Proposal Would Sharply Limit P2P File Sharing

Rhett Pardon
WASHINGTON, D.C. — The U.S. Copyright Office is meeting with a number of Internet companies and organizations Tuesday to discuss proposed changes to the so-called “Induce Act” that limits peer-to-peer file sharing.

The proposal was drafted to help Congress improve the Inducing Infringement of Copyrights Act of 2004, known as the Induce Act.

The language of the draft hopes to reduce the impact of the Induce Act on hardware manufacturers and substantially limits the ability for P2P networks to legally exist.

The proposed “intentional inducement” language attempts to narrow the test in the bill, which would create a new cause of action targeting companies that “induce” individuals to infringe copyrights.

Companies, under the new language of the bill, would be held liable for:

— Failing to take “reasonably available corrective measures” to prevent any continuing acts of infringement;

— Actively interfering with copyright holders’ efforts to detect infringing uses of dissemination technology and enforce their copyright against those uses;

— Offering an incentive to users of dissemination technology to make infringing use of the technology; and,

— 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.”

Efforts to change current law have been brought to the front burner after the 9th U.S. Circuit Court of Appeals upheld last month a lower court’s decision that distributors of file-sharing software used to trade copyrighted media over a decentralized P2P network are not liable for copyright infringement.

The federal appeals court in Metro-Goldwyn-Mayer Studios vs. Grokster Ltd., No. 03-55894, said that introduction of new technology will always be disruptive. The panel also said that it is up to Congress — not the courts — to restructure copyright liability laws.

The entertainment industry has introduced its own proposal known as the Discouraging Online Networked Trafficking Inducement Act of 2004, which would focus on companies that distribute a commercial computer program that is “specifically designed” for widescale piracy on digital networks.

That proposal would allow exemptions from liability for Internet service providers, venture capitalists, credit card companies, banks, advertising agencies, and others for providing “routine services” for their customers.

The Consumer Electronics Association, the U.S. Internet Industry Association, BellSouth Corp., the U.S. Internet Service Provider Association, Verizon, MCI and SBC Communications are backing that proposal.

On Thursday, the Copyright Office plans to submit the recommendations of the Induce Act to the Senate.