On April 7, 1994, a federal grand jury returned a one count indictment charging David LaMacchia, a student at MIT, with conspiring with "persons unknown" to violate 18 U.S.C. Sec. 1343, the wire fraud statute. According to the indictment, LaMacchia devised a scheme to defraud that had as its object the facilitation "on an international scale" of the "illegal copying and distribution of copyrighted software" without payment of licensing fees and royalties to software manufacturers and vendors. The indictment alleges that LaMacchia's scheme caused losses of more than one million dollars to software copyright holders. The indictment does not allege that LaMacchia sought or derived any personal benefit from the scheme to defraud. However, the case was based on the allegation that he permitted and facilitated, on an international scale, the illegal copying and distribution of copyrighted software, without payment of software licensing fees or the software purchase price to the manufacturers and vendors of the copyrighted software. This was accomplished through the use of two bulletin boards, one for uploading software and another (password protected) for the free downloading of the selected software.

The case was dismissed on December 29, 1994, and on January 27, 1995 the US Government decided not to appeal the dismissal. The dismissal decision led to the concept of the "LaMacchia Exemption" wherein it was implied that non-profit copyright infringing is not a crime. It is, however, already a civil offense -- as the SPA (Software Publishers Association) has proven.

The chronology of the case and links to the relevant documents are available on-line. A summary of the case is also available through the Ethics Center for Engineering and Science.

A photograph of David LaMacchia and his attorneys.

This precedent is now the subject of proposed "corrective" legislation.

Last updated 97/09/25
© J.A.N. Lee, 1997.