Intellectual property crimes

American Criminal Law Review

Volumn 45, Issue 2, 2008, Pages 665-715

  Min, Ae Yu ^a   Lehrer, Ryan ^a   Roland, Whitney ^a  

^a NONE

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EID: 44949134870     PISSN: 01640364     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (434)

1. See COMPUTER CRIME AND INTELLECTUAL PROPERTY SECTION, CRIMINAL DIVISION, U.S. DEP'T OF JUSTICE, PROSECUTING INTELLECTUAL PROPERTY CRIMES MANUAL, INTRODUCTION [hereinafter IP CRIMES MANUAL] ("[I]n 2005 the overall value of the 'intellectual capital' of U.S. businesses - including copyrights, trademarks, patents, and related information assets - was estimated to account for a third of the value of U.S. companies, or about $5 trillion."), available at http://www.cybercrime.gov/ipmanual/01ipma.html (last visited Oct. 30, 2007).
2. See id. ("This is a pivotal time for intellectual property enforcement. Market and technological developments have converged to create an environment in which the distribution of both legitimate and illegitimate goods flourishes as never before.").
3. Historically, civil remedies for theft of trade secrets have been sought in litigation. However, because increased technological complexity, delays in civil litigation, and advances in computer technology have allowed titieves to profit more rapidly from trade secrets, traditional remedies of injunctions and civil damages have become largely ineffective. Furthermore, because of the intangible nature of trade secrets and the fact that thieves are often judgment-proof or too sophisticated to be pursued, civil remedies are frequently illusory. See J. Derek Mason et al., The Economic Espionage Act: Federal Protection for Corporate Trade Secrets, 16 THE COMPUTER LAWYER 14, 15 (1999).
4. See Chris Carr et al., The Economic Espionage Act: Bear Trap or Mousetrap?, 8 TEX. INTELL. PROP. L.J. 159, 167 (2000).
5. See IP CRIMES MANUAL, supra note 1.
6. See Protecting American Interests Abroad: Hearing Before the Subcomm. on National Security, Veterans Affairs, and International Relations, U.S. House Committee on Government Reform, 107th Cong. 90-93 (2001) (testimony of Frank J. Cilluffo).
7. U.S. DEP'T OF JUSTICE, PROGRESS REPORT OF THE DEPARTMENT OF JUSTICE'S TASK FORCE ON INTELLECTUAL PROPERTY, (2006) at 29, htto://www.cybercrime.gov/2006IPTFProgressReport(6-19-06).pdf visited Oct 30, 2007).
8. See id.
9. See IP CRIMES MANUAL, supra note 1.
10. See Press Release, U.S. Dep't of Justice, Fed. Law Enforcement Targets Int'l Internet Piracy (Dec. 11, 2001), available at http://www.usdoj.gov/opa/pr/2001/December/01_crm_643.htm (last visited Oct 30, 2007). This operation, commenced in 2001, has resulted in the execution of more than 70 searches worldwide and, by June 2004, had resulted in the conviction of twenty seven U.S. defendants for violations of federal copyright laws. See Press Release, U.S. Dep't of Justice, Internet Distrib. of Pirated Software Pleads Guilty to Criminal Copyright Infringement (June 18, 2004) (presenting results of "Operation Buccaneer" enforcement effort against copyright violations), available at http://www.usdoj.gov/ criminal/cybercrime/wiedmaierPlea.htm (last visited Oct 30, 2007).
11. See Press Release, U.S. Dep't of Justice, Justice Dep't, FBI and Customs Serv. to Combat Intellectual Prop. Crime (July 23, 1999), available at http://www.cybercrime.gov/ipimtia.htm (last visited Oct. 30, 2007). In 2000, Former Attorney General Janet Reno credited the Anti-Piracy initiative announced in 1999 for bringing about the first convictions under the No Electronic Theft Act. Janet Reno, Former Att'y Gen., Symposium of the Americas: Protecting Intellectual Prop. in the Digital Age (Sept. 12, 2000), available at http://www.cybercrime.gov/ipsymposium.htm (last visited Oct. 30, 2007).
12. See Press Release, U.S. Dep't of Justice, Justice Dep't Announces Int'l Internet Piracy Sweep (June 30, 2005), available at http://www.cybercrime.gov/OperationSiteDown.htm (last visited Oct. 30, 2007).
13. The FBI has also established a new Cyber Division to deal with online or electronic theft of intellectual property and trade secrets, among other problems. See Panel Chairman Seeks Study of FBI Reorganization; Rep. Wolf Cites Concern on Impact of Shifting Agents to Counterterrorism Effort, WASH. POST, June 5, 2002, at A8 (detailing FBI proposal for division); Mark Larabee, FBI Puts Cyber-Crime in Sights, THE OREGONIAN, Aug. 18, 2002, at B1 (announcing division's creation in twenty cities across the country).
14. See Press Release, U.S. Dep't of Justice, Federal Law Enforcement Announces Operation D-Elite, Crackdown on P2P Piracy Network (May 25, 2005), available at http://www.usdoj.gov/opa/pr/2005/May/05_crm_291.htm (last visited Oct. 30, 2007).
15. See News Release, U.S. Attorney's Off. W. District of Va., West Virginia Man Sentenced in Peer-to-Peer Piracy Crackdown (Oct. 17, 2006), available at http://www.usdoj.gov/usao/vaw/press_releases/ stanley_17oct2006.html (last visited Oct. 30, 2007).
16. See U.S. Dep't of Justice, FY2006 Performance and Accountability Report, Appendix F, available at http://www.usdoj.gov/ag/annualreports/ pr2006/Appd/appd_f.pdf (last visited Oct. 30, 2007). The DOJ in fiscal year 2006 filed 178 cases involving 18 USC §§ 2318, 2319, 2319A, 2320 or 17 USC § 506, up from 143 such cases filed in fiscal year 2005. Id. The number of defendants who were tried and found guilty rose to 9 in fiscal year 2006, up from 7 in fiscal year 2005 and the number of defendants who pleaded guilty climbed to 178 in fiscal year 2006, up from 112 in fiscal year 2005. Id.
17. See George "Toby" Dilworth, The Economic Espionage Act of 1996: an Overview, available at http://www.cybercrime.gov/ usamay2001_6.htm (last visited Oct. 30, 2007).
18. See IP CRIMES MANUAL, supra note 1, Chapter IV: Theft of Commercial Trade Secrets; see discussion infra Section II.C; cf. 18 U.S.C. § 1905 (2000).
19. See Economic Espionage Act of 1996, Pub. L. No. 104-294, 110 Stat. 3488 (codified at 18 U.S.C. §§ 1831-1839). See generally Gerald J. Mossinghoff et al., The Economic Espionage Act: A New Federal Regime of Trade Secret Protection, 79 J. PAT. & TRADEMARK OFF. SOC'Y 191, 191-95 (1997) (discussing reasons for enactment of EEA).
20. See Mossinghoff, supra note 19, at 191.
21. 18 U.S.C. § 1831 (delineating what constitutes economic espionage).
22. Id. § 1832 (delineating what constitutes theft of trade secrets). The EEA provides for a maximum of fifteen years in prison for economic espionage and a maximum of ten years in all other cases. An orgamzation may be fined up to $10 million for economic espionage; all other offenders under this section can be fined up to $500,000. An organization found guilty of the theft of trade secrets offense under § 1832 can be fined up to $5 milliion. Id.
23. See Mossinghhoff, supra note 19, at 191.
24. 18 U.S.C. § 1839 (listing definitions of terms used in Chapter 90 - Protection of Trade Secrets). Even if the original owner never loses custody over his property, the EEA recogmzes the loss of value to that owner. See generally COMPUTER CRIME AND INTELLECTUAL PROPERTY SECTION, CRIMINAL DIVISION, U.S. DEP'T OF JUSTICE, FEDERAL PROSECUTION OF VIOLATIONS OF INTELLECTUAL PROPERTY RIGHTS (COPYRIGHTS, TRADEMARKS AND TRADE SECRETS) 73 (1997) [hereinafter FEDERAL PROSECUTION MANUAL] (describing elements of EEA and other possible charges for theft of trade secrets), available at http://www.usdoj.gov/criminal/cybercrime/ intell_prop_rts/toc.htm (last visited Jan. 21, 2006).
25. 18 U.S.C. § 1839(3)(a); see United States v. Krumrei, 258 F.3d 535, 539 (6th Cir. 2001) (holding "reasonable measures" is not unconstitutionally vague). This provision requires the owner of a trade secret to affirmatively protect it from theft, a burden not placed on owners of other types of property.
26. 18 U.S.C. § 1839(3)(b); see United States v. Hsu, 40 F. Supp. 2d 623, 630-31 (E.D. Pa. 1999) (expressing discomfort with uncertainty of this language); Robert C. Van Arnam, Business War: Economic Espionage in the United States and the European Union and the Need for Greater Trade Secret Protection, 27 N.C.J. INT'L L. & COM. REG. 95, 101 (2001) ("[T]he trade secret owner, who has worked to create value in its use, is rewarded with a commercial advantage over those who have not fairly developed similar knowledge.").
27. In contrast to the Uniform Trade Secrets Act ("UTSA"), under which civil actions for theft of trade secrets may be brought, § 1832 sets forth a broader definition of misappropriation, making the attempt, or conspiracy, to commit theft an offense, and also protects information no matter the form in which transmitted or stored, as well as providing for an extraterritorial reach of the law. See Robin J. Effron, Secrets and Spies: Extraterritorial Application of the Economic Espionage Act and the TRIPs Agreement, 78 N.Y.U. L. REV. 1475, 1486-90 (2003) (discussing distinguishing elements of the EEA); see also Mason, supra note 3, at 14-16 (discussing Wstory and provisions of Economic Espionage).
28. See James M. Fischer, An Analysis of the Economic Espionage Act of 1996, 25 SETON HALL LEGIS. J. 239, 248-50 (2001) (noting that no federal statote, prior to the EEA, completely dealt with theft of proprietary information);
29. Steven Z. Szczepanski, Know-How and Trade Secret Rights, 1 ECKSTROM'S LICENSING IN FOREIGN AND DOMESTIC OPERATIONS § 5.04A (2001) (mentioning EEA explicitly covers intangibles).
30. But cf. Joel M. Androphy et al., Criminal Prosecutions of Trade Secret Theft: The Emergence of the Economic Espionage Act, 38 HOUSTON LAW. 16, 19 (2000) (suggesting that the characterization of trade secret as "soft" business competitive information rather than "hard" technical data would be a valid defense against prosecution under the EEA).
31. H.R. REP. N0.104-788, at 7 (1996), reprinted in 1996 U.S.C.CA.N. 4021, 4026 [hereinafter EEA HOUSE REPORT] (reporting legislative history of the EEA).
32. 18 U.S.C. § 1831(a) (2000).
33. Id. § 1831(a)(1) ("[S]teals, or without authorization appropriates, takes, carries away, or conceals, or by fraud, artifice, or deception obtains a trade secret").
34. Id. § 1831(a)(2) ("[W]ithout authorization copies, duplicates, sketches, draws, photographs, downloads, uploads, alters, destroys, photocopies, rephcates, transmits, dehvers, sends, mails, communicates, or conveys a trade secret.").
35. Id. § 1831(a)(3) ("[R]eceives, buys, or possesses a trade secret, knowing the same to have been stolen or appropriated, obtained, or converted without authorization.").
36. Id. § 1831(a)(4) ("[A]ttempts to commit any offense described in any of paragraphs (1) through (3).").
37. 18 U.S.C. § 1831(a)(5) (2000) ("[C]onspires with one or more other persons to commit any offense described in any of paragraphs (1) through (3), and one or more of such persons do any act to effect the object of the conspiracy.").
38. Id. § 1831(a).
39. Id. § 1832(a).
40. Id. §1832.
41. See id. (noting that defendant must intend to convert trade secret to economic benefit of someone other than owner). This requirement is broader than the UTSA's corresponding provision. The UTSA requires the person misappropriating the trade secret be the one who will benefit economically from its disclosure or use. See Mason, supra note 3, at 16 (discussing the history and provisions of the Economic Espionage Act).
42. 18 U.S.C. § 1832(a) (2000) (indicating defendant must intend or know threat will injure owner of trade secret); see United States v. Martin, 228 F.3d 1, 12 (1st Cir. 2000) (holding sufficient if defendant's intent was to use information to create new business more successful than information owner's company).
43. 18 U.S.C. § 1832(a); see United States v. Hsu, 40 F. Supp. 2d 623, 627 (E.D. Pa. 1999) (stating that "related to or included in" is understandable to individual of normal intelligence).
44. See United States v. Yang, 281 F.3d 534, 543 (6th Cir. 2002) (requiring proof of an actual trade secret would "eviscerate the effectiveness of the act"); United States v. Hsu, 155 R3d 189, 202 (3d Cir. 1998) (holding that requiring proof of an actual trade secret would force the government "to disclose trade secrets to the very persons suspected of trying to steal them, thus gutting enforcement efforts under the EEA").
45. 18 U.S.C § 1837 (2000) (describing applicability of EEA to conduct outside United States).
46. Id. § 1837(1) (extending EEA's jurisdictional reach to citizens, permanent residents, or organizations controlled by laws of United States).
47. Id. § 1837(2) (extending EEA's jurisdictional reach to crimes where "some act in furtherance of the offense was committed in the United States").
48. See Van Arnam, supra note 26, at 109, 112-13 (stating that EEA cases have generally involved contractors, consultants, and former employees).
49. See J. Thomas Coffin, The Extraterritorial Application of the Economic Espionage Act of 1996, 23 HASTINGS INT'L & COMP. L. REV. 527, 535 (2000) (noting that cases with international implications such as Yang, 281 F.3d 534, fell outside the reach of § 1831 since no federal government entity was involved in the alleged information theft).
50. See generally Coffin, supra note 48, at 531-37 (providing details about the first indictment under § 1831 and prior indictments under § 1832).
