U.S. v. Moore, s. 78-2461

• Decision Date: 21 September 1979
• Docket Number: Nos. 78-2461,78-3020,s. 78-2461
• Citation: 604 F.2d 1228
• Parties: , 1978-81 Copr.L.Dec. 25,104 UNITED STATES of America, Plaintiff-Appellee, v. Arthur Blake MOORE, doing business as Sound Distributors, Inc., Charles Frederic Moss and Gary Fields, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1228

604 F.2d 1228

203 U.S.P.Q. 725, 1978-81 Copr.L.Dec. 25,104

UNITED STATES of America, Plaintiff-Appellee, v. Arthur Blake MOORE, doing business as Sound Distributors,

Inc., Charles Frederic Moss and Gary Fields,

Defendants-Appellants.

Nos. 78-2461, 78-3020.

United States Court of Appeals, Ninth Circuit.

Sept. 21, 1979.

Richard A. Carlson, David Teske, Portland, Or., for defendants-appellants.

Jack C. Wong, Asst. U. S. Atty., Portland, Or., for plaintiff-appellee.

Appeal from the United States District Court for the District of Oregon.

Before WRIGHT and TANG, Circuit Judges, and PALMIERI ^*, District Judge.

TANG, Circuit Judge:

These are consolidated appeals in which the defendants Arthur Moore, Charles Moss, and Gary Fields challenge their convictions for copyright infringement of sound recordings. Their primary contentions are that the evidence was insufficient to sustain their convictions and that the district court erroneously failed to apply the "first sale doctrine." We affirm the convictions.

The defendants were each charged in a ten-count information with copyright infringement of sound recordings, in violation of former 17 U.S.C. § 1(f) and 104(b). ¹ The evidence at the defendant's jury trial showed that the defendants purchased large spools of eight-track recording tape, known as "pancakes," in response to the advertisement of other distributors in Billboard Magazine. Each pancake contained a series of pre-recorded song sequences; approximately twenty albums were recorded on each tape. Attached to the pancakes were labels that stated that the albums on the pancakes were "sound-alikes", i. e., recreations or imitations of the original as recorded by various well-known artists. The defendants would rewind and splice the pancakes into approximately twenty eight-track cartridges, and then wrap each cartridge in cellophane. They attached a label indicating that it was a recreation on each cartridge. Moss distributed the packaged tapes to retailers. Nine government witnesses testified that they had a long business relationship with Moss and had purchased tapes from him on numerous occasions. The jury found Moss and Moore guilty on all counts and Fields on the tenth count only.

I First Sale Doctrine

The defendants first contend the trial court erred in not granting their motion for acquittal because the Government failed to prove the absence of a "first sale". They also argue that the district court erred in failing to instruct the jury on the "first sale doctrine."

The first sale doctrine provides that where a copyright owner parts with title to a particular copy of his copyrighted work, he divests himself of his exclusive right to vend that particular copy. United States v. Wise,550 F.2d 1180, 1187 (9th Cir.), Cert. denied 434 U.S. 929, 98 S.Ct. 416, 54 L.Ed.2d 290 (1977). See former 17 U.S.C. § 27. ² Although the owner's other copyright rights remain intact (e. g., publishing or copying), the copyright owner has no right under the copyright statute to restrict subsequent sales or transfers of that copy. Id. See United States v. Drebin,557 F.2d 1316 (9th Cir. 1977), Cert. denied 436 U.S. 904, 98 S.Ct. 2232, 56 L.Ed.2d 401 (1978).

In several recent cases, this court has considered the application of the first sale doctrine in the context of prosecutions for criminal infringement. See United States v. Atherton, 561 F.2d 747 (9th Cir. 1977); United States v. Drebin, 557 F.2d 1316 (9th Cir. 1977); Wise, supra. In each case, all involving the sale of copyrighted motion pictures, the court held that one of the elements that the Government must prove in a criminal prosecution under § 104 is the absence of a first sale as to those copyrighted articles that the defendant is charged with infringing. ³ Atherton, 561 F.2d at 749; Wise, 550 F.2d at 1190.

In arguing that the Government failed to prove the absence of a first sale, the defendants contend that the Government must completely account for the distribution of the sound recordings to meet its burden. Presumably, the defendants would have the Government trace the distribution of each recording to its original source to ascertain whether it was the subject of a legitimate first sale. We think that the defendants misconceive the nature of the proof necessary to prove the absence of a first sale.

