White-collar crime is a daily topic in the news but by no
means a new phenomenon. This article define white-collar crime and how to
analyse it. It names six characteristics of white-collar crime, namely the
preponderance of upper and middle-class delinquents, the motivation of financial
gain, non-violence, systemic character, the breach of trust, and diffuse
victimisation. It also highlights additional aspects for a working definition
which can be applied to various and even rapidly changing historical contexts.
This article is about the shady business – IPR and White Collar
Examines the association between intellectual property (IP) and white collar
crime (WCC), and identifies future research that might benefit policymakers;
federal, state, and local agencies; and the general public. This research
identifies some of the economic, political, and legal theories that support the
creation and maintenance of IPR laws, as well as those that support criticisms
of IPR protections. and also crimes associated with IP and controversial
of IP law are described to illustrate ways in which IPR violations
are associated with WCC and identify conflicting concerns and biases of the
numerous stakeholders in IP.
The term intellectual property generally refers to any product of the human
intellect that's deemed unique and potentially valuable within the marketplace,
including a thought , invention, literary creation, unique name, business
method, process, formula , and computer program. Since the creation and
dissemination of IP is a crucial a part of economic, social, and cultural
development, laws are created throughout the planet to define and protect the
rights of these who develop IP. These laws include protections through patents,
copyrights, trademarks, and trade secrets, and are enforced primarily through
legal action and prosecution .
White-collar crime has been defined as an
illegal act or series of illegal acts committed by nonphysical means and by
concealment of guile, to get money or property, to avoid the payment or loss of
cash or property, or to get business or personal advantage. This definition,
along side other definitions recently proposed by scholars, extends beyond the
normal definition of WCC as crime committed by people of high social station and
focuses on the offense instead of the offender.
Development and enforcement of IP laws are primarily designed to advance public
welfare through the skills of authors and inventors.
However, these efforts are
complicated by the very fact that IPR violations are related to other crimes,
including terrorism. for instance , profits from illegal sales of counterfeited
goods and insurance fraud 8 are traced to the funding of terrorist activities and
other gangland. Misappropriated IP has also served as a way of acquiring
symbols of legitimacy (e.g., a company's trademark) for fraudulent sales,
investment scams, and collection of private information (i.e., identity theft).
This research identifies a number of the economic, political, and legal theories
that support the creation and maintenance of IPR laws, also as people who
support criticisms of IPR protections. Although a radical review of literature
altogether fields related to IP was beyond the scope of this study, this review
identified a spread of issues and concerns associated with IP and established a
basis for gathering information from primary sources, and also crimes related to
IP and controversial of IP law are described for instance ways
during which IPR violations are related to WCC and identify conflicting concerns
and biases of the various stakeholders in IP.
Towards a definition
In this issue, we'll use the terms white-collar crime
and economic crime
interchangeably. to bypass the arduous task of crafting a fairly useful
definition, many authors take refuge to a non-systematic case-by-case approach
and work with an inventory of relevant crimes.
White-collar crime, then,
typically encompasses the subsequent offences committed mainly by corporations,
their owners, executives or employees also as by government or municipal
officials and members of the professions: fraud, corruption, embezzlement,
misappropriation and malfeasance, tax fraud, property theft, trading,
concealment , Ponzi schemes, misrepresentation of monetary statements,
price-fixing, illegal cartels, and collusion also because the breach of
environmental, health and safety regulations.
Historically, it took an extended time to categorise this type of malfeasance
under the rubric of crime, because people that committed white-collar crimes
weren't perceived as 'typical criminals' who engaged in theft, manslaughter, or
murder. They weren't a part of what was considered the criminal milieu during a
narrow sense. There was also the impression that white-collar crime was
victimless and not as damaging to society as offences like robbery. In some
countries, white-collar criminals can still expect much lower sentences than
other sorts of criminals.
The assessment of the offences committed within the corporate world began to
vary in light of the theories of sociologist and criminologist Edwin Hardin
Sutherland, who not only established the criminological term white-collar
in 1939, but also made clear that crimes weren't exclusively committed by
lower-class offenders. Sutherland, who had among other things previously worked
on juvenile delinquents in ghettos of recent immigrants, pointed to certain
parallels like the influence of cultural milieus.
This idea violated existing
prejudices that high-ranking persons wouldn't or only in highly exceptionally
circumstances commit crimes which economic crimes were thanks to merely
, which involve no moral culpability
. Sutherland, who is
taken into account one among the foremost influential criminologists of the 20th century, vehemently contradicted widespread views that criminality was caused
by poverty or biological and psychological factors.
