House Toughens Penalties on P2Ps

The U.S. House of Representatives approved legislation Tuesday night that
could put some peer-to-peer file swappers in jail for up to five
years. The measure represents the first bill aimed at P2P networks to pass
either the House or the Senate.

The Piracy Deterrence and Education Act of 2003 (H.R. 4077) expands the
current definitions of criminal copyright infringement to include “willful”
distribution by electronic means of 1,000 or more copyrighted works over a
six-month period.

The bill carries criminal penalties of up to three years for violations and
up to five years if the file swapping is done for financial gain. Second
offenders could be jailed for twice that long.

“The bill represents new highs and lows of Congressional capitulation to the
entertainment industry’s excessive demands,” said Adam Eisgrau, executive
director of P2P United, a lobbying group whose members include a number of
P2P companies. “Congress is within its rights, but that still doesn’t make
it right.”

The legislation now goes to the Senate, where there is no comparable
legislation, but where Orrin Hatch’s (R-Utah) Judiciary Committee is
considering a number of measures against file swapping. Over the next few
weeks, the House and Senate are expected to incorporate their various P2P
solutions into a unified bill.

Since the 108th Congress convened in January of 2003, the music industry has
extensively lobbied for harsh penalties against those who infringe
copyrights by passing protected works through the P2P networks. The industry
blames the decline in CD sales on illegal file swapping.

The legislation also stiffens penalties for software counterfeiting,
requires the Department of Justice to increase staffing and training for
intellectual property crimes, criminalizes videotaping of movies in theaters
and allocates $15 million for anti-piracy education programs.

“Counterfeiting has become a highly profitable and largely illicit risk-free
business,” said bill sponsor Lamar Smith (R-Texas). “These crimes lead to lost
jobs and are a direct hit on our economy. [The bill] empowers federal
authorities to prosecute counterfeiting activity on a greater scale with
better results.”

Smith angered a number of the opponents to the legislation by placing the
bill on the “Suspension Calendar,” which is normally reserved for
non-controversial bills. The legislation passed on a voice vote.

A group of library associations rushed a letter Tuesday to Rep. Joe Barton
(R-Texas), chairman of the House Energy and Commerce Committee, urging him to
delay a vote of Smith’s bill, saying the legislation “in fact, is a highly and
justifiably controversial piece of legislation. While cast as innocuous and
necessary by entertainment industry interests, H.R. 4077 is anything but.”

The library associations argued that the Copyright Act already provides a
private right of action that the entertainment industry has “used
vigorously” against copyright infringement. The music industry has filed
thousands of civil lawsuits over the past year against P2P users.

“Copyright infringement is an unfortunate cost of doing business in the
entertainment industry. That cost should be borne by the companies that
derive significant profits from the distribution of copyrighted products,
not the general public,” the letter states.

In another letter to Barton, the American Conservative Union, the Consumer
Federation of America and the Consumers Union, among others, said the bill
amounts to a $15 million federal subsidy “by diverting Department
of Justice funds and human resources in the midst of the war on terror to
protecting Hollywood’s and Big Music’s parochial interests.”

The Recording Industry Association of America had no comment on the
legislation.