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[IP] MP3 Device Makers Could Be Next





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From: EEkid@xxxxxxx
Date: July 10, 2004 11:55:09 AM EDT
To: dave@xxxxxxxxxx
Subject: MP3 Device Makers Could Be Next

MP3 Device Makers Could Be Next



Fri Jul 9, 3:15 PM ET

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Jason Lopez, www.newsfactor.com

Critics say it is a chilling proposal, but if the Inducing Infringement of Copyrights Act, currently in the Senate, were to become law, manufacturers of digital-music devices could be held liable for illegal downloading of music.


Forty-two tech companies, including Google, Yahoo (Nasdaq: YHOO - news), Cnet and Intel (Nasdaq: INTC - news), have signed a letter denouncing the proposed legislation.

The author of the bill, Republican Senator Orrin Hatch of Utah, is requesting hearings on music downloading and who should bear the liability of damages caused by music piracy.

 Bi-Partisan Solution

Last year, Hatch suggested that one remedy to the problem would be to develop technology that would destroy the hard drives of offending users remotely. He later backed off his extreme stance when it was discovered that his own computers were powering his Web site with unlicensed software.

Joining Hatch as co-sponsors of the bill are lawmakers from both sides of the aisle, including Democrats Patrick Leahy, Vermont; Tom Daschle, South Dakota; and Barbara Boxer, California, as well as fellow Republican Bill Frist of Tennessee.

While many legal experts do not believe the bill will become law, they say the tendency to punish rather than innovate is hampering the ability of the market to correct the problem. In essence, record companies are seen as making attempts to win through the courts, because they have been unable to create a successful music-downloading system.

 Beyond Borders

In the meantime, the operators of popular peer-to-peer networks responsible for carrying much of the pirated music on the Internet remain offshore. "Because the Internet has no borders, it is almost impossible to reach offshore companies operating on the Internet with no U.S. presence," said IP attorney Jim Burger of the Washington, D.C., firm Dow, Lohnes & Albertson.

"The last time I checked, the U.S. had no jurisdiction over Vanuatu," he told NewsFactor. Vanuatu is the island nation where Kazaa's programmers reside.

The new legislation might have a bigger impact on companies in the U.S. that are engaged in legitimate businesses, Burger believes.

 Negative Impact

"While I have sympathy for the creators whose copyrighted material is illegally downloaded, I am concerned that this type of legislation could negatively affect companies making products used for substantially non-infringing purposes," he said.

He is not alone in his sentiments. High-tech companies understand that litigation, while necessary to protect property on one hand, often makes for a lousy long-term business strategy. Suits against individual music downloaders can be effective only as long as the lawsuits make headlines.

As news outlets give the suits less coverage, the newest tactic appears to be to sue more parties.

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