He stated that the entire
damages of white-collar crimes were several times above those of all other
crimes combined. He also spoke out against the relative leniency for
perpetrators of economic crimes compared to those of 'normal' crimes.
The privileged position of white-collar criminals is that the results of several
factors. Their offences are especially difficult to prosecute because the
perpetrators use sophisticated means to hide them. they will also often afford
the simplest lawyers and have the political clout to influence the legislative
process to their advantage and, if need be, to bribe prosecutors and judges.
Additionally, the category bias of the courts works to their benefit. The law is
usually seen as not binding, as least not for and by economic elites.
quoted a fraudster, who described the legal code of the USA within the following
Law is sort of a cobweb; it's made for flies and therefore the smaller sorts of
insects, so to talk , but lets the large bumblebees break through. When
technicalities of the law stood in my way, I even have always been ready to
brush them aside easy as anything.
Building on such observations, we propose a more general definition of economic
crime for the aim of historical analysis.
The following six elements should be included in any reasonable definition of
economic or white-collar crime, albeit they're neither comprehensive nor present
altogether economic crimes.
- Following Sutherland's classic definition White-collar crime is
a person of respectability and high social status in the course of his
occupation. Even though lower-level employees like accountants or traders
occasionally cause colossal damages – like Nick Leeson who brought down Barings
Bank in 1995 – defendants typically are not members of the lower classes.
Instead they have attended good schools and very often prestigious universities,
have no previous criminal record, and possess all the characteristics of the
middle to upper middle classes.
- Economic crimes are illegal acts in which offenders' principal motivation is
economic gain. Individuals, groups of people or corporations purposively act
in an illegal manner to secure financial returns that cannot be collected by
- White-collar crime is generally non-violent, at least in terms of direct,
physical violence. It takes place in the context of regular, non-criminal
business transactions and is very often not the central business model itself.
White-collar criminals often spend most of their time with perfectly sound and
legitimate businesses. Although there can be a certain overlap with organized
crime, whose core methods involve the use or the threat of physical violence,
we suggest keeping the two phenomena separate. Mafia and other such groups are
formed primarily as criminal organizations operating in illegal markets while
'normal' corporations are founded as legitimate institutions, publish business
reports, work with the authorities, and pay taxes. Moreover, they operate mainly
in legal markets and do not regard violence as standard operating procedure.
- Economic crime is often systemic, part of a culture either of a corporate
culture inside the firm or a culture in the firm's environment, e.g. when it
sells products to corrupt governments. In the first case the corporations'
control mechanisms are typically weak, intentionally or unintentionally, which
is an obstacle to the prevention and the investigation of economic crimes.
Individual responsibility is therefore hard to ascertain. Defendants routinely
deny responsibility and point to their superiors who made them commit crimes, or
to their inferiors who engaged in shady practices without their knowledge or
- All economic transactions depend on a certain degree of trust, without which
transaction costs would simply be too high for economic activity. White-collar
criminals abuse the good faith of various stakeholders, from customers to the
general public, from shareholders to the authorities. Therefore, white-collar
crime often coincides with the breach of trust.
- Frequently, the victims of white-collar crimes are not easily identifiable
because the harm is spread out over many people. Bribery can lead to
overcharging in public projects which results in higher taxes for all citizens
of a country. As these facts are very often hidden, economic crime appears to be
victimless. In fact, it causes substantial harm, but victimisation is diffuse.
These six elements involved in economic malfeasance, i.e. upper- and
middle-class delinquents, motivation by financial gain, nonviolence, systemic
character, breach of trust, and diffuse victimisation, move us past a merely
case-based approach even if they do not add up to a fully satisfactory,
all-encompassing definition. Attempts to find such a definition are hampered by
the fluid lines between economic crime and legal practices.
Unlike murder or
theft, whose definitions have been pretty stable across centuries and different
countries, white-collar crimes are not the same in different countries and time
periods. It is very much a moving target. What is considered a normal business
practice can become a crime at short notice. Thus bribes were even
tax-deductible, until laws changed and criminalised the practice.
Theoretical Bases for property Protections
Traditionally, justification for IP laws is predicated on the view that strong
protection of IPR is that the best, if not the sole , means of stimulating
innovation and economic process . Despite widespread support of this view,
opposition to IPR protections has persisted for hundreds of years. Views on the
acceptable role of state and law within the development of IP vary tremendously
among economists, political theorists, sociologists, the legal profession ,
enforcement, and various IP consumers.
