As the Internet’s role in business and communications expands, so too do the opportunities for people and companies to face piracy issues, online defamation suits and domain name infringement and other trademark violations. Ifrah Law has significant experience representing clients in these areas.
Legislation surrounding online piracy has generated a lot of attention. While some people are understandably concerned about the reach of this legislation, for people involved in an online piracy dispute, the current laws that apply to your situation can have a significant impact on how well your rights are protected. Ifrah Law has extensive experience representing clients who are involved in Internet-related piracy issues.
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ISPs and other hosts of online communications enable countless individuals to communicate in real-time, from around the globe. Since monitoring the truth and legality of their users’ posts would be infeasible, Congress passed Section 230 of the Communications Decency Act (CDA 230). Ifrah Law has proven experience in applying CDA 230 to ISPs and other social networking hosts to protect them and their businesses from defamation suits.
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With so many commercial activities being driven by the Internet, it’s critical that companies constantly monitor their brands in the online space for cybersquatting and instances of domain name trademark infringement. Ifrah Law has over 20 years of involvement in the domain name arena and we understand the enforcement actions to use for each individual case, whether it be a UDRP proceeding, a suite under the ACPA, or some other option.
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The Obama administration has issued a road map to combat intellectual property theft over the next three years.
The “2013 Intellectual Property Enforcement Coordinator Joint Strategic Plan” follows up on the more narrowly tailored “Administration Strategy on Mitigating the Theft of Trade Secrets” that we wrote about earlier this year, and reviews progress made on intellectual property issues in general since the administration’s first general IP strategic plan was issued in 2010.
While this year’s plan rightfully highlights the administration’s achievements in trade secret protection, it sheds little light on the concrete steps necessary to achieve its future goals in that area.
The strategic plan reveals progress made on the trade secret legislation, investigation, prosecution, and sentencing fronts. The enactment of Public Law 112-236, the “Theft of Trade Secrets Clarification Act of 2012,” closed a loophole by clarifying that the Economic Espionage Act protects trade secrets related to “a product or service used in or intended for use in” interstate or foreign commerce. The FBI unveiled a public education campaign to raise awareness of trade secret theft, and FBI trade secret theft cases are up 39 percent.
The Department of Justice has provided federal prosecutors with special training in computer crimes in order to support law enforcement agencies in the investigation of trade secret theft perpetrated by persons who pose a national security threat. Over the past three years the administration has also bolstered criminal penalties for economic espionage and directed the U.S. Sentencing Commission to consider increasing offense levels for trade secret crimes.
Despite these accomplishments, there is much more to achieve. The plan aims to press for protection of trade secrets overseas and enforcement actions to address their theft or misappropriation, and expresses concern about “forced technology transfer,” that is, efforts by foreign governments to condition market access or the ability to do business on the transfer of trade secrets or proprietary information.
While this document is high on aspirational talk regarding international coordination, it is notably low on concrete proposals for domestic trade secrets legislation. The lack of momentum on this front may be understandable considering that the administration received only 13 comments in response to the “Administration Strategy on Mitigating the Theft of Trade Secrets” that it released in February. However, there is a general consensus in the IP community that the law needs to provide a federal civil cause of action for trade secret theft that provides for broad civil remedies, similar to the Copyright Act or the Patent Act. Until such an act is implemented, trade secrets will not have a level of protection commensurate with their importance.
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Earlier this year, the Department of Justice announced an initiative to step up its enforcement of trade secret theft. In a February 20 press conference, Attorney General Eric Holder announced that the Obama administration aimed to make it a top priority to prosecute intellectual property crimes. At the press conference, the DOJ unveiled a report titled, “Administration Strategy on Mitigating the Theft of U.S. Trade Secrets,” which focuses largely on how to prevent and remedy trade secret theft by foreign governments and foreign corporations.
Only two days later, however, a development in one of the DOJ’s highest-profile trade secrets cases demonstrated the difficulties of prosecuting foreign defendants. On February 22, a federal judge in the Eastern District of Virginia determined that, despite eight attempts, the DOJ had not properly served Kolon Industries Inc, a South Korean company accused of stealing trade secrets from duPont, a U.S. company. The DOJ’s criminal case follows a civil trial that returned a $919.9 million judgment against Kolon for stealing 149 trade secrets related to Kevlar, a synthetic fiber used in body armor. Kolon used those trade secrets to create its own competing fabric, Heracron.
The difficulties the DOJ encountered in bringing the overseas perpetrators to justice is especially relevant because the report indicates that most secret theft is committed by foreign nationals, especially in China. According to the report, “Chinese actors are the world’s most active and persistent perpetrators of economic espionage. US private sector firms and cybersecurity specialists have reported an onslaught of computer network intrusions that have originated in China, but the [intelligence community] cannot confirm who was responsible.” The vast majority of cases highlighted in the report involve Chinese nationals or Chinese firms.
