Monthly Archives

April 2012

Nearly $1 Million Worth of Counterfeit Movies and Music Seized

By Customs IP Enforcement, Intellectual Property, International IP

Two Mexican nationals made their initial appearance in federal court this week on charges of trafficking in counterfeit goods after U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) agents executed a search warrant at a rural Fresno (California)-area home, seizing more than 70,000 pirated copies of music and movies.

Alberto Campos-Limon, 24, and Jose Jeronimo-Jimenez, 32, both of Fresno, were taken into custody by Fresno HSI agents. They are charged in a criminal complaint with conspiracy; copyright infringement; and trafficking in counterfeit labels. The illegal activities allegedly occurred between Feb. 28 and April 24. Each offense carries a maximum penalty of up to five years in prison.

A third suspect, Arnoldo Chavez-Mendoza, 50, a Mexican national who currently resides in Tulare, was arrested on state charges of copyright infringement after agents conducting the enforcement action observed him purchasing several hundred audio CDs from the two defendants.

The suspects were taken into custody at a rural Fresno-area residence where investigators discovered the bulk of the counterfeit music and movie disks. During a search of the home, investigators also found a variety of equipment commonly used to mass produce DVDs and CDs.

“Commercial piracy and product counterfeiting undermine the U.S. economy, rob Americans of jobs, stifle American innovation and promote other types of crime,” said Clark Settles, special agent in charge who oversees HSI Fresno. “Intellectual property theft amounts to economic sabotage, which is why HSI will continue to aggressively pursue product counterfeiters and those who sell counterfeit products.”

This enforcement action is the culmination of a probe that began in February. According to the criminal complaint in the case, during the ensuing investigation agents made multiple undercover purchases of counterfeit DVDS, including films such as “Safe House,” “In Time,” “Haywire” and “Red Tails.” Among the titles seized Tuesday at the residence were numerous first run movies, including “Hunger Games” and “American Reunion.” All told, agents have seized more than 70,000 counterfeit DVDs and CDs in connection with the investigation. Authorities estimate the retail value of those disks at more than $900,000.

HSI received substantial assistance with the investigation from the Fresno County Sheriff’s Office, the Motion Picture Association of America and the Recording Industry Association of America (RIAA).

“The United States government has made intellectual property protection a priority,” said Dallas international trade and intellectual property attorney Jim Chester.  “It seems as if every week we see a new seizure of counterfeiting imports.  These efforts are helpful and worthwhile, but U.S. officials and law enforcement can only do so much.  Seizure of trademark and copyright infringing imports will hardly make a dent in the global piracy of intellecual property rights.”


Basics of Intellectual Property

By Intellectual Property

New PPT Presentation

[slideshare id=12674902&doc=ippracticeoverviewpres2012-120424151734-phpapp01]

This presentation described the various types of Intellectual property (trademarks, copyrights, patents, and trade secrets), and explains how IP rights are created, protected, exercised, and enforced.

ICE Seizes $4 Million Worth of Counterfeit Athletic Apparel

By Customs IP Enforcement, Intellectual Property, International IP

A massive cache of counterfeit athletic apparel was recently found in a Sacramento, California warehouse.

Agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) are currently working to inventory the contents of a warehouse on the city’s southeast side that yielded one of the largest single seizures of counterfeit apparel ever made in the area.

HSI agents executed a search warrant at the building on Berry Avenue Tuesday morning as part of a long-term investigation. Inside, investigators found multiple rows of shelving 40 feet high and more than 400 feet long stacked with apparel. Some of the merchandise was packed in boxes, other items were individually wrapped in plastic.

Agents still do not have a final count on the total number of items, but they say it will run into the tens of thousands. The bulk of the clothing was athletic apparel bearing a counterfeit Adidas trademark, including sports jerseys, shorts and shoes. In addition to the apparel, agents also discovered an array of counterfeit sports memorabilia, such as commemorative clocks and soccer balls.

“Commercial piracy and product counterfeiting undermine the U.S. economy, rob Americans of jobs, stifle American innovation and promote other types of crime,” said Dan Lane, assistant special agent in charge for HSI Sacramento. “Intellectual property theft amounts to economic sabotage, which is why HSI will continue to aggressively pursue product counterfeiters and those who sell counterfeit products.”

An investigative consultant who works with Adidas on issues involving intellectual property violations estimates if the seized merchandise had been genuine it would have retailed for more than $4 million.

