Continuing with a look at the proposed Anti-Counterfeiting Trade Agreement (check out Part 1 and Part 2), we now turn to Section 3: Criminal Enforcement. It’s hard to say which section of the ACTA has sparked the most controversy, but this section is a good candidate. People are concerned whenever changes in the scope of criminal law and liability are discussed.

As well they should be.

While criminal and civil law operate in much the same way, the implications of classifying a wrong as criminal rather than civil are vast. The effects of a criminal conviction on a person are far more substantial than being held liable in a civil court. The conviction becomes part of one’s criminal record, and the penalties are often harsher, especially since the possibility of imprisonment is available in criminal cases. Criminal courts are under a significantly greater duty to “get it right” when it comes to prosecuting crimes.

When it comes to classifying wrongs as either criminal or civil, we still today largely follow the principle that William Blackstone described in the 1700s.

WRONGS are divisible into two sorts or species; private wrongs, and public wrongs. The former are an infringement or privation of the private or civil rights belonging to individuals, considered as individuals; and are thereupon frequently termed civil injuries: the latter are a breach and violation of public rights and duties, which affect the whole community, considered as a community; and are distinguished by the harsher appellation of crimes and misdemeanors. 13 William Blackstone, Commentaries 2, available online at http://avalon.law.yale.edu/18th_century/blackstone_bk3ch1.asp.

Criminal copyright infringement – especially the type of internet piracy prevalent today – gives rise to a particular problem in recognition by people as a public wrong. Piracy often doesn’t entail the types of egregious conduct associated with criminal behavior: for example, violence, fraud, or deceit. It can be difficult to see how the harms extend beyond the specific copyright owner. So it is only natural that the public is wary when the subject of criminal copyright infringement comes up. 2Much of the discussion of the nature and history of criminal copyright infringement in the US was informed by I. Trotter Hardy’s excellent article Criminal Copyright Infringement, available at the William & Mary Law School Scholarship Repository.

With that said, criticism of the criminal enforcement section in the ACTA still contains a fair deal of FUD. “Your kids could go to jail for noncommercial file sharing!” says Boing Boing. As with the previous sections, much of the FUD comes from not knowing what is in the ACTA provisions and what is currently US law.

Criminal Copyright Infringement in the US

Criminal penalties have been a part of copyright law in the US since 1897. Over the decades that followed, the scope and penalties of criminal copyright infringement have increased several times. In 1997, in an effort to address internet piracy, Congress passed the NET Act, which amended the definition of “commercial advantage or financial gain” to include large-scale noncommercial infringement.

What’s notable about the NET Act, and missing from cries of file sharing kids being locked up, is what didn’t happen since the law was passed. Our jails are not overflowing with torrent users. While enforcement of IP crimes has slowly been increasing by the US government, prosecution of all IP crimes – which includes “trafficking of goods with counterfeit trademarks or brands (such as clothing and consumer electronics), software piracy, the distribution of bootleg musical recordings and movies, selling company trade secrets, and derivative copyright violations of intercepting cable/satellite broadcasts” – still represents less than 1% of total crimes prosecuted. 3Bureau of Justice Statistics, Intellectual Property Theft (2004). Most of the other ACTA negotiating party countries have had similar laws for nearly as long as the US. Fears of a pirate prison planet based on provisions which mirror laws that have been on the book for over a decade and haven’t resulted in locking up kids for file sharing are overstated.

One last thing to keep in mind: while it’s important that criminal laws are carefully crafted to only address actual, egregious public harms and imperative that constitutional and legal protections of alleged criminals are upheld, reality and practicality play just as much a role in keeping abuse of criminal provisions in check. Agencies which investigate and prosecute IP crimes have budgets, as well as far more common and harmful crimes to look at. Evidence must be gathered, and each element of the crime must be proven beyond a reasonable doubt – a burden that tends to weed out less certain cases and less culpable parties. David Goldstone, of the Computer Crime and Intellectual Property Section of the Department of Justice, explains other factors that may make US Attorneys less likely to prosecute IP crimes.

Let’s take a look now at Section 3 of the ACTA.

Section 3: Criminal Enforcement

Proposed ACTA Provision Corresponding US Law
ARTICLE 2.14: CRIMINAL OFFENSES

1. Each Party shall provide for criminal procedures and penalties to be applied at least in cases of willful trademark counterfeiting or copyright or related rights piracy on a commercial scale. Willful copyright or related rights piracy on a commercial scale includes:

(a) significant willful copyright or related rights infringements that have no direct or indirect motivation of financial gain; and
(b) willful copyright or related rights infringements for purposes of commercial advantage or financial gain.

