Copyright News

• Jurisdiction: United States,Federal,California
• Author: Jo Ardalan
• Publication year: 2019
• Citation: Vol. 44 No. 3

Copyright News

Jo Ardalan

One LLP

Say hello to my little friend: copyright infringement as a predicate act for civil rico liability

The RICO statute defines "racketeering activity" as including any act "indictable under. ..[18 U.S.C.] Section 2319, relating to criminal infringement of a copyright."¹ Section 2319 criminalizes willful copyright infringement as described in 17 U.S.C. 506(a).² Although the statute expressly identifies willful copyright infringement as a predicate act sufficient to support liability, some courts have hesitated to read the statute expansively.

Judge Haywood S. Gilliam, Jr. of the Northern District of California recently confronted a concern that has split district courts: Can willful copyright infringement satisfy the "predicate act" for a RICO claim if it does not constitute counterfeiting or piracy?³ In Kevin Barry Fine Art Associates v. Ken Gangbar Studio, Inc.,⁴ the plaintiff" sought a declaratory judgment of non-infringement and the defendant coun-terclaimed, alleging willful copyright infringement and RICO violations. At issue were sculptural and installation artworks that incorporated "intricate, cyclical patterns of nature." Ken Gangbar Studio alleged that the counter-defendant had solicited a quote to commission a piece similar to its Star work but had never received a substantive response to its quote.⁵ It further alleged that the counter-defendant subsequently created unauthorized copies of counterclaimant's sculptures.

The counter-defendant sought to dismiss the RICO counterclaims on the basis, among others, that copyright infringement is a civil RICO predicate act only if it involves counterfeiting or piracy. It relied on Stewart v. Wachowski from the Central District of California that so held. ⁶ In Stewart, the court concluded that the legislative history ofthe Anticounterfeiting Consumer Protection Act of 1996, Pub. L. No. 104-153, § 3, 110 Stat. 1386 ("Anticounterfeiting Act"), which added criminal copyright infringement as a "predicate act" to the statute, revealed "Congress's true intent in enacting the statute was simply to increase the available penalties for counterfeiting and piracy"⁷ Although the legislative history did not address whether Congress intended to make all acts of willful infringement RICO predicate acts or just those involving counterfeiting and piracy, the court reasoned that "Congress's intent in expanding the list of RICO predicate offenses was to supplement existing sanctions against counterfeiting and piracy organizations." ^8,9 The court's analysis turned on its reading of legislative history...