The difficulties in bringing foreign nationals to justice only emphasize the need for corporations to take stronger precautions to prevent their trade secrets from being stolen in the first place. The “Administration Strategy” document recognized this need and proposed that companies work cooperatively to develop best practices for trade secret protection in areas such as research and development compartmentalization, information security policies, physical security policies, and human resources policies.
The “Administration Strategy” document notes that companies suffering from trade secret theft may be hesitant to come forward for fear of how it could affect the company and its stakeholders. However, the document encourages them to do so, both in order to bring the perpetrator to justice and to allow the government to collect information that could help to identify patterns in trade theft and prevent similar events in the future.
The DOJ has demonstrated its commitment to trade secret enforcement by continuing to pursue the Kolon case despite the February setback. The DOJ filed a superseding indictment on March 19 and must now serve Kolon in accordance with the judge’s February 22 order. Given the fanfare with which the DOJ announced its trade secret agenda, there is no doubt that the government will continue to doggedly pursue this and other trade secret cases.
We support the DOJ’s effort to protect corporate trade secrets so that companies can benefit from the innovation that they work so hard to develop. As always, we also remain on the lookout for indications of overzealous prosecution in instances where it does not appear that confidential proprietary information has been stolen.
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A year ago, we wrote about the indictment in the Eastern District of Virginia of the executives and founders of Megaupload, one of the leading file-hosting sites on the Web. The charges were copyright infringement through the facilitation of piracy of copyrighted materials, money-laundering, and conspiracy. The site was shuttered after the indictment.
The case quickly got tied up in the U.S. Justice Department’s effort to extradite Kim Dotcom, Megaupload’s chief founder, from New Zealand, where he lives. After a series of setbacks, the DOJ just won a victory before a New Zealand appeals court. The extradition hearing is set for August 2013.
The issue before the appeals court was how much information the DOJ was required to turn over to Dotcom before the hearing. One of Megaupload’s defenses is that its activities were protected by the “safe harbor” provisions of the Digital Millennium Copyright Act, which protects Internet service providers from copyright liability for the activities of people who merely use their Web sites.
Dotcom wanted the DOJ to turn over, in advance of the hearing, information that it had about possible copyright infringement on the site – in other words, a good deal of the government’s evidence. Reversing a lower court, the New Zealand appeals court held that the DOJ need not turn over much of this material at this point.
“If a suspect was entitled to demand disclosure of all relevant documents on the basis that he or she wished to challenge not the reliability of the summarised evidence but rather the inferences that the requesting state seeks to draw from it,” the court wrote, then the extradition hearing process would not work properly. Rather, the suspect is entitled to a summary of the evidence but not to the government’s entire case at this juncture.
It thus appears that Dotcom will be able to get access to the DOJ’s entire case and to mount a full defense only if he is extradited to the United States and faces a criminal trial. But in order to hold such a trial, the DOJ will need to make a prima facie case at the extradition hearing, which Dotcom will be allowed to rebut, that Dotcom is guilty of the charged offenses. The appeals court said that this hearing will only involve a “limited weighing of evidence” and that the DOJ is entitled to some deference as to its reliability.
We have said before that this is a highly dubious prosecution. We are confident that despite this setback, Dotcom will get a full chance to present his case before an impartial tribunal.
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Angered by the recent tragic suicide of Internet activist Aaron Swartz, a group of hackers claiming to be from the group Anonymous, made threats over the weekend to release sensitive information about the United States Department of Justice. The group claimed to have a file on multiple servers that is ready to be released immediately.
Swartz’s suicide has served to mobilize the group Anonymous, a loosely defined collective of Internet “hacktivists” that oppose attempts to limit Internet freedoms. Anonymous is a staunch advocate of open access to information, as was Swartz. Anonymous said that Swartz “was killed” because he “faced an impossible choice.”
Swartz was facing federal computer fraud charges that carried a maximum sentence of 35 years in prison, although in reality he probably would not have been given a sentence anywhere near approaching the statutory maximum. Prosecutors told Swartz’s legal team they would recommend to the judge a sentence of six months in a low-security setting.
The charges arose from allegations that he made freely available an enormous archive of research articles and similar documents offered by JSTOR, an online academic database, through the computers at the Massachusetts Institute of Technology.
Swartz was a leading activist involved in the movement to make information more freely available on the Internet and is credited with helping to lead the protests that ultimately defeated the Stop Online Piracy Act (SOPA), a statute that would have significantly broadened law enforcement powers in policing Internet content that may violate U.S. copyright laws.
Earlier this month, Rep. Zoe Lofgren (D-Calif.) indicated that she is drafting a bill that she terms “Aaron’s Law,” which would limit the scope of the Computer Fraud and Abuse Act, a 1986 law that prosecutors used to help bring these charges against Swartz.
The hackers reportedly hijacked the website of the United States Sentencing Commission, the federal agency responsible for the federal sentencing guidelines for criminal offenses. They said that the Sentencing Commission’s website was chosen because of its influence in creating sentences that they deemed unfair. The hackers posted a message that demanded reform of the criminal justice system or threatening that sensitive information would be leaked. Anonymous also posted an editable version of the website, which invited users to edit it as they pleased.
