The Era of Digital Piracy

Introduction:

Intangible information has become a basic asset, the fuel driving the ‘information Economy’ and personal data comprises a substantial share of such information assets.[1]During the proclaimed period of internet boom, much of the value ascribed by stock markets to companies , was based on the personal data they held, i.e., the number of registered users rather than the products and services they sold.[2]This information, i.e., the personal data reveals our lives to others and as such, it use and abuse engages and impinges on our right to privacy.

Protection to such information has been provided under different regimes such as intellectual property,[3] trespass to persons,[4] and the interception of communications.[5] But the scope of this paper not only concerns with the exploitation of personal information, instead it also takes into consideration the possible violations of the rights of copyright holders. Today the Commercial piracy is rampant in the digital industry and its worst events can be witnessed in sectors such as media and software as in such sectors it is easy to replicate a product at a very low or negligible cost.[6]

Change in technology has created a differenttechnological environment today. The hardware based information technology is vastly emerging as more powerful; advancement in processor speed, increased  memory sizes, increased capacity of disk storage, has paved a new way for collection of data’s in a way which were never thought of.  The ever increasing technological advancement has caused various troubles and to deal with it Information Technology Act , 2000 came into scene after approval of IT bill in 1999.

Digital piracy can be defined as ‘‘the illegal copying/downloading of digital material, such as software, music, videos, audio books, and other copyrighted material”.[7]Today, Digital piracy of copyrighted works and exploitation of personal information is considered a serious global problem. To list a few instances,[8] The Motion Picture Association of America (MPAA) estimated worldwide losses out of digital piracy to tune of $18 billion in 2005,[9] while the Recording Industry Association of America (RIAA) reported $12 billion yearly loss in the music industry. Moreover, studies suggest that piracy cause losses of around $40 million per major Hollywood movie.[10]Needless to say that Bollywood is also not immune to piracy and has lost close to $4 billion in 2007.[11]

Moreover, the effects of piracy are not only limited to the loss in terms of money, studies suggest that over 800,000 jobs are lost due to piracy.[12]Further, Business Software Alliance (BSA) in 2007[13] suggested that around half of all PCs contain unlicensed software, with an overall piracy rate of 38%.[14]This growth of digital privacy is fuelled by several factors, such as availability of untraceable peer-to-peer networks, the spread of high-speed Internet connections at low cost.[15] To explain the situation, Sulaiman At- Rafee& Kamal Rouibah[16] comments that in this digital age when you can avail the high speed internet connection at low cost which enables you to download a movie in less than 15 min. why would an individual waste his time driving to the local cinema theater which is certainly more than 15 minutes.

It is therefore no surprise that the Corporations have been aggressively pursuing legal actions and lobbying for stronger protection throughout the world.[1

Regulatory Mechanism in India:

It would be worth noting that IT Act defines a ‘computer resource’; widely also including a “computer, computer system, computer network, data, computer database or software”[18]. As the definition makes it evident, this definition is broad enough to bring into its ambit a maximum intrusion which includes any electronic communication devices or networks — including mobile networks. In nutshell it can be asserted that IT Act provides for both civil liability and criminal penalty for countless activities involving use of a computer, many of which impinge on privacy directly or indirectly. The IT Act embeds the provision for the civil remedy through the way of damages and compensation.

Intellectual property in digital age can be protected only by legal remedies with technological protection measures. But the problem with these technological protection measures is that they do not last long and they can be infringed very easily using the circumvention techniques.[19] It is therefore essentially required for these techniques to be equipped with extraordinary legal protection i.e., double protection, one for the technological measures and the other for the copyrighted content.[20]

The international framework for protection of intellectual property was developed by two WIPO internet treaties i.e. the WIPO Copyright Treaty and WIPO Performances and Phonograms Treaty, 1996. These two treaties came up with the conclusion that “the answer to the problems with the machine is in the machine”.[21] It lays down the basis for the technological protection measures like encryption of the copyrighted material and electronic rights management information or digital identifiers which is collectively called by the treaties as Digital Rights Management(DRM).[22] These treaties obligates the contracting parties to provide adequate legal protection and effective legal remedies against circumvention of effective technological measures, i.e., DRM that might be used by the authors in connection with the exercise of their rights or In order to restrict acts in respects of their performances or phonograms. It has been provided under Article 11 of WCT[23] and Article 18 of WIPO Performances and Phonograms Treaty.[24]

Several Nations in this respect also argue that not only the circumvention but also the circumvention related activities like preparation for circumvention shall also be regulated under the ambit of these provisions. It was also required that the parties to WCT while framing their DRM legislation shall also frame a regulatory mechanism for controlling and restricting the preparatory activities rendering circumvention acts.[25] Keeping this mind, the Indian Government inserted, by an amendment, section 65A[26] and 65B in Indian Copyright Act.

