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Ernest Miller on What's Wrong with the Induce Act

by Richard Koman

Imagine a dark world in which unscrupulous adults rake in riches by getting children to do their dirty work, exposing themselves to arrest and imprisonment while the ringleaders run no risk of punishment. Sound like Oliver Twist? Orrin Hatch thinks so: in remarks introducing his Induce Act, or more properly, the Inducing Infringement of Copyrights Act, Hatch likened P2P software developers to Dickens' Fagan and Bill Sykes, or even worse:

In the film Chitty-Chitty Bang-Bang, the leering "Child-Catcher" lured children into danger with false promises of "free lollipops." Tragically, some corporations now seem to think that they can legally profit by inducing children to steal -- that they can legally lure children and others with false promises of "free music."

In other words, the only reason anyone runs P2P software is to steal music and movies. And software developers are making money hand over fist by tricking, luring, and generally "inducing" children (Hatch claims that half of P2P users are children) to commit the crime of copyright infringement, exposing them and their families to litigation.

(Editor's note: Ernest Miller has pointed out that the "Child-Catcher" in the Chitty-Chitty Bang-Bang film actually works for the government because the government passed an absurd law making children illegal. So it is actually a poor example for Senator Hatch to have used.)

Read Ernest Miller's blog, The Importance of ..., for his incisive opinion not only on the Induce Act but also other developments in media, technology, and law. And definitely check out the Hatch Hit List.

For a comprehensive index to all of Miller's writings on Induce, see the LawMeme Reader's Ernest Miller's Guide to the Induce Act, including links to the draft language and the "Obsessively Annotated Introduction to the Induce Act."

The P2P Congress also has P2P links to video of the Judiciary Committee's hearing on the bill.

Finally, as he promises in this interview, Miller has written a piece called "Induce Act Harms National Security," which quotes from Richard Koman's interview with Army Col. Michael Macedonia.

The problem, as Hatch sees it, is that P2P software built on decentralized networks are outside the conventional laws of "secondary liability," which punish those who "aid, abet, ... or induce" the commission of a crime. Since LimeWire, for instance, is based on the decentralized Gnutella network, the software's makers have no control over what users do with the technology -- unlike Napster, which controlled its own network and was thus saddled with business-crushing requirements to police how it was used. The idea of Induce, which is co-sponsored by Democratic Senator Patrick Leahy of Vermont, is to create a law that removes such loopholes, in the process shifting the focus of litigation from direct violators to for-profit targets.

But according to numerous legal experts, tech industry representatives, and informed citizens, the bill causes many more problems than it solves. To understand what's wrong with this bill, and why many think it would mean nothing less than Hollywood's right to veto any technology it doesn't like, we turned to Ernest Miller, the author of "The Importance Of ... " blog and creator of the Hatch Hit List, an ongoing list of new and innovative technologies likely to be illegal under the Induce Act (see sidebar).

Richard Koman: Is Senator Hatch trying to address a real problem or trying to provide cover for Hollywood?

Ernest Miller: I can't really say what Hatch is thinking about this issue specifically. Hollywood is certainly pushing this law because they want to have a veto over innovation and technology. Whether Hatch actually realizes this or not, I'm not sure.

Koman: One thing he talks about is that current law exposes end users to infringement prosecution, but leaves the developers of decentralized P2P programs immune.

Miller: Well, this is not a new problem. The Internet itself is going to expose people to copyright liability, because the Internet is a wonderful copyright-infringement machine. This has both good uses and bad uses. It may seem like ancient history now, but long before Napster, people were posting MP3s on their web pages. In those cases, Hollywood was going after the users and nobody seemed to have a problem with that. Generally, they weren't suing, they were just asking them to take them down, but they were going after them.

Koman: You make the point that if people were so interested in protecting consumers from this liability, they could simply pass legislation protecting them.

Miller: Absolutely. If they don't want people to be sued for engaging in copyright infringement they could pass a law to that effect. But they're not going to do that and the Induce Act doesn't stop those suits. The lawsuits will continue. There's no promise from the recording industry or the MPAA that they'll stop the lawsuits if the Induce Act passes.

In fact, they passed the No Electronic Theft Act almost a decade ago because of a student at MIT who posted copyright material to the Internet for free. They didn't think they could go after him under copyright law because he wasn't making any money from it, and so they made it illegal just to offer things on the Internet whether you made any profit or not. So clearly they're not against suing consumers -- they passed laws to do it. They're saying they don't want to sue consumers but that's really not the case.

Koman: What does the current language say?

