Firstly, I invite everyone here to my thread:
here about technology and law, particularly copyright. Please do take the opportunity to read the first post. I think you'll find it enlightening and informative.
There are a lot of misconceptions that are pervasive in this topic. One of the most common is the sentiment similar to what Xanatos posted. It essentially says: "If you're just a small fry, or if you're not profiting from the video, then it's perfectly legal."
This is false. Copyright makes no such distinction. The likenesses of the characters in Melee and Brawl are both copyrighted. Reproducing these images constitutes copyright infringement*. If you want to test this, try reproducing images of Mickey Mouse that Disney finds objectionable
and see what happens. The fact that you do not frequently get arrested for something does not make it legal, just like speeding on the highway.
The harm in creating such insanely high penalties such as a felony for copyright infringement is many:
1) Everyone is guilty. You are all copyright infringers. You do so on a daily basis, and if you think you don't then you're mistaken.
2) Selective enforcement. The consequence to having a law where everyone is guilty is that the powerful are able to persecute victims for unrelated issues. Everyone knows this phenomenon in the world of car speeding (and other car laws). The term "Driving While Black" comes to mind, where racist police persecute otherwise innocent black drivers under overly broad laws. Everyone is guilty of automotive law breaking, and the police are free to arrest whoever they want.
3) Chilling effects. This will naturally lead to less online streaming. Today when you put a video out online you might say: "There is a 1% chance that someone will claim it is infringing their copyright, and my video is taken down." This is a reasonable risk to undertake.
Under S.B.978 your new proposition is "There is a 1% chance that someone will claim my video infringes their copyright and I am arrested, put in prison, lose my job, and face felony criminal charges". This is a dangerous proposition! Many people will simply cease to create and release videos which are otherwise perfectly legitimate and valid.
EDIT:
4) Ambiguity in infringement. The law is far from black and white when it comes to copyright. There are many vagaries built into the system which only a judge can decide, and no current precedent exists**. Streaming a video game match online is of dubious legality. Everyone here should remember that just last year, MLG was unable to stream Brawl matches for undisclosed legal reasons. This is because even the THREAT of a lawsuit is scary enough to deter an organization away from broadcasting Brawl. Now imagine if Sundance himself were criminally liable under felony charges. Do you think that he and the multitude of others like him would choose to stream? No way.
Good additional information can of course be found via the Electronic Frontier Foundation
http://www.eff.org/deeplinks/2011/06/felony-penalties-proposed-illegal-streaming-senate
*= To the extend not allowed by Fair Use
**= Activision-Blizzard have already been
in legal actions with KeSPA over this same issue, on whether KeSPA is allowed to stream SC:BW matches. Though this is of course in South Korean jurisdictions only.
