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Statement of Senator Orrin G. Hatch
Before the United States Senate on Introduction of the "Inducing
Infringement of Copyrights Act of 2004" S. 2560
June 22, 2004
SEN. HATCH. Mr. President, I rise with my esteemed colleague and
friend, Senator Leahy, ranking Democrat Member of the Senate Judiciary
Committee, to introduce the "Inducing Infringement of Copyrights Act
of 2004." This Act will confirm that creative artists can sue
corporations that profit by encouraging children, teenagers and others
to commit illegal or criminal acts of copyright infringement.
Senator Leahy and I are pleased that Majority Leader Frist and
Minority Leader Daschle and Senators Graham and Boxer are
co-sponsoring this important bi-partisan legislation.
Mr. President, it is illegal and immoral to induce or encourage
children to commit crimes. Artists realize that adults who corrupt or
exploit the innocence of children are the worst type of villains. In
Oliver Twist, Fagin and Bill Sikes profited by inducing children to
steal. 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."
Such beliefs seem common among distributors of so-called peer-to-peer
filesharing ("P2P") software. These programs are used mostly by
children and college students – about half of their users are
children. Users of these programs routinely violate criminal laws
relating to copyright infringement and pornography distribution.
Criminal law defines "inducement" as "that which leads or tempts to
the commission of crime." Some P2P software appears to be the
definition of criminal inducement captured in computer code.
Distributors of some P2P software admit this. The distributors of
EarthStation 5 state, "While other peer 2 peer networks like Kazaa or
Imesh continue to deny building their programs for illegal file
sharing, at ES5 we not only admit why we built ES5, we actually
promote P2P, endorse file sharing, and join our users in swapping
files!"
Recently, in the Grokster case, a federal court drew similar
conclusions about the intent of other distributors of P2P software.
It warned that some P2P distributors "may have intentionally
structured their businesses to avoid secondary liability for copyright
infringement, while benefiting financially from the illicit draw of
their wares." In other words, many P2P distributors may think that
they can lawfully profit by inducing children to break the law and
commit crimes.
They are dead wrong. America punishes as criminals those who induce
others to commit any criminal act, including copyright infringement.
The first sentence of our Criminal Code states:
Whoever commits an offense against the United States or aids, abets,
counsels, commands, induces, or procures its commission, is punishable
as a principal….
Indeed, it is absurd to think that our law might be otherwise. No
civilized country could let sophisticated adults profit by tempting
its most vulnerable citizens – its children – to break the law.
I think we must understand how some corporations came to confuse child
endangerment with a legal business model. Their confusion seems to
arise from court cases misinterpreting a well-intended Supreme Court
decision that tried to clarify two critical components of federal law:
the law of secondary liability and the law of copyright.
The Supreme Court states that secondary liability is "imposed in
virtually all areas of the law." Secondary liability is universal
because its logic is compelling. It does not absolve lawbreakers of
guilt. But it recognizes that we are all human: We are all more
likely to break the law if encouraged or ordered to do so. Secondary
liability thus discourages lawlessness by punishing people who
manipulate others into doing the "dirty work" of breaking the law.
Secondary liability usually targets two types of persons: 1) those who
induce others to break the law, and 2) those who control others who
break the law.
Though secondary liability is nearly ubiquitous, it has almost always
remained as a judge-made, common-law doctrine – and for a good reason.
Secondary liability prevents the use of indirect means to achieve
illegal ends. Consequently, the scope of secondary liability must be
flexible – otherwise, it would just instruct wrong-doers on how to
legally encourage or manipulate others into breaking the law. The
common-law judicial process is ideally suited to evolve flexible
secondary-liability rules from the results of many individual cases.
As a result, Congress rarely codifies secondary liability. It has
codified secondary liability to narrow it, as in the Patent Act.
Congress has codified secondary liability in the Criminal Code to
ensure that the narrow construction given criminal statutes would not
foreclose secondary liability. In the Digital Millennium Copyright
Act, Congress codified a complex balance between opposed interests
that expanded one type of secondary liability and narrowed another.
