For the first time, a Chinese court has sentenced two Americans to prison time for DVD piracy.


BEIJING (The Hollywood Reporter) -- For the first time, a Chinese court has sentenced two Americans to prison time for DVD piracy.

A Shanghai court on April 19 ordered Randolph Hobson Guthrie III and Abram Cody Thrush, to serve up to 2-1/2 years for selling pirated DVDs online.

The sentencing of the two Americans and Chinese co-defendants Wu Dong and Wu Shibiao included fines totaling $66,500. The case was the result of an unprecedented three-year cooperation between Chinese police and U.S. customs officials.

The four co-defendants were convicted of using the Internet to sell more than 180,000 counterfeit DVDs to buyers in 25 countries. Officials said about 20,000 of the DVDs were sold to buyers in the United States.

China's State Office of Intellectual Property Rights Protection has previously hailed the case as one of the top intellectual property rights cases of the past year.

"It's good to see Chinese courts handing out strong sentences for intellectual property rights violations," said Michael Ellis, the Motion Picture Assn.'s Asia-Pacific director.

"The conviction and sentencing of Randolph Guthrie III and Abram Thrush send a clear message to movie pirates across the globe: You can click, but you cannot hide," said Motion Picture Assn. of America president/CEO Dan Glickman.

Guthrie already has served 10 months in jail since his arrest in July at his Shanghai apartment-turned-warehouse.

If Guthrie, a 38-year-old native of New York, serves his entire sentence, he will be released in January 2007 and then be deported from China, said defense attorney Zhai Jian, who served as Guthrie's attorney, in an interview. In addition, Guthrie was fined 500,000 yuan ($60,500).

Shanghai No. 2 District Court Judge Xue Zheng convicted Guthrie of violating Article 218 of the Chinese criminal code.

The judge dismissed a more serious charge of operating an illegal business in violation of Article 225 of the criminal code, Zhai said. That charge could have brought Guthrie up to 15 years in prison, said U.S. and Chinese lawyers following the case.

The violation for which Guthrie was convicted carries a maximum jail sentence of three years for illicit gains of more than 100,000 yuan ($12,000) from the sale of movies, videos, software and books without the permission of the copyright holder.

"I think Guthrie will not appeal to a higher court because, in my opinion, the charge is acceptable," Zhai said, adding that he had not seen his client since the sentencing April 19 but planned to visit with him in the coming week. "I have no idea whether my client will choose to appeal."

Some lawyers monitoring the case said Guthrie's sentence was light considering the amount of money reportedly involved. According to a Wall Street Journal report last month citing documents submitted to the court from a Chinese accounting firm, the amount was $244,386.

This amount approaches the 2.5 million yuan ($300,000) threshold that could have brought a sentence of between three and seven years, according to sentencing guidelines issued by China's Supreme People's Court in December.

Prosecutors said they seized 119,000 pirated DVDs in July in Guthrie's apartment and a warehouse rented by Wu Shibiao.

Authorities in both nations are increasing efforts to crack down on rampant counterfeiting, a crime that the MPAA estimates costs Hollywood up to $3.5 billion a year in losses worldwide.

The other American, Thrush, was sentenced to one year in prison and fined 10,000 yuan ($1,200), Zhai said. Two Chinese employees of Guthrie's also were sentenced for aiding Guthrie's business, Zhai said.

Wu Dong was ordered to pay a fine of 30,000 yuan ($3,600), and Wu Shibiao was ordered to serve 15 months in jail and pay a fine of 10,000 yuan ($1,200).

"The sentence of the Chinese who rented the space to the criminals is strong," said Dede Nickerson Huang, a Beijing-based veteran of the film industry in China. "China receives a lot of pressure to eradicate piracy, and such a bold sentence makes a statement to both foreigners and Chinese that piracy is against the law. A large portion of the pirated-goods consumer base in China is Americans living abroad or traveling in China. We cannot be both critic and consumer."

Last year, China seized 35 million counterfeit DVDs, nearly twice the number confiscated the previous year.

Michael Garcia of the U.S. Department of Homeland Security, the agency responsible for the customs investigation, said in a statement, "This landmark case will serve as a road map for future intellectual property rights investigations," the Associated Press reported.