COPYRIGHT PIRACY: THE BACKGROUND
The world today has entered into an era of instant communication. A person sitting in the remotest corner of India can enjoy live performance taking place in the far away places like America or Africa, thanks to electronic (parallel) media. Telephone and fax have made it possible to communicate oral or written messages across the globe within seconds. The computer-aided communication technologies such as E-Mail and Internet have added altogether a new dimension to today’s communication process by making it more speedy, informative and economical. The ways through which different types of information can be communicated have also undergone a sea change. These days a film song can be put in or accessed by a single device alongwith a textual message and even a painting. While all these have made communication among people more effective and efficient both in terms of time and cost, they pose the greatest threat to the copyright world. Modern communication channels, being intensively relying on a variety of copyrighted products, are liable to be pirated in large scale, if adequate precautions are not exercised.
Copyright is the right given by law to the creators of literary, dramatic, musical and a variety of other works of mind. It ordinarily means the creator alone has the right to make copies of his or her works or alternatively, prevents all others from making such copies. The basic idea behind such protection is the premise that innovations require incentives. Copyright recognises this need and gives it a legal sanction. Moreover, commercial exploitation of copyright yields income to the creators and thus making pecuniary rewards to individual’s creativity.
The origin of copyright had a link with the invention of printing press by Gutenberg in the fifteenth century. With the easy multiplying facility made possible by the printing press, there was voluminous increase in the printing and distribution of books which ,in turn, led to adoption of unfair practices such as unauthorised printing by competing printers.
Though piracy was born by the end of the fifteenth century, it was only in 1710 the first law on copyright in the modern sense of the term came into existence in England. The law which was known as `Queen Anne’s Statute’ provided authors with the right to reprint their books for a certain number of years. The 1710 law was confined to the rights of authors of books only, and more particularly the right to reprint. It did not include other creative works such as paintings, drawings etc. which also by that time became targets of piracy, in addition to other aspects relating to books (e.g. translation, dramatisation etc.) To overcome this problem a new enactment namely `Engravers Act’ came into existence in 1735. There followed a few more enactments in the subsequent periods and ultimately Copyright Act 1911 saw the light of the day.
Developments in this regard also took place in many other advanced countries, notably among them being France, Germany and the USA. In France a copyright decree was adopted in 1791 which sanctioned the performing right and another decree of 1793 established author’s exclusive right of reproduction. In Germany author’s rights were recognised by a Saxon Order dated Feb 27, 1686. In America the first federal law on copyright, the Copyright Law 1790 provided protection to books, maps and charts.
Copyright and National Economy
Besides protecting creative potential of the society, copyright contributes to a nation on economic-front as well . The copyright based industries together generate huge employment in the country of its origin. The national exchequer benefit from the contribution made by these industries in the form of excise duty, sales tax, income tax etc. from the production and sale of copyrighted products. Given the natural demand for such products from across the national boundaries exports help consolidate country’s foreign exchange reserves position.
While there is no two views on the economic importance of copyright, it is not easy to assess it properly. The first and the foremost difficulty arises in defining the copyright based industries. In simplistic term copyright industries include all those activities which directly or indirectly depend on copyrighted materials for their commercial success. But the range of activities that come under the subject of copyright is so wide that the task of defining the copyright industry becomes difficult. These industries are drawn from a large number of different industry classifications and they are also not readily identified as an industry in the usual sense. This makes the issue more complicated.
However, there is a general consensus on the activities that come under copyright industries. It include printing and publishing of books, newspapers, journals & other periodicals, production and sale of audio products (Cassettes/CDs), production & distribution of cinemas, videos and cables, creation of computer softwares & databases and their distribution, radio and television broadcasting, advertising, photography, dramatic and musical performances etc. The list is not exhaustive. But the present study is confined to only the main segments of the copyright industry and covers cinematographic works (including video), sound recordings, literary works (mainly book publishing), computer softwares and performances.