Since one among the results of
governmental involvement in IP issues is that the criminalization of IP use and
exchange, examining these differing views may be a necessary a part of
evaluating the character and consequences of IP laws, and tangentially the
character and consequences of IPR violations.
Recent arguments favoring weak IPR
protections include the contention that levels of IPR protections are often
inversely associated with innovation, economic process , and global health.
Specifically, it's argued, weak protections tend to stay market prices low, thus
stimulating economic growth; strong protections, by creating a monopoly, may
induce the producer to accumulate 'sleeping patents' in an attempt to preserve
market share, thus stifling both innovation and economic process.
Additionally, strong protections, including the planet Trade Organization's agreement on
Trade Related Aspects of property Rights (TRIPS), could, consistent with some,
threaten global health because they reduce access to life-saving medicines,
particularly in developing countries. Although this on-going, and currently
unresolved, argument has produced more questions than solutions, partially due
to the lack of cumulative empirical evidence, the dialogue may be a useful
complement to a summary of problems and concerns in IPR enforcement for an
assessment of future research needs.
From an economic perspective, a primary purpose of IP laws, like many other
laws, is to supply a desired result that economic process , or competition, fail
to supply . Specifically, IP laws are designed, in part, to guard future
economic gain from IP products as an incentive for investing in research and
development (R & D) today. Without such protections, it's assumed that
innovation would decline because initial costs can't be recovered during a free
In 1962, Kenneth Arrow identified three reasons why perfect
competition might fail to allocate resources optimally within the case of
invention: risk, inappropriability, and indivisibility. Both risk and indivisibility address the matter that R & D often require substantial
expenditures of your time and money. When invention efforts are unsuccessful,
this theory holds, expenditures fail to yield reasonable economic benefit to the
inventor. once they are successful, the value of manufacturing the primary
prototype is typically far greater than the value of manufacturing subsequent
copies, yet pricing (in a free market) tends to be more closely associated with
Although justifications for IP laws rely heavily on economic assumptions, they
also believe political theories, like the concept that ideas should be
considered property and government should protect these sorts of property.
Therefore, examination of IP laws, including violations of these laws, should
include analysis of underlying political theories to work out if the results of
IP laws are according to established belief systems of the society during which
the laws apply.The primary justification for IPR that Ostergard examined – John
Locke's labor theory of property – contends that objects produced by a private
through the blending of labor with resources are the property of that individual
alone. Although this dictum is centrally concerned with individual rights, it
also requires that others aren't made worse off by the acquisition.
stipulation raises the question, What is worse off
? One answer, provided by
Robert Nozick, is that individuals are worse off if they lose the chance to
enhance their situation. supported this definition, Ostergard argued, those
who are monetarily restricted from buying a replacement drug which will save
their lives are worse off; therefore, IP laws – as they're currently designed –
can't be justified with Locke's labor theory.
This analysis identifies as a
primary weakness in IP law the failure to differentiate between essential and non-essential intellectual objects, or the tendency to treat all intellectual
objects equally. to differentiate essential from non-essential objects, Ostergard suggested, a physical well-being criteria could be used. This
criteria would, for instance , deem a music composition non-essential, since people would be no worse off if they were monetarily restricted from buying a
replacement music compact disk.
Other criteria for differentiating
intellectual objects are the enhancement people's physical well-being and
overall well-being, including intellectual and cultural enhancement. Using these
criteria, music and cinema would be included as essential objects, within the
absence of which individuals would be worse off.
Legal Foundations of Intellectual Property Rights An early version of current
U.S. patent law was adopted in colonial America to promote in the United States
the absorption, dissemination and use of technical knowledge available in
foreign countries. These and other IP laws were subsequently developed as the
needs of the country changed and its status changed from importer of IP to
Intellectual Property Protections, Definitions
Protects any invention or discovery of a new and useful process,
machine manufacture, or composition of matter, or any new and useful improvement
Protects original works of authorship, specifically people who are
fixed in any tangible medium of expression, and provides the holder the
prerogative to breed , adapt, distribute, perform, and display the work
Defined as any word, name, symbol, or device, or any combination thereof…which
an individual features a real intention to use in commerce and …[register], to
spot and distinguish his or her goods…from those manufactured or sold by others
and to point the source of the products , albeit that source is unknown.
Defined as tip of a business.
