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Ernest Miller Ernest Miller pursues research and writing on cyberlaw, intellectual property, and First Amendment issues. Mr. Miller attended the U.S. Naval Academy before attending Yale Law School, where he was president and co-founder of the Law and Technology Society, and founded the technology law and policy news site LawMeme. He is a fellow of the Information Society Project at Yale Law School. Ernest Miller's blog postings can also be found @
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July 26, 2004

Ernest Miller's Draft Substitute for the INDUCE Act (IICA) v2.0

Posted by Ernest Miller

Sen. Orrin Hatch (R-UT) has requested assistance in drafting alternative language for the severely flawed Inducing Infringement of Copyrights Act (IICA, née INDUCE Act). Both the Business Software Alliance and NetCoalition have provided guidelines on what the alternative language should include. The IEEE-USA has gone one step further and actually drafted alternative language (Shredding the INDUCE Act (IICA) - CEA, IEEE-USA, NetCoalition and Backing Away from the INDUCE Act (IICA)).

Well, let no one say that I merely criticize and don't work on providing an alternative. Taking into consideration the suggestions of the BSA and NetCoalition, as well as basing the language on the IEEE-USA's, I've begun working on a draft INDUCE Act with alternative language (aka the "Support Technology, Oppose Piracy, Protect Innovation Research And Correct Youth Act of 2004," aka the "STOP PIRACY" Act). I didn't expect to get it right the first time. Version 1.0 is here: Ernest Miller's Draft Substitute for the INDUCE Act (IICA). Below is version 2.0 with differences noted in bold (except the title):

Proposed Substitute to the Inducing Infringement of Copyrights Act

Section 501 of title 17, United States Code, is amended by adding at the end the following:

(g)(1) Inducement of Infringement. Whoever actively and with actual knowledge induces infringement of a copyrighted work by another under Subsections 106(3), 106(4) or 106(6) of this title with the specific and actual intent to cause and to financially benefit from the infringing acts shall be liable as an infringer.

(2) Contribution to an Infringement. Whoever materially and with actual knowledge contributes to the infringement of a copyrighted work by another shall be liable as an infringer.

(3) Vicarious Infringement. Whoever has the right and ability to supervise an activity resulting in a direct infringement and has a direct financial interest in such activity and infringement shall be liable as an infringer.

(4) Limitations on Secondary Liability.

(A) manufacture, distribution, marketing, operation, sale, servicing, support, or other use of embodiments of technology capable of use for infringement, with or without the knowledge that an unaffiliated third party will infringe, cannot constitute inducement of infringement under Subsection g(1) in the absence of any additional active steps taken to encourage direct infringement.
(B) manufacture, distribution, marketing, operation, sale, servicing, support or other use of embodiments of technology capable of a substantial noninfringing use shall not be liable under this title, except for direct infringement and as provided under Subsection g(1).
(5) Damages for violations of section (g)(1) of this section shall be limited to an injunction against inducement, and actual damages for infringement of a work for which the defendant had specific and actual knowledge the work would be infringed.
There are two differences from version 1.0. The first distinction limits inducement to particular types of direct infringement (distribution, public performance and transmission). The reasons for this are several. For example, mucking with the reproduction right could cause headaches with regard to the mechanical license for phonorecords. The derivate work right doesn't seem to be a proper target either. There would seem to be too much danger of collateral damage with regard to creative uses that we would wish to protect (The INDUCE Act and the Right to Prepare Derivative Works).

In any case, the problem cited that the INDUCE Act is meant to solve is not the making of copies, or of derivative works, but of the distribution of these works. If you have 100 copies of a work at home, what is the harm? The real problem is when those copies are distributed. Thus, the first change narrows the INDUCE Act to target the wrong-doers, and not someone who might suggest making mashups at home.

The second change addresses what the proponents of the INDUCE Act claim is the purpose of the Act. They claim that they wish to address the commercial inducers, those who are making "millions of dollars while attempting to avoid any personal risk of the severe civil and criminal penalties for copyright infringement" (Judiciary Statement: “Protecting Innovation and Art While Preventing Piracy”). By including a "financial benefit" clause, only commercial inducers will be targeted.

This is a second draft. It probably still isn't right. If you have any suggested changes, comments, etc., please let me know.

Want to know more about the INDUCE Act?
Please see LawMeme's well-organized index to everything I've written on the topic: The LawMeme Reader's Guide to Ernie Miller's Guide to the INDUCE Act.

Comments (5) + TrackBacks (0) | Category: INDUCE Act


COMMENTS

1. Jay Fienberg on July 26, 2004 04:52 AM writes...

Does the "financial benefit" clause still leave commercial tech developers vulnerable to the threat of liability if their tech might be shown to have infringing uses?

Would this still allow cases with arguments that, say, an iPod like device would (intentionally) be for financial benefit from infringing uses?

(Maybe if this device came with a discalimer that said "we don't want you to infringe with this", it would be ok?)

Permalink to Comment

2. Ernest Miller on July 26, 2004 05:31 PM writes...

Yes, commercial developers would still be vulnerable, but you can't really avoid that. This way, however, many open source projects wouldn't have to worry about potential liability. I've tried to narrow the potential liability so that only bad actors would be caught.

The iPod would be protected so long as Apple did not specifically induced people to violate copyright. I highly doubt they've done that.

Permalink to Comment

3. Jay Fienberg on July 27, 2004 08:32 PM writes...

Thanks.

One concern is that successful open source projects can be associated with "financial benefit"--thinking of, say, RedHat or JBoss as examples.

My guess is that many specific p2p and other innovative network-connected technologies (that might have unintended infringing uses) will grow out of open source projects that might look more like hybrid free software / paid services (or, even "donation" receiving) companies than purely commerical paid software companies.

I don't know if this substitute for INDUCE would still open big issues for the hybrid free / paid developers.

(Please excuse if this is a somewhat dumb question / concern. INDUCE has inspired in me a lot of questions / concerns!)

Permalink to Comment

4. Ernest Miller on July 27, 2004 08:56 PM writes...

No problem. I agree, this doesn't alleviate all concerns. However, it is the best I've been able to come up with. I am open to other suggestions.

Permalink to Comment

5. X on August 27, 2004 06:00 AM writes...

I seem to remember that 'financial benefit' can include the receipt of other copyrighted works in return.

E.G. one might argue that, because some P2P network can be reasonably anticipated to make illicitly copied works more available, the developer, even making free of cost software, is still acting with some kind of financial incentive.

I seem to remember there are other ways in which "financial" benefits can be construed rather broadly. I mean, even ads on one's website might be enough.

In other words, you might want to check on that?

Unless it's covered in your addition "under Subsections 106(3), 106(4) or 106(6) of this title" -- I didn't look those up.

Permalink to Comment


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