Monday, September 27, 2004

The Register on the new IICA draft

The Register weighs in.

Clouds of ambiguity hover over Senate Bill S.2560, known as the "Induce Act", despite the latest tweaks. The Bill (Inducing Infringement of Copyrights Act of 2004, to give its full title) adds the same liabilities for copyright infringement to anyone who "intentionally induces", via a product or service, acts of copyright infringement.
"It nullifies the 1984 Betamax decision, the fundamental Supreme Court decision that helped to create new choices and experiences for consumers, and will create a litigation nightmare," said [] president Gigi Sohn in a press release.

"If the Copyright Act had read this way in 1975, it is highly unlikely that any home recording or email products would have come to market..."

This is an intereseting tidbit I've never heard before:

One of the bill's co-sponsors, Senator Hatch, once advocated introducing compulsory licenses (aka "Flat Fees") to bring sense to the record industry and raise money for songwriters from file trading. After being wooed by the Recording Industry Ass. of America, Hatch changed his mind.

Read the rest - The Register: Induce Act tweaks fail to stem concerns

WIRED on the new INDUCE Act draft

IICA is still overbroad. It's still written to overturn the Betamax doctrine.

CD burners, jukebox programs and Wi-Fi routers are just a few of the technologies that could be threatened under a new version of the Induce Act, critics say. Like the first version of the controversial bill -- which is championed by the music and movie industries -- the latest language says that a company that intentionally induces a person to infringe copyright is liable.
"Any technology that allows dissemination is still completely threatened by this bill," said Jason Schultz, an attorney with the Electronic Frontier Foundation. "Even if you have nothing in your business model that has anything to do with infringement, you can still be held liable for all of your users who do infringe."

Go read the rest. WIRED: New Induce Act Alarms Foes

Friday, September 24, 2004

Staff Draft of INDUCE 2.0

Ernest Miller has posted a copy of the Staff Draft S. 2560 - Inducing Infringement of Copyrights Act of 2004 [PDF].

Also, check out his new IT Conversations audio program on the many alternatives to the Induce Act.

Wednesday, September 22, 2004

American Conservative Union's Anti-INDUCE-Act Ad

Xeni Jardin: "An ad from the, ah, very right-wing American Conservative Union protesting the INDUCE Act. The ACU calls out Republicans for kowtowing to Hollywood against their principles. Ad ran in the Washington Times, Wall Street Journal and Weekly Standard. Link"

see also c-net.

Tuesday, September 21, 2004

Pro-Induce Alert sent to Grammy Members

Donna (copyfight) just notified us that "the National Arts and Recording Academy -- e.g., the group behind The Grammys -- has created its own pro-Induce action alert" to 20,000 members of the Recording Academy.

Donna also asks "that if you're reading this and haven't yet visited the EFF action center to tell Congress you oppose the Induce Act, now is the time to do it." Please do.

Donna, any chance we'll get to see that email list?

Monday, September 20, 2004

Induce Act in the News

Induce Act on the Move Copyfight... "We've got two weeks to weigh the merits of a bill that would reverse the doctrine that brought us twenty years of technological innovation?"

TECH groups push for R&D credit, Internet tax ban IT World - USA... Induce Act sponsor Senator Orrin Hatch, a Utah Republican, has pushed the bill as a way for entertainment companies to collect damages for unauthorized file ...

ORGS fight antipiracy bill Variety (subscription) - USA... calendar, technology companies and public-interest groups are desperately fighting any motion on the sweeping antipiracy bill known as the Induce Act. ...

NBA owner Cuban calls Sen. Hatch 'slimy' Provo Daily Herald - Provo,UT,USA... The senator is pushing the so-called "Induce Act," which would crack down on illegal downloading of copyrighted material by holding businesses liable for ...

