UNITED STATES v. BILY Crim. No. 75-457.
406 F.Supp. 726 (1975)
UNITED STATES of America v. Raymond M. BILY.
United States District Court, E. D. Pennsylvania.
As Amended December 12, 1975.
James Manning, Asst. U. S. Atty., Philadelphia, Pa., for plaintiff.
Edward C. Connolly, Warminster, Pa., for defendant.
MEMORANDUM AND ORDER
NEWCOMER, District Judge.
This is a criminal prosecution under the Copyright Act, 17 U.S.C. §§ 1, 101, and 104.
Defendant Raymond M. Bily lives in Warminster, Pennsylvania. He has maintained in his house and garage a large collection of motion picture films, and he has been listed as a collector in the 1973 International Directory of 16mm film collectors. On January 9, 1975, two special agents of the Federal Bureau of Investigation visited Mr. Bily's residence. They asked to examine his collection and to speak with him about it. Mr. Bily said that he was not surprised by the visit, since he had been told by other collectors that they had recently been called on by FBI agents.
After a brief discussion with the agents, Mr. Bily signed a waiver of rights form entitled "Interrogation; Advise of Rights." The agents talked with Mr. Bily for about two hours, and then informed him that they would like to search his house. Mr. Bily consented, executing a consent to search form which included this statement:
For approximately two more hours the agents searched Mr. Bily's house and garage, and continued to converse with him, whereupon Bily said, "That's enough. I want you to stop." The agents left the Bily residence, taking with them 16mm copies of the motion pictures, "Marooned," "White Christmas," and "Sweet Charity."
On January 10, 1975, the agents obtained a search warrant
On September 24, 1975, this Court held a hearing on the defendant's three pretrial motions. We heard the testimony of Mr. Bily, Mrs. Bily, Agents Creasy and Hoover, and the government's expert witness, Mr. Nolan.
The question of the validity of the first search presents factual questions only, and they can be dealt with briefly. The defendant alleges that his consent was not voluntarily given, both because he was under the influence of a medication at the time of his waiver of rights, and because the agents tricked him into signing the consent form by falsely stating that if he refused to waive his rights they would be back with a warrant in a half hour. We reject these contentions. Specifically, we find a) that the defendant was clear-minded and not acting under duress when he agreed to the search of his home, and b) that neither agent stated to the defendant that if he did not sign the waiver form a search warrant would be obtained immediately.
We credit in full the testimony of Agent Creasy in regard to the time the agents commenced taking possession of three films. That is, the agents had picked up "Marooned" and "Sweet Charity" before Bily demanded an end to the search, but "White Christmas" had not been taken prior to that time.
These statements were made at Creasy's cross-examination (Record, at 42):
We find that Bily's demand was a revocation of consent that took immediate effect. The seizures of "Marooned" and "Sweet Charity" were valid, because they were commenced before the revocation. However, there was no consent to the taking of "White Christmas". Nor were there grounds for an involuntary seizure. The reasons are set forth below in our discussion of probable cause in connection with the January 10th search warrant.
The question of the validity of the search warrant used to gain entry for the January 10 search and seizure presents difficult legal issues. There are relatively few reported decisions in the area of civil copyright infringement, only a handful dealing with criminal infringement, and none that we could find addressing the question of probable cause in a criminal infringement case. We know only of one relevant decision in which the Copyright Act was interpreted and applied in the unique factual setting of the film distribution systems of major motion picture studios.
The basic question facing the Court is, what constitutes probable cause for belief that a person has criminally infringed film copyrights? The answer to that question sets the standard with which we are to decide whether the facts alleged in the Affidavit for Search Warrant are legally sufficient to support the Magistrate's finding. What makes the final calculation so difficult, is that one must make two kinds of estimates which push in opposite directions. On the one hand, the government points out that a probable cause showing requires far less complete proof than is ultimately needed to convict an offender. On the other hand, the defendant argues that the Copyright Act places an extremely stiff burden of proof on the government prosecutor, and this burden correspondingly increases the evidentiary showing needed to demonstrate probable cause.
Briefly, the government's position is that it need only establish the probability that a crime has occurred and evidence is being secreted, and it is not required to make a prima facie showing of illegal activity, much less guilt beyond
The defendant stresses the implications of the unusual character of the alleged crime, infringement for profit. Judicial interpretations of the probable cause test have mostly been made in prosecutions for undeniably antisocial acts — narcotics distribution, bookmaking, thefts, assaults, and the like. But here, the very statute which prohibits certain narrowly defined uses of creative works actually encourages people to deal in such materials outside of the prohibited area. Moreover, criminal copyright infringement incorporates as one of its elements the concept of civil copyright infringement. Civil copyright law has not entirely kept pace with the problems created by new forms of media and copying.
