Infringement of Copyright—Pirated DVDs

We have had our eye on the case of Randolph Hobson Guthrie for a while, and it has taken an interesting turn. Back in April, Mr. Guthrie and another American, along with two Chinese co-defendants, were convicted in China for selling pirated DVDs out of Mr. Guthrie’s Shanghai apartment over the Internet.^[1] Mr. Guthrie was sentenced to two-and-a-half years in Chinese prison for his role in selling more that 180,000 counterfeit DVDs to buyers in 25 countries, including approximately 20,000 discs to buyers in the United States.^[2] At the time of the arrest, investigators from China and the US hailed the results as an example of unprecedented cooperation between Chinese and US law enforcement.^[3] Furthermore, China has been under intense international pressure to crack down on copyright violations in that country.^[4]

Mr. Guthrie and his American accessory, Abram Cody Thrush, were ordered to be deported after serving their sentences in China.^[5] Suddenly, late last week, Mr. Guthrie was expelled from China, and the official Xinhua news agency only stated that he had been “handed over to the U.S. police”; no other explanation was given.^[6]

Mr. Guthrie is now facing charges in the United States for his activities in China.^[7] It is unknown why he was sent back to the US early, and why Mr. Thrush was not.^[8] Mr. Guthrie will be transferred to Mississippi to face copyright infringement, trafficking in counterfeit labels, and money laundering charges there. Mississippi is the state where the probe first began; in 2003, an undercover Immigrations and Customs Enforcement [hereinafter ICE] agent purchased counterfeit DVDs at a Mississippi flea market.^[9] Just recently, ICE agents seized a large quantity of counterfeit CDs and DVDs at a flea market in Donna, Texas, which we discussed here.

Criminal Infringement of Copyright
As we have mentioned before, US copyright laws have changed. Under the newly amended 17 U.S.C. § 506, it is a crime for a person to willfully infringe the copyrights of another by reproducing or distributing, by electronic means, one or more copies of a copyrighted work having a total retail value of more than $1,000.^[10]

The punishment for violating section 506 is rather complicated. In Mr. Guthrie’s case, the punishment would be imprisonment for up to three years, a fine, or both, because the offense consists of the reproduction of more than six copies of a copyrighted work and a total retail value of more than $2,500.^[11]

Trafficking in Counterfeit Labels
Under 18 U.S.C. § 2318, it is a crime for a person to traffic in counterfeit labels affixed to a copy of a motion picture.

The punishment for a violation of section 2318 is a fine, imprisonment for up to five years or both.

International Money Laundering
We have previously discussed money laundering here.

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[1] Report: American Expelled from China for Selling Pirated DVDs, Handed over to U.S. Police, Associated Press, Sept. 29, 2005, available here.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Man Convicted in China of DVD Piracy Facing Charges in the U.S., USA Today, Oct. 3, 2005, available here.
[8] Id.
[9] Id.
[10] 17 U.S.C. § 506(a)(1)(B).
[11] 18 U.S.C. § 2319(c)(1).