The economic importance of copyright had been amply illustrated by a number of studies undertaken in the past in various parts of the world, notably in USA, Germany, Australia, U.K., Sweden and some other developed countries. For example, a study conducted in 1993 for the U.S.A. showed that the core copyright industries comprising motion picture, computer software, music & recording and book publishing industries accounted for $ 238.6 billion in value added to the US economy, which approximately accounted for 3.47 % of the country’s Gross Domestic Product (GDP). These industries grew at more than twice the annual growth rate of US economy as a whole between 1991 and 1993 (5.6% as against 2.7% for the economy as a whole). The total copyright industries taken together (i.e. core industries plus those distribute copyrighted products and other products those depend on wholly or principally on copyrighted materials) employed more than 5.7 million workers (about 4.8% of total U.S. workforce) and accounted for approximately 5.69% US GDP in 1993.
In India, no estimates are available to ascertain contribution of copyright based industries to the national economy. However, given the rich cultural background and huge population of the country, it is believed that copyright industries collectively contribute enormously to the economy. India is the largest audio cassette market in the world in terms of number of units sold. In 1996, India sold more than 350 million audio cassettes & CDs and the industry’s sales turnover stood at Rs.105,605 million. India’s software industry is showing a phenomenal growth. During 1996-97, the software industry in India with its size of Rs.63,100 million achieved a remarkable growth rate of above 50% over its previous year’s performance. During the same period India could export softwares worth Rs.39,000 million and the software industry provided employment to more than 160,000 people.
The publishing industry is also quite large in the country. About 11,000 publishers are engaged in producing more than 57,000 new titles every year, of which about 22% is published in English language. In 1995-96 India exported Rs.1120 million worth of books and other printed material. A sizeable portion of this (about 29.1 percent) went to advanced countries in the Europe. The print media in India comprising daily newspapers and numerous other periodicals e.g. weekly, monthly and annual journals/magazines is huge. In 1997, it had a total circulation of 10,57,08,191 and the turnover from print media is estimated to be as high as Rs. 8000 crores (table 2.1). The other core copyright industry namely film and video, also occupies an important place in the country. Film is considered as one of the best means of entertainment for the common people. India annually produces more than 600 films in major languages such as Hindi, Telugu, Tamil, Malayalam & Kannada. The demand for cable & satellite TVs are also on the rise. It is estimated that during 1996 cable connection in the country had reached about 20 million houses covering approximately 10 percent of the total households in the country.
Copyright and International Relations
The scope of copyright is not confined merely to the arena of creativity and its economic exploitation in the country of its origin. It has emerged as a major factor in international relations. In the recent past, the trade relations between the US and China deteriorated considerably over the issue of protection of Intellectual Property Rights (IPR). The US maintained that China is the worst violator of IPRs and the loss to the US economy is more than 2 billion dollars annually because of violation of its IPRs in China’s territory. The dispute took a serious turn when US trade groups wanted trade relations with China to be stopped completely. It was only after the intervention of the heads of both the countries any further deterioration was averted.
The importance of IPRs in general and copyright in particular in the relationships among the countries can be comprehended clearly from the above example. The Sino -US piracy dispute, though a recent one, is not the only case. With the advancement in technologies copyrighted items started flowing freely across the boundaries and piracy assumed an international dimension. Since the nineteenth century the countries felt the necessity of having copyright protection in foreign soil as well. As a result, negotiations were held between countries which in some cases resulted in the conclusion of multilateral treaties.
The first multilateral agreement on copyright is the Berne Convention which was concluded in 1886 and was meant for providing protection to literary and artistic works. A country joining the Convention has to provide copyright protection to literary and artistic works of member countries in its own territory and also entitled for enjoying reciprocal protection from others. The Berne Convention was revised seven times in 1896 (at Paris), 1908 (at Berlin), 1928 (at Rome), 1948 (at Brussels) , 1967 (at Stockholm) and 1971 (at Paris) and finally in 1978. Among these, the 1971 revision (the Paris Act) is of particular importance to the developing countries as it provided special concessions to these countries in making translations and reproduction of foreign literary works for educational purposes. Ninety countries are at present member of the Berne Convention.
The post Second World War era saw the emergence of the need for protecting copyright on an universal basis. Till then countries in the North America were not party to the Berne Convention and copyright protection in these countries were governed by various national and regional agreements. In August, 1952 the Intergovernmental Copyright Conference was convened in Geneva which led to the adoption of another historical copyright convention, namely the Universal Copyright Convention (UCC). The UCC is not a substitute for the Berne Convention. Rather it tried to establish the link between the countries on the Bern Union and those in North America. India is a member of both the Berne Convention and the UCC.