Provisions for both criminal and civil penalties for IPR violations are detailed
in federal law, also as various state laws. An appendix to the present report
provides a basic description of federal IP laws, including grounds for
challenging IP ownership, public use of protected IP, and violation penalties.
A major dispute related to copyright loss estimates involves disagreement over
the quantity of cash an IP owner would have gained within the absence of
violations. it's unrealistic, for instance , to equate an illegal copy with a
lost sale, since it's unlikely that each one owners of infringing material would
have purchased a licensed copy if infringing copies weren't available. Reports
of copyright violations also are challenged by the argument that some
violations, like downloading for private use, shouldn't be considered illegal,
or a minimum of should be distinguished from other sorts of IPR crime. Despite
the difficulties with estimating and reporting losses, published statistics are
often useful methods for conveying the magnitude of IPR violations.
Crimes related to property i.e, IPR and White Collar Crimes
Violations of IPR are often classified as a sort of white-collar crime,
specifically a whitecollar theft or fraud. for instance , the illegal
reproduction of a movie for the aim of selling counterfeited copies to others
for profit may be a WCC under this definition because it involves the
acquisition of property through deception, or fraud, for business or personal
The sale of counterfeited drugs also involves deception about the
manufacturer or content for illegal gain , and therefore the illegal use of a
secret to develop a marketable product involves deception concerning truth
ownership a thought or information. additionally , IPR violations are often wont
to facilitate other WCCs, such as:
- Investment fraud (e.g., employing a trademark of a legitimate company to
- concealment (e.g., concealing funds acquired from counterfeit goods
- Fraudulent sales (e.g., creating a bogus internet site to deceive
- fraud (e.g., using personal information acquired from a misappropriated
database or solicited employing a misappropriated trademark of a legitimate
- Other online scams (e.g., fraudulently acquiring donations using the
seal of the American Red Cross);
- Racketeering (e.g., organized efforts to misappropriate IP); and
- evasion (e.g., failing to report income acquired through IP violations).
One among the best public concerns about IPR violations (as a sort of WCC) is
that the threat to public health and safety, not only in foreign countries but
also within the us . for instance , in L.A. , investigators arrested five people
in reference to the distribution of counterfeited power tools, which were marked
with brand names like Makita, Black and Decker, and DeWalt and bore
counterfeited UL stickers (from Underwriters Laboratory) to point that the
tools had been inspected and authorized as safe. during this case, quite $9.7
million in counterfeit merchandise was recovered. Other cases have identified
counterfeit drugs, medical supplies, and aircraft parts as posing a danger to
the general public . the web is one among the foremost easily accessible venues
for the illegal use of IP as a facilitator for other criminal activity.
case of market manipulation, for instance , an employee of a communications
company called Pairgain used trademarks and other symbols copied from the web to
make an internet page that seemed to be a Bloomberg financial website . the aim
of this trademark violation was to legitimize a report as a Bloomberg report,
during which the worker wrote false information about the Pairgain activities.
due to the apparent legitimacy of the report, the worker was ready to manipulate
the worth of Pairgain stock and make a profit by selling his personally held
stock at artificially inflated prices.
In another case, a trader in Texas
manipulated stock prices by posting a false handout attributed to PR Newswire on
a Yahoo! Finance message board announcing that Lucent Technologies would have a
quarterly earnings shortfall.
These cases illustrate how the web are often wont
to commit IP violations for the aim of committing WCCs. Since WCC is usually
supported deception, and IP like a trademark can represent a corporation or
product that's recognized as valuable or reliable, it's not surprising that IP
violations are often including other WCC. Another WCC that's frequently related
to IP violations is concealment , which generally involves attempts to disguise
truth origin or ownership of funds derived from criminality through financial
The prevalence of the association between IP violations and
concealment prompted amendments to the federal concealment statute to
incorporate specific references to infringement of copyright and trafficking in
counterfeit goods and services. The consequence of those changes is that any use
of cash derived from certain sorts of IPR violations to fund specific sorts of
crime is taken into account concealment.Organized Crime and property Rights Violations
The Racketeer Influenced and Corrupt Organizations (RICO) statutes were created
to seek the eradication of gangland within the us by strengthening the legal
tools within the evidence-gathering process, by establishing new penal
prohibitions, and by providing enhanced sanctions and new remedies to affect the
unlawful activities of these engaged in gangland . RICO statutes were designed
to enable punishment of criminal activity, including certain sorts of IP
violations, that form a pattern of organized behavior, supported the idea that
much of the facility of gangland syndicates springs from the cash they create
through various sorts of [illegal] social exploitation.
