Warez Trading and Criminal Copyright Infringement by Eric Goldman

Warez Trading and Criminal Copyright Infringement
Eric Goldman
Marquette University Law School


  • Definition of warez trading
  • Applicable criminal laws
  • Some prosecutions
  • Some policy concerns
  • The bottom line:
    • Warez trading has been criminalized
    • More warez traders will be sent to jail

What is Warez Trading?

  • Warez trading vs. commercial piracy
  • Different types of warez traders
    • Warez distribution groups
    • Warez collectors
    • Warez downloaders
    • Abandonware enthusiasts

Criminal Copyright Infringement

  • Willful copyright infringement committed:
    • for commercial advantage or private financial gain, or
    • by reproducing or distributing, in any 180-day period, works with a total retail value over $1,000
  • Punishment can be up to 5 years in prison and $250,000 fine

Prosecution Elements

  • Valid copyright exists
    • Infringement
    • Uploading, downloading, distribution
    • Evidentiary challenges
    • First sale doctrine
    • Fair use
      • Nature of the use
      • Nature of the work
      • Amount taken
      • Effect on the market
  • Willfulness
    • Minority view: intent to copy
    • Majority view: “voluntary, intentional violation of a known legal duty”
      • Good faith but incorrect belief of non-infringement
      • Good faith but incorrect belief of fair use
      • Ignorance of the law
  • Commercial advantage/financial gain
    • Financial gain: “receipt, or expectation of receipt, of anything of value, including the receipt of other copyrighted works”
  • Retail value
    • $2,500 for felony, $1,000 for misdemeanor
    • Price of warez v. manufacturer’s list price

Other Criminal Laws

  • Circumvention
    • Circumventing
    • Trafficking in circumvention devices
  • Hacking/Trespass
    • Unauthorized access to obtain information
    • Unauthorized access and causing damage
  • Theft
  • Trade Secret Misappropriation
  • Copyright Management Information Integrity


  • Classes of defendants
    • Distribution groups (Fastlane, PWA, DOD, RWZ)
    • Individual traders (Levy, Thornton, Baltutat, Fitzgerald)
    • Movie traders (Spatafore, Gonzalez)
  • 100% conviction rate (so far)
  • Almost all defendants plead guilty
    • 2 jury trials, both lost
  • At least 19 defendants have received jail time
    • High: 46 months
    • Average: 25 months

Policy Concerns

  • Warez traders’ contribution to piracy is substantially overstated
    • Counting copies substantially distorts “lost sales”
  • Criminalizing warez trading may have counterproductive motivational effects
  • Congress has criminalized many Americans, not just warez trading
    • Is P2P file sharing for “financial gain”?
    • $5.56/day of infringement


  • Congress wants people to respect the law
    • If a law doesn’t work, make it meaner
    • But we do not respect unjust laws
  • Congress wants more scalps
    • The double-edge sword of busting P2P file sharers
    • Meanwhile, warez traders make great targets
      • Congress hates warez traders
      • Industry hates warez traders
      • The average person can distinguish their conduct from warez trading
  • Net Effect: More warez traders will be jailed