## Facts

- John M. Brown formerly worked as a computer programmer for The Software Link, Inc. (TSL), whose assets included the PC-MOS/386 computer operating-system program.
- After Brown left TSL and moved to New Mexico, the FBI searched his residence.
- Agents found five three-ring notebooks and a hard disk containing portions of the PC-MOS/386 source code.
- A federal grand jury charged Brown under the National Stolen Property Act (NSPA) with interstate transportation of stolen property (18 U.S.C. § 2314) and two counts of receipt/possession of stolen property (18 U.S.C. § 2315), based on alleged transport of the source code from Georgia to New Mexico and possession in New Mexico.
- Brown moved pretrial to dismiss the indictment, arguing that the alleged property was intangible intellectual property and therefore not “goods, wares, or merchandise” covered by §§ 2314–2315.
- The district court dismissed all counts; the United States appealed the dismissal under 18 U.S.C. § 3731.

## Issues

1. Whether proprietary computer source code, as alleged, constitutes “goods, wares, or merchandise” within 18 U.S.C. §§ 2314 and 2315.
2. Whether the NSPA applies when the asserted injury is misappropriation of intangible intellectual property embodied on physical media, rather than theft of tangible commercial goods.

## Decision

- The Tenth Circuit affirmed the district court’s pretrial dismissal of the indictment.
- The court held that the PC-MOS/386 source code, as charged, was intangible intellectual property and not “goods, wares, or merchandise” under §§ 2314–2315.
- The court rejected the government’s attempt to treat the case as theft of physical items (notebooks and a disk) when the prosecution’s theory targeted the value of the program information itself.

## Legal Principles

- 18 U.S.C. §§ 2314–2315 are directed at theft-like interference with tangible property and historically apply to physical “goods, wares, or merchandise” that are themselves stolen, converted, or taken by fraud.
- Misappropriation of intellectual property interests (including proprietary computer source code) is not covered by §§ 2314–2315 merely because the information is stored or written on physical media.
- Courts interpret “goods, wares, or merchandise” to exclude purely intangible property interests absent clear congressional direction to expand the NSPA’s scope.

## Conclusion

The Tenth Circuit held that misappropriated computer source code, even when found on physical media, is intangible intellectual property and therefore falls outside the National Stolen Property Act’s prohibition on transporting or possessing stolen “goods, wares, or merchandise” under 18 U.S.C. §§ 2314–2315.


United States v. Brown, 925 F.2d 1301 (10th Cir. 1991)