Civil copyright law is a compromise between competing social policies—one favoring the widest possible dissemination of new ideas and new forms of expression, and the other giving writers and artists enough of a monopoly over their works to ensure their receipt of fair material rewards for their efforts. The first policy predominates, which means that the system of rewards is to be no more extensive than is necessary in the long run to elicit a socially optional amount of creative activity.
FIRST SALE DOCTRINE
Through the Copyright Act, (17 U.S.C. § 1 et seq.) Congress has given copyright proprietors the right "to print, reprint, publish, copy and vend the copyrighted work." 17 U.S.C. § 1(a). The right to vend is not exclusive. Section 27 of the Act, the source of the first sale doctrine, provides in pertinent part:
Once the copyright proprietor transfers a particular copy of his work to another person under conditions which satisfy the first sale doctrine, the statute does not restrict further transfers of that copy.
Copyright proprietors frequently transfer rights in their works by complicated agreements which cannot simply be called "sales". In each case, the court must analyze the arrangement at issue and decide whether it should be considered a first sale. In one such case, which, like the present one, was a prosecution under 17 U.S.C. § 104, it was said that the question was whether the copyright owner had
In Wells, the copyright owner, Tobin, had licensed 107 customers to make copies of aerial maps. It was established at trial that the defendant sold copies of aerial maps bearing Tobin's copyright notices on their faces, that those copies had not been manufactured in the Tobin plant, and that the defendant was not one of the 107 customers licensed to make copies. After examining the contracts between Tobin and his customers, the court found that these contracts were first sales in the sense that the customers acquired title to all the copies they made under the license. It was noted that the contract had not expressly reserved title to the copies in Tobin, and the transactions had been supported by consideration.
The court next addressed itself to the possible criminal liability of the defendant, who was not a licensee. The
It has been held that a copyright proprietor exhausted his one-time exclusive right to vend, when he sold materials subject to the condition that they be put only to a specified use (waste paper), and the purchaser materially breached that condition. Independent News Co. v. Williams, 293 F.2d 510 (3d Cir. 1961). The need for a careful analysis of the actual relationship between the parties is pointed out by Judge Friendly, in his opinion in Platt & Munk Co. v. Republic Graphics, Inc., 315 F.2d 847, 854 (2d Cir. 1963):
These cases show the importance of distinguishing between contractual and statutory restrictions on what a person who holds a copyright work — but not the copyright — can do with the work. A pirated copy is one which has been obtained or made in violation of the statute. In most circumstances, a person who has purchased a work which he knew was pirated has not "lawfully obtained" it. His resale of the copy will be an infringement, Section 27 notwithstanding.
On the other hand, if the chain of transactions leading to a person acquiring possession of a copyrighted work contained breaches of contract, but no pirating, he has not infringed the copyright, and unless the non-occurrence of a first sale is affirmatively shown, he is not restricted in his further transfer of the copy. In the instant case, the affidavit contains no direct evidence, or substantial circumstantial evidence, that Bily manufactured films. Therefore, the government's theory of infringement at the time it sought the warrant had to be based on unauthorized sale or renting of films. On this theory, the government would ultimately have to prove the non-occurrence of first sales of the films in question. The statements in the affidavit may show a probability that there occurred some breaches of contract by persons in the chain of transfers culminating in Bily's possession of the films identified by the agents. However, it is questionable that there was a showing of a probability even that he was a civil infringer.
The problems of proof for a civil plaintiff under the copyright laws, as difficult as they may be, are much less than those of the government in a criminal prosecution. Under the civil law, there is strict liability for infringement. Buck v. Jewell-LaSalle Realty Co., 283 U.S. 191, 198, 51 S.Ct. 410, 411, 75 L.Ed. 971, 976 (1931). Shapiro, Bernstein and Co. v. H. L. Green Co., 316 F.2d 304, 308 (2d Cir. 1963). Even if the infringer had no economic motive and in fact netted no material gain from his conduct, he would still be liable for any damages caused to the copyright holder. The criminal law casts a smaller net. One cannot be convicted unless he has willfully infringed. Second, the infringing activities must have been engaged in for profit. Congress did not intend to make the bona fide film hobbiest a criminal. If a hobbiest willfully infringes a copyright, say by copying a copyrighted film without authorization, he is civilly liable to the copyright holder for the damages caused by the infringement, but for that act alone he cannot be convicted under 17 U.S.C. § 104.
