<http://online.wsj.com/article_print/0,,SB108820092814147912,00.html> The Wall Street Journal June 28, 2004 E-COMMERCE/MEDIA Senate Passes Two Measures To Combat Piracy on the Web By NICK WINGFIELD Staff Reporter of THE WALL STREET JOURNAL June 28, 2004; Page B3 The Senate passed two pieces of legislation designed to help crack down on individuals who trade pirated music and other material over the Internet. But another Senate proposal is causing a growing uproar among technology companies, which are afraid it could stifle innovation and make devices such as Apple Computer Inc.'s iPod a possible target of entertainment-industry lawsuits. The Senate on Friday passed the Protecting Intellectual Rights Against Theft and Expropriation, or Pirate, Act, introduced by Senators Patrick Leahy and Orrin Hatch, under which the Department of Justice will be able to bring civil copyright-infringement cases against people who download unauthorized copies of music, movies and other works using Internet file-sharing programs such as Kazaa. Under current law, the Justice Department can bring only criminal prosecutions, making copyright-infringement cases more difficult to prove in court. The Senate on Friday also passed a bill introduced by Sens. John Cornyn (R., Texas) and Dianne Feinstein (D., Calif.) that would increase penalties for distributing pre-release copyrighted works and create a federal law against use of camcorders in movie theaters. Comparable bills still need to be passed by the House of Representatives. While the bills were praised by the entertainment industry and criticized by technology-advocacy groups, the greatest controversy stemmed from a proposal introduced in the Senate Judiciary Committee last week by Sen. Hatch (R., Utah), called the Inducing Infringement of Copyrights Act. The bill, co-sponsored by a powerful bipartisan group including Senators Bill Frist (R., Tenn.), Tom Daschle (D., S.D.) and Barbara Boxer (D., Calif.), would allow entertainment companies to bring lawsuits against any company that "intentionally induces" individuals to violate copyrights by making unauthorized copies of songs, movies and other works. High-tech companies have often been at loggerheads with legislation backed by the entertainment industry, but the latest proposal seems to have struck an especially sensitive nerve in the tech world. The fear: that the proposal could effectively invalidate a key 1984 Supreme Court ruling in a lawsuit between Sony Corp. and the movie industry over the video cassette recorder. The ruling protected the VCR, which allowed users to make bootleg copies of movies, because it also had "substantial noninfringing uses." Critics of the Hatch proposal say it could go far beyond penalizing the file-sharing programs that allow users to swap music and movies. Indeed, they said, it could make targets of manufacturers of DVD and CD recorders, personal computers and other hardware. "We are concerned it will have an immediate chilling effect on the introduction of new technologies," says Jeff Joseph, a spokesman for the Consumer Electronics Association. Cindy Cohn, an attorney for the Electronic Frontier Foundation, an online civil-liberties group, said that under the Hatch proposal it could be argued, for instance, that the huge song storage capacity of Apple's iPod audio player induces copyright violations since it enhances the appeal of file-sharing programs and the piracy therein. Similarly, Toshiba Corp., maker of the iPod's hard drive, and CNET Networks Inc., which has explained how to use music on the iPod, might be considered inducers, the EFF said. Supporters of the bill insisted that such examples are unrealistic and that the proposal is aimed at a more a narrow group of companies, such as makers of file-sharing programs. -- ----------------- R. A. Hettinga <mailto: rah@ibuc.com> The Internet Bearer Underwriting Corporation <http://www.ibuc.com/> 44 Farquhar Street, Boston, MA 02131 USA "... however it may deserve respect for its usefulness and antiquity, [predicting the end of the world] has not been found agreeable to experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'