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David LaMacchia's case -- law of on-line bulletin boards

``` Date: 5 Oct 94 11:01:21 From: philg@zurich.ai.mit.edu (Philip Greenspun) Newsgroups: comp.org.eff.talk

If you type

mosaic http://www-swiss.ai.mit.edu/dldf/home.html &

you will be within one mouse click of David LaMacchia's motion to dismiss, filed last week (you can also get background information there and find out how to contribute to Mr. LaMacchia's defense).

If you are Web-challenged, here's the text...

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UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

---

) UNITED STATES OF AMERICA ) ) v. ) Cr. No. 94-10092-RGS ) DAVID M. LaMACCHIA ) ____________________________)

DEFENDANT'S MOTION TO DISMISS THE INDICTMENT FOR FAILURE TO STATE AN OFFENSE AND ON CONSTITUTIONAL GROUNDS David LaMacchia moves this Court to dismiss the

indictment for failure to state an offense and on the ground

the indictment unconstitutionally infringes upon LaMacchia's

rights to due process of law under the Fifth Amendment,

interests and values protected by the First Amendment and the

constitutional principle of separation of powers.

A fuller and more detailed statement of the grounds for

this motion are set forth in the Memorandum in Support of

Defendant's Motion to Dismiss the Indictment for Failure to

State an Offense and on Constitutional Grounds, filed

herewith.

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 motion on Jeanne Kempthorne, Assistant United States Attorney, 1000 Post Office & Courthouse, Boston, MA 02109 via hand delivery.

Andrew Good

---

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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. Sec. 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 Par. 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

term of art for such a wrongful appropriation of the

Sec.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.

Sec.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.0

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

proof that the infringement was done "willfully and for

purposes of commercial advantage or private financial gain."1

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,2 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.3

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. Sec. 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, Sec. 8,

cl. 8 of the Constitution.4 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

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 Sec.15.05, at p. 15-20 (1993);

Goldstein, Copyright, Vol. II, Sec.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.

Sec. 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 Sec. 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

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. Sec. 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

Corp. v. Universal City Studios, 464 U.S. 417, 429 (1984). In

reversing the conviction under Sec. 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

prohibition of schemes to defraud.5 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 Sec. 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. Sec. 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

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. Sec. 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-

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

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, Sec. 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

(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, Sec. 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.6

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

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

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 Par. 10.3 at 242 (describing consonance between

Thus, unlike the state law property rights protected by

the wire fraud and similar interstate fraud statutes, "the

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.

Sec. 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-

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

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. Sec. 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

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. Sec.Sec.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

Commission spent three years collecting data, holding

hearings, and deliberating before recommending that the

National Commission on New Technological Users of Copyrighted

Works, Final Report 2 (1978). Based on CONTU's

recommendations, Congress enacted the Computer Software

provisions explicitly defining computer programs, 17 U.S.C.

Sec.101, and authorizing owners of computer programs to copy

them for certain purposes. 17 U.S.C. Sec. 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. Sec.506(a) and

enacting 18 U.S.C. Sec. 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. Sec. 109). Congress waited

until 1992 before enacting a felony penalty for software

Sec.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.")7 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. Sec. 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. Sec. 1343.8 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. Sec. 507(a) (three year statute

of limitations for criminal copyright prosecutions), with 18

U.S.C. Sec. 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

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.9

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,10 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, Par. 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 (Par. 5), and to permit others "to avail

themselves of the opportunity" to do so. (Par. 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.11

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.12 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. Sec. 109 to limit computer

software rental); Pub.L. 102-561 (amending 18 U.S.C. Sec.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 683.13

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:

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

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

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

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

---

0 The indictment alleges that the defendant "knew or reasonably could have foreseen ... [that] traffic into and out of the CYNOSURE BBS for the purpose of unlawfully copying copyrighted software quickly became enormous." Indictment at Par. 12. 1 17 U.S.C. Sec. 506 provides that "[a]ny person who infringes a copyright willfully and for purposes of commercial advantage or private financial gain shall be punished as provided in section 2319 of title 18." 18 U.S.C. Sec. 2319 provides for misdemeanor or felony punishment depending upon the degree of the infringement. 2 Indeed, it is doubtful whether LaMacchia's conduct as alleged in the indictment -- operating a BBS with actual or constructive knowledge that others are using the BBS to copy and distribute copyrighted materials without the consent of the copyright owners -- constitutes even a civil copyright violation. See Sony Corp. v. Universal City Studios, 464 U.S. 417 (1984) (holding that sale of Betamax recorders does not constitute contributory infringement even where seller knows that customers use the equipment to make infringing copies). 3 In the press release issued with this indictment, United States Attorney Donald Stern explained the government's reason for bringing this indictment as follows:

