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Digital Piracy and Intellectual Property Protection

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Lokesh Pal

December 5, 2023

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Digital Piracy and Intellectual Property Protection

In today’s interconnected world, digital piracy has emerged as a significant challenge, impacting various industries and content creators.

This article centers around digital piracy and intellectual property protection.

Copyright Piracy

Copyright piracy is a widespread global issue.

Piracy involves the unauthorised reproduction, importation, or distribution of either the entire work or a significant portion of works protected by copyright.

Copyright owners, as the creators, hold specific exclusive rights over their works.

These rights encompass reproduction, publication, adaptation, translation, and public performance. Owners can also sell, assign, license, or pass on the copyright to others if they choose to do so.

When anyone, other than the copyright owner or their authorised representative, engages in any of the aforementioned activities with regard to a copyrighted work, it constitutes copyright infringement.

Copyright piracy is akin to theft, resulting in losses for property owners.

Beyond economic ramifications, piracy has a detrimental impact on a society’s creative potential, denying authors and artists their rightful earnings.

Piracy manifests in various forms. For computer software, piracy occurs by simply copying it onto an unauthorised machine.

Book piracy transpires when a book is reproduced and sold in the market by someone other than the legitimate publisher.

Violations of a performer’s rights occur when live performances are recorded or live-streamed without permission.

In the case of cinematographic works, piracy often involves the unauthorised reproduction of the film in video formats and/or broadcasting the video on cable networks without proper authorisation from the film producer, who is the right holder.

In reality, there are numerous other methods through which piracy of copyrighted works occurs.

The nature and extent of piracy also vary across different segments of the copyright industry. Therefore, it is essential to discuss the nature and extent of piracy issues segment by segment.

Types of Digital Piracy

Many websites offer illegal access to copyrighted content like movies, music, TV shows, games, and software.

I. Streaming Sites These sites let you watch copyrighted content without downloading. Some host the content, while others link to it. Both hosting and linking to pirated content are illegal.

II. Cyber-lockers These are online storage services where users can upload or download files. Sites like “Megaupload.com” (shut down in 2012) allowed such activities. Many forums share links to these cyber-lockers.

III. Peer to Peer (P2P) P2P networks link computers to share files. While some digital content is legal, pirated content often gets shared. With many users, P2P networks can quickly distribute a lot of pirated content. Users both download and upload content.

IV. Torrent Sites Users upload content to torrent sites, often funded by donations. Search engines like “Pirate Bay” then link to these uploads.

The Digital Evolution of Piracy

In the early 2000s, pirated movies were primarily distributed via CDs and DVDs. However, as internet access became more widespread, Internet piracy surged.

Today, over-the-top content providers face challenges from piracy on social media and communication platforms. This issue isn’t limited to movies; it affects the music, gaming, and sports sectors too. Studies show that streaming is the method for over 80% of pirated content.

In 2021, India was third in the world for visits to illegal streaming sites. The COVID-19 pandemic further fueled the demand for pirated content. With people stuck at home, film piracy shot up by 62%.

Several factors contribute to digital piracy’s rise. For many, the allure of cheap or free content is hard to resist.

Advanced technology has made pirated content accessible, especially in regions with restrictions.

Piracy methods include sharing passwords, sending files online, and using illegal streaming devices and services.

While these might be cheap for consumers, they result in significant revenue losses and damage the reputation of original creators.

Piracy in software

Software piracy refers to the illicit acquisition, duplication, reproduction, and dissemination of software without the proper licensing or authorisation.

In the current era of technology, software piracy has become increasingly prevalent.

Many software products now adhere to a one-user license policy, meaning they can only be legally redeemed and used by a single individual.

Any form of distribution, whether it involves sharing with a friend or disseminating it over the internet, is deemed illegal.

Movie piracy

Movie piracy has evolved into a more sophisticated endeavor in recent times.

It has transitioned from the days of shaky camcorder recordings to encompass dedicated websites, apps, and hardware add-ons, making it a more subtle yet increasingly perilous practice.

In the United Kingdom, over a third of individuals aged 16 and above engage in movie piracy.

The process of unlawfully sharing movies online has become more complex and difficult to track.

Pirates often use BitTorrent to upload and store their files online.

When a user requests a file, it is provided through the contributions of numerous seeders, essentially pirates who upload the file in fragments.

