BILL WOULD CRIMINALIZE P2P SHARING BUT MAINTAIN FILING THRESHOLD

HR-4077, the bill being marked up by the House Judiciary Courts, Internet & Intellectual Property Subcommittee, was introduced earlier Wed. by Subcommittee Chmn. Smith (R-Tex.). The bill replaces an earlier anti-piracy bill, HR-1561, and adds criminal file-sharing provisions. Those provisions, however, don’t appear to reduce the threshold for prosecution, a departure from draft legislation circulating last week (WID March 29 p1).

Officially called the Piracy Deterrence & Education Act of 2004, HR-4077 still contains HR-1561 provisions that would have the Dept. of Justice play a role in educating citizens on the dangers of file-sharing. House Internet Caucus Co-Chmn. Boucher (D-Va.) told us he planned to introduce an amendment to strip that language, in part because of concerns that DoJ would divert resources from law-enforcement efforts. HR-4077, like HR-1561, would appropriate $15 million for the education effort, but HR- 4077 includes language that the education campaign “shall not use funds or resources of the Department of Justice allocated for criminal investigation or prosecution.” HR-4077 also adds language that the DoJ education campaign would involve the “providing of information and notice to deter members of the public from committing acts of copyright infringement through the Internet.” Additional new language would invite copyright owners -- presumably including MPAA and RIAA -- to work with DoJ on sector-specific education approaches.

Individuals sharing music or other copyrighted files through a P2P operator could face years in prison under HR-4077. Anyone sharing (1) one or more works valued at $10,000 or more, (2) one prerelease work, or (3) 1,000 or more works of any value, would face up to 3 years in prison, or up to 5 years if profit was involved. A 2nd offense would mean up to 6 years in prison, or up to 10 years if the sharing was for profit.

Draft language of the new bill suggested that prosecutors hadn’t yet brought a criminal case against a P2P file sharer in part because it was difficult to make a case that the file sharing was “willfully” in violation of copyright law. That draft language lowered the threshold for prosecution for P2P users, which drew criticism from the ISP and P2P communities. But HR-4077 maintains the willfulness standard, and contains a provision that “evidence of reproduction or distribution of a copyrighted work, by itself, shall not be sufficient to establish the necessary level of intent.”

The new bill does remove a difficulty prosecutors have had in determining the commercial value of copyrighted works, by permitting prosecution when 1,000 works are offered for sharing. Smith also struck from the “findings” section at the beginning of HR-2517 that “[m]any computer users… do not know that copyright laws apply to Internet activity.” While HR-4077 still contains education provisions, it appears to assume anyone sharing files on a P2P network knows it could be a copyright infringement.

Added to the findings was a provision first seen in a manager’s amendment to HR-2517, offered at an aborted markup last fall. That provision states P2P services pose privacy and security threats and “contain software that could allow an independent company to take over portions of users’ computers and Internet connections and has the capability to keep track of users’ online habits.” The new bill still lacks liability protection for ISPs, protection found in the Digital Millennium Copyright Act.

Other modifications were made to HR-2517 in the new bill: (1) Grafted onto HR-4077 is language banning use of a camcorder or other device to film a movie in a theater. The language mirrors that of S-1932 by Sen. Cornyn (R-Tex.). Subcommittee ranking Democrat Berman (Cal.) and full committee ranking Democrat Conyers (Mich.) also had legislation (HR-2752) that would have banned such activity. (2) Portions of HR-2517 targeting physical counterfeiting have been stripped. Last Nov., Smith introduced a separate bill on that subject, HR-3632, the Anticounterfeiting Amendments of 2003. That bill also was scheduled for markup at our deadline Wed. in the same subcommittee. Sen. Biden (D-Del.) has introduced 2 similar bills recently on the subject, S-2227 and S-2242.

Much of HR-4077 consists of findings that P2P networks permit trafficking of copyrighted works and invite “child pornography, viruses, and confidential personal information” to spread. A “Sense of the Congress” portion, Sec. 9, states Kazaa has been downloaded more than 600 million times. “The vast majority of software products, including peer-to-peer technology, do not pose an inherent risk,” the bill states, and it praises “responsible” software companies that show concern for their users. The bill the cites several studies about the dangers of P2P. “To date, the businesses that run publicly accessible file- sharing services have refused or failed to voluntarily and sufficiently address these problems,” it says.

In response, P2P United Exec. Dir. Adam Eisgrau issued a statement Wed. calling the bill “a waste of taxpayer dollars” pushed by “Big Music and Hollywood.” He said the subcommittee “could truly advance public policy by saying no to industry’s insatiable demand for sanctions for the rest of this Congress and issuing mandatory ‘invitations’ instead to talks among all stakeholders on how to turn billions of unstoppable downloads into billions of bankable dollars for artists and other creators.” In a letter to subcommittee members, Eisgrau points to recent studies suggesting P2P isn’t hurting CD music sales (WID March 31 p1). He also informs the subcommittee that while his trade group represents P2P services such as Morpheus, Grokster, BearShare, Blubster and eDonkey, it doesn’t represent Kazaa.