Congress has always assumed that infringers could readily induce
consumers to accept infringing copies of works. It thus created "a
potent arsenal of remedies against an infringer…." But secondary
liability often arises if a third party can be ordered or induced to
make the infringing copies. Consequently, only after copying devices
became available to people who might be induced to infringe did
questions about secondary liability for infringement become pressing.
In 1984, these questions reached the Supreme Court in Sony Corp. v.
Universal City Studios, Inc. Sony held that the makers of the Betamax
VCR could not be held secondarily liable in a civil suit brought by
copyright holders – even though some consumers would use VCRs to make
infringing copies of copyrighted TV broadcasts.
Sony also created a broader limitation on secondary liability by
importing a limitation that that Congress had codified only in the
Patent Act; this was the substantial-noninfringing-use rule, also
called the "staple article of commerce" doctrine. Sony intended this
rule to strike, as between creators of works and copying equipment,
the same "balance" that it had struck under the Patent Act between the
rights of patent holder and makers of staple products.
Under the Patent Act, the substantial-noninfringing-use rule bars
secondary liability for selling a "staple" product that has a
"substantial noninfringing use" – even if that staple could also be
used as a component in an infringing copy of a patented invention.
This rule protects makers of staples without changing the nature of
secondary liability. In particular, it does not immunize bad actors
who intend to distribute "patent-infringement kits." Even in the rare
case of a novel invention that consists only of "staple" components,
an "infringement kit" must bundle components and include assembly
instructions. Neither the bundle nor the instructions will likely
have a "substantial noninfringing use."
Sony intended this rule to strike the same admirable "balance" under
the Copyright Act. Unfortunately, Sony also proposed that if this
rule proved problematic, Congress should alter it on a
technology-by-technology basis. This proposal was flawed: In 1976,
Congress redrafted the Copyright Act to avoid the need to re-adjust
copyrights on a technology-by-technology basis because legislation
could no longer keep pace with technological change. Returning to
this impractical technology-based approach would create an endless
procession of "tech-mandate" laws that discriminate between
technologies Congress deems "good" or "bad." But technologies are
rarely inherently either "good" or "bad." Most can be used for either
purpose; the effect depends on details of implementation impossible to
capture – or predict – in prospective legislation.
Of course, the dysfunctional corrective mechanism that Sony proposed
would have become problematic only if the Sony limitation was
misunderstood or misapplied by lower courts. Unfortunately, that has
now happened.
In cases like Napster and Grokster, lower courts misapplied the
substantial-non-infringing-use limitation. These courts forgot about
"balance" and held that this limitation radically alters secondary
liability. In effect, these cases retained secondary liability's
control prong but collapsed its inducement prong. The results of
these cases prove this point: Napster imposed liability upon a
distributor of copying devices who controlled infringing users;
Grokster did not impose liability upon distributors who appeared to
induce and profit from users' infringement.
A secondary-liability rule that punishes control and immunizes
inducement is a public-policy disaster. It seems to permit the
distribution of "piracy machines" designed to make infringement easy,
tempting, and automatic. Even Harvard's Berkman Center for Internet
and Society suggests that this is happening. The Center warns that
"it can be extremely difficult for a non-expert computer user to shut
down" the viral redistribution that can otherwise automatically make
the user an international distributor of infringing works. The Center
notes that the "complexity of KaZaA's installation and disabling
functions" may leave many users unaware that they have become a
contributor to global, for-profit copyright piracy. Unfortunately,
"piracy machines" designed to mislead their users are just one of the
perverse effects of a secondary-liability rule that punishes control
and immunizes inducement.
Perhaps the least perverse of these effects has been years of conflict
between the content and technology industries. Content creators
sought the tech-mandate "corrections" that Sony proposed. Technology
industries opposed such laws because they too easily foreclose
innocent or unforeseen applications. P2P software illustrates the
problem: Today, most P2P software functions like Earthstation 5's
"piracy machine." Yet all agree that non-piracy-adapted
implementations of P2P could have legitimate and beneficial uses.
