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Computer Crime and
Intellectual Property Section (CCIPS) 

Criminal Intellectual Property Laws

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  1. Federal Statutes Protecting Intellectual Property Rights
  2. The No Electronic Theft (NET) Act
  3. The Economic Espionage Act
  4. Federal Sentencing Guidelines for Intellectual Property Infringement
A.    Federal Statutes Protecting Intellectual Property Rights
B.    The No Electronic Theft (NET) Act

Software Pirate Guilty of Copyright Infringement in First NET Act Trial

On May 11, 2001, a federal jury in the Northern District of Illinois found Christian Morley of Salem, Massachusetts, guilty of conspiracy to infringe software copyrights. Morley was indicted last year along with 16 other defendants from across the United States and Europe for conspiring to infringe the copyright of more than 5,000 computer software programs available through a hidden Internet site located at a university in Quebec, Canada.

Nine Indicted in Chicago in $1 Million "Fastlane" Software Piracy Conspiracy (Feb. 16, 2001)

A former North Carolina man who was arrested last fall and eight new defendants across the United States who allegedly were associated with the underground software piracy group known as "Fastlane" were indicted on February 15, 2001, for pirating more than $1 million of copyrighted computer software, games, and movies through non-public Internet sites. All nine defendants were charged in a nine-count indictment that was returned by a federal grand jury in Chicago, where the investigation was conducted, Scott R. Lassar, United States Attorney for the Northern District of Illinois, and Kathleen McChesney, Special Agent-in-Charge of the Chicago Field Division of the Federal Bureau of Investigation, announced on February 16, 2001. More information on this cases is available via the link below:

Man Sentenced in Michigan for Offering Software Programs for Free Downloading on "Hacker Hurricane" Web site

Brian Baltutat was sentenced on January 30, 2001, to 3 years probation, 180 days home confinement, restitution to software manufacturers, and 40 hours of community service. On October 12, 2000, Baltutat pleaded guilty to software copyright infringement. He had offered approximately 142 software programs for free downloading on a web site called "Hacker Hurricane."

Man Pleads Guilty to Internet Piracy of Star Wars Film

On December 15, 2000, the United States. Attorney for the Northern District of California announced that Jason Spatafore pled guilty to a one count information charging criminal copyright infringement in violation of 17 U.S.C. § 506(a)(2) and 18 U.S.C. § 2319(c)(3). The defendant willfully infringed a copyright by reproducing and distributing by electronic means copies of parts of the film Star Wars Episode I: The Phantom Menace. He did this by posting copies of parts of the film on various web sites so others could download copies of the film from the Internet. He also
encouraged others to download copies of the film from those sites.
  • Man Pleads Guilty to Internet Piracy of Star Wars Film (December. 15, 2000)
  • Man Charged with Internet Piracy of Star Wars Film (September 20, 2000)

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    U.S. Indicts 17 in Alleged International Software Piracy Conspiracy

    On May 4, 2000, Scott R. Lassar, United States Attorney for the Northern District of Illinois, and Kathleen McChesney, Special Agent-in-Charge of the Chicago Field Division of the Federal Bureau of Investigation announced the indictment of seventeen defendants from across the United States and Europe. The defendants allegedly conspired to infringe the copyright of more than 5,000 computer software programs. If convicted, conspiracy to infringe a copyright carries a maximum penalty of five years in prison and a $250,000 fine, or, as an alternative, the Court may impose a fine totaling twice the gross gain to any defendant or twice the gross loss to any victim, whichever is greater. Restitution is mandatory.

    Eric Thornton Pleads Guilty to Charges Filed under the "No Electronic Theft" (Net) Act for Unlawful Distribution of Software on the Internet

    On December 22, 1999, the Department of Justice, United States Attorney for the District of Columbia Wilma A. Lewis, and Assistant Director in Charge of the Federal Bureau of Investigation’s Washington Field Office Jimmy C. Carter announced the guilty plea of Eric John Thornton to a charge of criminal  infringement of a copyright.  Mr. Thornton pleaded guilty to a violation of the No Electronic Theft ("NET") Act.  Mr. Thornton faces up to one year in jail and a fine of up to $100,000.00.  He is scheduled to be sentenced on March 3, 2000.

    First Felony Conviction and Sentencing Under No Electronic Theft Act

    The Justice Department and the United States Attorney for the District of Oregon announced the first conviction under the No Electronic Theft (NET) Act on August 20, 1999.  Jeffrey Levy, a 22 year old University of Oregon senior, pled guilty to illegally posting computer software programs, musical recordings, entertainment software programs, and digitally-recorded movies on his Internet web site, allowing the general public to download these copyrighted products.  On November 23, 1999, Levy was sentenced to a two year period of probation with conditions.  Since December, 1997, The NET Act punishes Internet piracy as a felony, even if the activity is not for profit.  Assistant Attorney General for the Criminal Division, James K. Robinson said at the time of the plea, "This is theft, pure and simple."

    On Tuesday, December 16, 1997, President Clinton signed into law H.R. 2265, the No Electronic Theft (NET) Act. The NET Act provides for enhanced protection of copyrights and trademarks by amending provisions in titles 17 and 18 of the U.S. Code. Most notably, the NET Act permits federal prosecution of large-scale, willful copyright infringement even where the infringer does not act for a commercial purpose or for private financial gain. This amendment closes the gap in statutory protection discussed in United States v. LaMacchia, 871 F. Supp. 535 (D. Mass. 1994). A summary of the statutory amendments, as well as a draft of the statute as amended (both with and without redlining) may be accessed via the links below:


    Computers are changing the way that copyrighted goods are being illegally copied and distributed, creating new challenges for copyright owners and for law enforcement.
     

    • The Statement of Kevin V. DiGregory, Deputy Assistant Attorney General of the Criminal Division before the Subcommittee on Courts and Intellectual Property of the House Committee on the Judiciary, presented September 11, 1997, describes how law enforcement is addressing this challenge and expresses the Department's support for the goals of H.R. 2265, The "No Electronic Theft ('NET') Act."
    • A one page Summary of Statement is also available.
    C.  The Economic Espionage Act
    The Computer Crime and Intellectual Property Section is also charged with evaluating all requests for approval of charges under the Economic Espionage Act and making a recommendation regarding the approval of such requests to the Attorney General, Deputy Attorney General, or Assistant Attorney General. In addition, the Section also prosecutes certain Economic Espionage cases directly.  Please click here for more information on the Economic Espionage Act.
    D.    Federal Sentencing Guidelines for Intellectual Property Infringement
    In May 2000, the United States Sentencing Commission amended the sentencing guidelines for certain IP crimes, including trademark and copyright infringement.
  • IP Sentencing Guidelines

  • IP Sentencing Guidelines (PDF)
    •   Click here for more information on:
    Intellectual Property Policy and Programs
    Intellectual Property Cases
    Prosecuting Intellectual Property Crimes Guidance
    Criminal Intellectual Property Laws
    Economic Espionage Act
    Intellectual Property Documents
       
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    Updated page May 22, 2001
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