Today is Data Privacy Day. These recent incidents serve to show that no organization – not even the U.S. Department of Justice – is immune from security breaches. Data breaches and data losses will occur and it is crucial for an organization to be prepared and have policies in place to allow a quick response when something does happen.
The legal ramifications and bad publicity that follow such an incident can be very damaging to an organization. However, by making sure that you are prepared, you can minimize your damages. Preparedness involves consultation across a range of specialties, including information technology, legal advice, and public relations. The impact that a data breach or loss can have on the bottom line of any organization is enormous and preparation is the best method to combat it.
A data breach or data loss can also have far-reaching legal consequences under international, federal and various state laws. For example, companies may not realize that if they have even a few employees or customers in a state, it may trigger a number of different requirements under state privacy laws. In order to avoid problems with federal agencies or state attorney general offices, it is best for companies to have a plan in place in advance and make sure they are already compliant with all relevant laws.
There can be no dispute that the death of Aaron Swartz – the Internet activist who took his own life on Friday, January 11 – is tragic. There can also be no dispute that the grief and anger his family feel is very real. The question is what the appropriate focus for that anger should be in order to give meaning to Swartz’s life – and death.
Swartz, who had blogged about his own battles with depression, was a leading activist involved with the movement to make information freely available on the internet, and is credited with helping to lead the protests that ultimately defeated the Stop Online Piracy Act (SOPA) – a statute that would have significantly broadened law enforcement powers in policing internet content that may violate U.S. copyright laws. Swartz’s suicide came as he faced federal charges of wire fraud and computer fraud arising from his alleged efforts to make freely available an enormous archive of research articles and similar documents offered by JSTOR, an online academic database, through computers at the Massachusetts Institute of Technology. The allegations in the indictment he faced were a tribute to Swartz’s computer acumen, describing the technological means that Swartz had used to access and download approximately 2 million documents from the JSTOR subscription archive by unauthorized access to the computers at MIT.
Swartz’s family has released a statement in which they blame his death on the decision by federal prosecutors in the District of Massachusetts to pursue “an exceptionally harsh array of charges, carrying potentially over 30 years in prison, to punish an alleged crime that had no victims.” Contrary to the family’s assertion that the prosecution caused Swartz to take his own life, we suggest that the appropriate focus here is not on prosecutorial overreaching, but rather on Congress’s decision to criminalize certain conduct and to set sentencing guidelines that would likely have led to imprisonment if Swartz were convicted.
It is true that the maximum statutory sentence of imprisonment for the wire fraud charge in the indictment against Swartz is 30 years. But there is no question that the likely sentence that Swartz would have faced if convicted of wire fraud and/or the other charges in the indictment would have been far less than that. The advisory range under the U.S. Sentencing Guidelines would have depended on the loss (or intended loss) suffered, among other things, but Swartz likely faced (based on back of the envelope calculations) a sentence of no more than two to four years in prison – a fact that he almost certainly knew from the lawyer who represented him. While four years in federal prison is significant, it is much less than the 30-year sentence mentioned by the family.
It is also not entirely clear that the prosecutors’ decision to pursue charges against Swartz was unreasonable. This is not just a case alleging the distribution of materials protected by copyright law – an issue on which there is fair debate as to whether conduct should be criminalized. Rather, in this case, Swartz was accused of having accessed the MIT computer systems and the JSTOR subscription (for which MIT paid approximately $50,000) through illicit means. There were also allegations that Swartz’s computer intrusions crashed some computers and caused some legitimate subscribers to the JSTOR service to lose access for a period of time. Thus, assuming the truth of the allegations in the indictment, the alleged crime here was not entirely victimless. Moreover, everyone agrees that illegally accessing a computer system is not conduct that should be condoned. For these reasons, Swartz’s family’s attacks on the prosecutors as overreaching – while understandable given their grief and anger – may actually be misplaced.
On the other hand, there is a fair question whether the conduct with which Swartz was charged is really the kind of conduct for which we need to send a person with no other criminal record to prison for a period of years. That, however, is not an issue of decision-making by the prosecutor’s office. Rather, that is a question for Congress, both in terms of establishing criminal liability and in terms of setting astronomical maximum statutory sentences (which increased the base offense level for this crime). And it is a question for the U.S. Sentencing Commission, which has raised Guidelines levels over the years. It is also a question for Congress in terms of setting Guidelines scoring that increasingly fails to reflect any expertise of the Sentencing Commission, but rather reflects only a congressional mandate to support increasingly harsh advisory sentences under the Guidelines for white-collar offenses.
Prosecutors may have been justified in seeking charges against Swartz for his conduct. But if his family, friends and supporters wish Swartz’s death to have as much meaning as his life, they should focus instead on the decisions that created the harsh potential penalties that Swartz faced.
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