Wednesday, May 30, 2007

LaMacchia Loophole

Year 1993. A 21 year-old student at MIT named David LaMacchia set up a bulletin board system called "Cynosure." It generated a lot of traffic worldwide. People used this service to download software they wanted or upload what they had. It was online for about six weeks before being taken down by the authorities. Software companies claimed that they lost one million dollars from Cynosure. Federal grand jury charged LaMacchia with 'one count of conspiring with unknown persons to violate the wire-fraud statute'. What LaMacchia did wasn't criminal conduct under the Copyright Act. The infringement was not for the purpose of commercial advantage. So, the charge was dismissed . The lawmakers had not thought that someone might engage in these types of activities with a non-financial motive. In 1997, Congress closed this loophole with NET (No Electronic Theft) Act.

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