## Facts

- Julius Chow Lieh Liu founded and ran Super DVD, a commercial CD/DVD replication plant that produced discs for paying clients.
- Replication required specialized equipment and source digital content supplied by customers; Super DVD operated at a scale that exposed it to criminal liability if copying lacked copyright authorization.
- Super DVD replicated items including Symantec software CDs, DVD copies of *Crouching Tiger, Hidden Dragon*, and music compilation CDs made from popular commercial recordings.
- Liu required customers to sign forms stating they had reproduction rights and claimed he relied on customer representations that the content was licensed or original.
- The government presented evidence that certain software and video discs were unauthorized and that compilation discs were made from well-known recordings rather than customer-created works.
- Liu was charged with criminal copyright infringement (17 U.S.C. § 506(a); 18 U.S.C. § 2319) and trafficking in counterfeit labels (18 U.S.C. § 2318).
- The district court instructed the jury that “willful” infringement meant acting “knowingly and intentionally” rather than by accident or mistake, without requiring knowledge that the conduct was unlawful.
- The district court also permitted conviction for trafficking in counterfeit labels without clearly requiring that Liu knew the labels were counterfeit.
- Liu was convicted and sentenced to four years’ imprisonment; he appealed based on the jury instructions and counsel’s failure to raise a statute-of-limitations defense to one count.

## Issues

1. Whether “willfully” in the federal criminal copyright statutes requires proof that the defendant knew the copying was unlawful, not merely intentional copying.
2. Whether “knowingly” trafficking in counterfeit labels under 18 U.S.C. § 2318 requires proof that the defendant knew the labels were counterfeit.
3. Whether counsel was ineffective for failing to raise an obvious statute-of-limitations defense, requiring dismissal of a time-barred count.

## Decision

- The court held that “willfully” in criminal copyright infringement requires proof the defendant knew he was acting illegally.
- The court held that “knowingly” trafficking in counterfeit labels requires proof the defendant knew the labels were counterfeit.
- The court found the challenged jury instructions misstated these mens rea elements and were not harmless beyond a reasonable doubt.
- The court held counsel was ineffective for failing to raise an obvious statute-of-limitations defense as to one count, and directed that count be dismissed on remand.
- The court vacated the convictions and sentence and remanded for further proceedings consistent with its mens rea rulings and for dismissal of the time-barred count.

## Legal Principles

- In criminal copyright infringement prosecutions under 17 U.S.C. § 506(a) and 18 U.S.C. § 2319, “willfully” requires proof the defendant knew the conduct was unlawful; intentional copying alone is insufficient.
- Under 18 U.S.C. § 2318, “knowingly” trafficking in counterfeit labels requires knowledge of the counterfeit nature of the labels.
- Jury instructions that omit or dilute an element of the offense are reviewed for harmless error, and the government must show the error was harmless beyond a reasonable doubt.
- Counsel renders ineffective assistance when failing to assert an obvious, dispositive statute-of-limitations defense, resulting in prejudice; the proper remedy is dismissal of the time-barred count.

## Conclusion

The Ninth Circuit vacated Liu’s convictions because the jury was not properly instructed on the required mental states for criminal copyright infringement and counterfeit-label trafficking, and it ordered dismissal of a time-barred count due to ineffective assistance of counsel.


United States v. Liu, 731 F.3d 982 (9th Cir. 2013)