51. See Press Release, U.S. Dep't of Justice, Former Chinese National Convicted of Economic Espionage to Benefit China Navy Research Center (Aug. 2, 2007), available at http://www.usdoj.gov/opa/pr/2007/August/07_nsd_572. html (last visited Oct. 30 2007).
52. See Effron, supra note 27, at 1490-92 (discussing how prosecution under the EEA may be impacted now that government officials have begun to make a link between economic espionage and terrorist activity and threats).
53. See IP CRIMES MANUAL, supra note 1, Chapter IV: Theft of Commercial Trade Secrets.
54. See id.
55. See Memorandum from Attorney General John Ashcroft to all U.S. Attorneys, all First Assistant U.S. Attorneys, all Criminal Chiefs and all Criminal Division Section Chiefs and Office Directors, available at http://www.usdoj.gov/criminal/cybercrime/eea1996.pdf (last visited Oct. 30, 2007)
56. See 142 CONG. REC. S12, 212-13 (daily ed. Oct. 2, 1996) (statement of Sens. Specter and Kohl) (asserting that parallel development of trade secrets and reverse engineering of a lawfully accessed product cannot constitute a violation of the EEA, and that no one can be righrfully accused of misappropriating an alleged trade secret which the owner fails to safeguard).
57. See generally Chris Carr & Larry Gorman, The Revictimization of Companies by the Stock Market Who Report Trade Secret Theft Under the Economic Espionage Act, 57 BUS. LAW. 25, 34-38 (2001) (describing sanctions for and defenses to intellectual property crimes);
58. Dennis J. Kelly & Paul R. Mastrocola, The Economic Espionage Act of 1996, 26 NEW ENG. J. ON CRIM. & CIV. CONFINEMENT 181, 187 (2000) (noting EEA's legislative history shows Congress did not intend "parallel development" or "reverse engineering" to be crimes).
59. See Glaxo Inc. v. Novopharm Ltd., 931 F. Supp. 1280, 1304-05 (E.D.N.C. 1996) (stating that a claim of trade misappropriation would not succeed against the defense of independent development where Novopharm independently developed a distinct production process for the drug, ranitidine hydrochloride, which did not incorporate Glaxo's process for making the drug). Courts are divided over who bears the burden of persuasion once the independent development defense is raised. See Moore v. Kulicke & Sofia Indus., 318 F.3d 561, 572 (3d Cir. 2003) (concluding that engineer who submitted a design approach and methodology retained the burden of persuasion, and only burden of production was shifted to manufacturer); Penalty Kick Mgmt v. Coca Cola Co., 318 R3d 1284, 1296 (11th Cir. 2003) (reasoning that PKM wanting Coca Cola to prove independent development constituted an improper attempt to shift burden of proof from Plaintiff to Defendant); Garter-Bare Co. v. Munsingwear, Inc., 723 F. 2d 707, 715 (9th Cir.) (applying California law to hold that the burden of proof shifted to the defendant to show that it arrived at the secret process by independent invention).
60. See Moore, 318 F.3d at 567 ("[U]nlike the patent system, which provides a remedy for any use of a technique similar to the patented technique, trade secret misappropriation protects against the wrongful use of the trade secret itself; it is the defendant's theft of the plaintiff's idea that this tort attempts to prevent").
61. Walker Mfg. v. Hoffmann, Inc., 261 F. Supp. 2d 1054, 1080 (N.D. Iowa 2003) (quoting Revere Transducers, Inc. v. Deere & Co., 595 N.W.2d 751, 775 (Iowa 1999)); see discussion infra Section IV.A.4.
62. See IP CRIMES MANUAL, supra note 1, Chapter IV: Theft of Commercial Trade Secrets.
63. For a more complete discussion of both reverse engineering and loss of trade secret status, see DVD Copy Control Assn. v. Bunner, 116 Cal. App. 4th 241 (Ca. Ct. App. 2004) (noting that an individual cannot be held liable for posting a trade secret on the Internet if the trade secret already had become public because widespread dissemination destroys trade secret status). See also discussion infra Section IV.4.
64. See Cook Group, Inc. v. Wilson (In re Wilson), 248 B.R. 745, 749 (M.D.N.C. 2000) (noting that proof that the information is readily available would furnish a complete defense to an original claim of trade secret misappropriation).
65. See IP CRIMES MANUAL, supra note 1, Chapter IV: Theft of Commercial Trade Secrets.
66. See id.
67. 18 U.S.C. § 2314 (2000). See James H.A. Pooley et al., Understanding the Economic Espionage Act of 1996, 5 TEX. INTELL. PROP. L.J. 177, 179-180 (1997) (indicating 18 U.S.C. §§ 2314, 2315 are also known as the Interstate Transportation of Stolen Property Act ("ITSP")).
68. 18 U.S.C. § 2314 (levying sanctions in form of fine, imprisonment for up to ten years, or both).
69. Id. Section 2314 imposes criminal sanctions on any person who: having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transports or causes to be transported, or induces any person or persons to travel in, or to be transported in interstate or foreign commerce in the execution or concealment of a scheme or artifice to defraud that person or those persons of money or property having a value of $5,000 or more. Id.
70. See, e.g., United States v. Farraj, 142 F. Supp. 2d 484, 489 (S.D.N.Y. 2001) (noting support for this position in previous Second and Third Circuit decisions where the stolen information was an "ordinary subject of commerce"). Farraj involved a paralegal's transmittal of a trial plan over e-mail as part of a scheme to sell the plan. The court acknowledged that the Tenth Circuit had taken the position that the NSPA does not apply to pure intellectual property; however, it viewed that decision as a misapplication of Supreme Court precedent. Id.
71. See Spencer Simon, The Economic Espionage Act of 1996, 13 BERKELEY TECH L.J. 305, 306 (1998) (explaining history of National Stolen Property Act).
72. See Farraj, 142 F. Supp. 2d at 486 (stating that the Supreme Court has not addressed NSPA applicability directly).
73. U.S. CONST. art. I, § 8, cl. 3. The Constitution provides in relevant part, "The Congress shall have power . . . [t]o regulate commerce . . . among the several states."
74. 18 U.S.C. § 2314 (2000) (criminalizing transportation of stolen goods in interstate or foreign commerce); see Van Dorn Co. v. Howington, 623 F. Supp. 1548, 1558 (N.D. Ohio 1985) (finding claim insufficient because it did not allege interstate transportation of stolen property under National Stolen Property Act).
75. See Peter J. G. Toren, The Prosecution of Trade Secret Thefts Under Federal Law, 22 PEPP. L. REV. 59, 67-68 (1994) (describing rationale underlying enactment of National Stolen Property Act).
76. See United States v. Brown, 925 F.2d 1301, 1309 (10th Cir. 1991) (dismissing indictment for lack of proof that computer program was physically removed from plaintiff's place of business).
77. See, e.g., United States v. Farraj, 142 F. Supp. 2d 484, 491 (S.D.N.Y. 2001) (allowing for conviction based on transfer of document via internet across state lines); United States v. Riggs, 739 F. Supp. 414, 420 (N.D. Ill. 1990) (finding crossing of "state lines via computer-generated electronic impulses" sufficient); United States v. Walter, 43 M.J. 879, 883 (N-M.C.C.A. 1996) (stating that electronic contents of stolen laptop computer system constitute "property" for purposes of the NSPA).
78. See Abbott v. United States, 239 F.2d 310, 312 (5th Cir. 1956) (requiring government to prove "[w]ho carried it, or how, or who caused it to be transported"); see also Howington, 623 F. Supp. at 1558 (holding plaintiff must allege transportation with particularity rather than "merely stat[ing] that a trade secret was appropriated in violation of the statutes"). Some courts, however, have permitted juries to draw their own conclusions from the evidence. E.g., United States v. Ytem, 255 F.3d 394, 395-96 (7th Cir. 2001) (upholding jury's determination based on circumstantial evidence).
79. See United States v. Weiner, 755 F. Supp. 748, 752 (E.D. Mich. 1991) (finding that fact defendants knowingly placed checks into stream of commerce met first NSPA requirement).
80. See In re Vericker, 446 F.2d 244, 248 (2d Cir. 1971) (quoting United States v. Seagraves, 265 F.2d 876, 880 (3d Cir. 1959) (citing definition in BLACK'S LAW DICTIONARY 823 (4th ed. 1951))). In Vericker, FBI documents describing individuals' criminal activity were found not to be ordinarily a subject of commerce and thus were held to be outside the statute. Vericker, 446 F.2d at 248.
81. See United States v. Martin, 228 F.3d 1, 13 (1st Cir. 2000) (stating that intangible, "purely intellectual" property does not fall within the auspices of § 2314); United States v. Stafford, 136 F.3d 1109, 1114-15 (7th Cir. 1998) (holding codes used to access money-transfer system did not meet definition of goods, wares, or merchandise); United States v. Brown, 925 F.2d 1301, 1307-08 (10th Cir. 1991) (holding computer source codes are not "goods, wares, or merchandise" under the NSPA).
82. See United States v. Lyons, 992 F.2d 1029, 1033 (10th Cir. 1993) (holding computer software stolen in conjunction with computer hardware was theft of tangible property); Brown, 925 F.2d at 1307-09 ("Purely intellectual property is not within this category. It can be represented physically, such as through writing on a page, but the underlying intellectual property itself remains intangible. . .and as such, it alone cannot constitute goods, wares, merchandise, securities or moneys . . . ."); United States v. Greenwald, 479 F.2d 320, 322 (6th Cir. 1973) (holding documents containing chemical formulae to be goods, wares, or merchandise given the established market for their sale and their written expression).
83. See United States v. Portrait of Wally, 105 F. Supp. 2d 288, 290-91 (S.D.N.Y. 2000) (applying federal common law doctrine that defendant "cannot be convicted of receiving stolen goods if, before the stolen goods reached the receiver, the goods had been recovered by their owner or his agent, including the police").
84. See, e.g., United States v. Schaffer, 266 F.2d 435, 439 (2d Cir. 1959), aff'd, 362 U.S. 511 (1960) (relying on legislative history to conclude that purpose of $5,000 minimum value is to avoid placing too great a burden on DOJ).
85. See Greenwald, 479 F.2d at 321 (acknowledging established market for novel chemical formulae). But see United States v. Coviello, 225 F.3d 54, 65 (1st Cir. 2000) (holding proper measure of loss was standard wholesale price of stolen CD-ROM discs); United States v. Willette, 764 F. Supp. 759, 761-62 (N.D.N.Y. 1991) (refusing to determine value of stolen knives based on retail price when owner was part of wholesale market).
86. See United States v. Kwan, 2003 WL 22992064 at *8-*9 (S.D.N.Y. Dec. 17, 2003) (recognizing the use of various valuation methods when no market value exists and allowing the use of cost of production as one method of valuation); United States v. Wilson, 900 F.2d 1350, 1355-56 (9th Cir. 1990) (rejecting strict market value in cases of goods with no readily ascertainable market value and allowing any reasonable method of ascribing an equivalent monetary value to items); United States v. Stegora, 849 F.2d 291, 292 (8th Cir. 1988) (valuing trade secret by looking to amount owner invested in development and production of trade secret).
87. See United States v. Stegora, 849 F.2d 291, 292 (8th Cir. 1988) (approving use of "thieves' market value" to appraise stolen goods or chattels).
88. See United States v. Robie, 166 F.3d 444, 453-54 (2d Cir. 1999) (allowing jury to infer value of stamps at issue at time they were transported across state lines rather than at time they were stolen).
89. 18 U.S.C. § 2314 (2000) ("[W]hoever transports . . . goods, wares, merchandise . . . knowing the same to have been stolen."); see United States v. Schultz, 333 F.3d 393, 411 (2d Cir. 2003) (stating that not knowing an item was stolen maybe a defense to action under NSPA, but where defendant possesses all of the relevant facts, liability cannot be avoided by claiming ignorance of the law).
90. See United States v. Bottone, 365 F.2d 389, 392-93 (2d Cir. 1966) (holding proof of defendant's comings and goings sufficient to suggest he knew he was selling stolen goods).
91. 18 U.S.C. § 2314 (describing crime of transportation of stolen property).
92. Id. § 1905 (describing crime of disclosure of confidential information by an officer or employee of the United States); see United States v. Wallington, 889 F.2d 573, 577-78 (5th Cir. 1989) (noting Act prohibits disclosure of information only if information is confidential and federal employee knew information to be so).
93. 18 U.S.C. § 1905 (2000) (limiting scope to "an officer or employee of the United States or of any department or agency thereof, any person acting on behalf of the Office of Federal Housing Enterprise Oversight, or agent of the Department of Justice as defined in the Antitrust Civil Process Act").
94. Id. (providing for fine or imprisonment of not more than one year, or both, and removal from office or employment, for disclosure of confidential information by officer or employee of United States); see Pooley, supra note 64, at 179.
95. See discussion infra Section II.D.
96. See Pooley, supra note 64, at 179-80 (noting that federal prosecutors turned to other federal statutes because only one single federal statute was available that directly prohibited the misappropriation of trade secrets).
97. See Megapulse, Inc. v. Lewis, 672 F.2d 959, 971 (D.C. Cir. 1982) (holding district court had jurisdiction over suit brought by government contractor seeking injunctive relief to prevent alleged violation of Trade Secrets Act).
98. See Hercules, Inc. v. Marsh, 659 F. Supp. 849, 855 (W.D. Va. 1987) (holding directory was not "confidential information" under Trade Secrets Act because release of information could not cause competitive harm to objecting company).
99. 18 U.S.C. §§ 1341, 1343 (2000) (describing elements of mail or wire fraud crimes). For a more extensive discussion of the mail and wire fraud statutes, see the MAIL AND WIRE FRAUD article in this issue.
100. The mail fraud statute is flexible because almost any use of the mail brings one under the statute's prohibitions. See, e.g., United States v. Boscarino, 2003 WL 22136305, at *1 (N.D. Ill. Sep. 16, 2003) (finding that "one mailing or wire" can be used as the predicate offense in a multi-count indictment without proof that there was use of mail or wire in every single one of the transactions).
101. See United States v. Manion, 339 F.3d 1153, 1156 (9th Cir. 2003) (noting that a person need only be a willful participant, rather than the mastermind of a scheme to be convicted, and such persons may be held vicariously liable for the acts of co-schemers).
