UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
____________________________
)
UNITED STATES OF AMERICA )
)
v. ) Cr. No. 94-10092-RGS
)
DAVID M. LaMACCHIA )
____________________________)
MEMORANDUM IN SUPPORT OF DEFENDANT'S
MOTION TO DISMISS THE INDICTMENT FOR FAILURE
TO STATE AN OFFENSE AND ON CONSTITUTIONAL GROUNDS
Introduction
The government has charged a 21 year old Massachusetts
Institute of Technology ("MIT") student, David LaMacchia,
with conspiracy to commit wire fraud, in violation of 18
U.S.C. § 371. The indictment alleges that, as the systems
operator ("SYSOP") of an electronic bulletin board system
("BBS") on MIT's computer network, LaMacchia conspired with
unknown persons to engage in a "scheme or artifice to
defraud" to
permit and facilitate, on an international scale, the
illegal copying and distribution of copyrighted
software, without payment of software licensing fees or
the software purchase price to the manufacturers and
vendors of the copyrighted software.
Indictment 5.
LaMacchia contends that the indictment invents a
criminal charge, primarily by distorting the wire fraud
statute, in order to circumvent Congress's decision not to
apply a criminal sanction to LaMacchia's alleged conduct.
The indictment's fatal defect can best be seen by noting the
words that the indictment avoids using, and the crimes it
does not charge.
Although the indictment charges that the goal of the
charged conspiracy was the "illegal copying and distribution
of copyrighted software" which caused financial injuries to
copyright holders, the indictment avoids using Congress's
term of art for such a wrongful appropriation of the
copyright holders' rights -- infringement. 17 U.S.C. §
501(a). Instead, the indictment contrives to misbrand
alleged copyright infringement by renaming it as a "scheme or
artifice to defraud" executed by "illegal copying and
distribution of copyrighted software" in a vain effort to
bring LaMacchia's alleged conduct within hailing distance of
activity prohibited by the wire fraud statute, 18 U.S.C. §
1343.
But the indictment's legal legerdemain does not end
there. Even though the "scheme to defraud" prohibited by the
wire fraud statute is itself an inchoate offense, the
indictment does not charge that LaMacchia committed, or even
aided or abetted the commission of, wire fraud. Indeed, the
indictment does not allege that LaMacchia personally copied
or distributed any copyrighted software or that he was
actually aware of the extent of such activity by others.
Rather, the government attempts to stretch the already thin
reed even further by charging LaMacchia with conspiracy to
commit wire fraud, attempting thereby to make him criminally
liable for conduct committed by unnamed persons, including
conduct he was not actually aware of.
Most significantly, though the true legal name for the
goal of the alleged conspiracy is copyright infringement, the
indictment does not charge that either LaMacchia or his
unnamed co-conspirators committed, or even conspired to
commit, criminal copyright infringement in violation of the
Copyright Act, 17 U.S.C. § 506. That provision requires
proof that the infringement was done "willfully and for
purposes of commercial advantage or private financial gain."
Effectively conceding that the conduct alleged in the
indictment was not done for profit and therefore does not
constitute criminal infringement or conspiracy to commit
criminal infringement, the government has nevertheless
decided to bring this prosecution because it believes that
LaMacchia's conduct should be a crime even if it is not.
The prosecution's attempt at lawmaking is prohibited,
however, by the Supreme Court's decision in Dowling v. United
States, 473 U.S. 207 (1985), which held that criminal
prosecutions for alleged copyright infringement must be
brought, if at all, under the Copyright Act, and cannot be
brought under statutes enacted by Congress to prohibit
interstate theft and fraud pursuant to its interstate
commerce power.
In Dowling, the Supreme Court reversed the defendant's
conviction for violation of the National Stolen Property Act,
18 U.S.C. § 2314, in connection with his interstate
distribution of infringing Elvis Presley recordings. In
doing so, the Court specifically rejected the government's
argument that the infringing recordings were "taken by fraud"
so as to be covered by that statute. The Court held that
Congress has regulated the copyright area directly, and in
great detail, in the Copyright Act pursuant to the special
grant of congressional authority contained in Article I, § 8,
cl. 8 of the Constitution. It ruled that the specific and
exclusive term Congress used for the wrongful appropriation
of copyright holders' rights is infringement, and that the
word "fraud" was "ill-fitting" when applied to copyright
infringement.
The Court emphasized that the purpose underlying the
interstate fraud and theft statutes enacted pursuant to
Congress's power to regulate interstate commerce -- the need
to fill gaps in state-by-state law enforcement -- does not
apply to the copyright area, where Congress has authority to
penalize the distribution of infringing goods directly,
whether or not those goods affect interstate commerce. 473
U.S. at 219-220. In light of the special care Congress has
shown in crafting the civil and criminal provisions of the
Copyright Act, the Court found it "implausible to suppose
that Congress intended to combat the problem of copyright
infringement by the circuitous route hypothesized by the
Government", 472 U.S. at 222, and refused to presume
"congressional adoption of an indirect but blunderbuss
solution to a problem treated with precision when considered
directly" in the Copyright Act. 473 U.S. at 227.
