Chasing Pirates: DOJ Sinks "Sparks Group" in International Copyright Infringement Action
On August 26, 2020, the Acting United States Attorney for the SDNY announced a major new enforcement action in the ongoing international fight against copyright piracy. The government unsealed indictments charging three alleged members of a sophisticated international piracy ring known as the "Sparks Group" with conspiring to illegally reproduce and distribute large numbers of copyrighted movies and television shows on the Internet. The indictments allege that the Sparks Group copied and disseminated hundreds of movies and shows before their retail release date, "including nearly every movie released by major production studios" from 2011 through January 2020, causing tens of millions of dollars in losses to the studios. Agents arrested one defendant in Cyprus and another in Kansas, while the third remains at large.
Umar Ahmad a/k/a "Artist," George Bridi, and Jonatan Correa a/k/a "Raid" are each charged with copyright infringement conspiracy (which carries a maximum penalty of five years in prison), and Bridi also is charged with wire fraud conspiracy (which carries a maximum penalty of 20 years in prison) and conspiracy to transport stolen property interstate (which carries a maximum penalty of five years in prison). Prosecutors from the SDNY's Violent and Organized Crime Unit are further seeking forfeiture of all proceeds traceable to the allegedly infringing activities. If the defendants are convicted, the production studios would be entitled to restitution under the PRO-IP Act of 2008.
As United States Postal Inspection Service Inspector-in-Charge Philip R. Bartlett explained, "Copyright criminals have come a long way from bootlegging movies in local theaters and selling inferior quality videos and DVD's on the streets of New York City for $5.00." According to the indictments, between 2011 and January 2020, the Sparks Group conspired to "fraudulently obtain DVDs and Blu-Ray discs for copyrighted movies and television shows prior to their retail release date, compromise the copyright protections on the discs, reproduce and upload the copyrighted content to servers controlled by the Sparks Group, and disseminate the copyrighted content on the Internet for public consumption before the DVDs and Blu-Ray discs were made available for sale by retailers to the public." To demonstrate that their pirated reproductions originated from authentic sources, the Sparks Group allegedly uploaded photographs of the DVDs and Blu-Ray discs in their original packaging.
The government further took offline dozens of servers that the Sparks Group allegedly controlled and used to illegally store and disseminate pirated copyrighted content around the world. The operation drew on the assistance of law enforcement authorities in 18 countries and the support of Eurojust and Europol.
This dramatic, coordinated, cross-border enforcement action serves as a vivid reminder of how DOJ continues to prioritize investigating and prosecuting large-scale commercial counterfeiting and online piracy, and is quite adept at working hand-in-hand with a wide range law enforcement partners across the globe.
While we do not yet know whether any of the alleged piracy victims—i.e., the production studios—played a part in identifying and/or initially investigating the Sparks Group, we imagine that it is highly likely that one or more did just that. An IP owner who decides to seek the assistance of law enforcement to help fight a counterfeiter needs to know how to conduct the initial investigation in a way that ultimately will help the US Attorney's Office. When approaching law enforcement with a counterfeiting case, an IP owner, in addition to emphasizing how the particular matter falls within the US Attorney's Office's or DOJ's stated priorities, should be prepared to explain the strength of the case and the quality of the investigation conducted to date, as well as address the government's likely concerns about the presence of any bias, the availability of corroboration, the proper preservation of documents and other evidence, and the segregation of potential witnesses. Many of these concerns may be diminished when the matter has been preliminarily investigated and presented to the government by a team consisting of IP specialists and experienced former prosecutors familiar with the rules of criminal procedure and evidence.
If you need help evaluating whether to seek the assistance of law enforcement in combating IP theft, or packaging a matter in a way that will get the government's attention, these authors and Arnold & Porter have significant experience helping clients navigate those issues.
© Arnold & Porter Kaye Scholer LLP 2020 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.