No Electronic Theft Act: Definition & Overview

Instructor: Beth Hendricks

Beth holds a master's degree in integrated marketing communications, and has worked in journalism and marketing throughout her career.

The No Electronic Theft Act stemmed from the behaviors of a college student, to make it possible to prosecute even without financial gain. In this lesson, you'll receive a primer of the No Electronic Theft Act.

Why the NET Act?

In 1994, a college student named David LaMacchia was able to get away with what authorities called copyright infringement. Copyright infringement happens when someone without the right reproduces or distributes content that doesn't belong to them. A student at Massachusetts Institute of Technology at the time, LaMacchia created an electronic bulletin board called Cynosure. On Cynosure, LaMacchia encouraged users to upload copyrighted software where it could be subsequently downloaded for free by other users.

Authorities seized on the website and attempted to prosecute LaMacchia for facilitating the distribution of software he did not own, but they were in for a surprise. Because the existing law did not include prosecuting violators who failed to profit from their infringement, the case against LaMacchia was dismissed. The court decided that because LaMacchia didn't make any money from the website (even though music and software companies claimed they lost more than $1 million that year in the U.S. alone because of LaMacchia's site), he could not be prosecuted under current laws.

That was pre-1997. Faced with lack of prosecution and the court's urging to make non-commercial infringements a crime, Congress created the No Electronic Theft Act, referred to as the NET Act.

What's in the NET Act?

The NET Act, passed in 1997 and signed into law by then-President Bill Clinton, was created as a direct result of the LaMacchia case. The new law said that people who engaged in copyright infringement could be prosecuted even if no monetary or commercial profit was realized.

Under the new law, it became a federal crime to reproduce or distribute things like music, movies, games and software with or without financial gain. Punishment for such acts could net the offender up to $250,000 in fines and a maximum of three years in prison.

Offenders of the NET Act might get in trouble for:

  • Posting copyrighted music or movies on the internet
  • Sending games or other forms of software electronically

The U.S. Copyright Office administers the No Electronic Theft Act, but does not enforce it. Copyright matters are most often prosecuted by the U.S. Department of Justice.

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