RICO mobster law may target pirates

Software pirates may soon get the same treatment as mobsters under a bill that would add their crimes to the list of offenses punishable through a federal anti-racketeering law known commonly as the RICO Act.

The House of Representatives passed the bill this week in an attempt to add some teeth to existing laws intended to protect trademarks and other intellectual property rights. Sponsored by Representative Bob Goodlatte (R-Virginia) and known as the Anticounterfeiting Consumer Protection Act, the bill was approved by the House Tuesday on a voice vote.

A similar version has already passed the Senate, and the two bills have now been sent to a conference committee to be reconciled. No date has been set for the House-Senate conference, according to Goodlatte's office, but President Clinton has indicated that he would sign such legislation.

By bringing counterfeiting under the auspices of the Racketeer Influenced and Corrupt Organizations (RICO) Act--originally passed to fight organized crime--a wide range of law enforcement officials would have authority to investigate trademark holders' claims that someone is illegally copying their intellectual property.

Under the law, plaintiffs would be able to seek statutory damages, or fixed dollar penalties, because actual loss due to counterfeiting is difficult to determine. The legislation also amends current law to permit seizure of any counterfeit goods or means of transportation used to traffic counterfeit items.

"We're trying to take away the tools of the trade," said Elizabeth Frazee, legislative director and counsel in Goodlatte's office.

The bill would protect all trademarked goods, not just software, but it is expected to help software vendors by fight piracy in particular, a crime that cost the industry $1.05 billion in 1994, according to the Software Publishers Association. The SPA said the cost of all trademarked counterfeiting is $200 billion annually.

Organized crime is starting to add counterfeiting rings to their activities, but no cases have been prosecuted yet concerning software specifically, Frazee said. One goal of the legislation that would benefit software vendors, however, is to crack down on counterfeit packaging production.

Although current law outlaws copying of software, it doesn't properly address the manufacture of fake labels and boxes, according to SPA counsel Mark Traphagen. By letting law enforcement go after the producers of the packaging by themselves, it will make it easier to close down piracy rings, Traphagen explained.