102. 18 U.S.C. § 1346 (defining "scheme or artifice to defraud" for purposes of mail fraud chapter).
103. See United States v. Henry, 29 F.3d 112, 114 (3d Cir. 1994) ("The statutes cover schemes to defraud another of intangible property, such as confidential business information.").
104. See Sunbird Air Serv. v. Beech Aircraft Corp., Civ. A. No. 89-2181-V, 1992 WL 135021, at *4 (D. Kan. May 29, 1992) (rejecting defendant's argument in a motion to dismiss that plaintiff failed to show victims were actually defrauded).
105. See Ginsburg v. United States, 909 F.2d 982, 991 (7th Cir. 1990), aff'd, 909 F.2d 982 (7th Cir. 1990) ("[A]ctual success of a scheme to defraud is not required for a mail fraud conviction.").
106. See Shaw v. Rolex Watch U.S.A., Inc., 726 F. Supp. 969, 972 (S.D.N.Y. 1989) (holding mail fraud statute does not require showing of reliance).
107. See United States v. Goodman, 984 F.2d 235, 237 (8th Cir. 1993) (stating to prove mail fraud, the government must prove the existence of a plan or scheme with intent to defraud,); cf. United States v. Regent Office Supply Co., 421 F.2d 1174, 1181 (2d Cir. 1970) (showing of intent to deceive, and even to induce, are not sufficient to constitute fraudulent intent).
108. See IP CRIMES MANUAL, supra note 1, Chapter IV: Theft of Commercial Trade Secrets.
109. See id.; see also Abbott v. United States, 239 F.2d 310, 315 (5th Cir. 1956) (sustaining conviction for use of mails to defraud, even when government failed to prove defendant caused interstate transportation of stolen goods under NSPA).
110. See 18 U.S.C. §§ 1341, 1343 (2000) (describing elements of mail or wire fraud crimes); see also Pooley, supra note 64, at 186.
111. E.g., Johnson Elec. N. Am. Inc. v. Mabuchi Motor Am. Corp., 98 F. Supp. 2d 480, 488 (S.D.N.Y. 2000) (holding patent owner had standing to bring civil claim under RICO based on mail and wire fraud).
112. 18 U.S.C. §§ 1961-1968 (2000) (criminalizing racketeer influenced and corrupt organizations activities). For a full discussion of §§ 1961-1968, see the RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS article in this issue.
113. E.g., Beck v. Prupis, 529 U.S. 494, 496-97 (2000) (recognizing that civil RICO claims are available for any person injured in his business or property from another's pattern of racketeering activity).
114. See 18 U.S.C. § 1961(1)(B) (identifying predicate offenses under RICO which violate criminal law); see also W. Assocs. Ltd. P'ship v. Mkt. Square Assocs., 235 F.3d 629, 633 (D.C. Cir. 2001) (finding predicate offenses are acts punishable under certain state and federal criminal laws).
115. 18 U.S.C. § 1341 (2000).
116. Id. § 1343.
117. Id. § 2314.
118. Id. § 2315. One commentator reports that Congress intended the criminal misappropriation of trade secrets to be a crime punishable under RICO, and thinks it likely that this will occur in the future. See generally, Michael Coblenz, Intellectual Property Crimes, 9 ALB. L.J. SCI. & TECH. 235, 283 (1999) (speculating that Economic Espionage Act (EAA) was not included in RICO amendments because the EEA was signed into law three months after RICO).
119. 18 U.S.C. § 1961(5) (defining "pattern of racketeering activity" for purposes of RICO chapter).
120. See H.J., Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229, 239 (1989) (relying on RICO's legislative history to conclude that to prove pattern of racketeering activity, plaintiff or prosecutor must show racketeering predicates are related and that they amount to or pose threat of continued criminal activity).
121. See Barticheck v. Fid. Union Bank/First Nat'l State, 832 F.2d 36, 39 (3d Cir. 1997) (considering the six factors to determine racketeering activity pattern); see also W. Assocs. Ltd. P'ship v. Mkt. Square Assocs., 235 F.3d 629, 633 (D.C. Cir. 2001) (explaining the six factors should not be applied rigidly but rather with common sense).
122. 18 U.S.C. § 1030 (2000) (as amended by the USA PATRIOT Act of 2001, Pub. L. No. 107-56, § 814, 115 Stat. 272, 382-84 (2001) and by the Cyber Security Enhancement Act of 2002, Pub. L. No. 107-296, § 225, 116 Stat. 2135, 2156 (2002), and as corrected for syntax by the 21st Century Department of Justice Appropriations Authorization Act, Pub. L. No. 107-273, 116 Stat. 1758 (2002))). For a detailed discussion of this statute, see the COMPUTER CRIMES article in this issue.
123. See Creative Computing v. Getloaded.com LLC, 386 F.3d 930, 930 (9th Cir. 2004) (referring to 18 U.S.C. § 1030 as the Computer Fraud and Abuse Act).
124. 18 U.S.C. § 1030(e)(2). "Protected computers" include any computers used in interstate commerce or communications and thus include any
125. See COMPUTER CRIME & INTELL. PROP. SECTION, U.S. DEP'T OF JUSTICE, THE NAT'L INFO. INFRASTRUCTURE PROT. ACT OF 1996 LEGISLATIVE ANALYSIS (the purpose of the CFAA is to address computer crime), available at http://www.cybercrime.gov/1030analysis.html (last visited Oct. 30, 2007).
126. 18 U.S.C. § 1030(a)(2)(c).
127. Id. § 1030(a)(4). An exception is if the defendant only used the computer and the value of that use is less than $5,000 per year. See id.
128. Damage is defined as any impairment to the integrity or availability of data or information. Id. § 1030(e)(8). "Integrity" has been construed as encompassing the misappropriation of trade secrets. See Shurgard Storage Centers, Inc. v. Safeguard Self Storage, Inc, 119 F. Supp 2d 1121, 1126 (W.D. Wash 2000).
129. 18 U.S.C. § 1030(a)(5).
130. See generally Linda B. Samuels & Bryan K. Johnson, The Uniform Trade Secrets Act: The States' Response, 24 CREIGHTON L. REV. 49 (1990) (analyzing the Uniform Trade Secrets Act as adopted by the states).
131. See, e.g., ALA. CODE § 13A-8-10.4 (1994) (theft of trademarks or trade secrets); CAL. PENAL CODE §499c. (West 1999); COLO. REV. STAT. § 18-4-408 (1999) (theft of trade secrets).
132. See, e.g., N.H. REV. STAT. ANN § 637:2 (1996) ("'Property' means anything of value, including . . . trade secrets, meaning the whole or any portion of any scientific or technical information, design, process, procedure, formula or invention which the owner thereof intends to be available only to persons selected by him."); UTAH CODE ANN. §§ 76-6-401, 76-4-404 (1999) (same).
133. See, e.g., GA. CODE ANN. § 16-8-13 (1999).
134. See Tiffani L. McDonough, Piecing It All Together: The Amendment to the Federal Trademark Counterfeiting Act Prevents Circumvention Through Component Parts, 35 AIPLA Q.J. 69, 74 (Winter 2007).
135. See id.
136. See id.
137. See Sam Cocks, Note, The Hoods Who Move the Goods: An Examination of the Booming International Trade in Counterfeit Luxury Goods and An Assessment of the American Efforts to Curtail its Proliferation, 17 FORDHAM INTELL. PROP. MEDIA & ENT. L.J. 501, 508 (Winter 2007)
138. Unlike protection of patents and copyrights, protection of trademark is not expressly provided for in the Constitution. The U.S. trademark law, consequently, developed in bits and pieces through various statutes, court rulings and amendments. See generally, Cocks, supra note 134, at 521-522 (describing the development of trademark law in the United States).
139. See Coblenz, supra note 115, at 273-83 (describing elements of TCA).
140. See IP CRIMES MANUAL, supra note 1, Chapter III: Trafficking In Counterfeit Trademarks, Service Marks, Certification Marks.
141. See id.
142. See generally McDonough, supra note 131.
143. See id.
144. See id. at 80.
145. Pub. L. No. 109-181, 120 Stat. 285 (2006) (codified at 18 U.S.C. § 2320).
146. 18 U.S.C. § 2320(a) (2000).
147. Id. § 2320(e)(2) (defining term "traffic").
148. Id. § 2320(e)(3) (defining term "financial gains").
149. See United States v. Hanafy, 302 F.3d 485, 487 (5th Cir. 2002) (presenting requirements for prosecuting criminal trademark counterfeiting offense (quoting United States v. Sultan, 115 F.3d 321, 325 (5th Cir. 1997))). However, the term "goods" is not defined in 18 U.S.C. § 2320.
150. SCIMGA invalidates recent circuit court decisions such as United States v. Giles, 213 F.3d 1247, 1251 (10th Cir. 2000) (distinguishing between trafficking in goods and trafficking in counterfeit marks or labels which are unattached to any goods and therefore not punishable under § 2320).
151. 18 U.S.C. § 2320(e)(1). Compare United States v. Petrosian, 126 F.3d 1232, 1233-34 (9th Cir. 1997) (finding that attaching a genuine mark to a counterfeit good makes the mark counterfeit under § 2320) with Hanafy, 302 F.3d at 485 (finding that attaching mark to trays containing genuine, unadulterated products associated with that mark does not give rise to criminal liability under § 2320).
152. 18 U.S.C. § 2320(f).
153. See United States v. Sung, 51 F.3d 92, 93 (7th Cir. 1995) (holding proof that person "knowingly used a counterfeit mark" under § 2320(d)(1)(A)(ii) does not require that person knew the mark to be someone else's registered trademark); United States v. Baker, 807 F.2d 427, 428-29 (5th Cir. 1986) (relying on legislative history to show criminal intent is not required).
154. See IP CRIMES MANUAL, supra note 1, Chapter III: Trafficking In Counterfeit Trademarks, Service Marks, Certification Marks; see United States v. Guerra, 293 F.3d 1279, 1285 (11th Cir. 2002) (finding defendants guilty of conspiracy to traffic in counterfeit cigars when evidence demonstrated they knew the "essential objective" of the conspiracy, even though they may not have known all its details and played only a minor role).
155. See United States v. Giles, 213 F.3d 1247, 1250 (10th Cir. 2000) (finding little value in using Lanham Act precedent in a § 2320 case because the Lanham Act deals with civil liability). But see Petrosian, 126 F.3d at 1234 (holding that Lanham Act can be used to expand the terms used in the TCA).
156. See IP CRIMES MANUAL, supra note 1, Chapter III: Trafficking In Counterfeit Trademarks, Service Marks, Certification Marks; 15 U.S.C. § 1115 (2000); see also R.J. Reynolds Tobacco Co. v. Premium Tobacco Stores, 2001 WL 747422 (N.D. Ill. Jun. 29, 2001) (discussing use of multiple defenses in action alleging violations of Lanham Act).
157. 18 U.S.C. § 2320(e)(1).
158. See, e.g., United States v. Brooks, 111 F.3d 365, 372 (4th Cir. 1997) (holding the government did not have to prove either actual confusion or an intent to mislead); United States v. Yamin, 868 F.2d 130, 133 (5th Cir. 1989) (holding the "likely to confuse" standard is not limited to actual purchasers but to "confusion of the public in general"); United States v. Torkington, 812 F.2d 1347, 1352 (11th Cir. 1987) (holding § 2320(d)(1)(A) requires proof that members of the purchasing public, rather than direct purchasers themselves, would likely be confused, mistaken, or deceived). For a more in-depth discussion of this argument, see Coblenz, supra note 115, at 275.
159. 18 U.S.C. § 2371 (2000); See IP CRIMES MANUAL, supra note 1, Chapter III: Trafficking In Counterfeit Trademarks, Service Marks, Certification Marks ("Consider these charges if the defendant only supplied counterfeit labels or packaging that were attached by another person.").
160. 18 U.S.C. §§ 1341, 1343 (2000); See IP CRIMES MANUAL, supra note 1, Chapter III: Trafficking In Counterfeit Trademarks, Service Marks, Certification Marks ("These charges can be filed if the defendant used the mail (or other interstate carrier) or wires (including the Internet) in a scheme to defraud purchasers, whether direct or indirect purchasers.").
161. 17 U.S.C. § 506 (2000); 18 U.S.C. § 2319 (2000); See IP CRIMES MANUAL, supra note 1, Chapter III: Trafficking In Counterfeit Trademarks, Service Marks, Certification Marks ("Consider these charges if the underlying goods are not only trademarked or service marked, but also contain copyrighted contents, such as books, movies, music, or software.").
162. 18 U.S.C. § 2318 (2000); See IP CRIMES MANUAL, supra note 1, Chapter III: Trafficking In Counterfeit Trademarks, Service Marks, Certification Marks ("Consider charging § 2318 if the labels, documentation, or packaging were intended to be used with copyrighted works.").
163. 21 U.S.C. §§ 331(a), 333, 343, 352, and 841 (2000); See IP CRIMES MANUAL, supra note 1, Chapter III: Trafficking In Counterfeit Trademarks, Service Marks, Certification Marks.
164. 18 U.S.C. § 1365 (2000); see IP CRIMES MANUAL, supra note 1, Chapter III: Trafficking In Counterfeit Trademarks, Service Marks, Certification Marks ("Tampering with labels and communicating false information that a consumer product has been tainted.").
165. 15 U.S.C. §§ 68a, 68h, 69a, 69i, 70a and 70i (2000); See IP CRIMES MANUAL, supra note 1, Chapter III: Trafficking In Counterfeit Trademarks, Service Marks, Certification Marks.
166. For further discussion, refer to the MONEY LAUNDERING article in this issue.
167. 18 U.S.C. § 1956(c)(7)(D) (2000).
168. Pub. L. No. 104-153, §§ 2, 3, 110 Stat. 1386 (1996) (amending 18 U.S.C. § 1961(1)(B)).
169. H.R. REP. NO. 104-556, at 3 (1996), reprinted in 1996 U.S.C.C.A.N. 1074, 1075 [hereinafter ANTICOUNTERFEITING HOUSE REPORT].