Friday, September 17, 2004

Strengthening Copyrights Will Damage Innovation

Jack Phelps says that Congress should be keeping its hands off and letting the market figure out how to make a profit off what is truly some of the most enabling technology in years -- P2P. [Babson Free Press]

WIRED reports on the letter to Congress

Here is an article in WIRED on the coalition requesting that Congress rethink the revised Induce Act:

Over 40 technology companies and consumer rights advocates sent a letter to Sens. Orrin Hatch and Patrick Leahy on Friday urging them to hold public hearings on the Induce Act, in hopes that Congress won't act hastily in passing a law that would have huge effects on the tech industries.
The groups believe the copyright recommendations would "create an unprecedented new form of liability of uncertain, but potentially unlimited, reach." They argue that the committee must hold more hearings to consider all proposals...
"Before any approach becomes law, it should, at minimum, be subjected to careful scrutiny in a public hearing at which novel elements in these approaches can be compared, and discussed to their full implications," the letter reads. "The process thus far has been constructive, but has not resulted in either the consensus of the confidence in a legislative framework that ought to underlie a major and consequential revision to the Copyright Act."

The letter is signed by Intel, Google, Sun Microsystems, Yahoo, EarthLink, Verizon, the Institute of Electrical and Electronics Engineers (IEEE-USA) and the Electronic Frontier Foundation, among others.
We all had plenty of time to think about the wording of the first version of IICA. There's no reason to rush this revision through Congress without giving it and alternative versions more consideration. Only the RIAA, MPAA, and the Copyright Office seem to be in such a rush. Hopefully Congress will not be rash. The new revision of the Induce Act is really not much better than the original.

One wants to believe that Congress would not act on something so important and potentially threatening to the US tech industry without some investigation of the bill, getting the facts, and hearing expert opinions.

There's no hurry Orrin, the RIAA will still be pushing for the bill next month as well. Let's take the time to get this one right.

Broad Coalition of Organizations Calls for More IICA Hearings

Ernest Miller reports that a broad collection of technology companies, civil liberties groups and other organizations have just released a letter calling for further hearings on the Inducing Infringement of Copyrights Act of 2004 before the bill enters markup.

You can read the letter here.

Thursday, September 16, 2004

INDUCErs: P2P Applications

EarthLink SIPshare, a simple, SIP-based proof-of-concept content sharing application, demonstrates the viability of SIP as a protocol over which peer-to-peer (P2P) applications other than the well-known voice and video cases may be implemented.

Percolation Search in Power Law Networks: Making Unstructured Peer-To-Peer Networks Scalable [pdf] [via]
Some researchers from UCLA have created a search algorithm that uses local rules to find content in ad-hoc networks. They have proved it can find any content in a P2P network of size N in time proportional to O(logN).

Bainwol Beaten

Stephen M. Nipper has an extremely interesting post for Induce Addicts.

Apparently, Altnet, who Stephen previously reported was suing the RIAA for patent infringement, has discovered that they are also suing IICA supporter Mitch Bainwol (prior posts here, here and here) and other cartel mambers (Marc Morgenstern, Hilary Rosen and Cary Sherman) for inducing infringement of their patent.

See Altnet v. RIAA patent infringement complaint.

Monday, September 13, 2004

Wired on the new IICA proposal

Wired News: Copyright Proposal Induces Worry

"The copyright office is now suggesting the exploration of a new and radically unprecedented approach to copyright law," said Bob Schwartz, counsel for the Consumer Electronics Association and the Home Recording Rights Coalition. "It would not require that a defendant in a copyright suit have any knowledge of infringing conduct, any relationship with a particular infringer or any intent to commit a violation of the law."

