Criminal Trademark and Copyright Infringement

When most people think of trademark and copyright infringement, they usually consider the civil consequences—like lawsuits and monetary damages. However, under certain circumstances, these infringements can escalate to criminal offenses.

You could face time in federal prison if convicted of criminal trademark infringement.

15 U.S. Code 1051, Application for registration; verification says, “(a) Application for use of trademark-

(1) The owner of a trademark used in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the Patent and Trademark Office an application and a verified statement in such form as may be prescribed by the Director, as well as such number of specimens or facsimiles of the mark as used as may be required by the Director.

(2) The application shall include specification of the applicant's domicile and citizenship, the date of the applicant's first use of the mark, the date of the applicant's first use of the mark in commerce, the goods in connection with which the mark is used, and a drawing of the mark.”

If you are charged and convicted with criminal infringement of someone else's intellectual property through trademark or copyright infringement, you could face as much as ten years in prison, depending on the circumstances and the specific violation, and fines of up to $2 million.

What Constitutes Criminal Trademark or Copyright Infringement?

The key elements identifying trademark or copyright infringement as a federal crime (versus just a civil violation) are the deliberate intent to steal and profit from someone else's protected intellectual property. The severity of the crime is generally measured by the profit obtained through the IP infringement.

Trademark Infringement

A trademark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services to consumers with which the trademark appears originate from a unique source and to distinguish its products or services from those of other entities.

Criminal trademark infringement is identified by the Lanham Act (15 U.S.C. §§ 1051 et seq.), primarily when intentional counterfeiting or piracy occurs. According to the law:

15 U.S.C. § 1117: It's a criminal offense to intentionally use a counterfeit trademark in connection with the sale, offering for sale, or distribution of goods or services. This act becomes a federal crime when it is capable of deceiving or causing confusion.
18 U.S.C. § 2320: Makes it a criminal offense to intentionally traffic in goods or services and knowingly use a counterfeit mark on or in connection with such goods or services (such as using someone else's trademark).

Copyright Infringement

Copyright protects original works of authorship, including literary, dramatic, musical, and artistic works. Criminal charges for copyright infringement are pursued under the following:

17 U.S.C. § 506: Criminal copyright infringement involves willfully copying, distributing, or publicly performing a copyrighted work at a commercial scale, especially with prior knowledge or reckless disregard of the risk that the copying is unlawful.
18 U.S.C. § 2319: Specifies penalties for violations of § 506, linking the severity of penalties to the retail value of the copied items and the infringer's intent.

To convict you of criminal trademark or copyright infringement, federal prosecutors must generally prove that you acted "willfully" and "for purposes of commercial advantage or private financial gain."

The threshold for criminal charges is higher than in civil cases, requiring evidence of intent and a significant scale of infringement.

What Are Related Federal Laws?

15 U.S. Code Subchapter I, The Principle Register, has several federal statutes related to 15 U.S.C. 1051 application for registration, such as the following:

15 U.S.C. 1052 - Trademarks registrable on the principal register; concurrent registration,
15 U.S.C. 1053 - Service marks registrable,
15 U.S.C. 1054 - Collective marks and certification marks registrable,
15 U.S.C. 1055 - Use by related companies affecting validity and registration,
15 U.S.C. 1056 - Disclaimer of unregistrable matter,
15 U.S.C. 1057 - Certificates of registration,
15 U.S.C. 1058 - Duration, affidavits, and fees,
15 U.S.C. 1059 - Renewal of registration,
15 U.S.C. 1060 – Assignment,
15 U.S.C. 1061 - Execution of acknowledgments and verifications,
15 U.S.C. 1062 – Publication,
15 U.S.C. 1063 - Opposition to registration,
15 U.S.C. 1064 - Cancellation of registration,
15 U.S.C. 1065 - Incontestability of right to use mark under certain conditions,
15 U.S.C. 1066 - Interference; declaration by Director,
15 U.S.C. 1066a - Ex parte expungement,
15 U.S.C. 1066b - Ex parte reexamination,
15 U.S.C. 1067 - Interference, opposition, and proceedings for concurrent use registration or for cancellation; notice; Trademark Trial and Appeal Board,
15 U.S.C. 1068 - The action of the Director in interference, opposition, and proceedings for concurrent use registration or for cancellation,
15 U.S.C. 1069 - Application of equitable principles in inter partes proceedings,
15 U.S.C. 1070 - Appeals to Trademark Trial and Appeal Board from decisions of examiners.
15 U.S.C. 1071 - Appeal to courts,
15 U.S.C. 1072 - Registration as constructive notice of claim of ownership

What are the Penalties Upon Conviction?

The penalties for criminal copyright and trademark infringement can be severe, involving:

Imprisonment: Convictions can result in significant prison terms. For instance, under 18 U.S.C. § 2320, a first offense involving counterfeit trademark goods can lead to up to ten years in prison for an individual. For copyright infringement, prison sentences are based on the retail value of the stolen IP—for example, up to 1 year in prison if the total retail value is $1000 or more; up to 3 years if the value is $2500 or more; and up to 6 years if it's a second or subsequent offense.
Fines: For standard copyright infringement, fines are typically capped at $250,000 per offense. For trademark infringement, individuals may face fines of up to $2 million and corporations of up to $5 million, depending on the case's specifics and the volume of counterfeit goods.
Forfeiture and Destruction: The law also allows for the seizure and destruction of counterfeit goods and any equipment used to produce them.
Restitution: Courts may order defendants to pay restitution to the trademark owner or copyright holder, compensating them for the financial losses caused by the infringement. The owner may also file for civil damages separately from the criminal charges.

What are the Common Defenses?

An experienced federal criminal defense attorney may employ several potential defenses if you're accused of criminal trademark or copyright infringement. These include:

Lack of Willfulness: Willful intent is key in making infringement a criminal offense. Your attorney may argue that the infringement was not willful—that you did not intend to violate the law.
Mistake of Fact: Demonstrating that there was a genuine mistake about the nature of the trademarked or copyrighted material can serve as a defense.
License or Authorization: If you can prove that you had permission from the trademark or copyright holder to use the property (e.g., as part of a license agreement), you can negate infringement claims.
Innocent Infringement: In some cases, particularly in copyright law, showing that the infringement was unintentional or that you were unaware of the infringement might mitigate penalties, though it rarely absolves them completely.

Contact our federal criminal defense law firm, Eisner Gorin LLP, in Los Angeles, California, for more information.

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