The Court acknowledged the temptation to utilize a fraud
and theft statute enacted pursuant to the commerce power as
an "existing and readily available tool to combat the
increasingly serious problem of ... copyright infringement,"
but concluded that such use was prohibited by the notice and
separation of powers concerns underlying the rule that
criminal statutes must be narrowly construed. 473 U.S. at
228-229.
The Dowling decision establishes that Congress has
finely calibrated the reach of criminal liability
[in the Copyright Act], and therefore absent clear
indication of Congressional intent, the criminal
laws of the United States do not reach copyright-
related conduct. Thus copyright prosecutions
should be limited to Section 506 of the Act, and
other incidental statutes that explicitly refer to
copyright and copyrighted works.
Nimmer on Copyright, Vol. 3 §15.05, at p. 15-20 (1993);
Goldstein, Copyright, Vol. II, §11.4.2, at 304 n.67 (1989)
("although the Court did not directly rule on whether the
mail fraud statute encompassed the infringing conduct, its
reasoning with respect to the Stolen Property Act, 18 U.S.C.
§ 2314, suggests that it would have treated the mail fraud
statute similarly"). See United States v. Gallant, 570 F.
Supp. 303 (S.D.N.Y. 1983) (distribution and sale of
infringing records is not a "scheme to defraud" within the
meaning of the federal wire fraud statute). The Dowling
holding has been directly applied to schemes involving
computer software. United States v. Brown, 925 F.2d 1301
(10th Cir. 1991) (illegal copying and distribution of
computer software does not violate § 2314).
The case at bar, involving an allegedly fraudulent
scheme to copy and distribute copyrighted material, is four-
square with the Dowling case except that the "circuitous" and
"blunderbuss" route proposed by the government here is an
indictment alleging conspiracy to commit interstate wire
fraud, rather than interstate transportation of property
"taken by fraud". This distinction is irrelevant, however,
because the primary holding of Dowling -- that conduct
interfering with copyright rights is punishable, if at all,
under the Copyright Act -- applies equally to the wire fraud
statute which, like the National Stolen Property Act, makes
no reference to copyrighted materials and was enacted by
Congress pursuant to its interstate commerce power to fill
gaps in state law enforcement.
Moreover, this case is even stronger than Dowling in one
important respect: Unlike the defendant in Dowling, who was
found guilty of criminal copyright violations, 473 U.S. at
212, LaMacchia is not even charged with any violation of the
Copyright Act. To permit the prosecution to use an
indictment charging conspiracy to commit wire fraud so as to
circumvent Congress's specific decision not to criminalize
the conduct in question via the Copyright Act, would give
rise to Due Process/notice and separation of powers concerns
even more serious than those expressed by the Dowling Court.
The indictment charges LaMacchia with conspiring to
commit wire fraud, 18 U.S.C. § 1343. Since, under Dowling,
the conduct alleged to have been the objective of the
conspiracy does not constitute wire fraud, the indictment
fails to allege the essential element of agreement to engage
in conduct which constitutes a federal crime. United States
v. Laub, 385 U.S. 475 (1967); O'Malley v. United States, 227
F.2d 332, 335 (1st Cir. 1955), cert. denied, 350 U.S. 966
(1956).
Accordingly, the indictment fails to state an offense
and must be dismissed under F.R.Crim.P. 12(b).
Argument
I. CONGRESS DID NOT INTEND THE WIRE FRAUD
STATUTE TO APPLY TO COPYRIGHT INFRINGEMENT.
At the core of the Dowling opinion is the Court's
recognition that federal crimes are defined by statute, not
by prosecutorial nor judicial interpretation. Quoting former
Chief Justice Marshall, the Court reiterated that
The rule that penal laws are to be construed
strictly, is perhaps not much less old than
construction itself. It is founded on the
tenderness of the law for the rights of
individuals; and on the plain principle that the
power of punishment is vested in the legislative,
not in the judicial department. It is the
legislature, not the Court which is to define a
crime and ordain its punishment.
473 U.S. at 213-214 (quoting United States v. Wiltberger, 5
Wheat. 76, 95 (1820)). Thus, the Court emphasized that
"[d]ue respect for the prerogatives of Congress in defining
federal crimes prompts restraint in [the criminal] area,
where we typically find a `narrow interpretation.'
appropriate." 473 U.S. at 213 (quoting Williams v. United
States, 458 U.S. 279, 290 (1982)).
The Court has repeatedly applied this constitutionally
required principle of statutory construction by affording
deference to the specialized and detailed provisions of the
Copyright Act. See, e.g., Dowling, 473 U.S. at 220; Sony
Corp. v. Universal City Studios, 464 U.S. 417, 429 (1984).
In reversing the conviction under § 2314 in the Dowling case,
the Court observed 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.
473 U.S. at 228. See also Sony, 464 U.S. at 429 ("As the
text of the Constitution makes plain, it is Congress that has
been assigned the task of defining the scope of the limited
monopoly that should be granted to authors or to inventors in
order to give the public appropriate access to their work
product.") Here, as in Dowling, Congress has not given any
indication that it intended a criminal fraud statute enacted
pursuant to its commerce power to be used to protect rights
which it created, and designed specific protections for, in
the Copyright Act. To the contrary, a comparison of the
language, history, and purpose of the wire fraud statute and
the Copyright Act evidence Congress's intent that
prosecutions for copyright infringement be brought only under
the criminal infringement provision of the Copyright Act.
