Crackdown on Piracy Hits Barrier

Like a stern father figure, Atty. Gen. Alberto R. Gonzales warned Los Angeles high school students last month about the perils of illegally downloading music or movies.

“There are consequences,” he said. “It is unlawful.”

Backing up the threat is another matter. While federal prosecutors have made fighting piracy a top priority, to date they have been reluctant to go after the group the entertainment industry most wants targeted: people who illegally download from hugely popular online file-sharing networks.

“No U.S. attorney wants to be the guy who put a UCLA sophomore in jail for downloading Britney Spears,” said George Washington University law professor Orin Kerr, a former federal high-tech crimes specialist.

Downloading is one of the most popular ways to watch movies and hear music among the world’s youth. Studio executives believe making examples of some of them could put the fear of God into would-be pirates.

Instead, prosecutors and the FBI have focused mainly on sophisticated “warez” groups that copy and distribute software, movies and music. Such groups are important pieces of the piracy distribution chain but have little in common with the masses who use file-sharing software.

When asked in an interview about going after downloaders, Gonzales was circumspect.

“Obviously, these are very complicated cases,” he said. “Sometimes the laws are not, I think, as flexible as they might be to help us prosecute these kinds of cases.”

The new Family Entertainment and Copyright Act makes it illegal to offer online even one movie, song or software program before its official release, making it easier to prosecute some cases. Though the law does not make downloading of copyrighted files a crime, many people who do such downloading also offer pirated material on their hard drives for others to copy. Still, Gonzales said, the new law was not aimed at people who make available a single bootlegged movie or song.

Prosecutors have neither the resources nor the stomach to go after that kind of lawbreaker, current and former Justice Department officials said. As with most federal crimes, the department prefers targeting bigger fish. Still, officials won’t rule out going after anyone who pirates copyrighted works should the right case come along.

Studios, labels and their allies in Congress believe that with a stronger copyright law it’s time to stop pulling punches with individuals who use Kazaa, BitTorrent or other popular file-sharing programs to pirate copyrighted works. They believe a highly publicized prosecution of a small-time infringer -- the average Kazaa user, for example -- would be a powerful deterrent.

“Knowing that the government of the United States has this tool available is so powerful,” said Dan Glickman, chief executive of the Motion Picture Assn. of America. “It is an extremely meaningful step and we hope they use that authority. We hope this will not be some illusion on the books.”

As it stands now, the worst that confronts people who share music or movies online are civil lawsuits filed by the MPAA or the Recording Industry Assn. of America.

Observers say federal prosecutors are walking a fine line.

“I think there’s this delicate dance. They’re trying to crack down on piracy without ending up the unpaid enforcement arm of the RIAA or the MPAA,” said attorney Fred von Lohmann of the Electronic Frontier Foundation, an advocacy group for civil liberties in cyberspace.

Hilary Rosen, former chief executive of the RIAA, said difficulty gathering evidence was one reason prosecutors were reluctant to go after individual downloaders. Although it is easy to see who is offering copyrighted works for downloading on a file-sharing network, legal experts say it is virtually impossible to observe someone downloading a copyrighted file from another person’s computer.

Even if you could overcome the difficulties, Kerr said, prosecutors worry that they could not win over a jury.

“The gap here is [that] it’s socially acceptable to download files, but it can also be a crime,” Kerr said.

For years, music and movie lobbyists fought to get the Justice Department to make piracy a priority of any kind. Former MPAA President Jack Valenti recalled unsuccessfully lobbying former Atty. Gen. Janet Reno, who was preoccupied with other law enforcement issues.

“They had a lot of crisis issues then,” he said. “The digital era had not hit us yet. It’s been in the last five or six years that the avalanche has come in a torrential way.”

In Reno’s defense, Bruce A. Lehman, the Clinton administration’s assistant secretary of Commerce in charge of intellectual property issues, said the current Justice Department was doing more than its predecessors because copyright owners had asked it to do more.

“Our view at the time was that piracy in the United States was not a huge, big problem,” Lehman said. “We didn’t feel that it was seriously economically damaging to the copyright-based industries. And our focus was much, much more on international piracy.”

The shift came under former Atty. Gen. John Ashcroft, an amateur singer and songwriter, who took a broad philosophical approach to protecting copyrights, patents and other intellectual property. Creativity and innovation not only are key elements of a society’s productivity but they also determine whether a country leads or follows, Ashcroft said in an interview last year. Protecting intellectual property, he said, is critical for the U.S. to remain a place of unique opportunity and inordinate prosperity.

But the 9/11 attacks pushed piracy to the back burner, said David Israelite, CEO of the National Music Publishers’ Assn. and a former top Ashcroft aide.

“We became all about terrorism, 24 hours a day,” he said.

Slowly, piracy resurfaced as a priority. Valenti said he was encouraged after a 40-minute pitch to Ashcroft and his staff in the fall of 2003. During the meeting, Valenti rolled off statistics, making the case that intellectual property was America’s only export with a surplus balance of trade, creating jobs at twice the rate of the U.S. economy.

Ashcroft, recalled Valenti, was impressed. “He realized this was an opportunity for the Justice Department to make a mark,” Valenti said.

By early 2004, Israelite approached Ashcroft about fully reigniting the piracy initiative. Israelite said there was a realization that, as manufacturing jobs went overseas, the U.S. economy had become more reliant on intellectual property as an economic engine.

“We were increasingly dependent on that and at the same time seeing an increase in the theft of intellectual property here and abroad,” Israelite said. “It had reached a crisis point.”

Ashcroft agreed and formed a task force. Israelite spent six months listening to federal prosecutors, heads of movie studios, recording industry officials and software companies.

While Israelite pledged more enforcement from the Justice Department, Hollywood promised to increase its efforts to go after pirates by filing civil suits and launching education efforts. Now, the department has 18 specialized units nationwide that work only on copyright cases.

The department’s task force “sent a message to a very large community of enforcers that intellectual property matters, and the behavioral consequences within the organization are enormous,” said RIAA Chief Executive Mitch Bainwol.

Now, with a tougher copyright act enacted, the industry is expecting even more from the Justice Department.

Rep. Howard L. Berman (D-North Hollywood), a frequent studio ally, said the problem was severe enough to command the department’s attention.

“If there was an elaborate white-collar scheme on a national and international basis to steal valuable property that, in the total context of things, cost an industry billions of dollars annually, I think everyone would expect the Justice Department and the FBI to prioritize finding and exposing and apprehending the people involved in it,” Berman said.

Industry and government officials, however, are struggling to sell the idea that piracy equals theft to a young, tech-savvy generation that views illegal downloading as no big deal.

Josh Bernoff, an analyst at Forrester Research, said the Family Entertainment and Copyright Act could help change that mind-set. According to a survey his firm conducted in 2003, more than two-thirds of the 12- to 22-year-olds interviewed said they would stop illegal downloading if they thought there was a serious threat of jail or a fine, Bernoff said.

The new law, he said, “might put a little bit of teeth into the scare now.”

John Barrett, an analyst at market research firm Parks Associates in Dallas, is more skeptical. At a recent conference in Universal City, he asked a panel of college students about file sharing and piracy. With so many of their friends illegally downloading, the students said, they were confident they would never be punished.

“There wasn’t a kid on that group,” he said, “that had the least bit of fear.”