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Cops to crack down on IP crime

James Nurton

A new police IP crime unit launches in the UK this week. Counterfeiters should look out, but there are also lessons for rights owners

The City of London is not necessarily where you would expect to find “IP criminals” unless, that is, counterfeiters and pirates are lurking in the global banks, insurance companies and law firms that are the main occupiers of London’s financial centre. From this Friday, though, the City of London Police will be home to the country’s first IP crime unit.

The reason is that the City cops are the national lead force for economic crime - such as insurance fraud, corruption and credit card fraud - and they have just been given £2.5 million from the UK IP Office. This will fund a team of 19 people in the new online IP crime unit, who will deal with serious and organised crimes affecting digital and physical goods (except for pharmaceuticals which are handled by the MHRA).

At a briefing last week ahead of the launch, Superintendent Bob Wishart acknowledged the magnitude of the task, noting that the bad guys are often one or two steps ahead of the enforcers. It sounds like the police will go after the organised criminals, payment providers and advertisers rather than stalking university corridors looking for some easy collars, which must be a good thing. Awareness campaigns and education also form part of their remit. And they will cooperate with overseas agencies such as the US IPR Center and global bodies such as Interpol.

Their most effective weapon may be the 2002 Proceeds of Crime Act (POCA), probably the most draconian IP-related legislation you’ve never heard of. Schedule 2 includes crimes under the Copyright, Designs and Patents Act and the Trade Marks Act among the list of “lifestyle offences” that can trigger actions under POCA, which means that where there is evidence of financial benefit criminals can be sentenced to up to 14 years in prison.

Welcome as this initiative is, we have three main concerns about whether it will be successful.

The first is funding. The money from the IPO covers just two years. Beyond that, nothing is certain. In other areas, there has been private sector money – the credit card fraud unit for example is supported by banks and payment providers. Would industry stump up for the IP crime unit and if so how would funding be organised? If not, would the IPO extend its funding indefinitely even if that was not popular among some users (there’s little obvious benefit for patent applicants)?

Second, there is the paradox that the people they are really going after are also going to be best able to fight any police action. Smart defendants will hire good lawyers, play games with jurisdiction and delay legal proceedings. Just look at Kim Doctom (left), accused more than 18 months ago of running a massive copyright piracy operation in New Zealand. The case against him seems to be going nowhere; he has won some key legal and PR battles; and is happily working on new business ventures.

Third, as Dotcom and others have shown, defendants will also try to capitalise on their victim status, particularly where criminal sanctions and extradition are possibilities. That raises the risk of public opinion swinging behind the counterfeiters and against IP owners and enforcement agencies.

Both the police and rights owners need to tread carefully when bringing criminal, rather than civil, actions. Otherwise any benefits could we be outweighed by long-term damage.


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