August 24, 2004 9:15 AM PDT

Industry offers alternative to P2P bill

ASPEN, Colo.--Electronics manufacturers and some Internet providers are mounting a counterattack to a copyright bill intended to ban peer-to-peer networks and that could also imperil devices like Apple Computer's iPod.

That measure, called the Induce Act, has been widely panned by the technology industry. Now some groups, including SBC Communications, Verizon Communications and the Consumer Electronics Association (CEA), are fighting back with their own proposal that will be sent to Capitol Hill on Tuesday afternoon.

Their proposal, dubbed the "Don't Induce Act," is designed to provide the Senate with an alternative that's less threatening to the industry. It is far narrower, saying that only someone who distributes a commercial computer program "specifically designed" for widescale piracy on digital networks could be held liable for copyright violations. Hardware like the iPod and other music players would not be targeted.

In an interview, Michael Petricone, a CEA vice president, said Senate Judiciary Chairman Orrin Hatch told the technology industry to "give us something that reflects your concerns."

"We came back and tried to do what Hatch asked us to do," Petricone said. Hatch, a Utah Republican, is the primary Senate proponent of the original Induce Act, which also enjoys support from top Democrats.

The Induce Act was debated at a Judiciary Committee hearing in July, but the panel has not yet voted on it.

Others involved in the drafting of the Don't Induce Act include the American Library Association, the Computer and Communications Industry Association (CCIA), DigitalConsumer.org, the Home Recording Rights Coalition and Public Knowledge, Petricone said.

CCIA President Ed Black said his organization, whose membership includes Covad Communications Group, Nortel Networks and Verizon, does not actually endorse the new proposal, even though the group helped draft it. Black called the Don't Induce Act a "good framework to approach these issues" that could serve as a starting point for negotiation.

The recording and movie industries, which strongly back the Induce Act, were lukewarm in their reception to the new, completely rewritten version of the bill.

Fritz Attaway, vice president for the Motion Picture Association of America, said the Don't Induce Act was so narrowly drafted, it would be impossible to use it to shutter even operators of peer-to-peer networks. "There is no way that anyone could ever meet the burden of proof that this establishes," Attaway said. "It's spin. (They're) not being honest here."

Mitch Glazier, a vice president at the Recording Industry Association of America, also offered some criticism.

"I don't think this, as written, is a reasonable proposal," he said. "I don't think that, as written, anyone could be found liable...But I'm glad that people are trying to draw the line between the good guys and the bad guys."

A court ruling last week gave the entertainment industry additional incentive to push hard this year for legislation designed to pull the plug on file-swapping networks.

The 9th Circuit Court of Appeals in Los Angeles ruled that Grokster and StreamCast Networks were not liable for any copyright infringement committed by people using their products, as long as they had no direct ability to stop the acts. "The Supreme Court has admonished us to leave such matters to Congress," the judges wrote.

The Don't Induce Act also could encounter criticism from some Silicon Valley companies that would prefer the status quo. Many of those companies in the past have said they prefer laws that are technology-neutral rather than ones that single out distributors of certain types of computer programs and make them liable for criminal and civil copyright violations.

"The rush to push something through very quickly (could result in a law) with unintended consequences and collateral damage that harms innovation," said Laura Ipsen, Cisco Systems' vice president for worldwide government affairs. "There's no clear pathway to legislation anytime soon."

The Don't Induce Act describes three requirements that would have to be met before a software distributor could be found liable: The "predominant" use of the program would have to be the mass, indiscriminate infringing redistribution of copyrighted works; the "commercial viability of the computer program" would have to be dependent on revenue derived from piracy; and the software distributor would have to have "undertaken conscious, recurring, persistent and deliberate acts" to encourage copyright infringement.

The proposal would also indemnify venture capital firms, payment services, financial services, Internet service providers, librarians and e-mail utilities. If the measure becomes law, anyone filing a "baseless lawsuit" under the Don't Induce Act could be heavily sanctioned with damages that are triple what would normally be levied.

Because the measure would only apply only to "commercial" activities, the proposal would not target free or open-source P2P clients.

4 comments

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How about...
How about we leave the laws as they are and let the copyright owners do what they are supposed to do and that is file suite on their own. We have enough half ass laws now that don't do a damb thing. We don't need the government @#$% around in this. There is nothing stopping the copyright owners from exersizing their rights to go after violators. The recording industry and hollywood and the computer industry simply don't want to have to work for it. If the government wastes our tax dollars doing this that leaves more profit for the big businesses.

Robert
Posted by (336 comments )
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Leave the law as it is
I disagrre: Filing lawsuits are impractical. As an example, many songs were factually stolen from by music publishers and the judge sided with the thieves (story here: <a class="jive-link-external" href="http://www.gvenegas.com" target="_newWindow">http://www.gvenegas.com</a>).

On the other hand, this inducement thing is ridiculous. It will only make copyright infringement worse by making the mockery of the law worse than it is.

The solution is too simple to be seen by anyone with anyone with an economic interest. Too simple for lawyers to see (thet have an economic interest).

The solution is to make art an art and not a buisiness. Leave the artists as owners of their art. Then art will flourish. Is that not the stated intention of the copyright laws?
Posted by (5 comments )
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Why not do like Canada...
Why don't the congress or senate do what the Canadian government has done. Just add a special tax on all media support and have all amounts transferred to a government body responsible for copyrights. Its simple and to the point.

I don't believe that any bill or law will stop the P2P phenomena, if curtailed in the U.S.A what about the rest of the planet, will U.S. residents be prevented from going on the web all together???? Because thats the only way your going to stop P2P in the States..

Theres no way that anybody can stop file sharing, laws or no laws and if American legislators cant see this, well sorry folks, theyre really dumb.

Jean Jacques Duguay
Posted by (1 comment )
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good idea but....
Good idea Jack but what about the people who don't file share? There is surprisingly a large number of internet users who simply don't download. In my opinion, they are unfairly charged in Canada.

I think the media owners should stop accusing the government and the individual users for their inability to come to terms with technology. They have to get their act together and come up with an equitable and intelligent system and stop blaming others! A system where customers are able to easily manipulate media files and get them at a fair price.

There's a really interesting study that came out of Harvard which concludes that file sharing doesn't actually hurt the industry. Have a read: <a class="jive-link-external" href="http://hbswk.hbs.edu/item.jhtml?id=4206&#38;t=innovation" target="_newWindow">http://hbswk.hbs.edu/item.jhtml?id=4206&#38;t=innovation</a>
Posted by koochoo (1 comment )
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