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Criminal Copyright Statutes Explained

Mar 22nd, 2015 | By | Category: Copyright Litigation

Overview of Federal Copyright Law Crimes

criminal copyright infringement

Introduction

If you are charged with a federal copyright crime, you need solid legal representation.  Below is a general overview of federal copyright civil and criminal statutes that you could be charged with.  If you have any questions, please contact us at the number below or fill out the contact form.  We also wrote another blog on the topi of criminal copyright infringement in context of software audits.

Bonus materials:  Here is a link to the US Attorney prosecution guide regarding prosecuting intellectual property crimes.  According to this manual:

“Although civil and criminal law contain protections for all the copyright owner’s exclusive rights, criminal enforcement focuses primarily on the distribution and reproduction rights, the only two rights for which the violation can be a felony offense subject to higher criminal penalties. See 17 U.S.C. § 506(a) and 18 U.S.C. § 2319. Those convicted of criminal felony copyright infringement face up to five years’ imprisonment and a $250,000 fine.”

Most people are probably aware of what “distribution” means (i.e. disseminating copyrighted works to the public, usually for money – ex. counterfeit goods), but what is the “reproduction right?”  According to the popular IP site Bitlaw:

“The reproduction right is perhaps the most important right granted by the Copyright Act. Under this right, no one other than the copyright owner may make any reproductions or copies of the work. Examples of unauthorized acts which are prohibited under this right include photocopying a book, copying a computer software program, using a cartoon character on a t-shirt, and incorporating a portion of another’s song into a new song. It is not necessary that the entire original work be copied for an infringement of the reproduction right to occur. All that is necessary is that the copying be “substantial and material.”


17 U.S.C. 501 (Copyright infringement)

(a) Anyone who violates any of the exclusive rights of the copyright owner as provided by sections 106 through 122 or of the author as provided in section 106A(a), or who imports copies or phonorecords into the United States in violation of section 602, is an infringer of the copyright or right of the author, as the case may be.

In Broad. Music, Inc. v. Pardon, No. 1:14-CV-01394-JAM, 2015 WL 966184, at *2 (E.D. Cal. Mar. 4, 2015) the Eastern District Court held:

“Under 17 U.S.C. § 501, the owner of a copyright may institute an action against an infringer of that copyright. “To establish a prima facie case of copyright infringement, a plaintiff must demonstrate (1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original.” Range Road Music, Inc. v. East Coast Foods, Inc., 668 F.3d 1148, 1153 (9th Cir.2012) (quoting Funky Films, Inc. v. Time Warner Entertainment Co., 462 F.3d 1072, 1076 (9th Cir.2006) (internal quotations omitted).  Here, Plaintiffs allege that they own valid copyrights for the songs “Jessie’s Girl,” “Mammas Don’t Let Your Babies Grow Up To Be Cowboys,” “Take On Me,” and “Total Eclipse Of The Heart.” Plaintiffs further allege that Defendant infringed upon the copyright by publicly performing these songs at Defendant’s business establishment on June 22, 2014. Accordingly, the Court finds that Plaintiffs’ complaint states sufficient allegations to support a cognizable claim for copyright infringement.”

 17 U.S.C. 506(a)(1)(A) (Criminal copyright infringement for profit)

(a) Criminal Infringement.— (1) In general.— Any person who willfully infringes a copyright shall be punished as provided under section 2319 of title 18, if the infringement was committed— (A) for purposes of commercial advantage or private financial gain; (B) by the reproduction or distribution, including by electronic means, during any 180–day period, of 1 or more copies or phonorecords of 1 or more copyrighted works, which have a total retail value of more than $1,000; or (C) by the distribution of a work being prepared for commercial distribution, by making it available on a computer network accessible to members of the public, if such person knew or should have known that the work was intended for commercial distribution.

In one case that tried to draw the distinction between civil copyright infringement and criminal liability In United States v. Liu, 731 F.3d 982, 988-89 (9th Cir. 2013) the Court discussed:


