Sunday, October 06, 2013

Case o' The Week: Big Win from J. Nguyen - Liu and Mens Rea for Criminal Copyright Offenses

Adobe, Dolby, Symantec, Gucci, and other companies have spoon-fed AUSAs and ICE agents a slew of criminal copyright prosecutions in the last several years. In a welcome decision, the Ninth has formally stiffened the mens rea requirements for these copyright cases. United States v. Liu, 2013 WL 5433753 (9th Cir. Oct. 1, 2013), decision available here.

Hon. Judge Jacqueline Nguyen
Players: Decision by Judge Nguyen, joined by Judges Noonan and Fisher. Big win for ND Cal counsel David Cohen and Jason Campbell.

Facts: Julius Liu ran “Super DVD,” a company that commercially replicated CDs and DVDs. Id. at *1. “Private investigator Cynthia Navarro, working on behalf of Symantec, posed as a potential lessee to investigate Super DVD’s warehouse . . . . Through a window, she could see into a locked room that was filled wall to wall with spindles of CDs.” Id. at *2. Federal agents searched Super DVD and found thousands of replicated disks. Id. Some disks contained Latin music, others had copies of Crouching Tiger, Hidden Dragon. Id. Liu did not have copyright authorization for either the music or the movie. Id. At trial, Liu testified that he was unaware that the client who asked for copies of Crouching Tiger did not have copyright permission. Id. He also described his efforts to determine the ownership of the Latin music by the client who requested the copies. Id. At trial, the district court changed jury instructions on “willfully” and “knowingly” the night before closing arguments, without highlighting substantive changes. Id. at *3. Liu was convicted of criminal copyright infringement and trafficking in counterfeit labels and sentenced to four years custody. Id.

Issue(s): “Under the relevant criminal statutes, Liu’s guilt turns on whether he acted ‘willfully’ and knowingly.’” Id. at *1.

Held: 1. “Willfully”: “[T]he term ‘willfully’ requires the government to prove that a defendant knew he was acting illegally rather than simply that he knew he was making copies.” Id. “We now explicitly hold that ‘willfully’ as used in 17 U.S.C. § 506(a) connotes a voluntary, intentional violation of a known legal duty.” Id. at *5 (internal quotations and citations omitted). “[T]he district court in this case erred by defining willfulness in such that the jury could have convicted Liu without finding that he knew that his actions were unlawful.” Id. at *7. “[W]e vacate Liu’s convictions and sentence for criminal copyright infringement . . . and remand . . . .” Id. at *9.

    2. “Knowingly”: “Liu also challenges the jury instructions . . . for trafficking in counterfeit labels. That offense requires proof that the defendant acted ‘knowingly.’ 18 U.S.C. § 2318(a)(1). Like ‘willfully,” the word ‘knowingly’ is susceptible to more than one meaning in this context. It could mean either that the defendant knew that he was trafficking or that he knew that the labels were counterfeit. We hold that ‘knowingly’ in this context means the latter, and thus the government must prove that Liu knew the labels were counterfeit.” Id. “[T]he district court erred in its instruction on knowledge – both because the court failed to clarify that ‘knowingly’ referred to knowledge that the labels were counterfeit and because it supplied [a] confusingly broad statement about the government not needing to prove knowledge . . . .” Id. at *11.

Of Note: Although the Ninth has previously assumed that proof of specific intent to violate someone’s copyright is required, Id. at *5, this explicit holding on willfully appears to be a decision of first impression in the Circuit. Id. That holding, combined with a robust reading of the word “knowingly,” id. at *10-*11, makes Liu a welcome decision honoring meaningful mens rea requirements. Liberals and conservatives agree: Congress is methodically eroding the mens rea requirement in criminal offenses. See Without Intent: How Congress is Eroding the Criminal Intent Requirement in Federal Law, article available here.   
   Encouraging to see the Ninth put some bite back into the mens rea requirements of federal statutes.

How to Use: A hidden gem in Liu is a potent discussion the process of crafting jury instructions. Id. at *3-*4. The instruction procedure here was so confused, and so last-minute, it earned the defense good appellate review standard despite the lack of a formal objection. Id.  
   Liu is a powerful prophylactic cite for a pretrial jury instruction memo– if the defense isn’t given a meaningful opportunity to review and object to proposed instructions, ‘tis the district court and government that will pay the price on appeal.
For Further Reading: “Silk Road” defendant Ross Ulbricht has made initial appearances in the ND Cal on his way East. He’s ably represented here by SF AFPD Brandon LeBlanc. For a thoughtful discussion of the case (and for a useful teaching tool on federal criminal procedures), see blog post here

Steven Kalar, Federal Public Defender N.D. Cal. Website at


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