In recent years, the issue of IPRs figured prominently in the Uruguay Round of General Agreement on Tariffs and Trade (GATT). It is for the first time the GATT went beyond its usual mandate to include the IPRs. The Trade Related Aspects of Intellectual Property Rights (TRIPS) is set out in Annex 1C of the Final Uruguay Round Text. The text comprises 73 articles grouped in seven different parts. The standards for specific IPRs such as copyright and neighbouring rights are discussed in part II.
Copyright in India
The copyright in India has travelled a long way since it was introduced during the British rule. The first law on copyright was enacted in the year 1847 by the then Governor General of India. When Copyright Act 1911 came into existence in England, it became automatically applicable to India, being India an integral part of British Raj. This act was in force in the country until after independence when a new copyright act (the Act of 1957) came into effect in 1958. Thereafter the Act has undergone many amendments. The latest in the series is the 1994 Amendment, which came into force in May 1995.
The Indian Copyright Act confers copyright on (i) original literary, dramatic, musical and artistic works, (ii) cinematographic films and (iii) sound recordings. The word `original’ means that it should not be copied from other works or alternatively it should be the outcome of independent efforts. The Act empowers copyright holder(s) to do or authorise doing a number of activities. The important among these are:
to reproduce the wk in material form
to publish the work
to perform the work in public or communicate it to the public
to produce, reproduce, perform or publish any translation of the work
to make any cinematographic film or a record in respect of the work
to make any adaptation of the work
to do, in relation to a translation or an adaptation of the work, any of the acts specified to the work in sub clauses to (a) to (f).
The above mentioned rights are `exclusive’ in the sense that the creator (or rightholder) alone has the right to enjoy these to the exclusion of others. The author by virtue of his creation becomes the `owner’ of the copyright in the work. However, there can be exceptions to this as in the following two cases :-
The creator may be employed by some one and having been employed to create a work, the rights belong to the employer – not the creator(s), and
The creator may transfer his copyright by a document in writing to another person. This is known as assignment.
The grant of copyright is a limited monopoly. It is limited in the `scope’ of the rights granted and in terms of `time’. In India, copyright on a literary work is provided for the lifetime of the author plus sixty years after his death. In case of joint authorship, the sixty years period is calculated from the beginning of the calendar year following the year in which the last (surviving) author dies. Copyright with respect to photographs, cinematographic works and sound recordings spans for 60 years of its first publication. In order to strike a balance between the society’s need for access to knowledge and the need to rewarding creators, limited uses of copyright protected works are permitted without authors consent. These are called `fair use’ of copyright. Section 52 of Indian Copyright Act permits certain activities which do not amount to infringement. Important in this `exception list’ are reproduction of literary, dramatic, musical or artistic works for educational purposes, e.g. research, review etc., and reporting in newspapers, magazines and periodicals etc.
The Copyright Act of India provides rightholders a dual legal machinery for enforcing their rights. The enforcement is possible through (1) the Copyright Board and (2) the courts. Legal remedies include imprisonment and/or monetary fines – depending upon the gravity of the crime. Sometimes remedies also include seizure, forfeiture and destruction of infringing copies and the plates used for making such copies. The 1984 amendment has made copyright infringement a cognizable non-bailable offence. Under the provisions of the Act any person who knowingly infringes or abets the infringement of copyright is considered as an offender and is punishable with a minimum of six months imprisonment which may extend to three years and a fine between fifty thousand and two lakhs rupees. The 1994 Amendment has incorporated a special penal provision for knowingly using an infringing computer software. The punishment provided for this act is imprisonment for a term of seven days to a maximum of three years and a fine between fifty thousand and two lakh rupees. In case the infringing copy of the computer software is used not for pecuniary gain or in the course of trade or business, the imprisonment can be relaxed and fine can be maximum of fifty thousand rupees.
Beside amending the Copyright Act the Indian Government has taken few more steps in strengthening the enforcement in the country. A Copyright Enforcement Advisory Council has been set up for advising the Government on measures for improving the copyright enforcement. Training programmes and seminars are arranged for police personnel. Necessary legislation was made for bringing video shops, cable operators under regulation. State governments are encouraged to set up IPR cells for exclusively dealing with copyright and other IPR violations. In spite of all these, enforcement of IPR violations, particularly copyright violations has not been strong enough in the country and piracy prevails exits in all types of copyright works notably musical works, video films and softwares.
