UNITED STATES OF AMERICA V. DAVID LA MACCHIA
UNITED STATES OF AMERICA
v.
DAVID LaMACCHIA
CRIMINAL ACTION NO. 9410092-RGS December 28, 1994MEMORANDUM OF DECISION AND ORDER ON DEFENDANT’S MOTION TO DISMISS STEARNS, D.J.
This case presents the issue of whether new wine can be poured into an old bottle. The facts, as seen in the light most favorable to the government, are these. The defendant, David LaMacchia, is a twenty-one year old student at the Massachusetts Institute of Technology (MIT). LaMacchia, a computer hacker, used MIT’s computer network to gain entree to the Internet. Using pseudonyms and an encrypted address, LaMacchia set up an electronic bulletin board which he named Cynosure.[1] He encouraged his correspondents to upload popular software applications (Excel 5.0 and WordPerfect 6.0) and computer games (Sim City 2000). These he transferred to a second encrypted address (Cynosure II) where they could be downloaded by other users with access to the Cynosure password. Although LaMacchia was at pains to impress the need for circumspection on the part of his subscribers, the worldwide traffic generated by the offer of free software attracted the notice of university and federal authorities.
On April 7, 1994, a federal grand jury returned a one count indictment charging LaMacchia with conspiring with “persons unknown” to violate 18 U.S.C. Sec. 1343, the wire fraud statute. According to the indictment, LaMacchia devised a scheme to defraud that had as its object the facilitation “on an international scale” of the “illegal copying and distribution of copyrighted software” without payment of licensing fees and royalties to software manufacturers and vendors. The indictment alleges that LaMacchia’s scheme caused losses of more than one million dollars to software copyright holders. The indictment does not allege that LaMacchia sought or derived any personal benefit from the scheme to defraud.
On September 30, 1994. the defendant brought a motion to dismiss, arguing that the government had improperly resorted to the wire fraud statute as a copyright enforcement tool in defiance of the Supreme Court’s decision in Dowling v. United States, 473 U.S. 207 (1985) The government argues that Dowling is a narrower case than LaMacchia would have it, and holds only that copyright infringement does not satisfy the physical “taking” requirement of the National Stolen Property Act, 18 U.S.C. Sec. 2314.
THE DOWLING DECISION
Paul Edmond Dowling was convicted of conspiracy, interstate transportation of stolen property [ITSP], copyright violations and mail fraud in the Central District of California. Dowling and his co-conspirators sold bootleg Elvis Presley recordings by soliciting catalogue orders from post office boxes in Glendale, California. The infringing recordings were shipped in interstate commerce to Maryland and Florida. The eight ITSP counts on which Dowling was convicted involved thousands of phonograph albums. “[E]ach album contained performances of copyrighted musical compositions for the use of which no licenses had been obtained nor royalties paid ….” Dowling, supra at 212. Dowling appealed his convictions (except those involving copyright infringement) The Ninth Circuit Court of Appeals affirmed. “[T]he [Ninth Circuit] reasoned that the rights of copyright owners in their protected property were indistinguishable from ownership interests in other types of property and were equally deserving of protection under the [stolen property] statute.” Id.
The Supreme Court granted certiorari only as to Dowling’s convictions for interstate transportation of stolen property.[2] The Court, in an opinion by Justice Blackmun, held that a copyrighted musical composition impressed on a bootleg phonograph record is not property that is “stolen, converted, or taken by fraud” within the meaning of the Stolen Property Act. Justice Blackmun emphasized that cases prosecuted under Sec. 2314 had traditionally involved “physical ‘goods, wares [or] merchandise.’” The statute “seems clearly to contemplate a physical identity between the items unlawfully obtained and those eventually transported, and hence some prior physical taking of the subject goods” Id at 216. In Dowling’s case there was no evidence “that Dowling wrongfully came by the phonorecords actually shipped or the physical materials from which they were made.” Dowling, supra at 214.
Justice Blackmun felt compelled, however, to answer the government’s argument that the unauthorized use of the underlying musical compositions was itself sufficient to render the offending phonorecords property “stolen, converted or taken by fraud.”
The Government’s theory here would make theft, conversion, or fraud equivalent to wrongful appropriation of statutorily protected rights in copyright. The copyright owner, however, holds no ordinary chattel. A copyright, like other intellectual property, comprises a series of carefully defined and carefully delimited interests to which the law affords correspondingly exact protections. Id. at 216.
