Yesterday in Phoenix federal court, Matthew Purse was sentenced to 21 months in federal prison, 3 years probation and $12,000 in fines and restitution. Purse had pled guilty to conspiracy, mail fraud and criminal copyright infringement when he and his accomplice, Chris Walters (who remains a fugitive), were caught engaing inseveral massive software piracy schemes through various eBay accounts and various websites, such as SoftwareDiner.com and Fivedollarsoftwarehouse.com.

SIIA initially discovered several massive software piracy schemes and began an investigation that eventually led to the indictment and conviction of Purse. SIIA forwarded the results of its investigation to the U.S. Department of Justice and other government agencies, and then worked closely with them to pursue Purse and others involved in the piracy schemes. On February 26, 2009, Purse pled guilty to conspiracy, mail fraud and criminal copyright infringement.  Purse and Walters duped nearly 8,000 unsuspecting consumers out of hundreds of thousands of dollars and cheated software companies such as Adobe, Symantec, Apple, Corel, Intuit and many others out of millions of dollars in revenue.  For more on this check out SIIA's press release.

On December 3rd, Victoria Espinel was confirmed by the Senate as the first U.S. Intellectual Property Enforcement Coordinator (IPEC).  The position, which is often referred to as the IP Czar, was created last year as part of the “Enforcement of Intellectual Property Rights Act of 2008” (Public Law 110-403; S. 3325).  SIIA applauds President Obama for his appointment of Espinel. She brings a deep experience in negotiations with other governments, as well as a strong record of working with all the key agencies that are on the front lines of enforcing IP laws.

By law, the position was to be located in the Executive Office of the President, but it took some time for the Administration to determine exactly where the position would reside.  Ultimately, it was decided that the IPEC would reside in the Office of Management and Budget.  In her new position, Espinel will chair an interagency intellectual property enforcement advisory committee, comprised of representatives from the Office of the U.S. Trade Representative (where Espinel previously worked as an Assistant USTR for Intellectual Property and Innovation, as well as Deputy Assistant USTR for Intellectual Property and as Associate General Counsel at USTR), the Patent and Trademark Office, the Copyright Office, and others, that will develop a Joint Strategic Plan.  The plan was supposed to be submitted to Congress no later than October 13, 2009 (12 months after the law’s enactment), but because Espinel was not confirmed until recently this deadline was delayed. 

Espinel has advised the Senate Judiciary Committee, Senate Finance Committee, House Judiciary Committee and House Ways and Means Committee on intellectual property issues and is a member of the Brain Trust of the Global Innovation Forum.  Most recently, Espinel served on the faculty of George Mason University School of Law.  She has also worked at the law firms of Covington & Burling and Sidley, Austin, Brown & Wood.  She has an LLM from the London School of Economics, a JD from Georgetown University Law School, and a BS in Foreign Service from Georgetown University's School of Foreign Service. 

David Kappos is the newly minted Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office.  As if that title wasn't already a mouthful, it looks like Kappos' title just grew a bit longer.  You can now add "blogger" to his title.  Yes, that's right a few days ago Kappos began a PTO blog.  The blog can be found at:  http://www.uspto.gov/blog/.   I commend the PTO and Kappos, in particular, for providing this new forum, and for jumping right into  his new position and attempting to promptly address many of the issues confront the PTO and other stakeholders in the patent system.

Yesterday, Gregory Fair, a 46-year-old man from Falls Church, Virginia, was sentenced to three years and five months in federal prison and was ordered to pay $743,098 in restitution to Adobe for selling at least $1.4 million in pirated Adobe software on eBay.  This past April Fair pled guilty to charges of criminal copyright infringement and mail fraud for selling the pirated software since 2001.  In addition to restitution and jail time, Fair also had to forfeit a BMW, a Hummer, a Mercedes, a 1969 Pontiac GTO and $144,000 in cash seized from a safe deposit box, all of which were obtained from his sale of the pirated software. 

The case was originally brought to the attention of federal authorities by SIIA-member Adobe in 2007.  Once alerted to the problem, undercover U.S. postal inspectors made several "test" purchases of the pirated software from Fair.  After verifying the illegal nature of the software, they then raided Fair's home where they found a CD burner and label printer that Fair was using to make copies of the illegal software.  The case was prosecuted by federal prosecutors Marc Miller and Glenn Leon.  Miller has been at the forefront of many of these eBay software piracy cases, including the case of Jeremiah Mondello, who comtinues to serve his four year prison term for selling pirated software on eBay.

About ten days prior to Fair's sentencing, another Gregory, Gregory Bambo, a 47 year-old-man from Richmond, California was also sentenced to prison for engaging in software piracy.  Bambo pled guilty to selling pirated software online during a three-year period beginning in 2004 and was sentenced to prison for one year and one day.  During the three years he engaged in the piracy, Bambo sold at least 1,400 cracked software programs having a combined retail value of just over a half million dollars. 

