These were stimulating comments.
Several pointed out correctly that tags on software files, indicating that the file is copyrighted, can probably be removed; and this suggests that only encryption, preventing copying, is likely to be effective in protecting the intellectual property rights of the owner of the copyright. But this in turn presents the spectre of overprotection of those rights. Copyright is limited in term and, more important (given the length of the term), is limited in other ways as well, such as by the right to make one copy for personal use and, in particular, the right of "fair use," which permits a significant degree of unauthorized copying. To the extent that encryption creates an impenetrable wall to copying, it eliminates these limitations on copyright. In addition, encryption efforts generate countervailing circumvention efforts, touching off an arms race that may create more costs than benefits.
When these points are combined with the undoubted fact that many millions of Americans simply do not see anything wrong with the copying of copyrighted music and film, so that legal restrictions on copying will not be reinforced by a strong moral norm, alternatives to lawsuits against direct and contributory infringers must be considered both by industry and lawmakers. Industry can reduce copying by reducing the price of the originals and by providing value added that is difficult to copy, such as attractive packaging. Congress could elide the problem by curtailing copyright protection for readily copiable work and substituting a tax on computers the proceeds of which would be distributed to the owners of copyrighted works.
Several commenters wondered about the limitations of contributory or indirect liability. What about companies that manufacture guns that they know to be particularly suitable for and used in criminal activity? There is no general answer; it all depends on how specialized a particular good is to illegal activity and how serious that illegal activity is. So the sale of burglar tools provides a good example; also the fencing of stolen goods. Most guns are sold for lawful uses, and since the desired characteristics of a gun (weight, accuracy, killing power, price, reliability, speed of action, and number of rounds) are generally independent of whether the gun is to be used legally or illegally, the analogy to burglar tools may fail; but this is not a subject about which I know enough to speak with assurance.