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The No Electronic Theft ("NET") Act
*Summary of Changes to the Criminal Copyright and Trademark Laws*
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On Tuesday, December 16, 1997, the President signed into law
H.R. 2265, the "No Electronic Theft (NET)" Act. The Act was
passed unanimously by both houses of Congress (143 Cong. Rec.
S12689 and 143 Cong. Rec. H9883-01). The NET Act strengthens the
copyright and trademark laws, providing enhanced protection in
the digital age in a careful and balanced manner.
The criminal copyright and trademark provisions in titles 17 and
18 of the U.S. Code are amended to:
* Permit the Department to prosecute individuals under
misdemeanor or felony provisions^(1) <#N_1_> in cases
involving large-scale illegal reproduction or distribution
of copyrighted works where the infringers act willfully
but without a discernible profit motive, bridging the gap
in statutory protection discussed in _U.S. v. LaMacchia_,
871 F. Supp. 535 (D. Mass. 1994);
* Exempt from criminal prosecution reproduction or
distribution that is not done "willfully" or that
constitutes small-scale non-commercial copying
(copyrighted works with a total retail value of less than
$1,000);
* Clarify that "willful" infringement must consist of
evidence of more than the mere intentional reproduction or
distribution of copyrighted works;
* Define "financial gain" in the Copyright Act (17 U.S.C.
101 et seq.) to include the "receipt, or expectation of
receipt, of anything of value, including the receipt of
other copyrighted works," to ensure that persons who
illegally traffic in copyrighted works by using barter
rather than cash are covered by the statute;
* Clarify that "reproduction or distribution" includes by
electronic as well as tangible means;
* Extend the statute of limitations from three to five
years, making the criminal copyright statute consistent
with most other criminal statutes;
* Establish a recidivist provision which raises penalties
for second or subsequent felony copyright offenses;
* Recognize victims' rights by allowing parties who own
rights in the pirated copyrighted works or in trademarks
on counterfeit goods to provide a victim impact statement
to the sentencing court; and
* Enhance the deterrent power of the copyright criminal laws
by directing the Sentencing Commission to amend the
Sentencing Guideline for copyright and trademark
infringement to allow courts to consider the quantity of
infringing goods and the retail value of the good
infringed upon, rather than the often lower value of the
infringing good, when sentencing defendants.
Copies of the trademark and copyright provisions as amended by
the NET Act are attached. These are 17 U.S.C. §§ 101, 506, and
507 and 18 U.S.C. §§ 2319, 2319A, and 2320. New language appears
in bold typeface.
The Computer Crime and Intellectual Property Section (CCIPS),
Criminal Division, is preparing a supplement to the manual
"Federal Prosecution of Violations of Intellectual Property
Rights - Copyrights, Trademarks and Trade Secrets" which will
explain and incorporate the changes effected by the NET Act. The
supplement will be reproduced and distributed to recipients of
the manual and will be posted on our website
(www.usdoj.gov/criminal/cybercrime).
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*1.* The reproduction or distribution of 10 or more copies of 1 or more
copyrighted works which have a total retail value of $2,500 or more
constitutes a felony, with a maximum sentence of three years
imprisonment and a fine of $250,000. The reproduction or distribution of
1 or more copies of 1 or more copyrighted works which have a total
retail value of more than $1,000 constitutes a misdemeanor, with a
one-year maximum sentence and a fine of up to $100,000.
Return to CCIPS page
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Last updated file February 18, 1998
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