“Congress first imposed criminal liability for certain types of infringement in the late nineteenth century. See Act of January 6, 1897, ch. 4, 29 Stat. 481, 482. The general approach to criminal copyright enforcement—then, as now—has been to punish only those violations that are both willful and economically motivated. 17 U.S.C. § 506(a)(1)(A)) (imposing criminal liability on “[a]ny person who infringes a copyright willfully and for purposes of commercial advantage or private financial gain”).  Of the two factors that distinguish criminal from noncriminal copyright violations, willfulness and commerciality, the latter is of little practical importance. The Copyright Act defines “financial gain” broadly to include “receipt, or expectation of receipt, of anything of value, including the receipt of other copyrighted works.” 17 U.S.C. § 101. The commerciality requirement thus “does not meaningfully winnow down the population of copyright defendants potentially liable to incarceration…. [T]he only bar against an overzealous prosecutor criminalizing nearly every copyright infringement case lies in the other prerequisite to criminal liability: willfulness.” But the term “willfully” is ambiguous. Willful’ … is a ‘word of many meanings….to infringe willfully could simply mean to intentionally commit the act that constitutes infringement. Alternatively, it could mean that the defendant must act with a “ ‘bad purpose’ or ‘evil motive’ in the sense that there was an ‘intentional violation of a known legal duty.’  Thus, the government must prove that the defendant acted “willfully”—that is, with “specific intent to violate the law”—to be convicted of certain federal criminal offenses. “As a general matter, when used in the criminal context, a ‘willful’ act is one undertaken with a ‘bad purpose.’ In other words, in order to establish a ‘willful’ violation of a statute, ‘the Government must prove that the defendant acted with knowledge that his conduct was unlawful.”

This appears to indicate that in order for a copyright infringement to be criminal, the Defendants must be acting in bad faith and have the specific intent and knowledge that they are violating the copyright laws and rights of another party.

As mentioned on the Department of Justice website:

“There are four essential elements to a charge of criminal copyright infringement. In order to sustain a conviction under section 506(a), the government must demonstrate: (1) that a valid copyright; (2) was infringed by the defendant; (3) willfully; and (4) for purposes of commercial advantage or private financial gain.”


18 U.S.C. 2319(b) (Criminal copyright infringement for profit)

(b) Any person who commits an offense under section 506(a)(1)(A) of title 17
(1) shall be imprisoned not more than 5 years, or fined in the amount set forth in this title, or both, if the offense consists of the reproduction or distribution, including by electronic means, during any 180-day period, of at least 10 copies or phonorecords,
of 1 or more copyrighted works, which have a total retail value of more than $2,500;
(2) shall be imprisoned not more than 10 years, or fined in the amount set forth in this title, or both, if the offense is a felony and is a second or subsequent offense under subsection (a); and
(3) shall be imprisoned not more than 1 year, or fined in the amount set forth in this title, or both, in any other case.

Plaintiff maintains that FCS required him to use unlicensed software. See Plf. Brf. at 54-56. Use of unlicensed software can result in civil and criminal penalties. See 17 U.S.C. § 506; 18 U.S.C. § 2319. Plaintiff, after admittedly using the software on one occasion, thereafter refused to use it and had it removed from his computer. See Schutze v. Fin. Computer Software, No. 3:04-CV-0276-H, 2006 WL 2842008, at *7 (N.D. Tex. Sept. 29, 2006)

17 U.S.C. 506(1)(B) (Criminal copyright infringement – no profit motive)


18 U.S.C. 2319(c) (Criminal copyright infringement – no profit motive)


17 U.S.C. 506(a)(1)(C) (Criminal copyright infringement – pre-release of a copyrighted work distributed over a computer network)

(a) Criminal infringement.

(1) In general.–Any person who willfully infringes a copyright shall be punished as provided under section 2319 of title 18, if the infringement was committed

(C) by the distribution of a work being prepared for commercial distribution, by making it available on a computer network accessible to members of the public, if such person knew or should have known that the work was intended for commercial distribution.


18 U.S.C. 2319(D) (Criminal copyright infringement – pre-release of a copyrighted work distributed over a computer network)


17 U.S.C. 1203 and 1204 (Criminal copyright infringement – circumvention of copyright protection)


18 U.S.C. 2319(A) (live music recording bootlegging)

(a) Offense.–Whoever, without the consent of the performer or performers involved, knowingly and for purposes of commercial advantage or private financial gain
(1) fixes the sounds or sounds and images of a live musical performance in a copy or phonorecord, or reproduces copies or phonorecords of such a performance from an unauthorized fixation;
(2) transmits or otherwise communicates to the public the sounds or sounds and images of a live musical performance;
or
(3) distributes or offers to distribute, sells or offers to sell, rents or offers to rent, or traffics in any copy or phonorecord fixed as described in paragraph (1), regardless of whether the fixations occurred in the United States;
shall be imprisoned for not more than 5 years or fined in the amount set forth in this title, or both, or if the offense is a second or subsequent offense, shall be imprisoned for not more than 10 years or fined in the amount set forth in this title, or both.

