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After years of agitating over Internet piracy and spending millions of dollars to press their case in Washington, the entertainment and software industries have gained a powerful ally: the U.S. Department of Justice. With just months until the presidential election that could end his term in office, Attorney General John Ashcroft has launched an ambitious effort to crack down on digital piracy and protect copyright holders. The initiative is led by Ashcroft’s deputy chief of staff, David Israelite, who chairs a newly formed task force on intellectual property issues. The high-level task force, which includes a dozen influential DOJ and Federal Bureau of Investigation officials, will draft plans to revamp federal law enforcement’s approach to IP matters, including widespread file sharing over peer-to-peer networks. Task force members will consider whether the Justice Department should take the lead role in going after online file-swappers — individuals who share copyrighted material across the Internet. Tactics being considered include ramping up criminal prosecutions and filing civil lawsuits similar to those now being brought by the recording industry. Not surprisingly, the DOJ task force has been applauded by industry groups, many of which have spent millions to deter file swapping. But critics complain that the Justice Department may be overstepping its appropriate role by championing the interests of a powerful industry that some think can take care of itself. “I think there are serious questions about whether taxpayer funds should be used to benefit a particular industry,” says Philip Corwin, a lobbyist for Australia-based Sharman Networks, which owns Kazaa, a popular Internet file-sharing program that has drawn fire from the industry. “How many U.S. attorneys are going to be involved? How many serious criminal and terrorist matters won’t they be pursuing?” Israelite says the increasing volume of IP crime over the Internet and its impact on the American economy demands a government response. “We view IP theft as a threat to our national security,” says Israelite. “As we move into the future, our economy is going to be increasingly dependent on our ability to protect IP. If theft increases at the rate we see long term, you’re looking at a scenario for economic disaster.” WALK THIS WAY Since September 2003, the Recording Industry Association of America has sued nearly 3,000 individuals for illegally distributing files on the Internet over peer-to-peer networks. But so far the Justice Department has stopped short of pursuing individuals who download content for personal use and focused instead on those who release proprietary software, music, video games, and movies onto the Internet in the first place. Even as the DOJ’s task force gets off the ground, Congress is contemplating two bipartisan bills that would draft the Justice Department even further into the fight over online piracy. A Senate bill sponsored by Orrin Hatch (R-Utah) and Patrick Leahy (D-Vt.) would empower the Justice Department to bring civil lawsuits against online file-swappers. Monetary damages would flow to the copyright holders. Jason Schultz, a staff attorney with San Francisco’s pro-consumer Electronic Frontier Foundation, says the Senate proposal would “shift the cost of enforcement from private corporations like record labels to the taxpayer.” On the House side, the Piracy Deterrence and Education Act of 2004 would lower the bar for copyright violations to be treated as federal felonies and would require the Justice Department to develop a public education program aimed at deterring online piracy. As of this writing, the Justice Department has not taken an official position on either legislative proposal. Rep. Rick Boucher (D-Va.), a leading Capitol Hill advocate for consumer rights on the Internet, says that both bills raise serious concerns. “We have seen a concerted effort year by year from the content-creating community to have Congress pile on more and more IP protections, typically at the expense of consumers,” Boucher says. UNDER PRESSURE According to congressional records, Sharman Networks spent $200,000 on outside lobby firms in 2003. In contrast, the RIAA and the Motion Picture Association of America spent nearly $3 million. Their message — that the ease with which copyrighted material can be reproduced and transmitted using digital technology threatens the vibrancy not only of their industries, but of the larger American economy — has resonated on both sides of the aisle. In July 2002, 19 lawmakers, including Sen. Joseph Biden (D-Del.) and Rep. F. James Sensenbrenner Jr. (R-Wis.), wrote to Ashcroft encouraging more aggressive enforcement of the laws against online piracy, including the prosecution of “individuals who intentionally allow mass copying from their computer over peer-to-peer networks.” “Online theft of our nation’s creative works is a growing threat to our culture and economy,” the letter stated. But Boucher points to a new study conducted by professors at Harvard Business School and the University of North Carolina that contradicts the recording industry’s assertions that file sharing has caused a massive dip in sales since 1999. Rather, the March 2004 analysis concludes that downloads of music files have no statistical effect on sales. The RIAA responded to the study by calling it “inconsistent with virtually every other study done . . . about the impact of illegal file sharing.” “The evidence is contradictory,” says Adam Thierer, director of telecommunications studies at the libertarian Cato Institute. Thierer says that the industry already has an effective recourse for copyright infringement — civil suits, like the thousands brought recently by the RIAA. “The question I have is why industry can’t pursue these things on their own, using their own staff, own time, own money?” he says. “Why is it we have to have the Department of Justice involved adjudicating things on their behalf?” YOU’VE GOT A FRIEND The DOJ’s Israelite compares the challenge of enforcing copyright laws in the digital era to that of combating illegal drug use. “We approach the drug problem in many different ways. We target suppliers, we target users, we target education so that we help people make the right choices,” Israelite says. “I think the same approach is going to be needed in IP theft.” Israelite says the Intellectual Property Task Force was modeled in part after the Corporate Fraud Task Force launched in the wake of the Enron scandal, which secured 250 convictions in its first year. However, with a possible change in administrations looming, the IP initiative may not yield much in the way of concrete action. (“We’re going to completely ignore the fact that there’s an election,” Israelite jokes.) Ultimately, the five working groups of the IP Task Force — which are examining issues related to criminal law, civil law, international treaties, legislative proposals, and public education — plan to make policy recommendations to the attorney general. The task force, which includes DOJ Criminal Division chief Christopher Wray, FBI General Counsel Valerie Caprioni, Civil Division head Peter Keisler, and Deputy Solicitor General Paul Clement, held its first meeting in May. As part of the process, Israelite is meeting with trade groups and industry representatives. “Private industry is also on their own trying to deal with this problem,” Israelite says. “It’s important that we learn about what they’ve been doing and how we can form partnerships.” The Electronic Frontier Foundation’s Schultz says that, so far, the DOJ’s outreach has overlooked pro-consumer organizations. “The discussions seem to be mostly between the Justice Department and content owners,” says Schultz. “We would welcome a chance to present our side of the story before they decide to devote increased resources in this area.” Vanessa Blum is a senior reporter at Legal Times . She can be reached at [email protected].

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