17 USC § 506. Criminal offenses

(a) Criminal Infringement.—
(1) In general.— Any person who willfully infringes a copyright shall be punished as provided under section 2319 of title 18, if the infringement was committed—

(A) for purposes of commercial advantage or private financial gain;
(B) by the reproduction or distribution, including by electronic means, during any 180–day period, of 1 or more copies or phonorecords of 1 or more copyrighted works, which have a total retail value of more than $1,000; or
(C) by the distribution of a work being prepared for commercial distribution, by making it available on a computer network accessible to members of the public, if such person knew or should have known that the work was intended for commercial distribution.

3. Each Party shall provide for criminal procedures and penalties to be applied in accordance with its laws and regulations, against any person who, without authorization of the holder of copyright in a motion picture or other audiovisual work, knowingly uses an audiovisual recording device to transmit or make a copy of the motion picture or other audiovisual work, or any part thereof, from a performance of the motion picture or other audiovisual work in a motion picture exhibition facility open to the public.

17 USC § 506. Criminal offenses

(a) Criminal Infringement.—

[…]

(3) Definition.— In this subsection, the term “work being prepared for commercial distribution” means—

[…]

(B) a motion picture, if, at the time of unauthorized distribution, the motion picture—
(i) has been made available for viewing in a motion picture exhibition facility; and
(ii) has not been made available in copies for sale to the general public in the United States in a format intended to permit viewing outside a motion picture exhibition facility.

A separate provision specifically focused on “pre-release” infringement is relatively recent in the US, having been added in 2005 as part of the Artists’ Rights and Theft Prevention Act. Eric Goldman explains that before the Act, it was difficult to make a case against infringers of pre-released works because, in theory, pre-release works do not have any market value.

ARTICLE 2.15: CRIMINAL LIABILITY AND PENALTIES

1. Liability of Legal Persons
(a) Each Party shall adopt such measures as may be necessary, consistent with its legal principles, to establish the liability of legal persons for the offences referred to in Article 2.14.
(b) Subject to the legal principles of the Party, the liability of legal persons may be criminal or non-criminal.
(c) Such liability shall be without prejudice to the criminal liability of the natural persons who have committed the criminal offences.

2. Inciting, Aiding and Abetting
The provisions of this section shall apply to aiding and abetting the offences referred to in Article 2.14.

US Code Title 18, Federal Rules of Criminal Procedure

18 USC § 2. Principals

(a) Whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal.

Liability of criminal defendants in US law is established primarily through common law. Title 18 of the US Code and the separately promulgated Federal Rules of Criminal Procedure also have provisions relating to establishing liability. 18 USC § 2 establishes that the same principles apply to those indirectly liable for infringement.

3. Penalties and Sanctions

(a) For the crimes referred to in Article 2.14, each Party shall provide effective, proportionate and dissuasive penalties that include imprisonment and monetary fines sufficiently high to provide a deterrent to future acts of infringement, with a view to removing the monetary incentive of the infringer.
(b) For legal persons held liable under Article 2.15.1, each Party shall provide for effective, proportionate and dissuasive sanctions, including monetary sanctions.

18 USC § 2319. Criminal infringement of a copyright

(a) Any person who violates section 506 (a) (relating to criminal offenses) of title 17 shall be punished as provided in subsections (b), (c), and (d) and such penalties shall be in addition to any other provisions of title 17 or any other law.

[Subsections specifying specific penalties edited for space. You can read them here.]

ARTICLE 2.16. SEIZURE, FORFEITURE/CONFISCATION AND DESTRUCTION

1. Seizure
(a) In case of an offence referred to in Article 2.14, each Party shall provide that its competent authorities shall have the authority to order the seizure of suspected counterfeit trademark goods or pirated copyright goods, any related materials and implements used in the commission of the alleged offence, documentary evidence relevant to the alleged offence and any assets derived from, or obtained directly or indirectly through the infringing activity.
(b) Each Party shall, if a prerequisite for such an order, according to its national law, is the identification of the items, ensure that the order need not determine the items that are subject to seizure in more detail than necessary to allow their identification for the purpose of the seizure.

2. Forfeiture/Confiscation and Destruction
(a) For the offences referred to in Article 2.14, each Party shall provide that its competent authorities shall have the authority to order confiscation/forfeiture or destruction where appropriate of all counterfeit trademark goods or pirated copyright goods, of materials and implements predominantly used in the creation of counterfeit trademark goods or pirated copyright goods, and of the assets derived from, or obtained directly or indirectly, through the infringing activity.
(b) Each Party shall provide that its competent authorities shall have the authority to ensure that the counterfeit trademark goods and pirated copyright goods that have been confiscated/forfeited under this subparagraph shall, if not destroyed, be disposed of outside the channels of commerce, in such a manner as to avoid any harm caused to the right holder.
(c) Each Party shall further ensure that confiscation/forfeiture and destruction under this subparagraph shall occur without compensation of any kind to the defendant.
(d) Each Party may provide that its judicial authorities have the authority to order the confiscation/forfeiture of assets the value of which corresponds to that of such assets derived from or obtained directly or indirectly through the infringing activity.