Moreover a thorough analysis of India’s efforts regarding the protection of Intellectual Property also suggests that India has been wary of international efforts to extend IP protection beyond its obligations under TRIPS.[27] Here it is also pertinent to mention that Indian law although contains strict civil and criminal provisions for copyright infringement, but the Act also makes way for the most expansive public-interest exceptions and limitations to copyright in the world.[28] Except for TRIPPS, India has neither adopted WIPO Copyright Treaty (WCT) nor the WIPO Performances and Phonograms Treaty (WPPT). Instead the State has preserved rights to reverse-engineer or circumvents DRM on the Intellectual Property which is strictly prohibited by the WCT.

Legislative Actions in India:

Statutes also provides for effective enforcement of IP Protection mechanisms. For instance, Section 53 of the Act provides for the strengthening of the Border Measures to control import & disposal of infringing copies by the Customs Department under civil remedies.[29] Section 65 A & B as have already been mentioned in above also works in this direction.[30] The authors also analyzed the fair use provision of the Act and determined that it also extends to the digital environment. Any transient and incidental storage of any work and unauthorized reproduction and distribution of such works is an infringement under section 51[31] of the Act attracting civil and criminal liability. However, the provisions of fair use extends an immunity to such violators on the grounds only of educational and research purposes. Digital Piracy however, in general terms cannot be accepted under this exception.

The unauthorized use of copyrighted work over the internet leads to suspension of the service provider’s activity.[32] Sec 52(c) while providing for the fair use exemption for transient or incidental storage of works, also provides for internet service provider’s liability when read with the addition of rights of storage and definition of infringement. [33]

Price Discrimination also plays a significant role in curbing this problem of digital piracy. So far, it has been assumed that original digital products are offered in a single version.[34] In many instances, producers of digital products deliberately offer the original products in different versions in an attempt to capture a larger share of consumer surplus through (second-degree) price discrimination.[35]Authors therefore, suggest that it is important to analyze the link between end-user piracy and the firms’ versioning strategies which will yield significant results.

Lacunae in the Indian Regulatory Mechanism:

The issue of Judicial Enforcement has been a constant problem in the Indian Scenario due to the massive backlogs of both civil and criminal cases. Such backlogs also mean that new infringement suits or criminal prosecutions can take years before they could be decided. Authors understand that the Judiciary attitudes and the prevailing interpretation of copyright law have resulted into such chaos and the failure of the Establishment.

Moreover, Enforcement, in India, is organized at the state level and not by the national government as it has been enshrined under the State List of the Indian Constitution.[36]Although India’s legal regime and Western-style court system make it relatively hospitable to imported legal arguments and practices,[37]but the real problem lies with the organization of police, law, and courts which are State based and which immediately enmeshes the enforcement efforts into the complex local political contexts as variousindustry actors have different degrees of leverage against the authorities and play a significant role in mobilizing the police and pushing cases through the overburdened Indian courts.[38]

India’s cumbersome criminal judicial procedures, in particular have been the discussion of establishments all over the world. The International Intellectual Property Alliance (IIPA) reports on India suggests the requirement for new “fast-track” IP courts that can process more than the current trickle of infringement cases.[39]In the current regulatory mechanism,stronger border surveillance measures are required as well as stronger national coordination of India’s highly decentralized state police forces are required.[40]The authors therefore, suggest the requirement of enacting of stronger enforcement provisions such as the provisions that are available in the pending revision of the Copyright Act. However, as long as the Act is not passed, digital piracy will remain to be un-tackled as has also been observed by the IIPA’s India reports. In 2009, it was argued that “what is desperately needed in India, and particularly for the Indian copyright industries, is a national anti-piracy strategy at the central government level, with the ability to link in the State governments . . . in a meaningful, enforceable way”.[41]

The lack of a strong empirical case against digital piracy and the inability of aggrieved to ask for specific damages have prevented people to go for aggressive action. It is evident from the fact that till date, no suits against Indian P2P sites have been filed. Another reason of such inability could be the uncertainty regarding the liability of intermediaries in case of violations.[42]

According to data collected by BayTSP on the number of infringements of client content found across P2P protocols and user-generated content sites.

