Are Federal Criminal Sanctions for IP Infringement Unconstitutional? (Part 1)

One of the main themes in my scholarship has been the use of criminal sanctions for IP infringement. I first examined in an article entitled “The Puzzle of Criminal Sanctions for Intellectual Property Infringement” why we have criminal sanctions in copyright and trademarks but not patents and discussed the utilitarian (meaning mainly economic) as well as public choice factors that have led to the current state of affairs in the U.S. and elsewhere. More recently, I wrote a paper entitled “The High Cost of Low Sanctions” in which I analyzed why low sanctions for otherwise bad laws and proposed bills can actually be worse than high sanctions. An area of focus of that discussion was criminal sanctions in IP as well.

I recently began questioning, however, whether there is a more general problem with such sanctions, which is their constitutionality. I would like to spend my remaining time on Concurring Opinions introducing some of the potential issues to consider in this context. In the first part of his post, I would want to introduce some of the background to the Constitution’s and Supreme Court’s treatments of federal criminal sanctions.

The Constitution only mentions criminal punishments in four places, and none of these refer to IP. Criminal sanctions for IP infringement, as for many other offenses, have generally been justified as constitutional due to their role in enforcing other enumerated powers or as necessary and proper in the pursuit of congressional regulation under the Commerce Clause. While punishing crimes is an important function of government and thirty-four of the fifty-five delegates at the Constitutional Convention were either lawyers or had studied law, criminal law was not a major source of discussion. The Federalist Papers provide little discussion of criminal law and none that directly relate to IP.

Shortly after the Constitution was enacted, Congress passed the Crimes Act of 1790. The law sought to punish a number of different offenses, including not only ones listed in the Constitution but also others such as bribery of federal judges.

In the Trade-Mark Cases, the Court had to decide whether criminal sanctions for trademark counterfeiting passed constitutional muster. The Supreme Court held that while Congress clearly had the authority to regulate commerce with foreign nations, between citizens of different states, or between U.S. citizens and foreign ones, intrastate commerce is beyond the control of Congress. The Court explained that Congress had failed to include–when it passed its original trademark legislation on registration and civil remedies in 1870–a requirement that the commerce regulated fall into the permissible categories; thus, the criminal offenses passed in 1876 and predicated on the 1870 law were unconstitutional just like the initial legislation.

The Supreme Court was more generous toward congressional authority when it came to upholding provisions that criminalized the use of postal channels in the service of fraud, lotteries, or obscenity, and other activities. Indeed, the late-nineteenth and early-twentieth centuries saw an expansion in a variety of federal regulatory crimes as citizens became more mobile and it became more difficult for individual states to contain offenses on their own.

In the next part, I will continue my discussion of Supreme Court jurisprudence on the topic of the constitutionality of federal criminal sanctions.

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