18 USC § 2323. Forfeiture, destruction, and restitution

(a) Civil Forfeiture.—
(1) Property subject to forfeiture.— The following property is subject to forfeiture to the United States Government:
(A) Any article, the making or trafficking of which is, prohibited under section 506 of title 17, or section 2318, 2319, 2319A, 2319B, or 2320, or chapter 90section 2318, 2319, 2319A, 2319B, or 2320, or chapter 90, of this title.
(B) Any property used, or intended to be used, in any manner or part to commit or facilitate the commission of an offense referred to in subparagraph (A).
(C) Any property constituting or derived from any proceeds obtained directly or indirectly as a result of the commission of an offense referred to in subparagraph (A).

(2) Procedures.— The provisions of chapter 46 relating to civil forfeitures shall extend to any seizure or civil forfeiture under this section. For seizures made under this section, the court shall enter an appropriate protective order with respect to discovery and use of any records or information that has been seized. The protective order shall provide for appropriate procedures to ensure that confidential, private, proprietary, or privileged information contained in such records is not improperly disclosed or used. At the conclusion of the forfeiture proceedings, unless otherwise requested by an agency of the United States, the court shall order that any property forfeited under paragraph (1) be destroyed, or otherwise disposed of according to law.

(b) Criminal Forfeiture.—
(1) Property subject to forfeiture.— The court, in imposing sentence on a person convicted of an offense under section 506 of title 17, or section 2318, 2319, 2319A, 2319B, or 2320, or chapter 90section 2318, 2319, 2319A, 2319B, or 2320, or chapter 90, of this title, shall order, in addition to any other sentence imposed, that the person forfeit to the United States Government any property subject to forfeiture under subsection (a) for that offense.

(2) Procedures.—
(A) In general.— The forfeiture of property under paragraph (1), including any seizure and disposition of the property and any related judicial or administrative proceeding, shall be governed by the procedures set forth in section 413 of the Comprehensive Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 853), other than subsection (d) of that section.
(B) Destruction.— At the conclusion of the forfeiture proceedings, the court, unless otherwise requested by an agency of the United States shall order that any—
(i) forfeited article or component of an article bearing or consisting of a counterfeit mark be destroyed or otherwise disposed of according to law; and
(ii) infringing items or other property described in subsection (a)(1)(A) and forfeited under paragraph (1) of this subsection be destroyed or otherwise disposed of according to law.

(c) Restitution.— When a person is convicted of an offense under section 506 of title 17 or section 2318, 2319, 2319A, 2319B, or 2320, or chapter 90section 2318, 2319, 2319A, 2319B, or 2320, or chapter 90, of this title, the court, pursuant to sections 3556, 3663A, and 3664 of this title, shall order the person to pay restitution to any victim of the offense as an offense against property referred to in section 3663A (c)(1)(A)(ii) of this title.

ARTICLE 2.17: EX OFFICIO CRIMINAL ENFORCEMENT

Each Party shall provide that its competent authorities may act upon their own initiative to initiate investigation or legal action with respect to the criminal offenses described in Article 2.14.

28 USC § 547. Duties

Except as otherwise provided by law, each United States attorney, within his district, shall—
(1) prosecute for all offenses against the United States

Ultimately, it is the US attorneys who prosecute criminal copyright infringement cases. A broad array of federal agencies, however, are charged with investigating intellectual property offenses, including the FBI and ICE.

ARTICLE 2.X. RIGHTS OF THE DEFENDANT AND THIRD PARTIES

Each Party shall ensure that the rights of the defendants and third parties shall be duly protected and guaranteed.

US Constitution, Fourth, Fifth, Sixth, and Eighth Amendments; US Code Title 18, Federal Rules of Criminal Procedure

This section may seem obvious, but since the rights of criminal defendants are enshrined in the Constitution, we often don’t give much thought to them. As with criminal liability, additional rules and procedures protecting the rights of criminal defendants can be found in the US Code and Federal Rules of Criminal Procedure. Other nations recognize the rights of criminal defendants through their own written constitutions (which may have been enacted some time after the nation was founded), implied constitutions, or statute.

References   [ + ]

1. 3 William Blackstone, Commentaries 2, available online at http://avalon.law.yale.edu/18th_century/blackstone_bk3ch1.asp.
2. Much of the discussion of the nature and history of criminal copyright infringement in the US was informed by I. Trotter Hardy’s excellent article Criminal Copyright Infringement, available at the William & Mary Law School Scholarship Repository.
3. Bureau of Justice Statistics, Intellectual Property Theft (2004).