[opendtv] News: The Induce Act

Here we go again...

I have been told by friends in Washington that this legislation may 
be the biggest attack on fair use to date. Some say that this 
legislation could make products like Apple's iPOD illegal...

Regards
Craig


September 30, 2004

Panel Considers Copyright Bill
By TOM ZELLER Jr.


Just over a year ago, the recording industry unleashed its first 
barrage of lawsuits against people who share music online - a move 
that appeared to curtail illegal file swapping briefly. But in the 
months since, activity on file-sharing networks has recovered and 
grown, prompting the music and movie industries to try legislating 
the file-sharing beast into submission.

  The Senate Judiciary Committee is now considering a bill that stands 
at the center of the file-sharing debate - the Induce Act, or the 
Inducing Infringement of Copyrights Act of 2004. It joins a torrent 
of other bills introduced in Congress and in state legislatures to 
address piracy of copyrighted materials. Negotiations on the bill's 
language are expected to continue today. A vote could come as early 
as next week.

Last week, Gov. Arnold Schwarzenegger of California signed a bill 
that would charge file swappers in the state with a misdemeanor if 
they fail to include a valid e-mail address with the files they 
trade. On Tuesday, the United States House of Representatives passed 
the Piracy Deterrence and Education Act, which would provide stiff 
penalties for copyright violators, including up to three years in 
prison. A similar measure passed the Senate in June.

  Unlike other bills, however, the Induce Act is aimed at the makers 
of peer-to-peer file-sharing software, rather than at those who use 
it. Supporters of the bill say it is needed to curb abuses of 
intellectual property rights. Opponents contend that its broad 
language will stifle innovation.

The fight has brought together some unusual alliances. The American 
Conservative Union, for example, has joined with advocacy groups, 
like Public Knowledge and the Electronic Frontier Foundation, to 
challenge the Induce Act. The group has begun running ads, citing 
what it sees as a potential tsunami of lawsuits that would follow 
should it be signed into law. "Compromising property rights and 
encouraging predatory, costly litigation is not a conservative 
position," the ads say.

  In a letter sent to the Senate this month, the National Taxpayers 
Union called the Induce Act "the legislative equivalent of trying to 
rid a house of termites by burning it to the ground." And the 
Heritage Foundation, a conservative group, produced its own study of 
peer-to-peer file sharing last month, concluding in part that this 
kind of legislation might well threaten "a huge range of legitimate 
activities."

Months of haggling have yielded alternate drafts, yet little in the 
way of middle ground. Still, critics and supporters appear to agree 
on at least one point: regardless of whether this particular version 
of the bill is passed, distributors of file-swapping software like 
Kazaa may not be able to escape legislation for long.

  Whether this or any law can ultimately stymie illegal peer-to-peer 
networking, however, remains an open question. After all, at any 
given moment, roughly seven million people are exchanging digital 
content on peer-to-peer networks, according to industry trackers. 
Much of it is pornography, most of it is music, and nearly all of it 
is illegally shared.

  At its heart, the Induce Act is the music and film industries' 
response to a court victory won by two peer-to-peer software 
companies, StreamCast Networks, the maker of Morpheus software, and 
Grokster. A federal appeals court in August upheld the notion that a 
technology capable of legal uses cannot be held liable simply because 
some - or even most - of its users deploy it to violate a copyright. 
That decision relied heavily on the principles of a 1984 Supreme 
Court decision popularly known as the  Sony-Betamax case, which gave 
makers of electronic devices crucial legal protection against claims 
of copyright infringement.

  The Induce Act, said Markham Erickson, the director of federal 
policy for NetCoalition, an Internet policy watchdog group, "would 
make Sony-Betamax irrelevant."

The language of the bill would hold liable anyone who "intentionally 
aids, abets, induces or procures" copyright infringement. The bill 
was introduced by Senator Orrin G. Hatch, Republican of Utah, and is 
supported by a bipartisan coalition of 10 senators, including 
Democrats like Patrick J. Leahy of Vermont, Hillary Rodham Clinton of 
New York and Barbara Boxer of California, as well as Republicans like 
Bill Frist of Tennessee and Lindsey O. Graham of South Carolina.

