Competitive Enterprise Institute | 1899 L ST NW Floor 12, Washington, DC 20036 | Phone: 202-331-1010 | Fax: 202-331-0640
Computer users know some downloads are more trouble than they are worth. The proposed INDUCE Act (S. 2560), currently in the Senate Judiciary Committee, would download an entire product-pack of bad laws, undermining the utility not just of downloads, but of key tools that computer manufacturers and internet service providers make available to consumers. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
The Committee's July 22 hearing on the INDUCE Act (working title "Inducement Devolves into Unlawful Child Exploitation") made two things clear. First, technology industries are right to fear this legislation would create major roadblocks in developing new technologies. Second, Judiciary Committee Chairman Orrin Hatch (R-UT) is determined to move this bill through the Senate ASAP no matter what.
INDUCE is supposed to target copyright infringement via illegal downloads, especially on peer-to-peer (p2p) networks like Kazaa and Grokster. The bill would create a new cause of action against anyone who "induces" such infringement—with "inducement" to be determined on a case-by-case basis, using an unspecific "reasonable man" standard to evaluate the presence of intent to induce a copyright violation.
The problem is that this concept has no real limits. Suppliers of any technology that allows transmitting, copying, or sharing of material protected by intellectual property law could be accused of "inducement.” That list is potentially endless: PC's, broadband service, dial-up service, scanners, printers, mp3 file systems, CD recorders, and so on. INDUCE's subjective standards of proof would have a dramatic chilling effect on the development, marketing, and distribution of new and existing technologies (once an accusation makes it to court, costs start to pile up quickly).
Robert Holleyman of the Business Software Alliance, a strong critic of online piracy, told the Judiciary Committee: "We urge you to ensure that beneficial technologies are not put at risk by the need to stop bad actors and to avoid overbroad or ambiguous standards that could chill innovation, deprive consumers of access to beneficial technologies, and encourage costly litigation.” That is sound advice, and equally pertinent to a new initiative by 40+ state attorneys-general (the folks who brought you the tobacco settlement, the gift that keeps on giving…to trial lawyers). Now the state legal eagles warn p2p filesharing networks that they need to police their own p2p nets more rigorously, taking 'concrete and material' steps to prevent illegal activities on t heir networks, or face legal liability themselves.
Fair enough. The p2p networks say they already policy themselves, but claim the AG's (like the entertainment industries) go too far, finding criminal acts in every file-swap, however innocent. The truth is no doubt somewhere in between, but it's not reassuring that eight of the same attorneys-general also have joined to sue energy companies for emitting carbon dioxide (yes, the same stuff we breathe out, and the alleged cause of 'global warming' in popular pseudo-science circles). Is it just me, or is there a dangerous undercurrent of anti-technology, flat-earth sentiment lurking among the AGs when they get together?
Whether at the state or federal level, the threat to future technological progress is not trivial. There are signs of sheer panic at the idea that new technology may cause problems. Senate Majority Leader Bill Frist (R-TN), INDUCE cosponsor, thinks his home-state country music industry is at risk. On June 22, he told the Senate "The once vibrant music community is being decimated by online piracy.” Yet country music sales rose by 11.2 percent this year. As Universal Music Group Nashville Chairman Luke Lewis recently noted: "There's a sense of optimism...The pickup in sales is not attributable to a couple of big superstars. The sales are spread out among a lot of different artists."
At a minimum, sweeping legislation like the INDUCE Act should be thoroughly vetted: not just with copyright holders, but with affected businesses, plus some who have a wider perspective, like the White House Office of Science and Technology, the Department of Congress, and the Librarian of Congress. An example of this 'distanced' perspective is a study of the copyright conundrum just released by the Congressional Budget Office. Overall, CBO concludes, "Revisions to copyright laws should be made without regard to the vested interests of particular business and consumer groups. Instead, they should be assessed with regard to their consequences for efficiency in markets for creative works and other products.” Precisely: If new law is needed, it has to be more nuanced, less risky than the INDUCE approach.