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“THE NO ELECTRONIC THEFT [NET] ACT” mentioning the U.S. Dept. of Justice was published in the Extensions of Remarks section on pages E1527 on July 25, 1997.
The publication is reproduced in full below:
THE NO ELECTRONIC THEFT [NET] ACT
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HON. HOWARD COBLE
of north carolina
in the house of representatives
Friday, July 25, 1997
Mr. COBLE. Mr. Speaker, I am pleased to be an original cosponsor of the No Electronic Theft Act, also known as the NET Act. I commend the bill's author and my good friend, Representative Bob Goodlatte of Virginia, for his leadership on this important copyright issue. As chairman of the Subcommittee on Courts and Intellectual Property, I cannot overemphasize the importance of this legislation; in fact, I plan to schedule a hearing on the NET Act and the broader subject of copyright piracy later in the fall.
Industry groups estimate that counterfeiting and piracy of intellectual property--especially computer software, compact discs, and movies--cost the affected copyright holders roughly $20 billion last year. Regrettably, the problem has great potential to worsen. The advent of digital video discs, similar to conventional compact discs but capable of storing far more material while rendering perfect secondhand copies, will only create additional incentive for copyright thieves to steal protected works.
The legislation introduced by Representative Goodlatte will deter copyright piracy by further criminalizing the act in a firm but fair manner. The NET Act constitutes a legislative response to the so-called LaMacchia case, a 1994 decision authored by a Massachusetts Federal court. In LaMacchia, the defendant encouraged lawful purchasers of copyrighted software and computer games to upload these works via a special password to an electronic bulletin board on the Internet. The defendant then transferred the works to another electronic address and encouraged others with access to a second password to download the materials for personal use without authorization by or compensation to the copyright owners. While critical of the defendant's behavior, the court precluded his prosecution under a Federal wiretap statute, stating that this area of law was never intended to cover copyright infringement. The court's dicta indicated that Congress has tread cautiously and deliberately in amending the Copyright Act, especially when devising criminal penalties for infringement.
It is self-evident, Mr. Speaker, that this transgression--the unauthorized access to a company's products--has even greater potential to ruin small, start-up companies. Let us not forget that small businesses still comprise that sector of our national economy which provides the most employment opportunities for American citizens. Thousands of independent hackers motivated like LaMacchia will cause harm to our Nation's workers and the small businesses which employ them. LaMacchia's behavior was not trivial; it deserves to be criminalized.
Accordingly, the NET Act would proscribe the willful act of copyright infringement, either for ``commercial advantage or private financial gain''; or by reproducing or distributing one or more copies of copyrighted works which have a retail value of $5,000 or more. In direct response to LaMacchia, the legislation specifically encompasses acts of reproduction or distribution that occur via transmission, or computer theft. In addition, ``financial gain'' is defined as receiving
``anything of value, including the receipt of other copyrighted works.'' This change would enable the Department of Justice to pursue a LaMacchia-like defendant who steals copyrighted works but gives them away--instead of selling them--to others. The legislation includes maximum statutory penalties of up to $250,000 in fines and prison terms of 6 years.
Mr. Speaker, the public must come to understand that intellectual property rights, while abstract and arcane, are no less deserving of protection than personal or real property rights. The intellectual property community will continue its work in educating the public about these concerns, but we in the Congress must do our job as well by ensuring that piracy of copyrighted works will be treated with an appropriate level of fair but serious disapproval. Again, I congratulate Representative Goodlatte for his leadership in this regard, and I look forward to working with him and other interested colleagues as we consider the NET Act in the near future.
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