However, in response to recent efforts to combat online piracy, including the shutdown of links to pirate sites hosting copies of movies, pirates have adapted by saving files offline.

These illicit games and movies are then distributed through optical discs in gray markets, further expanding the reach of pirate services.

Digital Piracy’s Big Problem

Businesses are waking up to digital piracy and IP theft. Why? It’s hurting their profits.

Think about Microsoft. They release a new Office version. Someone pirates it. Microsoft doesn’t get paid. This means big losses for them.

Digital piracy is everywhere, especially in Asia. About 30 to 40% of software there is pirated. Companies are working with governments to fight this.

In places like China, it’s worse. Over half of games, music, videos, and software are copied illegally. This means huge profit losses for software companies.

Piracy Cases in India

In a recent incident involving the movie ‘Udta Punjab,’ it was leaked online two days before its official release.

The producers of the movie filed a complaint. This resulted in the Mumbai police’s Cyber Crime cell arresting a 25-year-old individual for uploading the movie on his website.

He was charged under the Information Technology Act.

In 2012, a movie channel that had purchased the distribution rights for the film ‘Bachelor Party’ filed a complaint.

The Kerala Anti-piracy cell tracked down the IP addresses of over 1,000 people involved in the illegal uploading and downloading of the movie, leading to their arrests.

In 2015, the Delhi High Court issued an order to prevent websites from streaming or broadcasting the movie ‘Piku’ online, following a petition from the movie’s makers.

Online piracy is a major concern in India. The government has acknowledged this problem and has put in place measures to safeguard the rights of copyright owners.

The introduction of Digital Rights Management (DRM) provisions and John Doe orders has proven effective. With proper precautions and increased awareness, piracy can be reduced.

The Expanding Scope of Digital Piracy: Beyond File Sharing

File sharers represent only a fraction of the digital piracy landscape.

A thriving global criminal underground market specialises in the replication and illicit sale of counterfeit CDs, DVDs, software applications, and video games.

Law enforcement officials claim that black-market digital piracy is more profitable than drug trafficking.

The film industry faces a significant challenge from the illegal distribution of copied DVDs.

In some cases, black-market vendors gain access to movies even before their official theatrical release. These unlawful copies often originate from industry insiders or film reviewers.

After a movie is released in theaters, individuals illegally use camcorders to record it from the screen.

These bootleggers then create DVD masters on their personal computers and supply them to underground factories.

These factories employ high-speed burners to generate thousands of counterfeit DVDs, complete with fake cover art.

Subsequently, bootleg movies find their way into the black market for distribution.

Legitimate retail stores sometimes unintentionally stock counterfeit DVD copies for resale.

More commonly, small-scale vendors purchase these counterfeits to sell at swap meets, online platforms, and on street corners, often for as little as a dollar.

Impacts of Online Piracy

Digital piracy has significant consequences, affecting creators, copyright holders, and the economy.

  1. Economic Impact: Online piracy has a significant economic impact, as it prevents creators and copyright holders from receiving their rightful income.
    1. Industries like music, publishing, film, and software have seen a decline in revenue due to copyright piracy.
  2. Inhibiting Creativity: Pervasive piracy can deter creators from investing in new projects, fearing that their work will be illicitly shared and undervalued.
  3. Concerns about quality and safety arise when dealing with unauthorised content. As it often lacks quality assurance and may pose risks to users, such as files infected with malware and counterfeit products.

Legal Consequences

Punishment for Piracy

The Union of India recently amended the Cinematograph Act, 1952, to clarify the penalties for illegal downloading of movies.

Digital Pirates who use any recording device to copy or transmit a film without the copyright owner’s written authorisation can face punishment.

It doesn’t matter if the film is fully recorded or distributed online; even attempting to record it in a theater is a violation of the law.

The punishment typically involves imprisonment, a fine, or both, and this penalty can also apply to individuals who download these pirated movies.

Piracy Charges

Piracy isn’t limited to just the movie industry, so the penalties vary based on the industry involved. The main punishments are defined in the Copyright Act, 1957, and the Information Technology Act, 2000:

  • Under the Copyright Act, using pirated computer software can lead to imprisonment ranging from 7 days to 3 years, along with a fine ranging from Rs. 50 thousand to Rs. 3 lakh.
  • Under the IT Act, if someone accesses a computer, network, or computer systems without authorisation and views, copies, or extracts data digitally or using removable storage (like a pen drive or hard disk), they may be liable to pay compensation up to Rs. 1 crore. Downloading stolen data carries the same liability.

