Source: http://openjurist.org/550/f2d/1180
Timestamp: 2014-03-12 19:12:20
Document Index: 523427584

Matched Legal Cases: ['§ 104', '§ 2314', '§ 27', '§ 104', '§ 27', '§ 104', '§ 104', '§ 104', '§ 1', '§ 104', '§ 104', '§ 1', '§ 104', '§ 104', '§ 27', '§ 27', '§ 27']

550 F2d 1180 United States v. W Wise | OpenJurist
550 F. 2d 1180 - United States v. W Wise	Home550 f2d 1180 united states v. w wise
550 F2d 1180 United States v. W Wise 550 F.2d 1180
194 U.S.P.Q. 59
UNITED STATES of America, Plaintiff-Appellee,v.Woodrow W. WISE, Jr., dba Hollywood Film Exchange,Defendant-Appellant.
Gerald M. Singer, argued, Beverly Hills, Cal., for defendant-appellant.
William D. Keller, U. S. Atty., Vincent J. Marella, argued, Asst. U. S. Atty., Los Angeles, Cal., for plaintiff-appellee.
Before CHAMBERS and ANDERSON, Circuit Judges, and JAMESON,* District Judge.
Woodrow Wise, Jr. has appealed his conviction of criminal copyright infringement in violation of 17 U.S.C. § 104. He was charged in a superseding indictment with seven counts of criminal copyright infringement by willfully and for profit vending copyrighted feature-length motion pictures,1 and also with seven counts of interstate transportation of stolen and converted property (the motion picture prints) in violation of 18 U.S.C. § 2314. Following a non-jury trial appellant was convicted on six of the seven copyright infringement counts.2 He was sentenced to consecutive terms of one year imprisonment on each of the six counts and on condition that he serve one month on each count in a jail-type institution, the execution of the remainder of the sentence was suspended and the defendant was placed on probation for five years. The court granted defendant's motion for acquittal on the interstate transportation counts.3
On appeal Wise challenges the constitutionality of 17 U.S.C. §§ 27 and 104, contests the sufficiency of the evidence to sustain his conviction, and argues that his conviction is precluded by collateral estoppel. We affirm the conviction on four counts and reverse on two counts.
During the period set out in the indictment, from February to September, 1974, appellant operated a business called Hollywood Film Exchange in Los Angeles, California, which was engaged in the sale of copyrighted feature-length motion pictures, ranging in price from $95 to $575. Appellant mailed printed lists to film collectors throughout the United States, offering approximately 349 films for sale and permitting the purchases to be charged to credit cards. Use of the films was restricted to home use in accordance with a provision on each list stating:
"16 and 35 mm. used film for sale. Sold from one private movie collector to another for home showings only. No rights given or implied."
Sales of the films charged in the indictment were made by appellant to persons living in Michigan, Massachusetts, Georgia and North Carolina.
It was stipulated that the films were validly copyrighted by the motion picture studios which had produced them.4 The Government called as witnesses executives and house counsel of the studios, who testified with respect to the policies and procedures of the studios in the distribution of their motion pictures. The testimony indicated that the major areas of film distribution include: theatrical (movie theaters), nontheatrical (private groups), television (both network and cable), airlines and steamships, Armed Services, V.I.P. (prominent member of the motion picture industry or community), and "studio accommodation" (interstudio lending of films for technical or casting purposes).
