First, the current state of the law. Second, some reality checks.

The Current State of the Law: The Copyright Act of 1976 (17 U.S.C §101 et. seq.) generally makes it a Federal offense to reproduce any copyrighted material. A co py of a digital work may exist in either RAM or magnetic medium. It is legal for a software owner to make copies for their personal archival purposes. There is 3-year statute of limitations on any claim for copyright infringement (17 U.S.C. §507(b)). Cond uct occurring outside the US is not protected under the Copyright Act (which is why warez CD sellers are usually located abroad).


There are several types of liability:

(1) Direct infringement: imposed upon persons who actually make unauthorized copies of protected works. This would theoretically encompass both the uploader and downloader of protected materials, since each makes a n unauthorized copy (the uploader makes unauthorized copies on Usenet servers worldwide; the downloader makes an unauthorized copy on his computer). 17 U.S.C. §504 imposes strict liability for copyright infringement; that is to say that a defendant's inte nt or knowledge is not an element of infringement.

(2) Vicarious liability: imposed on persons who: 1) have the right and ability to supervise the infringing activity, and 2) stand to benefit financially from the infringement. Similar to direct infringement because knowledge not a requirement. Your Usenet news server sysops, for instance, might be found liable under this theory of liability.

(3) Contributory infringement: judge-made law - imposed only on persons who have actual knowledge of the infringement and induce, cause, or materially contribute to the activity. This might include your service provider, someone who posts a link to a warez site, or even your humble author for writing this FAQ. According to the Software Publisher’s Association the posting of cracks or serial numbers probably falls into this category.

(4) Authorization liability: this is a hazy doctrine where liability is imposed upon infringers for violating the publisher’s right to choose when and how their works are displayed.


Criminal Liability: There is a criminal cause of action for copyright infringement (16 U.S.C. §505 (a)). Where there is a finding of criminal liability, t he court may impose fines up to $100,000 and must order the destruction of "all implements, devices, or equipment" used to produce the infringing copies (17 U.S.C. §506(b)).


Criminal liability is only imposed for infringement that is: 1) willful (where the defendant exhibits reckless disregard for the possibility of infringement), and 2) for the purposes of commercial advantage or personal financial gain. The willfu lness element would presumably be clearly satisfied by posting materials to warez groups; it is hard to imagine more flagrant disregard for copyright. The "loophole" in criminal sanctions is that the infringer must achieve some financial gain. Posting to a warez group does not meet this requirement. 


In US v. LaMacchia (D.Mass 1994), a Federal court held that an MIT student who made hundreds of warez programs available online could not be held liable under the Copyright Act since he did not economically profit from his actions. The court hel d that simple devaluation of a copyright owner’s property is not covered under the Act. It is important to note, however, that in this case, LaMacchia did not actually upload the programs himself, which would be an act of direct infringement. I kno w of no case that has passed upon the criminal liability of the uploader, but the financial advantage requirement would presumably bar prosecution. It is also important to note that LaMacchia may have committed civil infringements (but see Netcom, below).


Civil Liability: Uploading a copyrighted work is almost certainly an act of direct infringement, as an unauthorized copy is created on news servers around the wo rld. Downloading a copyrighted work is also almost certainly an act of direct infringement, as an unauthorized copy is created on the downloader’s computer. 


Even if uploading were not found to be direct infringement, it would likely be considered contributory infringement, since the uploader has actual knowledge of the infringement and assists others in making unauthorized copies.


A successful plaintiff may choose either actual damages (including both the plaintiff’s losses and the infringer’s profits) or statutory damages, which can range from $500 to $20,000 per infringed copy, at the court’s discretion (17 U.S.C. §504(c)(1)). For cases involving willful infringement (a "reckless disregard" for the copyright owner’s rights), the court has discretion to award up to $100,000 (17 U.S.C. §504(c)(2).

Reality checks


The law is anything but settled in this area, especially as applied to cyberspace. Copyright violations are statutory and therefore judges theoretically must only call balls and strikes. However, judges are called upon to create the contours of statute s. An example of this is the creation of the doctrines of vicarious liability and contributory infringement. These concepts are mentioned nowhere in the Copyright Act. They were created by judges who believed that they were consistent with Congress’ inten t. Additionally, activist judges have been known to "legislate from the bench." Therefore, no conclusions can be drawn with 100% certainty, but certain guidelines have emerged.


Criminal Liability: Despite current rumors, it is unlikely that the FBI is monitoring the activities of the warez groups. Under the current state of the law, prosec ution simply isn’t feasible unless the poster financially gains. There is, however, a bill (S.1122) being offered by Senator Patrick Leahy (D-VT) that would remove the for-profit requirement from copyright infringement.

Even if Rep. Leahy’s bill were to go through, however, the Constitution bars any ex post facto laws, so only conduct from the point of enactment forward would be prosecutable.


Civil Liability: It is also unlikely that the software companies are monitoring activities in the warez groups. Even assuming a successful prosecution is possibl e, most publishers would not pursue a claim against a defendant without sufficient funds to pay an award (a "judgment-proof" defendant), or at least sufficient funds to cover attorney’s fees and court costs. There is always the chance, however, that Uncle Bill will make an example out of someone, despite the economic unviability of doing so.


As Stray Cat has repeatedly noted, he had posted the Agent key in his sig for years. Not only has he not been prosecuted, he hasn’t even been sent a "cease and desist" letter.


Conclusion: I am not an attorney. I am offering no legal advice. Were I to offer any legal advice, it would have to be – don’t post. However, the bottom line seems to be that posting warez free of charge is not currently criminally prosecutable. Additionally, the realities of the modern legal system make it highly unlikely that a warez poster will be civilly prosecuted unless that person has sufficient assets to pay a judgment (or at least the costs of bringing the claim). 

It is important that you recognize, however, that there is always a chance that you may be prosecuted, and as outlined above, the penalties can be severe. Likewise, cases have consistently ruled that the mere possession (not actual use) of a cop y of a protected work constitutes infringement.