A. Comparison of the Text of the Copyright Act With
the Wire Fraud Statute's Prohibition of a "Scheme
or Artifice to Defraud" Shows That the Wire Fraud
Statute Does not Encompass Copyright Infringement.
The wire fraud statute requires proof of a scheme or
artifice to defraud a victim out of his interest in money or
property, Carpenter v. United States, 484 U.S. 19 (1987),
however, nothing in Carpenter indicates that wrongful
appropriation of the bundle of rights created by the
Copyright Act is covered by the wire fraud statute's
prohibition of schemes to defraud. To the contrary, in
Dowling, the Supreme Court held that the wrongful
appropriation of the federally created rights conferred by
the Copyright Act was not intended by Congress to be reached
by its use in § 2314 of the phrase, "taken by fraud". In
language which controls here, the Court stated
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, 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.' 17 U.S.C. § 501(a)."
Dowling, 473 U.S. at 217, quoting Sony Corp., supra, 464 U.S.
at 433 (emphasis supplied).
The Court's refusal to equate wrongful misappropriation
of copyright holder's profits with fraud, and its insistence
that Congress intended such conduct to be proscribed
exclusively by its specialized term of art -- infringement --
was based on far more than the lexical differences between
different words used by Congress in the Copyright Act and in
an interstate fraud statute. The Court explained that
Congress's highly specialized and precise definitions of the
circumstances in which the protection of the copyright
holders' property interests would be redressed by a civil
remedy or punished by a criminal sanction were just as
carefully and purposefully phrased as the words Congress used
to delineate and create the rights of the copyright holder in
a protected work. The definitional boundaries of the
copyright holder's property interest and the civil and
remedies for its protection work together "correspondingly"
and harmoniously:
A copyright, like other intellectual property,
comprises a series of carefully defined and
carefully delimited interests to which the law
affords correspondingly exact protections.
Dowling, supra, 473 U.S. at 216 (emphasis supplied).
This indictment attempts to evade these "correspondingly
exact protections" embodied in Congress's design of the
criminal infringement statute, 17 U.S.C. § 506(a). As part
of its carefully balanced statutory scheme, Congress
purposefully limited the reach of the criminal sanction to
those wrongful appropriators of copyrighted works or the
profits derived therefrom who, unlike LaMacchia, act
"wilfully and for purposes of commercial advantage or private
gain". Congress deliberately chose not to impose a criminal
sanction, more broadly, upon anyone who executes a scheme to
deprive, or actually succeeds in depriving, a copyright
holder of his money or property through illegal copying or
distribution of his copyrighted work. The indictment seeks
to have this court interpret the wire fraud statute, a non-
copyright law, so as to reverse this legislative judgment,
simply because the Department of Justice believes that
Congress's definition of criminal copyright infringement is
under-inclusive or inadequate to address rapidly changing
technological conditions.
This court should insist, as the Dowling Court
instructs, that it will not legislate in this manner. By
comparing the texts of the Copyright Act and the interstate
fraud statute at issue in that case, the Dowling Court
recognized that Congress's exercise of its exclusive
copyright power involves sensitive weighing of vitally
important economic and non-economic interests.
The Constitution authorizes Congress to confer certain
rights upon copyright holders "[t]o promote the Progress of
Science and useful Arts." U.S. Const., art. I, § 8, cl. 8.
Unlike property rights created by state statutory or common
law, the privileges conferred upon copyright holders "are not
based upon any natural right that the author has in his
writings", and "are neither unlimited nor primarily designed
to provide a special benefit." Sony, 464 U.S. at 429 & n. 10
(quoting House Judiciary Report accompanying 1909 revision of
Copyright Act, H.R. Rep. No. 2222, 60th Cong., 2d Sess., 7
(1909)). "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, § 8, cl. 8." Feist
Publications, Inc. v. Rural Telephone Service Co., ___ U.S.
___, 111 S.Ct. 1282, 1290 (1991). "The sole interest of the
United States and the primary object in conferring the
monopoly lie in the general benefits derived by the public
from the labors of authors." 464 U.S. at 429 (quoting United
States v. Paramount Pictures, Inc., 334 U.S. 131, 158
(1948)). Copyright law makes profits to the copyright holder
"a secondary consideration." Id.
Correspondingly, Congress has not criminalized all
wrongful misappropriations of copyright holders' profits, nor
all misappropriations of such profits accomplished by fraud
or intended to be accomplished by a scheme or artifice to
defraud. Congress has determined that wrongful conduct which
seeks to inflict or actually inflicts a loss of such profits
upon the copyright holder -- but which was not engaged in
"for commercial advantage or private financial gain" -- not
be addressed through a criminal sanction.