A rule that punishes only control also produces absurd results.
Secondary liability should focus on intent to use indirect means to
achieve illegal ends. A rule that punishes only control degenerates
into inane debate about which indirect means was used. Thus Napster
and Grokster are regulated differently – though they function
similarly from the perspective of the user, the distributor, or the
copyright holder.
A rule that punishes only control also acts as a "tech-mandate" law:
It mandates the use of technologies that avoid "control" – regardless
of whether they are suited for a particular task. Napster was
punished for processing search requests efficiently on a centralized
search index that it controlled. Grokster escaped by processing
search requests less efficiently on a decentralized search index that
it did not control. Rewarding inefficiency makes little sense.
A secondary-liability rule that punishes only control also punishes
consumers: It encourages designers to avoid "control" by shifting
risks onto consumers. For example, Napster incurred billion-dollar
liability because it controlled computers housing a search index that
located infringing files. Programs like Kazaa avoid Napster's
"control" by moving their search indices onto computers owned by
unsuspecting consumers. Consumers were never warned about the risks
of housing these indices. As a result, many consumers, universities,
and businesses now control computers that house "mini-Napsters" –
parts of a search index much like the one that destroyed Napster.
These indices could still impose devastating liability upon anyone who
"controls" a computer housing them. A secondary-liability rule that
punishes only control thus rewards Kazaa for shifting huge risks onto
unsuspecting consumers, universities and businesses.
And search indices are just one of the risks that designers of P2P
software seem to impose upon their young users to avoid control. For
example, the designers of most filesharing software choose to lack the
ability to remove or block access to files known to contain viruses,
child pornography or pornography mislabeled to be appealing to
children. This ability could create "control" and trigger liability.
Aiding distributors of viruses and pornography may be just an
unfortunate side effect of avoiding control while inducing
infringement.
A secondary-liability rule that immunizes inducement also encourages
attempts to conceal risks from consumers: It is easier to induce
people to take risks if they are unsure whether they are incurring a
risk or its severity. The interfaces of most P2P software provide no
warnings about the severe consequences of succumbing to the constant
temptation of infringement.
Another risk to users of P2P software arises when pornography combines
with the "viral redistribution" that thwarts removal of infringing
copies of works. Most filesharing networks are awash in pornography,
much of it mislabeled, obscene, illegal child pornography, or harmful
to minors. Anyone risks criminal prosecution if they distribute
pornography accessible to minors over these child-dominated networks.
As a result, one P2P distributor who does distribute "adult" content
demands that it be protected by access controls. But every adult who
uses this distributor's software as intended to download one of
millions of unprotected pornographic files automatically makes that
pornography available for re-distribution to millions of children.
This distributor has sat silently – knowing that its software exposes
millions of its users to risks of criminal prosecution that the
distributor cannot be paid to endure.
Perhaps the worst effect of punishing control and rewarding inducement
is that it achieves precisely what Sony sought to avoid: It leaves
copyright holders with an enforcement remedy that is "merely
symbolic": It seems real, but it is illusory.
In theory, a rule that immunizes inducement still permits enforcement
against those induced to infringe. At first, this remedy seems viable
because copyrights have traditionally been enforced in lawsuits
against direct infringers who actually make infringing copies of
works.
But a fallacy lurks here: The "direct infringers" at issue are not the
traditional targets for copyright enforcement. In fact, they are
children and consumers: They are the hundreds of millions of
Americans – toddlers to seniors – who use and enjoy the creative works
that copyrights have helped create.
There is no precedent for shifting copyright enforcement toward the
end-users of works. For nearly 200 years, copyright law has been
nearly invisible to the millions who used and enjoyed creative works.
Copyright law was invisible to consumers because the law gave creators
and distributors mutual incentives to negotiate the agreements that
ensured that works reached consumers in forms that were safe to use in
foreseeable ways. Now, those incentives are collapsing. As a result,
artists must now waive their rights or sue consumers – their fans.
