ILNews

Copyright infringement spurs knife fight in Warrick County

Back to TopCommentsE-mailPrintBookmark and Share

A copyright infringement dispute between two out-of-state companies has spurred criminal charges in Warrick County, a place where neither business has facilities, employees or quite possibly ever visited before these charges were brought.

Margaret and Ben Lu, founders of Wuu Jau Co. Inc., in Edmond, Okla., have each been charged with three counts of forgery, one count of theft and three counts of counterfeiting by the Warrick County prosecutor for allegedly infringing on the copyrights of Master Cutlery Inc., based in New Jersey.

knives-1col.jpg Ben and Margaret Lu of Oklahoma face theft and forgery charges in Indiana for alleged copyright infringement. (Submitted photo)

The two companies import and distribute hunting and survival knives from manufacturers based in China. According to court documents, the Lus were arrested after they sold and shipped knives allegedly copyrighted by Master Cutlery to an entity in Warrick County.

Since Margaret and Ben Lu were arrested, Wuu Jau has filed a copyright infringement claim against Master Cutlery in the U.S. District Court for the Central District of California. A sister company of Wuu Jau, Neptune Trading Co., is located in the coastal state.

Master Cutlery then filed a counterclaim in federal court against Neptune and Wuu Jau.

Why Indiana is involved in this case baffles Evansville attorney Mark Foster. A lawyer at Foster O’Daniel Hambidge & Lynch LLP, Foster is part of the criminal defense team representing the Lus.

“I still don’t know why they took it,” Foster said of the Warrick County Prosecutor’s Office. “It doesn’t make a whole lot of sense to me. I’m sure (Chief Deputy Prosecutor Daniel Miller) had his reasons, but for Warrick County, Ind., to stick its nose in a fight between a New Jersey company and an Oklahoma company, I don’t know.”

Miller did not return a call seeking comment.

One possible connection to Indiana is the intellectual property consulting firm Continental Enterprises in Indianapolis. Court documents identify Continental as investigating Wuu Jau on behalf of Master Cutlery and organizing the purchases of the disputed knives.

The shipments brought the knives to Warrick County and established the connection to Indiana. Court filings state, Continental presented the evidence to Warrick County which filed the seven felony counts.

Through its vice president and intellectual property counsel Jeremiah Pastrick, Continental did not make any statements specifically about the Wuu Jau case, saying it did not want to comment while the matter is still pending.

Setting precedent

A trademark fight involving toy guns that reached the Indiana Supreme Court in 2012 involved Continental Enterprises and has similarities to the copyright case in Warrick County.

Working on behalf of firearms manufacturer Heckler & Koch Inc., Continental initiated an investigation of Houston-based toy gun importer Generation Guns that included having orders shipped to Indiana. Subsequently, the Huntington County Prosecutor’s Office charged Yu-Ting Lin, who imported the guns, and her business associate An-Hung Yao with three counts of counterfeiting, three counts of theft, and one count of corrupt business influence based on the similarities between one of the toy guns and H&K’s MP5 submachine gun.

The first time Yao and Lin set foot in Indiana was when they were brought here in a state van to face criminal charges, said Jeremy Gayed, partner at Barrett & McNagny LLP in Fort Wayne, who was one of Lin’s attorneys.

Huntington County Prosecutor Amy Richison said she decided to prosecute because of a series of police shootings in neighboring Allen County. At least one of those involved law enforcement mistaking an airsoft gun from Generation Guns for an actual gun.

Indiana State Police shared with Richison the results of its investigation which contained information gathered by Continental Enterprises. Richison said she wanted to prevent the tragedy of someone in her community being killed accidentally by a police officer.

Richison acknowledged she used Continental Enterprises as a resource to understand the intricacies of intellectual property law. She maintained it was no different than the toxicologists, scientists and other experts she relies on in other cases and emphasized the Indianapolis firm was not driving the prosecution.

“I make my own choices and decisions,” Richison said. “I don’t have people influencing me one way or another.”

The defendants’ motion to dismiss was appealed all the way to the Indiana Supreme Court. In An-Hung Yao and Yu-Ting Lin v. State of Indiana, 35S02-1112-CR-704, the court rejected the defense team’s arguments that Indiana lacked jurisdiction. The justices held that counterfeiters can be held criminally liable even if they do not affix an intellectual property owner’s name or logo to a product.

On its website, Continental calls the Yao decision a “resounding victory.” Pastrick said the justices understood the nuances emerging in intellectual property as counterfeiters move away from blatantly copying a product.

