law code

What constitutes "infringement" of a copyrighted work? Generally,
infringement is the violation of one of five exclusive rights granted to a
copyright owner by federal law. The five exclusive rights are: (1) reproduction,
(2) distribution, (3) public display, or (4) public performance of the
copyrighted work, as well as (5) preparation of derivative works based upon the
original copyrighted work. See 17 U.S.C. § 106(1)-(5). "An unlicensed
use of the copyright is not an infringement unless it conflicts with one of
the[se] specific exclusive rights conferred by the copyright statute." Sony
Corp. v. Universal City Studios, Inc., 464 U.S. 417, 447 (1984) (citation
omitted) (holding that sale of VCRs does not constitute contributory infringement
of television program copyrights because VCRs are capable of substantial non-
infringing uses). In addition to these five exclusive rights applicable to all
copyrighted works, the Digital Performance Right in Sound Recordings Act of 1995,
Pub. L. No. 104-39, 109 Stat. 336 (1995), codified at 17 U.S.C. § 106(6),
established a sixth exclusive right pertaining to digital audio transmission of
sound recordings. See also 17 U.S.C. § 101 (defining "sound
recording" to exclude audiovisual works); 17 U.S.C. § 114(j)(3) (excluding
transmission of audiovisual works from the definition of "digital audio
transmission"); 17 U.S.C. § 114(d)-(j) (limitations including exemptions for
certain broadcast transmissions, subscription transmissions, and licensed
transmissions).

What makes copyright infringement a crime? Is it a felony? Copyright
infringement is a crime where it is done willfully and either: (1) for
commercial advantage or private financial gain, 17 U.S.C. § 506(a)(1); or
(2) by reproduction or distribution on a large scale (i.e., copying works
with a total retail value of over $1,000), 17 U.S.C. § 506(a)(2). Felony
punishment is provided only for reproduction or distribution of at least 10
copies during any 180 days of copyrighted works worth more than $2,500.
18 U.S.C. § 2319(b)-(c). The reason that copyright infringement is a crime is
to punish and deter the misappropriation of intellectual property that an author
-- who may have no means to prevent copying -- invested time, energy and money
to create.

Is copyright infringement a crime under 17 U.S.C. § 506(a) and
18 U.S.C. § 2319 if the infringer is not making any money? Yes, if
the infringement is reproduction or distribution done willfully on a large
scale. Although punishment can be more harsh if the infringer has pecuniary
motives, willful infringement by reproduction or distribution of at least 10
copies during any 180 days of copyrighted works worth more than $2,500 is a
felony, punishable by up to three years in prison and a fine, even if not
done for commercial gain. See 18 U.S.C. § 2319(c). Even if the
infringer is not profiting from his or her actions, he or she is
facilitating the theft of intellectual property from its creator. Because
intellectual property can be disseminated so cheaply in digital format over
computer media (like the Internet), the criminal law can play an important
role protecting the rights of copyright owners.

What other criminal laws protect copyrighted material besides
17 U.S.C. § 506(a) and 18 U.S.C. § 2319. A number of other
federal laws specifically protect copyrighted works. 18 U.S.C. § 2318
prohibits the counterfeit labeling of copyrighted works. Further, in 1994,
Congress created 18 U.S.C. § 2319A, which expressly covers the
unauthorized "fixation" of and trafficking in recordings and musical videos
of live musical performances. Pub. L. No. 103-465, Title V, § 513(a),
108 Stat. 4974 (1994). Systems of copyright management are protected by
17 U.S.C. § 1201 and § 1202. 17 U.S.C. § 506 also provides
lesser criminal sanctions for conduct which does not constitute copyright
infringement but which nonetheless undermines the integrity of the copyright
system, such as for false representations in copyright applications.
See 17 U.S.C. § 506(c)-(e).

A significant number of other federal statutes are important in copyright
cases. For example, most large-scale copyright cases involve the unauthorized use
of a trademark in violation of 18 U.S.C. § 2320; for instance, infringing
copies of movies will typically be sold with packaging bearing the trademark of
the rightful owner of distributor. In addition, other criminal laws, from the
familiar such as mail and wire fraud, 18 U.S.C. §§ 1341, 1343, to the
obscure, such as unauthorized reception of cable service, 47 U.S.C. § 553,
or the unauthorized use of communications, 47 U.S.C. § 605, can be
applicable as well.

--------------------------------------------------------------------------------
III.B. The Elements of Copyright Infringement (Felony and
Misdemeanor)
There are four essential elements to a charge of felony copyright
infringement. In order to obtain a felony conviction under
17 U.S.C. § 506(a) and 18 U.S.C. § 2319, the government must
demonstrate that:

1. A copyright exists, see infra Section III.B.1;

2. It was infringed by the defendant by reproduction or distribution of the
copyrighted work, see infra Section III.B.2;

3. The defendant acted willfully, see infra Section III.B.3; and

4. The defendant infringed at least 10 copies of one or more copyrighted works
with a total retail value of more than $2,500 within a 180-day period. See
infra Section III.B.4.

See 17 U.S.C. § 506(a)(2); 18 U.S.C. § 2319(a), (c)(1). The
maximum punishment for this crime is 3 years imprisonment and $250,000.
See infra Section III.D.

Another element, if proven, enhances the maximum penalty: That the
defendant acted "for purposes of commercial advantage or private financial gain."
If it is proven, the statutory maximum prison sentence can rise to 5 years.
See 17 U.S.C. § 506(a)(1); 18 U.S.C. § 2319(a), (b)(1). See
also infra Section III.B.5 (discussing commercial purposes
element). Moreover, a commercial motivation case will usually have better jury
appeal than a case without commercial motivation. Indeed, if commercial
motivation is not alleged, defendants may be more inclined to raise the
affirmative defense of fair use, codified at 17 U.S.C. § 107, since fair use
defenses are more plausible when defendants do not profit financially by their
acts of infringement. For a discussion of "fair use," see infra
Section III.C.3.

Misdemeanor copyright infringement is another option for prosecutors. It
can be a useful charge in cases where scale of the crime is difficult to prove
with specificity, such as a video store engaging in copying of video tapes
without records showing when those copies were made, or how many of those copies
were made. See infra Section III.B.6.

Prosecutors should also be aware of an important defense that is sometimes
treated as an element of the crime. A minority of courts also require that the
government prove the absence of a "first sale." Some cases refer to this as a
"fifth element." See infra Section III.C.2.

The statutes governing criminal copyright infringement were substantially
amended in 1997. No Electronic Theft Act (NET) Act, Pub. L. No. 105-147, 111
Stat. 2678 (1997). These amendments modified the requisite elements for the
crime. Notably, the proof of commercial or financial motivation is no longer
required for a felony conviction. Consequently, criminal copyright infringement
cases pre-dating the NET Act are of limited utility for setting out the elements
of the crime. See, e.g., United States v. Manzer, 69 F.3d 222, 227
(8th Cir. 1995) (infringement of computer program used in satellite descrambler
modules); United States v. Hux, 940 F.2d 314, 319 (8th Cir. 1991)
(affirming, in relevant part, copyright infringement conviction for manufacture
of modified satellite descrambler devices), overruled on other grounds by
United States v. Davis, 978 F.2d 415 (8th Cir. 1992); United States v.
Wise, 550 F.2d 1180 (9th Cir. 1977) (affirming in part and reversing in part
conviction for unauthorized sale of copyrighted motion pictures). Nevertheless,
since the substance of many of the specific elements were unchanged, the cases
pre-dating the NET Act are of use in interpreting the current elements.


III.B.1. Existence of a copyright