DOJ Refocuses Policies and Priorities in Combating Intellectual Property Crime

By: James W. Kraus

While the Computer Crime and Intellectual Property Section (CCIPS) of DOJ has been in existence for nearly 20 years, the emphasis on criminal enforcement of intellectual property laws has gained significant importance in more recent years.  Beginning with its Task Force on Intellectual Property more than ten years ago, DOJ has continued to ramp up its fight against theft of intellectual property, identifying it as a threat to U.S. economic security.    This has also included the development of specialized prosecutors (CHIP – Computer Hacking / Intellectual Property) prosecutors in U.S. Attorney’s offices around the country, particularly in areas where the threat is significant.

On Friday, Attorney General Loretta Lynch announced DOJ’s next step in its efforts, outlining a new collaborative strategy to more closely partner with businesses in intellectual property efforts.  Her announcement came as part of remarks in a speech she made in Boston to MassChallenge, one of the world’s largest start-up accelerators.  She said that, while the digital age has provided many benefits, hacking has demonstrated new vulnerabilities to companies, even large ones, to exploitation of their intellectual property.  She cited to an estimate by the Organization for Economic Cooperation and Development that trade and counterfeit and pirated goods accounts for up to $250 billion every year.  She said that this amount does not encompass the harm caused by unauthorized on-line distribution of copyrighted works, or the theft of trade secret information by competitors or foreign governments.

Attorney General Lynch said that the FBI’s collaborative strategy in this regard will include partnering with third party market places by providing advice regarding the acquisition of the right analytical tools and techniques to combat intellectual property concerns on their web sites.  The FBI will also serve as a bridge between brand owners and third party market places in an effort to mitigate instances of the manufacture, distribution, advertising and sale of counterfeit products.  She said that she believes that this new strategy will help law enforcement and companies better identify, prioritize and disrupt the manufacturing, distribution, advertising and sale of counterfeit products.

What remains to be seen is what form the increased collaboration with private companies will take.  The proposed collaboration may require more information sharing by private businesses with DOJ, something that can complicate relationships those businesses have with foreign companies, particularly those that are state-owned.  The key to success will be striking the delicate balance between protecting the integrity of critical information while preserving the dynamism necessary to conduct business globally.

In addition to the new strategy implemented by the FBI, Attorney General Lynch announced that DOJ’s Office of Justice Programs is going to provide more than $3.2 million to state and local law enforcement agencies across the country through the Intellectual Property Enforcement Program (IPEP), an amount she claims brings DOJ’s total investment in that regard to nearly $4.8 million for 41 task forces since it was established in 2009.  According to the Department, over the last six years, funds distributed under this program have helped local authorities to arrest more than 3,500 individuals for violating intellectual property laws and to seize more than $266 million in counterfeit property and currency.  The new grants, which will be provided to state and local law enforcement agencies in ten jurisdictions across the U.S., will be targeted for supporting training, increased prevention capabilities and step-up of enforcement activities.

The Department has also launched a new intellectual property web site,http://www.justice.gov/iptf, to serve as both a resource to companies facing intellectual property challenges, and as a mechanism to educate the public regarding this growing threat.

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