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File-swapping foes exert P2P pressure

As the entertainment industry shifts its anti-piracy efforts to individuals, a little-known 1997 law could spell possible prison time for those convicted.

Declan McCullagh Former Senior Writer
Declan McCullagh is the chief political correspondent for CNET. You can e-mail him or follow him on Twitter as declanm. Declan previously was a reporter for Time and the Washington bureau chief for Wired and wrote the Taking Liberties section and Other People's Money column for CBS News' Web site.
Declan McCullagh
5 min read
WASHINGTON--The anti-piracy war is about to spill over onto the home front.

Until now, the entertainment industry has relied on civil lawsuits aimed at companies, not individuals, to limit widespread copyright infringement on peer-to-peer networks.

Napster fell to legal assaults, and MP3.com soon came under fire by the recording industry. MP3Board.com, Scour.com, and Sharman Networks, which markets Kazaa, have been targets of the entertainment industry's legal fusillades against suspected copyright infringers.

Now, however, the entertainment industry is revising its strategy. The new plan appears to extend the target beyond companies with an apparent declaration of legal warfare against individuals who the industry believes are swapping illicit songs or movies through peer-to-peer networks. The outcome could include jail time for those convicted of wrongful file swapping.

This move comes as copyright holders are striving to combat the continued popularity of peer-to-peer networks, which permit millions of people to link their PCs to a massive collection of files, some legal to distribute and some not. Napster's courtroom demise has not ended the popularity of such services, which are less centralized and more difficult to dismember with one legal stroke.

The new strategy relies on a two-pronged approach. Part one, as previously reported by CNET News.com, appears to widen legal efforts to include civil lawsuits against individuals.

Trading copyrighted wares without permission generally runs afoul of current federal law, which means that the Recording Industry Association of America (RIAA), if it chooses could pursue the matter in court. That has some benefits: If the RIAA wins a judgment, it can take a cut of the defendant's future paychecks and inheritances, and the debt does not disappear even if that person files for bankruptcy.

But suing individual pirates is expensive. Some of the most prolific file-swappers may have few assets to seize, and trying to hold parents financially responsible for their teenager?s legally dubious online activities could become a public-relations nightmare.

Swap a song, go to jail?
Enter part two of the new strategy, which seeks to enlist the resources of the federal government in an attempt to put peer-to-peer pirates in federal prison.

Last Friday, Reuters reported that some of the most senior members of Congress are pressuring the Justice Department to invoke a little-known law: the No Electronic Theft (NET) Act.

Under the NET Act, signed by President Clinton in 1997, it is a federal crime for a person to share copies of copyrighted products such as software, movies or music with friends and family members if the value of the work exceeds $1,000. Violations are punishable by one year in prison, or if the value tops $2,500, not more than five years in prison.

That's a mighty weapon to wield against peer-to-peer pirates, especially when so many Americans are potential federal felons, but it seems likely that the Justice Department will honor Congress' request. The agency already has used the NET Act to imprison software pirates, a move that tech companies hailed as "an important component of the overall effort to prevent software theft."

During his confirmation hearing in June 2001, Attorney General John Ashcroft told Congress that, "Given the fact that much of America?s strength in the world economy is a result of our being the developer and promoter of most of the valuable software, we cannot allow the assets that are held electronically to be pirated or infringed. And so we will make a priority of cybercrime issues."

Neither the Justice Department nor the RIAA commented when contacted on Monday.

A copy of the letter from Congress, seen by CNET News.com, complains of "a staggering increase in the amount of intellectual property pirated over the Internet through peer-to-peer systems." The 19 members of Congress--including Sen. Joseph Biden, D-Del., Rep. James Sensenbrenner, R-Wisc., and Sen. Dianne Feinstein, D-Calif.--urged Ashcroft "to prosecute individuals who intentionally allow mass copying from their computer over peer-to-peer neworks."

Peter Jaszi, a law professor at American University who is a critic of recent additions to copyright law, says he welcomes the idea of prosecutions under the NET Act.

"It's positive in the sense that this decision is going to make everyone aware of what the real stakes in this contest are," Jaszi said. On the other hand, he said, "I think (the industry) is going to have a tremendously difficult time trying to find judges and juries who will convict individuals who are engaging in content sharing of this type."

Any NET Act prosecution could send a chill through the entire peer-to-peer community inside the United States, with possible prison time for what most people seem to view as a harmless activity--illegal, perhaps, but easy to forgive--like speeding on an interstate highway.

Jaszi says any future trial "may become a trial of the whole question of whether we regard content sharing" as a criminal act.

Closing a loophole
Rampant file-swapping is precisely the activity that the NET Act was designed to punish. Rep. Bob Goodlatte, R-Va., the co-chairman of the Congressional Internet Caucus, drafted the NET Act to close what had become known as the "LaMacchia Loophole."

In 1994, David LaMacchia was a junior at the Massachusetts Institute of Technology who was charged with wire fraud for creating a file-swapping site on the Internet. But a federal judge dismissed the criminal charges, ruling that although LaMacchia could be sued in civil court, he was not guilty as charged. "It is not clear that making criminals of a large number of consumers of computer software is a result that even the software industry would consider desirable," U.S. District Judge Richard Stearns ruled.

A second section of the NET Act that does not include the $1,000 minimum limit could make prosecutions even easier. If a person links to a peer-to-peer network and shares copyrighted content against the law in "expectation? that others will do the same, that triggers felony penalties automatically.

Separately, Reps. Howard Berman, D-Calif., and Howard Coble, R-N.C., have introduced a bill that would permit nearly unchecked electronic disruptions if a copyright holder has a "reasonable basis" to believe that piracy is occurring on a computer connected to a peer-to-peer network.