Friday, September 10, 2004

Recommended Statutory Language and Explanatory Memo

Recommended Statutory Language

Section 501 of title 17, United States Code, is amended by adding at the end the following:
(g)(1) Inducement of Infringement – Whoever manufactures, offers to the public, provides, or otherwise traffics in any product or service, such as a computer program, technology, device or component, that is a cause of individuals engaging in infringing public dissemination of copyrighted works shall be liable as an infringer where such activity:
(A) relies on infringing public dissemination for its commercial viability;
(B) derives a predominant portion of its revenues from infringing public dissemination; or
(C) principally relies on infringing public dissemination to attract individuals to the product or service.
(2) For the purposes of this subsection, “public dissemination” means digital transmission to the public of copies or phonorecords or any other exercise of any of the rights set forth in sections 106(3), 106(4), 106(5) or 106(6).
(3) Limitations on Remedies – (A) No award of statutory damages under Section 504(c) shall be made for a violation of this subsection unless the copyright owner sustains the burden of proving, and the court finds, that such violation was committed willfully. (B) In granting injunctive relief under Section 502 for a violation of this subsection, the court shall, to the extent practicable, limit the scope of the injunctive relief so as not to prevent or restrain noninfringing uses of the product or service.
(4) Nothing in this subsection shall enlarge or diminish the doctrines of vicarious liability and contributory infringement, including any defenses thereto or any limitations on rights or remedies for infringement. Nothing in this subsection shall enlarge or diminish liability for infringement of the exclusive rights in sections 106(1) or 106(2).

Explanatory Memorandum


In developing this recommendation, the Copyright Office reviewed comments from and engaged in constructive discussions with a wide variety of interested parties, including American Federation of Television and Radio Artists, Association of American Publishers, Broadcast Music, Inc., Business Software Alliance, Center for Democracy & Technology, Consumer Electronics Association, Corbis, Digital Future Coalition, Digital Media Association, Distributed Computing Industry Association, Entertainment Software Association, Future of Music Coalition, IBM, IEEE, Information Technology Association of America, Internet Commerce Coalition, Motion Picture Association of America, NetCoalition, Public Knowledge, Recording Artists Coalition, Recording Industry Association of America, Software and Information Industry Association, Sun Microsystems, Verizon, and the Video Software Dealers Association. Senate Judiciary staff met with several groups individually to discuss the bill and examine proposed changes, and they shared the results of those meeting with us. We reviewed the thoughtful proposals for statutory language submitted by IEEE, NetCoalition, Consumer Electronics Association and the Business Software Alliance.
After the individual meetings held by Committee staff, Jule L. Sigall, Associate Register for Policy & International Affairs, moderated a group meeting in late August with interested parties identified by the staff. At this meeting, the various alternatives and ideas contained in the proposals were discussed with the parties in a constructive dialogue. Based on that discussion and the written proposals, the Copyright Office circulated a discussion draft to the parties that was intended to reflect the ideas discussed in the meeting in more concrete terms. We made clear that this discussion draft was not a draft of the Office’s recommendation; rather, it was designed to provoke comment and feedback on the many different concepts put forth in the various proposals so that the Office could be fully informed on the parties’ views on all aspects of this issue.
We received written comments from nearly all of the interested parties on the discussion draft, and held a meeting on September 7 to discuss those comments with the parties. Several groups who commented on the discussion draft but were not originally identified by Committee staff as participants requested to and did participate in that meeting. In all cases, these meetings and discussions were highly constructive, with the parties considering the issues forthrightly and providing thoughtful feedback and information on the many different issues involved.

