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Ernest Miller on What's Wrong with the Induce Act

by Richard Koman
08/20/2004

Imagine a dark world in which unscrupulous adults rake in riches by getting children to do their dirty work, exposing themselves to arrest and imprisonment while the ringleaders run no risk of punishment. Sound like Oliver Twist? Orrin Hatch thinks so: in remarks introducing his Induce Act, or more properly, the Inducing Infringement of Copyrights Act, Hatch likened P2P software developers to Dickens' Fagan and Bill Sykes, or even worse:

In the film Chitty-Chitty Bang-Bang, the leering "Child-Catcher" lured children into danger with false promises of "free lollipops." Tragically, some corporations now seem to think that they can legally profit by inducing children to steal -- that they can legally lure children and others with false promises of "free music."

In other words, the only reason anyone runs P2P software is to steal music and movies. And software developers are making money hand over fist by tricking, luring, and generally "inducing" children (Hatch claims that half of P2P users are children) to commit the crime of copyright infringement, exposing them and their families to litigation.

(Editor's note: Ernest Miller has pointed out that the "Child-Catcher" in the Chitty-Chitty Bang-Bang film actually works for the government because the government passed an absurd law making children illegal. So it is actually a poor example for Senator Hatch to have used.)

Read Ernest Miller's blog, The Importance of ..., for his incisive opinion not only on the Induce Act but also other developments in media, technology, and law. And definitely check out the Hatch Hit List.

For a comprehensive index to all of Miller's writings on Induce, see the LawMeme Reader's Ernest Miller's Guide to the Induce Act, including links to the draft language and the "Obsessively Annotated Introduction to the Induce Act."

The P2P Congress also has P2P links to video of the Judiciary Committee's hearing on the bill.

Finally, as he promises in this interview, Miller has written a piece called "Induce Act Harms National Security," which quotes from Richard Koman's interview with Army Col. Michael Macedonia.

The problem, as Hatch sees it, is that P2P software built on decentralized networks are outside the conventional laws of "secondary liability," which punish those who "aid, abet, ... or induce" the commission of a crime. Since LimeWire, for instance, is based on the decentralized Gnutella network, the software's makers have no control over what users do with the technology -- unlike Napster, which controlled its own network and was thus saddled with business-crushing requirements to police how it was used. The idea of Induce, which is co-sponsored by Democratic Senator Patrick Leahy of Vermont, is to create a law that removes such loopholes, in the process shifting the focus of litigation from direct violators to for-profit targets.

But according to numerous legal experts, tech industry representatives, and informed citizens, the bill causes many more problems than it solves. To understand what's wrong with this bill, and why many think it would mean nothing less than Hollywood's right to veto any technology it doesn't like, we turned to Ernest Miller, the author of "The Importance Of ... " blog and creator of the Hatch Hit List, an ongoing list of new and innovative technologies likely to be illegal under the Induce Act (see sidebar).

Richard Koman: Is Senator Hatch trying to address a real problem or trying to provide cover for Hollywood?

Ernest Miller: I can't really say what Hatch is thinking about this issue specifically. Hollywood is certainly pushing this law because they want to have a veto over innovation and technology. Whether Hatch actually realizes this or not, I'm not sure.

Koman: One thing he talks about is that current law exposes end users to infringement prosecution, but leaves the developers of decentralized P2P programs immune.

Miller: Well, this is not a new problem. The Internet itself is going to expose people to copyright liability, because the Internet is a wonderful copyright-infringement machine. This has both good uses and bad uses. It may seem like ancient history now, but long before Napster, people were posting MP3s on their web pages. In those cases, Hollywood was going after the users and nobody seemed to have a problem with that. Generally, they weren't suing, they were just asking them to take them down, but they were going after them.

Koman: You make the point that if people were so interested in protecting consumers from this liability, they could simply pass legislation protecting them.

Miller: Absolutely. If they don't want people to be sued for engaging in copyright infringement they could pass a law to that effect. But they're not going to do that and the Induce Act doesn't stop those suits. The lawsuits will continue. There's no promise from the recording industry or the MPAA that they'll stop the lawsuits if the Induce Act passes.

In fact, they passed the No Electronic Theft Act almost a decade ago because of a student at MIT who posted copyright material to the Internet for free. They didn't think they could go after him under copyright law because he wasn't making any money from it, and so they made it illegal just to offer things on the Internet whether you made any profit or not. So clearly they're not against suing consumers -- they passed laws to do it. They're saying they don't want to sue consumers but that's really not the case.

Koman: What does the current language say?