The limited scope of the criminal sanction which
Congress has designed for only a limited subset of wrongful
misappropriations of copyright holders' rights is designed to
be consonant with the scope of the limited monopoly which
Congress granted to copyright holders, and its secondary
ranking of the protection of copyright holders' profits as an
objective of copyright law. The boundaries of the criminal
copyright sanction are part of a comprehensive and exclusive
legislative scheme which reflects a careful balance between
encouraging both the production and dissemination of new
works and widespread access to and use of these works. See
Sony, 464 U.S. at 429. The First Amendment value of free
dissemination of ideas is part of this balance and is
embodied in the Copyright Act. Campbell v. Acuff-Rose Music,
Inc., 114 S. Ct. 1165, 1171 (1994) (recognizing the
"guarantee of breathing space within the confines of
copyright"); Harper & Row Publishers v. Nation Enterprises,
471 U.S. 539, 558-560 (1985) (recognizing that "the Framers
intended copyright itself to be the engine of free
expression" and that there are "First Amendment protections
already embodied in the Copyright Act"). See Goldstein,
supra at 10.3 at 242 (describing consonance between
copyright and First Amendment).
Thus, unlike the state law property rights protected by
the wire fraud and similar interstate fraud statutes, "the
copyright holder's dominion is subjected to precisely defined
limits." Dowling, 473 U.S. at 217. For example, a copyright
protects only the particular expression of facts or ideas,
not the facts or ideas themselves. Campbell, 114 S. Ct. at
1169 & n.5; Harper & Row Publishers, 471 U.S. at 560
(recognizing the First Amendment protection embodied in the
distinction between copyrightable expression and
uncopyrightable facts and ideas). Similarly, the Copyright
Act "has never accorded the copyright owner complete control
over all possible uses of his work." Dowling, 473 U.S. at
216. Rather, the Act codifies the traditional privilege of
others to make "fair use" of the copyrighted work. 17 U.S.C.
§ 107; Campbell, 114 S. Ct. at 1170 (observing that the fair
use doctrine guarantees "breathing space").
Recognition that a copyright "comprises a series of
carefully defined and carefully delimited interests to which
the law affords correspondingly exact protections," 473 U.S.
at 216, led the Court in Dowling to conclude that "[w]hile
one may colloquially like[n] 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." 473 U.S. at
217-218 (emphasis supplied). See Sony, 464 U.S. at 451 n. 33
(holding that the copying of copyrighted material "does not
even remotely entail comparable consequences to the copyright
owner" as "theft of a particular item of personal property.")
The government would have this court interpret non-
copyright statutes in a manner which plainly interferes with
Congress's carefully constructed statutory scheme, even
though the Supreme Court assiduously protected the copyright
laws from a similar Justice Department assault in Dowling.
Here, as in Dowling, the alleged scheme to copy and
distribute copyrighted materials does not constitute a
"scheme to defraud" a victim out of money or property
protected by the wire fraud and similar commerce power
statutes. The highly specialized wording, nuanced balancing
of interests and exclusively federal nature of Congress's
system of protections from and remedies for copyright
infringement indicates that Congress did not intend the
wrongful misappropriation of copyright holders' profits or
works to be punishable as an interstate "scheme to defraud"
intended to deprive a person of money or property protected
by state law.
As the Court cautioned in Dowling, "when interpreting a
criminal statute that does not explicitly reach the conduct
in question,...[courts should be] reluctant to base an
expansive reading on inferences drawn from subjective and
variable `understandings.'" 473 U.S. at 218. Here, as in
Dowling, this Court must conclude that Congress did not
intend the wire fraud statute to reach the interference with
copyright alleged in the indictment.
B. The Legislative History of the Wire Fraud
Statute Does not Demonstrate Congressional
Intent to Reach Copyright Infringement Schemes.
In Dowling the Court reasoned that the premise of
section 2314 -- "the need to fill with federal action an
enforcement chasm created by limited state jurisdiction" --
simply does not apply to the copyright area, where no such
need exists due to Congress's constitutional authority to
penalize copyright infringement directly, whether or not the
infringement affects interstate commerce. 473 U.S. at 218-
221. The Court pointed out that, in dealing with infringing
goods, "Congress has never thought it necessary to
distinguish between intrastate and interstate activity. Nor
does any good reason to do so occur to us." 473 U.S. at 221.
Similarly, the legislative history of the wire fraud
statute reveals that it, like section 2314, represents a
congressional exercise of the commerce power to fill state
law enforcement gaps. The wire fraud statute was aimed
primarily at preventing "frauds against the public." House
Report No. 388, 82nd Congress, 1st Sess. at 1 (1951).
Recognizing that fraud is inherently a matter of state rather
than federal concern, Congress limited the wire fraud
statute, as it had to for jurisdictional purposes, to
situations involving interstate wire or radio transmissions.
Id., at 3. The wire fraud statute, like the statute at
issue in the Dowling case, was Congress's response to "the
need for federal action in an area that normally would have
been left to state law." 473 U.S. at 220.
