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Rep. Howard Berman, D-Calif., recently introduced a bill in Congress that would permit the use of technologies to prevent infringement of copyrighted works on peer-to-peer (P2P) computer networks under certain circumstances. This represents one of the latest efforts by the entertainment and music industries to combat the online trading of movies and music. SECTION 514 The bill seeks to amend Title 17 of the United States Code by adding a new � 514 at the end. As stated at the outset of the bill, the purpose of � 514 is to “limit the liability of copyright owners for protecting their works on peer-to-peer networks.” LIMITATION OF LIABILITY Section 514(a) would provide that a copyright owner would not be liable in any civil or criminal proceeding for “disabling, interfering with, blocking, diverting, or otherwise impairing the unauthorized distribution, display, performance, or reproduction of his or her copyrighted work on a publicly accessible peer-to-peer file trading network.” This limitation of liability is available so long as this impairment does not “alter, delete, or otherwise impair the integrity of any computer file or data residing on the computer of a file trader” without authorization. EXCEPTIONS The preceding limitation of liability would not be afforded if one of several exceptions found in � 514(b) would apply. These exceptions include: (i) impairment action taken with respect to computer files or data that do not actually contain exclusive copyrighted works; (ii) the impairment taken causes economic loss to any person “other than the affected file traders;” (iii) the impairment action taken causes more than $50.00 of economic loss to the affected file trader with respect to computer data or files that do not contain exclusive copyrighted works; or (iv) the copyright owner fails to comply with certain notification procedures. NOTIFICATION To come within the ambit of the limitation of liability that would be provided in � 514(a), the copyright owner would need to comply with notification procedures set forth in � 514(c). Specifically, the copyright owner would be required to notify the Department of Justice seven days in advance as to the specific technologies the copyright owner intends to use to impair the unauthorized P2P distribution of copyrighted works. Furthermore, at the request of an affected file trader, the copyright owner would need to provide notice as to the reason for the impairment, the name and address of the copyright owner and the right of the affected file trader to bring legal action. LEGAL ACTION FOR WRONGFUL IMPAIRMENT Section 514(d) makes plain that if a copyright owner “knowingly and intentionally” impairs the distribution of a particular computer file or data while having “no reasonable basis” to believe that such distribution would constitute copyright infringement, then the affected file trader would be entitled to seek compensation for economic loss, so long as that loss exceeds $250.00. The affected file trader would need to bring a claim with the attorney general within one year of the accrual of the claim. Either within 60 days of a positive determination of the attorney general, or within 120 days of no determination of the attorney general, the affected file trader would be permitted to file an action for economic loss and attorney fees in the proper U.S. district court. In addition, under � 514(e), the attorney general would be permitted to seek injunctive relief to prevent a copyright owner from impairing activities if the owner has engaged in a “pattern and practice” of impairing the distribution of computer files or data “without a reasonable basis to believe that infringement of copyright has occurred.” PASSING CONGRESSIONAL MUSTER? It will be interesting to see how Congress addresses this bill and whether the bill ultimately will become law. While it does provide a powerful weapon for copyright holders, that weapon is available only under limited circumstances, and the counter-weapon of legal action for wrongful impairment is specifically available to deter and correct any frivolous impairments. Eric J. Sinrod is a partner in the San Francisco office of Duane Morris, where he focuses on technology and litigation matters. His Web site is sinrodlaw.com and his firm’s site is Duane Morris. Sinrod may be reached by e-mail at [email protected].

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