170. Id.
171. See generally MELVILLE B. NIMMER & DAVID NIMMER, NIMMER ON COPYRIGHT: A TREATISE ON THE LAW OF LITERARY, MUSICAL AND ARTISTIC PROPERTY, AND THE PROTECTION OF IDEAS § 15.05[B] (1998) (discussing how Congress broadened scope of federal criminal copyright liability through amendment of criminal law).
172. See ANTICOUNTERFEITING HOUSE REPORT, at 6 (discussing how Congress broadened scope of federal criminal copyright liability through amendment of criminal law).
173. 18 U.S.C. § 1963(a) (2000).
174. Id. § 1956(a)(1)(B)(ii).
175. ANTICOUNTERFEITING HOUSE REPORT, supra note 166, at 6.
176. U.S. CONST. art. I, § 8, cl. 8. (Congress shall have the power "[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries").
177. See United States v. LaMacchia, 871 F. Supp. 535, 539 (D. Mass. 1994) (requiring commercial exploitation for criminal offense of copyright infringement). Prior to 1996, infringement was a criminal offense, but when Congress included infringement in the RICO scheme they created new layers of criminal sanctions and civil penalties not previously present. Snowden v. Lexmark Int'l, Inc., 237 F.3d 620, 624 (6th Cir. 2001).
178. See generally Mary Jane Saunders, Criminal Copyright Infringement and the Copyright Felony Act, 71 DENV. U. L. REV. 671, 673 (1994) (discussing requirements for criminal copyright infringement);
179. Robert A. Spanner, The Brave New World of Criminal Software Infringement Prosecutions, 12 No. 11 COMPUTER LAW. 1 (1995) (discussing various factors involved in criminal software prosecutions);
180. Kent Walker, Federal Criminal Remedies for the Theft of Intellectual Property, 16 HASTINGS COMM. & ENT. L.J. 681 (1994) (presenting an Assistant U.S. Attorney's view on factors for prosecuting high-technology crime as distinguished from civil infringement).
181. See, e.g., LaMacchia, 871 F. Supp. at 539-40 (discussing history of criminal copyright law); see also Saunders, at 679-80 (describing the legislative history of the criminal copyright statute).
182. Copyright Act of 1976, Pub. L. No. 94-553, 90 Stat. 2541 (codified as amended at 17 U.S.C. § 506(a) (2000)). The 1976 Act changed the nature of the criminal copyright system by substituting a single federal statutory copyright for dual copyright codes. Federal law now preempts the field of copyrights. 17 U.S.C. § 301(a) (2000) (stating federal statute preempts state law); FEDERAL PROSECUTION MANUAL, supra note 24, at 24.
183. Act of May 24, 1982, Pub. L. No. 97-180, 96 Stat. 91 (codified at 18 U.S.C. § 2319 (2000)). While certain acts of criminal copyright infringement were defined as felonies, most infringements remained misdemeanor offenses. 18 U.S.C. § 2319. The criminal copyright law supplements private civil remedies by punishing conduct that undermines the integrity of the copyright system, despite the conduct's inability to rise to the level of civil action. 17 U.S.C. §§ 506(c)-(e); FEDERAL PROSECUTION MANUAL, supra note 24, at 17.
184. Pub. L. No. 102-561, 106 Stat. 4233 (1992) (codified as amended at 18 U.S.C. §§ 2319(b)-(c)). For an in-depth discussion of the legislative history of the Copyright Felony Act, see Saunders, supra note 175, at 677-80.
185. See Saunders, supra note 175, at 677-80 (discussing legislative history of the Copyright Felony Act).
186. For a comparison of the old and revised statute, see Carl H. Loewenson, Jr. & Marta E. Nelson, Congress Toughens Criminal Copyright Law, N.Y.L.J., Nov. 13, 1992, at 1 (outlining changes brought about by the Copyright Felony Act of 1992).
187. See 18 U.S.C. § 2319 (2000). Under the 1992 Act, felony sanctions applied to ten or more copies made within a 180-day period, with a total retail value exceeding $2,500. Id. § 2319(b).
188. See 17 U.S.C. § 506(a).
189. See id. § 102 (excluding ideas, procedures, processes, systems, methods of operation, concepts, principles, and discoveries from copyright protection); Southco, Inc. v. Kanebridge Corp., 390 F.3d 276, 281 (3d Cir. 2004) (noting "Congress has provided copyright protection for original works of authorship fixed in any tangible medium of expression").
190. 18 U.S.C. § 2319A(b)-(c) (2000); see United States v. Moghadam, 175 F.3d 1269, 1274 (11th Cir. 1999) (upholding constitutionality of the anti-bootlegging statute based on the Commerce Clause, thereby avoiding the question of whether the Copyright Clause's fixation concept can be expanded to encompass live performances that have not been reduced to tangible form); see also Dowling v. United States, 473 U.S. 207, 209 (1985) (defining "bootlegging" as the making of "an unauthorized copy of a commercially unreleased performance").
191. Pub. L. No. 109-229, 119 Stat 218 (2005) (codified as 18 U.S.C. § 2319B).
192. Id.
193. No Electronic Theft (NET) Act of 1997, Pub. L. No. 105-147, 111 Stat. 2678 (1997).
194. See Coblenz, supra note 115, at 244 (commenting on history of criminal copyright statutes). The NET Act is the centerpiece of DOJ efforts to combat intellectual property infringement, especially in the New York - New Jersey area, California, Massachusetts, and the Southern District of Florida; see also Deputy Attorney General Eric H. Holder, Jr., Press Conference, Announcing the Intellectual Property Rights Initiative, (July 23, 1999) (detailing new interdepartmental commitment), available at http://www.usdoj.gov/criminal/cybercrime/dagipini.htm (last visited Oct. 31, 2007).
195. NET Act of 1997, § 2(b) (1997) (amending 17 U.S.C. § 506(a) (2000)).
196. See H.R. REP. NO. 105-339, at 3-5 (1997) (describing legislative justifications for removal of "financial gain" requirement for criminal copyright infringement). But see Wendy M. Grossman, Cyber View: Downloading as a Crime, SCI. AM., Mar. 1998, at 37 (criticizing NET Act for absence of fair-use exemptions).
197. See Scott R. Lassar, Press Release, Software Pirate Guilty of Copyright Infringement Under NET Act, available at http://www.cybercrime. gov/pwa_verdict.htm (last visited Oct. 31, 2007) (detailing results of first NET Act trial for computer software piracy conspiracy).
198. Pub. L. No. 105-304, 112 Stat. 2860 (codified as amended at 17 U.S.C. § 512). See United States v. Elcom Ltd., 203 F. Supp. 2d 1111, 1127-29 (N.D. Cal. 2002) (upholding DMCA to constitutional challenge); see also David Goldstone et al., Novel Criminal Copyright Infringement Issues Related to the Internet (discussing enactment of the DMCA), http://www.cybercrime.gov/usamay2001_5.htm (last visited Oct. 31, 2007).
199. 17 U.S.C. § 512 (2000).
200. Id. § 1204.
201. Id. § 1201.
202. Id. § 1202.
203. See Press Release, U.S. Dep't of Justice, First Indictment Under Digital Millennium Copyright Act Returned Against Russian National, Company, in San Jose, California (August 28, 2001) (describing first DMCA indictment under 17 U.S.C. § 1201 for trafficking in technology designed to circumvent copyrighted technology), http://www.cybercrime.gov/ Sklyarovindictment.htm (last visited Oct. 31, 2007); see also Universal City Studios, Inc. v. Reimerdes, 111 F. Supp. 2d 294, 345 (S.D.N.Y. 2000) (ordering civil relief in form of injunction against defendants posting decryption software in violation of DMCA).
204. See Computer Crimes and Intellectual Property Section, U.S. Dep't of Justice, Intellectual Property Cases, (summarizing criminal conviction for intellectual property violations, with nature of violation noted), http://www.usdoj.gov/criminal/cybercrime/ipcases.html (last visited Oct. 31, 2007).
205. See generally Michael M. DuBose, How The Show Goes On: Law and Theater in the Twenty-First Century, 29 COLUM. J.L. & ARTS 481 (discussing recent progresses in global enforcement).
206. Council of Europe, Convention on Cybercrime, European Treaty Series (ETS) no. 185, available at http://conventions.coe.int/Treaty/en/Treaties/ Html/185.htm (last visited Oct. 31, 2007).
207. 18 U.S.C. § 2318 (2000).
208. Id.
209. 17 U.S.C. §§ 506(c)-(d) (2000). Section 506(c) now refers to Fraudulent Copyright Notice, and § 506(d) to Fraudulent Removal of Copyright Notice. Evidence of reproduction or distribution of a copyrighted work, by itself, is not sufficient to establish a willful infringement under subsection (a). See 17 U.S.C. § 506(a); see also United States v. Manzer, 69 F.3d 222, 227 (8th Cir. 1995) (applying four factors to find sufficient evidence of willful copyright infringement of computer software).
210. 17 U.S.C. § 1101.
211. See CRIM. RESOURCE MANUAL No. 1848, available in the JUSTICE MANUAL (2d ed.) [hereinafter RESOURCE MANUAL], available at http://www.usdoj.gov/ usao/eousa/foia_reading_room/usam/title9/crm01848.htm (last visited Oct. 31, 2007).
212. See 17 U.S.C. § 410(c) (2000); see also Orange County Choppers, Inc. v. Olaes Enter., Inc., 497 F. Supp. 2d 541, 550 (S.D.N.Y. 2007) (stating certificate of registration establishes presumption of valid copyright).
213. See, e.g., Entertainment Research Group, Inc. v. Genesis Creative Group, Inc., 122 F.3d 1211, 1220 (9th Cir. 1997) (applying the Durham test to invalidate copyright of a derivative work based on lack of originality); Durham Indus. v. Tomy Corp., 630 F.2d 905, 908-09 (2d Cir. 1980) (invalidating copyright for lack of originality, despite certificate of registration); Twin Brooks Corp. v. Walt Disney Co., 83 F.3d. 1162 (9th Cir. 1996) (examining whether the original publication complied with the 1909 Copyright Act).
214. See 17 U.S.C. § 102(a) (2000).
215. See RESOURCE MANUAL, at 1849 ("[O]nce the validity of the copyright has been established, the government must then prove that the defendant infringed upon that right").
216. See, e.g., Dam Things From Denmark v. Russ Berrie & Co., 290 F.3d 548, 562 (3d Cir. 2002) ("The test for actual copying can be established by direct evidence."); United States v. Manzer, 69 F.3d 222, 227 (8th Cir. 1995) (holding testimony by electrical engineer that computer files sold by defendant were more than seventy-percent similar to copyrighted software was sufficient evidence to prove infringement); National Medical Care, Inc. v. Espiritu, 284 F. Supp. 2d 424, 432 (S.D. W. Va. 2003) (stating plaintiff may prove unauthorized copying by direct evidence of copying); cf. New York Times Co. v. Tasini, 533 U.S. 483, 503-04 (2001) (finding LEXIS/NEXIS and UMI actions of reproducing and distributing works without permission to be clear evidence of infringement and further finding that this conduct failed to qualify as 17 U.S.C. § 201(c) "contribution to collective work" exception).
217. See Three Boys Music Corp. v. Bolton, 212 F.3d 477, 485 (9th Cir. 2000) (finding music copyright infringement where there was evidence that defendant might have been a fan of plaintiff's work and there were shared elements in the music of both parties); Bouchat v. Baltimore Ravens, Inc., 241 F.3d 350, 354 (4th Cir. 2001) (recognizing that access can be established even where defendant does not actually see copyrighted item as long as defendant "had the opportunity to view" the copyrighted item); Apple Computer, Inc. v. Microsoft Corp., 35 F.3d 1435, 1442 (9th Cir. 1994) (upholding use of circumstantial evidence of copying as sufficient because direct evidence is usually not available); United States v. O'Reilly, 794 F.2d 613, 615 (11th Cir. 1987) (noting the copy need not be identical in all respects); see also Saunders, supra note 175, at 682-85 (discussing methods of proving first element of offense). But cf, Peel & Co. v. Rug Mkt., 238 F.3d 391, 398 (5th Cir. 2001) (stating that a layman observer must be able to immediately detect piracy without suggestion from others). Some circuits apply the inverse ratio rule, which requires a lesser showing of similarity when the showing of access is high. See Bolton, 212 F.3d at 485 (noting plaintiff can prove infringement even without evidence of access if works are "strikingly similar"); Selle v. Gibb, 741 F.2d 896, 903 n.4 (7th Cir. 1984) (stating when there is virtually no evidence of access, considerable similarity is necessary). However, the inverse ratio rule has yet to be applied in the criminal context. A plaintiff creates "a presumption of copying" through indirect evidence by establishing reasonable access and substantial similarity. Bolton, 212 F.3d at 486.
218. See United States v. Moore, 604 F.2d 1228, 1234 (9th Cir. 1979) (stating because government proved defendants distributed copyrighted sound recordings, it was not necessary to prove defendants also reproduced infringing recordings).
219. See Smith v. Jackson, 84 F.3d 1213, 1218 (9th Cir. 1996) (discussing extrinsic and intrinsic prongs of substantial similarity test). The extrinsic test is based on external, objective criteria as to whether the two works share a similarity of ideas and expression. The intrinsic test employs a subjective standard, and asks whether an ordinary, reasonable observer would find a substantial similarity of expression of the shared idea. See id.; see also Ford Motor Co. v. Summit Motor Prod., 930 F.2d 277, 291 (3d Cir. 1991) (noting extrinsic test involves expert testimony while intrinsic analysis utilizes lay perspective). The "intended audience" rule may be substituted for the "ordinary observer" rule in situations where the works' audience possesses specialized expertise that lay people would lack in assessing the similarity between two works. Lyons P'ship v. Morris Costumes, Inc., 243 F.3d 789, 802-03 (4th Cir. 2001) (finding that judging similarities between a popular purple dinosaur character and reproductions must be done from the perspective of the child audience for which the product was intended).
