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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Fair use Certain acts normally restricted by copyright may, in circumstances specified in the law, be done without the authorization of the copyright owner. Fair use may therefore be described as the privilege to use copyrighted material in a reasonable manner without the owner's consent and allows the reproduction and use of a work for limited purposes such as criticism, comment, news reporting, teaching, and research. To determine whether a use is fair or not most copyright laws consider: 1) purpose and character of the use, 2) nature of the copyrighted work, 3) amount and substantiality of the portion used, and 4) effect of the use on the potential market. Examples of activities that may be excused as fair use include: providing a quotation in a book review; distributing copies of a section of an article in class for educational purposes; and imitating a work for the purpose of parody or social commentary.

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Liability of ISPs ISPs (Internet Service Provider), BBSs (Bulletin Board Service Operators), systems operators and other service providers (in the U.S.) can usually be hold liable for infringing activities that take place through their facilities under three theories: 1) direct liability: to establish direct infringement liability there must be some kind of a direct volitional act, 2) contributory liability: a party may be liable for contributory infringement where "... with knowledge of the infringing activity, [it] induces, causes or materially contributes to the infringing activity of another." Therefore a person must know or have reason to know that the subject matter is copyrighted and that particular uses violated copyright law. There must be a direct infringement of which the contributory infringer has knowledge, and encourages or facilitates for contributory infringement to attach, and 3) vicarious liability: a party may be vicariously liable for the infringing acts of another if it a) has the right and ability to control the infringer's acts and b) receives a direct financial benefit from the infringement. Unlike contributory infringement, knowledge is not an element of vicarious liability.

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