LaMacchia Loophole
| United States v. LaMacchia | |
|---|---|
| United States District Court for the District of Massachusetts | |
| Full case name | United States of America v. David LaMacchia |
| Date decided | 28 December 1994 |
| Citations | 871 F.Supp. 535 |
| Judge sitting | Justice Richard Stearns |
| Case holding | |
| Copyright prosecutions may only be brought under Section 506 of the Copyright Act, which does not include non-commercial copyright infringement within its scope. | |
| Keywords | |
| NET Act, copyright infringement, LaMacchia Loophole, wire fraud, Copyright Act, Cynosure | |
United States v. LaMacchia 871 F.Supp. 535 (D.Mass. 1994) was a case decided by the United States District Court for the District of Massachusetts which ruled that, under the copyright and cybercrime laws effective at the time, committing copyright infringement for non-commercial motives could not be prosecuted under criminal copyright law.
The ruling gave rise to what became known as the LaMacchia Loophole which is that criminal charges of fraud or copyright infringement would be dismissed under current legal standards, so long as there was no profit motive involved. The court's ruling explicitly drew attention to a perceived shortcoming of the law that there was no criminal liability under the Copyright Act for even large-scale non-commercial copyright infringement. The NET Act, passed in 1997, was a direct response to the "LaMacchia Loophole." The law provides for criminal prosecution of individuals who engage in copyright infringement even when there is no commercial benefit from the infringement.
The defendant in the case was David LaMacchia, a 21-year-old student at the Massachusetts Institute of Technology at that time. Under pseudonyms and using an encrypted address, LaMacchia set up an electronic bulletin board which he dubbed Cynosure. He then encouraged people to upload copyrighted software applications and computer games to the board, which he subsequently transferred to another encrypted address called Cynosure II, where the software could be accessed and downloaded freely by anyone with access to the Cynosure password. LaMacchia encouraged his correspondents to exercise caution when accessing the site, but despite his best efforts to avoid detection, the heavy traffic to his site drew the attention of university and government authorities.
On April 7, 1994, LaMacchia was indicted by a federal grand jury for "conspiring with unknown people" to violate 18 U.S.C. Sec. 1343, the wire fraud statute. The indictment held that LaMacchia had devised a scheme to defraud the software manufacturers and copyright owners whose software had been distributed on Cynosure without paying proper licensing fees and royalties, thereby causing losses totaling over one million USD. There was no allegation that LaMacchia had derived any personal profit from the scheme, which is why the indictment was not made on grounds of copyright infringement.
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