Copyright piracy is a phenomenon prevalent worldwide. Piracy means unauthorised reproduction, importing or distribution either of the whole or of a substantial part of works protected by copyright. The author of a copyrighted work, being the owner, enjoys certain exclusive rights with respect to his or her works. These include right to reproduce, to publish, to adopt, to translate and to perform in public. The owner can also sell, assign, license or bequeath the copyright to another party if he wishes so. If any person other than the copyright owner or his authorised party undertakes any of the above mentioned activities with respect to a copyrighted product, it amounts to infringement of the copyright. Copyright piracy is thus like any other theft which leads to loss to the owners of the property. Besides economic loss, piracy also adversely affects the creative potential of a society as it denies creative people such as authors and artists their legitimate dues.
There are different ways through which piracy takes place. A computer software is pirated by simply copying it onto another machine not authorised for its use. Book piracy takes place when a book is reproduced by someone other than the real publisher and sold in the market. A performer’s right is violated when a live performance of an artist is recorded or telecasted live without his/her permission. In a cinematographic work piracy generally takes place through unauthorised reproduction of the film in video forms and/or displaying the video through cable networks without taking proper authorisation from the film producer (the right holder). In fact, there are numerous other ways through which piracy of copyrighted works take place. The nature and extent of piracy also vary across the segments of the copyright industry. It is, therefore, necessary to discuss the nature and extent of piracy problems segment wise. Such an attempt is made in the following paragraphs.
Piracy of literary works means illegal reproduction of books and other printed materials and distribution/selling of these for profit. In India, the journals/magazines and other periodicals are not pirated much. Here piracy of literary works generally takes place in three principal ways. : 1) wholesale reprinting of text and trade books 2) unauthorised translations and 3) commercial photocopying of books/ journals. Many a time piracy takes the form of publishing fake books, where authors shown in books are not the real authors.
Book piracy, in India, primarily depends on two factors, namely, the price of the book and its popularity. These two factors positively contribute to piracy. Piracy is generally confined to foreign and good indigenous books. Because these books are demanded in large quantities and are also priced high. The types of books pirated mostly are medical, engineering and other professional books, encyclopaedia and popular fictions. The piracy is also wide spread with respect to books published by National Council of Educational Research & Training (NCERT), National Open School and Board(s) of Secondary Education. These books even if priced low are having large demand.
The pirates first identify books to be pirated and then get the same printed in large numbers through unscrupulous printers. The pirated books are normally sold with other (legitimate) books by usual retailers identified by the pirates. The number of printers/sellers involved in piracy is generally less. The piracy is also seasonal in nature. The entire process of printing through selling get over within a month or two.
Besides the above, piracy in the form of mass photocopying of books is largely prevalent in India, especially in and around educational institutions. Students borrow books from libraries and then get these photocopied from the photocopier kept at the institution where from the books are borrowed. While copyright law permits photocopying of literary works for limited private uses such as research, review or criticism what happens, many a time is that the entire book is photocopied including the cover pages. In the process student community and the photocopy operators gain, but the publishers lose a huge revenue. Unfortunately, the institutions turn a blind eye to this.
Sometimes even some renowned publishers involve themselves in piracy by way of selling books beyond the contract period. This happens when an Indian publisher buys re-print rights from some foreign publishers and keeps on selling books even after the expiry of the period mentioned in the agreement. This is done in the pretext of clearing old stock. Thus an impression is created that books are printed during the contract period but in reality are sold beyond the contract period just to exhaust the old stock.
The other way through which piracy takes place is printing/selling of books meant for review. Many foreign publishers send books to India for review. The pirates somehow get access to such books and make quick prints to sell in Indian market. All these happen much before the authorised Indian distributors get their copies for selling in India. Naturally, the distributors’ sales get affected adversely.
Piracy of literary works leads to loss of revenue to publishers (in terms of less sales), authors (non-payment of royalty) and the national exchequer (non-payment of income tax and other levies payable by publishers/authors). While it is believed that book piracy is high in India, it is very difficult to arrive at an estimate. Only information from secondary sources (e.g. publishers, police records etc.) can be gathered to form a rough idea on piracy. But that would reflect only the tip of the iceberg. In terms of percentage, it is believed that about 20-25 percent of books sold (in number) in the country are pirated. Actual monetary loss due to piracy is anybody’s guess.
