The troubling role of federal registration in proving intellectual property crimes.

AuthorRichey, Susan M.


The government relies upon federal registration of intellectual property as prima facie evidence of valid rights when prosecuting trademark counterfeiting and copyright infringement offenses. The inference of validity arising from registration, well established in civil and administrative proceedings, raises constitutional concerns in the context of criminal proceedings, particularly where validity of the rights is an element of the offense. The federal statute establishing the crime of trademark counterfeiting requires proof of a federal registration but makes no reference to proof that the registration or underlying common law trademark rights are valid; whereas, the federal crime of copyright infringement is understood to require proof that a valid copyright exists but does not require proof of registration. This Article posits that Congress intended validity of intellectual property rights to be an element of both crimes and, against that stance, questions the government's method of establishing that element with proof of a federal registration.

To the extent the inference of validity arising from federal registration operates to relieve the government of its obligation to prove each element of the relevant offense beyond a reasonable doubt, use of this evidentiary tool violates the constitutional rights of criminal defendants. These rights are at risk unless proof of the basic fact--federal registration--renders existence of the inferred fact--valid intellectual property rights--more likely than not. The "more likely than not" test hinges upon the rigor of the registration examination procedures in place in the Trademark and Copyright Offices, respectively. This Article outlines those procedures and notes the serious difficulty in drawing a conclusion of validity from the cursory nature of the copyright registration process and the less troubling, but still problematic, validity conclusion based on the trademark registration process. Defenses that challenge the validity inference trigger similar constitutional concerns if criminal defendants must carry the burden of persuasion, or in some instances, the burden of production, on such matters. With criminal sanctions on the line, courts should respect the limits of a federal registration as a proxy for proof that valid intellectual property rights exist in the first instance and reflect that understanding in the jury instructions.

TABLE OF CONTENTS I. INTRODUCTION. II. FEDERAL REGISTRATION OF TRADEMARKS AND COPYRIGHTS A. Overview of the Registration Process B. Proof of Registration III. ELEMENTS OF THE PRIMARY FEDERAL INTELLECTUAL PROPERTY OFFENSES A. The Crime of Trademark Counterfeiting Defined B. The Crime of Copyright Infringement Defined IV. Congress' Definitional Intent in 18 U.S.C. [section] 2320 A. Silence on the Issue of Validity B. Separate "In Use " Requirement C. Specification of the Principal Register D. The Rule of Lenity V. INJECTING THE CIVIL PRESUMPTION CREATED BY REGISTRATION INTO A CRIMINAL CASE A. Mandatory Presumption B. Permissive Inference VI. INVOKING INVALIDITY DEFENSES IN A CRIMINAL CASE A. Burden of Persuasion B. Burden of Production VII. CONCLUSION I. INTRODUCTION

Early legislative attempts in the United States to address intellectual property theft incorporated the sanction of criminal penalties, (1) and, although not consistently available in the intervening years, criminal prosecutions may be urged by present-day trademark and copyright owners to help curb theft. Despite that fact, owners of these rights tend to rely more heavily upon civil remedies, seeming to view infringement as best resolved through litigation between private parties. (2) Whether resulting from that view or giving rise to it, prosecutors historically ignore criminal enforcement of intellectual property rights and focus their resources on more tangible forms of theft, such as bank robbery, burglary, and shoplifting. (3) Recent developments, however, are shifting prosecutorial discretion, (4) and drawing attention to intellectual property crimes as offenses with the potential to pose serious risks to public safety and to the viability and stability of economic markets. (5) Counterfeits are expanding well beyond the luxury or status goods market (6) to pharmaceuticals, (7) baby formula, (8) airplane and automobile parts, (9) and jeopardizing the health and physical well-being of unsuspecting consumers. Meanwhile, rampant piracy of copyrighted material via the internet threatens the business base of the software, entertainment, and music industries. (10) More worrisome still, domestic and international law enforcement agencies believe intellectual property offenses are being used to fund organized crime and terrorist activity. (11) These developments counsel vigilant investigation and diligent prosecution.

