Legislative Efficacy: No Electronic Theft Act by Eric Goldman

Legislative Efficacy: No Electronic Theft Act
Eric Goldman
Marquette University Law School

The NET Act

  • Passed in 1997 in response to LaMacchia case
  • Criminalized willful infringement of $1,000 retail value within 180 days
    • Even if no commercial advantage or private financial gain
  • Redefined financial gain to include the receipt of anything of value

The Act’s Goals

  • Plug the “LaMacchia loophole”
    • Shut down commercial-scale and self-aggrandizing pirates
  • Curb piracy
    • Especially Internet-mediated software piracy
  • Shut down warez traders

Has the Act Succeeded?

  • Eight publicized enforcement actions
    • 7 of 8 involve warez traders
    • Government has won plea bargains or convictions in all cases
    • Jail sentences ranging up to 46 months
  • But piracy has not abated
    • IPRC Study
    • Warez trading sites increased 900% from 1997 to 1999
    • 80% have downloaded software without paying, and over 40% have burned CD instead of buying

Hypotheses about Efficacy

  • Inadequate enforcement/penalties
  • Ignorance of the law
  • Socialization
  • Act does not target warez trading well
    • Ego-seeking
    • Cyber-Robin Hoods
    • Strong social bonds

Other Problems

  • No definition of “willfulness”
    • Majority v. minority views
    • Is ignorance of the law or good faith belief of fair use a defense?
  • The law may apply to facilitators
  • Financial thresholds criminalize too many people
    • You are a criminal infringer if you willfully infringe $5.56 per day


  • The Act closed the LaMacchia loophole
  • The individuals prosecuted under the Act comport with Congress’ intent
  • But the law isn’t curbing piracy generally or by warez traders
  • And the social costs from overcriminalization are not trivial