Can I be arrested for intellectual property theft?
Intellectual property is a huge part of the global economy, but its distribution and spread is harder to control than any other type of asset. Intellectual property can make or break a business, and therefore there are laws and regulations regarding the use and appropriation of IP. Because intellectual property involves ideas rather than tangible products, people tend to think stealing it is not as big a deal as stealing actual goods, but intellectual property theft is a serious crime.
What is intellectual property?
Intellectual property is any type of property that is a creation of the human mind. This category includes things like books, art, music, inventions, designs, and the images, logos, or brand names used by companies to sell their products.
Intellectual property law is designed with the intent to encourage the creation of intellectual goods, but also to encourage their widespread use for the benefit of society at large. It is a bit tricky to achieve this balance, but generally, the law gives creators the exclusive right to the use of their intellectual property for a fixed period of time, thus creating a financial incentive for creation. At the same time, when the creator’s rights expire, their ideas can be used to stimulate innovation and technological progress.
What are the types of intellectual property?
Intellectual property includes a wide variety of concepts, but they can be broken down into a few general categories.
Copyrights
Copyrights apply to artistic or literary works such as books, music, movies, paintings, or sculptures. Computer programs, maps, and advertisements are also examples of work that can be copyrighted.
Copyrights do not protect the idea itself, but they protect the creator’s specific work from being stolen and reproduced by others. Copyrights generally last for a period of 70 years after the author’s death, in the United States, but can be up to 120 years for work that is by an anonymous author or one using a pseudonym, or if it is a work for hire, which means that the work was created by an employee in the course of their job duties and is owned by the employer.
Patents
Patents are rights to inventions, products, or processes. A patent requires three things: the invention must be new, not obvious, and have an industrial application. A patent gives the creator of the invention the exclusive right to make and sell their invention for a particular period of time, which allows the creator to profit from his or her idea when it is new and innovative (and usually most profitable).
In exchange for this financial protection, the creator is obligated to make available to the public information about their invention that explains how it is innovative and unique. Patents do expire after a period of time, and when the time is up, the patent information allows other members of the public to build upon the original invention and improve or modify it. In this way, patents serve to protect original inventors but also encourage innovation and progression.
Trademarks
A trademark is a specific sign or design which distinguishes one company’s goods or services from others. A trademark is closely associated with a particular brand and makes that brand’s products easily identifiable to consumers. This may be a brand name, logo, or slogan that is unique to one brand and is not generically applicable to the product. Trademarks can sometimes be a bit vaguer than a specific image, such as the use of a particular set of colors or a unique shape. Trademarks are noted by the use of a superscripted TM ™ or circled R ®.
Trade Secrets
Trade secrets are any type of secret information that is unique and essential to the production of a product. Trade secrets may be formulas, processes, or practices that make a product unique, and in the U.S. there are three requirements to qualify as a trade secret: the information itself, the information must have been kept secret by the owners, and the information must be valuable because it is not publicly known.
What are the penalties for intellectual property theft?
The theft of intellectual property can lead to serious consequences for infringers, even accidental ones, so it’s essential to make sure that all of the content and graphics for your business are unique and original. It is also important to be sure that you actually own the intellectual property that is attached to your business because the rights do not automatically transfer from the creator to you.
Even if you do everything right and hire an artist or designer to create a unique design or logo for your company, if you neglect to secure the rights, then the artist can later use the work again for other purposes or commercialize it on their own and then sue your company for infringing upon their legally owned trademark. Thus, it is necessary to explicitly state in your contract with an outside creator that any work created as a result of the job is owned by your company.
Even unintentional violation of intellectual property rights can be bad news because lack of knowledge is not an acceptable defense against infringement. In California, the Uniform Trade Secrets Act applies, and theft of IP is referred to as “misappropriation”. The statute of limitations for a misappropriation case is three years. An intellectual property thief can be ordered by a court to not disclose trade secrets they have knowledge of or be issued an injunction to stop using illegally acquired intellectual property. In addition, an offender can be sued in civil court for the financial loss attributed to the theft and the profits gained by the thief.
Federal law also applies to intellectual property theft via the Economic Espionage Act of 1996, which criminalizes the misappropriation of trade secrets and establishes penalties of up to $5 million in fines (for businesses and organizations) and 10 years in prison (for individuals). This law also requires forfeiture of the profits gained from the crime and any property associated with or intended to be used in the commission of the crime.
