Federal Internet Law & Policy
An Educational Project

IP: Copyright: Enforcement: NET Act

Dont be a FOOL; The Law is Not DIY

"In December 1997, Congress passed the No Electronic Theft ("NET") Act, making it a criminal offense to distribute or to reproduce copies of copyrighted works, if not authorized to do so, regardless of whether the distributor was trying to profit from the activity.  The legislation was intended to fill a gap in the criminal copyright statute, highlighted in the dismissal of an indictment in United States v. LaMacchia, 871 F. Supp. 535 (D Mass 1994).

"In LaMacchia, an MIT student operated a BBS over the Internet that allowed anyone with a computer and modem to send to the BBS or acquire from the BBS copyrighted software programs.  His actions caused an estimated loss to copyright holders of over $1 million during the 6-week period the system was in operation.  The student could not be charged with violation of the criminal law protecting copyright, 17 U.S.C. § 506, because he was not acting "for commercial purpose or private financial gain,' an element of the criminal copyright offense.  Instead he was charged with conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1343.  The district court dismissed the indictment, finding copyright law to be the exclusive remedy for protecting intellectual property rights from this kind of theft, even while recognizing that the existing copyright law failed to cover this conduct.  The district court invited Congress to remedy this gap in the law, and Congress did so in the NET act.

"The NET Act creates a new criminal offense to cover the unauthorized distribution or reproduction of copies of copyrighted works, regardless of whether the distributor intends to profit from the activity.  See 17 U.S.C. § 506(a)(2); 18 U.S.C. § 2319(b)(2).  It establishes a felony, punishable by up to three years imprisonment, for reproducing or distributing, during any 180-day period, ten or more copies of one or more copyrighted works that have a total retain value of more than $2,500.  The NET Act also:

-- President's Working Group on Unlawful Conduct on the Internet, The Electronic Frontier: The Challenge of Unlawful Conduct Involving the Use of the Internet, Appendix I (March 2000)





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