§ 1.07 Why Impose Criminal Sanctions?

• Jurisdiction: United States
• Publication year: 2020

§ 1.07 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.¹⁵⁷ 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.¹⁵⁸

Intellectual property now plays an increasingly important role in the economic wellbeing and security of the United States.¹⁵⁹ In response to this recognition, Congress has significantly broadened the scope of existing criminal laws that protect intellectual property rights¹⁶⁰ and has passed several laws.¹⁶¹ 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.¹⁶² 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.¹⁶³ These values, which reflect concerns with morality, punishment and efficiency are analogous to those expressed by the criminalization of forgery.¹⁶⁴ Criminal law is essential to further these goals, by asserting certain sanctions on behalf of those ill-positioned to do so themselves.¹⁶⁵ 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.¹⁶⁶ 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.¹⁶⁷

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.¹⁶⁸

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...