The heydays of piracy on the internet may soon be over, thanks to the No Electronic Theft (NET) Act (105 H.R. 2265). The bill, introduced by U.S. Rep. Bob Goodlatte (R-Va.), seeks greater penalties for criminal copyright infringement and aids in the prosecution of offenders.

Under NET, those who make unauthorized copies of software, music or other copyrighted material face a fine of up to $250,000 and a five year jail sentence, with repeat offenders subject to stiffer penalties. The bill also extends the statute of limitations for prosecution from three years to five, and provides victims of infringement an opportunity to offer a"victim impact statement" detailing the harm they have suffered. In addition, courts must use the retail value of the infringed works when determining if the statute has been violated and in sentencing (where currently the extent of commercial advantage or private financial gain by the infringer is used).

Perhaps most notably, the NET Act expands the definition of "financial gain" under Title 17 to include the receipt of anything of value, including the receipt of other copyrighted works. The bill's supporters hope that this definition will close the loophole created by U.S. v. LaMacchia, 871 F.Supp. 5353 (D. Mass. 1994).

In LaMacchia, an MIT undergraduate allegedly ran a computer bulletin board system through which he solicited and distributed thousands of copies of copyrighted software. LaMacchia was not paid for his service. Although he was charged with wire fraud, the court announced in dicta that without evidence of commercial advantage or private financial gain, LaMacchia could not be found guilty of criminal copyright infringement. The wire fraud charges were dismissed.

Under the new definition of financial gain, LaMacchia, along with all those who pirate for barter or for fun, would fall squarely within the scope of criminal copyright infringement even if they never actually use the products they pirate.

While the software and entertainment industries laud the government's latest effort to bring law to cyberspace, the bill is not without its defects. Register of Copyrights Marybeth Peters has criticized the Act for criminalizing even de minimis cases of infringement. Under the Act, a person making a single unauthorized copy with minimal retail value could face criminal charges. This result contradicts the House Judiciary Committee's previous position on the criminal punishment of de minimis or incidental copying.*

In addition, the language of the Act suggests that Internet Service Providers (ISPs) may be criminally liable for infringement committed by their users. Because the Act does not define the term"willful," ISPs fear that a court may require only an intent to copy, rather than an intent to infringe.

* See H.R. Rep. No. 102-997, 102 Cong., 2d Sess. 6 (1992).