## Facts

- Earnest H. Cross and Richard Denney co-owned an Indiana video-rental store, Porky’s Family Video; Diana Fleek was the chief clerk and Cross’s live-in girlfriend.
- The store obtained some videocassettes from legitimate sources but also rented unauthorized duplicate copies of copyrighted motion pictures.
- After complaints, FBI agents contacted Cross, told him the store was renting pirated tapes, explained how to identify unauthorized copies, and instructed him to stop.
- Cross removed suspect tapes from shelves but, after new complaints months later, the FBI placed an undercover agent as a part-time employee.
- The undercover agent and other agents (posing as customers) observed and rented multiple tapes lacking features consistent with legitimate commercial distribution.
- Fleek instructed the undercover agent how to transfer labels from legitimate tapes to unauthorized copies to make infringing tapes appear legitimate for rental.
- A federal grand jury charged all three defendants with (1) conspiracy to willfully infringe copyrights for commercial advantage/private financial gain and (2) substantive criminal copyright infringement.
- A jury convicted all defendants on both counts, and each received a sentence including incarceration or probationary conditions and, for Denney, a fine.

## Issues

1. Whether the evidence was sufficient to prove defendants willfully infringed copyrights, meaning they knew their conduct was unlawful and proceeded anyway.
2. Whether the evidence was sufficient to prove infringement was for purposes of commercial advantage or private financial gain.
3. Whether the evidence sufficiently established each defendant’s knowing participation in the conspiracy and the substantive offense.
4. Whether challenged evidentiary rulings or jury instructions required reversal.

## Decision

- The Seventh Circuit affirmed all convictions on both counts.
- The court held the evidence permitted a finding of willfulness, especially given the FBI’s explicit warning and the store’s later resumption of infringing rentals and concealment practices.
- The court held the “commercial advantage/private financial gain” element was satisfied because the infringing tapes were used as part of the store’s rental business for revenue-generating purposes.
- The court found sufficient proof tying each defendant to the conspiracy and substantive infringement, including Fleek’s active instruction on disguising infringing tapes.
- The court rejected claimed instructional and evidentiary errors as non-reversible.

## Legal Principles

- Criminal copyright infringement under 17 U.S.C. § 506(a) requires proof the infringement was (1) willful and (2) for purposes of commercial advantage or private financial gain, with penalties addressed in 18 U.S.C. § 2319.
- “Willfulness” is satisfied by proof the defendant knew the conduct was unlawful; the government need not prove knowledge of every technical detail of copyright law.
- Willfulness may be proven by circumstantial evidence, including prior law-enforcement notice of illegality followed by continued infringing conduct and concealment efforts.
- The “commercial advantage/private financial gain” element focuses on purpose; using infringing copies as part of a revenue-oriented business activity can satisfy the element without proof of actual profit realized.
- Conspiracy under 18 U.S.C. § 371 may be established by evidence of agreement and knowing participation, which can be inferred from coordinated operational conduct in furtherance of the illegal objective.

## Conclusion

The court upheld convictions for conspiracy and criminal copyright infringement where defendants continued renting disguised unauthorized movie copies after explicit FBI warnings, supporting findings of willfulness and a revenue-driven purpose sufficient to meet the commercial advantage/private financial gain requirement.


United States v. Cross, 816 F.2d 297 (7th Cir. 1987)