220. See Berkla v. Corel Corp., 302 F.3d 909, 924 (9th Cir. 2002) (noting the law of virtual identity is "well-settled").
221. See Apple Computer, Inc. v. Microsoft Corp., 35 F.3d 1435, 1442-43 (9th Cir. 1994) (comparing the virtual identity and substantial similarity tests for infringement).
222. See Mitel, Inc. v. Iqtel, Inc., 124 F.3d 1366, 1372 (10th Cir. 1997) ("The appropriate test to be applied and the order in which its various components are to be applied . . . may vary depending upon the claims involved, the procedural posture of the suit, and the nature of the [works] at issue." (quoting Gates Rubber Co. v. Bando Chem. Indus., 9 F.3d 823, 834 (10th Cir. 1993))); Berkla v. Corel Corp., 66 F. Supp. 2d 1129, 1143 (E.D. Cal. 1999) (defining virtual identity test and finding it the appropriate standard for reverse engineering cases when the range of protected and unauthorized expression is narrow).
223. See Apple Computer, 35 F.3d at 1442-47 (describing court's proper dissection of Microsoft graphical user interface ("GUI") into protected and unprotected components for purposes of evaluating substantial similarity); BUC Intern. Corp. v. Intern. Yacht Council Ltd., 489 F.3d 1129, 1148 (11th Cir. 2007) (stating only those elements that are copyrightable need be analyzed). But see Atari Games Corp. v. Oman, 888 F.2d 878, 882-83 (D.C. Cir. 1989) (declaring sequence of frames in computer game must be analyzed as a whole and not on a component-by-component basis).
224. The literal elements of a computer program are the source and object code. Non-literal elements include a program's structure, sequence, and organization expressed through "general flow charts . . . organization of inter-modular relationships, parameter lists, and macros," which are produced by the code's interaction with hardware and operating programs. Computer Assoc. Int'l, Inc. v. Altai, Inc., 982 F.2d 693, 702 (2d Cir. 1992) (holding non-literal elements of examined computer programs were not substantially similar).
225. See, e.g., Jacobsen v. Deseret Book Co., 287 F.3d 936, 943 (10th Cir. 2002) (describing the three steps of the test); Gates Rubber, 9 F.3d at 823 (adopting test and remanding for application); Lexmark Int'l v. Static Control Components, 253 F. Supp. 2d 943, 965 (E.D. Ky. 2003) (noting that the abstraction-filtration-comparison test does not apply to cases of literal infringement).
226. See, e.g., Tradescape.com v. Shivaram, 77 F. Supp. 2d 408, 415-16 (S.D.N.Y. 1999) (describing the various layers of abstraction in a computer program); MiTek Holdings, Inc. v. Arce Eng'g Co., Inc., 89 F.3d 1548, 1555 (11th Cir. 1996) (holding that court properly skipped abstraction step and proceeded to filtration step when plaintiff identified eighteen non-literal elements of its layout programs that it contended were entitled to copyright protection because plaintiff had, in effect, undertaken the abstraction step itself).
227. Under the filtration prong, the court removes elements that are: (i) taken from the public domain; (ii) dictated by efficiency; or (iii) required by factors external to the program, such as compatibility with other programs, demands of the industry served, and mechanical specifications of the computers that will run the program. See Computer Assoc. Int'l, 982 F.2d at 707 (explaining the filtration step in detail).
228. See id. at 710-11 (describing the comparison prong of this test as focusing on whether the defendant copied any aspect of the plaintiff's core protectable expression).
229. See 17 U.S.C. § 102(b) (2000) (prohibiting extension of copyright protection to ideas); see also Veeck v. S. Bldg. Code Cong. Int'l Inc., 293 F.3d 791, 800-02 (5th Cir. 2002) (en banc) (explaining the policy behind the merger doctrine).
230. 17 U.S.C. § 117(a) (2000) (providing limitations on copyright owners' exclusive rights with respect to copies of computer programs). Courts have applied different interpretations of the meaning of the word "owner." See, e.g., DSC Communications Corp. v. Pulse Communications, Inc., 170 F.3d 1354, 1360 (Fed. Cir. 1999) (finding telephone companies that used manufacturer's copyrighted software were not necessarily "owners" of copies of that software for purposes of 17 U.S.C § 117(a)); Stenograph, L.L.C. v. Bossard Assocs., Inc., 144 F.3d 96, 100 (D.C. Cir. 1998) (holding defendant who loaded validly copyrighted software onto computer without owner's permission and used software as designed had copied and infringed copyright of software); Applied Info. Mgmt., Inc. v. Icart, 976 F. Supp. 149, 153-54 (E.D.N.Y. 1997) (discussing factors used to determine whether a licensee owns a copy of computer program); Religious Tech. Ctr. v. Netcom On-Line Commc'n Servs., Inc., 907 F. Supp. 1361, 1368-73 (N.D. Cal. 1995) (holding internet provider not liable for copyrighted material loaded onto computer by third party when provider lacked knowledge material was copyrighted).
231. 17 U.S.C. §§ 117(c)-(d) (2000) (providing exception to exclusive rights for maintenance and repair of computer programs in response to MAI Sys. Corp. v. Peak Computer, Inc., 991 F.2d 511, 518-19 (9th Cir. 1993) (asserting that "copying" for purposes of the Copyright Act occurs even when copyrighted program is temporarily loaded into computer's random access memory).
232. 17 U.S.C. § 506.
233. See Danjaq, L.L.C. v. Sony Corp., 263 F.3d 942, 959 (9th Cir. 2001) (stating one who has been notified that his conduct constitutes copyright infringement, but who reasonably and in good faith believes the contrary, has not acted willfully); United States v. Moran, 757 F. Supp. 1046, 1050-52 (D. Neb. 1991) (holding that "willfully" under the criminal copyright statute meant defendant must have voluntarily intended to violate a known legal duty; mere intent to copy was insufficient). But see United States v. Manzer, 69 F.3d 222, 227 (8th Cir. 1995) (holding copyright notice on plastic module containing copyrighted software was sufficient to put defendant on notice for purpose of willfulness); United States v. Heilman, 614 F.2d 1133, 1137-38 (7th Cir. 1980) (finding willful infringement of copyright when defendant knew material was copyrighted); see also Saunders, supra note 175, at 688 (comparing majority and minority rules). See generally Coblenz, supra note 115, at 248 (explaining requirements for intent element).
234. See United States v. Backer, 134 F.2d 533, 535 (2d Cir. 1943) (holding defendant guilty of infringement even though he intended to make copies closely resembling copyrighted work without causing "copyright trouble"). But see Twin Peaks Prods., Inc. v. Publ'ns Intern., Ltd., 996 F.2d 1366, 1382 (2d Cir. 1993) (articulating the standard for willfulness as "whether the defendant had knowledge that its conduct represented infringement or perhaps recklessly disregarded the possibility"); Jobete Music Co., Inc. v. Johnson Commc'ns., Inc., 285 F. Supp. 2d 1077, 1083 (S.D. Ohio 2003) (discussing Second Circuit's view that a person who was not willful does not necessarily have innocent intent, as it is possible in an action for plaintiff to not prove willfulness, and at the same time, for the defendant to be unable to prove it acted innocently); Lydia Pallas Loren, Digitization, Commodification, Criminalization: The Evolution of Criminal Copyright Infringement and the Importance of the Willfulness Requirement, 77 WASH. U. L.Q. 835, 877 (1999) (discussing willfulness requirement and questioning whether Second Circuit has truly articulated different view).
235. Pub. L. No. 105-147, § 2(b), 111 Stat. 2678 (1997) (amending 17 U.S.C. § 506(a)).
236. See United States v. Cross, 816 F.2d 297, 301 (7th Cir. 1987) (holding fact that copies were not sold for money irrelevant where hope of gain existed) (citing United States v. Moore, 604 F.2d 1228, 1235 (9th Cir. 1979)); United States v. Shabazz, 724 F.2d 1536, 1540 (11th Cir. 1984) (holding evidence that defendant "sold pirated tapes, solicited wholesale customers, and shipped large quantities of tapes out of state" was sufficient to prove his intent to make profit); United States v. Wise, 550 F.2d 1180, 1195 (9th Cir. 1977) (holding whether gain was realized is irrelevant).
237. See H.R. REP. NO. 105-339, at 7 (1997); see also A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1015 (9th Cir. 2000) ("[T]he definition of a financially motivated transaction for the purposes of criminal copyright actions includes trading infringing copies of a work for other items, 'including the receipt of other copyrighted works.'" (quoting NET Act)); United States v. Black, 116 F.3d 198, 202-03 (7th Cir. 1997) (stating the term "distribution" does not necessarily preclude barter-type arrangements).
238. See Cross, 816 F.2d at 303 ("In order to understand the meaning of criminal copyright infringement it is necessary to resort to the civil law of copyright."); see also Coblenz, supra note 115, at 251 (explaining civil defenses available for copyright infringement).
239. 17 U.S.C. § 109 (2000). Section 109(a) provides: "the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy." Id; see United States v. Larracuente, 952 F.2d 672, 674 (2d Cir. 1992) (discussing Eleventh Circuit's use of "first sale" doctrine as a defense in criminal copyright case which obliges defendant to prove that copies were legally made).
240. See 17 U.S.C. § 109. A lawful original sale of the work is necessary for the first sale doctrine to apply; see also United States v. Cohen, 946 F.2d 430, 434 (6th Cir. 1991) (recognizing that individuals can rent or sell a copy of copyrighted work if lawfully obtained by that individual); United States v. Drum, 733 F.2d 1503, 1507 (11th Cir. 1984) (stating that "the government may prove the absence of a first sale by direct evidence of the source of the pirated recordings or by circumstantial evidence that the recording was never authorized"); Microsoft Corp. v. Harmony Computers & Elecs., Inc., 846 F. Supp. 208, 213 (E.D.N.Y. 1994) (holding the "first sale" doctrine inapplicable when the product was licensed rather than sold). But see ProCD, Inc. v. Zeidenberg, 86 F.3d 1447, 1453-55 (7th Cir. 1996) (holding "shrinkwrap" license, package label limiting use of work, is enforceable under state contract law, but does not create exclusive rights, otherwise preempted by Copyright Act).
241. 17 U.S.C. § 109 (2000). These rights are reserved for copyright owners in 17 U.S.C. § 106.
242. Id. § 109(d).
243. See Quality King Distribs., Inc. v. L'anza Research Int'l, Inc. 523 U.S. 135, 152 (1998) ("The whole point of the 'first sale' doctrine is that once the copyright owner places a copyrighted item in the stream of commerce by selling it, he has exhausted his exclusive statutory right to control its distribution."). However, the Supreme Court did not address "cases in which the allegedly infringing imports were manufactured abroad." Id. at 154 (Ginsburg, J., concurring). See generally
244. See Sony Corp. of Am. v. Universal Studios, Inc., 464 U.S. 417, 448 (1984) (holding manufacture and sale of VCRs did not constitute contributory infringement). The Supreme Court has noted that since the doctrine is an equitable rule of reason, no generally applicable definition is possible, and each case raising the question must be decided on its own facts. Id. at 450 n. 31 (quoting H.R. REP. NO. 94-1476 at 65-66, reprinted in 1976 U.S.C.C.A.N. 5680). But see Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 549 (1985) (holding defendant failed to establish that their unauthorized use of quotations from a public figure's unpublished manuscript was sanctioned by the fair use doctrine).
245. 17 U.S.C. § 107. See Kelly v. Arriba Soft Corp., 336 F.3d 811, 817 (9th Cir. 2003) (holding internet search engine provider's use of photographs as thumbnails constituted fair use of photographs).
246. United States v. Elcom Ltd., 203 F. Supp. 2d 1111, 1121 (N.D. Cal. 2002) (citing Harper, 471 U.S. 539, 549). See Kelly, 336 F.3d at 818 ("We must balance [the applicable] factors in light of the objectives of copyright law, rather than view them as definitive or determinative tests.").
247. 17 U.S.C. § 107 (2000). Congress views these factors as non-exclusive guidelines to be weighed in a case-by-case analysis in light of the objectives of copyright law. See Nunez v. Caribbean Int'l News Corp., 235 F.3d 18, 21 (1st Cir. 2000) (utilizing these four factors to find unauthorized use of copyrighted photographs to be fair use); see also Worldwide Church of God v. Philadelphia Church of God, 227 F.3d 1110, 1116-20 (9th Cir. 2000) (finding examination of four fair use factors demonstrated copyright infringement from standpoint of a reasonable copyright owner).
248. See, e.g., Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579-80 (1994) (finding song which would otherwise infringe on copyright was fair use as parody); SunTrust Bank v. Houghton Mifflin Co., 268 F.3d 1257, 1267-72 (11th Cir. 2001) (finding "The Wind Done Gone" to have transformative use as parody of "Gone With the Wind"); Dr. Seuss Enters. v. Penguin Books USA, Inc., 109 F.3d 1394, 1399 (9th Cir. 1997) (applying four elements of fair use doctrine to parody of Dr. Seuss poetry); Leibovitz v. Paramount Pictures Corp., 948 F. Supp. 1214, 1221 (S.D.N.Y. 1996), aff'd, 137 F.3d 109 (2d Cir. 1998) (rejecting claim that all commercial use of protected elements of copyrighted work is de facto infringement and holding movie advertisement that parodied copyrighted photograph did not infringe on copyrighted work).
249. Campbell, 510 U.S. at 580-82 ("For the purposes of copyright law . . . the heart of any parodist's claim to quote from existing material, is the use of some elements of a prior author's composition to create a new one that, at least in part, comments on that author's works . . . . [T]he threshold question is whether a parodic character may reasonably be perceived."); Leibovitz, 948 F. Supp. at 1220 (noting work must comment upon or criticize copyrighted work to qualify as parody).
250. See discussion infra Section IV.A.4.
251. Pub. L. No. 109-229, 119 Stat. 223 (2006).
252. 18 U.S.C. § 2319(b)(1) (2000). The penalty is for the "reproduction or distribution, including by electronic means, during any 180-day period, of at least 10 copies . . . of 1 or more copyrighted works, which have a total retail value of more than $2,500." Id.
