In response to last week's Business Software Alliance report on Intellectual Property in the 21st Century, a local tabloid screamed: "Tech Firms Aim to Change Copyright Act: ISP's Liability for File Sharers at Issue."

Other sources picked up the alarm - MIT's Technology Review, for example, and several proprietary investment sites.

This characterization of BSA's position was overblown. The report expressed disappointment in the result of last year's DC Circuit ruling in RIAA v. Verizon (recently followed by the 8th Circuit) to the effect that copyright holders can obtain the identity of illicit downloaders from ISPs only if they file a formal law suit, not through a pre-litigation subpoena. The report then suggested that "policymakers should consider whether clarifying the current law . . . is needed to facilitate enforcement . . . . [which] requires cooperation by third parties." (Report at p.11.)

This is about as wishy washy as one can get in the public policy world, far short of any call to actually reopen the DMCA, and alarmism is premature.

However, it could happen. The 8th Circuit decision, which came down after the BSA report was in final form, will certainly force the content companies to think again about whether they want to seek legislative relief. With agreement by two courts of appeal, the chance of Supreme Court review is slight, so Congress is now the only realistic possibility.

If the DMCA does get revisited, things could get ugly, because everyone has a wish list.

The most baffling aspect of the situation is that, imho, the ISPs acted against their own interest by litigating the point. They have no significant interest in protecting the identities of pirates, and the interests of legitimate users are not threatened. To the extent the subpoenas are an economic burden on ISPs, the content companies could easily have been persuaded to pay the costs.

Furthermore, there are two basic approaches to enforcing IP rights against illicit downloads over the Net: sue the downloaders, or sue the intermediaries, such as Grokster or the ISPs. The harder it is to sue the downloaders, the greater the pressure on content companies to find a way to attack the intermediaries. So by inhibiting actions against the actual infringers, the ISPs paint a target on themselves.

The bottom line is that the ISPs, acting to promote an interest of minimal importance to themselves but very important to the content companies, have made enforcement more expensive and somewhat less effective, seriously alienated the content world, and increased the chances that the safe harbors for ISPs built into the DMCA will indeed be re-examined.

If such a re-opening occurs, the ISPs will not be arguing solely over this subpoena issue. If they really want to sweat, they should look not at the cautious language of the BSA report, but at a recent article by legal heavyweights Douglas Lichtman and Eric Posner on Holding Internet Service Providers Accountable. The abstract is:

Internet service providers are today largely immune from liability for their role in the creation and propagation of worms, viruses, and other forms of malicious computer code. In this Essay, we question that state of affairs. Our purpose is not to weigh in on the details - for example, whether liability should sound in negligence or strict liability, or whether liability is in this instance best implemented by statute or via gradual common law development. Rather, our aim is to challenge the recent trend in the courts and Congress away from liability and toward complete immunity for Internet service providers. In our view, such immunity is difficult to defend on policy grounds, and sharply inconsistent with conventional tort law principles. Internet service providers control the gateway through which Internet pests enter and reenter the public computer system. They should therefore bear some responsibility for stopping these pests before they spread and for helping to identify individuals who originate malicious code in the first place.

posted by James DeLong @ 3:16 PM | Internet: P2P, Search Engines...

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