At the same time, given the relatively high-stakes criminal penalties that hang in the balance, (12) focusing on the certainty of the intellectual property rights at issue is imperative because such property lacks the easily verified physicality of emptied bank vaults, stolen cars, and pilfered electronic gadgets. Put another way, if intangible subject matter does not meet certain criteria, no valid property rights exist and the crime of theft is not possible. (13)

Logically, proof that purported intellectual property rights are valid should precede a finding that theft has occurred. Courts in the United States routinely handle this analytical step by accepting proof of federal registration to support evidentiary presumptions or inferences of validity in enforcement proceedings. (14) Presumptions or inferences of validity flowing from federal registration of trademarks and copyrights increase the efficiency of such proceedings but raise special concerns in criminal prosecutions because they trigger constitutional protections absent in civil litigation. An evidentiary inference differs from a true presumption in that it allows but does not require the trier-of-fact to find the inferred fact from proof of the foundational fact; a true presumption, while common in civil actions, is disfavored in criminal prosecutions. (15) A closely related device is the affirmative defense: a requirement that the defendant bear the ultimate burden of proving a defense can be functionally equivalent to an inference that shifts the burden of persuasion on an element of the claim or offense. (16)

To the extent that either of these litigation tools force criminal defendants to bear the ultimate burden of proof on validity issues, or, in some instances, to carry the burden of production on such matters, intellectual property criminal statutes may violate the constitutional rights of the accused by relieving the government of its obligation to prove all elements of the offense beyond a reasonable doubt. (17) Government prosecutors rely upon proof of federal registration to establish valid rights for a variety of intellectual property crimes; however, criminal trademark counterfeiting (18) and criminal copyright infringement (19) represent the primary federal offenses that rely upon such proof and so are discussed in this Article to the exclusion of other intellectual property crimes.

The statutes defining these two offenses do not establish parallel schemes. The criminal trademark counterfeiting statute requires proof that a federal trademark registration exists whereas the criminal copyright infringement statute specifies only proof that a copyright exists. Federal prosecutors read the latter statute to mean that a valid copyright must exist whereas they read the former statute without any reference to proof of validity. (20) In other words, prosecutors equate proof that a trademark registration exists with proof that valid intellectual property rights exist. Of course, if the registration itself has been procured through fraud in the Trademark Office, (21) or if the registration has been improvidently issued for invalid subject matter, e.g., a generic term, phrase, or symbol, (22) or functional trade dress, (23) the equation between registration and validity fails. Although not required by the felony copyright infringement statute, prosecutors routinely submit certificates of copyright registration to raise a similar inference of validity. (24)

This approach does not take into account the cursory nature of the examination of applications for registration in the Copyright Office as contrasted with the more rigorous examination at work in the Trademark Office, a factor that should impact the creation, let alone the force, of any evidentiary inference of validity. (25) In particular, the minimal Copyright Office examination does not delve into either the status of the underlying rights in a claimed derivative work (26) or the existence of an invalidating first sale of a copyrighted work. (27) Complicating matters with respect to both crimes, the entity with access to the most information on validity--the purported intellectual property owner--is not a party in a criminal prosecution. (28)

This Article argues that validity of asserted copyrights and trademarks, including validity of registrations in trademark counterfeiting cases, is an essential element of either crime and, against that backdrop, questions the government's mode of meeting its proof obligation by relying solely on certificates of federal registration. To establish a foundation for this argument, Part II of this Article summarizes the federal registration process for trademarks and copyrights and highlights the disparity in administrative examination applied to these two types of intellectual property. Part III reviews the statutory elements of the crimes of trademark counterfeiting and copyright infringement. Part IV focuses on the question of congressional intent in defining the former crime. Having concluded that, despite the non-parallel language of the criminal statutes, validity of...

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