253. Id. § 2319(b)(2).
254. Pub. L. No. 106-160, § 3, 113 Stat. 1774 (1999).
255. U.S. SENTENCING GUIDELINES MANUAL § 2B5.3 (2007) [hereinafter U.S.S.G. MANUAL]. Sentences for violations of federal criminal laws are determined with reference to the Guidelines. See 18 U.S.C. § 3553(a); United States v. Booker, 543 U.S. 220 (2005). In 2005, the Supreme Court severed the provision that made the Guidelines mandatory, rendering them "effectively advisory." See Booker, 543 U.S. at 245; see also Kimbrough v. United States, 2007 WL 4292040, at *10, (U.S. Dec. 10, 2007) ("[W]hile [the federal sentencing statute] still requires a court to give respectful consideration to the Guidelines, see Gall v. United States, 2007 WL 4292116 (U.S. Dec. 10, 2007), Booker 'permits the court to tailor the sentence in light of other statutory concerns as well.' Booker, 543 U.S. at 245-46.").
256. U.S.S.G. MANUAL § 2B5.3(b)(2) (increasing base by two levels or to twelve, whichever is higher).
257. Id. § 2B5.3(b)(1) (noting infringement amount ranges and corresponding level increases).
258. 18 U.S.C. § 2318 (2000).
259. Id.
260. Id.
261. Id.
262. Id.
263. 18 U.S.C. § 2319B (2000).
264. Id.
265. Id.
266. Id.
267. See generally WILLIAM PATRY, THE FAIR USE PRIVILEGE IN COPYRIGHT LAW 63-64, 468-77 (1985).
268. 17 U.S.C. § 102(b) (2000).
269. See Sony Computer Entm't, Inc. v. Connectix Corp., 203 F.3d 596, 602 (9th Cir. 2000) (holding reverse engineering undertaken for a legitimate purpose "is a fair use of the copyrighted work, as a matter of law" (quoting Sega Enters. Ltd. v. Accolade, Inc., 977 F.2d 1510, 1527-28 (9th Cir. 1992))). Intermediate copying during process of reverse engineering could be considered copyright infringement, but such copying may qualify for the fair use exception if it is deemed necessary for accessing functional elements of the software. Sony, 203 F.3d at 603; see also Ticketmaster Corp. v. Tickets.Com, Inc., 2003 WL 21406289 (C.D. Cal. Mar. 7, 2003) (holding that reverse engineering is a "fair use" where a company obtains a "temporary copy" of electronic information from an Internet site "for the limited purpose of extracting unprotected public facts").
270. 17 U.S.C. § 1201(f)(1).
271. Id. § 1201(f). For discussion of reverse engineering as fair use exception under DMCA, see Universal City Studios, Inc. v. Corley, 273 F.3d 429, 441 (2d Cir. 2001) (rejecting reverse engineering as fair use defense in action brought under DMCA). See also Lexmark Int'l, Inc. v. Static Control Components, Inc., 253 F. Supp. 2d 943, 970 (E.D. Ky. 2003) (noting that DMCA's reverse engineering exemption is not a broad exception that excuses any behavior that makes some device "interoperable" with some other device, but only allows circumvention of access restrictions "solely for the purpose of enabling interoperability of an independently created computer program with other programs").
272. See 18 U.S.C. § 2314 (2000).
273. See United States v. Belmont, 715 F.2d 459, 461 (9th Cir. 1983) (applying NSPA to interstate transportation of "off the air" copies of motion pictures); United States v. Drebin, 557 F.2d 1316, 1328 (9th Cir. 1977) (holding copies of copyrighted motion pictures constitute goods, wares, or merchandise, and thus fall within meaning of the NSPA).
274. 473 U.S. 207 (1985).
275. Id. at 216. The defendants in Dowling manufactured, without authorization, commercially unreleased Elvis Presley performances and produced record albums. Id. at 210. The Supreme Court, citing the Copyright Act, concluded that it was not the intent of Congress that the National Stolen Property Act should apply to copyright infringement. Id. at 221-27.
276. Id. at 216-17.
277. 18 U.S.C. §§ 1341, 1343 (2000) (amended to increase permissible prison term from 5 years to 20 years).
278. See United States v. Manzer, 69 F.3d 222, 230 (8th Cir. 1995) (affirming a conviction based on selling unauthorized satellite decryption equipment by mail and the telephone); United States v. Shultz, 482 F.2d 1179, 1182 (6th Cir. 1973) (upholding a conviction under 18 U.S.C. §§ 1341, 1343 for selling counterfeit sound recordings over the mail); Cooper v. United States, 639 F. Supp. 176, 180 (M.D. Fla. 1986) (holding that using wires to distribute thousands of pirated sound recordings is a crime under 18 U.S.C. § 1343).
279. United States v. Wang, 898 F. Supp. 758, 760 (D. Colo. 1995).
280. See id. (holding wire fraud statute could be applied).
281. Pub. L. No. 104-153, § 3, 110 Stat. 1386 (1996) (amending 18 U.S.C. § 1961(1)(B) to include criminal copyright infringement to the list of RICO predicate offenses).
282. 18 U.S.C. §§ 1961-1968 (2000).
283. See supra Section II.E. (discussing RICO); see also United States v. Drum, 733 F.2d 1503, 1506 (11th Cir. 1984) (applying RICO to charges arising out of sound recording copyright infringement business); United States v. Sam Goody, Inc., 506 F. Supp. 380, 391-92 (E.D.N.Y. 1981) (holding repeat copyright infringers who satisfied RICO criteria could not avoid prosecution on the grounds they were not members of organized crime because RICO applies to any enterprise, both legal and illegal). But see Snowden v. Lexmark Int'l, Inc., 237 F.3d 620, 625 (6th Cir. 2001) (refusing to apply RICO penalties retroactively to infringing activity which took place prior to effective date of Anti-Counterfeiting Consumer Protection Act).
284. See 18 U.S.C. § 1956(c)(7)(D) (2000) (amended to insert section 1030, relating to computer fraud and abuse). For further discussion of this statute and its applicability to copyright law, see the MONEY LAUNDERING article in this issue.
285. See Feist Publ'ns, Inc. v. Rural Telephone Serv. Co., 499 U.S. 340, 359-60 (1991) (holding originality, not "sweat of the brow" - hard work in compiling facts - is the key to copyright ability); see also CDN Inc. v. Kapes, 197 F.3d 1256, 1260 (9th Cir. 1999) (holding that a coin wholesaler's price listings went beyond mere compilation of prices, and involved creativity in the process of judging and estimating the value of coins, so as to be sufficiently original to be copyrightable).
286. Feist, 499 U.S. at 357.
287. John Hazard Jr., Selected Material from U.S. Copyright Office Report, Copyright Protection for Databases in the United States, 2 COPYRIGHT L. IN BUS. AND PRACTICE, app. 11 (Nov. 2003).
288. Id.
289. Id.
290. Id.
291. Id.
292. Id..
293. See Goldstein v. California, 412 U.S. 546, 561-63 (1973) (discussing whether state law stands as an "obstacle to the accomplishment and execution of the full purposes and objectives of Congress").
294. See Foley v. Luster, 249 F.3d 181, 1286 (11th Cir. 2001) (finding that under Florida law breach of duty for trade secrets was sufficient extra element to avoid pre-emption). Many states pass criminal piracy acts for sound recordings, but on grounds that may avoid preemption such as unfair competition. See Nimmer, supra note 168, at §8C.03. These states also survive pre-emption by creating an extra element unprotected by federal copyright law.
295. 17 U.S.C. § 301(c) (2000) (referring specifically to an exception for sound recordings).
296. See Elder v. Ashcroft, 537 U.S. 186, 205 (2003) (finding the CTEA within the constitutional authority of Congress under the Copyright Clause).
297. For a general overview of the elements of the criminal copyright offense, see supra Section IV.A.1.
298. Pub. L. No. 94-553, § 101, 90 Stat. 2541-2589 (1976) (codified as amended in scattered sections of Title 17 of the U.S. Code).
299. 17 U.S.C. § 101. The 1980 amendment to the 1976 Act places computer programs within the category of protected "literary works." Computer databases are also included in the category of "literary works." H.R. REP. NO. 94-1476, at 54 (1975), reprinted in 1976 U.S.C.C.A.N. 5659, 5667 (1975).
300. E.g., ALS Scan, Inc. v. RemarQ Communities, Inc., 239 F.3d 619, 625-26 (4th Cir. 2001) (finding that ALS Scan had provided adequate notice of infringing digital images on two internet newsgroups to which RemarQ provided access).
301. See A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir. 2001) (finding copyright infringement where musical recordings were copied and distributed by users of an Internet site); see also In re Aimster Copyright Litigation, 334 F.3d 643, 645 (7th Cir. 2003) (noting that individuals swapping music on the Internet are direct copyright infringers).
302. The "Internet" refers to the online world and is used interchangeably with "cyberspace" and "Web." It is described as "an international network of interconnected computers" from which any number of users may access a "wide variety of communication and information retrieval methods." Reno v. ACLU, 521 U.S. 844, 849 (1997) (explaining and adopting Internet terminology).
303. Infringement of ten copies or phonorecords, of one or more copyrighted works, valued at more than $2,500 carries a maximum sentence of five years for a first offense and ten years for a second offense. 18 U.S.C. § 2319(b) (2000). Infringement of one or more copies or phonorecords with a total retail value of more than $1,000, carries a maximum sentence of one year. 18 U.S.C. § 2319(c). Copies or recordings can be created and distributed by any process, "including by electronic means." 18 U.S.C. § 2319(b)(1). Current proposed legislation would double the maximum sentences provided under §§ 2319(b)-(c) and replace "second or subsequent offense" with "if the offense was committed after a prior felony conviction under this section, under section 1204(a) of title 17, or under section 2318, 2319A, or 2319B of this title." H.R. 5921, 109th Cong. (2d Sess. 2006).
304. 17 U.S.C. § 506(a)(1)(C) (2000). As amended by Pub. L. No. 109-9, Title 1 § 103(a), 119 Stat. 220 (2005).
305. 18 U.S.C. § 2319(d). Generally, an offense under this section carries a maximum sentence of three years, fines, or both. § 2319(d)(1). If the offense is committed for commercial or personal financial gain, the maximum sentence increases to five years, fines, or both. § 2319(d)(2). Repeat offenders face a maximum sentence of six years, fines, or both. § 2319(d)(3). If the offense is a second offense and is committed for commercial or personal financial gain, the maximum sentence jumps to ten years, fines or both. § 2319(d)(4).
306. The White House created the National Information Infrastructure Task Force ("IITF") in February 1992 to investigate regulatory needs for the online world. The IITF then formed the Working Group on Intellectual Property to examine the intellectual property implications of the National Information Infrastructure ("NII"). On July 7, 1994, the Working Group released a preliminary draft of its report, known as the "Green Paper." Following testimony and public comments on this draft, the Working Group released a final version of the report in September 1995, known as the "White Paper." Its main finding was that "with no more than minor clarification and limited amendment the Copyright Act will provide the necessary balance of protection of rights." WORKING GROUP ON INTELLECTUAL PROPERTY RIGHTS, INTELLECTUAL PROPERTY AND THE NATIONAL INFORMATION INFRASTRUCTURE 17 (1995) [hereinafter WHITE PAPER], available at http://www.uspto.gov/web/ offices/com/doc/ipnii/ (last visited Jan. 16, 2006).
307. Several commentators have criticized the authors of the WHITE PAPER for overbreadth and lack of technical knowledge. See, e.g., LANCE ROSE, NETLAW 83 (1995) (arguing United States intellectual property laws have evolved along with technology and can protect intellectual property rights of owners in cyberspace);
308. Eric Schlachter, The Intellectual Property Renaissance in Cyberspace: Why Copyright Law Could Be Unimportant on the Internet, 12 BERKELEY TECH. L.J. 15, 32 (1997) (analyzing deficiencies of traditional copyright concepts with regard to Internet conventions and use);
309. Andrew Grosso, Copyright and the Internet: A Footnote, A Sleight of Hand, and a Call to Reason, FED. LAW., Jan. 1997, at 44 (arguing WHITE PAPER definitions make "mere viewing" over the Internet unlawful);
310. Pamela Samuelson, The Copyright Grab, WIRED, Jan. 1996, at 135 (criticizing the WHITE PAPER for misrepresenting judicial copyright precedent and extending copyright protection beyond traditional commercial applications).
311. Uploading denotes placing files onto a server from which they may be accessed by anyone browsing the Internet. See United States v. Riggs, 739 F. Supp. 414, 417 (N.D. Ill. 1990) (defining uploading as transferring computer stored data from one's own computer to a remote computer).
312. 17 U.S.C. § 106(3) (2000).
313. Downloading denotes retrieving or accessing any information over the Internet. See Marobie-Fl Inc. v. Nat'l Ass'n of Fire Equip., 983 F. Supp. 1167, 1168 (N.D. Ill. 1997).
314. 17 U.S.C. § 106(1) (2000). See A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1027 (9th Cir. 2001) (finding Napster users who downloaded copyrighted music directly infringed copyrights, and that the Napster service could be held contributory and vicariously liable). But see In re Aimster Copyright Litig., 334 F.3d 643, 649 (7th Cir. 2003) (contending that the Ninth Circuit erred in Napster "in suggesting that actual knowledge of specific infringing uses is a sufficient condition for deeming a facilitator a contributory infringer").
315. Napster, 239 F.3d at 1014-15.
316. Id. at 1015.
317. Id. at 1016.
318. Id. at 1018-19. Through sampling, individuals make temporary copies of a work to decide whether they will purchase it. The Ninth Circuit held unauthorized sampling a commercial use, regardless of whether "some users eventually purchase" work. Id. at 1018. Space-shifting involves individuals downloading files of works they previously purchased to gain the convenience of using a different format of the same work. See, e.g., Sony v. Univ. City Studios, Inc., 464 U.S. 417, 423 (1984) (holding time-shifting, by recording television shows for later home viewing, is fair use); In re Aimster Copyright Litig., 334 F.3d 643, 652-53 (7th Cir. 2003) (copying music files from the Internet for a CD one already owns may be fair use) (emphasis added); Recording Indus. Ass'n of Am. v. Diamond Multimedia Sys., Inc., 180 F.3d 1072, 1079 (9th Cir. 1999) (copying music files from computer to a portable MP3 player is fair use). However, general file sharing is not within the protected area of space-shifting because it simultaneously distributes the copyrighted material to the public. See Napster, 239 F.3d at 1019 (discussing transfer of MP3 files).
