears particularly puzzling given that his motivation--to make a profit from the willful copying of protected material--is the same with respect to all three types of infringement, and given that similar actions ran afoul of the three IP regimes.

One could argue that we have departed from the sentiment expressed in the British judge Sir James Eyre's 1774 statement that "[a] mechanical Invention and a literary Composition exactly agree in Point of similarity; the one therefore is no more entitled to be the object of Common Law Property than the other." (2) Is the United States treating "soft" IP (i.e., copyrights and trademarks) more like property than it does patents by criminalizing "theft" of the former but not the latter? …