Anti piracy drive with respect to books is generally weak in India. The industry associations are not very active in this regard. Whatever action is taken is done by the respective publishers. The enforcement machinaries (such as police) are also not very active in controlling piracy for a variety of reasons. The public awareness is also very poor.
Besides the above, Indian books are also pirated abroad, especially in the neighbouring countries such as Pakistan, Bangladesh etc. India exports books to a large number of countries including developed countries from Europe. During 1995-96 India exported books to the tune of Rs.1120 million. Exports earnings could have been much more in the absence of wide spread piracy of Indian works abroad. Similarly, foreign literary works are pirated in India. Given the low and rapidly declining value of rupee in terms of hard currencies good foreign books (e.g. US books) cost very high in India. As a result majority of the readers individually can not afford to buy these books. In such circumstances, piracy provides the escape route, because a pirated foreign book in India can be as cheap as half the original price or even less. The International Intellectual Property Alliance (IIPA) estimated that in 1995 trade loss due to piracy of US books in India amounted to $ 25 million.
The sound recording industry faces three types of piracy. First, there is a simple way by which songs from different legitimate cassettes/CDs (and thus different rightholders) are copied and put in a single cassette/CD. These are then packaged to look different from the original products and sold in the market. Second, there is counterfeiting, when songs are copied in to and packaged to look as close to the original as possible using the same label, logos etc. These products are misleading in the sense that ordinary end users think that they are buying original products. The third form of music piracy is bootlegging, where unauthorised recordings of performance by artists are made and subsequently reproduced and sold in the market. All these happen without the knowledge of the performers, composer or the recording company,
Earlier the music piracy was confined to cassette tapes only. With the advent of CDs in the eighties it was thought that piracy of sound recordings would become things of the past. But in reality CD piracy is the greatest threat to today’s music world. Infact, with CDs piracy has got an international vigour. Fortunately or unfortunately, CD industry is still in it nascent stage in India. At present CD market is just 2 to 3 percent of the overall music market in the country. CDs have not taken off mainly because of high prices. In India CDs are sold on an average price ranging between Rs.150 to Rs.550. Considering price of cassettes, the price differential (between cassettes and CDs) is quite high and prohibitive for ordinary music lovers.
Cassette piracy in India is as old as the cassette industry itself. Govt. policy put music industry in the small scale category and volume of a record company’s cassette production was restricted to 300,000 units per annum. This led to a wide gap in the demand supply front which was ultimately bridged by the pirates. Even if music piracy percentage has declined from a high of 95% in 1985 to about 30% in 1995, India is the world’s sixth largest pirate market in value terms (table 2.2) but third in volume terms (table 2.3). In 1995, more than 128 million pirated cassettes/CDs were sold as against the sale of 325 millions of legitimate audio products. The sale of pirated cassettes/CDs (both in number & value) is also on the rise in the country. However in contrast to many developed countries piracy of CDs is low in India. At present CD piracy is below 10% level.
The popularity of Indian music has gone beyond the national boundaries. There is large demand for Indian music in the neighbouring countries such as Pakistan, West Asia as well as far off countries like USA, Canada and the UK. Indian music is also pirated in some of these foreign countries, the notable among these being Pakistan and the West Asia. Similarly, foreign audio products are also subject to piracy in Indian soil. As per IIPA’s estimate the trade losses due piracy of American audio products alone in India was to the tune of US $ 10 million in 1995.
Copyright in cinematographic works is more complex in nature as there exists a variety of copyrights in a single work and many a times these rights are also overlapping. The first right in a film is the `theatrical right’ i.e. the right to exhibit films in theatres. The producer is the copyright holder. The distributors buy theatrical rights from producers and then make some arrangements with the theatre owners for actual exhibition to the public. The theatrical rights are limited by territory and time. Films are also released in video cassettes. In fact, these days viewing film at home has become more popular than seeing the same at theatres. The producers sell the video rights to another party, who makes video cassettes for sale in the market. These cassettes are meant for `home viewing’ only i.e. one can buy a copy of it for seeing at home with family members and friends. Such cassettes can not be used for showing the film in cables or through satellite channels. Because showing films in cables or satellite channels require acquisition of separate sets of rights namely `cable rights’, and `satellite rights’.
