U.S. copyright law protects books, photographs, videos, movies, sound recordings, software code, and other creative works of expression from unauthorized copying. A copyright gives its owner the exclusive right to reproduce, distribute, perform, display, or license a work, and the exclusive right to produce or license the production of derivative works. Copyright protection attaches as soon as the work is “fixed in a tangible medium of expression,” thus covering both published and unpublished works. However, there are some limits to the protections afforded by copyright law, such as in the use of a copyrighted work for purposes such as criticism, comment, news reporting, teaching, scholarship, or research. File-sharing software applications work by making selected files on a user’s computer available for downloading by anyone using similar software, which, in turn, gives the user access to selected files on computers of other users on the peer-to-peer network. The growing popularity and proliferation of file-sharing applications such as KaZaA has had a profound effect on the dissemination of copyrighted works, by both the copyright holder and infringers. The use of file sharing has grown steadily over the past few years. For example, by May 2003, KaZaA had become the world’s most downloaded software program of any kind, with more than 230 million downloads. According to the Recording Industry Association of America, the increased use of peer-to-peer networks has contributed to an increase in copyright infringement, with millions of users downloading more than 2.6 billion copyrighted files (mostly sound recordings) each month via various peer-to-peer networks. The widespread unauthorized distribution of copyrighted material on peer- to-peer systems is a concern not only for copyright owners but also for those who administer the networks on which the file-sharing applications run. Because of their high-bandwidth connections and the concentration of large groups of young, computer-literate users, college and university networks are particularly vulnerable to adverse impacts from the use of file-sharing applications. In 2002, a committee of representatives from education and the entertainment industry—the Joint Committee of Higher Education and Entertainment Communities—was convened to discuss and address matters of mutual concern, including the misuse of university networks for copyright infringement. In addition, the Recording Industry Association of America has conducted searches for copyrighted material being illegally shared on peer-to-peer networks and has sent more than 30,000 notices to colleges and universities regarding files that are being shared on systems connected to university networks. Congress has moved to address piracy issues that have been raised by developments in computer and Internet technology. With regard to the widespread unauthorized distribution of copyrighted material on peer-to- peer systems, the crime of felony copyright infringement has four essential elements: 1. A copyright exists; 2. The copyright was infringed by the defendant, specifically by reproduction or distribution of the copyrighted work, including by electronic means; 3. The defendant acted “willfully.” Under the law, evidence of reproduction or distribution of a copyrighted work, by itself, is not sufficient to establish willful infringement; and 4. The defendant infringed at least 10 copies of one or more copyrighted works with a total retail value of more than $2,500 within a 180-day period. In addition to criminal liability, significant civil remedies are available to copyright holders for infringement. Copyright holders are entitled to receive either “actual damages and profits” from an infringer, or they can elect to receive “statutory damages” ranging from $750 to $30,000 for each infringed work, increasing to $150,000 if the copyright holder proves the infringement was willful. In addition, a court can order an injunction against further infringement, the impoundment and disposition of infringing articles, and attorneys’ fees and costs. Several federal entities are responsible for enforcing the federal statutes pertaining to intellectual property protection and copyright infringement. Table 1 shows these agencies, along with other key organizations involved in efforts to protect intellectual property rights and combat copyright infringement, including illegal file sharing on peer-to-peer networks. The federal law enforcement agencies work with state and local law enforcement agencies, including state police and local district attorneys, in the investigation and prosecution of intellectual property crime. In addition, industry organizations, such as the Recording Industry Association of America, the Business Software Alliance, and the Software and Information Industry Association, provide federal law enforcement organizations with information and documentary evidence in support of federal investigations and prosecutions. (See app. III for a detailed description of federal organizations involved in investigating and prosecuting copyright infringement.) The college and university officials we interviewed are aware of the use of file-sharing applications on their networks, almost all of them have experienced some problems and increased costs as a result of the use of these applications, and they are taking steps to reduce the use of peer-to- peer file-sharing technology on their networks. All of the college and university officials we interviewed stated that they have implemented technical controls to limit the use of file-sharing technology on their networks and that they have either undertaken or plan to undertake