Description of Recommendation

This recommendation reflects an effort to meet the goals expressed for this legislation by the cosponsors of S. 2560 at the July 22 hearing and in their August 13 letter. First, the bill should be technology-neutral, and should not impose liability based on the use of any particular technology but on the circumstances in which that technology is used. Second, it should provide an effective cause of action against those services who today are establishing massive networks of copyright infringement through the use of peer-to-peer technology, but be flexible enough to accommodate new, unforeseen situations in the future. Third, the bill should not chill innovation by unnecessarily creating the threat of liability for developers and distributors of technology who are not engaged in encouraging and profiting from copyright infringement. Fourth, the bill should also preserve the decision by the Supreme Court in Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417 (1984), often referred to as the Betamax case. We have strived to meet all of these goals in our recommendation, despite the great difficulty that exists in reconciling these important and sometimes conflicting issues.
In light of the variety of conflicting proposals put forth by the parties and the many issues involved, it was not possible to achieve consensus for this recommendation in the time we had. What we have attempted to do is recommend an approach that accommodates the legitimate concerns of all the parties, and therefore we believe it presents the best chance to serve as basis for developing consensus for this legislation.
Our effort to develop consensus proposals began with the text of S. 2560, and we engaged in a discussion with the interested parties of additional language that would clarify the scope of the bill and assuage concerns of technology companies and others about its application. The bill as introduced reflects a “behavior-based” approach, which has the decided advantage of focusing not on the technology involved but on the defendant’s actions. NetCoalition and IEEE offered alternatives that would codify all secondary liability doctrines, including a form of inducement liability. Another approach was offered by Consumer Electronics Association, which would create liability for a narrow class of activity of distributing a computer program specifically designed to encourage mass, indiscriminate infringing distribution. The Business Software Alliance proposed changes to S. 2560 that it asserted would make the bill more specific and give more comfort to technology companies about the scope of liability under the bill. Our discussion draft attempted to capture as many of the concepts in these proposals as possible so that we could hear the parties’ views on them before making our recommendation.
A concern raised by technology companies about the behavior-based approach was that it did not provide enough guidance on what activity was subject to liability and what was not. Also, it was claimed that an approach that focused on intent would likely not be susceptible to summary adjudication, but would require expensive jury trials for resolution of the liability question. To address these concerns, some parties offered the CEA proposal as an alternative, claiming that it offered more objectivity and a clearer standard of liability, even though it, by its terms, contains elements of intent and behavior, and an element examining the design of technology.
Our discussion draft provoked many comments, and parties on both sides had concerns about many of the provisions. One concept that did not draw much criticism, and garnered some support from one technology group, was a provision that made liability turn on whether the defendant provided technology as part of an operation that relied on infringement for its commercial viability or for a predominant portion of its revenues. The CEA proposal also contains a variation of this concept, albeit used in a different context.
After serious consideration of the issues raised by these alternative approaches, we have concluded that none of these approaches by itself accommodates the legitimate concerns of all parties and meets the goals described above. However, each has positive aspects to it that have contributed to our recommendation. We have concluded that enacting a separate form of liability, as S. 2560 would, is the preferable course to take, rather than codifying all forms of secondary liability, given the long history these existing doctrines have and the myriad of additional issues that would be raised if their codification were considered as part of this effort. We started with the general concept in the CEA proposal of clearly identifying the activity that creates liability, but modified that draft substantially to make it meet the goals described above, particularly the goal of creating a form of liability that can accommodate changes in the way technology is used in the future.
This approach focuses neither on technology nor behavior generally, but specifically on the business model in which a technology is employed, essentially revolving around the question of whether the defendant is relying on infringement to build a business around its product or service. Our decision was based in part on the relatively positive feedback described above that we received on this “business model” concept. We believe that this approach best serves the goal of both capturing the existing peer-to-peer services built on widespread infringement, yet remaining flexible enough to address potential use of new technology by “bad actors” in the future that we cannot predict right now, just as we could not predict the imminent phenomenon of massive infringement by means of peer-to-peer when the Digital Millennium Copyright Act was enacted in 1998. Experience has taught us that legislation that focuses on a particular technology is likely to be obsolescent from the moment it is enacted, and waiting to enact new legislation to address new technological developments inevitably is a Sisyphysian effort.

Subsection 501(g)(1)