The government has to carry several burdens to convict this defendant under 17 U.S.C. § 102 — it must show infringement, that the infringement was willful, and that it was engaged in for profit. Moreover, each element of the crime must be proven beyond a reasonable doubt. It is the combined effect of the policies behind the Copyright Act; the definition of the crime; and the principles of our criminal justice system which puts the government to this test. It would be both anomalous and unjust if this statute were interpreted to allow the government to forcibly search a person's home and carry away property on the basis of facts that would not even make out a strong claim for civil copyright infringement.
Did the allegations in the search warrant establish probable cause for belief that Bily had committed willful infringement for profit? The threshold question is whether any of those allegations were untrue. We find that there are neither any intentional or unintentional misrepresentations, United States v. Armocida, 515 F.2d 29, 41 (3d Cir. 1975), but that there are two ambiguities.
The first ambiguity is the following statement (the language of the printed form is emphasized):
It is clear from the testimony of the agents at the hearing, and it is consistent with the other statements in the affidavit, that the term "unauthorized copies" was not intended as an allegation that the agents had reason to believe at that time that Bily was manufacturing copies of copyrighted films. Rather, "unauthorized" refers to the allegations in paragraphs six and seven that Bily had no contractual right from the copyright owners to possess the films.
A more important ambiguity is in paragraph two of "Attachment `A'" to the affidavit which states, in pertinent part:
There was no testimony at the hearing that Mr. Bily actually used the phrase, "for profit". The FBI agents did testify that when they indicated to Mr. Bily near the end of the January 9th search that they intended to retain possession of some of his films, Mr. Bily became very excited and exclaimed, "If you take my films you take my livelihood." Mr. and Mrs. Bily each testified at the hearing that this statement was never made. The alleged statement came at a tense moment, and it is possible that some or
Except for our qualifications about these two ambiguous phrases, we have taken the allegations in the affidavit to be true. We will now assess the probative value of the statements in each paragraph of the affidavit. The purpose of this is to lay bare the relevant factors in our decision; our final conclusion is based on a common sense reading of the whole affidavit, United States v. Bamberger, 482 F.2d 166 (9th Cir. 1973), cert. den. 414 U.S. 1041, 94 S.Ct. 543, 38 L.Ed.2d 332 (1973).
Paragraph one states that Mr. Bily's name was obtained from a directory of film collectors. There is no explanation why Bily was chosen out of the many names in the Directory. The government's expert witness admitted at the hearing that there are many thousand film hobbiests whose pursuit of their hobbies is entirely lawful.
Paragraph two summarizes statements made by Bily during the January 9 search. They are probative of the fact that Bily dealt in copyrighted films for profit. We have already pointed out, however, the ambiguity of the term "for profit" in this paragraph. Also, there is no admission that any dealings made "for profit" were transfers that infringed copyrights.
Paragraph three describes a particular transfer of a particular film. The details of the transaction connote a commercial relationship, but are also consistent with hobby activities. Both the defendant and the government's expert testified that film collectors frequently trade films for money in lieu of other films.
Paragraph four identifies three films taken from Bily on January 9, and gives the copyright status of those three, and of other films seen in Bily's home. Specifically, it is stated that Bily "has no right from [the copyright owners] to duplicate, sell, or otherwise possess these films." (emphasis added) This quotation fell far short of stating the elements of an infringement. Duplication was not at issue. And Bily could have had the right to sell or to otherwise possess those films, even if the copyright owners had never given him such a right. The copies in question could have been transferred by the copyright owners to other parties, in transactions that satisfied the first sale criteria. Even if sales contracts or licenses prohibited further transfer, and the party transferred the film to Bily in breach of the agreement, Bily could then be the lawful possessor, with no contractual obligations to the copyright owners, and he would not be liable under the Copyright Act for his subsequent transfer of the copy. The copyright owner would have a cause of action in contract against its buyer. While the statements in paragraphs four to eight are probative of infringement, they fall short of establishing a probability of it. All they do is negate the possibility of a first sale directly to Bily; they are perfectly consistent with first sales to persons who could have subsequently transferred copies to Bily.
We conclude that the search warrant was not issued on probable cause. The government's January 10, 1975 search of defendant's home, and the seizure of many of his films on that date violated his rights under the Fourth Amendment of the Constitution. In reaching this decision we have taken into account:
1) the standards of proof for the crime charged, willful infringement for profit, 17 U.S.C. § 104.
2) the policies of the Copyright Act. The non-infringing use and dissemination of creative material is considered not merely innocent activity but a public benefit. Any attempts at enforcing the Act which chill or unduly burden non-infringing use of copyright works, contradict the policy of the Act.