In this new electronic environment it has become increasing difficult to protect intellectual property rights. Therefore, the government views large scale cases of software piracy, whether for profit or not, as serious crimes and will devote such resources as are necessary to protect those rights. U.S. Department of Justice Press Release (April 7, 1994)(emphasis added). 4 Article I, Sec. 8, cl.8 provides that 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." 5 Carpenter was held to have engaged in a scheme to defraud The Wall Street Journal of its property interest in proprietary information. The propriety information in issue was held to have been owned by the newspaper as property created and protected by state law -- not property created and protected by the federal copyright statute. 6 See Office of Technology Assessment, Intellectual Property Protection for Computer Software, Hearings before the House Committee on the Judiciary Subcommittee on Courts, Intellectual Property and the Administration of Justice (November 2, 1989) ("Thus, the limited monopoly granted to authors via copyright ... is a quid-pro-quo arrangement to serve the public interest, rather than a system established only to guarantee income to creators."). 7 In fact, the legislative history of the 1992 amendment to the Copyright Act indicates that the Software Publisher's Association sought to make Congress aware of the Supreme Court's holding in Dowling that the Copyright Act is the exclusive source of criminal penalties for copyright-related crimes. Hearing on S. 893 before House Judiciary Committee Subcommittee on Intellectual Property and Judicial Administration (August 12, 1992) ("in one case the Supreme Court overturned a prosecution for copyright on what was essentially a copyright infringement under other Federal statutes because of the very strong presumption that this is an intellectual property area, and that Congress must legislate through its intellectual property policy authority.") (testimony of Attorney Bruce Lehman for the Software Publisher's Association). 8 Section 1343 authorizes imprisonment for up to 30 years, and a fine of $1,000,000 if the violation affects a financial institution; otherwise imprisonment for up to five years and a $1,000 fine is authorized. 9 In 1992, Congress heeded computer industry concerns that the reach of the criminal sanction be clear and limited to commercial software pirates. "There are millions of people with personal computers to make copies. That is exactly one of the reasons I think you want to be very careful. You do not want to be accidentally making a large percentage of the American people, either small businesses or citizens, into the gray area of criminal law." Hearing on S. 893 before the House Judiciary Subcommittee on Intellectual Property and Judicial Administration (August 12, 1992), Comments of Mr. Black, Vice President and General Counsel, Computer & Communications Industry Association, at 65. 10 The defendant does not agree with all of the facts and characterizations set forth in the indictment, particularly with respect to the defendant's role and duties as a computer bulletin board systems operator ("SYSOP"), as well as the nature of the BBS here at issue. However, these factual issues must be left for another day, if there be another day in this case. 11 This case thus touches upon a First Amendment question of first impression -- to wit, whether the SYSOP of a general purpose computerized BBS may be held criminally responsible as a conspirator for the activities of others who upload, download, and hence copy copyrighted software without paying a licensing fee to the copyright-holders, where the SYSOP did not himself upload, download, nor copy such software, and where the SYSOP did not operate the BBS for commercial gain. The Dowling Court expressed reluctance to adopt the government's interpretation of a criminal fraud statute which would have made the editors of The Nation liable even though those editors had complete control over the content of that publication and full knowledge of President Ford's ownership of the copyright in the excerpt of his memoirs which was published. The infant medium of computer bulletin boards operates to a very substantial degree beyond the control of even the most diligent SYSOP. The degree to which human editorial intervention and control are required by law is far from clear. The conspiracy charge would make LaMacchia criminally responsible for his failure to monitor, control, edit and censor the contents of a BBS that the Indictment itself describes as having generated "enormous" communicative traffic. (See Indictment Par. 12). The First Amendment concerns raised by the government's proposed applications of the wire fraud and conspiracy statutes to the activities of this new type of operator of a constitutionally protected medium can and should be avoided by rejecting the government's position, as the Dowling Court did. See "Note: The Message in the Medium: The First Amendment on the Information Superhighway", 107 Harv.Law Rev. 1062, 1084 (a hallmark of the development of electronic media is that "both interactivity and infinite capacity will reduce the editorial control of network operators") (March 1994); see also Smith v. California, 361 U.S. 147, 80 S.Ct. 215 (1959), rehearing denied, 361 U.S. 950, 80 S.Ct. 399 (1960) (statute seeking to impose strict criminal liability on bookstore owner for possessing obscene material, held violation of First Amendment). 12 "Because First Amendment freedoms need breathing space to survive, government may regulate in the area only with narrow specificity." N.A.A.C.P. v. Button, 371, U.S. at 433. 13 As Professor Michael Tigar correctly observed in "Mail Fraud, Morals and U.S. Attorneys," 11 Litigation 22 (1984), the government's effort to enlist this court to approve its abuse of the wire fraud statute is the modern version of a constitutionally prohibited tactic which had been used by British common law judges -- have the courts declare conduct to be a crime after the accused has acted. Tigar quoted Jeremy Bentham's description of this tactic.

It is the judges...that make the common law. Do you know how the judges make it? Just as a man makes laws for his dog. When your dog does anything you want to break him of, you will wait till he does it and then beat him for it. That is the way you make laws for your dog, and that is the way the judges make laws for you and me.

---

-- Philip Greenspun

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MIT Department of Electrical Engineering and Computer Science 545 Technology Square, Rm 433, Cambridge, MA 02139, (617) 253-8574 Personal Web URL: http://www-swiss.ai.mit.edu/~philg/philg.html summer address: PO Box 952, Los Alamos, NM 87544 (505) 665-0131 ```

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David LaMacchia's case -- law of on-line bulletin boards