SECTION I:
Why Impose Criminal
Sanctions?
The
determination to impose criminal sanctions for any activity even one previously
subject to civil liability is never one that should be made lightly,
particularly given what some regard as the over-criminalization of American
law.1
However, the Criminalization of
intellectual property violations and computer misuse are grounded in both
traditional and modern justifications for imposing criminal liability:
preventing fraud, enforcing commercial honesty, punishing theft of property,
and enhancing market reliability.2
Intellectual
property now plays an increasingly important role in the economic well-being
and security of the United States.3 In response
to this recognition, Congress has significantly broadened the scope of existing
criminal laws that protect intellectual property rights 4 and has passed several laws.5 Such
laws are necessary to deter copyright pirates, trademark counterfeiters or
trade secret thieves who might otherwise regard civil penalties as the cost of
doing business. In addition, criminalization of violation of intellectual
property rights embodies important values expressed by the criminal law:
deterring fraud, protecting property, and facilitating commercial interaction.6 These values, which reflect concerns with morality,
punishment and efficiency are analogous to those expressed by the
criminalization of forgery.7 Criminal law is
essential to further these goals, by asserting certain sanctions on behalf of
those ill-positioned to do so themselves.8
Of the three identifiable classes of victims
of copyright piracy or trafficking in counterfeit goods and services-purchasers
or end users of the pirated or counterfeit goods or services, foreseeable third
parties in society at large, and legitimate owners of the copyrighted goods or
authentic marks only the third group might ever find civil sanctions under the
Copyright Act or Lanham Act a possible remedy, must less a realistic one.9 Finally, under a modern law and economics analysis
of criminal law, the essential role, for example, of trademarks and service
marks in facilitating commerce makes counterfeiting an excellent candidate for
criminal protection.10
More
specifically, copyright piracy and trafficking in counterfeit goods is
tantamount to fraud in that the purchase of the counterfeit product is often
not getting what they expected. Prohibitions against fraud have long been
codified by federal as well as state law, either as a separate crime or as part
of a comprehensive theft statute. In comparison to many traditional forms of
fraud such as check kiting, copyright pirates or trademark counterfeiters can
perpetrate their fraud on a much larger scale.
Counterfeit goods can be widely
disseminated without requiring the presence or active involvement of the
defrauder. With the digitalization of consumer products and the Internet,
counterfeit goods may be quickly and cheaply disseminated throughout the world.11
Further,
because of the ease with which pirated digital copyrighted works and
misappropriated trade secrets can be reproduced and distributed, once the
proverbial “cat is out of the bag” with respect to that material, there is very
little that the victim can do to prevent further harm. While the criminal
prosecution of that particular defendant for that particular crime does not
make that particular victim whole, it may serve to deter future criminal
violations of intellectual property rights.
In addition,
end users may be widely dispersed and thus their losses are dispersed. Many
consumers of mass market products may be deceived, with one suffering only a
minor monetary loss. Moreover, they are often not in direct contact with the
copyright pirate or counterfeiter. Since end users may not know who deceived
them, or even that they were deceived, and in many cases has suffered only
minimal damage, an individual end user may have insufficient information or
incentive to bring a civil action against the copyright pirate or
counterfeiter. Thus, a copyright pirate or counterfeiter who has defrauded
thousands of end users and profited greatly, but caused minimal damage to each
individual, may avoid paying any damages. A criminal prosecution can be crucial
for providing any measure of justice under such circumstances and for deterring
potential violators.12
Intellectual
property is increasingly treated like other forms of property. Consequently,
its theft might be similarly criminalized. Indeed, a company's intangible
assets such as its trade secrets may be worth far more than its tangible assets
and the damage caused by the theft of a company's trade secrets may be far greater
than the theft of any of its tangible assets. Since the harms caused to victims
of intellectual property violations are as real as those caused by the theft of
tangible property, the need for criminal sanctions is the same.13
While the
victim of conventional theft can sometimes deter crime through self-help
security measures such as by hiring additional security guards or attaching
anti-theft tags to the merchandise, it is very difficult to do so in the case
of intellectual property violations.14 Government
prosecution can play a uniquely critical role in deterring such crime and
providing meaningful protections, such as investigation, to victims of
intellectual property violations.15
NOTES:
1 See Goldstone and Toren, “The
Criminalization of Trademark Counterfeiting,” 31 Conn. L. Rev. 1, 8 (Fall 1998)
(hereinafter “Trademark Counterfeiting”). See also, Mann, Punitive Civil
Sanctions: The Middle Ground Between Civil and Criminal Law, 101 Yale L.J.