Miller: Basically it adds to the things that you can sue people for -- it doesn't take anything away. Everything you could sue for today, you can still sue for, after Induce becomes law. It basically creates a new kind of secondary liability for people who haven't directly infringed copyright but who provide tools or support for people who do infringe copyright. It defines "intentional inducement" in a very interesting way, by basing it on circumstantial evidence. If a reasonable person would think that you meant to encourage people to infringe copyright, then you would be guilty of the infringement.

Koman: What kind of technology would be threatened because of this circumstantial standard?

Miller: Well, clearly the VCR. Sony was sued in 1976 for bringing out the Sony Betamax, and the Supreme Court finally ended that case in 1984. But had the Induce Act been in force in 1976, clearly they would have been sued under it and the suit might have been successful. The movie industry made a lot of claims that Sony's ads, even though they didn't directly come out and say "infringe copyright," were clearly telling people to infringe copyright, that the machine wasn't designed with precautions to keep people from infringing copyright, and they didn't put enough copyright warnings in the manuals or on the hardware. These are the exact sorts of things they're complaining about regarding P2P software today, which is what they want to make illegal.

Koman: Doesn't that suggest the Sony decision itself would be attacked or legislated out of existence were Induce to become law?

Miller: No, actually. One of the defenses of the Induce Act is that it doesn't overturn Sony. And, of course, the politicians are all very supportive of the Sony Betamax decision because they don't want people to think they're trying to get rid of the VCR. But the Induce Act in many ways does something worse than directly overrule Sony Betamax: it would make the Sony Betamax decision irrelevant by creating a new way to sue.

Now, normally, if you want to get somebody for secondary liability and copyright, you'd sue for "contributory or vicarious liability." Sony Betamax provides protection to companies bringing out new devices and services. However, the Induce Act ignores Sony and basically makes it irrelevant because you sue under "inducement of copyright infringement" and then the Sony protections don't apply. And, of course, the standard is very subjective and vague.

Koman: So to show inducement, you would just have to show that the provider of some technology, with a wink and a nod, hoped that people would get the idea that they could use the product for some illicit purpose.

Miller: Right. With a wink and nod, people would violate copyright and the company would sell more product because people could infringe copyright. In fact, you don't actually have to make a profit to do this, so open source projects would also be liable under the Induce Act. The main interest, of course, is they want to go after people who are making money from P2P services such as Kazaa; however, the way the bill is written, you don't actually have to make money to get sued. So imagine if somebody wrote an open source Gnutella client; they could be sued, even though they just did it as a hobby, with no anticipation of making any profit whatsoever.

There are a number of open source projects they could go after; certainly, they could sue with regard to certain elements of an open source project. If you wrote a new IM client that let people browse their friends' hard drive, for example, you might get sued because of it, and it wouldn't matter whether you made a profit or not. Open source is clearly threatened by this.

Koman: So whether the project included "substantially noninfringing uses" or not would no longer apply.

Miller: Absolutely. Consider BitTorrent -- even though there's very clear, obvious, wonderful uses for BitTorrent, they could look at that and say, well, it's really for people to use for infringement, so it's outta here.

Koman: To show that P2P networks are actually useful for something besides copyright infringement, the P2P Congress pulled this publicity stunt of distributing video of the hearing over BitTorrent, LimeWire, and eDonkey. But under Induce, it doesn't really matter whether P2P networks are used for valuable things or not.

Miller: Under the Induce Act, no. And I would say it's not a publicity stunt at all; it's actually a very valuable service. You have all these hearings but they're only streamed, and Congress doesn't provide an archive. Now, hosting them is bandwidth-expensive, but BitTorrent and some of these other P2P systems, like eDonkey, which stream from multiple sources, severely reduce the bandwidth costs to make these things available.

Koman: The chilling effect on technology developers seems very clear. One that's received a lot of press has been, would the iPod be illegal?

Miller: Realistically, iPods are not going to be sued out of existence. It's a possibility, but it's very unlikely because Apple's already done a deal with the recording industry. However, if you were to imagine that Apple hadn't done a deal, then very clearly the iPod could be sued. Now, obviously, the iPod plays the DRM-protected iTunes, but it also plays MP3s. You have to remember that the RIAA sued the very first MP3 player, the Diamond Rio. And in fact, they were still suing them as late as 1999, five years ago, when the lawsuit finally ended. So had Apple brought out the iPod back in 1999 or 1998, they would have been sued as well. And with the Induce Act the lawsuit would very likely have been successful. I'm not interested in the iPod specifically, but in the next iPod -- the next really cool thing that could be used for infringement, but which also makes our lives a lot better.

Koman: So, assume that this was passed. How debilitating a hit would it be to technological innovation?