As anticipated, on September 25th, the President nominated Victoria Espinel to the position of Intellectual Property Enforcement Coordinator (IPEC).  The position, which is often referred to as the IP Czar, was created last year as part of the “Enforcement of Intellectual Property Rights Act of 2008” (Public Law 110-403; S. 3325).  By law, the position was to be located in the Executive Office of the President, but it took some time for the Administration to determine exactly where the position would be.  Ultimately, it was decided that the IPEC would reside in the Office of Management and Budget.  Once she is confirmed (which appears likely), Espinel will chair an interagency intellectual property enforcement advisory committee, comprised of representatives from the Office of the U.S. Trade Representative (where Espinel previously worked as an Assistant USTR for Intellectual Property and Innovation, as well as Deputy Assistant USTR for Intellectual Property and Associate General Counsel at USTR), the Patent and Trademark Office, the Copyright Office, and other agnecies, that will develop a Joint Strategic Plan.  The plan is supposed to be submitted Congress no later than October 13, 2009 (12 months after the law’s enactment), but with Espinel not yet confirmed this deadline is certain to be pushed back. 

Espinel brings a deep experience in negotiations with other governments, as well as a strong record of working with all the key agencies that are on the front lines of enforcing IP laws.  She is the founder and President of Bridging the Innovation Divide, a not-for-profit foundation focused on addressing the “innovation divide” and empowering all Americans to obtain the full benefit of their creativity and ingenuity.  She has advised the Senate Judiciary Committee, Senate Finance Committee, House Judiciary Committee and House Ways and Means Committee on intellectual property issues and is a member of the Brain Trust of the Global Innovation Forum.  Most recently, Espinel served on the faculty of George Mason University School of Law.  She has also worked at the law firms of Covington & Burling and Sidley, Austin, Brown & Wood.  She has an LLM from the London School of Economics, a JD from Georgetown University Law School, and a BS in Foreign Service from Georgetown University's School of Foreign Service.

SIIA’s new music video “Don’t Copy That 2,” the sequel to its 1992 classic “Don’t Copy That Floppy,” has had a dramatic, worldwide impact on anti-piracy awareness.  Since its September 9th release, SIIA’s “Don’t Copy That 2” music video has been viewed more than 255,000 times on YouTube, where more than a thousand people have posted comments about the video and its message, “It’s not just a copy. It’s a crime.”  The video has also been a favorite of bloggers and Twitter users around the world, who have made it the subject of hundreds of tweets and postings over the last two weeks.

People either love it or hate it, but either way Don’t Copy that 2 is having a powerful impact.  And that is exactly our goal – to deliver our anti-piracy message to audiences around the world. The criminal consequences of piracy are significant, but we can’t expect to deliver that message simply through reports, press releases and run-of-the-mill educational materials.  Don’t Copy that 2 is reaching young and engaged audiences that need to understand that pirating copyrighted works is a serious crime.”

People have called it ‘hysterical,’ ‘genius,’ ‘contemporary drama at its finest,’ and my favorite – ‘the worst anti-piracy ad ever.’  Whatever you want to say about it, one thing is clear:  ‘Don’t Copy That 2’ has gained the attention of both those who obey – and those who violate – copyright laws.  The video is fun to watch, and perhaps even more fun to critique, but it has unquestionably been a successful means for delivering a serious message.

Many more stories and blogs were published about the new Don't Copy That 2 video. Here are a few more:

• Don’t Copy That Floppy Dusts Itself Off for the 00’s—Wall Street Journal Digits Blog
• Don't Copy That Floppy 2 released; piracy sure to be greatly impacted—Examiner
• Does ‘Don’t Copy That Floppy 2′ have Rage screens in it?—The IT Chronicle
• The Return of Don’t Copy That Floppy--GameSpy
• “Don’t Copy That Floppy” Returns! - Technologizer
• 'Don't Copy That Floppy' Sequel Warns of Piracy; Includes id Software Cameo, Klingons—ShackNews
• Dept of Awesome: Don't copy that 2: released today--ZGeek
• The Triumphant Return of Pirate Hatin’ Rapper DP—Copyright Alliance
• Don’t Copy That 2—Video Game 2 Play
• Tell yo momma: 'It's not just a copy, it's a crime!'—Noob Galore
• Don’t Copy That 2—Artistically Chill
• The Ruler's Back: DP Returns For Don't Copy That Floppy Sequel—Game Set Watch
• Don’t Copy That 2--VideoSift
• Antipiracy PSA to leave Pirate Bay running scared
• The Web Hostess Live Q&A-The Washington Post

Today, SIIA launched its new anti-piracy video - “Don’t Copy That 2”. The video is a sequel to the 1992 “Don’t Copy That Floppy”video, which was a huge success in schools throughout the country and eventually became a cult phenomenon on YouTube. You can view the video on the Don’t Copy That Website or search for it on YouTube. (You can also download a copy of the video in podcast form on iTunes. Just search for “Don’t Copy That Floppy 2”.)