17 U.S.C. 1309 (infringement of a vessel hull or deck design)

Because we agree with the district court that Maverick’s Pathfinder 2200 V–Hull design is not protected under the VHDPA, we need not address Maverick’s infringement claim. See 17 U.S.C. § 1309(a). The district court, however, addressed it for the sake of argument; so, we will discuss it briefly.  Pursuant to 17 U.S.C. § 1309(e), “[a] design shall not be deemed to have been copied from a protected design if it is original and not substantially similar in appearance to a protected design.” Here, the record demonstrates that AMH and Blazer’s boats are “original and not substantially similar in appearance” to Maverick’s Pathfinder 2200 V–Hull design.  See Maverick Boat Co. v. Am. Marine Holdings, Inc., 418 F.3d 1186, 1192 (11th Cir. 2005)

18 U.S.C. 2319B (Criminal copyright infringement – illegally recording a movie in a movie theater)

(a) Offense.–Any person who, without the authorization of the copyright owner, knowingly uses or attempts to use an audiovisual recording device to transmit or make a copy of a motion picture or other audiovisual work protected under title 17, or any part thereof, from a performance of such work in a motion picture exhibition facility, shall–
(1) be imprisoned for not more than 3 years, fined under this title, or both; or
(2) if the offense is a second or subsequent offense, be imprisoned for no more than 6 years, fined under this title, or both.
The possession by a person of an audiovisual recording device in a motion picture exhibition facility may be considered as evidence in any proceeding to determine whether that person committed an offense under this subsection, but shall not, by itself, be sufficient to support a conviction of that person for such offense.

Copyright infringement in software audit cases

Here is some general information from Wikipedia:

Legal definition

Criminal copyright infringement requires that the infringer acted “for the purpose of commercial advantage or private financial gain.” 17 U.S.C. § 506(a).[9]

To establish criminal liability, the prosecutor must first show the basic elements of copyright infringement: ownership of a valid copyright, and the violation of one or more of the copyright holder’s exclusive rights.

The government must then establish that defendant willfully infringed or, in other words, possessed the necessary mens rea. Misdemeanor infringement has a very low threshold in terms of number of copies and the value of the infringed works. An individual may be liable if the infringement was committed:

(B) by the reproduction or distribution, including by electronic means, during any 180-day period, of 1 or more copies or phonorecords of 1 or more copyrighted works, which have a total retail value of more than $1,000;

or

(C) by the distribution of a work being prepared for commercial distribution, by making it available on a computer network accessible to members of the public, if such person knew or should have known that the work was intended for commercial distribution. 17 U.S.C. § 506(a)(1).

Felony copyright infringement has a slightly higher threshold and possibly serious penalties. 18 U.S.C. § 2319(b).

(1) shall be imprisoned not more than 5 years, or fined in the amount set forth in this title, or both, if the offense consists of the reproduction or distribution, including by electronic means, during any 180-day period, of at least 10 copies or phonorecords, of 1 or more copyrighted works, which have a total retail value of more than $2,500;

(2) shall be imprisoned not more than 10 years, or fined in the amount set forth in this title, or both, if the offense is a felony and is a second or subsequent offense.

Without establishing the threshold value, legitimate infringement, or the requisite state of mind, there can be no criminal liability. If the defendant can show they had a legitimate copy or use – such as through the first-sale doctrine – then the burden of proof falls on the government.

Contact a federal copyright infringement law firm

If you are facing legal issues involving copyright infringement (as either a Plaintiff or Defendant or subject to a software compliance licensing audit from entities such as the BSA, SIIA, Autodesk, Microsoft, Adobe or other publishers, we can be reached at (877) 276-5084 to speak with an intellectual property lawyer.  We can help answer your copyright law questions.  For more information about dealing with a licensing audit check out our detailed resource page on audit defense.

 

 

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We are a business and civil litigation firm with a focus on copyright infringement cases involving illegal movie downloads (torrent cases such as London Has Fallen and Malibu Media defense), software audits (ex. Microsoft audits, SPLA, Autodesk audit notification letter, Siemens PLM defense, SIIA, Adobe and Business Software Alliance defense) and other software vendors threatening piracy and infringement. We also handle cases involving internet law, anti-SLAPP, media law, right of publicity, trademarks & domain name infringement, and we have a niche practice area handling California BRE licensing disputes, accusations, subpoena response, statement of issues and investigations. We have offices in San Francisco, Beverly Hills, Newport Beach, San Diego & Phoenix, Arizona and accept federal copyright and trademark cases nationwide. All content on our website is general legal information only and not a substitute for legal advice, and should not be relied upon. Decisions to hire counsel should not be based on advertising alone. Blogs, videos and podcasts are authored by Steve Vondran, Esq. unless otherwise noted. We can be reached at (877) 276-5084.

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