Entertainment groups and consumer organizations were unable Thursday to reach a compromise over a Senate proposal aimed at manufacturers of file-sharing (searchsoftware commonly used to steal electronic copies of music, movies and computer programs.

The Induce Act, strongly supported by Senate Judiciary Committee Chairman Orrin Hatch, R-Utah (search), would make manufacturers of such software liable for inducing people to commit copyright infringement. Consumer groups and some computer companies have complained that the bill's language is too broad and could apply liability to legitimate technology.

Sensing an impasse after weeks of acrimonious debate, Hatch invited lawyers and lobbyists representing the sides to propose their own compromise in the waning days of this congressional session. But the sides agreed overnight that a compromise was increasingly unlikely given the tight deadline, according to participants in the talks who spoke on condition of anonymity.

Hatch canceled plans Thursday to present the bill to the Judiciary Committee, and participants in the talks said there would likely be no movement on the proposal in the immediate future. Hatch has previously said he intended to pursue the legislation next session if a bill wasn't approved. Sen. Arlen Specter, R-Pa., is expected to take over as Judiciary chairman early next year.

The chief executive for the Recording Industry Association of America (search), Mitch Bainwol, acknowledged Thursday that negotiations need more time.

"So long as illegitimate peer-to-peer services hijack a positive technology and intentionally offload their legal liability to America's kids, legislation will be a priority for the creative community," Bainwol said.

In a letter late Wednesday, the Center for Democracy and Technology (search), a Washington-based civil liberties group, urged Hatch to delay action, saying the current proposals would "chill the development of legitimate consumer technologies."

In a separate letter, several consumer groups — including Public Knowledge (search), the Electronic Frontier Foundation (searchand Consumer Union (search— cautioned Hatch that divisive unresolved issues could have a "potentially enormous impact on innovation, creativity and competition."

Supporters of the Induce Act said it was necessary after a federal appeals court cleared manufacturers of file-sharing software of liability for large-scale copyright infringement committed by customers.

That court effectively limited entertainment companies and others to suing users of such software individually.