2007 Rankings                      2008 Rankings                                                            Counts

1 1 BitTorrent 174,229,660
2 2 eDonkey 131,997,341
5 3 Ares 2,403,199
4 4 Gnutella 2,050,382
3 5 Direct Connect 1,057,170
9 6 You Tube 544,657
13 7 My Space 414,324
n/a 8 Mega Video 195,491
14 9 Daily Motion 83,243
11 10 Usenet 56,566

Moreover, the Indian Information technology Act provides immunity to the Internet service providers(ISPs) and other online services in the cases where they are able to prove that they have followed relatively common standards of due diligence to prevent infringement. Courts even confer this immunity even if these standards were notoriously underspecified.[43] But such a standing of the Courts also give rise to complications. For instance, the Copyright Act under Section 51[44] allows for imposing the intermediary liability in cases when the party has “reasonable ground for believing” that infringement is occurring due to the acts of a particular Individual and S. 63 of the same Act imposes the liability for knowingly infringing or abetting the infringement. Authors are of the opinion thatthe interpretation of these provisions will have to wait for resolutions in the Courts as there are lots of disagreements on the interpretation as of now.

There are various other provisions in the Indian system that has resulted in the failure of the Establishment. One such provision is related to Compulsory licensing as it may not generate sufficient funds to compensate copyright holders.[45] The case of the Microsoft Corporation v. YogeshPopat and Another has set the precedent in making decisions ex parte in India i.e., without the presence of the accused. Other cases in line with this precedent were Microsoft v. Kamal Wahi(2004) and Indian Performing Right Society Ltd. v. DebashisPatnaikAndOrs(2007).

Conclusion And Suggestions:

The authors feel that the protection of Information technology in India has yet to go a long way. There are numerous lacunae present in the establishment today which can only be curbed by giving due regard to the International Laws and by harmonized functioning of the Enforcement bodies. There is no doubt that the Statutes take into consideration the possible events of digital piracy and provides for an enforcement mechanism but an effective result can only be seen if these enforcement bodies work in tandem and for the greater good of the society.

As far as the Information Technology Act is concerned, it seems to be complete and well versed with all the aspect of digital privacy but one point which draws attention is Section 69 which gives the “Central Government or a state government the power to exercise powers of interception under this section.[46] The Interception Rules 2009 authorizes  the secretary in the Ministry of Home Affairs as the “competent authority”, with respect to the Central Government, in order  to issue directions relating to interception, monitoring and decryption.

However, an exception is made in cases of emergency, eitherin remote areas where obtaining prior directions from the competent authority is not feasible orfor ‘operational reasons’ where obtaining prior directions is not feasible. This provision runs against constitutional guarantee of “right to privacy” and state too can’t interfere in someone’s privacy. The concern regarding the fact of states security is well understood but still individual rights are of utmost importance and giving such power to state can lead to misuse too. The issue of right to interception to government makes the whole Act dubious as on one hand all rights are granted and on other they are snatched.



[1]Chris Reed & John Angel, Computer Law: The Law and Regulation of Information Technology, 459(6th ed. 2009).

[2]Id.

[3] Ashdown v. Telegraph Group[2001] EWCA Civ 1142.

[4]Morris v. Beardmore [1981] AC 447.

[5]Regulation of Investigatory Powers Act, § 1(2000).

[6]IshitaChatterjee, Costly Reporting, Ex-Post Monitoring, And Commercial Piracy: A Game Theoretic Analysis, Business School University of Western Australia, 87 (2003).

[7]Sulaiman At- Rafee& Kamal Rouibah, The fight against digital piracy an experiment, Telematics & Information Journal, (2009), available at:

www.elsevier.com/locale/tele.