As the Court emphasized in Dowling, however, copyright
is an area of federal rather than state concern. Congress
has regulated this area directly in the Copyright Act and has
chosen not to distinguish between intrastate and interstate
infringements. 473 U.S. at 221. In contrast to the wide
variety of fraud schemes covered by the wire fraud statute,
the states have no interest in nor authority over schemes to
infringe federal copyright rights, since Congress has
expressly preempted the copyright area from state regulation
and control. 17 U.S.C. § 301. In short, since Congress has
regulated the copyright area directly in the Copyright Act,
there is no need for supplemental federal action under
statutes enacted pursuant to Congress's interstate commerce
power.
Here, as in Dowling, the premise of the criminal statute
which the defendant is charged with violating -- "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." 473 U.S. at
221. Thus, in this case, as in Dowling, "it is implausible
to suppose that Congress intended to combat the problem of
copyright infringement by the circuitous route hypothesized
by the Government." Id.
C. The History of the Copyright Act Indicates
That Congress did not Believe the Wire
Fraud Statute Applied to Copyright Violations.
In Dowling, the Court reviewed the legislative history
of the Copyright Act through 1985 and found that it supplied
additional reason not to presume "congressional adoption of
an indirect but blunderbuss solution to a problem treated
with precision when considered directly." 473 U.S. at 221-
226. The Court observed that
[n]ot only has Congress chiefly relied on an array
of civil remedies to provide copyright holders
protection against infringement, see 18 U.S.C. §§
502-505, but in exercising its power to render
criminal certain forms of copyright infringement,
it has acted with exceeding caution.
473 U.S. at 221. The Court noted that Congress "hesitated
long before imposing felony sanctions on copyright
infringers," then "carefully chose those areas of
infringement that required severe response," and "studiously
graded penalties even in those areas of heightened concern."
473 U.S. at 225. The Court found that this "step-by-step,
carefully considered approach is consistent with Congress'
traditional sensitivity to the special concerns implicated by
the copyright laws," and utterly inconsistent with the
"blunderbuss" idea of prosecuting copyright infringement
indirectly through a fraud provision that was neither
designed or tailored to apply to the specialized concerns
involved in fixing criminal sanctions to protect the
interests of copyright holders. 473 U.S. at 225-226. The
Court observed that "neither the text nor the legislative
history" of the Copyright Act "evidences any congressional
awareness, let alone approval, of the use of" section 2314
"in prosecutions for interference with copyright." 473 U.S.
at 225 n.18. The discrepancy between Congress's careful
balancing of interests in the Copyright Act and the
government's "blunderbuss" attempt to prosecute copyright
infringement using an interstate fraud statute enacted
pursuant to the interstate commerce power, convinced the
Court "that Congress had no intention to reach copyright
infringement when it enacted" the non-copyright criminal
provision. 473 U.S. at 226.
Similarly, the discrepancy between the Congress's
approach in the Copyright Act to criminalization of copyright
infringement, particularly to criminal infringement of
computer software copyrights, and the government's
"blunderbuss" attempt to apply the wire fraud statute to this
case leads to the conclusion that Congress did not intend for
the wire fraud statute to reach copyright infringement.
Unlike the wire fraud statute, which Congress has
amended only three times in 42 years, Congress has frequently
amended the Copyright Act in response to changes in
technology. Sony, 464 U.S. at 430 & n.11 ("From its
beginning, the law of copyright has developed in response to
significant changes in technology."). Congress has shown
particular care and precision in designing the copyright
protection for computer software.
In 1974 Congress created the National Commission on New
Technological Uses of Copyrighted Works (CONTU) to evaluate
the need for legislation protecting computer software and to
make specific recommendations for such legislation. See 120
Cong. Rec. 41415 (1974) (the evaluation by CONTU "is
inherently valuable in our forthcoming review of the
copyright laws.") (statement by Rep. Danielson). The
Commission spent three years collecting data, holding
hearings, and deliberating before recommending that the
Copyright Act be amended to protect computer software.
National Commission on New Technological Users of Copyrighted
Works, Final Report 2 (1978). Based on CONTU's
recommendations, Congress enacted the Computer Software
Copyright Act of 1980, which added to the Copyright Act
provisions explicitly defining computer programs, 17 U.S.C. §
101, and authorizing owners of computer programs to copy them
for certain purposes. 17 U.S.C. § 117. Congress initially
provided only a misdemeanor penalty for criminal infringement
of computer software copyrights, and proceeded with caution
before imposing felony penalties for such conduct. In
enacting the Piracy and Counterfeiting Amendments of 1982,
which created a felony penalty for certain types of copyright
infringement, Congress specifically excluded infringements of
computer software. Pub.L. 97-180, 96 Stat. 91 (amending 17
U.S.C. §506(a) and enacting 18 U.S.C. § 2319). Congress
increased the copyright protection afforded computer software
in the Computer Software Rental Amendments of 1990, but did
not increase the criminal penalties for software infringement
at that time. Pub.L. 101-650 (amending 17 U.S.C. § 109).
Congress waited until 1992 before enacting a felony penalty
for software copyright infringement. Pub.L. 102-561
(amending 18 U.S.C. §2319 to include computer software).
