The U.S. Justice Department recommended a sweeping transformation of the nation's intellectual-property laws, saying peer-to-peer piracy is a "widespread" problem that can be addressed only through more spending, more FBI agents and more power for prosecutors.

In an extensive report released Tuesday, senior department officials endorsed a pair of controversial copyright bills strongly favoured by the entertainment industry that would criminalise "passive sharing" on file-swapping networks and permit lawsuits against companies that sell products that "induce" copyright infringement.

"The department is prepared to build the strongest, most aggressive legal assault against intellectual-property crime in our nation's history," Attorney General John Ashcroft, who created the task force in March, said at a press conference in Los Angeles on Tuesday afternoon.

A spokesperson for the Australian Attorney-General's department said government solicitors had examined the report but that most of its recommendations had already been applied in Australia -- "some as part of the implementation of the U.S. Free Trade Agreement".

According to the Attorney General, changes to Australia's anti-piracy strategy were more likely to emerge from its review of recent changes to the Copyright Act to address emerging technologies.

The review, currently being undertaken in cooperation with the Department of Information and Communication Technology and the Arts (DCITA) and due to be completed some time next year. The review will look at whether Australia's criminal and civil copyright protection regimes are "flexible enough" to deal with new technologies.

In an example of the U.S. Justice Department's hunger for new copyright-related police powers, the report asks Congress to introduce legislation that would permit wiretaps to be used in investigating serious intellectual-property offences and that would create a new crime of the "importation" of pirated products. It also suggests stationing FBI agents and prosecutors in Hong Kong and Budapest, Hungary, to aid local officials and "develop training programs on intellectual-property enforcement."

The Recording Industry Association of America applauded the report, saying that "for those who work in the community of record labels, songwriters and artists, the commitment of focus, energy and resources outlined in this report is music to our ears." The Motion Picture Association of America joined the applause, thanking the Justice Department for "defending our country's economy against pernicious IP pirates."

Phil Corwin, a lobbyist for Sharman Networks, distributor of the popular Kazaa file-sharing software, said the Justice Department seems "to be endorsing a war on copyright infringement modeled in large part on the war on drugs. That should invite very close scrutiny of the recommendations."

"They could be proposing here the greatest mass criminalisation of conduct by otherwise law-abiding citizens since Prohibition," Corwin said. "Congress should think long and hard before they treat noncommercial infringement by ordinary citizens...the same as prosecutions of organised crime."

Tuesday's report was not focused exclusively on Internet piracy: It also included recommendations about responses to trademark infringements, trade secret violations and fake pharmaceuticals. But the Internet-related bills it endorses are at the heart of the ongoing political battle pitting Hollywood and the music industry against the computer industry, "fair use" advocates and librarians.

By backing the Piracy Deterrence and Education Act--which criminalises common uses of file-swapping products--and the Induce Act, the report lends the authority and prestige of the nation's largest law enforcement agency to the pitched battles taking place in Congress this year. While the Induce Act enjoys support from the MPAA and RIAA, it has been savaged by technology firms including CNET Networks (publisher of News.com), BellSouth, EarthLink, Google, MCI, RadioShack, Panasonic, Red Hat, Sun Microsystems, Verizon Communications and Yahoo.

The report also opposes legislative efforts to amend the Digital Millennium Copyright Act, which broadly restricts hardware or software that can "circumvent" copy protection mechanisms. The 1998 law should stay intact, the Justice Department says, arguing that the law should prevent "deliberate and unauthorised circumvention."

Among the report's authors: Valerie Caproni, the FBI's general counsel; Kevin Ryan, the U.S. Attorney for Northern California; and no fewer than five assistant attorneys general at the Justice Department.

In an unusual twist, one section of the report that was being considered in August seems to have vanished in the final draft.

Hewitt Pate, assistant attorney general for antitrust and a task force member, indicated at a conference in Aspen, Colorado, that the report would oppose a bill to let the Justice Department sue pirates in civil court. But no discussion of the so-called Pirate Act--approved by the Senate in June--appears in the final report.

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