Miller: It's hard to overestimate it, to be honest. It would be incredibly debilitating to investment and innovation across the board, to anything having to do with the Internet, anything having to do with computers and the ability to copy. First of all, there's no clear boundary as to what is legal and what is not. There's no bright line defense. As long as they can provide some evidence that a reasonable person could think some technology was intended to induce infringement, then the lawsuit has to go all the way to the jury. You can't get it dismissed very easily. That's very expensive.

There's no limitation on who can be sued. Not only can the company making the device be sued, but under the Induce Act they can sue the company that invested in the company, they can sue the company that provides parts and supplies to the company, they can sue business partners, they can sue the advertising agencies. If you come up with something that's a really wonderful, neat new product but Hollywood won't like it, who's going to do business with you, who's going to invest in you? It's going to be incredibly difficult to do business, and that's going to dry up investment to no end. It's scary how far-reaching this is.

Koman: Unless you cut a deal with Hollywood.

Miller: Yes. And, of course, that will be fine for some of the big guys like Microsoft who are happy to cripple their products and put in DRM and have the power to negotiate with Hollywood, but for startups? For instance, instant messaging. AOL didn't invent that. It was six guys in Israel. But it makes copying and sharing files very easy. Would ICQ have gotten off the ground with Induce Act around? Probably not.

Koman: In point of fact, every Internet technology by definition involves the storing and copying of files, some of which might be illicit.

Miller: Exactly. All of them have that capability, all of them have that potential. So unless you can negotiate with Hollywood beforehand and get their approval .... Here we have the MPAA and the NFL saying, we don't like TiVo-to-Go, because you can share it with ten different people -- even though you need a registered dongle for each of these different devices, which makes it really inconvenient. You know, they're ridiculous.

MPAA sued the ReplayTV out of existence, not because they won the court case, but because ReplayTV simply couldn't afford the legal bills. The legal bills would be enormously high here and anybody who did business with ReplayTV would be sued as well. So who would do business with them? They wouldn't be able to get parts. They wouldn't be able to get any investments.

Koman: Let's walk through some of the Hatch Hit List, where you've listed a number of technologies that will never get off the ground if Induce is passed. These are all sort of contenders to be the next iPod. Wi-Fi car stereos, to start.

Miller: This is a technology that is just coming out. People don't necessarily think they need it yet, but this is a really cool technology -- who wouldn't want to be able to download the latest MP3s, have them in your car in the morning, bring them with you to the office, without all the hassle of all this DRM and registration, which can make it difficult to do that. But this is also a technology that could obviously be used for copyright infringement. If you have a Wi-Fi car stereo that you can share with other cars, you can share between your home and the car, there are all kinds of crazy things that you'll be able to do with it, and so I imagine when the Induce Act passes, very quickly Hollywood will sue the manufacturers to put in all kinds of DRM to make sure that people can't make it easy to connect and to share. You'll have to register your Wi-Fi at home so it can talk to your car in the garage.

Koman: AM/FM transmitters.

Miller: I used that because we're talking about copyright infringement; we're not just talking about copying things, we're not just talking about distribution of things, we're talking about all of copyright law, which includes the rights to public performance, the rights to derivative works, and so we're not just talking about things on the Internet. We're talking about the right to sue over all sorts of devices that you wouldn't really think of. The web site that sells these things talks about using them for your block, for your entire dorm at your college. Well, you know, that's considered a public performance under copyright law. You can buy these things cheap; $70, $90, it's really cool, you learn all about electronics, it's a great project. But you know, if Hollywood sues, they have to put in DRM, all kinds of restrictions, the price will go up, they may not be able to sell them at all, they may just say, well, it's just not worth it anymore.

Koman: Arcade emulators. It's perfectly legal right now to emulate these old games, yes?

Miller: Absolutely. Everybody thinks they're very cool, but when they first came out where did people get the games to play on them? There were legal sources, but most people were getting them from illegal sources. But the very basic technology itself is legal, and its been very beneficial to people who care about video game culture. But clearly if the Induce Act had been around, arcade emulators clearly would have been illegal. And the fact that they've built up such a market for the free arcade emulators is what allowed the current market in ROMs. If they hadn't existed, nobody would have bought the ROMs, but now you can pay $3.00 and get a really cool game.

Koman: Online translators, such as Babelfish or Google's translation engine.

Miller: Absolutely. This is a good indication of how far the Induce Act stretches. It deals with derivative works, which is a copyright issue. Translations are the paradigmatic example of a derivative work. Translations were one of the main targets when they added derivative works to the copyright law, because originally translations weren't covered by copyright law, because they weren't copies. They're incredibly useful devices. It's very clear that under existing law they have substantial noninfringing uses. I mean I'm happy to have everybody read my work in Spanish, Italian, and what not. But clearly they're encouraging people to translate works that are copyrighted. Therefore, under the Induce Act they would be liable.