This broad area of law
also can be wont to sanction owners of IP who seek to guard their rights in
impermissible ways. during a recent case, for instance , a cable company
allegedly threatened to sue customers of another company, which was selling
decoder boxes for pirating cable channels, if they did not pay the cable
company a (settlement) fee. supported the pattern of misrepresenting that the
mere purchase of a descrambler was illegal so as to get money (which served
because the basis for mail and wire fraud charges, two other RICO predicates), a
court upheld the customers' rights to sue the cable company and their firm under
RICO.Controversial of property
Law a serious source of conflict within the IP debate is differences in
cultural norms, not only among nations but also among groups defined by age or
behavior. people that associate themselves with the web culture, for instance ,
often have different beliefs about appropriate uses IP than people within the
enforcement community. Individuals in several countries may have different views
on appropriate uses of IP due to differences in IP laws or generally accepted
practices in their community. Beliefs and views about IP could also be supported
legal, social, or ethical considerations, and, more importantly, can have
visceral meaning for community members that's not easily relinquished.
The structure of the difficulty
This special issue analyses the history of economic crimes with the assistance
of case studies from four centuries. It seeks to probe the causes of those
offences also because the penal, political, social, and other consequences that
they had for those that perpetrated them also as for the form of corporate
governance. It also investigates the general public perception of those crimes.
In other words, the issue's goal is to historicise economic criminal actions and
public perceptions of them. an equivalent goes for the training processes and
countermeasures adopted by states, trade associations, self-regulatory bodies,
It also traces the invention of latest legal categories to return to terms with
these crimes, which frequently created these crimes during a technical sense. We
ask whether the expansion in economic crimes may be a results of the
multiplication of business regulations and therefore the proliferation of
potential offences. Finally, we discuss the training processes and
countermeasures adopted by states, trade associations, self-regulatory bodies,
White-collar crime isn't only a really large discipline but a subject fraught
with definitional fuzziness. This introductory article has moved beyond
case-by-case definitions and tried to pinpoint a number of the core elements of
economic crime. The empirical essays during this volume cover considerable
ground by that specialize in diverse phenomena from fraud to corruption, from
environmental crime to the manipulation of privatisation processes also because
the reaction of lawmakers, authorities, and civil society to instances of
malfeasance and systemic crimes.
Still, the essays during this volume leave many
gaps. In future research more detailed and archival-based case studies on
individual companies and crimes also as general histories of certain sorts of
offences are needed. We even have to analyse the reaction to the challenge of
economic crime by legislation and jurisdiction, by corporations as potential
offenders and victims, and by society at large. White-collar crime is an
integral a part of capitalism, and it's about time for scholars to explore this
dark and too long neglected side of economic history.End-Notes:
Bio In Brief:
- National White Collar Crime Centre, Intellectual Property and White-
collar Crime: Reports of Issues, Trends, and Problems for Future Research',
2004 <https://www.ncjrs.gov/pdffiles1/nij/grants/208135.pdf> accessed on
17th July 2020.
- Martand Nemana, 'Judicial Analysis of Order of Abandonment', 2017 Singh
& Associates <https://www.mondaq.com/india/trademark/629512/judicial-analysis-of-order-of-abandonment>
accessed on 17 July 2020.
- Hartmut Berghoff @ Uwe Spiekermann, 'Shaddy business: On the history of
white-collar crime', (2018) 60 Tandfonline <https://www.tandfonline.com/doi/full/10.1080/00076791.2018.1414735>
accessed on 18 July 2020.
- Beresford, A.D., Desilets, C., Haantz, S. et al. Intellectual property
and white-collar crime: report of issues, trends, and problems for future
research. Trends Organ Crim 8, 62–78 (2005) <https://doi.org/10.1007/s12117-005-1014-z>
accessed on 7 July 2020.
Rudrakshi is a fifth year law student at Faculty of law, University of Nagpur. She is a Psychological Counsellor at very young age and also works as a social worker. She is interested in every facets of law. She is also interested in developing more skills of legal drafting and exploring knowledge around on law with its psychological aspects and socio-legal issues. She is also a polygot and keen learner of different languages. She has previously interned with NALSA- National Legal Services Authority, New Delhi and many more legal areas. Besides law, she believe in interacting with number of peoples and exploring minds.
Written By: Ku. Rudrakshi M. Mendhe
- Law Student and Psychological Counsellor.