The studio witnesses detailed the individual distribution transactions concerning each film, and the written agreements underlying the transactions were introduced into evidence. The testimony and documents revealed that the studios generally do not sell films,5 but rather license their use for limited purposes and for limited periods of time. The license agreements with respect to the films involved in this case generally reserved title to the films in the studios and required their return at the expiration of the license period. Many of the agreements prohibited copying of the prints. The V.I.P. licenses reserved all rights and title in the studios, restricting the licensee to possession of the print for his own personal use. None of the films had been subject to an outright sale.6
The Government also presented evidence that the studios sell worn-out 35 mm. film to Film Salvage Company, which reclaims the raw film stock and destroys the images thereon. Studio representatives testified that only the film stock, and not the motion picture photoplay, is sold to the salvage company. Before sending the film, the studios remove all identification from the film and send alternate reels from any one picture so that no two consecutive reels are ever sent in the same shipment, nor is a major portion of a picture sent in one shipment. Several of the studios also cut fifty foot segments off the beginning and end of each reel. Upon receipt of the film, Film Salvage chemically removes the images from those portions of the film which are suitable for use as magnetic recording tape. Other portions, suitable for use as picture leader, are cut into 200 foot sections which are spliced together (no two of the segments being from the same picture) to make 1000 foot reels, and the images on the film are obscured by a wire brush. Remaining portions of the film are ground up, melted down, and used in the plastics industry. Film Salvage then sends the studios certificates of destruction which confirm the destruction of particular film shipments. Representatives of the studios and Film Salvage testified that it would be impossible, through this process, to put together a complete motion picture.7 The vice president of Film Salvage Company testified that the company does not resell the motion picture photoplays shipped to it for destruction.
Three of the studios, Universal, Paramount and Warner Brothers, destroy old 16 mm. film in-house by physically chopping or sawing the film into small pieces, which are sent to the salvage company. Columbia disposes of its 16 mm. film in the same manner as its 35 mm. film, by shipping it to a salvage company.
On the issue of willfulness, the Government presented consent decrees in actions instituted by various studios against appellant for copyright infringement due to appellant's unauthorized sale of copyrighted motion pictures. The consent decrees issued on December 18, 1970 and January 20, 1971, among other things, enjoined appellant from selling, copying, and dealing in copyrighted feature-length films of the studios involved.
Herbert Earnshaw, the attorney for the studios who negotiated the consent decrees, testified that appellant had several discussions with him concerning appellant's background and business operation. Appellant confided to Earnshaw that he "knew that he was in trouble", that he was "doing something unlawful", and that he had been expecting some sort of action by the film companies. Appellant disclosed to Earnshaw some of the sources of supply for the motion pictures he had been selling. These sources were people who worked for film companies, whom appellant paid to steal films which were to be junked. Appellant stated that he had contacts in Washington, D. C., Boston, and Michigan who supplied him with stolen prints. At the conclusion of their discussions, Earnshaw explained to appellant that "he should not be dealing with prints that had a copyright notice on them".
The defense presented no witnesses but relied on cross-examination of the Government's witnesses in an effort to show that the studios do sell films, that some of the agreements concerning the instant films were actually sales rather than licenses, and that appellant, like any average person, did not know that what he was doing was illegal.
(1) Is 17 U.S.C. § 104 unconstitutionally vague or overbroad?
(2) Is 17 U.S.C. § 27 unconstitutionally vague?
(3) Is the Government's prosecution barred by collateral estoppel?
(4) Was the evidence sufficient to prove that appellant willfully infringed copyrights for profit?
Constitutionality of 17 U.S.C. § 104
17 U.S.C. § 104 provides in pertinent part:
"(a) (A)ny person who willfully and for profit shall infringe any copyright secured by this title, or who shall knowingly and willfully aid or abet such infringement, shall be deemed guilty of a misdemeanor . . . ."
Appellant contends that the statute is unconstitutionally vague because it fails to define the word "infringe" and fails to give notice that "vending" copyrighted material constitutes infringement. The Government replies that § 104 is sufficiently certain when considered in the context of Title 17, which provides the statutory scheme for copyright law. We agree.
Section 1 of Title 17 enumerates the rights of the copyright holder, which include the rights "to print, reprint, publish, copy, and vend the copyright work . . . ." (Emphasis added.) Section 5 specifies the types of property subject to copyright protection, including "motion picture photoplays". As the Government argues, it is clear that any act which is inconsistent with the exclusive rights of the copyright holder, as enumerated in § 1, constitutes infringement.