Far from evidencing any congressional awareness or
approval of wire fraud prosecutions in this area, the
legislative history of the 1992 amendment to the Copyright
Act makes clear that Congress believed that infringement of
computer software copyrights was not covered by any then-
existing criminal felony provision. The Senate Report
accompanying the 1992 amendment states that "[t]he only
defense against piracy is the copyright law" and that the
amendment creating a felony penalty for copyright
infringement was necessary "[b]ecause acts of software piracy
are only misdemeanors [and] prosecutors are disinclined to
prosecute these criminal acts." Senate Report No. 102-997
192nd Cong., 2nd Sess, at 3 (1992). See Hearings on S. 893
before Subcommittee on Intellectual Property and Judicial
Administration of House Judiciary Committee (August 12, 1992)
(comment of Rep. James) ("all copyright infringements as they
relate to computer programming are as a matter of law nothing
more than a misdemeanor at this time. There is no felony
involved.") Thus, in amending the Copyright Act in 1992,
Congress believed it was creating the exclusive felony
criminal provision applicable to copyright infringement.
The legislative history of the 1992 amendment creating
the felony penalty for software copyright infringement makes
it especially clear that Congress intended criminal penalties
to be imposed only upon "commercial pirates" and not
individuals who, without profit motive, make or distribute
infringing software for personal use or for friends. Senate
Report 102-268 at 2 (provision is aimed at "thieves who
desire to duplicate and sell unauthorized copies"); Id. at 3
(the mens rea "limitation restricts prosecutions to
commercial pirates); House Report 102-997 at 5-6 ("Even if
civil liability has been established, without the requisite
mens rea it does not matter how many unauthorized
copies...have been made or distributed: No criminal
violation has occurred."); 138 Cong. Rec. S. 17958-59
(October 8, 1992) ("the copying must be undertaken to make
money, and even incidental financial benefits that might
accrue as a result of the copying should not contravene the
law where the achievement of those benefits were not the
motivation behind the copying.") (comments of sponsor Sen.
Hatch); 138 Cong. Rec. S. 7580 (June 4, 1992) ("the large-
scale, commercially oriented copying of computer programs
should be treated as a criminal offense") (comments of Sen.
Hatch). The government's attempt to circumvent this mens rea
requirement by prosecuting LaMacchia for conspiracy to commit
wire fraud threatens to undermine the clear and manifest
intent of Congress.
Similarly, Congress studiously graduated penalties and
remedies under the Copyright Act, differentiating between
civil and criminal penalties, and within the later category
between misdemeanor (up to one year) and felony punishment
(up to 10 years) based upon the extent of infringement
involved, and between first-time (up to five years) and
repeat (up to ten years) offenders. 18 U.S.C. § 2319 (b).
Application of the wire fraud statute in this area would
override those graduations, imposing felony punishment
regardless of the type or amount of the infringement. 18
U.S.C. § 1343. See Dowling, 473 U.S. at 225-226. Use of the
wire fraud statute to prosecute copyright infringement would
also override Congress's enactment of a shorter statute of
limitations for criminal copyright infringement prosecutions.
Compare 17 U.S.C. § 507(a) (three year statute of
limitations for criminal copyright prosecutions), with 18
U.S.C. § 3282 (general five-year statute of limitations
applicable to prosecutions of noncapital offenses, including
wire fraud).
The Supreme Court has warned that courts should not
expand upon the protections afforded by the Copyright Act
without "explicit legislative guidance." Sony, 464 U.S. at
431; Dowling, 473 U.S. at 228-229. The government's belief
that "[i]n this new electronic environment it has become
increasingly difficult to protect intellectual property
rights," provides no exception to this rule, for as the Court
has stated
[s]ound policy, as well as history, supports our
consistent deference to Congress when major
technological innovations alter the market for
copyrighted materials. Congress has the
constitutional authority and the institutional
ability to accommodate fully the varied
permutations of competing interests that are
inevitably implicated by such new technology.
Sony, 464 U.S. at 431; Dowling, 472 U.S. at 228 (reversing
conviction despite recognition of desire to utilize section
2314 as a tool to combat copyright infringement).
D. The Consequences of the Government's
Theory Counsel Against Application of
the Conspiracy and Wire Fraud Statutes Here.
An additional factor in the Supreme Court's rejection of
the government's position in Dowling was the Court's
recognition that "the rationale supporting application of the
statute under the circumstances of this case would equally
justify its use in a wide expanse of the law which Congress
has evidenced no intention to enter by way of criminal
sanction." 473 U.S. at 227. The Court expressed particular
reluctance to utilize criminal statutes that do not expressly
refer to copyright infringement to impose criminal penalties
upon publishers of infringing materials. The Court referred
to Harper & Row Publishers, Inc. v. Nation Enterprises, 471
U.S. 539 (1985), a case in which it had recently held that
The Nation, a weekly magazine of political commentary,
infringed former President Ford's copyright by publishing
verbatim excerpts from his unpublished memoirs. Noting that
the government's theory in Dowling would permit prosecution
of The Nation for interstate transportation of its infringing
publication under a criminal provision other than the
Copyright Act, the Court stated that it would "pause, in the
absence of any explicit indication of congressional
intention, to bring such conduct within the purview of a
criminal statute." 473 U.S. at 226.
