[Congressional Record Volume 143, Number 107 (Friday, July 25, 1997)]
[Extensions of Remarks]
[Page E1527]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   THE NO ELECTRONIC THEFT [NET] ACT

                                 ______
                                 

                           HON. HOWARD COBLE

                           of north carolina

                    in the house of representatives

                         Friday, July 25, 1997

  Mr. COBLE. Mr. Speaker, I am pleased to be an original cosponsor of 
the No Electronic Theft Act, also known as the NET Act. I commend the 
bill's author and my good friend, Representative Bob Goodlatte of 
Virginia, for his leadership on this important copyright issue. As 
chairman of the Subcommittee on Courts and Intellectual Property, I 
cannot overemphasize the importance of this legislation; in fact, I 
plan to schedule a hearing on the NET Act and the broader subject of 
copyright piracy later in the fall.
  Industry groups estimate that counterfeiting and piracy of 
intellectual property--especially computer software, compact discs, and 
movies--cost the affected copyright holders roughly $20 billion last 
year. Regrettably, the problem has great potential to worsen. The 
advent of digital video discs, similar to conventional compact discs 
but capable of storing far more material while rendering perfect 
secondhand copies, will only create additional incentive for copyright 
thieves to steal protected works.
  The legislation introduced by Representative Goodlatte will deter 
copyright piracy by further criminalizing the act in a firm but fair 
manner. The NET Act constitutes a legislative response to the so-called 
LaMacchia case, a 1994 decision authored by a Massachusetts Federal 
court. In LaMacchia, the defendant encouraged lawful purchasers of 
copyrighted software and computer games to upload these works via a 
special password to an electronic bulletin board on the Internet. The 
defendant then transferred the works to another electronic address and 
encouraged others with access to a second password to download the 
materials for personal use without authorization by or compensation to 
the copyright owners. While critical of the defendant's behavior, the 
court precluded his prosecution under a Federal wiretap statute, 
stating that this area of law was never intended to cover copyright 
infringement. The court's dicta indicated that Congress has tread 
cautiously and deliberately in amending the Copyright Act, especially 
when devising criminal penalties for infringement.
  It is self-evident, Mr. Speaker, that this transgression--the 
unauthorized access to a company's products--has even greater potential 
to ruin small, start-up companies. Let us not forget that small 
businesses still comprise that sector of our national economy which 
provides the most employment opportunities for American citizens. 
Thousands of independent hackers motivated like LaMacchia will cause 
harm to our Nation's workers and the small businesses which employ 
them. LaMacchia's behavior was not trivial; it deserves to be 
criminalized.
  Accordingly, the NET Act would proscribe the willful act of copyright 
infringement, either for ``commercial advantage or private financial 
gain''; or by reproducing or distributing one or more copies of 
copyrighted works which have a retail value of $5,000 or more. In 
direct response to LaMacchia, the legislation specifically encompasses 
acts of reproduction or distribution that occur via transmission, or 
computer theft. In addition, ``financial gain'' is defined as receiving 
``anything of value, including the receipt of other copyrighted 
works.'' This change would enable the Department of Justice to pursue a 
LaMacchia-like defendant who steals copyrighted works but gives them 
away--instead of selling them--to others. The legislation includes 
maximum statutory penalties of up to $250,000 in fines and prison terms 
of 6 years.
  Mr. Speaker, the public must come to understand that intellectual 
property rights, while abstract and arcane, are no less deserving of 
protection than personal or real property rights. The intellectual 
property community will continue its work in educating the public about 
these concerns, but we in the Congress must do our job as well by 
ensuring that piracy of copyrighted works will be treated with an 
appropriate level of fair but serious disapproval. Again, I 
congratulate Representative Goodlatte for his leadership in this 
regard, and I look forward to working with him and other interested 
colleagues as we consider the NET Act in the near future.

                          ____________________