Publishers Push Piracy Plan on Providers

The powerful Software Publishers Association is using heavy-handed legal tactics to impose digital copyright rules on the online industry, said industry officials and online libertarians.

"They were not meeting their [legal] responsibilities" to curb copyright piracy, said Peter Beruk, the director of the SPA's domestic anti-piracy unit. The SPA is funded by several software developers, including Microsoft Corp., Redmond, Wash.

By suing the companies and pressing them to accept the SPA's Code of Conduct for online companies, the SPA is trying to establish rules for online companies' handling of intellectual property, said Parekh.

Every online company that settles a dispute by signing the SPA's Code of Conduct bolsters the SPA's clout in any future discussions, argued Beruk. "Any settlement ... is a basis for future settlements," including possible court decisions, he said.

The SPA sued Community Connexion; Tripod Inc., Williamstown, Mass.; GeoCities, Santa Monica, Calif.; and three individuals for allegedly contributing to the electronic distribution of stolen intellectual property, such as software.

The three lawsuits were prompted by the companies' failure to respond to letters from the SPA, asking the companies to curb access to software tools that could crack anti-piracy technology used by SPA members, said Beruk.

Already, almost 25 companies have responded to the SPA's warning letters, curbing access to the cracking tools and incorporating portions of the SPA's Code of Conduct into their agreement with customers, Beruk said.

An executive at GeoCities said they expect to reach an agreement with the SPA. Tripod settled its dispute Nov. 8.

As part of its settlement with the SPA, Tripod redrafted its contract with its roughly 116,000 subscribers. "Our Terms of Service now explicitly state that we do not tolerate on our [subscribing] members' home pages the presence of illegal software, [software product] serial numbers and tools that have no other purpose than to crack software," according to a statement from Tripod.

"Tripod sets an excellent example for [Internet service providers], who should advise their subscribers that infringing material will not be tolerated on their servers," according to a statement from the SPA.

However, Community Connexion rebuffed the lawsuit because the SPA had no evidence of piracy, said Parekh.

The SPA then dropped the lawsuit, "as an act of good faith to promote dialogue," Beruk said.

But Community Connexion won't talk with the SPA until the association pays Community Connexion's legal expenses -- roughly $4,500 -- and apologizes for the lawsuit, said Parekh. "We won't talk to them on any basis without that," he said. Parekh said he had received no support from larger online companies. The SPA has nothing to apologize for, said Beruk. "We would apologize if we had made a mistake," he said.

The SPA's lawsuits followed the failure earlier this year of congressional-backed negotiations on a new digital copyright law. Telecommunications firms, including online companies, disagreed with copyright owners, including the SPA, on a common approach to curbing intellectual property theft on the Internet.

Telecommunications firms sought to minimize their role in ferreting out online piracy, saying it could be too expensive and intrusive on their customers' privacy, while copyright owners tried to make the telecommunications firms liable for copyright theft.

By getting companies to agree to the Code of Conduct, the SPA gradually builds up legal ammunition for any eventual court battle with a large online company such as America Online Inc., Dulles, Va., said one legal expert. The ammunition is needed because the existing digital copyright law provides little definition for what "reasonable" anti-piracy policies should be adopted by online companies to avert lawsuits by aggrieved copyright owners.

With the agreements under its arm, the SPA "inevitably then can say [in any court case] that all these other ISPs say [SPA-backed anti-piracy policy] is reasonable, but this [ISP] does not," said Beruk.

"If they decide to sign it, terrific. It shows they are responsible [companies]," he said.

This strategy will yield quicker results than relying on Congress to change the law, or on judges to make case law via court decisions, said Beruk. Creating federal or case law can take five years, during which time publishers would lose much from piracy, he said.

"We are not interested in making case law, [but if rebuffed by online companies] we may be forced to go all the way" to court, he said.

But the SPA is "trying to perpetuate a fraud," said Mike Godwin, counsel to the Electronic Frontier Foundation, a libertarian group based in San Francisco. The SPA's Code of Conduct "is not a voluntary standard if you were sued to establish it," he said.

But "it is not ethical practice to sue people who can't afford to defend themselves," said Godwin.

Godwin urged the online industry to support Community Connexion and other online firms sued by the SPA. The SPA is trying to "establish a [legal] standard [by suing the small companies] so they can go after the big online companies," he said.

However, industry officials have not rallied to the defense of the smaller online firms. Sara Fitzgerald, an executive with the Silver Spring, Md., Interactive Services Association, which is funded by the online industry, said Nov. 13 that she had just begun to look into the issue. Susan Wallace, a spokeswoman for Prodigy Inc., White Plains, N.Y., declined to comment. n

Software Publishers Association's Code of Conduct

The below-signed ISP voluntarily agrees to:

1.Commit to a policy making only legally authorized software available to subscribers, members and users.

2.Implement its policy by naming a compliance officer and using its best efforts to ensure that the unauthorized reproduction and/or distribution of copyrighted computer programs does not occur on or through its servers, that information that appears to have been posted to be used to circumvent manufacturer-installed copy-protect devices in computer programs, including, but not limited to, serial numbers and cracker utilities (hereinafter "cracker material") will not be posted on its server(s), and that the linking of one or more sites on its server(s) to one or more other sites that contain pirated computer programs and/or cracker material does not take place unless such linking clearly appears to be intended for lawful purposes.

3. Remove pirated computer software and cracker materials or otherwise block access to it as soon as practicable after it is discovered.

4. Educate subscribers, members and other users of their legal obligation to respect copyright through, among other things, public service messages, warnings and hypertext links to appropriate educational Web pages.

5.Terminate subscribers or members who, without reasonable justification, fail or refuse to abide by the policy of making only legally authorized software available on its server(s).

6.Not knowingly sponsor, endorse or advertise access to infringing software.

Signature