Meet the New Draft, Same as the Old Draft

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 that 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."