Our recommendation would create a new subsection (g) to section 501 of the Copyright Act. The operative provision on liability is set forth in paragraph (g)(1). This provision narrows the existing bill considerably, as it only applies to situations where technology is employed as a cause of “infringing public dissemination.” As explained below, “public dissemination” is defined in paragraph (2) to exclude direct infringement that implicates only the reproduction or derivative work rights. In other words, this recommendation would not impose liability on any product or service that is a cause of only private reproductions, such as the VCR, CD-burners, or the typical portable music player. Liability, if any, for conduct related to such personal reproduction technology remains the province of existing copyright law, and is not affected in any way by this new form of liability. Furthermore, liability would be imposed only in one of three circumstances, each of which turns on the importance of the infringing use of the product or service to the defendant’s commercial interest or efforts to attract the public to their product or service. Liability would result if the technology is “a cause” of individuals engaging in infringing public dissemination of copyrighted works. We considered predicating liability on whether the defendant has “induced” or “caused” infringement, but after careful consideration concluded that neither of those words clearly expresses the appropriate causal connection between the actions of the defendant and the infringing acts of a third party. Although the theory of liability is based on concepts of inducement, as reflected in the caption of subsection (g)(1), discussions on this issue revealed a great deal of concern over the precise meaning of the term “induce” and little agreement over what the meaning of that term as used in the bill should be. Predicating liability on whether the defendant “causes” infringement could be interpreted as requiring that the defendant’s conduct be the proximate or ultimate cause of the infringement, which we rejected as too high a burden. Obviously, the proximate cause of any act of infringement is most likely going to be the volitional act of the individual who engaged in the infringement, rather than any acts of a person who has induced an individual to infringe. We concluded that, combined with the three conditions set forth in subparagraphs (g)(1)(A)-(C), simply requiring that the defendant’s conduct be “a cause” of the infringement reflects the appropriate balance.
The key factor in determining liability lies in the three conditions, at least one of which must be met, in order for liability to be imposed. Each of these conditions set forth in subparagraphs (g)(1)(A)-(C) turns on the importance of the infringing use of the product or service to the defendant’s commercial interest or efforts to attract the public to its product or service. The third condition in subparagraph (C) would allow liability to be imposed where a defendant attracts consumers to its product or service primarily through infringement but has not undertaken the activity for commercial purposes.
The approach taken here seeks to avoid the controversial issues surrounding the various alternatives and focus liability on the business model adopted by the defendant. If the defendant distributes its product or service as part of an enterprise that relies on infringement to attract customers, remain commercially viable or earn a predominant portion of its revenues, it will be liable under this provision. Under this approach, there is no need for the courts to get into thorny questions about how a particular technology was designed, what its particular functions can or can’t do, or difficult questions of intent. In essence, this approach determines whether inducement has occurred through an objective test of how the technology is deployed as part of the defendant’s business.
The analysis under these three provisions would focus on the defendant’s “activity” of manufacturing, distributing or providing the product or service, and in cases where a particular activity is a part of a larger operation, the court should isolate the defendant’s activity that is a cause of the infringement at issue from the rest of the organization for purpose of analyzing whether any of the three conditions apply. For example, if a large software and services company has a division that begins distributing a device that is a cause of infringing dissemination, the revenues and commercial viability of the other parts of the company would not be considered in the analysis of subparagraphs (g)(1)(A)-(C); thus, whether or not an entire organization’s revenues are derived from infringement would have no bearing on liability, but only whether the activity in question depends on infringement for its commercial viability or that activity’s revenues predominantly derive from infringement. We intend “derives a predominant portion of its revenues from infringing public dissemination” to mean that more of the revenues from that particular activity can trace their origin to infringing public dissemination (e.g. to purchases by persons who are using the product or service for purposes of infringing public dissemination) that to all other sources; i.e. more than fifty percent of revenues are derived from infringing public dissemination.

Section 501(g)(2)

Paragraph (2) defines “public dissemination” as the exercise of the so-called “public” rights under copyright: distribution of copies to the public, public performance, public display and public performance of sound recordings by means of digital audio transmission. It also makes clear that distribution by digital transmission to the public is covered, to leave no doubt that the form of infringing distribution occurring on peer-to-peer services falls within the form of direct infringement that serves as a predicate for liability under this new provision. The term “digital transmission” is already defined in section 101 of the statute, and a similar formulation to that here is used in Section 115(c)(3)(A), which makes clear that the mechanical compulsory license includes the right to “distribute or authorize the distribution of a phonorecord … by means of a digital transmission ….” See also, e.g., A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1014 (9th Cir. 2001). We have also included the public performance and public display rights to cover services that do not distribute copies but still infringe by making works available to the public in the form of performances and displays, such as peer-to-peer webcasting services. However, the mere infringement of the reproduction right or the derivative work right, without any of these additional elements, would not constitute “public dissemination.” This should allay the concerns of those who fear that the legislation could be used to target manufacturers and marketers of devices used for personal copying.