“It signifies Indiana’s willingness to protect intellectual property in innovative and creative ways that keep up with what’s going on in the marketplace,” Pastrick said.

Gayed said that significant civil remedies already exist in the federal code to address infringement issues. Continental Enterprises has found a “really creative way” to help stop whatever is happening in the marketplace that their clients do not like. It has found an avenue for persuading county prosecutors to file charges on behalf of their private clients.

“The civil approach, hiring an attorney, filing a lawsuit is definitely one approach,” Pastrick said, “but I don’t think it’s the only approach, and it seems the Supreme Court agreed.”

Motion to dismiss

Like the defendants in the Yao case, Margaret and Ben Lu’s attorneys have filed a motion to dismiss partly on the grounds that the state courts lack jurisdiction. The defense argues the Lu case is distinct because it involves copyright – not trademark as in Yao – and Indiana’s authority is preempted by the federal Copyright Act.

“My take on this case is that the state of Indiana is overreaching to charge someone with an act that the state of Indiana doesn’t have the right to police,” said Benjamin Ashurov, IP attorney at KB-Ash Law Group in California. He is a member of the defense team who is providing expertise on the intellectual property aspect.

The defense can offer no state court opinion nor 7th Circuit Court of Appeals decision on point, but they reference a Florida case, Crow v. Wainwright, 720 F. 2d 1224, 1225 (11th Cir. 1983). There, the court threw out a conviction for selling “bootleg” eight-track tapes because the Copyright Act preempted Florida’s regulation of the defendant’s actions.

Attorneys for Yao made the jurisdictional argument, but the Supreme Court rejected it.

If the trial court denies the motion to dismiss, Ashurov said the defense will ask the federal court to issue an injunction to stop the state criminal proceeding while the civil copyright claim is being considered.

Margaret and Ben Lu maintain their innocence and their daughter, Jennifer, has launched an intense crusade to get the charges dropped. She has written directly to the prosecutor and has drafted a letter to Gov. Mike Pence.

However, it may be too late.

Tyler Helmond, an attorney at Voyles Zahn & Paul in Indianapolis who worked on the Yao defense, pointed out that a person charged with a crime not only has to incur the expense of hiring a lawyer but, unlike a civil suit, is faced with losing their reputation and liberty.

“It creates a scenario where the first company that is able to convince a prosecutor to charge a crime has really won,” he said. •

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. I have been on this program while on parole from 2011-2013. No person should be forced mentally to share private details of their personal life with total strangers. Also giving permission for a mental therapist to report to your parole agent that your not participating in group therapy because you don't have the financial mean to be in the group therapy. I was personally singled out and sent back three times for not having money and also sent back within the six month when you aren't to be sent according to state law. I will work to het this INSOMM's removed from this state. I also had twelve or thirteen parole agents with a fifteen month period. Thanks for your time.

  2. Our nation produces very few jurists of the caliber of Justice DOUGLAS and his peers these days. Here is that great civil libertarian, who recognized government as both a blessing and, when corrupted by ideological interests, a curse: "Once the investigator has only the conscience of government as a guide, the conscience can become ‘ravenous,’ as Cromwell, bent on destroying Thomas More, said in Bolt, A Man For All Seasons (1960), p. 120. The First Amendment mirrors many episodes where men, harried and harassed by government, sought refuge in their conscience, as these lines of Thomas More show: ‘MORE: And when we stand before God, and you are sent to Paradise for doing according to your conscience, *575 and I am damned for not doing according to mine, will you come with me, for fellowship? ‘CRANMER: So those of us whose names are there are damned, Sir Thomas? ‘MORE: I don't know, Your Grace. I have no window to look into another man's conscience. I condemn no one. ‘CRANMER: Then the matter is capable of question? ‘MORE: Certainly. ‘CRANMER: But that you owe obedience to your King is not capable of question. So weigh a doubt against a certainty—and sign. ‘MORE: Some men think the Earth is round, others think it flat; it is a matter capable of question. But if it is flat, will the King's command make it round? And if it is round, will the King's command flatten it? No, I will not sign.’ Id., pp. 132—133. DOUGLAS THEN WROTE: Where government is the Big Brother,11 privacy gives way to surveillance. **909 But our commitment is otherwise. *576 By the First Amendment we have staked our security on freedom to promote a multiplicity of ideas, to associate at will with kindred spirits, and to defy governmental intrusion into these precincts" Gibson v. Florida Legislative Investigation Comm., 372 U.S. 539, 574-76, 83 S. Ct. 889, 908-09, 9 L. Ed. 2d 929 (1963) Mr. Justice DOUGLAS, concurring. I write: Happy Memorial Day to all -- God please bless our fallen who lived and died to preserve constitutional governance in our wonderful series of Republics. And God open the eyes of those government officials who denounce the constitutions of these Republics by arbitrary actions arising out capricious motives.

