U.S. v. 3,000 Microsoft Flash Drives - InformationWeek

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5/9/2008
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U.S. v. 3,000 Microsoft Flash Drives

The devices with fake Microsoft Windows logos are just the latest in a series of goods seized by U.S. Customs and Border Protection agents.

Three thousand Microsoft flash drives are facing off against Uncle Sam in an Alaska court and even if they win, they lose.

Last month, the United States filed a lawsuit to establish the forfeiture of 3,000 flash drives marked with fake Microsoft Windows logos.

The flash drives were impounded in March 2007 by U.S. Customs and Border Protection agents at an Anchorage, Alaska, FedEx facility, according to court documents.

The U.S. government has become more concerned about counterfeit high-tech goods recently because the potential safety and security risks of unauthorized electronics are magnified as society becomes ever more dependent on networked systems.

The number of intellectual property-related seizures declined 7%, from 14,675 in 2006 to 13,657 in 2007, according to government figures. But the dollar value of the goods seized increased, from $155,369,236 in 2006 to $196,754,377 in 2007. The number of defendants sentenced for intellectual property crimes also increased 35% during this period, from 213 in 2006 to 287 in 2007.

In early April, a Microsoft representative confirmed that the shipper, Hong Kong-based Alliance Fort International Electronics Ltd., was not authorized to use Microsoft's trademarked logos.

Alliance Fort International Electronics nonetheless contested the government's seizure last July. So the U.S. government filed its lawsuit to retain the disputed "Microsoft" flash drives.

The merchandise was listed on the shipping manifest as "pendrive," with a declared value of $22,025. CBP estimates the value of the goods at $70,000.

But because Moore's Law has, since 1965, more or less accurately predicted the doubling of microprocessor power every two years, the market value of electronics tends to decline at a related rate over time.

Thus, even in the unlikely event that Alliance Fort International Electronics should, at some point in the future, manage to win back its "Microsoft" flash drives, the value of that hardware will be significantly diminished, perhaps beyond the point of being trade show freebies.

The passage of time, observed Assistant U.S. Attorney James Barkeley, who is handling the flash drive case, tends to make potential claimants less motivated to contest forfeiture proceedings.

That works out when the company trying to recover impounded goods is violating the law. But should high-tech goods be seized in error, Moore's Law renders U.S. law moot over time as the market value of electronics goods drains away.

If there's any reason to be consoled about this no-win seizure situation, it may be that at least tech gear doesn't go off (in the sense of rotting). Consider the plight of Tai Loong Hong Marine Products, which recently bested U.S. government lawyers in U.S. v. Approximately 64,695 Pounds of Shark Fins. The Hong Kong-based company won its shark fins back, but they're now more than 5 years old.

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