educational and enforcement efforts to limit student copyright infringement. Most of the officials interviewed stated that they felt they had the right tools and knowledge to deal with the use of peer-to- peer file-sharing applications to download or share copyrighted material on university networks, and almost all of the officials stated that they thought the approaches they have used to address the problem have been either somewhat or very successful at controlling the problem. All of the university officials we interviewed indicated that their colleges or universities routinely monitor their networks and most of them indicated that the institutions also actively monitored their networks specifically for the use of peer-to-peer file-sharing applications during the 2003 to 2004 academic term. For those colleges and universities that monitored specifically for the use of file-sharing technology (10 of 13 respondents), university officials stated that the amount of bandwidth that appeared to be used by file-sharing applications varied, from as low as 0 to 9 percent to as high as 90 to 100 percent. (See fig. 1.) While several university officials were unable to estimate the percentage of students using file-sharing applications to download or share music, images and video files, several estimated that 30 percent or more of students were doing so during the 2003 to 2004 academic term. One official estimated that between 90 and 100 percent of the students at the institution were using file-sharing applications. In addition, all of the college and university officials interviewed indicated that they had received notices from representatives of copyright holders alleging file-sharing copyright violations by students, with more than half of the interview respondents indicating that they had received more than 100 notifications. In most or all of these cases, university officials were able to trace the infringement notification to an individual student. (See fig. 3.) Overall, most of the college and university officials we interviewed indicated that they had experienced some network performance or security problems as a result of the use of peer-to-peer file-sharing applications on their institutions’ networks. Specifically, two officials interviewed stated that their institution had experienced network performance problems somewhat often as a result of student use of file- sharing applications, and six officials indicated that they had experienced few network performance problems. Further, of the 13 institutions whose officials we interviewed, 9 indicated that they had experienced security problems as a result of file sharing or downloading. For those who indicated that they had experience problems, the most common types of security incidents reported were the introduction of viruses or malicious code (eight interview respondents) and temporary loss of network resources (five interview respondents). In addition, almost all of the officials that were interviewed stated that their institutions had spent additional funding during the 2003 to 2004 academic year to deal with the effects of the use of peer-to-peer file- sharing applications on their networks, with the median amount of additional spending being between $50,000 and $99,999; two officials stated that their institutions had spent between $250,000 to $749,999. This additional funding was spent on a variety of network infrastructure and operational areas, including bandwidth expansion, bandwidth management software/hardware, system management, and system maintenance. (See fig. 3.) All of the colleges and universities whose officials we interviewed indicated that they are taking steps to reduce or eliminate the use of peer- to-peer file-sharing technology for copyright infringement on their networks. Specifically, all of the officials interviewed stated that they have implemented technical controls to limit the use of file-sharing technology. These technical controls include (1) limiting access to file-sharing applications, both among internal users of the network and between internal and external users; (2) reducing or limiting the amount of bandwidth available to network users seeking to download or share files; and (3) segregating the portion of the network serving college or university administered housing from the rest of the university network. In addition, all of the officials interviewed stated that they have either undertaken or plan to undertake educational and enforcement efforts to limit student copyright infringement. All of the officials that were interviewed stated that they have undertaken educational efforts, such as issuing or revising network use policies and student codes of conduct; and 12 of the 13 officials that were interviewed stated that they plan to undertake educational activities regarding intellectual property violations or illegal file sharing of copyrighted materials. (See fig. 4.) Further, all the officials interviewed stated that they have undertaken enforcement efforts to address copyright infringement on peer-to-peer networks. During the 2002 to 2003 academic year, all of the college and university officials interviewed stated that they had either discovered or had been made aware of individuals using file-sharing applications such as KaZaA or peer-to-peer network indexes on their institution’s network. When file downloading was discovered, all the officials stated that enforcement actions were taken against the individuals responsible. These actions included issuing a warning to the user or users, banning them from the network for a period of time, and shaping the bandwidth available for a group of users. (See fig. 5.)