The Piracy "Industry"

Until recent years, the problem of piracy (the unauthorized reproduction or distribution of copyrighted works (for commercial purposes)) was largely confined to the copying and physical distribution of tapes, disks and CDs. Yet the emergence and increased use of global data networks and the WWW has added a new dimension to the piracy of intellectual property by permitting still easier copying, electronic sales and transmissions of illegally reproduced copyrighted works on a grand scale.

This new development, often referred to as Internet piracy, broadly relates to the use of global data networks to 1) transmit and download digitized copies of pirated works, 2) advertise and market pirated intellectual property that is delivered on physical media through the mails or other traditional means, and 3) offer and transmit codes or other technologies which can be used to circumvent copy-protection security measures.

Lately the International Intellectual Property Alliance has published a new report on the estimated trade losses due to piracy. (The IIPA assumes that their report actually underestimates the loss of income due to the unlawful copying and distribution of copyrighted works. Yet it should be taken into consideration that the IIPA is the representative of the U.S. core copyright industries (business software, films, videos, music, sound recordings, books and journals, and interactive entertainment software).)

Table: IIPA 1998 - 1999 Estimated Trade Loss due to Copyright Piracy (in millions of US$)





Motion Pictures

Records & Music

Business Applications

Entertainment Software

Books





1999

1998

1999

1998

1999

1998

1999

1998

1999

1998

Total Losses

1323

1421

1684

1613

3211

3437

3020

2952

673

619



Total Losses (core copyright industries)

1999

1998

9910.0

10041.5




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Challenges for Copyright by ICT: Copyright Owners

The main concern of copyright owners as the (in terms of income generation) profiteers of intellectual property protection is the facilitation of pirate activities in digital environments.

Reproduction and Distribution

Unlike copies of works made using analog copiers (photocopy machines, video recorders etc.) digital information can be reproduced extremely fast, at low cost and without any loss in quality. Since each copy is a perfect copy, no quality-related limits inhibit pirates from making as many copies as they please, and recipients of these copies have no incentive to return to authorized sources to get another qualitatively equal product. Additionally the costs of making one extra copy of intellectual property online are insignificant, as are the distribution costs if the copy is moved to the end user over the Internet.

Control and Manipulation

In cross-border, global data networks it is almost impossible to control the exploitation of protected works. Particularly the use of anonymous remailers and other existing technologies complicates the persecution of pirates. Also digital files are especially vulnerable to manipulation, of the work itself, and of the (in some cases) therein-embedded copyright management information.

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Total copyright industries

The total copyright industries encompass the "core copyright industries" and portions of many other industries that either create, distribute, or depend upon copyrighted works. Examples include retail trade (a portion of which is sales of video, audio, software, and books, for example), the doll and toy industry, and computer manufacturing.


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Royalties

Royalties refer to the payment made to the owners of certain types of rights by those who are permitted by the owners to exercise the rights. The rights concerned are literary, musical, and artistic copyright and patent rights in inventions and designs (as well as rights in mineral deposits, including oil and natural gas). The term originated from the fact that in Great Britain for centuries gold and silver mines were the property of the crown and such "royal" metals could be mined only if a payment ("royalty") were made to the crown.

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