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IBM Reinventing Education
November 20, 1997

Federal Act Targets Software Theft From Net

By JERI CLAUSING Bio
 WASHINGTON — They number in the thousands: sites where copies of often expensive software can be found in just a matter of seconds and copied free with the point and click of a mouse.

And in the free, rebellious tradition of Internet, those offering the wares often flaunt the fact that they are putting copyrighted goods out in the public domain for the taking. On one site, a disclaimer pops up before you access a Web page with links to sites around the Net:

"You are entering a site where is URLs places around the Internet, where U can find copyrighted software. If U dislike idea of pirating software, simply ---- --- by pressing button. And DON'T send me email dreadful is stealing software."

"I'm not interested in financial losses, which suffered Uncle Bill last year due pages like this. If U like idea don't paying for software, then press to and an, you're welcome."

Such blatant piracy, however, may soon be a thing of the past. Congress last week passed a bill that would make some Net piracy a felony and could put violators, even those not making a dime for their efforts, in prison for up to five years.
“We have eccentric philanthropists who are giving it away on the Internet because they can. Up until passage of this bill, it was those people who were exempt.”

Bob Kruger, vice president of enforcement, Business Software Alliance

The so-called, No Electronic Theft, or NET, Act makes it a federal crime to "willfully" make or possess 10 or more digital copies with a value of $2,500 or more. Violators could get up to five years in prison and a $250,000 fine.

The charge would be reduced to a misdemeanor for copied material with a retail value of $1,000 or more, which would carry a jail term of up to one year.

The bill was sponsored by Representative Bob Goodlatte, a Virginia Republican, in response to a legal case in Massachusetts. In 1995, a Boston judge dismissed a case against David LaMacchia, a 20-year-old engineering student at the Massachusetts Institute of Technology who was accused of illegally distributing more than $1 million in copyrighted software over the Internet, on the grounds there was no financial gain involved.

"They said he didn't profit," Goodlatte said. "This makes it clear that if you give it away, you are still guilty of a crime."

The bill, which now just needs President Clinton's signature to become law, was pushed by the software industry, which estimates it loses billions of dollars a year worldwide to piracy.

"The copyright laws were designed to go after people who did it for commercial benefit," said Bob Kruger, vice president of enforcement for the Business Software Alliance. "Now we have eccentric philanthropists who are giving it away on the Internet because they can. Up until passage of this bill, it was those people who were exempt."

Pirated software on the Internet, Kruger said, "is easy to find. It's accessible to the masses. And unlike passing disks around, you can download software in the privacy of your home or office with very little risk of being detected. Internet piracy makes some of our other piracy concerns quaint by comparison."

Although being sure to make clear that he was also strongly discouraging the more casual passing of software disks, Kruger said those are not the people the bill was drawn to target.

"If you think about piracy in terms of people passing out copied disks to their neighbors or their friends or to their co-workers, you're probably still living in the early 90s because things have evolved very, very fast," he said. "Along with all the good things the Internet brings, it has also opened up a new front for those of us who are concerned about piracy."
The No Electronic Theft Act does include a provision aimed at protecting ISPs from liability.

Kruger said 10 people who work for him surf the Internet looking for such software sites. Although there are a number of legitimate "freeware" and "shareware" sites, Kruger said his enforcers estimate there are about 10,000 Internet sites where copyrighted software, sometimes valued at in the thousands of dollars, can be downloaded free.

"It's all out there, everything," he said.

"What's scariest, I suppose, if I knew I could walk into an Egghead (software store), grab that box and put it under my coat without getting caught, I still might not do it. You know that's stealing. But if I'm home and have the capability of doing this and no one it going to catch me, I don't have to account for what I did. That might lower my moral compunction. ... This makes it so easy to do that honest people might be tempted."

The bill is the first of several cyberspace copyright bills pending in Congress, including bills to ratify two worldwide treaties to protect copyrights in cyberspace. The World Intellectual Property Organization treaties make it an international crime to reproduce or distribute digital works without permission. The initial bill drew opposition because of concerns it would impede the sharing of academic research and would open Internet service providers to liability for transmitting pirated works.

But last week, Representative Rick Boucher, a Virginia Democrat, and Representative Tom Campbell, a California Republican, introduced the Digital Era Copyright Enhancement Act, which would carry out the treaties while addressing fair-use issues raised by The Digital Future Coalition, the American Library Association, and the Computers and Communications Industry Association.

Goodlatte says his bill has a provision exempting Internet service providers unless they are knowingly involved in the transmission of pirated works.

"There was language put into this bill to make it clear that if you are simply transmitting, if you have no knowledge or control of that, you are not liable," he said.

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Jeri Clausing at jeri@nytimes.com welcomes your comments and suggestions.



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