Sound recordings are not readily traced because of their wide distribution and the ease with which they can be reproduced. This difficulty should not be fatal to the Government's burden of proving the absence of a first sale. A pirated tape that is reproduced from the original recording without authorization is plainly not the subject of a first sale. Therefore, the Government can prove the absence of a first sale by showing that the tape in question was unauthorized, and it can establish this proof not only by evidence tracing the distribution of that tape but also by circumstantial evidence from which a jury could conclude beyond a reasonable doubt that the recording was never authorized and therefore never the subject of a first sale. See United States v. Whetzel, 191 U.S.App.D.C. 184, 188-189, 589 F.2d 707, 711-12 (D.C.Cir. 1978). In other words, evidence suggesting that the tapes had an illegitimate origin negates the possibility of a valid first sale as much as proof from tracing the distribution of the tape to its original source. See id.

The kind of circumstantial evidence that will establish proof of the absence of a first sale is demonstrated in United States v. Whetzel, supra. In Whetzel, the labels on the tapes listing a manufacturer with a non-existent address, the low price of the tapes, the circumstances of the sale, and the complete absence of evidence that would suggest that the tapes were legitimate sufficiently proved the unauthorized nature of the tapes. Id. Here, the Government presented very similar evidence showing that the tapes sold by the defendants were unauthorized. The record shows that the defendants had no authority from any company to manufacture or distribute tapes. There was further testimony that no one had the authority to manufacture the whole tapes contained in the pancakes. The fact that the tapes were labeled and packaged by the defendants and that the price of the tapes was only about $1.00 also pointed to the illicit origin of the tapes. Additionally, an expert witness testified that the sound on the tapes sold by the defendants was inferior to that of the copies sold by the copyright holders, suggesting that the defendants' tapes were something other than legitimate copies. Finally, there was a total absence of evidence suggesting that the tapes were legitimate. In short, the Government's evidence, demonstrating the unauthorized origin of the tapes, necessarily established the absence of a first sale.

The defendants also contend that the district court erred by refusing to instruct the jury on the first sale doctrine. We agree that the district court erred. The absence of a first sale is an element of the Government's proof of § 104 infringement, Atherton, 561 F.2d at 749, and the court is required to instruct the jury as to the elements of the crime charged. United States v. Valdez, 594 F.2d 725, 729 (9th Cir. 1979); United States v. Manufacturers' Association of Relocatable Building Industry, 462 F.2d 49, 50 (9th Cir. 1972).

The failure to give a required instruction is reviewable under the harmless error standard. Valdez, 594 F.2d at 729. In the circumstances of this case, we find that the failure of the district court to give the required instructions was harmless beyond a reasonable doubt. By clear evidence, the Government proved the absence of a first sale. Further, as we discuss below, the Government presented substantial evidence to prove the other essential elements of the crime. Finally, we note that the court's instruction on infringement required that the jury find that the defendants "made unauthorized copies and distributed those copies." The jury found this fact to be true beyond a reasonable doubt.

II Reproduction and Distribution

The defendants contend that the Government is required to prove that they reproduced And distributed the infringing sound recordings in order to establish that they violated 17 U.S.C. §§ 104(b) and 1(f). They argue that evidence of distribution alone is insufficient to convict them.

Section 104(b) prohibits a person from wilfully infringing for profit any copyright provided by § 1(f). Section 1(f) enumerates certain rights afforded the copyright owner, including the right "to reproduce and distribute to the public" reproductions of the copyrighted work. The defendant's contention that the government is required to prove both reproduction and distribution is grounded solely on the presence of the conjunctive "and" in § 1(f). Because the copyright holder has the exclusive right to reproduce and distribute, the defendants argue that "it is logical to infer that the infringer must also 'reproduce And distribute.' "

We do not find this argument persuasive. Section 104(b) does not explicitly or implicitly require proof of both reproduction and distribution. It only prohibits infringement of the rights specified in § 1(f). We have previously held that "it is clear that any act which is inconsistent with exclusive rights of the copyright holder, as enumerated in § 1, constitutes infringement." Wise, 550 F.2d at 1186. It takes little imagination to see that either an act of reproduction or an act of distribution may interfere with the copyholder's rights and, thus, either may constitute infringement. We find no support in the statutory language or history to support the conclusion that Congress intended that persons engaged in the distribution of unauthorized copyrighted works should be able to do so with impunity.

Finally, we note the illogic of the defendants' argument. Section 1(a) enumerates that the copyright holder shall have the exclusive right to ...