In the past few years, the entertainment industry has deployed aggressive tactics toward individual end-users, online service providers, and other third parties. One of the latest proposals that the industry has been exploring is the so-called graduated response or three strikes system, which threatens to suspend the service of internet users after they have received two warnings from their ISPs about potentially illegal online file-sharing activities. In December 2008, the RIAA made a formal public announcement of its change of focus toward greater cooperation with ISPs. This new collaborative effort seeks to replace the highly unpopular lawsuits the industry has filed against individual file-sharers in the past five years. To strengthen their legal positions, and to induce greater cooperation from ISPs, some industry groups have suggested that the graduated response system had already been built into the framework under the Digital Millennium Copyright Act of 1998 -- a proposition that had been vehemently rejected by ISPs, civil liberties groups, consumer advocates, and academic commentators. This article explores the system's effectiveness in addressing massive online copyright infringement. It then examines whether the system has been built into the so-called DMCA framework and highlights the problems and unintended consequences brought about by the system. The article concludes by outlining seven basic principles policymakers need to take into account if they choose to institute such a system despite its many shortcomings.