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Intellectual Property: ICE-ing Up

By 3 December 2010 3 Comments

U.S. Immigration and Customs Enforcement (ICE) last week announced that it had taken action against 82 websites “engaged in the illegal sale and distribution of counterfeit goods and copyrighted works.” “Action” means that ICE shut them down by getting a judicial order seizing the domain names under 18 U.S.C. Sec. 2323 and associated laws, which provide for forfeiture of property used in illegal counterfeiting or copyright infringement activities.

The action was not novel, as it was a continuation of the In Our Sites program announced last June — “In the first action carried out as part of the initiative, authorities executed seizure warrants against nine domain names of Web sites that were offering first-run movies, often within hours of their theatrical release. Seven of those sites were targeted for seizure by the SDNY. Agents from ICE’s Homeland Security Investigations (HSI) also seized assets from 15 bank, Paypal, investment and advertising accounts, and executed four residential search warrants in several states.”

Nor does ICE generally hide the light of its enforcement activities under a bushel. Because it wants both to deter potential offenders and to justify its budget to Congress and to its supporting constituencies, such as the content industry and business generally, ICE issues a stream of press releases on its activities, including those directed at protecting intellectual property rights. In FY2009, “ ICE launched 1,479 IPR investigations that resulted in 414 arrests, 164 indictments and 203 convictions, as well as the seizure of more than $62 million in counterfeit merchandise.” Nor are we talking about just protecting Hollywood:  “counterfeit pharmaceuticals and critical technology components, such as computer chips for defense systems and airplane equipment, were among the top seized commodities.”

However, the latest announcement triggered an immediate and violent allergic reaction on the blogosphere, including left, right, and points in between (see, e.g., ; Mike Masnick on TechDirt;  Larry Downes on Technology Liberation Front; Paul Rahe on Ricochet; AllahPundit on Hot Air; David Post on Volokh Conspiracy), probably because recent publicity over S.3804, Combating Online Infringement and Counterfeits Act, had focused attention on the topic.

The most significant disquiet is over the importation of forfeiture law into this area.

Well, yes.  Forfeiture law generally is a snake pit, characterized by insufficient notice, abuse (local law enforcement uses it as a source of supplementary funding), arbitrary action, lack of adequate mechanisms for error correction, and gross disproportion between offense and punishment.  Quite a few people have been complaining about this for some time (see here; here; here; or see, via Walter Olson’s Overlawyered: “The U.S. Attorneys Office in San Diego has recently criminally prosecuted a French bakery for allegedly engaging in an intentional pattern and practice of hiring unauthorized workers. As part of the indictment, the Government is seeking hefty monetary fines, prison time for the owner and management, and asset forfeiture of the entire business to the Government”)

However, ICE seems to have better quality control over its activities than other law enforcement agencies (though I will certainly take correction on this point from those with superior knowledge), and so far the complaints do not include charges that the Feds got the wrong guys. The critiques were all of the slippery slope, about what might happen in the future.

So by all means, let us revamp forfeiture law. And while we are at it, we need to look at reform of other areas of legal abuse, such as vague obstruction of justice charges, torture by plea bargaining, and financial ruin via legal fees. But there is no basis for a claim that the Internet deserves the modern equivalent of benefit of clergy, which exempts it from the rules applicable to others.

On the substance, counterfeit goods and systematic copyright infringement are serious issues, and shutting down web domains that are devoted to them (not that sometimes transgress – we are talking about sites that are in the business) is a reasonable reaction. But I would certainly endorse a proposal for quick review and for hefty compensation for any errors – as long as the same rules apply to the non-cyber world.

Other criticisms of the ICE action have less force. One complaint is, why is ICE, which is part of Homeland Security, enforcing IP laws? Reasonable question, but the problems of infringement and counterfeiting have a huge international component, so no matter where the National Intellectual Property Right Coordination Center goes, the fit will be imperfect.

Besides, an elementary principle of government organization is that law enforcement agencies should be divided so that no one cabinet department has total control of the civilian armed force. ICE is the second biggest enforcement agency, so it is good to keep it out of DOJ. Those who favor organizational tidiness should recall  Judge Kozinski’s comment on the Right to Bear Arms:  “The Second Amendment is a doomsday provision, one designed for those exceptionally rare circumstances where all other rights have failed . . . . However improbable these contingencies may seem today, facing them unprepared is a mistake a free people get to make only once.”

The argument that ICE’s actions are an unconstitutional prior restraint on free speech is unpersuasive. Web domains are taken down for contributory infringement, and newspapers can be told not to publish infringing material. False advertising can be forbidden. There are many illicit activities that involve speech that can nonetheless be prohibited.  This line of attack is not new, and it usually falls to the “fire in a crowded theater” counterargument.

Finally, of course, some of the criticism of the ICE action comes from people who do not believe in intellectual property or its protection, and who are eager use any stick to beat the dog. This is a different debate — I have a piece on it coming out soon in The American, so . . . continued next week.