United States v. Teh
Sixth Circuit, July 31, 2008, No. 06-2371
Slip Opinion
On July 31, the 6th Circuit affirmed the conviction of Thiah Teh, who was indicted after airport officials searched his luggage and found what appeared to be 756 counterfeited DVDs and 284 counterfeited DVD sleeve packages. Teh was found guilty and sentenced to one year of probation under 18 U.S.C. § 545, which imposes fines and up to twenty years imprisonment for "knowingly import[ing] . . . merchandise contrary to law." Although the government did not indicate at trial what statutory provision provided the basis for the "contrary to law" element of the § 545 violation, it asserted on appeal that Teh's actions violated 18 U.S.C. § 2318, which provides felony penalties for up to 5 years for importing counterfeit labels, documentation, or packaging.
Teh argued on appeal, inter alia, that a copyright violation could not serve as the basis for a § 545 offense under Dowling v. United States, 473 U.S. 207 (1985), which held that distribution of bootleg sound recordings could not be prosecuted under the National Stolen Property Act ("NSPA"). The Supreme Court reasoned that, by enacting the Copyright Act, Congress intended to address copyright violations with more precision than the NSPA would allow. In addition, the Court also expressed concern that civil copyright violations might otherwise come within the ambit of the criminal trafficking statute, which carries significantly more serious penalties.
Nonetheless, the Sixth Circuit held that Dowling's reasoning did not apply in Teh because the government's use of § 545 did not give rise to same concerns as prosecution under the NSPA. First, the court noted that in Dowling, the application of the NSPA would have allowed the government to entirely avoid application of the more precise and relevant Copyright Act. In Teh, however, such circumvention did not occur - to prove the "contrary to law" element of § 545, the government necessarily needed to prove that Teh violated § 2318 of the Copyright Act. Second, the court distinguished § 2318 from the NSPA, as the former was amended after Congress had enacted the Copyright Act to "specifically address the trafficking of counterfeit labels affixed to motion pictures by providing felony penalties for this offense." Third, the combination of § 545 and § 2318 did not result in the criminalization of an otherwise civil offense because § 2318 itself criminalizes counterfeiting activity. For all of these reasons, the Sixth Circuit held that the district court's decision was in error. However, the court concluded that, even if the district court's decision had been in error, it would not have substantially affected Teh's rights. Given that Teh was only sentenced to one year probation under § 545, which was far less than the maximum five-year prison penalty imposed by § 2318, the court found Teh's claim could not survive plain error review.
Before shutting down his blog on August 1st of this year, Senior Copyright Counsel of Google Inc., William Patry commented on the case, writing
"In the end, the court of appeals confirmed the conviction, as a kind of harmless error, but there is nothing harmless in this type of counterfeiting: it is a cancer on the motion picture industry, and a quite appropriate use of government resources to stop it. Hopefully, in light of the Teh case, some of those resources will be allocated to proper drafting of indictments."