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Meet the New Draft, Same as the Old Draft
Posted Oct 5, 2004 Print Version     Page 1of 1

The U.S. Copyright Office's introduction of a "discussion draft" that would narrow the scope of the controversial Inducing Infringement of Copyright Act has done little to quell fears that the legislation would deliver a massive blow to technological innovation. The Induce Act, as its more commonly known, would hold technology companies liable for making products that encourage consumers to violate copyright laws. Companies would be held responsible for each act of copyright violation with their technology and face penalties of up to $30,000 per infringement and $150,000 per instance of willful infringement.

The bill would give copyright holders virtual veto power over any technological development that could be used to distribute copyrighted material. In its original form, the language was so broad as to apply potentially to anyone who even goes so far as to make liable anyone who even advocates any technology or activity that might violate copyright law, according to Nashville-based entertainment attorney Fred Wilhelms. (See Wilhelms' commentary on the Induce act.) The original act, introduced by Senators Orrin Hatch and Patrick Leahy, was so broad that many worried it might cover gadgets like MP3 players, which could be argued "encourage" consumers to download songs illegally.

Mary Beth Peters, the U.S. Register of Copyrights, testified on behalf of the original bill in May. After public opposition to the bill—from groups such as the Consumer Electronics Association, the Electronic Frontier Foundation, and an alliance of technology companies including MCI, Verizon Communications, and SBC Communications—was reported in trade publications and newspapers, the Copyright Office introduced its discussion draft on September 2. The draft suggested alternative language defines violators as those who commit "affirmative, overt acts that are reasonably expected to cause or persuade another person or persons to commit any infringement." Those "overt acts" include distributing technology that "automatically causes the user of the technology to infringe copyrighted works," "actively interfering with copyright holders' efforts to detect infringing uses," or "distributing a dissemination technology as part of an enterprise that substantially relies on the infringing acts of others for its commercial viability."

Clearly targeted at peer-to-peer networks like Grokster and Morpheus—recently declared legal by a federal appeals court—both the original bill and the discussion draft have drawn fire from those who claim that, even with the new language, the legislation would contradict the U.S. Supreme Court's 1984 Betamax decision, which ruled that a technology was legal if it presented substantial noninfringing uses. The discussion draft even uses that language, offering an exemption for technologies with substantial noninfringing uses, "so long as that technology is not designed to be used for infringing purposes."

"That's a real stinger that guts the Betamax decision," Wilhelms says. "If this language appears in the final bill, it will still be legal to produce VCRs, but it very well may be infringement to produce VCRs that include a jack for input from your TV. Under the same reasoning, the TV with the output jack would be equally at risk." In essence, Wilhelms says, the Copyright Office's draft would have the same end result.

Internet service providers like Verizon quickly objected to the Copyright Office's alternative. "Let's say the recording industry wants the names of our subscribers," said Verizon vice president and associate general counsel Sarah Deutsch in an interview with "Is objecting to the request interfering with the efforts to detect infringing uses? It seems to be." With the support of 17 companies including Verizon, the Home Recording Rights Coalition proposed an alternative in late August that amended the Induce Act's language to cover only technology "specifically designed to cause or enable infringement." The Recording Industry Association of America objected to the revision, claiming that it wouldn't cover peer-to-peer networks.

In September, a group called Downhill Battle—which advocates a loosening of copyright restrictions on everything from sampling to filesharing—created a "Save Betamax" ( Web site to lobby consumers to contact their legislators and express opposition to the Induce Act in any of its proposed forms. According to the Web site, more than 5,000 people signed up.

The real threat of the Induce Act is that it would have a chilling effect on investment in and R&D for new technology, Wilhelms says. "The whole Induce bill--and the discussion draft--only make sense if you believe that we have reached the end of technological advancement in the way we share information; that email and P2P are at the end of a trail that began with the cave paintings in Lasceaux. If you don't believe that, then giving anyone who has an interest in maintaining the present scheme of things the power to control what comes next is counterintuitive."

The Induce Act (SB2560) is currently under review by the Senate Judiciary Committee.

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