1795, 1802 (1992) (“This, I advocate the shrinking of the criminal law in order to fit it into its proper role in
the law of sanctions, next to an expanding arena of punitive civil sanctions”).
2 See Goldstone and Toren, N. 1 supra,
31 Conn. L. Rev. at 9.
3 For example, according to the
legislative history of the Anti-counterfeiting Consumer Protection Act of 1996,
Pub. L. No. 104-153, 110 Stat. 1386:
“American
companies spend millions of dollars to research, develop, test, and market
their products. Developing high-quality goods requires substantial investment
before profits can be recouped. The theft of the value of intellectual property
is devastating, regardless of whether the product is a shoe, a software
program, or a motion picture.” S. Rep. No. 104-177, 104th Cong., 1st Sess., at
8, (Nov. 28, 1995).
4 Congress enacted the first criminal
law protecting intellectual property in 1909.
See Act of March 4, 1909, Ch. 28, 35 Stat. 1082. The law covered only
copyright violations and only at a minimal level. Since then, Congress has
gradually and consistently expanded the role of federal law enforcement in this
area, by imposing felony penalties for
unlawfully reproducing or distributing motion pictures or sound recordings in
1982, see Pub. L. No. 97-180, 96 Stat. 92 (May 24, 1982), by broadening the
protection to all types of copyrighted works in 1992, see Pub. L. No. 102-561,
106 Stat. 4233 (Oct. 28, 1992), by making a copyright violation a “specified
unlawful activity” for money laundering in 1994, see Pub. L. No. 103-325, 108
Stat. 2111 (Sept. 23, 1994), by including copyright violations as predicate
offenses under RICO in 1996, see Pub. L. No. 104-253, 110 Stat. 1386 (Oct. 9,
1996), and in 1997, by passing the No Electronic Theft Act (NET) Act, which
criminalizes copyright infringement even in certain circumstances where the
infringer does not act for commercial purpose or private financial gain. See 18
U.S.C. § 2319(b)(1).
5 In addition to criminalizing
trademark infringement in 1984, see Pub. L. No. 98473, 98 Stat. 2178 (1984),
Congress in 1996 criminalized the theft of trade secrets by passing the Economic
Espionage Act of 1996. Pub. L. No. 104-294, 110. Stat. 3488 (1996).
6 See Goldstone and Toren, N. 1 supra,
31 Conn. L. Rev. at 11.
7 Id. See also, McCarthy on Trademarks
and Unfair
Competition § 3:8, 3-15 (4th Ed. 2003): “Trademark infringement between competitors
is infringement in the same sense as if someone goes to your bank and passes
himself off as you, using copied identification. That person cashes a check,
drawing funds from your account because the bank teller has been confused by
the similarity of the identification.”
8
Goldstone and Toren, N. 1 supra, 31 Conn. L. Rev. at 11.
9
Goldstone and Toren, N. 1 supra, 31 Conn. L. Rev. at 11.
10
Goldstone and Toren, N. 1 supra, 31 Conn. L.
Rev. at 17-20.
11
Goldstone and Toren, N. 1 supra, 31 Conn. L. Rev. at 13.
12 Goldstone and Toren, N. 1 supra, 31
Conn. L. Rev. at 11.
13
Goldstone and Toren, N.
1 supra, 31 Conn. L. Rev. at 16.
14 Goldstone and Toren, N. 1 supra, 31
Conn. L. Rev. at 17.
15 Goldstone and Toren, N. 1 supra, 31
Conn. L. Rev. at 17.
--------------------------.