  Supporters contend that in the absence of tough legislation, 
commercial enterprises like Kazaa and Grokster will continue to reap 
profits from rampant illegal behavior on the peer-to-peer networks.

  "Music, movies, books and software contribute well over half a 
trillion dollars to the U.S. economy each year, and support 4.7 
million workers," Senator Frist said in remarks supporting the bill's 
introduction in June. "When our copyright laws are blatantly ignored 
or threatened, an enormous sector of our economy and creative culture 
is threatened."

Mitch Bainwol, Senator Frist's former chief of staff and now chairman 
of the Recording Industry Association of America, which is leading 
the charge on the Induce Act and the thousands of lawsuits that have 
been filed against individual users, puts it more plainly.

  "Napster was shut down because it had a centralized server," he 
said, referring to the father of peer-to-peer file sharing that was 
forced to shut down in 2001, and later reopened as a pay service. 
Soon after Napster's initial collapse came the decentralized 
peer-to-peer networks that are now at the center of the debate. 
"These decentralized systems exploit a loophole. They make money on 
advertising and their business model is based on theft."

While that may be true, opponents of the Induce Act say that the 
bill's language is so sweeping that many other technologies may be in 
danger of being caught in its grasp. They argue that innovations as 
common as the VCR - or  Xerox machines or the iPod - would never have 
come about if their inventors had toiled under the threat that some 
users might misuse the technology.

  "This is not just closing loopholes," said Susan Crawford, a 
professor of Internet law at the Cardozo School of Law in New York. 
"They're creating nooses."

  That concern has generated a frenzy of activity among trade groups 
and Internet advocates on one side, and the recording industry and 
their supporters in Congress on the other. Several drafts of the bill 
were generated and discussed by the groups, including versions from 
the federal copyright office, which has supported the bill, and the 
Consumer Electronics Association, a trade group that sought to codify 
the principles of the Sony-Betamax decision and minimize the bill's 
repercussions by focusing the language squarely on peer-to-peer 
technologies.

  While supporters of the bill have characterized the negotiations and 
language-tweaking over the last several months as free and open, 
opponents say the process has done little to address their concerns.

  "We said, 'If you're going after the peer-to-peer networks, then you 
define it that way,' " said Gary Shapiro, president of the Consumer 
Electronics Association. "So we gave them a piece of legislation and 
it was totally ignored."

"We're intensely paranoid about this," he added.

  Other opponents point out that peer-to-peer technology is not 
something that can be successfully constrained by new laws. A company 
can be prevented from making commercial gains with a product that 
uses peer-to-peer networking, but how would a law stop the tinkerers 
and programmers who know how to create peer-to-peer software and 
willingly share their innovations on the Internet?

  "You might as well ask yourself, 'Why couldn't the World Wide Web 
ever just go away?' " said Adam Toll, a co-founder of BigChampagne, a 
company that tracks peer-to-peer usage. "It would take a totalitarian 
concentration of resources to make such a thing happen, and you'd 
have to take away the thinking that resides in millions of brains 
around the world."

  Eric Garland, the chief executive of BigChampagne, predicts this 
battle will be a blip in the evolution of the music and film 
industries. "This is really not so different from what happened with 
radio over 70 years ago," he said.

  The current legislative and legal battles, Mr. Garland said, are 
merely the desperate attempts by the content industries to hold on to 
an old business model that affords them a remarkable amount of 
control over how and when their products are consumed. Once they 
accept the new paradigm, "these types of technologies are eventually 
going to make people in the creative chain a lot of money," Mr. 
Garland said.

  Perhaps so, but Mr. Bainwol of the recording industry suggests that 
the illegal file sharers need to be dealt with first. "There's no way 
to have a vibrant peer-to-peer market place so long as you have a 
rampant illegal market place," he said.

  Copyright 2004 The New York Times Company
 
 
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