A cable network is generally limited to local areas as it requires receivers (viewers’ TVs) which are to be physically connected through cable wire to the operators. In case of satellite channels, however, there is no such physical limit as transmission takes place through air and received at the users end by dish antenna(s). Interestingly in India satellite transmissions, in most of the cases, reach to endusers through cable networks only.
The cable networks in India work in a two-tier system. At the top there are main operators who transmit their programmes through numerous small local operators on a franchise basis. As mentioned earlier programmes of satellite channels reach the viewers through cable networks. The (main)cable operators do not pay anything to satellite channels for showing latter’s programmes in the network, except for pay channels (e.g. ESPN, Zee Cinema, Movie Club etc). The small cable operators, however, share their incomes with their respective main operators. The revenue for small operators come from the subscription of viewers.
Music is an integral part of any cinematographic work. In India, film sound tracks account for almost 80% of the total music market. Even if film producer has the copyright in the film, the music included in the film is the outcome of efforts undertaken by a separate group of creative people such as the composer, lyricists etc.- each of which is a rightholder of its own right. Generally the producer sells this right to a music company who makes cassettes/CDs of such songs for sale in the market. The incidence of a large number of rights in a single work and the involvement of a variety of right holders make the copyright issue very complicated in cinematographic works.
Piracy of cinematographic works takes two principal forms, namely `video piracy’ and `cable piracy’. However, piracy in one form can spill over and affect the revenues of the other. Video piracy takes place when a film is produced in the form of video cassette without taking proper authorisation from the right holder i.e. producer. Many times producers of films sell video rights to another party (generally after six weeks or more of release in theatres ) who makes video cassettes for selling or lending. The video cassettes kept for sale are meant for home viewing only. Any commercial use of such cassettes like in video parlours or in cable networks amounts to copyright violation. Two types of video piracies are common in India. One, where video right for films has not been sold at all (by the producer) but video cassettes are available in the market for buying or borrowing. And two, when video right is (legally) sold to a party, but cassettes are made and sold by others (pirates) as well.
Cable piracy is unauthorised transmission of films through cable network. As mentioned above, showing a film in a cable network requires acquisition of proper authorisation from the rightholder. But many a time, films , especially the new releases, are shown through cables without such authorisation, which tantamounts to piracy.
Piracy is a rare phenomenon in satellite channels because such channels are organised and generally do not show films without buying proper rights. But there are cases where right of one channel operator is violated by others.
It is very difficult to give even a rough estimate of video piracy in India because information in this regard is scanty and not accessible. But video piracy in both the forms are quite rampant here. Besides this, piracy through video parlours is largely prevalent normally in the rural India or smaller towns. Perhaps more widespread and damaging is the cable piracy. These days almost all new releases are shown in the cable simultaneously with the exhibitions in theatres . As per a resolution adopted by the Film Makers Combine, video release of a film can be made only after six weeks of theatrical release. But cable operators show such films much before the stipulated time period. This is a clear case of cable piracy and its extent is considerably high in country.
All parties involved in the legitimate transaction of films – from the producers to the theatre owners, lose heavily because of widespread video or cable piracy. The Government also loses because pirates’ activities do not bring in any revenue such as entertainment tax at theatres and excise duty and sales tax at the points of legitimate production/selling.
The piracy in computer software simply means copying and distribution of computer programmes without the copyright holders permission. The software industry, generally, consists of creation and distribution of computer programmes. Creation of computer programme is similar to writing a novel or other literary works and it requires intellectual skill and training in software programming. Though a software can be written by individual programmer, most of the major software’s are the outcome of group efforts, where medium to large sized teams spend months or even years to write a complete programme.
Distribution of computer programmes in most of the developed countries occurs through a two-tiered system of wholesalers and dealers, similar to that of many other industries. The software publishers make a substantial amount of their shipments to a small number of distributors in any given country, who maintain well-stocked warehouses and can respond quickly to orders from hundreds or thousands of individual retail dealers or resellers. The dealers market and provide the software products directly to end-users of computers. The end users can be individuals, commercial enterprises, educational institutions and government establishments. Sometimes, software publishers also deal directly with a small number of the largesr dealers or resellers in an individual country. Licensing is a common practice in software industries. The publisher of a software generally authorises its end users through the mechanism of the shrink-wrap license contained in the package.