THE
HISTORY
Section
II:
The use of
computers to commit crimes began as far back as the 1960s, but because of the
limited numbers of computers and the lack of inter-connectivity, computers were
generally a tool used by criminals to commit a traditional offense such as
fraud. Use of computers in this manner was similar to other technological
advances that benefited society but could also be used for criminal purposes,
such as automobiles that could be used to escape from a bank robbery or
telephones that could be used by scam artists to contact potential victims. In
response to such technological advancements, the federal government and states
amended their existing substantive criminal law or enacted new laws to cover
such activity.1 While the changes in technology prior to
computers did provide individuals with opportunities to commit new crimes or
made it easier to commit traditional crimes, the threats posed to society by
the use of technology remained acceptable and could generally be managed by
local or state law enforcement.
However,
with the proliferation of the personal computer and the worldwide
interconnection of such computers through the Internet, modern computer crime
presents risks to society and unique challenges to law enforcement than in the
past. The criminal threats posed by the Internet is based on a vastly more
complex technology than the automobile, for example, computers allow criminals
to commit more crimes in less time than ever before, giving law enforcement
less time to react to any potential criminal threat. In addition, because of
the anonymity provided by the Internet, a criminal can engage in criminal
activity with very little risk of apprehension.
Moreover,
the worldwide reach of the Internet allows a cyber-criminal to cause harm to
thousands, if not millions, of victims that may not, even be located in the
same geographic area. In the case of computer crime, national borders lose all
significance. To make matters worse, such acts may not even be a crime in the
originating jurisdiction. For example, the individual who created and
distributed the “Love Bug” virus that caused an estimated $15 billion in
damages worldwide, could not be prosecuted in the Philippines where he lived
because such conduct was not a crime in that country at that time.2
“By 1919,
the law of most States against local theft had developed so as to include not
only common-law larceny but embezzlement, false pretenses, larceny by trick,
and other types of wrongful taking. The advent of the automobile, however,
created a new problem with which the States found it difficult to deal. The
automobile was uniquely suited to felonious taking whether by larceny,
embezzlement or false pretenses. It was a valuable, salable article which
itself supplied the means for speedy escape. ‘The automobile [became] the
perfect chattel for modern large-scale theft.’ This challenge could be best met
through use of the Federal Government’s jurisdiction over interstate commerce.
The need for federal action increased with the number, distribution and speed
of the motor vehicles until, by 1919, it became a necessity. The result was the
National Motor Vehicle Theft Act.”
In response
to how computers can be used to facilitate traditional crimes and to the rise
of cyber-crimes for which there is no analogous traditional crime, Congress has
pursued a dual approach. First, Congress has updated existing laws to ensure
that such statutes could be used to prosecute those types of crimes committed
with the aid of a computer, although, not all of these attempts have been
successful.3 Second, in 1984 Congress enacted the first
statute that was expressly designed to
cover computer crime in which there is no analogous traditional crime.4
Since then, Congress has repeatedly amended and revised
this statute to be a more effective weapon in fighting computer crime.5 In general, the existing version of the Computer Fraud and
Abuse Act, like its predecessors, seeks to protect the confidentiality,
integrity and availability of data and systems.6 The Act
contains seven major provisions that create liability for crimes against “protected
computers”—those used in interstate or foreign commerce or communications, and
any computer connected to the Internet.7
NOTES:
1 For example, the Supreme Court in
United States v. Turley, 352 U.S. 407, 413-414, 77 S. Ct. 397, 1 L.Ed.2d 430
(1957), explained the necessity of a federal criminal statute prohibiting the
theft of motor vehicles.
2 The virus infected tens of thousands
of computers worldwide including computers
at the Pentagon, the Central Intelligence Agency, Congress, and private
companies such as Microsoft, and Dow Jones & Co.
3 See, e.g., Ashcroft v. The Free
Speech Coalition, 535 U.S. 234, 122 S.Ct. 1389, 152 L.Ed.2d 403 (2002)
(portions of the Child Pornography Prevention Act which criminalizes the
production, distribution, and reception of computer generated, sexual images of
children were unconstitutionally over-broad because they proscribed speech which was neither child pornography nor
obscene and thus abridged the freedom to engage in a substantial amount of
lawful speech.).
4 Ashcroft, 535 U.S. 234, at 236.
5 Ashcroft, 535
U.S. 234, at 239.
6 Ashcroft, 535 U.S. 234, at 341.
7 See generally, 18 U.S.C. § 1030.
-Pardon the ramblings of an old man, I started this article and did not quite finish it, simply because I got side-tracked... I'm only human.... -Birdy
