Appeal Waiver Did Not Preclude Of Resitution Order; Reversed Because Microsoft Suffered No Real Loss

U.S. v. Hudson, --- F.3d ----, 2007 WL 1128895(10th Cir. April 17, 2007)

D, who plead guilty under an appeal waiver agreement, to infringing a Microsoft copyright, appealed the $322,000 restitution order, on ground that Microsoft suffered no loss. (D sold multiple counterfeit programs to one buyer, well below retail price, who detected the fraud, refused to pay, and contacted Microsoft. The buyer was not out of pocket, and Microsoft never lost a product nor was there proof of loss of sales. Loss was calculated as the same number of copies of the real deal at retail price).

The 10th first determined that D did not waive his right to appeal a district court’s violation of the restitution statute.

On the merits, the 10th notes that restitution must be based on actual loss. There was no evidence of loss of a theoretical sale by Microsoft to the buyer. Reversal of restitution.