An unusual Senate coalition consisting of Hatch (R-UT), Leahy (D-VT), Frist (R-TN), Daschle (D-SD), Graham (R-SC), and Boxer (R-CA) is circulating a draft bill called the "Inducing Infringement of Copyrights Act of 2004."

The bill would add to the Copyright Act a provision that anyone who "intentionally induces" a copyright violation can be held liable as a copyright infringer. Included in the factors that determine whether intent exists is "whether the activity relies on infringement for its commercial viability."

The targets in the crosshairs are the P2P networks, as presently constituted, which get some 97% of their traffic from illicit file-sharing, and depend on this to supply the eyeballs that will induce advertisers to pony up some dollars.

Not surprisingly, controversy is already erupting.

The issue of contributory infringement is a difficult one, as discussed by PFF's William Adkinson in Liability of P2P File Sharing Systems For Copyright Infringements By Their Users (March 2004).

The proper policy is to avoid banning any technology, but at the same time hold the users of the technology responsible when they develop business models that are based on appropriation of intellectual property. Thus a maker of copying machines should be able to sell them untrammeled even if it knows to a certainty (as indeed it does) that some people will use them to reproduce copyrighted works. But it should not be allowed to put up neon signs advertising "books pirated here."

In the storm of vituperation that is moving in, it is important to focus on this distinction. The bill would not ban P2P the technology, as it might be applied by people with a legitimate use for it. But it is indeed directed at the business models that depend on illicit appropriation for their viability.

For a thoughtful discussion of the problems, and of how to draw the right lines, consult Judge Richard Posner's opinion in Recording Industry v. Deep (In Re Aimster Copyright Litigation), 334 F. 2d 643 (7th Cir. 2003):

"There are analogies in the law of aiding and abetting, the criminal counterpart to contributory infringement. A retailer of slinky dresses is not guilty of aiding and abetting prostitution even if he knows that some of his customers are prostitutes--he may even know which ones are. [Cases] The extent to which his activities and those of similar sellers actually promote prostitution is likely to be slight relative to the social costs of imposing a risk of prosecution on him. But the owner of a massage parlor who employs women who are capable of giving massages, but in fact as he knows sell only sex and never massages to their customers, is an aider and abettor of prostitution (as well as being guilty of pimping or operating a brothel). [Cases] The slinky-dress case corresponds to Sony, and, like Sony, is not inconsistent with imposing liability on the seller of a product or service that, as in the massage-parlor case, is capable of noninfringing uses but in fact is used only to infringe. To the recording industry, a single known infringing use brands the facilitator as a contributory infringer. To the Aimsters of this world, a single noninfringing use provides complete immunity from liability. Neither is correct.

"To situate Aimster's service between these unacceptable poles, we need to say just a bit more about it. In explaining how to use the Aimster software, the tutorial gives as its only examples of file sharing the sharing of copyrighted music, including copyrighted music that the recording industry had notified Aimster was being infringed by Aimster's users. The tutorial is the invitation to infringement that the Supreme Court found was missing in Sony. In addition, membership in Club Aimster enables the member for a fee of $4.95 a month to download with a single click the music most often shared by Aimster users, which turns out to be music copyrighted by the plaintiffs. Because Aimster's software is made available free of charge and Aimster does not sell paid advertising on its Web site, Club Aimster's monthly fee is the only means by which Aimster is financed and so the club cannot be separated from the provision of the free software. When a member of the club clicks on "play" next to the name of a song on the club's Web site, Aimster's server searches through the computers of the Aimster users who are online until it finds one who has listed the song as available for sharing, and it then effects the transmission of the file to the computer of the club member who selected it. Club Aimster lists only the 40 songs that are currently most popular among its members; invariably these are under copyright."

The decision went on to note that the evidence that Aimster was guilty of contributory infringement was sufficient to shift the burden to the company to establish that there are indeed substantial non-infringing uses of its service.

Read the whole opinion, which provides an excellent context for thinking about the proposed bill.