Investigative powers of the U.S. Grand Jury in prosecuting intellectual property crimes

But what does it mean to be ‘indicted’ by a ‘grand jury’, and what are the role and powers of the grand jury in prosecuting international intellectual property (“IP”) crimes with foreign elements?  

In this article we consider the investigative powers of the grand jury, and its power to subpoena evidence in grand jury proceedings. In particular, we will consider both the powers and limitations of the U.S. grand jury in compelling witness testimony in criminal IP infringement cases, including whether potential witnesses living outside of the U.S. can be long-armed into returning to the country to give testimony in grand jury proceedings. 

What is a U.S. grand jury?

The grand jury's power is rooted in the Fifth Amendment of the United States Constitution, which establishes the grand jury as part of the criminal justice system. It provides: “No person shall be held to answer for a capital or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury.” 

U.S. federal prosecutors are required to set up grand juries to investigate potential criminal conduct, and to determine whether there is sufficient evidence to pursue a prosecution or bring formal criminal charges against a suspect. Securing a grand jury indictment is, therefore, an important first step in prosecuting serious IP crimes in the US federal court system, before charges can be brought for copyright infringement, trade secret theft, and other IP-related offenses. 

Grand juries are comprised of an impartial group of ordinary citizens - usually between 16 to 23 members. During a criminal investigation, evidence and an outline of the case is presented by the prosecutor to the grand jury, who then vote in secret as to whether they believe there is probable cause, or enough evidence to charge a person with a crime.

Unlike trial juries, grand juries do not determine whether a person is guilty or innocent. Their primary function is to determine whether there is sufficient evidence for the government to bring formal charges and proceed to trial. 

Grand jury trials sit in secret in order to protect jurors and witnesses from intimidation, as well as the reputation of the accused if no indictment is issued. As they are prosecutor-led, no judges or defence attorneys are present during grand jury proceedings.  

Long reach of the grand jury to compel witnesses

The function of the grand jury is investigative and not prosecutorial. Grand juries are charged with conducting their own investigations and have broad powers to subpoena witness testimony, documents and other evidence from home and abroad as part of their investigation. 

Subpoenas in federal proceedings, including grand jury proceedings, are governed by Rule 17 of the Federal Rules of Criminal Procedure; they are effectively orders issued by a federal grand jury under the supervision of a federal district court, and may be served anywhere within the United States. 

The power of a grand jury to compel evidence or witness testimony from U.S. citizens located in foreign countries derives from section 1783 of Title 28 of the United States Code which provides: “A court of the United States may order the issuance of a subpoena requiring the appearance as a witness before it, or before a person or body designated by it, of a national or resident of the United States who is in a foreign country…if the court finds that particular testimony…is necessary in the interest of justice, and . . . that it is not possible to obtain his testimony in admissible form without his personal appearance or to obtain the production of the document or other thing in any other manner.”

Before any efforts to seek evidence from abroad are made, prosecutors must obtain permission from U.S. Criminal Division’s Office of International Affairs, and usually requires extensive coordination between various federal, state, and local law enforcement agencies including the FBI. 

It is important to note that while the grand jury's power to subpoena is extensive, it is not unlimited. Generally, subpoenas cannot be used for ‘fishing expeditions’ and the court must find that the evidence being sought is necessary in the interest of justice. 

A U.S. national who refuses to return for a grand jury subpoena without adequate excuse may result in a federal district court finding the party in contempt of court. Witnesses who refuse to answer questions properly put to them by the grand jury may also be held in contempt and either fined or imprisoned until they comply with the directions of the grand jury.

Witnesses who are subpoenaed by a U.S. grand jury should be informed of their constitutional rights, including the right to ‘invoke the fifth’, and seek legal advice from qualified advisors both in their place of residence and in the respective state jurisdiction of the grand jury proceedings.

Final remarks 

Addressing U.S. delegates in Beijing in April of this year, U.S. Patent and Trademark Office Director Kathi Vidal said that IP rights continue to be a main concern for U.S. businesses operating in China as they face significant challenges with infringement.

In response, the U.S. federal, state, and local law enforcement agencies and prosecutors have formed task forces to combat IP crime and to promote information sharing between all levels of law enforcement and industry. In 2010, the Department of Justice established the Task Force on Intellectual Property to investigate and prosecute a wide range of IP crimes, with a particular emphasis on public health and safety, theft of trade secrets and economic espionage, and large-scale commercial counterfeiting and piracy. It aims to provide heightened civil enforcement, achieve greater coordination amongst all levels of law enforcement partners including the FBI, and increase focus on international enforcement efforts. 

Given that the grand jury process is conducted in secret, it is difficult to comment extensively on the evidential procedure in proceedings. However, from our experience of having represented U.S. nationals living in China being subpoenaed to give evidence in grand jury IP criminal investigations, it is clear that the grand jury has a long-reach as regards foreign discovery and plays an important role in the U.S. criminal justice system and the prosecution of IP crimes with foreign elements.   

For enforcement of Intellectual Property Rights, or if you need assistance with any aspect of foreign discovery, please contact a member of our team.