Application of the wire fraud statute to the conduct in
this case raises precisely the same concerns. If the wire
fraud statute were applicable to the conduct in the case at
bar, then it would also apply to anyone who transmits or
receives even a single infringing copy of a computer software
program through an electronic bulletin board system or
through electronic mail, even if the illicit copy were made
solely for personal use, a result Congress clearly sought to
avoid. See Part I.C., supra. The government's theory is not
limited to computer software or computer networks, but would
apply to anyone who copies any type of infringing material
and who utilizes a computer, telephone, radio, or television,
transmission or broadcast across state lines in connection
with such activity.
Moreover, under the government's theory the charge in
this case -- conspiracy to commit wire fraud -- would reach
not only persons who engage in infringing conduct, but also -
- as in this case -- the computer systems operators,
publishers, and broadcasters whose equipment or media may be
used by others to carry out such activity. Just as in
Dowling, where the Court refused to adopt an interpretation
of a general criminal statute that could result in criminal
punishment of magazine publishers for publishing infringing
materials, so too here this Court should not interpret the
wire fraud and conspiracy statutes to reach the conduct of a
systems operator whose BBS is used by others to copy or
transmit infringing materials, in the absence of any clear
and definite expression of congressional intent to do so.
These consequences, it should be noted, implicate First
Amendment interests and values. The indictment in this case,
which for purposes of a motion to dismiss we must take at
face value, concedes that the defendant was the Systems
Operator ("SYSOP") of a computerized BBS. It makes no
allegation that the BBS was devoted exclusively to the
copying of copyrighted software, and indeed it concedes that
the BBS contained not only software, but "files and messages"
which "can consist of virtually any type of data or
information." (Indictment, 7) Defendant's BBS, therefore,
must be considered to be a general purpose BBS rather than
one dedicated solely to the infringement of copyrighted
software. The indictment makes no allegation that defendant
himself uploaded, downloaded, nor copied any copyrighted
software. It alleges simply that he maintained the BBS and
thereby was able "to permit and facilitate" others in their
copying software ( 5), and to permit others "to avail
themselves of the opportunity" to do so. ( 9) The
allegations in the indictment paint a picture of someone
managing a BBS used by a wide variety of people for a variety
of purposes. It alleges knowledge that software copying was
going on, but there is no allegation that defendant provided
the software to be copied, nor copied it himself.
It is thus beyond doubt that the defendant was engaged,
at least to some extent, in First Amendment protected
activity, wholly aside from the question of the extent to
which his alleged knowledge and "facilitation" of copying of
copyrighted software on his general purpose BBS might have
reduced such constitutional protection in some degree. Since
the operation of a computerized BBS is a communicative
activity, First Amendment concerns limit the extent to which
blunderbuss criminal statutes and creative prosecutorial
attempts at extending the reach of the criminal law may be
tolerated by a court. Those who are engaged in First
Amendment activity cannot be confused with those who sell
ordinary wares, such as food, who may be held strictly liable
for the merchandise they sell. See Smith v. California, 361
U.S. at 154. Communicative activity needs "breathing space"
in order to survive. N.A.A.C.P. v. Button, 381 U.S. 415
(1963); New York Times Co. v. Sullivan, 376 U.S. 254 (1964).
Prosecution of an individual such as David LaMacchia under
the wire fraud statute, given the fact that the Copyright
statute does not criminalize his activity (see arguments I A-
C, supra), is about as chilling to communicative activity as
it can get. Indeed, courts have been very careful to avoid
holding the common carrier distributors of information even
civilly liable for such torts as defamation and business
disparagement. See Cubby, Inc. v. Compuserve, Inc., 776
F.Supp. 135 (S.D.N.Y. 1991) (carrier that did not have
responsibility to "manage, review, create, delete, edit and
otherwise control the contents" of a computerized
communications system could not be held liable on "a theory
of vicarious liability" for the tortious actions of others
(id at 143), because of the First Amendment).
E. The Rule of Lenity Prohibits the
Application of the Wire Fraud Statute to This Case.
In refusing to extend a more general criminal statute to
the area of copyright infringement, the Dowling Court invoked
the "`time-honored interpretive guideline' that `ambiguity
concerning the ambit of criminal statutes should be resolved
in favor of lenity.'" 473 U.S. at 228-229 (quoting Liparota
v. United States, 471 U.S. 419, 427 (1985), quoting Rewis v.
United States, 401 U.S. 808, 812 (1971)). See also United
States v. Enmons, 410 U.S. 396 (1973); United States v.
Anzalone, 766 F.2d 676 (1st Cir. 1985). The primary purposes
underlying the rule of lenity -- (1) to promote fair notice
to those subject to the criminal laws and (2) to maintain the
proper balance between Congress, prosecutors and courts --
require its application in this case.