319. In re Aimster Copyright Litig., 334 F.3d at 643.
320. Id. at 646-47 (noting that the fact that Aimster's servers do not maintain the copyrighted files prevents Aimster from being a direct copyright infringer, although its individual users who maintain such files are direct infringers).
321. Id.
322. Id. at 649 (citing Sony v. Univ. City Studios, Inc., 464 U.S. 417 (1984)).
323. See Tiffany Design, Inc. v. Reno-Tahoe Specialty, Inc., 55 F. Supp. 2d 1113, 1121 (D. Nev. 1999) (finding that the digitization of any copyrighted material may support finding of infringement even if only in the computer's RAM for the shortest amount of time); see also MAI Sys. Corp. v. Peak Computer, Inc., 991 F.2d 511, 518 (9th Cir. 1993) (finding that loading diagnostic software into a computer's RAM will produce the same copyright violations as loading operating software).
324. Tiffany Design, 55 F. Supp. 2d at 1121.
325. 17 U.S.C § 106(3) (2000).
326. Tiffany Design, 55 F. Supp. 2d at 1121.
327. Pub. L. No. 109-9, Title I § 103(a), 119 Stat. 220 (2005) (amending 17 U.S.C. § 506(a)). The Act also redefined "financial gain" to include "the receipt or expectation of receipt, of anything of value, including the receipt of other copyrighted works." Pub. L. No. 105-147, § 2(a), 111 Stat. 2678 (1997) (amending 17 U.S.C. § 101).
328. NET Act, Pub. L. No. 105-147, as codified at 17 U.S.C. § 101 (2000); see A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1015 (9th Cir. 2001) (noting, in dicta, that conduct of Napster users was within NET Act's meaning of financial gain); Press Release, U.S. Dep't of Justice, Software Pirate Guilty of Copyright Infringement Under NET Act (May 15, 2001) (stating that a Chicago, IL federal jury returned a guilty verdict in the nation's first trial under the 1997 NET Act involving a computer software piracy conspiracy), available at http://www.usdoj.gov/criminal/cybercrime/pwa_verdict.htm (last visited Oct. 31, 2006).
329. Pub. L. 109-9, Title 1 § 103(a), 119 Stat. 220 (2005) (adding 17 U.S.C §506(a)(1)(C)). However, any person in violation of § 506 (a)(1)(C) cannot not receive more than three years imprisonment and fines unless financial gain, repeat offense, or both are shown under Title 17. 18 U.S.C. § 2319(d) (2000).
330. See, e.g. BMG Music, et al. v. Gonzalez, 430 F.3d 888, 890-91 (7th Cir. 2005).
331. 17 U.S.C. § 109(a) (allowing owner of a "particular copy or phonorecord lawfully made . . . or any person authorized by such owner" to, without copyright owner's authority, "sell or otherwise dispose of the possession of that copy or phonorecord"). For a general overview of the first sale doctrine, see supra Section IV.A.2.
332. If the downloader is the equivalent of a record buyer, then, just as the latter may legally resell his copy of the record, the former may resell whatever he downloaded. The difference between the two scenarios is that the record seller sacrifices his copy of the record, whereas the downloader likely retains a copy. See WHITE PAPER, supra note 300, at 95.
333. See William Sloan Coats et al., Streaming into the Future: Music and Video Online, 20 LOY. L.A. ENT. L. REV. 285, 294 (2000) (arguing that the doctrine depends on the fact that number of copies does not increase);
334. accord David L. Hayes, Advanced Copyright Issues on the Internet, 7 TEX. INTELL. PROP. L.J. 1, 99 (1998).
335. See WHITE PAPER, supra note 300, at 95 (noting that the transmission and then deletion of a file still constitutes further copying of the file). But see H.R. 4536, 109th Cong. (2005), which would amend 17 U.S.C. § 109 to allow the copyright owner to transfer copies online by adding: (f) The privileges prescribed by subsections (a) and (c) apply in a case in which the owner of a particular copy or phonorecord of a work in a digital or other non-analog format, or any person authorized by such owner, sells or otherwise disposes of the work by means of a transmission to a single recipient, if the owner does not retain the copy or phonorecord in a retrievable form and the work is so sold or otherwise disposed of in its original format. Id. This essentially allows for the legal sale of copyrightable digital entertainment online.
336. See United States v. Belmont, 715 F.2d 459, 461 (9th Cir. 1983) (stating that absence of a "first sale" is a necessary element of copyright infringement action), overruled on other grounds by Dowling v. United States, 473 U.S. 207, 212 (1985). Contra United States v. Goss, 803 F.2d 638, (11th Cir. 1986) (finding that the first sale doctrine is a defense).
337. 17 U.S.C. § 506(a) (2000).
338. In contrast, a finding of civil copyright vicarious liability requires only that the defendant be in a position to control the use of the copyrighted works and had authorized such use without the owner's permission. See generally Nimmer, supra note 168, at § 12.04(A)(2)(a).
339. To hold a party liable for contributory infringement, the government must prove that the system provider: (i) knew or had reason to know of direct infringement by its users; and (ii) induced or materially contributed to the infringing conduct. Cable/Home Commc'n Corp. v. Network Productions, Inc., 902 F.2d 829, 845 (11th Cir. 1990); see A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1020-24 (9th Cir. 2001) (finding likelihood of contributory liability where Napster had actual knowledge of infringing material and materially contributed by providing support services without which users could not find and download music easily); Matthew Bender & Co., Inc. v. West Publig. Co., 158 F.3d 693 (2d Cir. 1998) (holding that the provision of machinery or goods that facilitate copyright infringement may subject a party to contributory liability). But see In re Aimster Copyright Litig., 334 F.3d 643, 649 (7th Cir. 2003) (contending that: (i) the Ninth Circuit erred in Napster "in suggesting that actual knowledge of specific infringing uses is a sufficient condition for deeming a facilitator a contributory infringer;" (ii) there needs to be an examination of both the infringing and non-infringing uses of such technology; and (iii) willful blindness does not absolve a contributory infringer from liability).
340. Vicarious liability for copyright infringement extends beyond the employer-employee relationship to a defendant that has: (i) the right and ability to supervise the infringing activity; and (ii) a direct financial interest in the infringing activity. See Napster, 239 F.3d at 1022-24 (finding Napster was financially interested because its future revenues depended on an increased user base and that the company maintained the right and technological ability to supervise users' conduct by locating infringing materials listed on its search indices); see also Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 262 (9th Cir. 1996) (holding that the complaint stated cause of action despite no employer-employee relationship); Faulkner v. Nat'l Geographic Soc'y, 211 F. Supp. 2d 450, 472 (S.D.N.Y. 2002) (noting that "[b]enefit and control are the signposts of vicarious liability").
341. Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 125 S. Ct 2764 (2005) (finding company intentionally promoted copyright infringement by targeting former users of a similar product and seeking to derive profits from increased advertisement revenues generated from high-volume use). For further discussion of the impact of Grokster, see Statement of Debra Wong Yang Before the Committee on the Judiciary, United States Senate, Concerning the Impact of the Supreme Court's Decision in MGM v. Grokster (Sept. 28, 2005), available at http://judiciary.senate.gov/testimony.cfm7id= 1624&wit_id=4683 (last viewed Oct. 31, 2006).
342. Id. at 2779.
343. Id.
344. 464 U.S. 417 (1984). In Sony, the Court found that Sony neither intended to promote copyright violations nor sought to increase profits through unlawful taping on its videocassette recorders. Id. at 438.
345. Grokster, 545 U.S. 913, 125 S. Ct. 2764, 2779.
346. 17 U.S.C. § 512 (2000); Digital Millennium Copyright Act, Pub. L. No. 105-304, 112 Stat. 2877 (1998). The DCMA also prevents internet service providers from facing liability for unauthorized RAM copying.
347. The statute defines a service provider, as used in subsection (a) of the statute, as "an entity offering the transmission, routing, or providing of connections for digital online communications, between or among points specified by a user, of material of the user's choosing, without modification to the content of the material as sent or received." 17 U.S.C. § 512(k)(1)(A). For all other subsections in the statute, "the term 'service provider' means a provider of online services or network access, or the operator of faculties therefore, and includes an entity described in subparagraph (A)." Id. § 512(k)(1)(B).
348. Id. § 512(a). Such liability exemption will only apply, however, if: (i) the transmission of the material was initiated by or at the direction of a person other than the service provider; (ii) the transmission is carried out through an automatic technical process without selection of the material by the service provider; (iii) the service provider does not select the recipients of the material except as an automatic response to the request of another person; (iv) no copy of the material made by the service provider is maintained on the system or network in a manner ordinarily accessible to anyone other than anticipated recipients for a longer period than is reasonably necessary for the transmission; and (v) the material is transmitted through the system or network without modification of its content. Id.
349. 17 U.S.C. §§ 512(c)(1)(A)(i)-(ii), (c)(1)(B). See ALS Scan, Inc. v. RemarQ Communities, Inc., 239 F.3d 619, 625 (4th Cir. 2001) (noting that "the DMCA's protection of an innocent service provider disappears at the moment the service provider loses its innocence, i.e., at the moment it becomes aware that a third party is using its system to infringe"); see also Hendrickson v. Ebay, Inc., 165 F. Supp. 2d 1082 (C.D. Cal. 2001) (extending a company's "safe harbor" exemption to its employees, when the liability of those employees is solely based on alleged acts and omissions committed in the course and scope of employment).
350. 17 U.S.C. § 512(c)(1)(A)(iii), (c)(1)(C). However, such limitations on liability are contingent upon the provider's designation of an agent to receive notifications of such infringement and making contact information available through its service. 17 U.S.C. § 512(c)(2); see ALS Scan, Inc. 239 F.3d at 619 (noting that notice provisions are met, and thus exemption is forfeited, when the holder of a copyright provided Internet service provider with information that identified two newsgroup sites created for the sole purpose of publishing its copyrighted works, asserted that virtually all the images at the two sites were its copyrighted material, and referred provider to two web addresses where provider could find pictures of its models and obtain copyright information); see also Hendrickson, 165 F. Supp. 2d at 1082 (noting that notice requirement is not met where owner of a copyright fails to identify which copies of a film being offered online were infringing).
351. 17 U.S.C. § 512(f)(1)-(2) (2000).
352. Id. § 512(g)(2) (discussing exception under which service provider could be liable for taking down material).
353. Id. § 512(g)(1); see also Costar Group, Inc. v. Loopnet, Inc. 373 F.3d 544, 556 (4th Cir. 2004) (rejecting plaintiff's argument that defendant lost its passive status by performing a gate-keeping practice on photographs submitted for online listing, and holding that defendant had not become a "copier" by using this screening process). See also Recording Indus. Assoc. of Am. v. Verizon, 351 F.3d 1229 (D.C. Cir. 2003) (construing 17 U.S.C. § 512(h), and the general structure of § 512, as providing that a subpoena could only be issued to an ISP engaged in storing on its servers material that was infringing or the subject of the infringing activity, not as a mere conduit to an ISP).
354. See Mark A. Lemley & R. Anthony Reese, Reducing Digital Copyright Infringement Without Restricting Innovation, 56 STAN. L. REV. 1345, 1370 (2003).
355. BLACK'S LAW DICTIONARY 917 (8th ed. 2004).
356. 35 U.S.C. § 292 (2000) (providing qui tam cause of action whereby a penalty, in form of fine not more than $500 for each offense, may be imposed and divided between person bringing suit and the United States).
357. Id.
358. Id.; see Project Strategies Corp. v. Nat'l Commc'ns Corp., 948 F. Supp. 218, 226-27 (E.D.N.Y. 1996) (holding patent marking statute was not violated in part because use of phrase "U.S. and foreign patents granted and pending" was not false or misleading where the granted patent was foreign and the pending patent was in the United States); accord KOR-CT LLC v. Savvier, Inc, 344 F. Supp. 2d 847(D. Conn. 2004).
359. 35 U.S.C. § 292(a); see Boyd v. Schildkraut Giftware Corp., 936 F.2d 76, 79 (2d Cir. 1991) (holding cosmetic compact case manufacturer who misunderstood instructions to delete reference to patent holder's patent number and shipped compacts with holder's number did not intend to deceive the public); Laughlin Products, Inc. v. ETS, Inc., 257 F. Supp. 2d 863, 871 (N.D. Tex. 2002) (granting summary judgment dismissing plaintiff's false marking claim finding that plaintiff failed to prove that defendant had an intent to deceive based on affidavits from marketing personnel, who had used the word "patented" on website and advertising materials, stating they were unfamiliar with the law and had no intention of misleading the public), aff'd, 68 Fed. Appx. 976 (Fed. Cir. 2003); see also Barnett v. Strom, 265 F. Supp. 2d 946 (N.D. Ill. 2003) (finding intent to deceive public by inventor's use of patent number for which he had expressly granted exclusive to another).
360. See Clontech Laboratories, Inc. v. Invitrogen Corp., 406 F.3d 1347, 1355 (Fed. Cir. 2005) (affirming a finding that patentee did not have a reasonable belief that the products marked were covered by the listed patents
361. See DP Wagner Mfg., Inc. v. Pro Patch Sys., Inc., 434 F. Supp. 2d 445, 456 (S.D. Tex 2006) (applying and discussing Clontech).
362. 18 U.S.C. § 497 (2000) (making criminal forging, counterfeiting, or altering of any letters patent, as well as knowingly passing, uttering, or publishing as genuine, any such letters patent).
