FOR IMMEDIATE RELEASE:  July 25, 2002                   CONTACT:  Gene 
Smith  202-225-4695

BERMAN INTRODUCES LEGISLATION

TO FOIL PEER TO PEER  PIRACY

WASHINGTON -- U.S. Rep. Howard L. Berman (D-CA), together with Reps. Howard 
Coble (R-NC), Lamar Smith (R-TX), and Robert Wexler (D-FL) today introduced 
legislation to address copyright infringement on publicly accessible 
peer-to-peer (P2P) networks.


"Songwriters, photographers, film producers, karaoke tape makers and other 
copyright owners are experiencing massive piracy of their works through P2P 
networks," Berman stated.  "Billions of P2P downloads every month 
constitute copyright infringements for which these creators and owners 
receive no compensation.  There is no excuse or justification for this 
piracy.  Theft is theft, whether it is shoplifting a CD in a record store, 
or illegally downloading a song from Morpheus."

"I am a big fan of P2P networks and the technology behind them," Berman 
continued.  "I think these networks have terrific potential for all kinds 
of legitimate applications, including the legal distribution of copyrighted 
works.  However, it should remain the creator's choice to distribute their 
works through a P2P network, not a pirate's.  P2P piracy must be cleaned 
up, and cleaned up now."

"The bill my colleagues and I introduce today will free the marketplace to 
develop technologies that thwart P2P piracy without impairing P2P networks 
themselves," Berman stated.  "It will do so by allowing copyright owners, 
in certain limited circumstances, to use technological tools to thwart P2P 
piracy without fear of liability."

"The law has long allowed property owners to use self-help to protect their 
property," Berman pointed out.  "Satellite companies periodically employ 
electronic countermeasures to thwart the theft of their signals and 
programming.  Software companies employ technologies that make their 
software inoperable if license terms are violated.  However, copyright 
owners cannot use many promising, anti-piracy technologies because doing so 
runs afoul of certain common law doctrines and state and federal statutes, 
including the federal Computer Fraud and Abuse Act, that were never 
intended to apply to such self-help activities."

"In other words," said Berman, "while P2P technology is free to innovate 
new and more efficient methods of distribution that further exacerbate the 
piracy problem, copyright owners are not equally free to craft 
technological responses.  This is not fair, and today my colleagues and I 
introduce legislation that allows copyright owners to use technology to 
deal with technological piracy.

"Contrary to widespread, if uninformed speculation, our legislation is 
narrowly crafted, with strict bounds on acceptable behavior by the 
copyright owner," Berman cautioned.  "It gives copyright creators a very 
limited safe harbor from liability when they use technological tools for 
the narrow purpose of thwarting P2P piracy.  It does not allow copyright 
owners to send viruses through P2P networks, destroy files, hack into the 
personal files of P2P users, or indiscriminately block lawful 
file-trading.  Further, our legislation does not allow copyright owners to 
damage the property of any intermediaries, including ISPs, or to do more 
than de minimis damage to the actual P2P pirate."

Berman continued, "We've been extremely careful to ensure that copyright 
owners have strong incentives to use self-help technologies carefully.  If 
copyright owners stray outside the cautiously crafted confines of the safe 
harbor, the full range of current legal remedies are available against 
them.  Further, if the copyright owner egregiously misuses self-help 
technologies, the bill gives affected file traders a new, additional cause 
of action, and gives federal prosecutors new ability to seek an injunction."

"No legislation can eradicate the problem of peer-to-peer piracy,"  Berman 
concluded.  "However, removing the unintended legal constraints on 
technologies that may help deal with the problem is an important part of 
the solution.  Our legislation  will help the marketplace more effectively 
manage P2P piracy without deterring further development of P2P's 
revolutionary  technology."

#   #   #

Statement of the Honorable Howard L. Berman (D-CA) on Introduction of 
Legislation to Promote Technology Solutions to P2P Piracy

Mr. Chairman:

I rise today to introduce legislation that will help stop peer-to-peer piracy.

The growth of peer-to-peer (P2P) networks has been staggering, even by 
Internet standards.  From non-existence a few years ago, today nearly a 
dozen P2P networks have been deployed, a half-dozen have gained widespread 
acceptance, and one P2P network alone is responsible for 1.8 billion 
downloads each month.  The steady growth in broadband access, which 
exponentially increases the speed, breadth, and usage of these P2P 
networks, indicates that P2P penetration and related downloading will 
continue to increase at a breakneck pace.