Miller: Basically it adds to the things that you can sue people for -- it doesn't take anything away. Everything you could sue for today, you can still sue for, after Induce becomes law. It basically creates a new kind of secondary liability for people who haven't directly infringed copyright but who provide tools or support for people who do infringe copyright. It defines "intentional inducement" in a very interesting way, by basing it on circumstantial evidence. If a reasonable person would think that you meant to encourage people to infringe copyright, then you would be guilty of the infringement.

Koman: What kind of technology would be threatened because of this circumstantial standard?

Miller: Well, clearly the VCR. Sony was sued in 1976 for bringing out the Sony Betamax, and the Supreme Court finally ended that case in 1984. But had the Induce Act been in force in 1976, clearly they would have been sued under it and the suit might have been successful. The movie industry made a lot of claims that Sony's ads, even though they didn't directly come out and say "infringe copyright," were clearly telling people to infringe copyright, that the machine wasn't designed with precautions to keep people from infringing copyright, and they didn't put enough copyright warnings in the manuals or on the hardware. These are the exact sorts of things they're complaining about regarding P2P software today, which is what they want to make illegal.

Koman: Doesn't that suggest the Sony decision itself would be attacked or legislated out of existence were Induce to become law?

Miller: No, actually. One of the defenses of the Induce Act is that it doesn't overturn Sony. And, of course, the politicians are all very supportive of the Sony Betamax decision because they don't want people to think they're trying to get rid of the VCR. But the Induce Act in many ways does something worse than directly overrule Sony Betamax: it would make the Sony Betamax decision irrelevant by creating a new way to sue.

Now, normally, if you want to get somebody for secondary liability and copyright, you'd sue for "contributory or vicarious liability." Sony Betamax provides protection to companies bringing out new devices and services. However, the Induce Act ignores Sony and basically makes it irrelevant because you sue under "inducement of copyright infringement" and then the Sony protections don't apply. And, of course, the standard is very subjective and vague.

Koman: So to show inducement, you would just have to show that the provider of some technology, with a wink and a nod, hoped that people would get the idea that they could use the product for some illicit purpose.

Miller: Right. With a wink and nod, people would violate copyright and the company would sell more product because people could infringe copyright. In fact, you don't actually have to make a profit to do this, so open source projects would also be liable under the Induce Act. The main interest, of course, is they want to go after people who are making money from P2P services such as Kazaa; however, the way the bill is written, you don't actually have to make money to get sued. So imagine if somebody wrote an open source Gnutella client; they could be sued, even though they just did it as a hobby, with no anticipation of making any profit whatsoever.

There are a number of open source projects they could go after; certainly, they could sue with regard to certain elements of an open source project. If you wrote a new IM client that let people browse their friends' hard drive, for example, you might get sued because of it, and it wouldn't matter whether you made a profit or not. Open source is clearly threatened by this.

Koman: So whether the project included "substantially noninfringing uses" or not would no longer apply.

Miller: Absolutely. Consider BitTorrent -- even though there's very clear, obvious, wonderful uses for BitTorrent, they could look at that and say, well, it's really for people to use for infringement, so it's outta here.

Koman: To show that P2P networks are actually useful for something besides copyright infringement, the P2P Congress pulled this publicity stunt of distributing video of the hearing over BitTorrent, LimeWire, and eDonkey. But under Induce, it doesn't really matter whether P2P networks are used for valuable things or not.

Miller: Under the Induce Act, no. And I would say it's not a publicity stunt at all; it's actually a very valuable service. You have all these hearings but they're only streamed, and Congress doesn't provide an archive. Now, hosting them is bandwidth-expensive, but BitTorrent and some of these other P2P systems, like eDonkey, which stream from multiple sources, severely reduce the bandwidth costs to make these things available.

Koman: The chilling effect on technology developers seems very clear. One that's received a lot of press has been, would the iPod be illegal?

Miller: Realistically, iPods are not going to be sued out of existence. It's a possibility, but it's very unlikely because Apple's already done a deal with the recording industry. However, if you were to imagine that Apple hadn't done a deal, then very clearly the iPod could be sued. Now, obviously, the iPod plays the DRM-protected iTunes, but it also plays MP3s. You have to remember that the RIAA sued the very first MP3 player, the Diamond Rio. And in fact, they were still suing them as late as 1999, five years ago, when the lawsuit finally ended. So had Apple brought out the iPod back in 1999 or 1998, they would have been sued as well. And with the Induce Act the lawsuit would very likely have been successful. I'm not interested in the iPod specifically, but in the next iPod -- the next really cool thing that could be used for infringement, but which also makes our lives a lot better.

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