“Risky business” – Riskier than you think

Does your shoe company use a fluoroscopic shoe-fitting machine? Are you in the business of selling artificially-colored ducklings or rabbits? Believe it or not, you may be committing a crime under Wisconsin law.

Didn’t know you were committing a crime? In the words of Aristotle, “nemo censetur ignorare legem,” nobody is thought to be ignorant of the law.

Granted, these examples may be extreme, but what about common business disputes, such as those involving intellectual property? What if you and your business are accused of misappropriating a trade secret? Infringing on a copyright? Or using a counterfeit mark?

Crossing the line into risky business practices may not only spur civil litigation but could also result in costly criminal investigations, or worse yet, criminal charges and penalties. This is particularly true of our intellectual property laws.

Most people associate “white-collar” crime with, for example, embezzlement or perjury. But did you know that trade secret theft is a felony under both state and federal law?

In addition to creating potential civil liability, individuals engaged in theft of trade secrets can be punished under 18 USC §1832 by up to 10 years in federal prison and assessed large fines. Businesses can be fined up to $5 million. Wisconsin law also provides for imprisonment and fines for these violations.

Likewise, the willful infringement of a copyright for financial gain constitutes a federal crime under 17 USC §506. Punishment can include up to a decade in prison.

Violations of trademark law can result in federal indictment under 18 USC §2320 which prohibits trafficking in counterfeit goods and services.

Certain violations could result in up to two decades in prison and huge fines. Businesses can be fined up to $30 million. Wisconsin law also allows for imprisonment and fines for such violations.

In Wisconsin, electronic software and data is protected under §943.70. Commonly referred to as the Wisconsin Computer Crimes Act, the law protects against the destruction or modification of computer data and programs, and also forbids unauthorized access or copying. Felony charges can result, depending upon the violation.

These examples demonstrate the severe consequences that can follow from crossing the line in an effort to gain a competitive edge.

Even if you and your business are ultimately cleared of criminal wrongdoing, the costs and bad publicity associated with any criminal probe can be devastating.

And so, as our “flat-world” economy requires everyone to up their game like never before, we must be mindful not only of potential civil liability for risky business practices, but also of the potential costs and consequences of a criminal investigation.

FOS can help you and your business navigate the choppy waters you may face in your never-ending quest for better and bolder innovation and ideas.