Worse yet, artists must sue their fans for the sin of misusing devices
designed to be easy and tempting to misuse. That is unfair: When
inducement is the disease, infringement can be seen as just a symptom.
Yet artists must ignore inducers who profit by chanting, "Hey, kids,
infringement is cool, and we will help you get away with it."
Instead, artists can only sue kids who succumb to this temptation.
They must leave Fagin to his work – and sue Oliver Twist.
This sue-Oliver "remedy" is a debacle. For example, immunizing
inducement ensures that artists will have to sue their fans: Inducers
will have both the incentive and the means to thwart less extreme
measures, like educational campaigns. For example, RIAA tried to
avoid lawsuits against filesharers by sending educational instant
messages to infringers. Kazaa, for "privacy" reasons, disabled
instant messaging by default in the next version of its software.
Lawsuits then followed.
And imagine the poor parent who tries to tell a teenager that free
downloading of copyrighted music is illegal. The teenager, confused
because "everyone is doing it," consults a leading technology-news
site promising a "trusted source of information for millions of
technology consumers." There, the teenager finds a P2P distributor
promoting "Morpheus 4.0, the only American filesharing software ruled
legal by a U.S. federal court." This statement is false: Grokster
did not rule Morpheus "legal"; in fact, the case only confirmed that
downloading copyrighted works is illegal. Below this misinformation,
the teenager will find an independent editorial review rating Morpheus
4.0 as a "Recommended" download and "an excellent choice" for those
seeking "the latest and greatest." Who will the teenager believe?
Worse yet, if artists must sue only the induced, they just feed the
contempt for copyrights that inducers breed. Inducers know that
people induced to break a law become that law's enemies: Once you
break a law, you must either admit wrongdoing or rationalize your
conduct. Rationalization is often so easy. You can blame the law:
Copyright is a stupid law needlessly enshrined in the Constitution by
naives like James Madison. You can blame the victim: Some rock stars
still make money; I do not like the "business model" of the record
labels. You can blame the randomness of enforcement: Everyone else
was doing it, so why not me? Anyone who has talked to young people
about filesharing has heard such rationalizations time and again.
And forcing artists to ignore inducers and sue the induced locks
artists into a war of attrition that they are unlikely to win. If you
imagine inducement as a bush, this "remedy" forces artists to spend
their money to sever each leaf – while the inducer makes money by
watering the root. Artists may not be able to sustain this unending
battle.
This may let inducers attempt an extortionate form of "outsourcing."
Inducers can increase or decrease their devices' propensity to
encourage piracy. Inducers can thus tell American artists that if the
artists pay the inducers to become licensed distributors of their
works, perhaps fewer bad things will happen. Implicitly, if artists
do not pay, perhaps more bad things will happen. Were artists to
succumb to such tactics, jobs and revenues created by the demand for
American creative works would go overseas to some unsavory locales.
Worst of all, inducers will inevitably target children. Children
would be easily induced to violate complex laws like the Copyright
Act. Any child is a terrible enforcement target. And because most
adults never induce children to break laws, children induced to
infringe copyrights would not even be "bad kids." Indeed, they would
probably be smart, mostly law-abiding young people with bright
futures. Innocent, mostly law-abiding children make the worst
enforcement targets – and thus the best "human shields" to protect an
inducer's business model.
This threat to children is real. Today, artists are suing high-volume
filesharers who cannot be identified until late in the process. One
filesharer sued for violating federal law over 800 times turned out to
be a 12-year-old female honor student. This otherwise law-abiding
young girl and her family then faced ruin by the girl's favorite
artists. The public knew that something was wrong, and it was
outraged. So the people who gave that girl an easily misused toy –
and profited from her misuse of it – exploited public outrage with
crocodile tears about the tactics of "Big Music." And then, I
imagine, they laughed all the way to the bank.
The Supreme Court could not have intended to force artists to sue
children in order to reduce the profits that adults can derive by
encouraging children to break the law. No one would intend that. Yet
it seems to be happening.
