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New Senate Bill Discourages Innovation

As currently drafted, the Inducing Infringement of Copyrights Act of 2004 (S.2560), introduced today, would stifle innovation and jeopardizes critical protections for innovators established in theU.S. Supreme Court’s landmark 1984 Betamax ruling, said the Consumer Electronics Association (CEA). CEA is urging the Senate Judiciary Committee to hold a hearing on the bill so that concerns can beheard and addressed.

The proposed bill adds a new and overly broad copyright cause of action for “intentionally inducing” copyright infringement, said the CEA, and thus could have a crippling effect on the development and introduction of new technologies.

“We understand that the intent of the sponsor is to stamp out companies that are inducing children to receive unlawfully distributed and otherwise illicit material. But it could also have a huge negative impact on legal multipurpose devices, software and home networking products,” said CEA President and CEO Gary Shapiro. “This new and separate copyright cause of action is so broad that it would stifle innovation. It essentially would grant copyright owners veto power over the introduction of any new technology for home and personal use.

“By establishing this new and vague cause of civil action, it essentially gives content owners another tool in their arsenal to sue legitimate companies over any device, software, home network, programming guide or database drawn from or linked to copyrighted material that they deem objectionable,” continued Shapiro. “This gun hanging over the head of entrepreneurs, large and small, will stifle competition and prevent the introduction of products and technologies we cannot even begin to imagine. Because of its potential consequences, the bill requires full and careful consideration. We look forward to working with Chairman Hatch and other sponsors in the context of a full hearing about all the implications of such a major change to the law.”

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