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Will the Inducing Infringement Act Kill the iPod?

PRESS RELEASE
June 24, 2004

EFF Attorneys Play Devil's Advocates, Post Mock Inducement Complaint against Apple

San Francisco - With Senator Orrin Hatch (R-Utah) and his colleagues pushing hard to bring the Inducing Infringement of Copyright Act ("Induce Act") to the full Senate for a vote, the Electronic Frontier Foundation (EFF) is already dreading the loss of all technologies this legislation has the potential to destroy. Although Hatch wants the public to believe that the legislation will only hurt "the bad guys" in the P2P wars, EFF argues that the Act is so sweeping that "the good guys" will get taken down too. The Induce Act, which would make it illegal to "induce" people to infringe copyright, could potentially outlaw everything from CD burners to the iPod.

To dramatize how the Induce Act might harm innovators and consumers, EFF attorneys realized they would have to make the threat a reality by becoming devil's advocates. Today, EFF posted a mock complaint in a lawsuit that could be brought against Apple, accusing the corporation of selling its popular iPod music player to induce people to infringe copyright.

The complaint, which mimics the format of an actual complaint that record companies might draft, points out that "Apple advertises that its 40 GB iPod can hold 'up to 10,000 songs.' This amount of capacity far exceeds the total CD collection of the vast majority of Americans. This suggests that Apple knew and intended that iPod owners would be getting their music from elsewhere, including P2P networks." The complaint also named Toshiba as a defendant for manufacturing the hard drive used exclusively by Apple for its iPod and CNET Networks for writing a review of the iPod that instructs users on how to copy music files between computers.

Because the Induce Act defines "intent" as being "determined by a reasonable person taking into account all relevant facts," it's unlikely that a technology company like Apple would be able to easily dismiss any lawsuit brought against it. It would face the prospect of an expensive trial, with all the attendant legal fees and negative publicity. One such company, SonicBlue, recently fought against a group of copyright holders in court over its ReplayTV and spent close to $1,000,000 per month in legal fees alone. In essence, this means that copyright owners can use the "inducement" theory to inflict an arbitrarily large penalty on any tech company that builds a device they don't like. That's not a pleasant possibility for an innovator to face as he or she tries to launch a new product.

EFF hopes that its mock complaint, brought by a hypothetical "group of major recording labels" against Apple, will raise awareness about how the Induce Act will destroy incentives to innovate. "We knew we could draft a legal complaint against any number of the major computer or electronics manufacturers for the everyday devices we all know and love, like CD burners and MP3 players," said EFF Staff Attorney Jason Schultz. "We picked Apple as our mock target because one could argue it's 'reasonable to know' that having an iPod enhances the lure of using P2P to download music."

"We don't mean to single out Apple, Toshiba or CNET," said Cindy Cohn, EFF's legal director. "If the Induce Act passed, a similar lawsuit could easily be imagined against Hewlett-Packard for selling PCs equipped with CD burners or against cell phone manufacturers who allow users to swap ringtones."

EFF Action Alert on Inducing Infringement Act

Contacts:

Jason Schultz
Staff Attorney
Electronic Frontier Foundation
jason@eff.org
+1 415 436-9333 x112

Cindy Cohn
Legal Director
Electronic Frontier Foundation
cindy@eff.org
+1 415 436-9333 x108

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