These are the inevitable results of a secondary-liability rule that
immunizes inducement. This "rule" has created the largest global
piracy rings in history. These rings now create billions of
infringing copies of works, and reap millions in profits for leaders
who insulate themselves from direct involvement in crime by inducing
children and students to "do the dirty work" of committing illegal or
criminal acts. These rings then thwart deterrence and condemn
attempts to enforce the law. These rings may now use profits derived
from rampant criminality to extort their way into the legal Internet
distribution market – a market critical to the future of our artists
and children.
This must stop – and stop now. Artists have tried: They targeted
for-profit inducers. But artists were thwarted by a court ruling that
held, in effect, that although artists can sue exploited children and
families into bankruptcy, courts need "additional legislative
guidance" to decide whether artists can, instead, sue the corporations
that profit by inducing children to break the law. I find this
assertion wholly inconsistent with the intent of both Congress and the
Supreme Court. But until this fundamentally flawed ruling is
overruled by legislation or higher courts, artists cannot hold
inducers liable for their actions.
Fortunately, Congress has charged the Department of Justice to enforce
the Criminal Code. In the Criminal Code, Congress made it a federal
crime to willfully infringe copyrights or to distribute obscene
pornography or child pornography. Congress also made it a crime to
induce anyone – child or adult – to commit any federal crime.
Indeed, Congress codified many forms of criminal secondary liability
in the Criminal Code. I have already quoted its first sentence. Here
is its second: "Whoever willfully causes an act to be done which if
directly performed by him or another would be an offense against the
United States, is punishable as a principal." One court has said that
this ensures that "[a] crime may be performed through an innocent
dupe, with the essential element of criminal intent residing in
another person." Not coincidentally, some federal prosecutors worry
that P2P software makes infringement so tempting, easy and automatic
that many of its users will lack criminal intent. Perhaps – but their
relative innocence will not protect their inducers.
The Criminal Code also codifies other forms of secondary liability,
like this one:
If two or more persons conspire to injure, oppress, threaten any
person in any State … in the free exercise or enjoyment of any right
or privilege secured to him by the Constitution or the laws of the
United States, …. [t]hey shall be fined under this title or imprisoned
not more than ten years, or both….
These examples of laws imposing secondary criminal liability have
something in common: Congress codified no exceptions for "substantial
non-criminal uses." The message is clear: Those who induce others to
commit crimes cannot avoid prison by showing that some of them
resisted. I will work with my colleagues in Congress to ensure that
the Department of Justice enforces the federal laws that prevent
anyone from inducing violations of any federal law by our citizens,
our students, or our children.
Congress, too, must do its part by enacting the Inducing Infringement
of Copyrights Act, S. 2560. This bill will protect American artists,
children and taxpayers by restoring the privately funded civil remedy
crippled by the Grokster ruling. Congress must act: A federal court
has held that artists can only enforce their rights by suing exploited
children and students pending "additional legislative guidance" about
whether artists can, instead, sue the corporations that profit by
inducing children to break laws and commit crimes. Silence could be
misinterpreted as support for those who profit by corrupting and
endangering others. This bill will restore the tried, privately
funded civil enforcement actions long used to enforce copyrights.
This bill will also preserve the Sony ruling without reversing,
abrogating or limiting it. The Inducement Act will simply import and
adapt the Patent Act's concept of "active inducement" in order to
cover cases of intentional inducement that were explicitly not at
issue in Sony. The Inducement Act also preserves the Section 512 safe
harbors for Internet service providers.
The bill also contains a savings clause to ensure that it provides the
"guidance" courts have requested – not an iron-clad rule of decision
for all possible future cases. This flexibility is critical because
just as infringement cases are fact specific, so should inducement
cases center on the facts of a given case, with courts endowed with
the flexibility to impose just results. This bill does not purport to
resolve or affect existing disagreements about when copies made and
used within an individual's home environment are permissible and when
they are infringing.