Section 501(g)(3)

Because paragraph (1) makes those liable under this subsection as “an infringer,” all of the remedies available under Chapter 5 of the Copyright Act are available in actions under this subsection. However, paragraph (3) provides two important limitations on those remedies, one of which is based on a proposal made by IEEE regarding limitations on monetary relief. First, statutory damages, of any level, are not available for violations of this new provision unless the copyright owner proves that the violation of subsection (g)(1) was willful. This provision was drafted to address concerns raised by technology companies that the specter of liability under this theory might chill innovation, and a limitation on statutory damages should help to ally those concerns, since a nonwillful violator would only be liable for the actual damages and lost profits that the plaintiff could prove the defendant had caused. Also responsive to this concern is the existing Section 505 of the Copyright Act, which allows a court to award attorney’s fees to a prevailing defendant in “any civil action” under title 17, which would include this new form of liability.
Second, a court that issues an injunction under this subsection must, where practicable, fashion the scope of the injunction not to restrain or prevent the noninfringing uses of the product or service at issue. This is a critical aspect of the Sony decision, which sought to prevent copyright liability from inhibiting the noninfringing use of technology. Thus, in the peer-to-peer context, an injunction might prohibit those features of a peer-to-peer service that cause infringement, but would not prohibit the service or the technology itself.

Section 501(g)(4)

This paragraph provides savings clauses to ensure that this new form of liability does not affect the existing doctrines of secondary liability, as well as the defenses and limitations on remedies for such liability. It also makes clear that this new provision does not affect existing law of liability for infringement of the rights of reproduction and preparing derivative works, which are not predicate acts for liability under this recommendation.
As with the remedies provisions in Chapter 5, which are fully applicable to this new cause of action, the limitations on liability in Section 512 also apply fully to this new provision. Thus, even in the unlikely case that a qualifying “service provider” would meet the criteria for liability under this provision, it would still be entitled to the limitations on liability in Section 512, if it met the conditions of those provisions.Like the new form of liability contained in the CEA proposal, the recommendation does not make the defense recognized in the Sony decision regarding capability of noninfringing uses applicable to this new form of liability. Application of the Sony defense to this new form of liability is unnecessary, as the concerns underlying that decision are accommodated in this recommendation. First, the recommendation’s narrowed scope, addressing technologies of “public dissemination,” confines it to circumstances not present in the Sony case, which involved personal copying technology in the form of the VCR, not distribution technology. Second, liability under this provision does not turn on a product’s or service’s capabilities, features or design – rather, it depends on the business model in which that product or service is offered. The very same technology may result in liability when offered by one defendant and not result in liability when offered by another, depending on how each defendant relies on the infringing use of the technology to attract consumers or earn revenues. In this way, the recommendation avoids the concern expressed by groups like IEEE and BSA over having the courts engage in searching review of a technology’s design or capabilities to determine liability. Third, as noted above, the limitation on injunctive relief that requires a court to accommodate noninfringing uses as much as practicable vindicates the most important concern underlying the Sony case – that unrelated areas of commerce not be burdened by copyright liability. Fourth, the savings clause makes clear that Sony remains fully applicable to causes of action under the existing doctrines of secondary liability.

Wednesday, September 08, 2004

Inducing DRM

Jason Schultz, at Copyfight, says that the RIAA plans to use the Induce Act to "pressure companies into incorporating DRM."

Tuesday, September 07, 2004

Senate IICA Draft Discussion

The Senate Judiciary Committe staff is hosting a 2 p.m. meeting today to discuss the latest draft of IICA. Public Knowledge and Professor Susan Crawford have already posted excellent comments on this latest draft by the Copyright Office.

Update: Art Brodsky of Public Knowledge, who attended the meeting, reports that the draft of the bill to be submitted to the Judiciary Committe, some time this month, may extend beyond the original intent to go after bad-actor companies and P2P and will "cover a wider set of issues and more technology than simply P2P."

See also: Copyright Office Jumps Into P2P Fray

It seems to me that we need to get another round of letter writing to your congressional representatives under way.

