NET Act
Encyclopedia
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.
This state of affairs was underscored by the unsuccessful 1994 prosecution of David LaMacchia, then a student at the Massachusetts 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" (17 USC 101), 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" (17 USC 506(a)(1)(B)). In response to the NET Act, the US Sentencing Commission stiffened sanctions for intellectual property
infringement.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
No Electronic Theft Act (NET Act), a federal law
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...
passed in 1997, provides for criminal prosecution of individuals who engage in copyright infringement
Copyright infringement
Copyright infringement is the unauthorized or prohibited use of works under copyright, infringing the copyright holder's exclusive rights, such as the right to reproduce or perform the copyrighted work, or to make derivative works.- "Piracy" :...
under certain circumstances, even when there is no monetary profit or commercial benefit from the infringement. Maximum penalties can be five years in prison
Prison
A prison is a place in which people are physically confined and, usually, deprived of a range of personal freedoms. Imprisonment or incarceration is a legal penalty that may be imposed by the state for the commission of a crime...
and up to $250,000 in fines. The NET Act also raised statutory damages
Statutory damages for copyright infringement
Statutory damages for copyright infringement are available under some countries' copyright laws.The charges allow copyright holders, who succeed with claims of infringement, to receive an amount of compensation per work...
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.
This state of affairs was underscored by the unsuccessful 1994 prosecution of David LaMacchia, then a student at the Massachusetts Institute of Technology
Massachusetts Institute of Technology
The Massachusetts Institute of Technology is a private research university located in Cambridge, Massachusetts. MIT has five schools and one college, containing a total of 32 academic departments, with a strong emphasis on scientific and technological education and research.Founded in 1861 in...
, 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" (17 USC 101), 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" (17 USC 506(a)(1)(B)). In response to the NET Act, the US Sentencing Commission stiffened sanctions for intellectual property
Intellectual property
Intellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...
infringement.