The United States Department Of Justice Makes Enforcement Of The Criminal Intellectual Property Laws A High Priority

usdoj.gov, Aug 31, 2005

The Criminal Intellectual Property Laws A High Priority

A. CRIMINAL ENFORCEMENT RECOMMENDATIONS

The United States Department of Justice makes enforcement of the criminal intellectual property laws a high priority. The Justice Department prosecutes criminal cases involving the theft of copyrighted works, trademark counterfeiting, and theft of trade secrets. Many divisions and offices of the Justice Department participate in the enforcement of intellectual
property laws, including federal prosecutors located throughout the nation. These prosecutors work closely with local, state, and federal law enforcement agents to identify criminals and prosecute them in accordance with the law.
While the Department of Justice has successfully prosecuted numerous intellectual property cases over the past several years, the Task Force believes additional success is possible. Accordingly, the Task Force recommends that the Department of Justice adopt the following recommendations to further expand and strengthen the fight against intellectual property crime:

(1) Create five additional CHIP Units in regions of the country where intellectual property producers significantly contribute to the national economy. These areas are (1) the District of Columbia; (2) Sacramento, California; (3) Pittsburgh, Pennsylvania; (4) Nashville, Tennessee; and (5) Orlando, Florida; (2) Reinforce and expand existing CHIP Units located in key regions where intellectual property offenses have increased, and where the CHIP Units have effectively developed programs to prosecute CHIP-related cases, coordinate law enforcement activity, and promote public awareness programs; (3) Designate CHIP Coordinators in every federal prosecutor’s office and make the
coordinators responsible for intellectual property enforcement in that region; (4) Examine the need to increase resources for the Computer Crime and Intellectual Property Section of the Criminal Division in Washington, D.C., to address
additional intellectual property concerns; (5) Recommend that the FBI increase the number of Special Agents assigned to
intellectual property investigations, as the Justice Department itself increases the number of prosecutors assigned to intellectual property enforcement concerns; (6) Recommend that the FBI increase the number of personnel assigned to search for digital evidence in intellectual property cases; (7) Dismantle and prosecute more nationwide and international criminal organizations that commit intellectual property crimes;

VIII. WHAT(8) Enhance programs to train prosecutors and law enforcement agents investigating intellectual property offenses; (9) Prosecute aggressively intellectual property offenses that endanger the public’s health or safety;
(10) Emphasize the importance of charging intellectual property offenses in every type of investigation where such charges are applicable, including organized crime, fraud, and illegal international smuggling; (11) Enhance its program of educating and encouraging victims of intellectual property offenses and industry representatives to cooperate in criminal investigations.

Recommended enhancements include:

(A) Encouraging victims to report intellectual property crime to law enforcement agencies; (B) Distributing the new “Department of Justice Guide to Reporting Intellectual Property Crime” to victims and industry representatives regarding federal intellectual property offenses; and (C) Hosting a conference with victims and industry representatives to educate
participants on how they can assist in law enforcement investigations; and (12) Issue internal guidance to federal prosecutors regarding how victims can assist prosecutors in intellectual property cases. Detailed background information and explanations for each of these important recommendations are set forth below.

CRIMINAL ENFORCEMENT RECOMMENDATION #1 Expand the CHIP Program by Adding Five New Units
RECOMMENDATION:

The Department of Justice should create five additional CHIP Units in regions of the country where intellectual property producers significantly contribute to the national economy. These areas are (1) the District of Columbia; (2) Sacramento, California; (3) Pittsburgh, Pennsylvania; (4) Nashville, Tennessee; and (5) Orlando, Florida.
BACKGROUND: In July 2001, the Attorney General created the Computer Hacking and Intellectual Property (“CHIP”) Program based on the success of the model CHIP Unit existing in the United States Attorney’s Office in San Jose, California. The CHIP Program requires prosecutors to focus on copyright and trademark violations, theft of trade secrets, computer intrusions, theft of computer and high-tech components, and Internet fraud. In addition, CHIP Unit prosecutors are expected to develop public awareness programs and provide training to other prosecutors and law enforcement agencies regarding high-tech issues.

The Attorney General expanded the CHIP Program by creating 10 additional units in strategic regions of the country where, similar to San Jose, California, intellectual property offenses and computer crime were most prevalent. Using funds provided by Congress for the 2001 fiscal year, the Justice Department added 28 positions for prosecutors and assigned them to 10 offices to create new CHIP Units. In addition to the new positions, each office assigned existing prosecutors to the CHIP Unit. In total, the 10 CHIP Units created in 2001 consisted of 48 CHIP Unit positions for prosecutors. In 2002, the Attorney General expanded the program once more and created CHIP Units in Chicago, Miami, and Kansas City, Missouri.

As a result, the CHIP Program currently consists of Units in 13 offices with approximately 60 prosecutors dedicated to computer crime and intellectual property enforcement. EXPLANATION: The Task Force has found that the CHIP program has been very successful in increasing the effectiveness of the Justice Department’s intellectual property
enforcement efforts. During the 2003 fiscal year, the first full year after all 13 of the CHIP Units became operational, the offices with CHIP Units filed charges against 46% more defendants than they had averaged in the four fiscal years prior to the formation of the units.

This increase in intellectual property prosecutions in districts with CHIP Units can be linked to several factors. First, many districts have large populations and strong business sectors that are frequently victimized by intellectual property crime. In addition, the creation of a specialized unit in the area visibly conveys the Department of Justice’s commitment to
prosecuting intellectual property crime. As a result, more victims have reported intellectual property crimes and cooperated with law enforcement authorities. Moreover, CHIP Units have developed local policies, guidelines, and strategies to address specific intellectual property crime issues in their regions. Consequently, the strategically tailored and focused approach to a particular region in areas with CHIP Units is more likely to result in a higher number of enforcement actions.

The Department of Justice should expand the CHIP Program by adding units in areas of the country where intellectual property resources significantly contribute to the national economy. These areas should have intellectual property concerns that can be addressed with intellectual property enforcement efforts, such as a large population of potential victims and a history of intellectual property offenses in the area. Accordingly, the Task Force recommends the creation of new units in the following five areas: (1) the District of Columbia, home to numerous sensitive government computer systems that contain the nation’s intellectual property; (2) Sacramento, California (population 6.8 million), which has significant high-tech sectors; (3) Pittsburgh, Pennsylvania (population almost 4 million), which also has significant high-tech sectors; (4) Nashville, Tennessee, home to one of the largest recording industries in the world, including the
country music industry; and (5) Orlando, Florida (population 8.9 million), an expanding region with a history of intellectual property prosecutions.

Each of these areas has business sectors that generate significant intellectual property resources and are often victimized by intellectual property crime. The creation of CHIPUnits in these areas should significantly increase the Justice Department’s intellectual property efforts.