Monday, September 06, 2004

Record recording company profits reported

BMI had record profits this year (BMI report):

BMI reported revenues of $673 million for the 2004 fiscal year, an increase of nearly $43 million, 6.8% over the prior year. The performing rights organization generated royalties of more than $573 million for its songwriters, composers and music publishers. Royalties increased by $40 million or 7.5% from the previous year. BMI President and CEO Frances W. Preston said both the revenues and royalty distributions were the largest in the company's history.
BMI's performance is especially remarkable over the past 10 years, a period when market forces and technology have battered other companies in the music and copyright business. During the period 1995-2004, BMI had an average annual revenue growth rate of 9%, far higher than other copyright organizations.

I wonder what the profits of other "music and copyright businesses" are like. My impression is that they aren't making less money than in the past. Arstechnica wonders what the deal is here:

Such results are confusing when we're told every month that the industry as a whole is on the verge of destruction, mostly on account of piracy. We're told that the industry, and artists are suffering (just ask Senator Hatch). Surely, one might think, that this year is an exception, but for BMI, they've seen a 9% average growth every year for the last 10 years. The songwriters and performers represented by BMI, it would seem, are doing rather well. No one wants to say that they're doing too well or that they shouldn't be doing well. No, that misses the point. The point is very simple, and rather subtle: when the industry as a whole is posting great numbers (and sometimes trying to conceal them), and in the case of BMI they're posting record numbers, it's simply disingenuous to pretend that the threat against the industry as a whole is nearly so serious as to justify the argument that artists are actually suffering immensely.
We have the right and responsibility to ask: why is civil law being revised when the industry as a whole is seeing all time highs? Not only has BMI posted record results, signaling strong economic stability for the artists themselves, but the record companies are making more money, too. Why is there an open and vicious attack on Fair Use when record companies are making more than ever, as are artists' representation groups?

Here Arstechnica questions whether the RIAA is skewing its sales statistics to back up its argument that the industry will go down in flames without something akin to the Induce Act. Why are we going to pass a dangerous law like IICA when we don't appear to have a true reason yet? The research on how much pirating is costing the industry is conflicting and it is clear that the music industry is starting to figure out how to harness the power of the internet for selling music anyway. Smell fishy to you too?

Sunday, September 05, 2004

Crawford on the IICA redraft

Susan Crawford on the redraft version of IICA, as usual she makes many good points and asks the important questions:

Now the Copyright Office has circulated a redraft that, if anything, is likely to get people even more worried than they were about the original S.2560. It doesn't seem like a move towards compromise. If anything, it signals a hardening of position: any technology that makes infringement possible (not just KaZaa or Grokster) can be reached under the draft, and the Sony/Betamax rule is dead.

Sony is dead because the draft says that one possible "overt act" could be distributing a technology "that, when used as intended, automatically causes the user of the technology to infringe copyrighted works without the user making a specific, informed decision, for each copyrighted work at issue, about whether to engage in such infringement." This boils down to: if you build a technology that makes it possible to distribute works publicly (broadband access? mp3 players that connect to the internet? PCs?) you're liable. Even if you don't meet current judicial standards for contributory or vicarious liability.

What's remarkable here is that the content industry feels that Grokster has given it an opening to broaden copyright liability beyond recognition. Why haven't the comments of the many other businesses and advocates that opposed S.2560 been listened to? Why are people stuck negotiating a special-purpose bill that doesn't seem to be special-purpose at all -- but, instead, seems to take on anything that might be used by an infringer? Why is the Copyright Office (clearly not neutral on this subject) holding the pen?

She is typically optimistic, believing that reason will prevail and the Induce Act will ultimately be redrafted so that it is less threatening to technological innovation.

Here is the rest of the post: Taking on Technology.
For insightful commentary on all things cyberlaw, check out the Susan Crawford blog. [I finished up my class with her last semester so I'm not sucking up when I say that :) ]

Thursday, September 02, 2004

New Draft of IICA Released

Declan reports that the U.S. Copyright Office has drafted a new version of IICA will supposedly ban P2P while leaving the Ipod be.

