US v. Armstead

Facts: Defendant sold bootleg DVDs to an undercover government agent on two occasions. On the first occasion, he sold 100 bootleg DVDs to the agent for $500. On the second occasion, he sold 200 bootleg DVDs for $1000.

Procedural History: Defendant was convicted of felony copyright infringement for personal financial gain under 18 USC 2319(b)(1). The defendant conceded all the elements to the offense except for the total value of the DVDs he bootlegged. If the “retail value” of the DVDs is less than $2500, he would be convicted of a misdemeanor, whereas if the “retail value’ of the DVDs is more than $2500, he would be convicted of a felony. The jury was so instructed and convicted him of the felony

Issue: what does “have a total retail value of more than $2500” mean?

Holding: The term “retail value” means the highest market value of copies of the copyrighted material in a retail context.

Analysis: The defendant wanted the relevant market to be that of the “thieves market,” where a bootleg DVD is worth whatever the going rate for bootleg DVDs are on the black market. The government wanted the relevant market to be the price of an authorized copy of the movie sold in retail. The court adopts—as a matter of first impression—that the “retail value” includes both markets (both the illicit and the legitimate markets) and thus it is proper to convict the defendant even though he sold the goods to the undercover agent for only a total of $1500.

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