## Facts

- Julio Larracuente owned and operated a video-rental store.
- An investigator rented tapes from the store that were identified as counterfeit copies of copyrighted motion pictures.
- Surveillance observed Larracuente moving boxes of blank tapes into his home and later transporting boxes of videocassettes from his home to his store, at times with another individual assisting him.
- A search of Larracuente’s residence revealed a large copying operation, including numerous VCRs, copying equipment, counterfeit tapes, and packaging materials.
- At trial, the parties stipulated that copyrights in certain seized films were owned by third parties and that Larracuente had no authorization to reproduce those films.
- A jury convicted Larracuente of criminal copyright infringement and conspiracy and, by special interrogatory, found he had copied at least 65 copyrighted films within a 180-day period.
- The district court calculated sentencing “retail value” using the normal retail price of legitimate videotapes corresponding to the infringed titles.

## Issues

1. Whether the evidence was sufficient to prove copying “without authorization,” or whether the government had to negate speculative licensing or sublicensing possibilities.
2. Whether the evidence was sufficient to support a conspiracy conviction based on circumstantial proof of an agreement with at least one other person.
3. Whether, for sentencing, “retail value” could be calculated using the legitimate retail price of authentic videotapes rather than the defendant’s discounted prices or profit.

## Decision

- The court affirmed the convictions and sentence.
- The court held the evidence supported a finding of unauthorized copying; the government was not required to disprove every hypothetical license or sublicense.
- The court held the conspiracy conviction was supported by evidence of coordinated conduct, including assistance by another person and the organized nature of the copying and distribution activity.
- The court upheld using the normal retail price of legitimate videotapes to compute “retail value” for guideline purposes where copies were of ordinary quality and sold through ordinary consumer channels.

## Legal Principles

- Criminal copyright infringement requires proof of a valid copyright interest and copying without authorization.
- Authorization through licensing is treated as an affirmative defense; absent a substantiated licensing claim, the prosecution need not negate speculative licensing chains.
- A conspiracy may be proved by circumstantial evidence permitting a rational inference of an agreement and knowing participation; identification of the co-conspirator by name is not required.
- For guideline valuation in copyright offenses, where infringing copies are comparable in quality and distributed in typical retail channels, “retail value” may be based on the normal retail price of the legitimate items rather than the infringer’s actual sales price or gain.

## Conclusion

The court affirmed Larracuente’s criminal copyright and conspiracy convictions and approved a sentencing valuation method that uses the legitimate retail price when counterfeit copies are sold to ordinary consumers through standard retail outlets, while treating licensing authorization as an affirmative defense rather than an element the government must exhaustively disprove.


United States v. Larracuente, 952 F.2d 672 (2d Cir. 1992)