Andrew Raff writes (in the comments) that "Ernest Miller has some commentary already: Copyright Office Produces 'Discussion Draft' Alternative to INDUCE Act (IICA)"


To amend chapter 5 of title 17, United States Code, relating to inducement of copyright infringement, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

This Act may be cited as the ‘Inducing Infringement of Copyrights Act of 2004’.

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

(g) (1) Whoever intentionally induces another to infringe any of the exclusive rights in Sections 106(3), 106(4), 106(5) or 106(6) under subsection (a) shall be liable as an infringer. For the purposes of this subsection, ‘induces’ means to commit one or more affirmative, overt acts that are reasonably expected to cause or persuade another person or persons to commit any infringement under subsection (a) of this section.

(2) For the purposes of this subsection, “overt acts” constituting inducement may include:
(A) distributing any dissemination technology that, when used as intended, automatically causes the user of the technology to infringe copyrighted works without the user making a specific, informed decision, for each copyrighted work at issue, about whether to engage in such infringement;
(B) actively interfering with copyright holders’ efforts to detect infringing uses of
dissemination technology and enforce their copyright against those uses;
(C) offering an incentive to users of dissemination technology to make infringing use of the technology, such as providing improved performance of the technology in exchange for infringing distribution of copyrighted works;
(D) failing to take reasonably available corrective measures to prevent any continuing acts of infringement resulting from overt acts described in subparagraphs (A)-(C) of this subsection (2) that were committed before the effective date of this subsection; or
(E) distributing a dissemination technology as part of an enterprise that substantially relies on the infringing acts of others for its commercial viability or the revenues of which are predominantly derived from the infringing acts of others.
(3) For the purposes of this subsection, and absent any other overt act, an "overt act" does not include:
(A) distributing any dissemination technology capable of substantial noninfringing uses knowing that it can be used for infringing purposes, so long as that technology is not designed to be used for infringing purposes;
(B) distributing any dissemination technology that incorporates reasonably effective measures to prevent or halt dissemination that constitutes infringement within the meaning of this subsection;
(C) advertising, marketing or promoting a dissemination technology that does not specifically encourage the use of that technology for infringing purposes;
(D) the providing of information on the use of a dissemination technology by the creator or distributor of that dissemination technology when the information does not specifically encourage the use of that technology for infringing purposes, including through instruction manuals, handbooks, user guides or customer support services;
(E) the providing of information on the use of a dissemination technology by a person not affiliated with the creator or distributor of that dissemination technology in the context of commentary, criticism, or reviews of the dissemination technology; or
(F) providing products or services to a distributor of dissemination technology in the same manner that such products or services are provided to other members of the public, including but not limited to financial services, delivery services, advertising services, product reviews or evaluations, library services, real estate services, customer-support services for users of computer software or hardware, utilities and telecommunications services.
(4) For the purpose of this subsection, "dissemination technology" means any product, service, device, component, or part thereof, that enables or facilitates the distribution of copies of a work to the public, performance of a work publicly, display of a work publicly, or the performance of a work publicly by means of a digital audio transmission.

(5) Courts adjudicating actions under this subsection should attempt, to the extent practicable, to minimize the potential burdens of such litigation upon the parties by measures including:
(A) allowing discovery and summary judgment on the objective questions of inducement and infringement before permitting discovery and adjudication of the subjective element of intent;
(B) exercising their authority under this Chapter to award fees and costs to the prevailing party.
(6) Nothing in this subsection shall enlarge or diminish the doctrines of vicarious and contributory liability for copyright infringement, including any defenses thereto or any limitations on rights or remedies for infringement, or the authority of courts to apply or adapt common-law standards. Nothing in this subsection shall enlarge or diminish liability for infringement of the exclusive rights in Sections 106(1) or 106(2).

(7) The limitations on liability in Section 512 shall apply to actions brought under this subsection.

[A provision to make clear that this bill has no effect on pending litigation over inoperative dissemination technologies, such as Napster.]