Unfortunately, the primary current application of P2P networks is unbridled 
copyright piracy.  P2P downloads today consist largely of copyrighted 
music, and as download speeds improve, there has been a marked increase in 
P2P downloads of copyrighted software, games, photographs, karaoke tapes, 
and movies.  Books, graphic designs, newspaper articles, needlepoint 
designs, and architectural drawings cannot be far behind.  The owners and 
creators of these copyrighted works have not authorized their distribution 
through these P2P networks, and P2P distribution of this scale does not fit 
into any conception of fair use.  Thus, there is no question that the vast 
majority of P2P downloads constitute copyright infringements for which the 
works' creators and owners receive no compensation.

The massive scale of P2P piracy and its growing breadth represents a direct 
threat to the livelihoods of U.S. copyright creators, including 
songwriters, recording artists, musicians, directors, photographers, 
graphic artists, journalists, novelists, and software programmers.  It also 
threatens the survival of the industries in which these creators work, and 
the seamstresses, actors, Foley artists, carpenters, cameramen, 
administrative assistants, and sound engineers these industries employ.  As 
these creators and their industries contribute greatly both to the cultural 
and economic vitality of the U.S., their livelihoods and survival must be 
protected.

Simply put, P2P piracy must be cleaned up.  The question is how.

The answer appears to be a holistic approach involving a variety of 
components, none of which constitutes a silver bullet.  Wider deployment of 
online services offering copyrighted works in legal, consumer-friendly 
ways, digital rights management technologies, lawsuits against infringers, 
prosecutions of egregious infringers, and technological self-help measures 
are all part of the solution to P2P piracy.

While pursuit of many of these components to the P2P piracy solution 
requires no new legislation, I believe legislation is necessary to promote 
the usefulness of at least one such component.  Specifically, enactment of 
the legislation I introduce today is necessary to enable responsible usage 
of technological self-help measures to stop copyright infringements on P2P 
networks.

Technology companies, copyright owners, and Congress are all working to 
develop security standards, loosely termed digital rights management (DRM) 
solutions, to protect copyrighted works from unauthorized reproduction, 
performance, and distribution.  While the development and deployment of DRM 
solutions should be encouraged, they do not represent a complete solution 
to piracy.  DRM solutions will not address the copyrighted works already 
"in the clear" on P2P networks. Additionally, DRM solutions will never be 
foolproof, and as each new generation of DRM solutions is cracked, the 
newly-unprotected copyrighted works will leak onto P2P networks. Similarly, 
copyrighted works cannot always be protected by DRM solutions, as they may 
be stolen prior to protection or when performed in the clear - for 
instance, when a movie is copied from the projection booth.

Shutting down all P2P systems is not a viable or desirable option for 
dealing with the massive copyright infringement they facilitate. While the 
9th Circuit could shut Napster down because it utilized a central directory 
and centralized servers, the new P2P networks have increasingly engineered 
around that decision by incorporating varying levels of 
decentralization.  It may be that truly decentralized P2P systems cannot be 
shut down, either by a court or technologically, unless the client P2P 
software is removed from each and every file trader's computer.

As important, P2P represents an efficient method of information transfer 
and supports a variety of legitimate business models. Removal of all P2P 
networks would stifle innovation.  P2P networks must be cleaned up, not 
cleared out.

Copyright infringement lawsuits against infringing P2P users have a role to 
play, but are not viable or socially desirable options for addressing all 
P2P piracy.  The costs of an all-out litigation approach would be 
staggering for all parties.  Copyright owners would incur overwhelming 
litigation expenses, otherwise-innocent P2P users would undoubtedly 
experience privacy violations, internet service providers and other 
intermediaries would experience high compliance costs, and an already 
overcrowded federal court system would face further strain.  Further, the 
astounding speed with which copyrighted works are spread over P2P networks, 
and thus their immediate ubiquity on millions of computers, renders almost 
totally ineffective litigation against individual P2P users.  Certainly, a 
suit against an individual P2P user will almost never result in recovery of 
sufficient damages to compensate for the damage caused.