A copyright, as Justice Blackmun explained, is unlike an ordinary chattel because the holder does not acquire exclusive dominion over the thing owned. The limited nature of the property interest conferred by copyright stems from an overriding First Amendment concern for the free dissemination of ideas. “The primary objective of copyright is not to reward the labor of authors. but ‘[t]o promote the Progress of Science and useful Arts.’ Art. I, Sec. 8, cl. 8.” Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340, 349 (1991). Data general Corp. v. Grumman Systems Support, 36 F.3d 1147, 1187 (1st Cir. 1994) (same). Justice Blackmun offered the “fair use” doctrine (17 U.S.C. Sec. 107) and the statutory scheme of compulsory licensing of musical compositions (17 U.S.C. Sec. 115) as examples of ways in which the property rights of a copyright holder are circumscribed by the Copyright Act.[3] Dowling, supra at 217.
It follows that interference with copyright does not easily equate with theft, conversion or fraud. The Copyright Act even employs a separate term of art to define one who misappropriates a copyright:
“Anyone who violates any of the exclusive rights of the copyright owner,” that is, anyone who trespasses into his exclusive domain by using or authorizing the use of the copyrighted work in one of the five ways set forth in the statute, “is an infringer of the copyright.” There is no dispute in this case that Dowling’s unauthorized inclusion on his bootleg albums of performances of copyrighted compositions constituted infringement of those copyrights. It is less clear, however, that the taking that occurs when an infringer arrogates the use of another’s protected work comfortably fits the terms associated with physical removal employed by Sec. 2314. The infringer invades a statutorily defined province guaranteed to the copyright holder alone. But he does not assume physical control over the copyright; nor does he wholly deprive its owner of its use. While one may colloquially like infringement with some general notion of wrongful appropriation, infringement plainly implicates a more complex set of property interests than does run-of-the-mill theft, conversion or fraud. As a result, it fits but awkwardly with the language Congress chose – “stolen, converted or taken by fraud” – to describe the sorts of goods whose interstate shipment Sec. 2314 makes criminal. Id at 217-218 (citations omited).
The ITSP statute, Justice Blackmun observed, had its roots in efforts by Congress to supplement the efforts of state authorities frustrated by jurisdictional problems arising from the transportation of stolen property across state lines. Id. at 219-220.
No such need for supplemental federal action has ever existed, however, with respect to copyright infringement, for the obvious reason that Congress always has had the bestowed authority to legislate directly in this area…. Given that power, it is implausible to suppose that Congress intended to combat the problem of copyright infringement by the circuitous route hypothesized by the government . . . In sum, the premise of Sec. 2314 — the need to fill with federal action an enforcement chasm created by limited state jurisdiction — simply does not apply to the conduct the Government seeks to reach here. Id at 220-221.
A review of the evolution of criminal penalties in the Copyright Act led Justice Blackmun to observe that:
“The history of the criminal infringement provisions of the Copyright Act reveals a good deal of care on Congress’ part before subjecting copyright infringement to serious criminal penalties…. In stark contrast, the Government’s theory of this case presupposes a congressional decision to bring the felony provisions of Sec. 2314, which make available the comparatively light fine of not more than $10,000 but the relatively harsh term of imprisonment of up to 10 years, to bear on the distribution of a sufficient quantity of any infringing goods simply because of the presence here of a factor-interstate transportation-not otherwise though relevant to copyright law. The Government thereby presumes congressional adoption of an indirect but blunderbuss solution to a problem treated with precision when considered directly. Id. at 225-226.
Finally, noting that the government’s expansive reading of the Stolen Property Act would have the unsettling effect of criminalizing a broad range of conduct involving copyright and other intellectual property that had been historically regulated by the civil laws, Justice Blackmun concluded that “the deliberation with which Congress over the last decade has addressed the problem of copyright infringement for profit, as well as the precision with which it has chosen to apply criminal penalties in this area, demonstrates anew the wisdom of leaving it to the legislature to define crime and prescribe penalties. Here, the language of Sec. 2314 does not ‘plainly and unmistakably’ cover petitioner Dowling’s conduct” Id at 228 (footnote omitted). Dowling’s ITSP convictions were reversed.
