Copyright Bill to Kill Tech? By Katie Dean
Story location: http://www.wired.com/news/politics/0,1283,64297,00.html

02:00 AM Jul. 22, 2004 PT

The Senate Judiciary Committee will consider a bill Thursday that would hold technology companies liable for any product they make that encourages people to steal copyright materials.

Critics say the bill would effectively outlaw peer-to-peer networks and prohibit the development of new technologies, including devices like the iPod. The Inducing Infringement of Copyrights Act (S. 2560) was introduced last month by Sen. Orrin Hatch (R-Utah), head of the Senate Judiciary Committee. The legislation would hold a company liable that "intentionally induces" a person to infringe copyright.

"We think this is a recipe for disaster for the Internet," said Markham Erickson, general counsel for NetCoalition, a public policy group that represents Internet companies like Google, Yahoo and Internet service providers. "The bill as it is currently drafted is extremely broad and not entirely clear. It would, at a minimum, undermine the Sony Betamax decision."

In the Betamax decision, the Supreme Court ruled that any technology that people use for legal purposes would be legal -- even if the device could be used for illegal purposes, like content piracy. Because of the ruling, the consumer electronics industry and Hollywood went on to develop a thriving market in home video and DVDs.

"This takes an objective standard and replaces it with a subjective one that allows a copyright holder to try and determine the intent of a company when producing a product," Erickson said. "It's not outside the realm of possibility that you would be placing the entertainment industry in charge of technological innovation if this law were passed."

It's the biggest threat to technology in 20 years, said Jeff Joseph, a spokesman for the Consumer Electronics Association. The organization's president will testify before the committee.

The judiciary committee will also hear testimony from Register of Copyrights Marybeth Peters and the heads of the Business Software Alliance and the Recording Industry Association of America. A representative from the IEEE-USA's intellectual-property committee and the director of NetCoalition will also testify.

One supporter of the bill, RIAA chief Mitch Bainwol, is expected to include information about the music trade group's recent settlement with iMesh, a company that makes file-trading software, in his testimony. On Tuesday, the RIAA announced that iMesh agreed to pay record companies $4.1 million for copyright infringement. The company also said it will modify its business to prevent consumers from illegally sharing or downloading songs.

Critics said the bill is the wrong fix for the piracy problem.

"This bill really creates a huge risk that people won't bring new products to market because they will be afraid to be sued out of existence," said Mike Godwin, legal director of Public Knowledge, which is opposed to the bill and is submitting written testimony to the committee. "We keep asking, 'What's the rush?' It's not clear that everything has to be wrapped up in the summer of 2004."

Godwin said Senate judiciary staff are eager to get the legislation moving because they are worried that a federal appeals court in California will uphold an April 2003 court decision that did not hold peer-to-peer companies liable for their users' copyright infringement. The so-called Grokster case was argued before the 9th U.S. Circuit Court of Appeals in February, and a decision is expected soon

[Link]