Preventing Piracy

While legal consequences can deter piracy, they are often insufficient due to limited prosecutions.

Intellectual property rights owners typically issue cease-and-desist orders against sites hosting pirated content, merely removing download links.

Effective piracy prevention methods, although loosely defined, include:

  1. Price Regulation: Offering digital goods and services at realistic, lower prices can significantly reduce piracy by diminishing the incentive for pirated content.
  2. Barriers to Entry: Governments instruct ISPs to block access to sites hosting pirated content, reducing pirate users who lack the technical knowledge to bypass these restrictions.
  3. User Confrontation: Some TV and streaming services interact with users in real time, notifying them that their use of pirated audiovisual content is known. Game developers use similar tactics to engage pirate gamers humorously.
  4. Industry Cooperation:
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    Effective piracy prevention requires all relevant producers to systematically and efficiently implement these methods. One weak link can undermine efforts to deter actual pirates.

Ways to Protect Intellectual Property from Digital Piracy

  1. Digital Rights Management (DRM) Technology: Employ DRM tools and encryption to restrict unauthorised access, copying, and distribution of digital content.
  2. Watermarking and Tracking: Embed watermarks or tracking mechanisms within digital files to trace unauthorised sharing back to the source.
  3. Legal Measures: Register copyrights, trademarks, and patents to establish legal ownership and facilitate enforcement against piracy.
  4. Secure Licensing Agreements: Implement robust licensing agreements that define terms of use and distribution, including limitations on copying and sharing.
  5. Frequent Updates: Continuously update and improve security measures to stay ahead of evolving piracy techniques.
  6. Educate Users: Raise awareness among consumers and employees about the importance of respecting intellectual property rights and the consequences of piracy.
  7. Collaboration with ISPs: Partner with Internet Service Providers to detect and block infringing activities on their networks.
  8. Anti-Piracy Software: Utilise anti-piracy software and services that monitor and combat piracy on various online platforms.
  9. Legal Action: Pursue legal action against individuals and entities engaged in digital piracy to deter future infringements.
  10. Public Awareness Campaigns: Launch campaigns to inform the public about the economic and ethical implications of piracy and promote legal alternatives.
  11. Secure Distribution Channels: Ensure secure distribution channels for digital content, making it harder for pirates to intercept and reproduce.
  12. Regular Audits: Conduct periodic audits to identify and address vulnerabilities in intellectual property protection measures.

Addressing Digital Piracy

There are ongoing debates on various major anti-piracy strategies. These are:

  1. Pursue online pirates and the file-sharing networks facilitating them, employing legal action against end users of peer-to-peer networks, deterring potential infringers. Challenges include the foreign operations of such networks.
  2. Enhance efforts to prosecute those producing and selling bootleg digital media, allocating resources for investigations, and imposing stricter penalties. International challenges arise due to differing copyright protections.
  3. Employ technological measures to block illegal access and distribution of copyrighted digital content, despite the persistence of pirates in circumventing these safeguards.
  4. Educate the public, especially youth, on the ethical and legal use of digital media, emphasising the value of intellectual property and consequences for copyright violations.
  5. Encourage major media companies to adopt file-sharing technology for affordable, consumer-friendly access to digital products, following the success of platforms like iTunes.
  6. Expedite the entry of copyrighted material into the public domain and expand “fair use” provisions to promote wider access to intellectual property while respecting creators’ rights.

Reporting Piracy: How to Do It

Reporting acts of piracy is a crucial but often overlooked method for preventing piracy.

Some organisations provide online piracy reporting services, relying on user surveillance and vigilance. Here are a few of these associations:

  1. Software and Industry Information Association: This extension of the SIIA, based in Washington, DC, tackles computer and software piracy on an organisational level.
  2. Recording Industry Association of America (RIAA): The RIAA focuses on music theft and piracy in the United States to protect artists from revenue loss due to illegal music distribution and sales.
  3. Copyright Alliance: Instead of directly combating copyright infringement, this unique organisation notifies content producers, allowing them to take appropriate action.

