The controversial INDUCE Act, which some observers fear could be used to derail the success of Apple's iPod and other products of its type, fell at the eleventh hour.

The legistlation, which aims to punish companies that profit from Internet-driven copyright abuse, has been described as "too general", and has seen tech industry groups move from supporting the Act to protesting against it. Many commentators fear the Act could be abused against its stated intent, and instead used to stifle tech industry innovation.

Negotiations Wednesday night between representatives of the MPAA, RIAA and Business Software Alliance and the Act-proposing senator who is trying to push his new rule through the US process broke down.

The senator then postponed the vote, because he did not think it would pass. Heavy opposition from a slew of technology groups doomed the plan, with attempts at negotiation badly misfiring.

Thesis meets antithesis - music versus technology

The Consumer Electronics Association, IEEE and the NetCoalition, "blamed the intransigence of the recording industry for the talks' collapse".

"The recording industry continues to propose language that would not solve the piracy problems in the manner (Hatch) identified, but instead would effectively put at risk all consumer electronics, information technology products, and Internet products and services that aren't designed to the industry's liking," the groups wrote.

"In fact, the most recent draft put forward by the recording industry at 1am this morning (on October 6) is a large step backwards from previous drafts in that it would jeopardize more legitimate products and would create a flood of litigation, and thus would hurt vital sectors of the US economy. In short, the draft is unacceptable," they wrote.

But no synthesis yet

The Center For Democracy and Technology also voiced its opposition to the Act, saying: "The draft circulated by the RIAA early this morning would sweep in a broad range of legitimate consumer technologies, leaving those who simply design and distribute products like TiVo, online collaboration tools, new instant messaging systems, and even Web browsers subject to litigation."

Others close to the situation now see little chance for the bill to survive except in a lame duck session. While observers are ready for any possibility, one source suggested that the bill could be losing lots of momentum as ugly details come to the surface.

In the background, the consumer electronics industry want congress to codify the US Supreme Court's Sony Betamax decision. This declared that video recorders were legitimate, because they had uses that went beyond the recording of copyrighted work.

Supporters of the Induce Act continue to attempt to define what peer-to-peer is. Digital Music News reports that they have begun work on new legislation, the Intellectual Property Protection Act of 2004 (IPPA).