Rather, this bill is about is the intentional inducement of global
distribution of billions of infringing copies of works at the prodding
and instigation of sophisticated corporations that appear to want to
profit from piracy, know better than to break the law themselves, and
try to shield themselves from secondary liability by inducing others
to infringe and then disclaiming control over those individuals.
I also want to thank everyone who has worked with us to craft a bill
that addresses this serious threat to children and copyrights without
unduly burdening companies that engage in lawful commerce in the wide
range of devices and programs that can copy digital files. As Sony
illustrates, clear knowledge that a copying device can be used to
infringe does not provide evidence of intent to induce infringement.
It was critical to find a way to narrowly identify the rare bad actors
without implicating the vast majority of companies that serve both
consumers and copyright-holders by providing digital copying devices –
even though these devices, like all devices, can be misused for
unlawful purposes. In particular, I would like to thank the Business
Software Alliance for its invaluable assistance in crafting a bill
that protects existing legitimate technologies and future innovation
in all technologies – including peer-to-peer networking.
Senator Leahy and I look forward to working with all affected parties
to enact this bill and restore the balance and private enforcement
that Sony envisioned. But until Congress can enact the Inducing
Infringement of Copyrights Act, the duty and authority to stop
inducement that targets children and students resides in the
Department of Justice that Congress has charged to protect artists,
commerce, citizens and children. The Department must act now to
clarify some simple facts: American has never legalized the "business
model" of Fagin and Bill Sykes. Modern Child-Catchers cannot lawfully
profit by luring children into crime with false promises of "free
music."
Mr. President, I urge all of my colleagues to support S. 2560, the
Inducing Infringement of Copyrights Act.
On Wed, 23 Jun 2004 13:47:51 -0700, John Parres
wrote:
>
> http://www.washingtonpost.com/wp-dyn/articles/A64204-2004Jun23.html
>
> Senate Bill Targets Internet Song-Swapping
>
> By Andy Sullivan
> Reuters
> Wednesday, June 23, 2004; 12:22 PM
>
> Senate leaders late Tuesday introduced a bill to make it easier to sue
> "peer-to-peer" services like Kazaa and eDonkey 2000, which allow users
> to copy music and movies for free over the Internet.
>
> The Inducing Infringement of Copyrights Act of 2004 would allow
> companies to be held liable if they "intentionally induce" copyright
> infringement.
>
> Under a recent U.S. court ruling, peer-to-peer networks cannot be held
> liable if consumers use them to distribute copyrightable works.
>
> While that case is being appealed, the recording industry has sued
> 3,429 individual peer-to-peer users, many of them underage.
>
> In remarks on the Senate floor, Utah Republican Sen. Orrin Hatch said
> peer-to-peer companies were exposing children to legal risks.
>
> "It is illegal and immoral to induce or encourage children to commit
> crimes," said Hatch, who as chairman of the Judiciary Committee
> oversees copyright matters.
>
> The odds of any new bill becoming law are slim, as Congress has only
> 35 working days scheduled before the fall elections.
>
> But the bill has powerful backers, including Senate Majority Leader
> Bill Frist, Sen. Tom Daschle, the Democratic Senate leader, and
> Vermont Sen. Patrick Leahy, the top Democrat on the Judiciary
> Committee.
>
> The recording industry managed to use copyright law to shut down the
> first file-sharing service, Napster, which has recently been
> resurrected as an industry-approved pay service.
>
> But the industry has had less luck against second-generation services
> like Kazaa and Grokster, which claim their decentralized architecture
> prevents them from controlling user behavior.
>
> A U.S. district court last year said these networks could not be held
> liable because, like photocopiers and videocassette recorders, they do
> not commit copyright infringement but merely make it possible.
>
> The nonprofit policy group Public Knowledge said the bill is too
> broad, as it could discourage investment in new technology and expose
> people to lawsuits who do not mean to encourage copyright
> infringement.
>
> Trade groups representing movie studios and record labels praised the bill.
>