What is the No Electronic Theft act?

Answer 1

The Copyright Act provides for both civil and criminal liability for acts of copyright infringement. Infringement is a crime only where it is done "willfully and for purposes of commercial advantage or private financial gain."

The penalties for criminal infringement, set forth in Title 18 of the U.S. Code, are determined by its extent: if the infringer has made, in any 180-day period, ten or more copies of one or more copyrighted works with a total retail value of $2,500, the crime is a felony entailing up to five years imprisonment and/or a fine of up to $250,000 for individuals and $500,000 for organizations.

For cases not meeting this threshold, the crime is a misdemeanor, with the maximum penalty of imprisonment for up to one year and/or a fine of up to $25,000 for individuals and $100,000 for organizations. There is also an increased penalty for repeat offenders, authorizing a sentence of up to 10 years.

The damage from piracy has grown over the years as technology has developed, making it easier and easier to produce higher quality copies of copyrighted works in various formats. Copyright owners today lose substantial sums of money to piracy.

The United States No Electronic Theft Act (NET Act), a federal law passed in 1997, provides for criminal prosecution of individuals who engage in copyright infringement under certain circumstances, even when there is no monetary profit or commercial benefit from the infringement. Maximum penalties can be five years in prison and up to $250,000 in fines. The NET Act also raised statutory damages by 50%.

Prior to the enactment of the NET Act in 1997, criminal copyright infringement required that the infringement was for the purpose of "commercial advantage or private financial gain." Merely uploading and downloading files on the internet did not fulfill this requirement, meaning that even large-scale online infringement could not be prosecuted criminally.

The case of United States v. LaMacchia, 871 F. Supp. 535 (D. Mass. 1994), has drawn attention to current law's shortcomings. David LaMacchia, a student at the Massachusetts Institute of Technology described by the court as a "computer hacker," created and operated electronic bulletin boards on the Internet and encouraged users to upload and download copies of popular copyrighted commercial software. The illegal copying that took place on the bulletin boards resulted in alleged losses to the copyright owners of over one million dollars. Because LaMacchia lacked a commercial motive, however, the government charged him with wire fraud rather than criminal copyright infringement. The court dismissed the indictment, holding that copyright infringement can only be prosecuted under the Copyright Act. Id. at 545 (relying on Dowling v. United States, 473 U.S. 207 (1985))

This state of affairs was underscored by the unsuccessful 1994 prosecution of David LaMacchia, then a student at theMassachusetts Institute of Technology, for allegedly facilitating massive copyright infringement as a hobby, without any commercial motive. The court's dismissal of United States v. LaMacchia suggested that then-existing criminal law simply did not apply to non-commercial infringements (a state of affairs which became known as the "LaMacchia Loophole"). The court suggested that Congress could act to make some non-commercial infringements a crime, and Congress acted on that suggestion in the NET Act.

The NET Act amended the definition of "commercial advantage or private financial gain" to include the "receipt, or expectation of receipt, of anything of value, including the receipt of other copyrighted works" and specifies penalties of up to five years in prison and up to $250,000 in fines. In addition, it added a threshold for criminal liability where the infringer neither obtained nor expected to obtain anything of value for the infringement - "by the reproduction or distribution, including by electronic means, during any 180-day period, of 1 or more copies or phonorecords of 1 or more copyrighted works, which have a total retail value of more than $ 1,000".