HSI officials advise the probe is ongoing and no arrests have yet been made. HSI is receiving substantial assistance with the investigation from U.S. Customs and Border Protection (CBP), including CBP personnel with specialized expertise in identifying counterfeit merchandise who were on site for the execution of Tuesday’s search warrant. The Sacramento Police Department also provided support for the enforcement action.

It is believed the seized merchandise was destined for distribution to retail outlets throughout the United States. Once the items are inventoried, they will be transported to a secure facility for storage while the case is ongoing.

U.S IP-intensive Industry Worth $5 Trillion, 40 Million Jobs to US Economy

By Intellectual Property, International IP, Technology Transactions

The U.S. Commerce Department recently released a comprehensive report, entitled “Intellectual Property and the U.S. Economy: Industries in Focus,” which finds that intellectual property (IP)-intensive industries support at least 40 million jobs and contribute more than $5 trillion dollars to, or 34.8 percent of, U.S. gross domestic product (GDP).

While IP is used in virtually every segment of the U.S. economy, the report identifies the 75 industries that use patent, copyright, or trademark protections most extensively. These “IP-intensive industries” are the source – directly or indirectly – of 40 million jobs. That’s more than a quarter of all the jobs in this country. Some of the most IP-intensive industries include: Computer and peripheral equipment, audio and video equipment manufacturing, newspaper and book publishers, Pharmaceutical and medicines, Semiconductor and other electronic components, and the Medical equipment space.

The report has several important findings, including:

• IP-intensive industries contributed $5.06 trillion to the U.S. economy or 34.8 percent of GDP in 2010.

• 40 million jobs, or 27.7 percent of all jobs, were directly or indirectly attributable to the most IP-intensive industries in 2010.

• Between 2010 and 2011, the economic recovery led to a 1.6 percent increase in direct employment in IP-intensive industries, faster than the 1.0 percent growth in non-IP-intensive industries.

• Merchandise exports of IP-intensive industries totaled $775 billion in 2010, accounting for 60.7 percent of total U.S. merchandise exports.

The full report can be found online at



SOURCE:  USPTO / US Dept of Commerce

Crime of the Century? Software Pirates Steal $100 Million in Revenue from US Companies

By Customs IP Enforcement, Export, Intellectual Property, International IP, Internet / eCommerce

Two Chinese nationals have been charged in a 46-count superseding indictment for a variety of charges including software piracy and illegally exporting technology to China. Additionally, a Maryland man, and former NASA employee, has pleaded guilty to charges of criminal copyright infringement. Both investigations are being conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).

Xiang Li, 35, and Chun Yan Li, 33, of Chengdu, China, have been charged by a federal grand jury. Xiang Li was arrested by HSI agents June 7, 2011, in Saipan, Northern Mariana Islands. Chun Yan Li remains an at large fugitive in Chengdu.

“Counterfeiting and intellectual property theft are seriously undermining U.S. business and innovation — more than $100 million in lost revenue in this one case alone,” said ICE Director John Morton. “Homeland Security Investigations is committed to protecting American industry and U.S. jobs from people like Xiang Li, the leader of this criminal organization who believed he could commit these crimes without being held accountable for his actions. Li thought he was safe from the long arm of U.S. law enforcement, hiding half way around the world in cyberspace anonymity. He was sorely mistaken. Whether in China or cyberspace, this arrest is proof that HSI and our partners at the National Intellectual Property Rights Coordination Center are committed to identifying, infiltrating and disrupting these criminal enterprises wherever they exist.”

“These cases demonstrate our vulnerability to foreign acquisition of American technology,” said U.S. Attorney Charles M. Oberly III, District of Delaware. “I applaud our law enforcement partners for their exceptional dedication in pursuing this major investigation.”

The indictment charges that Xiang Li and Chun Yan Li engaged in a course of criminal conduct relating to the unauthorized access to, reproduction and distribution of copyrighted software between April 2008 and June 2011. This copyrighted software stolen by Xiang Li and Chun Yan Li was produced by more than 150 manufacturers, mostly American.

The charges arise out of the defendants’ operation of a website called Crack 99 that sold pirated copies of software in which the access control mechanisms had been “cracked” or circumvented. An international investigation was initiated by HSI after discovering the Crack 99 website, which advertised the sale of pirated software.

During the course of the conspiracy, more than 150 manufactures lost retail value of the pirated software in excess of $100 million.

