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August 2004

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Industry offers alternative to P2P bill
By Declan McCullagh
CNET News.com
August 24, 2004, 9:15 AM PT
URL: http://zdnet.com.com/2100-1104-5322019.html

ASPEN, Colo.--Electronics manufacturers and some Internet providers are
mounting a counterattack to a copyright bill intended to ban
peer-to-peer networks and that could also imperil devices like Apple
Computer's iPod.

That measure, called the Induce Act, has been widely panned by the
technology industry. Now some groups, including SBC Communications,
Verizon Communications and the Consumer Electronics Association (CEA),
are fighting back with their own proposal that will be sent to Capitol
Hill on Tuesday afternoon.

Their proposal, dubbed the "Don't Induce Act," is designed to provide
the Senate with an alternative that's less threatening to the industry.
It is far narrower, saying that only someone who distributes a
commercial computer program "specifically designed" for widescale
piracy on digital networks could be held liable for copyright
violations. Hardware like the iPod and other music players would not be
targeted.

In an interview, Michael Petricone, a CEA vice president, said Senate
Judiciary Chairman Orrin Hatch told the technology industry to "give us
something that reflects your concerns."

"We came back and tried to do what Hatch asked us to do," Petricone
said. Hatch, a Utah Republican, is the primary Senate proponent of the
original Induce Act, which also enjoys support from top Democrats.

The Induce Act was debated at a Judiciary Committee hearing in July,
but the panel has not yet voted on it.

Others involved in the drafting of the Don't Induce Act include the
American Library Association, the Computer and Communications Industry
Association (CCIA), DigitalConsumer.org, the Home Recording Rights
Coalition and Public Knowledge, Petricone said.

CCIA President Ed Black said his organization, whose membership
includes Covad Communications Group, Nortel Networks and Verizon, does
not actually endorse the new proposal, even though the group helped
draft it. Black called the Don't Induce Act a "good framework to
approach these issues" that could serve as a starting point for
negotiation.

The recording and movie industries, which strongly back the Induce Act,
were lukewarm in their reception to the new, completely rewritten
version of the bill.

Fritz Attaway, vice president for the Motion Picture Association of
America, said the Don't Induce Act was so narrowly drafted, it would be
impossible to use it to shutter even operators of peer-to-peer
networks. "There is no way that anyone could ever meet the burden of
proof that this establishes," Attaway said. "It's spin. (They're) not
being honest here."

Mitch Glazier, a vice president at the Recording Industry Association
of America, also offered some criticism.

"I don't think this, as written, is a reasonable proposal," he said. "I
don't think that, as written, anyone could be found liable...But I'm
glad that people are trying to draw the line between the good guys and
the bad guys."

A court ruling last week gave the entertainment industry additional
incentive to push hard this year for legislation designed to pull the
plug on file-swapping networks.

The 9th Circuit Court of Appeals in Los Angeles ruled that Grokster and
StreamCast Networks were not liable for any copyright infringement
committed by people using their products, as long as they had no direct
ability to stop the acts. "The Supreme Court has admonished us to leave
such matters to Congress," the judges wrote.

The Don't Induce Act also could encounter criticism from some Silicon
Valley companies that would prefer the status quo. Many of those
companies in the past have said they prefer laws that are
technology-neutral rather than ones that single out distributors of
certain types of computer programs and make them liable for criminal
and civil copyright violations.

"The rush to push something through very quickly (could result in a
law) with unintended consequences and collateral damage that harms
innovation," said Laura Ipsen, Cisco Systems' vice president for
worldwide government affairs. "There's no clear pathway to legislation
anytime soon."

The Don't Induce Act describes three requirements that would have to be
met before a software distributor could be found liable: The
"predominant" use of the program would have to be the mass,
indiscriminate infringing redistribution of copyrighted works; the
"commercial viability of the computer program" would have to be
dependent on revenue derived from piracy; and the software distributor
would have to have "undertaken conscious, recurring, persistent and
deliberate acts" to encourage copyright infringement.

The proposal would also indemnify venture capital firms, payment
services, financial services, Internet service providers, librarians
and e-mail utilities. If the measure becomes law, anyone filing a
"baseless lawsuit" under the Don't Induce Act could be heavily
sanctioned with damages that are triple what would normally be levied.

Because the measure would only apply only to "commercial" activities,
the proposal would not target free or open-source P2P clients.

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