3) the failure to show on the affidavit, that the law enforcement officers attempted to obtain, or did obtain, other than by the January 9 search, corroborating evidence that the defendant was carrying on a film distribution business and engaging in copyright infringement. It appears that the defendant's name was picked more or less at random from a published directory of collectors.
4) the absence of exigent circumstances. There was no present danger that the defendant would become a fugitive, or would destroy evidence, if a warrant was not promptly issued.
5) the presence of an obvious and noncriminal explanation for the facts described in the search warrant. This is not a situation where a suspicion of criminal activities is strengthened by the absence of any reasonably apparent explanation for known facts other than criminal motivation and conduct. The facts alleged in the affidavit are fairly explained by the defendant's announced and publicized
In United States ex rel. Kislin v. State of New Jersey, 429 F.2d 950 (3d Cir. 1970), the Court of Appeals for the Third Circuit was presented with what it called a "borderline case" on the question of the sufficiency of an affidavit for search warrant. In deciding that the warrant had been properly issued, the Court relied on the Supreme Court's statement in United States v. Ventresca, 380 U.S. 102, 109, 85 S.Ct. 741, 13 L.Ed.2d 684 (1965), that
For the several reasons we have just given, we do not believe that the instant case is "doubtful" or "marginal". Moreover, even if the question of the probability of the commission of a crime was more evenly balanced, it would have to be noted that a prosecution under the Copyright Act is not a case "in [the] area" of the prosecutions in Ventresca, supra, (illegal distillery), or in Kislin, supra, (gambling). We doubt that the weak presumption stated in Kislin exists in a Copyright Act prosecution given the policy of the Act to encourage the dissemination of copyrighted materials, up to the borderline of unlawful conduct.
UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA
The undersigned being duly sworn deposes and says:
That he (has reason to believe) that (on the premises known as) 836 Bristol Road, Warminster, Pa., situated on the S.E. corner of the intersection of Bristol and Brookdale Roads, being a two-story, white-frame, split-level residence.
in the Eastern District of Pennsylvania
there is now being concealed certain property, namely unauthorized copies of duly copyrighted motion pictures, including "Cactus Flower", "Anatomy of a Murder", "Anastasia", "The Bedford Incident", "Hurry Sundown", "Odd Couple", "Father Goose", and "Khartoum", and other evidence and business records which is evidence of the crime, fruits of the crime or things designed or used or intended to be used to commit a crime, i.e., the sale for profit of copyrighted motion pictures in violation of Title 17, USC, Sections 1 and 104,
here give alleged grounds for search and seizure
(1) On January 9, 1975, the name RON BILY, 836 Bristol Road, Warminster, Pennsylvania, was obtained from a copy of a 1973 International Directory of 16 mm film collectors as a film collector by Special Agent EDDIE O. CREASY, Federal Bureau of Investigation.
(2) On January 9, 1975, Special Agent EDDIE O. CREASY and Special Agent HERBERT C. HOOVER, JR., Federal Bureau of Investigation, interviewed Mr. RAYMOND M. BILY, 836 Bristol Road, Warminster, Pennsylvania, concerning his possible possession of copyrighted 16 mm films during this interview, Mr. BILY freely admitted that he had in his possession at that moment many 16 mm copyrighted motion pictures and that he had been engaged in the buying, selling, and trading of motion pictures for profit for 23 years.
(3) On January 9, 1975, Mr. RAYMOND M. BILY, specifically stated to Special Agent CREASY and Special Agent HOOVER that he sold during the month of December 1974 the motion picture "White Christmas" to LEONARD MALIK, Post Office Box 15073, Sacramento, California. Mr. BILY advised that later Mr. MALIK returned the film to BILY, stating that the film was poor quality and demanding a credit for the purchase of other motion pictures.
(4) On January 9, 1975, Special Agent CREASY and Special Agent HOOVER obtained from Mr. BILY the 16 mm copies of the motion pictures "Marooned", "White Christmas", and "Sweet Charity".
(5) On January 10, 1975, Special Agent JOHN ROBERT KUTZ, Federal Bureau of Investigation, reviewed the first portion of the first reel of each of the above motion pictures and determined that they were in fact color prints of "Marooned", "White Christmas", and "Sweet Charity".
(6) On January 10, 1975, Mr. MIKE MANGAN, General Attorney, Schnader, Harrison, Segal, Lewis, 719 Packard Building, Philadelphia, Pennsylvania, stated that the motion picture "White Christmas" was a
(7) On January 9, 1975, Special Agent EDDIE O. CREASY and Special Agent HERBERT C. HOOVER, JR., observed throughout the residence located at 836 Bristol Road, Warminster, Pennsylvania, the following motion pictures and others not yet identified:
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