In particular, the indictment charges that Xiang Li, Chun Yan Li and others conspired and engaged in software cracking. This is considered the willful circumvention of digital license files and access control software created to prevent unauthorized access to copyrighted software products.

Xiang Li, Chun Yan Li and others also conspired and engaged in the unauthorized international distribution and reproduction of cracked copyrighted computer software over the Internet.

Commercial software is often designed with security features embedded in the software code for the purpose of preventing the unauthorized access or reproduction of the software. Software in which the access controls have been circumvented — and is sold without authorization of the copyright owner — is considered pirated software. The superseding indictment charges that Xiang Li unlawfully distributed this pirated software over the Internet by selling the copyrighted material on the websites:, and

These websites advertised over 2,000 different cracked software products for sale at a fraction of their retail prices. The advertised pirated software, most of which was created and copyrighted by companies based in the United States, is used in numerous applications including: engineering, manufacturing, space exploration, aerospace simulation and design, mathematics, storm water management, explosive simulation and manufacturing plant design. The prices listed for the pirated software on the websites range from $20 to $1,200. The actual retail value of these products ranges from several hundred dollars to over one million dollars.

The indictment charges that between April 2008 and June 2011, Xiang Li distributed over 500 pirated copyrighted works to at least 325 purchasers located in Delaware, at least 27 other states and over 60 foreign countries. More than one-third of these purchases were made by individuals within the United States.

Xiang Li faces up to 20 years in federal prison and an extensive fine — a $500,000 fine or twice the loss from this case — per charge

Former NASA employee pleads guilty

Cosburn Wedderburn, 38, of Windsor Mill, Md., a former NASA employee, has pleaded guilty to conspiracy to commit criminal copyright infringement. This case was investigated by HSI with the assistance of the NASA Office of Inspector General.

According to court documents, Wedderburn was a customer of Xiang Li. He purchased over $1 million of cracked stolen software.

Wedderburn faces up to five years in federal prison and an extensive fine — a $250,000 fine or twice the loss from this case.


I.C.E. Seizes more than $896,000 in proceeds from the online sale of counterfeit sports apparel manufactured in China

By Customs IP Enforcement, Import, Intellectual Property, International IP, Internet / eCommerce, Technology Transactions

The U.S. Immigration and Customs Enforcement (ICE)-led National Intellectual Property Rights Coordination Center (IPR Center) and the Department of Justice recently seized more than $896,000 in proceeds from the distribution of counterfeit sports apparel as the result of an investigation into the sale of counterfeit goods on commercial websites. The investigation also resulted in the seizure of seven domain names engaged in the sale of counterfeit goods. The funds were seized from interbank accounts and three PayPal accounts.

The investigation by ICE’s Homeland Security Investigations (HSI) is a result of Operation In Our Sites, which targets online commercial intellectual property crime, and began in June 2010. Operation In Our Sites targets online retailers for a diverse array of counterfeit goods, including sports equipment, shoes, handbags, athletic apparel, sunglasses and DVD boxed sets. To date, 758 domain names of websites engaged in the sale and distribution of counterfeit goods and illegal copyrighted works have been seized as a result of Operation In Our Sites.

“Counterfeiting and intellectual property theft are seriously undermining U.S. business and innovation,” said ICE Director John Morton. “Consumers are at risk, American industry is harmed and U.S. jobs are lost. As a country, we can ill afford the toll that intellectual property theft exacts on our economy and industries. Operation In Our Sites and the related efforts of the National Intellectual Property Rights Coordination Center are critical to combating intellectual property crime and consumer fraud over the Internet.”

According to court documents, investigation by federal law enforcement officers revealed that several subjects whose domain names had been seized in November 2010 through Operation In Our Sites continued to sell counterfeit goods using new domain names. In particular, the individuals, based in China, sold counterfeit professional and collegiate sports apparel, primarily counterfeit sports jerseys. Law enforcement officers made numerous undercover purchases from the websites associated with the new domain names. After the goods were confirmed to be counterfeit or infringing, seizure warrants for seven domain names used to sell the goods were obtained from a U.S. magistrate judge in U.S. District Court for the District of Columbia.

The individuals conducted sales and processed payments for the counterfeit goods using PayPal accounts and then wired their proceeds to bank accounts held at Chinese banks. Pursuant to warrants issued by a U.S. district judge, law enforcement officers seized $826,883 in proceeds that had been transferred from PayPal accounts to various bank accounts in China. The funds were seized from correspondent, or interbank, accounts held by the Chinese banks in the United States. Pursuant to additional seizure warrants issued by a U.S. magistrate judge, law enforcement officers also seized $69,504 in funds remaining in three PayPal accounts used by the subjects.