In short, the costs of a litigation approach are likely to far outweigh the 
potential benefits.  While litigation against the more egregious P2P 
pirates surely has a role, litigation alone should not be relied on to 
clean up P2P piracy.

One approach that has not been adequately explored is to allow 
technological solutions to address technological problems.  Technological 
innovation, as represented by the creation of P2P networks and their 
subsequent decentralization, has been harnessed to facilitate massive P2P 
piracy.  It is worth exploring, therefore, whether other technological 
innovations could be harnessed to combat this massive P2P piracy 
problem.  Copyright owners could, at least conceptually, employ a variety 
of technological tools to prevent the illegal distribution of copyrighted 
works over a P2P network. Using interdiction, decoys, redirection, 
file-blocking, spoofs, or other technological tools, technology can help 
prevent P2P piracy.

There is nothing revolutionary about property owners using self-help -- 
technological or otherwise --  to secure or repossess their 
property.  Satellite companies periodically use electronic countermeasures 
to stop the theft of their signals and programming.  Car dealers repossess 
cars when the payments go unpaid.  Software companies employ a variety of 
technologies to make software non-functional if license terms are violated.

However, in the context of P2P networks, technological self-help measures 
may not be legal due to a variety of state and federal statutes, including 
the Computer Fraud and Abuse Act of 1986.  In other words, while P2P 
technology is free to innovate new, more efficient methods of P2P 
distribution that further exacerbate the piracy problem, copyright owners 
are not equally free to craft technological responses to P2P piracy.

Through the legislation I introduce today, Congress can free copyright 
creators and owners to develop technological tools to protect themselves 
against P2P piracy.  The proposed legislation creates a safe harbor from 
liability so that copyright owners may use technological means to prevent 
the unauthorized distribution of that owner=s copyrighted works via a P2P 
network.

This legislation is narrowly crafted, with strict bounds on acceptable 
behavior by the copyright owner. For instance, the legislation would not 
allow a copyright owner to plant a virus on a P2P user's computer, or 
otherwise remove, corrupt, or alter any files or data on the P2P user's 
computer.

The legislation provides a variety of remedies if the self-help measures 
taken by a copyright owner exceed the limits of the safe harbor.  If such 
actions would have been illegal in the absence of the safe harbor, the 
copyright owner remains subject to the full range of liability that existed 
under prior law.  If a copyright owner has engaged in abusive interdiction 
activities, an affected P2P user can file suit for economic costs and 
attorney's fees under a new cause of action.  Finally, the U.S. Attorney 
General can seek an injunction prohibiting a copyright owner from utilizing 
the safe harbor if there is a pattern of abusive interdiction activities.

This legislation does not impact in any way a person who is making a fair 
use of a copyrighted work, or who is otherwise using, storing, and copying 
copyrighted works in a lawful fashion.  Because its scope is limited to 
unauthorized distribution, display, performance or reproduction of 
copyrighted works on publicly accessible P2P systems, the legislation only 
authorizes self-help measures taken to deal with clear copyright 
infringements.  Thus, the legislation does not authorize any interdiction 
actions to stop fair or authorized uses of copyrighted works on 
decentralized, peer-to-peer systems, or any interdiction of public domain 
works.  Further, the legislation doesn't even authorize self-help measures 
taken to address copyright infringements outside of the decentralized, P2P 
environment.

This proposed legislation has a neutral, if not positive, net effect on 
privacy rights. First, a P2P user does not have an expectation of privacy 
in computer files that she makes publicly accessible through a P2P 
file-sharing network - just as a person who places an advertisement in a 
newspaper cannot expect to keep that information confidential.  It is 
important to emphasize that a P2P user must first actively decide to make a 
copyrighted work available to the world, or to send a worldwide request for 
a file, before any P2P interdiction would be countenanced by the 
legislation. Most importantly, unlike in a copyright infringement lawsuit, 
interdiction technologies do not require the copyright owner to know who is 
infringing the copyright.  Interdiction technologies only require that the 
copyright owner know where the file is located or between which computers a 
transmission is occurring.

No legislation can eradicate the problem of peer-to-peer piracy. However, 
enabling copyright creators to take action to prevent an infringing file 
from being shared via P2P is an important first step toward a solution. 
Through this legislation, Congress can help the marketplace more 
effectively manage the problems associated with P2P file trading without 
interfering with the system itself.

I yield back the balance of my time.