Like other copyright based industries, the software industry also faces several forms of piracy. In fact, piracy in software is more than in others because it is relatively easy to copy a software in computers especially in PCs and for all practical purposes the pirated version looks and performs in an identical manner as the original. The five principal types of software piracy involve (1) counterfeiters (2) resellers (3) mail order houses (4) bulletin boards and (5) end-user piracy. Counterfeiters are relatively new phenomenon in the software industry and most flagrant software counterfeiters produce disks, documentation and packaging that look very similar to those of the software publisher. Reseller piracy occurs in the software distribution channel, when distributors or dealers either make copies of software onto floppy disks, or the internal storage device or the “hard disk” of computers that they are selling, without authorisation from the software publisher. Mail-order piracy consists of the unauthorised copying of software onto diskettes, CDs, or other media and distribution of such software by post. Bulletin board pirates engage in unauthorised reproduction and distribution of software via telecommunication. Typically, this involves an individual computer user who has installed a number of software programmes on his computer, and who allows other users to connect to his computer through the telephone line via modem and copy the programmes onto discs. The pirate in most cases has copied the programme onto his own computer without authorisation of the copyright holder’s consent is also a copyright violation. End-user piracy takes place when a user copying software onto hard disks of more comptuers than the number authorised by the publisher. This form of piracy perhaps takes place on a wider scale than other forms because end-users often make substantial copies of the softwares possessed by them and then distribute or exchange the same. Though this harms the interests of rightholders, endusers definitely gain out of it because this leads to obvious economic advantages for them.
Identifying a pirated software is not an easy task. This is primarily for two reasons. First, as mentioned earlier there is hardly any difference between an original software and a pirated software, once it is copied onto a hardware. Second, detection of piracy requires access to software or hardware or both, which may not be feasible in many cases. However, there are some ways through which an unauthorised copy of a software can be identified. Many a times publishers supply softwares in packaged form which contain software on diskettes with printed labels giving manufacturer’s name, full product name, version number, trade mark and copyright notices. Besides these, the packages also typically, contain professionally printed documentation, a keyboard template, enduser license and registration cards and other printed materials pursuant to a standard bill of materials that would apply to all packages of that particular product. In such cases, the most simple pirated copies may be spotted easily on “black-disks”, which do not contain manufacture’s label but rather type written, hand-written or crudely printed labels indicating the programmes contained on the diskettes. In case of installed software it is more difficult to identify a pirated copy. Once a computer is searched, the programmes copied onto it can be found and identified. Then users can be asked to produce the proof of original possession (e.g. original packages, documentation, purchase record, license cards etc.) of such programmes. If users fail to do so, there is a prima facie case of infringement. In some cases even test purchases can be made to secure evidence of piracy.
The extent of software piracy and losses due to such piracy cannot be given in exact quantitative terms though it is believed that piracy in this sector is wide spread. In Europe alone the sofware industries lose an estimated $ 6 billion a year. In fact, Europe holds the dubious distinction of accounting for about 50 per cent of world wide losses from software piracy, more than any other region including the number two Asia. According to a study of Software Publishers Association, a US based body, losses due to piracy of personal computer business application softwares nearly equalled revenues earned by the global software industry. In 1996, piracy costed the software industry US $ 11.2 billion, a 16 percent decrease over the estimated losses of Us $ 13.3 billion in 1995. The country-specific data show that in 1996 Vietnam and Indonesia had the highest piracy rate of 99 per cent and 97 percent respectively, followed by China (96%), Russia (91%), Thailand (80%) etc. In India software piracy is costing the IT industry quite dear. According to a survey conducted jointly by Business Software Alliance (BSA) and NASSCOM in May 1996, total losses due to software piracy in India stood at a staggering figure of about Rs. 500 crores (US $ 151.3 million) showing about 60 per cent piracy rate in India.
Piracy of copyrighted products is a problem as old as the copyright itself. Only in recent years it has received prominence, especially in the academic and policy circles. In India, no official estimate is available to indicate the extent of piracy and associated economic loss. But perceptions are that the piracy is a big problem.