“We are working hard to protect American businesses and consumers from the damaging effects of intellectual property crime,” said Assistant Attorney General Lanny A. Breuer. “This investigation disrupted an online counterfeit goods operation, and also struck at the heart of the criminal enterprise by seizing hundreds of thousands of dollars in illegal profits. The Justice Department, together with our partners at ICE, will continue to do all that we can to punish and deter the sale and distribution of counterfeit goods.”

“Those who traffic in counterfeit goods harm the American economy as well as the consumers who purchase the substandard merchandise,” said U.S. Attorney Ronald C. Machen Jr., District of Columbia. “Seizing the domain names of these unscrupulous operators was one big step, and seizing their ill-gotten proceeds should send them another message that these counterfeit sales will not be tolerated.”

The investigation was conducted by the IPR Center and HSI. The case is being prosecuted by Assistant U.S. Attorneys Jonathan Hooks and Diane Lucas, and Special Assistant U.S. Attorney Katharine Wagner of the District of Columbia; Senior Trial Attorney Pamela Hicks of the Asset Forfeiture and Money Laundering Section in the Justice Department’s Criminal Division; and Trial Attorney Thomas Dougherty of the Computer Crime and Intellectual Property Section in the Justice Department’s Criminal Division.

As the largest investigative arm of the Department of Homeland Security, HSI plays a leading role in targeting criminal organizations responsible for producing, smuggling and distributing counterfeit products. HSI focuses not only on keeping counterfeit products off our streets, but also on dismantling the criminal organizations behind such illicit activity.

HSI manages the IPR Center in Washington. The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting and piracy. As a task force, the IPR Center uses the expertise of its 20 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public’s health and safety, the U.S. economy and the war fighters.

To report IP theft or to learn more about the IPR Center, visit


Protecting Intellectual Property (IP) in International Business

By Intellectual Property, International Business, International IP, Technology Transactions

Protecting IP in International Trade

[slideshare id=12331751&doc=protectipatborder-120409212707-phpapp02]

Intellectual property is a valuable asset in the modern business world.  Unfortunately, it is also mercurial and difficult to protect, particularly in international business.  This PPT provides some strategies for protecting IP assets at home and abroad.



Importer of Pirated Software Gets “Clicked” . . . into Handcuffs

By Customs IP Enforcement, Import, International IP, Internet / eCommerce

A California, man was recently arrested by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) special agents for importing more than 1,000 counterfeit Microsoft Office CD-ROMs and selling them to unsuspecting customers over the Internet.

Collier Bennett Harper, 30, was taken into custody late Friday (April 6). He is charged in a four-count federal indictment following the seizure of two shipments of Microsoft Office Professional Edition 2007 software CD-ROMs. Specifically, the indictment charges Harper with two counts of trafficking counterfeit goods and two counts of smuggling. If convicted of all charges, Harper faces a maximum sentence of 60 years in federal prison. The case is being prosecuted by the U.S. Attorney’s Office for the Central District of California.

“With the advent of the Internet, counterfeiting now threatens nearly every consumer in the nation and it also harms the valuable intellectual property of our manufacturers,” said U.S. Attorney André Birotte Jr., Central District of California. “That is why we are working with our partners at HSI to crack down on the illegal sales and distribution of counterfeit products like the software packages seized in this case.”

HSI’s investigation revealed that, as part of the alleged scheme, Harper would contact reputable dealers on eBay and hire them to sell the counterfeit software. According to investigators, the defendant allegedly instructed the sellers how to list the software, describing the product as “new” and authentic. The sellers would provide Harper with the payment and the customers’ addresses, and the defendant would ship the counterfeit software to the unsuspecting buyers. Based on evidence gathered during the probe, investigators believe nearly 1,000 counterfeit software packages were sold.

“The sale of counterfeit goods is not a victimless crime,” said Claude Arnold, special agent in charge for HSI Los Angeles. “These activities undermine our economy, rob Americans of jobs, stifle American innovation and promote crime. Intellectual property theft amounts to economic sabotage, which is why HSI will continue to aggressively pursue product counterfeiters and those who sell counterfeit products.”

Investigators estimate, based upon the manufacturer’s suggested retail price, the seized software would have retailed for approximately $150,000 had it been genuine.