  3. From back in the day before secularism got a stranglehold on Hoosier jurists comes this great excerpt via Indiana federal court judge Allan Sharp, dedicated to those many Indiana government attorneys (with whom I have dealt) who count the law as a mere tool, an optional tool that is not to be used when political correctness compels a more acceptable result than merely following the path that the law directs: ALLEN SHARP, District Judge. I. In a scene following a visit by Henry VIII to the home of Sir Thomas More, playwriter Robert Bolt puts the following words into the mouths of his characters: Margaret: Father, that man's bad. MORE: There is no law against that. ROPER: There is! God's law! MORE: Then God can arrest him. ROPER: Sophistication upon sophistication! MORE: No, sheer simplicity. The law, Roper, the law. I know what's legal not what's right. And I'll stick to what's legal. ROPER: Then you set man's law above God's! MORE: No, far below; but let me draw your attention to a fact I'm not God. The currents and eddies of right and wrong, which you find such plain sailing, I can't navigate. I'm no voyager. But in the thickets of law, oh, there I'm a forester. I doubt if there's a man alive who could follow me there, thank God... ALICE: (Exasperated, pointing after Rich) While you talk, he's gone! MORE: And go he should, if he was the Devil himself, until he broke the law! ROPER: So now you'd give the Devil benefit of law! MORE: Yes. What would you do? Cut a great road through the law to get after the Devil? ROPER: I'd cut down every law in England to do that! MORE: (Roused and excited) Oh? (Advances on Roper) And when the last law was down, and the Devil turned round on you where would you hide, Roper, the laws being flat? (He leaves *1257 him) This country's planted thick with laws from coast to coast man's laws, not God's and if you cut them down and you're just the man to do it d'you really think you would stand upright in the winds that would blow then? (Quietly) Yes, I'd give the Devil benefit of law, for my own safety's sake. ROPER: I have long suspected this; this is the golden calf; the law's your god. MORE: (Wearily) Oh, Roper, you're a fool, God's my god... (Rather bitterly) But I find him rather too (Very bitterly) subtle... I don't know where he is nor what he wants. ROPER: My God wants service, to the end and unremitting; nothing else! MORE: (Dryly) Are you sure that's God! He sounds like Moloch. But indeed it may be God And whoever hunts for me, Roper, God or Devil, will find me hiding in the thickets of the law! And I'll hide my daughter with me! Not hoist her up the mainmast of your seagoing principles! They put about too nimbly! (Exit More. They all look after him). Pgs. 65-67, A MAN FOR ALL SEASONS A Play in Two Acts, Robert Bolt, Random House, New York, 1960. Linley E. Pearson, Atty. Gen. of Indiana, Indianapolis, for defendants. Childs v. Duckworth, 509 F. Supp. 1254, 1256 (N.D. Ind. 1981) aff'd, 705 F.2d 915 (7th Cir. 1983)

  4. "Meanwhile small- and mid-size firms are getting squeezed and likely will not survive unless they become a boutique firm." I've been a business attorney in small, and now mid-size firm for over 30 years, and for over 30 years legal consultants have been preaching this exact same mantra of impending doom for small and mid-sized firms -- verbatim. This claim apparently helps them gin up merger opportunities from smaller firms who become convinced that they need to become larger overnight. The claim that large corporations are interested in cost-saving and efficiency has likewise been preached for decades, and is likewise bunk. If large corporations had any real interest in saving money they wouldn't use large law firms whose rates are substantially higher than those of high-quality mid-sized firms.

  5. The family is the foundation of all human government. That is the Grand Design. Modern governments throw off this Design and make bureaucratic war against the family, as does Hollywood and cultural elitists such as third wave feminists. Since WWII we have been on a ship of fools that way, with both the elite and government and their social engineering hacks relentlessly attacking the very foundation of social order. And their success? See it in the streets of Fergusson, on the food stamp doles (mostly broken families)and in the above article. Reject the Grand Design for true social function, enter the Glorious State to manage social dysfunction. Our Brave New World will be a prison camp, and we will welcome it as the only way to manage given the anarchy without it.

ADVERTISEMENT