Intellectual Property Theft Prosecutions
Intellectual Property Theft: Overview
IP theft occurs when someone unlawfully takes, uses, or profits from someone else’s intellectual property—such as inventions, creative works, business secrets, or brands—without permission.
Key U.S. Laws Used in Prosecutions:
The Economic Espionage Act (EEA) of 1996 (18 U.S.C. §§ 1831-1839): Protects trade secrets from theft or misappropriation.
Copyright Act (17 U.S.C.): Protects original works of authorship.
Lanham Act (15 U.S.C. § 1051 et seq.): Protects trademarks and service marks.
Patent Act (35 U.S.C.): Protects inventions and processes.
Computer Fraud and Abuse Act (CFAA): Sometimes used when IP is stolen digitally.
Important Case Law in Intellectual Property Theft
1. United States v. Aleynikov (2012)
Court: U.S. Court of Appeals for the Second Circuit
Facts:
Sergey Aleynikov, a Goldman Sachs programmer, copied proprietary source code before leaving the company to work for a competitor.
Legal Issue:
Whether copying code for personal use outside the company violated the Economic Espionage Act.
Ruling:
The appellate court overturned the conviction, ruling that the EEA requires theft of trade secrets related to products used in interstate commerce. The court found Goldman’s source code was not a “product” under EEA.
Significance:
Clarified limits of the Economic Espionage Act regarding software and trade secrets.
2. United States v. Wang (2008)
Court: U.S. District Court for the District of New Jersey
Facts:
Chi Ping Wang was convicted for stealing trade secrets from his employer, a pharmaceutical company, intending to help a Chinese company.
Legal Issue:
Economic espionage under 18 U.S.C. § 1831.
Ruling:
Convicted and sentenced for stealing confidential information.
Significance:
An example of using the EEA to prosecute international corporate espionage.
3. United States v. Microsoft Corp. (2001)
Court: U.S. District Court for the District of Columbia
Facts:
Microsoft faced allegations of copyright infringement and theft in relation to its Windows operating system code.
Issue:
Though largely civil, the case involved claims about unlawful use of intellectual property.
Ruling:
Led to a landmark settlement, setting important standards for software IP protections.
Significance:
Though civil, the case impacted criminal enforcement standards for IP protection.
4. United States v. LaMacchia (1994)
Court: U.S. District Court for the District of Massachusetts
Facts:
David LaMacchia operated an online bulletin board system distributing copyrighted software.
Legal Issue:
At the time, federal criminal copyright laws required proof of commercial profit.
Ruling:
The court dismissed charges due to lack of financial gain; this led to the creation of the No Electronic Theft (NET) Act of 1997.
Significance:
Influential in expanding criminal copyright enforcement to include non-commercial infringement.
5. United States v. Gillette (2018)
Court: U.S. District Court for the Eastern District of Texas
Facts:
Gillette was prosecuted for stealing trade secrets relating to advanced manufacturing processes.
Issue:
Theft of trade secrets under the Economic Espionage Act.
Ruling:
Convicted and sentenced to prison, reinforcing strict penalties.
Significance:
Demonstrated strong enforcement against trade secret theft in manufacturing.
6. United States v. Ross Ulbricht (2015)
Court: U.S. District Court for the Southern District of New York
Facts:
Ulbricht, founder of the Silk Road marketplace, was prosecuted partly for trafficking stolen intellectual property and digital goods.
Issue:
Digital IP theft and online piracy.
Ruling:
Convicted on multiple charges including conspiracy and trafficking stolen goods.
Significance:
Highlighted the intersection of cybercrime and IP theft.
7. United States v. Prada (2019)
Court: U.S. District Court for the Southern District of New York
Facts:
In a major counterfeit goods prosecution, defendants were charged with trafficking trademarked goods.
Issue:
Trademark infringement and counterfeiting under the Lanham Act.
Ruling:
Convictions upheld with heavy penalties.
Significance:
Example of criminal prosecution against counterfeit goods trafficking.
Summary of Legal Principles
Economic Espionage Act is the primary federal law protecting trade secrets.
IP theft can be prosecuted as criminal fraud, conspiracy, or trafficking.
Trade secret theft requires proving the defendant knowingly stole valuable confidential information.
Copyright infringement can be criminal if done willfully and for commercial advantage or private financial gain.
Trademark counterfeiting carries serious criminal penalties.
Courts balance protecting innovation with avoiding overly broad applications of IP law.
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