INTRODUCTION :: In the past few years, the entertainment industry has deployed aggressive tactics toward individual end-users, Internet service providers (ISPs), and other third parties. While these tactics have had only mixed results and have been heavily criticized by policymakers, civil liberties groups, consumer advocates, and academic commentators, the industry continues its desperate search for an effective and more publicly acceptable solution to address massive online copyright infringement.
One of the latest proposals that the industry has been exploring is the so- called “graduated response” system. Similar to other “three strikes and you’re out” systems that are commonly found in the United States, the graduated response system provides an alternative enforcement mechanism, through which ISPs can take a wide variety of actions after giving users two warnings about their potentially illegal online file-sharing activities. These actions include, among others, suspension and termination of service, capping of bandwidth, and blocking of sites, portals, and protocols.
In December 2008, the Recording Industry Association of America (RIAA) made a formal public announcement of its change of focus toward greater cooperation with ISPs. This new collaborative effort seeks to replace the highly unpopular lawsuits the industry has filed against individual file-sharers in the past five years. To strengthen their legal positions and to induce greater cooperation from ISPs, some industry groups have suggested that the graduated response system had already been built into the framework under the Digital Millennium Copyright Act of 1998 (DMCA) -a proposition that ISPs, civil liberties groups, consumer advocates, and academic commentators have vehemently rejected.
November 2014, Vol. 66, No. 6
Lily Kahng, The Taxation of Intellectual Capital