The concept of vagueness is rooted in a "rough idea of fairness", Colten v. Kentucky, 407 U.S. 104, 110, 92 S.Ct. 1953, 32 L.Ed.2d 584 (1972) and requires "that laws give the person of ordinary intelligence a reasonable opportunity to know what is prohibited, so that he may act accordingly". Grayned v. City of Rockford, 408 U.S. 104, 108, 92 S.Ct. 2294, 2298, 33 L.Ed.2d 222 (1972). The standard of specificity required of a penal statute was enunciated in Boyce Motor Lines, Inc. v. United States, 342 U.S. 337, 340, 72 S.Ct. 329, 330, 96 L.Ed. 367 (1952):
This court has said: "A statute meets the standard of certainty required by the Constitution if its language conveys sufficiently definite warning as to the proscribed conduct when measured by common understanding and practices." Turf Center, Inc. v. United States, 325 F.2d 793, 795 (9 Cir. 1963).
We find that § 104 satisfies these standards of certainty. Viewed in a common sense manner and in the context of the copyright statutory scheme, the statute is sufficient to put one on notice that the unauthorized vending of copyrighted works constitutes infringement. The court in United States v. Wells, 176 F.Supp. 630, 633 (S.D.Tex.1959) was of a similar view:
". . . To gain any idea of its (§ 104) coverage or of the protection afforded by the copyright law one must resort to the civil law of copyright and to the provisions of Title 17 as a whole. The basic question of interpretation involved in Section 104 is the meaning of infringement of copyright. Although there is no statutory definition of infringement of copyright, it may be readily inferred from the provisions of Title 17 United States Code § 1(a), conferring upon the copyright proprietor the exclusive right to print, reprint, publish, copy and vend the copyrighted work. (Emphasis supplied). The grant of these exclusive rights implies the prohibition that others shall not exercise them without the consent of the copyright proprietor; to do so without such consent would be infringement of copyright."8
Further, the statute requires a willful violation, which undercuts any claim of lack of warning or fair notice of the criminal sanctions. Screws v. United States, 325 U.S. 91, 101-103, 65 S.Ct. 1031, 89 L.Ed. 1495 (1945). We conclude that § 104 is not unconstitutionally vague.
Appellant additionally challenges the statute as overbroad because it prohibits vending, as well as copying, copyrighted material. This argument misperceives the nature of the overbreadth doctrine which focuses on the potential application of a statute to constitutionally protected conduct. See Grayned v. City of Rockford, 408 U.S. at 114, 92 S.Ct. 2294. The vending of copyrighted material even when done with proper authorization, is not behavior subject to constitutional protection. Consequently, § 104 is not subject to attack on grounds of overbreadth. We hold that the statute is constitutional.
Constitutionality of 17 U.S.C. § 27
While the copyright laws protect the right of the copyright proprietor to vend his work, that right is not absolute, but is subject to the "first sale doctrine" as stated in 17 U.S.C. § 27. That statute provides in pertinent part:
"(B)ut nothing in this title shall be deemed to forbid, prevent, or restrict the transfer of any copy of a copyrighted work the possession of which has been lawfully obtained."
Although the statute speaks in terms of a transfer of possession, the judicial gloss on the statute requires a transfer of title before a "first sale" can occur. Thus, the first sale doctrine provides that where a copyright owner parts with title to a particular copy of his copyrighted work, he divests himself of his exclusive right to vend that particular copy. While the proprietor's other copyright rights (reprinting, copying, etc.) remain unimpaired, the exclusive right to vend the transferred copy rests with the vendee,9 who is not restricted by statute from further transfers of that copy, even though in breach of an agreement restricting its sale.10 See Harrison v. Maynard, Merrill & Co., 61 F. 689, 691 (2 Cir. 1894).
Appellant contends that § 27 is unconstitutionally vague because it