At the local level, you can also contribute. Besides abstaining from piracy yourself, you can help deter movie piracy by reporting suspicious activities, such as camcorder recording, to the nearest security official.

The Industry’s Response to Piracy

The industry has taken steps to address the issue of Internet piracy by emphasising the substantial investments they make in bringing their intellectual property (IP) products to market. These investments often encompass:

  1. Royalties for Creators
  2. Marketing Expenditures
  3. Other Operational Costs

Companies argue that continued piracy undermines the incentives for creators to produce new content.

When creators do not see the returns on their investments of time and effort due to piracy, they may be discouraged from pursuing original works.

Businesses assert that piracy should be treated as a criminal activity, drawing parallels to historical piracy where pirates were regarded as thieves and exploiters.

In recent years, legal actions have been taken against digital pirates.

For instance, the U.S. Supreme Court shut down Napster, a file-sharing platform, and law enforcement agencies collaborated to dismantle similar file-sharing sites.

Globally, governments are increasingly cracking down on piracy, targeting those who engage in the illegal copying and distribution of books, music, movies, and software.

Although these efforts have made some headway in curbing digital piracy, a fundamental shift in public perception regarding piracy is needed.

Achieving consensus among governments, the IP industry, and proponents of free IP movements is essential. Until such an agreement is reached, piracy will persist.

While intellectual property rights provide copyright protection to individuals and companies, there will always be individuals attempting to profit from the hard work of others.

Unchecked piracy and counterfeiting can deter creative individuals from producing new content, ultimately impeding innovation and progress.

Legal Aspects of Digital Piracy in India: Copyright Act vs. Information Technology Act

The Information Technology Act and Copyright Act serve distinct purposes in addressing piracy.

The Copyright Act covers a broad range of piracy issues and penalties, while the Information Technology Act specifically deals with unauthorised computer or network use.

Under the Information Technology Act, piracy involves unauthorised data copying from a computer or network, and the punishment includes direct damages, potentially reaching up to Rs. 1 crore.

The amount of compensation is determined by factors like the gains made, losses incurred, and the repetitive nature of the piracy.

However, Internet Service Providers can be exempted from this Act if they can demonstrate their lack of knowledge regarding piracy activity.

Is Piracy Classified as a Felony?

To understand if piracy is a felony, we need to distinguish between a crime and a felony.

A crime is defined as an illegal activity that causes harm to others, while a felony is considered a more severe form of crime.

A felony is determined by the severity of the original crime. It usually involves punishments of more than one year in prison or even the death penalty.

A lesser punishment designates the offense as a misdemeanor.

In the case of piracy, punishments in India can include up to 3 years in prison and a significant fine. Given the lengthy prison term, piracy can indeed be classified as a felony.

Conclusion: Digital Piracy and Intellectual Property Protection

The issue of digital piracy remains a complex challenge that impacts various stakeholders, including the entertainment industry bodies, internet service providers, and internet users.

The proliferation of illegal copies of content on the internet highlights the need for robust legal frameworks and copyright protection measures.

As internet users increasingly seek access to premium content on demand, it becomes imperative to raise awareness about copyright laws and the detrimental effects of piracy.

Additionally, the threat of copycat products and the unauthorised distribution of cinematograph films underscore the importance of ongoing efforts to combat digital piracy.

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FAQs

What is digital piracy?

Digital piracy refers to the unauthorised copying, distribution, or sharing of digital content, such as movies, music, software, and more, without the permission of the copyright holder.

How can I protect my intellectual property from piracy?

You can protect your intellectual property by registering copyrights, using digital rights management (DRM) tools, and monitoring online platforms for unauthorised use.

How does the law address digital piracy?

Laws, such as copyright laws, provide legal frameworks to address digital piracy by granting creators exclusive rights to their works and allowing legal action against infringers.

What is the legal status of copying music files for personal use?

The legal status of copying of music files for personal use can vary by jurisdiction.

In some regions, making personal copies of music you’ve legally obtained may be allowed under “fair use” or “private copying” provisions. However, it’s crucial to check your local copyright laws, as the permissibility of copying music files may differ.

Always ensure you have the appropriate rights to the music you copy to avoid copyright infringement.

How does digital piracy affect content creators?

Digital piracy can significantly impact content creators by depriving them of revenue and discouraging future creative work. It also undermines the value of intellectual property.

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