A US Senate bill that would allow copyright holders to sue creators of products that "induce" copyright violations would discourage technology companies from offering new media players or other recording products, said representatives of four technology groups.
The Inducing Infringement of Copyrights Act of 2004 broadly allows lawsuits against anyone defined as inducing copyright violations and could be used by the music and movie industries to sue venture capitalists who invest in new technologies or journalists who review digital recording products, said Gary Shapiro, president and chief executive of the Consumer Electronics Association.
The legislation, which does not exempt makers of technologies with substantial legitimate uses from lawsuits, would discourage the creation of new products such as the iPod or TiVO, or home video and recording equipment, Shapiro said.
"I cannot find any technology company that supports this legislation as written," Shapiro testified before the Senate Judiciary Committee. "This bill is by far the biggest threat to personal creativity, new technology, and innovation in 20 years. I urge you to consider the harm it will engender."
The bill, aimed at peer-to-peer (P2P) software suppliers, would allow artists and entertainment companies to sue creators of products that "intentionally induce" copyright violations, based on what a "reasonable person" would consider an inducement.
Currently, civil penalties for copyright infringement can be up to $30,000 (£16,000) per act of infringement, or up to $150,000 per act of willful infringement. Total damages are determined at trial.
While Shapiro and other technology groups said the bill goes too far, committee chairman Orrin Hatch challenged the groups to come up with alternative legislation to curb the unauthorised trading of copyrighted material online. The bill is not targeted at makers of legal technologies, Hatch said.
Hatch accused Shapiro's group of opposing all proposals that would expand penalties for copyright violations. "I would like to have a great mind like yours help us solve the problem, instead of criticising," Hatch said.
Hatch accused most P2P suppliers of enticing young people to trade files illegally and then leaving them to face legal action themselves, instead of the P2P service providers.
"To implement their schemes, architects of file-sharing piracy must encourage users to infringe copyright," Hatch said. "Our aim is stop the for-profit commercial piracy operations that threaten the futures of artists, legal commerce, and all but their most cautious and expert users."
Despite opposition from tech groups, supporters of the bill said it is necessary to stop the billions of unauthorised downloads every year. About 97% of files traded on P2P services are illegal, said Mitch Bainwol, chairman and chief executive of the Recording Industry Association of America (RIAA).
The RIAA has had little choice but to sue users of P2P software after a California judge threw out a lawsuit against P2P suppliers Grokster and StreamCast Networks in April 2003, Bainwol said. "They make a total mockery of intellectual property rights," Bainwol said of P2P suppliers.
Hatch asked Bainwol if the RIAA would use the Inducing Infringement of Copyrights Act to sue makers of legitimate products such as MP3 players. Bainwol promised that the RIAA would not.
But Kevin McGuiness, executive director and general counsel of the NetCoalition, an internet company trade group, said that promise was not enough.
"It is a little disconcerting for those of us in the internet community to sit idly by and watch this legislation go forward based on presumption of good intentions forever on behalf of lawyers for the entertainment community," McGuiness said.
The Inducing Infringement of Copyrights Act could harm the progress of the internet while not stopping unauthorised file trading, McGuiness said. "The internet is basically one big copying machine," he said.
Grant Gross writes for IDG News Service