The main reasons behind copyright piracy are poor enforcement and lack of awareness on copyright matters. The copyright laws of India are as good as those of many advanced countries in Europe and America, where concern for copyright is at a high level. Punishments prescribed for violators are stringent and comparable to those of many countries in the world (Table 2.4). But laws alone can do little justice unless implemented properly. The enforcement mechanism is weak in the country.
Even police personnel, who can play a major role in combating piracy, are not fully aware of various provisions of the law. There is also lack of adequate number of personnel who can fully devote to copyright crimes alone. The police is more concerned with usual law and order problems and copyright related crimes are attached least priority.
The awareness level among end-users is also very low. While buying a copyrighted product, majority of consumers do not look at copyright notification (e.g. C or P ). As long as price is low (as generally is the case with pirated products) users do not mind buying pirated products even knowingly.
Table 2.2 : Top Ten Pirate Territories (Value)
Country Pirate sales in US $ (million) Pirate % of total sales % of world pirate sales
Russia 363.1 62% 17%
USA 279.4 2% 13%
China 168.0 48% 8%
Italy 145.6 20% 7%
Brazil 118.8 10% 6%
Germany 92.2 3% 4%
Mexico 85.3 22% 4%
India 82.1 23% 4%
Pakistan 62.1 94% 3%
France 58.5 2% 3%
T o t a l 1,455.0 68%
Source: International Federation of Phonographic Industry (IFPI), London
Table 2.3 : Top Ten Pirate Territories (Units)
Country Pirate sales in (millions) Pirate % of country’s total sales % of world pirate sales
Russia 222.3 73% 23%
China 145.0 54% 15%
India 128.4 30% 13%
Pakistan 75.4 94% 8%
Mexico 70.0 54% 7%
Brazil 62.4 45% 7%
USA 26.6 3% 3%
Italy 21.5 33% 2%
Romania 21.5 85% 2%
Turkey 16.4 30% 2%
T o t a l 789.5 83%
Source: Same as Table 2.2
Table 2.4 Summary and Comparison of Criminal Penalties for Copyright Infringement in Selected Countries
Country Fines/Penalty Imprisonment Terms
U.S.A Upto $ 250,000 for a first offence of infringement by an individual done in ” Willfully and for purposes of commercial advantage or private financial gain”.
Upto 5 years
Upto $ 250,000 for a second offence by an individual. Upto 10 years
Upto $ 50,000 for first offence by an organisation. Upto 5 years
Upto $ 500,000 for a second offence by an organisation. Upto 10 years
France 6,000 to 120,000 Francs (about US $ 1070 to US $ 21,428) for a first offence of infringement.
Double the above penalties for second offence.
3 months to 2 years
Poland Unspecified fines for unauthorised dissemination for purposes of economic gain. Upto 2 years in jail
Unspecified fine if the infringer turn the above offence into a regular source of income for a criminal commercial activity and organises or direct such acitivity. Not less than 6 months and not more than 5 years.
Unspecified fine for unauthorised fixation or reproduction activity. Upto 2 years in jail.
(Reported the maximum criminal fine under the penal code is 250 million zloty (about $ 11,075) Upto 3 years in jail.
Hungary Unspecified fine for infringements causing considerable damage. Upto 3 years.
Unspecified fine for infringements causing particularly high pecuniary damage. Upto 5 years.
Greece 1 to 5 million Drachmas (about $ 4,050 to $ 20,485) for infringing acts Atleast 1 year.
2 to 10 million Drachmas (about $ 8,100 to $ 40,485) applies if the intended profit or damage threatened by infringing acts are particularly large. Atleast 2 years.
Portugal The equivalent of between 150 and 250 days for infringements of enumerated acts.
The above penalty doubles for repeated offence, provided that the offence in question does not constitute an offence punishable by a more severe penalty.
Upto 3 years.
Singapore Upto $ 10,000 for the article or $ 100,000 whichever is lower. Upto 5 years
Upto $ 6,666 or $ 66,000 for violation of the reproduction and the display rights and to the sale or importation of infringing copies. Upto 3 years.
Upto $ 50,000 (US $ 33,335) for violation of the distribution right. Upto 3 years.
Upto $ 20,000 (US $ 13,333) for making or possession of a “plate or similar contrivance for the purpose of making infringing copies of sound recordings or audio – visual works and for violation of the public performance right. Upto 2 years.
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