BILL INTRODUCED TO PERMIT FOILING OF ONLINE PIRACY

Bill to thwart digital piracy online was introduced July 25 by Rep. Berman (Cal.), ranking Democrat on House Judiciary Courts, Internet & Intellectual Property Committee. Bill would amend U.S. statutes to make it legal for content owners to use technology to travel on peer-to-peer (P2P) networks and interdict copyrighted material. “I am a big fan of P2P networks and the technology behind them,” Berman said, adding “it should remain the creator’s choice to distribute their works through a P2P network, not the pirate’s. P2P piracy must be cleaned up, and cleaned up now.”

Berman’s bill was co-sponsored by Subcommittee Chmn. Coble (R-N.C.), who is expected to hold hearing on it after Aug. recess. Also co-sponsoring bill were House Judiciary Crime Subcommittee Chmn. Smith (R-Tex.) and Courts Subcommittee member Wexler (D-Fla.). Berman’s Chief of Staff Gene Smith said Berman was seeking feedback on bill not only from other members but from consumer, high-tech, entertainment and software groups.

Bill is targeted at public decentralized P2P networks. After Napster lost in court to copyright holders, P2P networks without central server as in Napster model surfaced, leaving copyright holders with no one to sue. Berman, who represents N. Hollywood and lists big 7 movie studios as his largest campaign donors, said in analysis of his bill that his changes would give copyright owner ability to act to protect content. Specifically, bill would add new provision to Title 17 of U.S. Code, called Sec. 514, that would create safe harbor for content owners to use technology to “prevent unauthorized distribution” of content. They would not be allowed to remove files or data from P2P user’s computer, corrupt files on that computer “or any other actions that would impair integrity of any computer file or data,” Berman analysis said.

At least one high-tech association leader saw Berman bill as superior to S-2048 by Senate Commerce Committee Chmn. Hollings (D-S.C.), which would have FCC mandate digital rights management standard if private industry couldn’t reach agreement. Assn. for Competitive Technology Pres. Jonathan Zuck wrote Berman July 25 saying “we applaud your effort to promote technological rather than regulatory solutions.” He also told Berman he wanted to “maintain the dialog to avoid unintended consequences” to file- sharing technologies. “This is a kind of experiment in safe harbor,” Zuck told us, saying many of his members were software companies and had their own piracy problems. When asked whether P2P users wouldn’t start developing their own technologies to thwart content providers’ efforts, Zuck said: “A little bit of an arms race is inevitable… there is a bit of a battle ahead.” Berman staff member Smith said “there may be a bit of an arms race.”

Justice Dept. would be responsible for oversight under Berman bill. Content providers seeking to use technologies on P2P networks would inform Justice of that fact, and if content provider “has a recurring history of abusive interdiction” U.S. could seek injunction to stop that company, which Berman said “should provide a substantial disincentive to potential abuse by copyright owners.” If file trader can show actual economic loss of $250 or more from content provider’s actions, it can file claim with Attorney Gen. within one year.

Berman in his floor statement said content providers, IT and CE companies were working to develop digital rights management (DRM) technologies, but “they do not represent a complete solution to piracy.” He said DRM couldn’t interdict copyrighted content already “in the clear” on P2P networks without encryption, watermarking or flags. Berman said that in theory copyright owners could file infringement suits against P2P users but “costs of an all-out litigation approach would be staggering for all parties,” adding that “the astounding speed” with which files travel through P2P networks “renders almost totally ineffective litigation against individual P2P users.”

Bill was welcomed by MPAA Pres. Jack Valenti: “We're pleased that a bipartisan group of lawmakers, led by Howard Berman and Howard Coble, want to curb the explosion of Internet piracy. As they clearly recognize, copyright theft harms creators, consumers and intellectual property owners alike.” He said he planned to work with Berman on bill to seek improvements. Bill gives content owners flexibility in crafting technology as they feel is necessary within safe harbor limitations, but is limited to P2P networks, not targeting other areas where files have been shared such as chat rooms.

Berman bill was criticized as “Hollywood vigilante legislation” by Computer & Communications Industry Assn. (CCIA). “Hollywood moguls have long railed against illicit tampering with their protected content by ‘hackers’ and ‘Internet pirates,'” Pres. Ed Black said: “Now the Hollywood studios and the recording industry seek statutory authority for their own hacking, spoofing and virus attacks, with the capability to shut down many Internet Web sites and services at their discretion.” Black said: “The breadth of the safe harbor provisions, combined with the severe limitations on suits by aggrieved parties, are really tantamount to a license for content owners to strike wherever they see fit.”