The proposal, called the Induce Act, says “whoever intentionally induces any violation” of copyright law would be legally liable for those violations, a prohibition that would effectively ban file-swapping networks like Kazaa and Morpheus. In the draft bill seen by CNET News.com, inducement is defined as “aids, abets, induces, counsels, or procures” and can be punished with civil fines and, in some circumstances, lengthy prison terms.
Foes of the Induce Act said that it would effectively overturn the Supreme Court’s 1984 decision in the Sony Corp. v. Universal City Studios case, often referred to as the “Betamax” lawsuit. In that 5-4 opinion, the majority said VCRs were legal to sell because they were “capable of substantial noninfringing uses.” […] Jeff Joseph, vice president for communications at the Consumer Electronics Association [said,] “It’s designed to have this fuzzy feel around protecting children from pornography, but it’s pretty clearly a backdoor way to eliminate and make illegal peer-to-peer services. Our concern is that you’re attacking the technology.”
Also, another good article about it on ArsTechnica.