June 24, 2004

Ernest Is [Bothered], Too [10:28 am]

The Obsessively Annotated Introduction to the INDUCE Act

In introducing the bill, Hatch provided extensive justifications and arguments on behalf of the bill. Eight pages worth: Before the United States Senate on Introduction of the “Inducing Infringement of Copyrights Act of 2004” S. 2560 [PDF]. Since it looks like this bill will move quickly in Congress, opponents will have to get up to speed quickly. Thankfully, Hatch provided an excellent guide to the talking points proponents will use. Consequently, I’ve decided to go through Hatch’s introduction and extensively annotate it. However, this is just a response piece and many arguments against the bill won’t be here. The annotation is long, but I think there are definitely some valuable nuggets of information, such as, towards the end, Hatch makes clear he wants criminal enforcement of the Act.

My comments are in brackets, bold and italics. I’ve added hyperlinks to Hatch’s text as I thought useful.

My recommendation: Read it. All of it. Now. Then suggest it to someone else.

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Derek’s Bothered….. [10:22 am]

And he explains why in two good postings: Things That Bother Me, Vol. 1 and Things That Bother Me, Vol. 2. The first is about Sen Hatch’s misuse of some Berkman Center materials in support of his IICA; the second is about why keeping Betamax as doctrine in this area is so important

[T]he point makes some sense: it is silly that we let Morpheus get a free ride while Napster had to be shut down. Unlike Hatch, however, I certainly don’t think that this inconsistency demands a rule such that that Morpheus is also liable. Indeed, I think we can still leave Napster liable while avoiding the “tech mandate”/tech ban problem. To create a more consistent and beneficial doctrine, we should tweak - but not eviscerate - the Napster decision.

Interpreted broadly, Sony stands for the principle that we should let new technology develop completely unconstrained from secondary liability. As I have discussed elsewhere, I think Sony rule should actually be interpreted a little narrower. Sony stands for not using secondary liability to force tool-makers to modify how their tools operate, but secondary liabilty could apply to the tool-maker’s conduct in relation to the tool-user.

[...] [W]hat change would not affect non-infringing uses, definitively? We don’t know, and no weighing can properly take into account these undefined and thus indeterminately impacted uses. Sony understood this point - that by constraining the way a tool functioned, we risked impairing legitimate uses. The VCR ushered in “time-shifting,” a use that most people probably did not conceive of prior; it, and other technologies, could also usher in other untold uses, which would have been impacted by any change to the tools themselves. Telling Napster to respond to notices of infringement is consistent with this rule as well as with a rule that forces Morpheus to do nothing. One could sever Napster’s infringing uses from the non-infringing uses, known or not; by addressing their conduct only, new uses of the technology could continue to evolve. In so doing, we could get rid of the de facto “tech mandate” that effectively bans centralized P2P and thus no longer “reward inefficiency.”

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Network Taxation Under Consideration In Florida [9:07 am]

It’s going to be interesting to see how they expect to collect this tax: Florida to Tax Home Networks

Florida state officials are considering taxing home networks that have more than one computer, under a modified 1985 state law that was intended to tax the few businesses that used internal communication networks instead of the local telephone company.

[...] “According to my accountant, the way the law is written, if my tax filing includes deductions for the repair or maintenance of my two computer and one printer network, those costs will be subject to state communication taxes,” said graphic artist Linda Kellman, who works from home. “Self-employed people get slammed with insane taxes everywhere, and I’ve sadly but grudgingly accepted that. But this tax, if they ever try to collect it, would be the last straw. Can I outsource my network to a more sensible state, do you think?”

[...] “All my life, I’ve willingly paid my fair share of taxes in exchange for community services,” said 73-year-old George Fedoro, a retired engineer who now lives in Boca Raton. “But this tax is not fair and could turn senior citizens into criminals, because no one that I know can or will pay it.”

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Transparent Ploy, Or Change At Microsoft? [8:53 am]

Microsoft Tells Court It Won’t Be a Rival to Oracle

A top executive of the Microsoft Corporation testified on Wednesday that the company has no plans to compete in the enterprise software market, bolstering the government’s case that the market is far less competitive than Oracle contends.

Amazing how often I get to mention Theodoric of York in this weblog!

Update: I just got an email pointing out that this search on "enterprise" and "solutions" within the microsoft.com domain yields over 30,000 hits. ("enterprise solutions" yields about 2000) Seems like lots of people at Microsoft are wasting their time putting together website information on a market niche within which they have no plans to compete — maybe someone should tell the board?

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Harmonic Convergence [8:46 am]

The day after Sen Hatch’s effort to wipe out Grokster hit the Senate floor, there was a hearing before the US Senate Committee on Commerce, Science, & Transportation, The Future of Peer-to-Peer (P2P) Technology. The testimony is now online. There also is a webcast. The participants:

In the face of the IICA/INDUCE Aet, the FTC testimony is particularly notable,

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OT: Maybe It’s The Moonies [8:23 am]

Glad to see this story getting ink outside of Salon. What is this about, anyway? A Crowning at the Capital Creates a Stir

[N]ews that the Rev. Sun Myung Moon, the eccentric and exceedingly wealthy Korean-born businessman, donned a crown in a Senate office building and declared himself the Messiah while members of Congress watched is causing a bit of a stir.