The rules governing conduct relating to copyright are
spelled out in detail in the Copyright Act. Congress has
amended the Copyright Act twice in the past five years to
deal specifically with computer software, and has chosen not
to make the conduct alleged in the indictment a crime. See
Pub.L. 101-650 (amending 17 U.S.C. § 109 to limit computer
software rental); Pub.L. 102-561 (amending 18 U.S.C. §2319 to
permit felony punishment of commercial computer software
infringement). It is reasonable -- indeed it is desirable --
for individuals and businesses to look to the Copyright Act
in an effort to conform their copyright-related conduct to
the law. Nothing in the Copyright Act provides any warning
that the conduct alleged in the indictment constitutes a
criminal offense; what message there is, is indeed to the
contrary.
The wire fraud statute, in contrast, was enacted in
1952, long before the computer revolution, and cannot
reasonably be considered to be a source of software copyright
rights or duties. Indeed, we are not aware of any reported
case in which the systems operator of a BBS has been
successfully prosecuted for wire fraud or conspiracy to
commit wire fraud for alleged copyright infringement
occurring on his or her system. The government's attempt to
use the wire fraud and conspiracy statutes to make new law in
this case clearly violates the "fair warning requirements of
the due process clause of the fifth amendment." United
States v. Anzalone, 766 F.2d at 683.
In addition to the Due Process/notice problem just
described, the government's attempt to utilize the wire fraud
and conspiracy statutes in a manner which Congress neither
foresaw nor intended threatens to undermine the proper
balance between Congress, prosecutors and courts, which the
rule of lenity is intended to preserve. The Supreme Court
has repeatedly emphasized that "because of the seriousness of
criminal penalties, and because criminal punishment usually
represents the moral condemnation of the community,
legislatures and not courts should define criminal activity."
United States v. Bass, 404 U.S. at 348 (cited in Anzalone,
766 F.2d at 680-681). As the First Circuit observed in
Anzalone,
in our constitutional system the commitment to the
separation of powers is too fundamental for us to
pre-empt congressional action by judicially
decreeing what accords with "common sense and the
public weal." Our Constitution vests such
responsibilities in the political branches.
766 F.2d at 683.
In Dowling the Court recognized that lower courts were
attempting "to utilize an existing and readily available tool
to combat the increasingly serious problem of bootlegging,
piracy, and copyright infringement," but rejected such
attempts on the ground that the responsibility for defining
federal crimes rests with Congress, not with the judiciary:
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.
473 U.S. at 228. See M. Tigar, Mail Fraud, Morals and U.S.
Attorneys, 11 Litigation 22, 53 (1984) (arguing that "[i]f
Congress has regulated in an area, there is little sense in
letting Assistant United States Attorneys in each judicial
district think up their own versions of the rules that
everybody should obey and how they should be punished for
violating those rules" through the vehicle of the federal
fraud statutes.) Similarly, the contrast between the
precision with which Congress has addressed the problem of
computer software copyright infringement, both criminal and
civil, in the Copyright Act, and the serious notice problems
created by the government's unprecedented attempt to extend
the reach of the wire fraud and conspiracy statutes to cover
the conduct in this case, demonstrates the necessity of
leaving it to Congress to define crime and punishment in the
copyright area.
Conclusion
Here, as in Dowling, "Congress has not spoken with the
requisite clarity" to prosecute the defendant for conspiracy
to commit wire fraud. 473 U.S. at 229. In stark contrast to
the Copyright Act, which deals explicitly with criminal
copyright infringement of software, the language of the wire
fraud statute does not "plainly and unmistakably" cover the
area of copyright infringement; the purpose of the wire fraud
statute -- to fill gaps in state law enforcement -- is not
applicable to the problem of copyright infringement; and the
rationale utilized to apply the wire fraud statute to the
defendant's conduct would result in its extension to areas
which Congress has not indicated any intent to reach. Id.
As is evident from the 1990 and 1992 amendments to the
Copyright Act, Congress is not hesitant to amend the
Copyright Act as it deems necessary to address changes in
computer technology and software development. If Congress
deems it appropriate to criminalize the type of copyright-
related activity in this case, Congress must do so in
language that is "clear and definite." 473 U.S. at 214.
Because the wire fraud statute does not "plainly and
unmistakably" cover the conduct alleged in the indictment,
and indeed because the Copyright Act explicitly excludes the
alleged conduct from the ambit of criminal activity, the
indictment charging David LaMacchia with conspiracy to commit
wire fraud must be dismissed.
Request for Oral Argument
Defendant respectfully requests oral argument on this
motion pursuant to Rule 7.1(D).
DATED: September 30, 1994
Respectfully submitted,
David M. LaMacchia
By his counsel
Sharon L. Beckman (BBO # 552077)
Andrew Good (BBO # 201240)
Harvey A. Silverglate (BBO # 462640)
Silverglate & Good
89 Broad St., 14th Floor
Boston, MA 02110
(617) 542-6663, fax 451-6971
David Duncan (BBO #546121)
Zalkind, Rodriguez, Lunt & Duncan
65A Atlantic Avenue
Boston, MA 02110
(617) 742-6020, fax 742-3269
Certificate of Service
I, Andrew Good, hereby certify that I have this day
served the foregoing memorandum on Jeanne Kempthorne,
Assistant United States Attorney, 1000 Post Office &
Courthouse, Boston, MA 02109 via hand delivery.
_________________________
Andrew Good
DATED: September 30, 1994