Opinion ID: 606103
Heading Depth: 2
Heading Rank: 2

Heading: Stolen Computer Software And The Sentencing Guidelines

Text: 12 Mr. Lyons asserts that he was convicted of transporting only stolen computer hardware, and that our decision in United States v. Brown, 925 F.2d 1301 (10th Cir.1991), precludes consideration of the value of stolen computer software in calculating his sentence. We disagree. 13 Sentencing on a charge of transporting stolen property requires calculation of the total value of the property stolen. U.S.S.G. § 2B1.2(b)(1). The district court calculated the total value of the stolen property at $292,000: $27,000 for the value of the hardware and $265,000 for the software. We review the court's factual findings supporting calculation of loss under the clearly erroneous standard, but review de novo questions of law regarding the application of the Sentencing Guidelines. United States v. Smith, 951 F.2d 1164, 1166, 1170 (10th Cir.1991). 14 As an initial matter, we question Mr. Lyons' assertion that he was not convicted for the theft of software. The court granted Mr. Lyons' motion to strike the phrase and computer software from the indictment as surplus language. The remaining words of the indictment charged Mr. Lyons with transportation of stolen computer components and computer equipment. During the hearing on the motion to strike, the parties discussed how the changes would affect the remaining charges, which concluded: 15 The Court: And I say, well, why are [the words and computer software] surplus language? And the only argument it seems to me is they're surplus language because all of these are computer components or computer equipment. They're embraced by the larger term, and thus we don't need the lesser, more specific term. 16 Defense Counsel: Your honor, I've consulted with my client, and we accept the court's interpretation. 17 . . . . . 18 The Court: But namely, when we're talking about computer software, that that's embraced within the larger terms of computer components and computer equipment? 19 Defense Counsel: That's correct.... 20 Aplee.App. at 26-27. Given this concession by defense counsel, we find that the language of the modified indictment included software offenses. Convicted of transporting both stolen hardware and software, Mr. Lyons' sentence properly aggregated the total value of these items. 21 We believe that the verbal exchange between defense counsel and the court demonstrates that all parties accepted that the software offenses would still remain in the indictment, arguments to the contrary notwithstanding. We nonetheless recognize that the district court's written order striking the language from the indictment did not specify that the remaining language included software. Therefore, we hold in the alternative that even if the charges of conviction did not include transportation of stolen software, consideration of unconvicted software offenses would still have been appropriate at sentencing. 22 The Guidelines permit the sentencing court to look beyond the charges of conviction in computing a sentence. United States v. Underwood, 982 F.2d 426, 429 (10th Cir.1992). Guideline § 1B1.3 broadly defines relevant conduct, permitting consideration of dismissed charges. United States v. Saucedo, 950 F.2d 1508, 1518-19 (10th Cir.1991). A court should consider defendant's acts beyond the charges of conviction if those acts were part of the same course of conduct or common scheme or plan as the offense of conviction. U.S.S.G. § 1B1.3(a)(2) & comment. (n. 2 & backg'd). Culpability for relevant conduct need only be shown by a preponderance of evidence. United States v. Frederick, 897 F.2d 490, 491-93 (10th Cir.), cert. denied, 498 U.S. 863, 111 S.Ct. 171, 112 L.Ed.2d 135 (1990). Our review of the record satisfies us that the preponderance of the evidence supports the trial court's conclusion that Mr. Lyons was criminally culpable for offenses related to the software. 23 Mr. Lyons contends that even if he stole the software, our decision in Brown precludes consideration of its value. In Brown, we applied the Supreme Court's decision in Dowling v. United States, 473 U.S. 207, 105 S.Ct. 3127, 87 L.Ed.2d 152 (1985) to computer software, and held that the intangible intellectual property of a computer program standing alone cannot constitute goods, wares or merchandise within the meaning of 18 U.S.C. § 2314. Brown, 925 F.2d at 1308. The fact that Mr. Lyons stole the software in conjunction with the theft of tangible hardware distinguishes this case from Brown. Brown recognizes that the theft of intangible intellectual property in conjunction with the theft of tangible property falls within the ambit of § 2314. Id. at 1307-08 n. 14. Unlike the present case, there was no evidence in Brown that defendant was involved in the physical theft or transportation of stolen tangible property. 24 In an age where the intangible intellectual property value of goods may vastly exceed the intrinsic worth of accompanying tangible goods, application of the letter and intent of the Sentencing Guidelines mandates that courts include intangible value when thefts of tangible objects occur. For example, the Guidelines assess value for criminal copyright infringement on the basis of the market value of the infringing items, even though that value arises from its worth as intangible intellectual property. U.S.S.G. § 2B5.3. This market value may far exceed the loss or gain due to the offense. Id. The same approach is used for calculating the value of intercepted transmissions prosecuted under the Electronic Communications Act of 1986, in which case the intercepted transmissions are completely intangible. Id. comment. 25 We also reject Mr. Lyons' contention that the court overestimated the value of the software. Testimony at the sentencing hearing indicated that $265,000 would have been the cost of a single sublicensed copy of the items stolen. The court's calculation of value was not clearly erroneous.