Koman: LEGO Mosaics. I guess LEGO sells you the bricks to recreate photographic images in LEGO form?

Miller: Yes, you can use LEGOs to make mosaics. They're really quite cool. And the LEGO Company will let you send them a picture and then they'll send you the specific bricks you need to make that picture in LEGO. Obviously, they'll let you send in any JPEG or GIF. How are they going to control whether you control the copyright on that or not? They even have a copyright warning, but this is aimed at kids. Who's going to read that copyright warning? And so one could say they're clearly encouraging people to violate copyright.

Koman: By copying a copyright image in LEGO form?

Miller: Exactly. That just shows the absurdity of how far this law reaches.

Koman: Something that's not absurd at all is VoiceOver IP.

Miller: No, that is a very, very scary thing. I think that's one of the scariest things out there, actually. If you think about it, there are so many wonderful uses of VOIP. We haven't even begun to think about what telephones will look like when everything is VOIP; there are so many wonderful things you're going to be able to do. Of course, one of the things you're going to be able to do is send files, audio files certainly, but people are going to come up with some really clever stuff. The problem is that a lot of it is going to permit people to infringe copyright. Do we really want Hollywood controlling what capabilities our phones have? Because ultimately, that's what the Induce Act would do. We already have enough trouble with the FBI trying to tell us how our phones have to work. Imagine if Hollywood got to do it.

Koman: The implications, then, are not just for cool consumer gadgets but for the entire future of telecommunications infrastructure.

Miller: Absolutely. If the Induce Act had been law when the Internet was starting, we wouldn't have open protocols like HTTP and TCP/IP. They'd be required to have some sort of copyright checkpoints. People wouldn't be able to run their own servers; you'd have to have a license to have a server. The only reason the Internet as we know it wouldn't be illegal is because it's so widely in use. The next versions are going to have that stuff built in, if the Induce Act happens.

Koman: Of course, the Internet was originally designed by the military to be a communications system resistant to nuclear attack, and it's those original design decisions that make copyright infringement so easy on today's net. Wouldn't the the Induce Act actually impinge on the military's ability to make their best technology decisions?

Miller: The military wouldn't be liable because of sovereign immunity. You couldn't sue the government if they built something.

Koman: Right, but there's a lot of private sector technology that the military relies on.

Miller: Absolutely, off-the-shelf stuff. I mean let's face it, a lot of stuff like IM that the military is using was developed and adapted from civilian applications.

Koman: I did an interview with Col. Michael Macedonia, the chief scientist for an Army simulation center called STRICOM, and everything they are doing is built on private sector or open source technology, from Linux clusters running on Intel boxes to head-mounted displays connected by Wi-Fi to NVIDIA graphics chips to virtual reality games. So there is a connection between what the private sector is free to develop and the military's ability to use cutting-edge technology.

Miller: That's good. I'm going to write a little story about that: "Induce Act Harms National Security."

Koman:What's this about The New York Times?

Miller: The Induce Act is extremely broadly worded. There are no real limitations on liability. If you read the Times article, it's actually very positive about this whole phenomenon; it romanticizes it, makes it seem very attractive. It basically tells you how to do it, it gives you the equipment they used, the legal implications, it's a how-to guide. So under the Induce Act, they could be sued. People who write reviews, reporters who write about ways to get around certain things, could very easily be sued.

Koman: The Business Software Association has now come out against the act; does it seem like the balance is shifting towards at least some rewrite?

Miller: Yes, definitely. If it were just the RIAA and the MPAA, I don't think it would get as far as it has so far. But what happened was that the BSA came out in support, which meant the lobbyists and supporters could say, "Look, tech companies are behind it." And so the bill got much further than it would have. When the BSA basically changed position and said, well, we support the purpose of the bill, but we think changes need to be made, and they're very significant changes, the BSA basically took the side of the Net Coalition and IEEE.

Koman: Do you think with changes it's possible to craft an acceptable law around the question of inducement?

Miller: Inducement is already illegal under the law. The question is just how you define inducement. This law wants to define it in new ways. It wants to ignore Sony Betamax. I think it might be worthwhile for us to put into the law a codification of the Sony Betamax decision. "Look, this is what constitutes secondary liability for copyright infringement, but if you have substantial noninfringing uses, you're protected." And make that legislative law, not just judge-made law. I think its possible to craft a law that will protect innovation, that will make it very clear what is acceptable for innovation and what is not. I think it's possible to craft a law that will protect innovation while still providing the ability to sue bad actors for copyright infringement. But the focus is on protecting innovation, not copyright.

Richard Koman is a freelancer writer and editor based in Sonoma County, California. He works on SiliconValleyWatcher, ZDNet blogs, and is a regular contributor to the O'Reilly Network.

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