Redrafting the INDUCE ACT (IICA)

I think Senator Hatch and Mr. Bainwol will be happy with this modification:

(g)(4) In this subsection, the term `whoever' means commercial file sharing networks, darknets and p2p applications, but is not meant to include email, instant messaging, search engines, web browsers, and broadband techology.
(g)(5) The intent of this act is to codify the Betamax ruling and pre-emptively over-rule the Grokster, Morpheus decision.

Andrew Greenberg and the IEEE offer this Proposed Substitute to S. 2560 [pdf]:

Section 501 of title 17, United States Code, is amended by adding at the end the following:

(g)(1) Inducement of Infringement. Whoever actively and knowingly induces infringement of a copyrighted work by another with the specific and actual intent to cause the infringing acts shall be liable as an infringer.
(2) Contribution to an Infringement. Whoever knowingly and materially contributes to the infringement of a copyrighted work by another shall be liable as an infringer.
(3) Vicarious Infringement. Whoever has the right and ability to supervise an activity resulting in a direct infringement and has a direct financial interest in such activity and infringement shall be liable as an infringer.
(4) Limitations on Secondary Liability.

(A) manufacture, distribution, marketing, operation, sale, servicing, or other use of embodiments of an otherwise lawful technology by lawful means, with or without the knowledge that an unaffiliated third party will infringe, cannot constitute inducement of infringement under Subsection g(1) in the absence of any additional active steps taken to encourage direct infringement.
(B) manufacture, distribution, marketing, operation, sale, servicing or other use of embodiments of an otherwise lawful technology capable of a substantial noninfringing use cannot constitute contribution to an infringement under Subsection (g)(2) or vicarious infringement under Subsection (g)(3).

(5) Damages for violations of section (g)(1) of this section shall be limited to an injunction against inducement, and actual damages for infringement of a work for which the defendant had specific and actual knowledge the work would be infringed.

See also: Ernest Miller's Draft Substitute for the INDUCE Act (IICA) v2.0