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6 January 1998
Excerpted from United States Sentencing Commission request for comment on revised sentencing guidelines of 6 January 1998


Legislative Amendments

Electronic Copyright Infringement

9. Issue for Comment

    The No Electronic Theft Act, Public Law 105-147, was recently 
enacted to provide a statutory basis to prosecute and punish persons 
who, without authorization and without realizing financial gain or 
commercial advantage, electronically access copyrighted materials or 
encourage others to do so. The Act includes a directive to the 
Commission to (A) ensure that the applicable guideline range for a 
crime committed against intellectual property (including offenses set 
forth at section 506(a) of title 17, United States Code, and sections 
2319, 2319A, and 2320 of title 18, United States Code) is sufficiently 
stringent to deter such a crime; and (B) ensure that the guidelines 
provide for consideration of the retail value and quantity of the items 
with respect to which the crime against intellectual property was 

    Each of the statutes mentioned in the congressional directive 
currently are referenced to Sec. 2B5.3 (Criminal Infringement of 
Copyright or Trademark). That guideline provides for incrementally 
greater punishment when the retail value of the infringing items 
exceeded $2,000. However, when copyrighted materials are infringed upon 
by electronic means, there is no ``infringing item'', as would be the 
case with counterfeited goods. Therefore, the Commission must determine 
how to value the infringed upon items in order to implement the 
congressional directive to take into account the retail value and 
quantity of the items with respect to which the offense was
committed. The Commission invites comment on how Sec. 2B5.3 (Criminal 
Infringement of Copyright or Trademark) should be amended to best 
effectuate the congressional directives.

    An approach suggested by the Department of Justice is set forth 
below. The Commission invites comment on this and alternative 

    Department of Justice Proposed Amendments to Sec. 2B5.3:

    The text of Sec. 2B5.3 is amended to read as follows: ``(a) Base 
offense level: [6]

    (b) Specific Offense Characteristic

    (1) If the loss to the copyright or trademark exceeded $2,000, 
increase by the corresponding number of levels from the table in 
Sec. 2F1.1 (Fraud and Deceit).''.

    The Commentary to Sec. 2B5.3 captioned ``Application Note'' is 
amended in Note 1 by striking:

    `` `Infringing items' means the items that violate the copyright or 
trademark laws (not the legitimate items that are infringed upon).'',

and inserting:

    ``A court may calculate the `loss to the copyright or trademark 
owner' in any reasonable manner. In determining `loss to the copyright 
or trademark owner,' the court may consider lost profits, the value of 
the infringed upon items, the value of the infringing items, the injury 
to the copyright or trademark owner's reputation, and other associated 

    The Commentary to Sec. 2B5.3 captioned ``Application Note'' is 
amended by striking ``Note'' and inserting ``Notes''; and by adding at 
the end the following new note:

    ``2. In some cases, the calculable loss to the victim understates 
the true harm caused by the offense. For example, a defendant may post 
copyrighted material to an electronic bulletin board or similar online 
facility, making it easy for others to illegally obtain and further 
distribute the material. In such an instance, it may not be possible to 
determine or even estimate how many copies were downloaded, or how much 
damage the defendant's conduct ultimately caused. In such cases, an 
upward departure may be warranted. See Chapter Five, Part K 

    The Commentary to Sec. 2B5.3 captioned ``Background'' is amended in 
the first paragraph by striking ``value of the infringing items'' and 
inserting ``loss to the copyright or trademark owner''; and by striking 
``loss or''.

[End excerpt]