[8]Id.

[9]MPAA, 2005. Copyright Industries in the US Economy: The 2004 Report. Retrievedon  Jan. 11th, 2009. Available at: http://www.mpaa.org/piracy_Economies.asp

[10]De Vany&D. Walls, Estimating the effects of movie piracy on box-office revenue,Review of Industrial Organization 290–301(2007).

[11] Joshi, Virtual Bites: Digital Piracy Robs Bollywood. Retrieved 12/10/2008. Available at:

http://www.business-standard.com/india/storypage.php?autono=328043. (2008).

[12]Id.

[13]BSA, 2008.Fifth Annual BSA and IDC Global Software Piracy Study.Retrieved on: December 11th, 2008. Available at:

http://global.bsa.org/idcglobalstudy2007.

[14] Hill, Digital piracy: causes, consequences, and strategic responses. Asia Pacific Journal of Management 24 (1), 9–25(2007).

[15]Id.

[16]Supra note 7.

[17] Taylor, S., Ishida, S., et al, Intention to engage in digital piracy: a conceptual model and empirical test,Journal of Service Research 11 (3), 246 (2009).

[18]Information Technology Act, § 2(k) (2000).

[19] The Impact of the Internet on Intellectual Property Law, World Intellectual Property Organization, Program Activities, retrieved on: September 3rd, 2013, Available at:

http://www.wipo.int/copyright/en/ecommerce/ip_survey/chap3.html

[20]SeverineDusollier, some reflections on copyright management information and moral rights, retrieved on Aug 28, 2013; Available at:

www.ssrn.com

[21] The International Bureau of WIPO, Overview of the international protection of copyright and related rights:  from the Berne Convention for the protection of literary and artistic works to the WIPO copyright treaty and the WIPO performances and phonograms treaty, presented in Wipo National Seminar on copyright and                        related rights for lawyers and judges (2005).

[22]Id.

[23]WIPO Copyright Treaty, Article 11(1996).

[24]WIPO Performances and Phonograms Treaty, Article 18 (1996).

[25]Supra note 21.

[26]Indian Copyright Act, §65 (1957).

[27] Lawrence Liang and Ravi Sundaram, Media Piracy In Emerging Economies, Social Science Research Council, retrieved on : Aug. 25th, 2013,  Available at:

http://piracy.americanassembly.org/wp-content/uploads/2011/06/MPEE-PDF-Ch8-India.pdf.

[28] Consumers International (2010) rates the Indian Copyright Act as one of the most balanced in the world, with broad scope for private, educational, and critical use and broad online rights. Available at: http://a2knetwork.org/reports/india.

[29]Indian Copyright Act, § 53 (1957).

[30]Supra note 26.

[31]Indian Copyright Act, § 51 (1957).

[32] Peter Eckersley, Virtual Markets for Virtual Goods: An Alternative Cooperation of Digital Copyright, 13-14,(Melbourne,Australia: Intellectual Property Research Institute of Australia, The University of Melbourne, 2003), Available at:

http://www.cs.mu.oz.au/~pde/writing/virtualmarkets.pdf (discussing precautionary measures against “identity rental”); NeilWeinstock Netanel, Impose a Noncommercial Use Levy to Allow Free Peer-to-Peer File Sharing, Harvard Journal of Law &Technology17, no. 1, 1-84, 55-57 (Fall, 2003):

[33]Indian Copyright Act, § 52(1957).

[34]Martin Pierz, Joel Wandfogel,  The Oxford Handbook of the Digital Economy, 137(2012)

[35]Id.

[36]The Constitution of India (1949).

[37]Supra note 27.

[38]Id..

[39]Id.

[40]Id.

[41]IIPA (International Intellectual Property Alliance), 2009b. India: IIPA Special 301 Report on Copyright Protection and Enforcement, Washington, DC: IIPA (2009).

[42]Fisher,Promises to Keep, 228(2000).

[43]Supra note 27.

[44]Supra note 31.

[45]Netanel, Impose a Noncommercial Use Levy, 53(2000).

[46]Information Technology Act (2000).

By:-Anil Vishnoi,

National Law University, Orissa

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