The Legal Risks
The Legal Risks of not blocking P2P file sharing are extensive. These downloads can be dangerous applications that quickly devour bandwidth and jeopardize company finances because companies can be held liable for employee actions such as downloading copyrighted song material.
Company Liability - There is an established legal precedent that will hold a company liable in part for the damages inflicted on another company if their computers or networks were used to stage the attack. Because of this legal precedent, the danger to a host network is not just the loss of bandwidth and subsequent breakdown in communications, but also the legal liabilities involved can result in damage to a company or organization’s reputation, and even threaten its financial stability.
Company Reputation - It’s important to note that the damage to an organization’s reputation can be more costly in the long run, especially if the organization is supposed to be secure and web savvy or if security vulnerabilities can threaten to expose sensitive data such as financial, personal or health records.
- As an example, for hospitals, health insurance and dedicated health care providers, such damage can result in a loss of business over time that devastates their long term prospects and when combined with -short term fines, can even mean going out of business or experiencing a takeover by another health care company.
Copyright Infringement - The Recording Industry Association of America (RIAA), the Motion Picture Association of America (MPAA) as well as Microsoft and many other Software Companies aggressively peruse copyright infringement by sending settlement demand letters and filing lawsuits against individuals.
Lawsuits - On September 8, 2003, the recording industry sued 261 American music fans for sharing songs on peer-to-peer (P2P) file sharing networks, kicking off an unprecedented legal campaign against its own customers. The recording industry has now filed, settled, or threatened legal actions against well over 28,000 individuals, and there is no end in sight. While the strategy of forcing ordinary music fans to pay thousands of dollars to avoid even bigger RIAA-member lawsuits is itself troubling, many innocent individuals, companies and corporations’ are also being caught in the crossfire. Today, new case law supports the collection of monetary damages from the businesses and institutions who allow individuals to use their networks for the illegal downloading of copyrighted material
Child Porn - P2P is the most common method of downloading Porn including illegal Child Porn which potentially creates a criminal law violation.
New Law and Stiffer Penalties - October 2008 – President Bush signed into law the Resources and Organization for Intellectual Property Act (Pro-IP Act) on Counterfeiting and Piracy of Music, Videos, TV Shows and Software which is a Federal Copyright Infringement Crime, The new law provides stiffer penalties for breaching intellectual property.
Formerly known as the Enforcement of Intellectual Property Rights Act, the PRO-IP Act was introduced by Senators Patrick Leahy (D-Vt.) and Arlen Spector (R-Penn.) in the Senate in July of 2008.
In addition to stiffer penalties, the PRO-IP Act establishes the Cabinet-level position of intellectual property enforcement coordinator (IP czar, for the rest of us) and gives the Department of Justice (DOJ) more muscle to coordinate federal and state efforts against counterfeiting and piracy.
This new law also allows for local Law Enforcement to come into a business or institution and seize computers and network equipment used to facilitate the violation of copyrighted infringement laws.