The video is intended to be fun to watch while also conveying the message that pirating software and content carries stiff penalties and can ruin your life. We hope “Don’t Copy That 2” will prevent piracy by helping people make better choices when it comes to downloading or purchasing copyrighted works. The video even concludes with an appearance from convicted software pirate Jeremiah Mondello, who issues a warning about the consequences of software piracy from a federal prison in Oregon.

An extended and modified educational version of “Don’t Copy That 2”  will be released for distribution to classrooms early next year.

See what others are saying about the video:

Wall Street Journal -- http://blogs.wsj.com/digits/2009/09/08/dont-copy-that-floppy-dusts-itself-off-for-the-00s/?blog_id=100&post_id=6373

CNNmoney -- http://money.cnn.com/2009/09/09/news/piracy_floppy/?postversion=2009090914

Technologizer - http://technologizer.com/

http://www.escapistmagazine.com/news/view/94574-Dont-Copy-That-2-Hits-the-Tubes

http://www.examiner.com/x-20129-Denver-Games-Gadgets--Technology-Examiner

6IW.com - http://www.6iw.com/

Popular Fidelity - http://www.popfi.com/

Overclock.net - Overclocking.net - http://www.overclock.net/

UFies.org - http://ufies.org/

CodyDelzer.com BLOG - http://www.codydelzer.com/

The Games News - http://thegames-news.com/

Last Friday, August 28th, a jury in the Northern District of California, awarded French luxury goods maker, Louis Vuitton Malletier (part of LVMH), $32.4 million in statutory damages for its claims of contributory copyright and trademark infringement.   The amount awarded -- $31.5 million for contributory trademark infringement and $900,000 for contributory copyright infringement -- was certainly newsworthy standing alone.  But really what pushes this case to the top of the IP headlines is that the defendants held liable here -- Akanoc Solutions and Managed Solutions Group, Inc -- are Internet Service Providers (ISP) (and their primary -- Stephen Chen). 

Many a case has been brought against an ISP by a plaintiff trying to hold that ISP liable for the acts of its users.  I could be wrong, but I believe this is the first case where an ISP was held liable for the acts of its users.  For one reason or another these other ISPs and hosting sites have been able to escape liability.  But that was not to be the case here.  Through internal emails, Plaintiff LV was able to demostrate that the ISPs knew of the counterfieting taking place on the sites they hosted but took no action.  The jury agreed with LV that the ISP defendants should be liable because they knew of the large amounts of counterfeiting of LVMH product taking place on their sites and failed to take proper action to stop it.

The case began with a complaint filed back in 2007 in which LV claimed that "most if not all" of the sites hosted by Akanoc were trafficking in counterfeit goods.  About two years later, the jury awarded almost all of $1 million in damages requested for each of LV's fifteen trademark infringement claims against each of the three defendants. The copyright award was $150,000 for each of two copyrights against three defendants for a total of $900,000.

Although motions are still pending in the case, the amount of damages ordered by the jury should send a strong signal that ISPs must actively enforce their terms of use and effectively disable or remove content the subject of abuse notices from rights owners.  This case proives that an ISP that knows of an infringement and fails to take quick and effectuve action to remove the infringement from its site runs the risk of incurring a large damage award and serious damage to its business reputation as a result.

At this point the identity of the IP Czar seems to be a fairly poorly kept secret.  The identity of the candidate for the IP Czar position – Victoria Espinel, a former assistant trade rep for IP at USTR, apparently has been known for a few months.  But yet she has yet to be announced as the candidate. 

Why is that?  What’s the hold up?

Apparently, this being a new position, the Obama Administration is not sure where to house Ms. Espinel.  Since the IP Czar – which officially is referred to by the less-glamorous title of IP Enforcement Coordinator – is a position that must be confirmed by the Senate, the position apparently cannot reside in an agency or office headed by someone who does not need to be Senate-confirmed.  That leaves some limited options, including: 

• A stand-alone office.  While this is probably the most desirable in terms of making the position as prominent within the Administration as IP owners would like, it remains uphill battle.
• Office of Science and Technology Policy (OSTP).  OSTP is known for espousing views that are less then favorable to the IP community.  Placing the IP Czar within OSTP would make no more sense than coupling Oscar and Felix (or for a more modern reference, coupling Harry Potter with Voldemort).
• Office of Management and Budget (OMB).  If a stand-alone office is not in the cards than this may be the best alternative.  While OMB does not usually establish policy, it does coordinate with numerous agencies on various projects, which is certainly within the purview of the IP czar.

A decision on this matter is likely to come within the next few weeks.  So perhaps by the time Labor Day roles around we will have a better idea of where the IP Czar will be laboring.