[...] To hold the event in the Dirksen building, the organization was required to find a senator to act as a sponsor. But the identity of the sponsor remained a secret on Wednesday; the Senate Rules and Administration Committee, which approved the request, would not release the name.

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ClearPlay Also On House JudComm’s Mind [8:18 am]

Push to Allow DVDs to Be ‘Sanitized’ Alarms Studios

A House bill now gaining momentum would make it so that sanitizing films do not violate federal copyright law as long as the edited copies are restricted to home use, as opposed to being shown in theaters. DVDs are sanitized through filters that can remove any kind of material regarded as offensive — profanity, nudity or violence, for example.

[...] The legislation was introduced in response to a fight being waged in federal court in Colorado by the studios, the Directors Guild of America and 16 prominent directors against ClearPlay Inc., a Utah company that sells filtering software and DVD players with special filtering features built in.

Jack Valenti, president of the Motion Picture Assn. of America, told a congressional committee last week that such editing without the input of the directors and studios “disfigures the original vision of the creator.”

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IICA (née INDUCE) Act Coverage [8:06 am]

  • New York Times: Bill to Curb Online Piracy Is Challenged as Too Broad

    A copyright bill introduced in the Senate this week is facing criticism from groups including representatives of the telecommunications and electronics industries, who contend it could make computer companies, Internet providers and other technology businesses liable for online piracy.

    But supporters of the bill, including its bipartisan sponsors, say it would provide a powerful tool to curb illegal copying of music files and other media, and would protect children from the lure of a technology that is intended to help them break the law.

    [...] But Mitch Bainwol, chief executive of the Recording Industry Association of America, a recording industry lobbying group, said the legislation was meant to be narrowly tailored to address companies that build technology focused on illegal file sharing.

    He said he did not envision the legislation’s enabling lawsuits against “neutral” technologies, like computer makers.

    “This is not about going after the device makers,” Mr. Bainwol said, though he stopped short of guaranteeing that the recording industry would never use the measure to sue them.

  • Washington Post: Expanded Copyright Law Proposed

    But some legal experts argue that the bill is worded so broadly that it threatens numerous electronic devices and software products that enable copying of digital entertainment. And opponents worry that the bill is being hustled through the Senate without sufficient hearings and debate.

    [...] “I find it sort of scary,” said Jessica D. Litman, a law professor at Wayne State University. “It is worded so broadly that it . . . threatens to sweep within it all of the other activities, devices and technologies that have infringing as well as non-infringing uses.” These might include, for example, machines that “burn” compact discs or digital video discs (DVDs).

    [...] Susan P. Crawford, a professor of Internet law at the Benjamin N. Cardozo School of Law in New York, said that any lawyer advising makers of devices, software or even Internet service providers would be compelled to warn them that they could face secondary liability if they know their products might get used for illegal purposes.

    “The VCR would not be a legal product; TiVo would not be a legal product,” said Gary Shapiro, president of the Consumer Electronics Association. “I’m surprised the leadership would jump on this bill without hearing from the other side.”

  • The Boston Globe: US Senate bill targets Net media-swapping

    Movie and recording industry groups praised the bill, while a trade group representing several peer-to-peer networks said it would hurt innovation.

    Separately, one peer-to-peer executive said movie and music companies were pressuring other companies not to do business with them and asked the government to investigate.

    Under a recent US court ruling, peer-to-peer networks cannot be held liable if consumers use them to distribute copyrighted works. While that case is being appealed, the recording industry has sued 3,429 individual peer-to-peer users, many of them underage.

  • CNet News: Senate bill bans P2P networks

    An early version of the IICA seen by CNET News.com was called the Inducement Devolves into Unlawful Child Exploitation Act, or Induce Act. The final version appears to be identical.

    [...] Under existing law, companies are not liable for “vicarious copyright infringement” performed by their users, said Mike Godwin, a lawyer at the advocacy group Public Knowledge. That legal doctrine permits Sony to sell VCRs, TiVo to sell digital TV recorders and Apple Computer to sell iPods, even though some fraction of their customers use them for copyright infringement.

    If the IICA were to become law, “let’s say that you’re selling an MP3 player and it turns out that the MP3 player can be used to move copyrighted material around really easily,” Godwin said. “People start buying your MP3 player. Do you want a world where courts can say, ‘Hey buddy, you’re liable for copyright infringement?’”

  • Wired News: File-Trading Bill Stokes Fury

    Adam Eisgrau, executive director of P2P United, a group representing the file-trading industry, believes the Induce Act is an attempt by the recording industry to mute the unpleasant ramifications of a likely appeals court loss.

    “It’s a stealth maneuver intended to circumvent a line of cases emerging that peer-to-peer software is indeed legal to design, to make available and to use, on a case-by-case basis, depending on what you use it for,” Eisgrau said. He characterized the Induce Act as an example of “big entertainment pulling big strings.”

    [...] Another problem with the bill, said Will Rodger, director of public policy at the Computer and Communications Industry Association, which is pressing to block its passage, is that its authors do not provide a clear definition of what constitutes inducement.

    “As we read it, reporters who wrote about peer-to-peer file-trading networks could well be charged with inducing infringement,” he said. “Their definition of inducement seems to cover almost anything.”

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