MP3 Device Makers Could Be Next

[David Farber <dave () farber net>]

Begin forwarded message:

From: EEkid () aol com
Date: July 10, 2004 11:55:09 AM EDT
To: dave () farber net
Subject: MP3 Device Makers Could Be Next

MP3 Device Makers Could Be Next



Fri Jul 9, 3:15 PM ET

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Add Technology - NewsFactor to My Yahoo!

Jason Lopez, www.newsfactor.com

Critics say it is a chilling proposal, but if the Inducing Infringement 
of Copyrights Act, currently in the Senate, were to become law, 
manufacturers of digital-music devices could be held liable for illegal 
downloading of music.


 Forty-two tech companies, including Google, Yahoo (Nasdaq: YHOO - 
news), Cnet and Intel (Nasdaq: INTC - news), have signed a letter 
denouncing the proposed legislation.

 The author of the bill, Republican Senator Orrin Hatch of Utah, is 
requesting hearings on music downloading and who should bear the 
liability of damages caused by music piracy.

 Bi-Partisan Solution

Last year, Hatch suggested that one remedy to the problem would be to 
develop technology that would destroy the hard drives of offending 
users remotely. He later backed off his extreme stance when it was 
discovered that his own computers were powering his Web site with 
unlicensed software.

 Joining Hatch as co-sponsors of the bill are lawmakers from both sides 
of the aisle, including Democrats Patrick Leahy, Vermont; Tom Daschle, 
South Dakota; and Barbara Boxer, California, as well as fellow 
Republican Bill Frist of Tennessee.

 While many legal experts do not believe the bill will become law, they 
say the tendency to punish rather than innovate is hampering the 
ability of the market to correct the problem. In essence, record 
companies are seen as making attempts to win through the courts, 
because they have been unable to create a successful music-downloading 
system.

 Beyond Borders

In the meantime, the operators of popular peer-to-peer networks 
responsible for carrying much of the pirated music on the Internet 
remain offshore. "Because the Internet has no borders, it is almost 
impossible to reach offshore companies operating on the Internet with 
no U.S. presence," said IP attorney Jim Burger of the Washington, D.C., 
firm Dow, Lohnes & Albertson.

 "The last time I checked, the U.S. had no jurisdiction over Vanuatu," 
he told NewsFactor. Vanuatu is the island nation where Kazaa's 
programmers reside.

 The new legislation might have a bigger impact on companies in the 
U.S. that are engaged in legitimate businesses, Burger believes.

 Negative Impact

"While I have sympathy for the creators whose copyrighted material is 
illegally downloaded, I am concerned that this type of legislation 
could negatively affect companies making products used for 
substantially non-infringing purposes," he said.

 He is not alone in his sentiments. High-tech companies understand that 
litigation, while necessary to protect property on one hand, often 
makes for a lousy long-term business strategy. Suits against individual 
music downloaders can be effective only as long as the lawsuits make 
headlines.

 As news outlets give the suits less coverage, the newest tactic 
appears to be to sue more parties.

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