Penalties to be applied in cases of criminal copyright infringement (i.e., violations of 17 U.S.C. § 506(a)), are set forth at 18 U.S.C. § 2319. Congress has increased these penalties substantially in recent years, and has broadened the scope of behaviors to which they can apply. See this Manual at 1847.
Statutory penalties are found at 18 U.S.C. § 2319. A defendant, convicted for the first time of violating 17 U.S.C. § 506(a) by the unauthorized reproduction or distribution, during any 180-day period, of at least 10 copies or phonorecords, or 1 or more copyrighted works, with a retail value of more than $2,500 can be imprisoned for up to 5 years and fined up to $250,000, or both. 18 U.S.C. §§ 2319(b), 3571(b)(3).
Defendants who have previously been convicted of criminal copyright infringement under 18 U.S.C. § 2319(b)(1) may be sentenced to a maximum of 10 years imprisonment, a $250,000 fine, or both. Finally, a defendant is guilty of a misdemeanor violation if he violated rights other than those of reproduction or distribution, or has reproduced or distributed less than the requisite number of copies, or if the retail value of the copies reproduced or distributed did not meet the statutory minimum, or if other elements of 17 U.S.C. § 506(a) are not satisfied. Misdemeanants can be sentenced a maximum of one year and can be fined a maximum of $100,000. See 18 U.S.C. §§ 2319(b)(3), 3571(b)(5).
Sentences for criminal copyright infringement and trademark counterfeiting are currently determined by reference to section 2B5.3 of the Sentencing Guidelines. That guideline establishes, as a Specific Offense characteristic, that if "the retail value of the infringing items exceeded $2,000," then the guideline level is to be increased by the corresponding number of levels from the table in section 2F1.1. The Commentary further makes clear that the term "infringing items," as used above, "means the items that violate the copyright or trademark laws (not the legitimate items that are infringed upon)." It is not entirely clear, however, what is meant by "retail value" in this context, and courts have relied upon a number of methods to achieve equitable results. Prior to the sentencing phase in intellectual property cases, prosecutors are advised to consult with the Criminal Division's Computer Crime and Intellectual Property Section, and to review pertinent portions of that Section's Intellectual Property Rights Prosecution Manual.
These sentencing provisions affect the plea negotiation process in two ways. First, because a plea involving these enhanced penalties must include recognition of the number of infringing copies involved in the offense, the prosecutor must establish a factual record to support the sentence. In addition, by tying the most severe sanction to copyright recidivists, 18 U.S.C. § 2319 introduces an additional element into plea negotiations. In cases involving individual and corporate defendants, prosecutors may wish to obtain individual pleas, since those pleas could be used in subsequent prosecutions to enhance a defendant's sentence.
[cited in JM 9-71.001]