363. Id.
364. Dowling v. United States, 473 U.S. 207 (1985) (holding that the National Stolen Property Act provision imposing criminal penalties for interstate transportation of stolen property did not reach interstate transportation of "bootleg records;" that is, unauthorized copies of commercially unreleased performances of a famous entertainer. Phonorecords were not "stolen, converted or taken by fraud" except in the sense that they were manufactured and distributed without consent of copyright owners of musical compositions performed on records).
365. 18 U.S.C. § 2314 (stating that anyone knowingly involved in the transportation of stolen goods, securities, moneys, fraudulent state tax stamps, or articles used in counterfeiting shall be fined or imprisoned under this title not more than ten years, or both).
366. See Dowling, 473 U.S. at 227 ("Despite its undoubted power to do so . . . Congress has not provided criminal penalties for distribution of goods infringing valid patents.").
367. Id. at 216-17 (finding National Stolen Property Act "contemplates a physical identity between the items unlawfully obtained and those eventually transported" and finding language of copyright statutes clearly distinguishes possessory interests of copyright holder from ordinary property interests).
368. Though 18 U.S.C. § 2512 is a criminal statute, there is recent discussion over whether and what civil remedies are available. See DIRECTV Inc. v. Nicholas, 403 F.3d 223, 226-27 (4th Cir. 2005) (allowing for civil cause of action based on principles of §§ 2512-2520). But see DirectTV Inc. v. Robson, 420 F.3d 532, 538-39 (5th Cir. 2005) (noting that no civil action can be brought based on possession or purchase of a pirate access device alone).
369. 18 U.S.C. § 2512(1)(a),(b) (2000).
370. Samuel Rosenstein, The Electronic Communications Privacy Act of 1986 and Satellite Descramblers: Toward Preventing Statutory Obsolescence, 76 MINN. L. REV. 1451, 1452 (1992).
371. Id. The mens rea was changed in 1986 from willful to intentional. See Pub. L. No. 99-508, Title I, § 101(c)(1), (7), (f)(2), 100 Stat. 1851 (1986) (codified at 18 U.S.C. § 2512 (2000)).
372. See United States v. Splawn, 982 F.2d 414, 417 (10th Cir. 1992) (describing the requirement that the design of the device renders it primarily useful for the purpose of surreptitious interception); accord United States v. Harrell, 983 F.2d 36, 38-39 (5th Cir. 1993).
373. 18 U.S.C. § 2512(1)(c). The language regarding electronic dissemination was inserted in 2002. See Pub. L. 107-296, Title II, § 225(f), 116 Stat. 2158 (2002) (codified at 18 U.S.C. § 2512(1)(c)).
374. David A. Lampman, II, The Unusual Suspects: Unscrambling Satellite Piracy, 22 CARDOZO ARTS & ENT. L.J. 553, 585 (2004) (discussing flaws in the scope of the Wire Tap law as it relates to the satellite descramblers).
375. Though the Supreme Court decision in United States v. Booker, 543 U.S. 220 (2005), renders the Sentencing Guidelines advisory, the provisions of the Guidelines are still used as a factor in sentencing. As such, courts, when considering sentences, must still look to the Guidelines in an advisory capacity.
376. U.S.S.G. MANUAL §§ 3D1.1-3D1.5 (2007) (explaining calculation of single offense level for multi-count convictions). This section explains how the Guidelines provide incremental punishment for significant additional criminal conduct. To assess a multiple count sentence, the most serious offense is used as the starting point. Any additional counts determine how much to increase the offense level, but convictions on multiple counts do not result in a sentence enhancement unless they represent additional conduct that is not otherwise accounted for.
377. 18 U.S.C. § 1831(a) (2000).
378. Id.
379. U.S.S.G. MANUAL § 2B1.1 (2007) (covering offenses involving economic espionage under 18 U.S.C. § 1831 and also applies to theft of trade secrets violations as defined under § 1832).
380. Id. § 2B1.1(b)(5).
381. 18 U.S.C. § 1834(a)(1) (2000). The court may consider "the nature, scope, and proportionality of the use of the property in the offense." Id. § 1834(a)(2). The forfeiture provision has been likened to the forfeiture provision in RICO. See Michael Coblenz, Criminal Punishment of Trade Secret Theft Under New Federal Law: The Economic Espionage Act of 1996, A.B.A. IPL NEWSL., Spring 1997, at 11, 49 (discussing factors court may consider in determining whether to impose forfeiture).
382. 18 U.S.C. § 1834(a)(1).
383. Id. § 2314 (describing who falls under the Act for crimes involving stolen property). Section 2314 was amended in 1994 to remove the outdated maximum fine. Pub. L. No. 103-322, Title XXXIII, § 330016(1)(L), 108 Stat. 1796, 2147 (1994).
384. U.S.S.G. MANUAL § 2B1.1 (2007).
385. Id. §§ 2B1.1(a), (b)(1).
386. Id. § 2B1.1(b)(1)(N).
387. Id. § 2B1.1(b)(4). See United States v. Coviello, 225 F.3d 54, 65 (1st Cir. 2000) (holding that defendant store, Crazy Bob's, could be considered "in-the-business" of buying and selling stolen property even though it was a legitimate business which also sold legitimate goods; therefore, the Sentencing Guidelines regarding sentence enhancement apply).
388. 18 U.S.C. § 1905 (2000) (making it misdemeanor for any employee of the United States to disclose trade secrets "[t]o any extent not authorized by law").
389. Id.
390. U.S.S.G. MANUAL app. A (2007).
391. Id. §§ 2H3.1(a), (b) (2006 Supp.) (setting base level offense for economic gain from the crime).
392. Id. §§ 2H3.1(a), (b) (Proposed Amendment 2007).
393. Id. § 2H3.1(c)(1) (setting guidelines for cross reference offense).
394. 18 U.S.C. § 1341 (2000) (as amended by the Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, § 903(a), 116 Stat. 745, 805) (covering mail fraud); 18 U.S.C. § 1343 (2000) (as amended by the Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, § 903(b), 116 Stat. 745, 805) (covering wire fraud).
395. 18 U.S.C. § 1341 (protecting financial institutions in cases of mail fraud); 18 U.S.C. § 1343 (protecting financial institutions in cases of wire fraud).
396. U.S.S.G. MANUAL app. A (2007). For a complete discussion of sentencing under Mail and Wire Fraud, see the MAIL AND WIRE FRAUD article in this issue.
397. Id. §§ 2B1.1(a), (b) (setting base level offense, and applying it to losses of $5,000 or less).
398. Id. § 2B1.1(b)(1)(N).
399. Id. § 2B1.1(b)(2)(A)(i).
400. Id. § 2B1.1(b)(2)(B).
401. 18 U.S.C. § 1963(a) (2000) (stating criminal penalties applicable to RICO conviction).
402. Id. (concerning any proceeds obtained from racketeering activity).
403. See U.S.S.G. MANUAL app. A (2007). For a complete discussion of sentencing under RICO, see the RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS ACT article in this issue.
404. Pub. L. No. 104-153, § 3, 110 Stat. 1386 (1996) (amending 18 U.S.C. § 1961(1)(B)).
405. 18 U.S.C. § 2320(a) (2000). When the individual is a repeat offender under this section, the maximum fine increases to $5 million, and the sentencing cap is set at no more than twenty years imprisonment. If an organization or corporation has a previous conviction under this section, it may be fined up to $15 million.
406. See id. (requiring higher penalties for repeat offenders).
407. Id. § 2318(a). In 1996, the statute was amended to include "computer program(s)." Pub. L. No. 104-153, §§ 4(a), (b), 110 Stat. 1386, 1387 (1996).
408. 18 U.S.C. § 2320(b)(2)-(3); see Vuitton v. White, 945 F.2d 569, 575-76 (3d Cir. 1991) (discussing requirements for relief under ex parte seizure provision of the Act); Time Warner v. Does 1-2, 876 F. Supp. 407, 411 (E.D.N.Y. 1994) (explaining although Congress granted an ex parte seizure right for infringement cases, search and seizure must comport with certain safeguards intended to guard civil defendants' Fourth Amendment rights).
409. 17 U.S.C. § 506(a)(1); 18 U.S.C. §2319(b)(1) (explaining sentence for criminal copyright infringement).
410. 18 U.S.C. §§ 3571(b), (c) (establishing range of fines for individuals and organizations contingent upon loss to victim and class of felony of conviction). In the D.C. District Court, a defendant pled guilty to one felony count of Criminal Infringement of a Copyright, in violation of 18 U.S.C. § 2319(b)(1). He was sentenced to two months incarceration, followed by fourteen months home detention, and was ordered to pay $290,556 in restitution. Press Release, U.S. Dep't of Justice, Software Pirate Sentenced (May 31, 2002), available at http://www.cybercrime.gov/surisSent.htm (last visited July 28, 2005).
411. 18 U.S.C. § 2319(b)(2) (explaining sentence for repeat offender). Current proposed legislation would double the maximum sentences provided under §§ 2319(b), (c) and replace "second or subsequent offense" with "if the offense was committed after a prior felony conviction under this section, under section 1204(a) of title 17, or under section 2318, 2319A, or 2319B of this title." H.R. 5921, 109th Cong. (2d Sess. 2006).
412. 18 U.S.C. § 3571(d). See United States v. Rothberg, 222 F. Supp. 2d 1009, 1019 (N.D. Ill. 2002) (holding absence of a profit motive or financial gain in Rothberg's violation of 17 U.S.C. § 506(a) warranted a two-level decrease in the offense level under U.S.S.G. MANUAL § 2B3.3(b)(2)).
413. 18 U.S.C. § 2319(d) (2000).
414. Id. § 2319(d)(1) (explaining sentence for first time non-commercial offender).
415. Id. § 2319(d)(2) (explaining sentence for first time commercial offender).
416. Id. §§ 2319(d)(1), (2).
417. Id. §§ 2319(d)(3), (4) (explaining sentence for repeat offender).
418. 17 U.S.C. § 506(a)(1) (2000); 18 U.S.C. §§ 2319(b)(3), 3571(b)(5).
419. 17 U.S.C. § 506(b); see United States v. One Sharp Photocopier, 771 F. Supp. 980, 984 (D. Minn. 1991) (finding government is entitled to forfeiture of a copier used to illegally duplicate software operations manual accompanying copyrighted computer software).
420. U.S.S.G. MANUAL app. A (2007).
421. Id. § 2B5.3(a) (setting the base offense level for trafficking).
422. Id. § 2B5.3(b)(1) (referring to section 2B.1 table for increases in offense levels). The reference in section 2B5.3 to the table contained in section 2B1.1 applies only to the actual table, not to the entire offense guideline, meaning that enhancements contained in section 2B1.1 are not applicable to defendants convicted of violating section 2319 or 2320. "An instruction to use a particular subsection or the table from another offense guideline refers only to the particular subsection or table referenced, and not to the entire offense guideline." Id. § 1B1.5(b)(2); see also United States v. Cho, 136 F.3d 982, 984-86 (5th Cir. 1998) (stating that § 2B5.3(b)(1) makes reference only to table in former § 2F1.1 and not to table's prefatory sentence, stating "loss" is offense characteristic as opposed to "retail value" in [former] section 2B5.3(b)(1), which is correct factor in determining sentence enhancement for defendant's trademark infringement conviction). But cf. Roger J. Miner, Considering Copyright Crimes, 42 J. COPYRIGHT SOC'Y U.S.A. 303, 307 (1995) (criticizing Guidelines penalties for copyright felonies as "much too low").
423. See United States v. Guerra, 293 F.3d 1279 (11th Cir. 2002) (noting that courts have based sentencing enhancement on the actual retail price where there was insufficient evidence of the value of the infringing items (citing United States v. Kim, 963 F.2d 65, 67-71 (5th Cir. 1992))); cf. United States v. Larracuente, 952 F.2d 672, 674-75 (2d Cir. 1992) (holding "[w]here, as here, unauthorized copies are prepared with sufficient quality to permit their distribution through normal retail outlets, the value of the infringing items is their normal retail price to ultimate consumers who purchase from such outlets," but finding that the result may be different if "infringing items were of obviously inferior quality"). The application notes to U.S.S.G. MANUAL § 2B5.3 provide instruction to courts in determining the infringement amount providing guidelines as to when use of the retail value of the infringing item may be appropriate as opposed to use of the retail value of the infringed item. U.S.S.G. MANUAL § 2B5.3, Note 2 (A)(B). A recent amendment to the application notes under section 2B5.3 gave courts further flexibility allowing the court to make a reasonable estimate of the infringement amount using any relevant information if the number of infringing items was indeterminate. U.S.S.G. MANUAL § 2B5.3, Note 2(E).
424. U.S.S.G. MANUAL § 2B5.3(b)(2) (2007).
425. 35 U.S.C. § 292(a) (2000) (establishing fines for forgery and counterfeiting); e.g., Accent Designs, Inc. v. Jan Jewelry Designs, Inc., 827 F. Supp. 957, 968-70 (S.D.N.Y. 1993) (applying § 292(a)'s fining mechanism).
426. E.g., Krieger v. Colby, 106 F. Supp. 124, 131 (S.D. Cal. 1952) (imposing eight separate fines on defendants who received shipments of goods with labels violating predecessor to § 292). But see Sadler-Cisar, Inc. v. Commercial Sales Network, Inc., 786 F. Supp. 1287, 1296 (N.D. Ohio 1991) (holding that "continuous markings over a given time constitute a single offense" under § 292(a)).
427. 18 U.S.C. § 497 (2000) (Letters Patent statute).
428. Id. (setting imprisonment guidelines for false marking violations).
429. 18 U.S.C. § 3571(b) (outlining fines for individuals); id. § 3571(c) (setting forth fines for organizations); id. § 3571(d) (stating fine equals twice gross gain or loss when violators have pecuniary gain or if victims suffer loss).
430. U.S.S.G. MANUAL app. A (2007).
431. 18 U.S.C. § 2512.
432. See Lampman, supra note 363, at 585 (criticizing the application of law as not applying strict penalties to users, while focusing prosecutions on wholesale distributors and hackers).
433. U.S.S.G. MANUAL § 2H3.2.
434. Id. §2B5.3 n. 3.