This is also something I wrote for my school newspaper
Let's say you want to watch season 2 of the popular TV show Alias. Your TV reception sucks, and you don't have cable, but you do have a nice high speed DSL Internet connection. So you set up BitTorrent and use it to download all 22 episodes of season 2. Some 30 hours later, you have all 22 episodes on your hard drive. Now, while you were downloading, you were simultaneously making available for upload what you already had; this is how BitTorrent works, everyone shares whatever they have so that everyone can eventually get the whole.
Unfortunately, during that time, included among the "peers" connected to you were the dreaded Disney lawyers, and they got your IP address.
US Code, Title 17, Chapter 5, Section 504, subsection c 1-2:
"[...] the copyright owner may elect [...] to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action, with respect to any one work [...] in a sum of not less than $750 or more than $30,000 as the court considers just. [...] In a case where the copyright owner sustains the burden of proving, and the court finds, that infringement was committed willfully, the court in its discretion may increase the award of statutory damages to a sum of not more than $150,000."
They'll claim that you knew you were infringing their copyright, and they'll be demanding the maximum penalty: That's 22 episodes -- 22 works -- so they'll be claiming $3,300,000. (Though the court may decide to make it as little as $16,500.)
(If you can convince the court that you were not aware and had no reason to believe you were infringing copyright, this could ultimately be reduced down to $4,400 according to a later part of subsection 2 ("In a case where the infringer sustains the burden of proving, and the court finds, that such infringer was not aware and had no reason to believe that his or her acts constituted an infringement of copyright, the court in its discretion may reduce the award of statutory damages to a sum of not less than $200.") -- good luck.)
US Code, Title 17, Chapter 5, Section 505:
"In any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof. Except as otherwise provided by this title, the court may also award a reasonable attorney's fee to the prevailing party as part of the costs."
So they'll be wanting their lawyers' costs, too.
US Code, Title 17, Chapter 5, Section 506, subsection a:
"Criminal Infringement. - Any person who infringes a copyright willfully [...] for purposes of commercial advantage or private financial gain [...] shall be punished as provided under section 2319 of title 18, United States Code."
Uh-oh...
But you didn't download for commercial or private financial gains, right? Wrong. Congress redefined "financial gain" as part of the "No Electronic Theft" (NET) Act in 1997 specifically to include the likes of you:
US Code, Title 17, Chapter 1, Section 101:
"The term ''financial gain'' includes receipt, or expectation of receipt, of anything of value, including the receipt of other copyrighted works."
You were sharing what you had (a copyrighted work) so you could get the whole (a copyrighted work). From the Congressional Committee Report on the NET Act: "This revision [...] will enable authorities to prosecute someone like LaMacchia who steals or helps others to steal copyrighted works but who otherwise does not profit financially from the theft." LaMacchia was the defendant in United States v. LaMacchia. He was accused of setting up a computer to allow people to download copyrighted software; since he was not doing this commercially and reaped no financial gain, they could only try to prosecute the case under wire fraud statutes, and the case was eventually dismissed (see onlineethics.org/cases/lamacchia/ ).
US Code, Title 18, Part I, Chapter 113, Section 2319, subsection b 3:
"Any person who commits an offense under section 506(a)(1) of title 17 [...] shall be imprisoned not more than 1 year, or fined in the amount set forth in this title, or both, in any other case."
US Code, Title 18, Part II, Chapter 227, Subchapter C, Section 3571, subsection b 5:
"Fines for Individuals. - [...A]n individual who has been found guilty of an offense may be fined [...] for a Class A misdemeanor that does not result in death, not more than $100,000;"
So, a $100,000 fine, a year in jail, some $3 million in statutory damages, plus all costs and lawyers fees, just for downloading a broadcast TV show with BitTorrent...