Copyright Law Blog

Software Piracy and Internet Pirates Going to Prison

July 30th, 2009 at 12:41pm Under copyright infringement

Software piracy gave a sharp awakening to copyright infringement counsels around the world. Software piracy law efforts backed by the SIIA (Software and Information Industry Association), the RIAA (Recording Industry Association of America), the Business Software Association (BSA) and of course Microsoft, are running fast and furious to intimidate internet pirates and quash any and all efforts of internet piracy, software piracy and copyright infringement on software, music and film. Efforts at suppressing internet piracy, copyright infringement and software piracy are running full speed ahead. Illegal copyright infringement and software piracy can result in civil or criminal trials. Prior to 1978, copyright infringement could be subject to state or federal laws. However, in 1976, Congress codified Section 17 of the United States Code to limit copyright infringement to the federal courts effective January 1, 1978 – essentially dissolving the power of the states to prosecute cases of copyright infringement – the legal claim for software piracy and internet piracy. Sentencing for federal crimes have been historically more punitive than that for state crimes and have been under legislative and judicial scrutiny for decades. The Sentencing Reform Act of 1984 led to Federal Sentencing Guidelines that were enacted in 1987 – presumably to develop consistency in sentencing. In 2004 the Federal Sentencing Guidelines were struck down by the Supreme Court. The Supreme Court decided the federal guidelines were advisory, but not mandatory. Hence, anyone subject to federal sentencing for copyright infringement, software piracy or internet piracy could receive a substantially higher sentence than the federal guidelines suggest – and presumably lower. But apparently “advisory” is still mandated. In the USA vs. Kononchuck software piracy case which involved pirated Microsoft software, the original sentencing judge was lenient and sentenced one of the defendants to only probation and house arrest. The prosecutor appealed the light sentence, and the case was brought back to court for new, harsher, sentencing. These types of decisions surely contribute to the 2.3 million people that are imprisoned today – up from 1.1 million in 1990. Pew Research reports 1 in every 100 adults in America is in prison. The US Sentencing Guidelines Manual (U.S.S.G.) lists the mitigating factors that are taken into consideration for internet piracy, software piracy and copyright infringement in Section 2B5.3. Because copyright infringement is an economic offense, the retail cost of the software pirated and the number of items pirated determine the severity of the crime. The Courts use a “base” crime level, and adjust the sentencing accordingly with the elements of the case. Copyright Infringement starts off at “level 8,” and only one count of a value under $2000 could bring a sentence anywhere from 0 to 6 years (as determined in the 2007 Federal Sentencing Guidelines Chapter Five Part A Sentencing Table). With just one or two “marks” against a defendant, the minimum jail times goes up to 4 years. “Uploading” is 2 points – and increases the sentence to 4-10 years.Software piracy, internet piracy and copyright infringement prison terms are still undergoing scrutiny during the appeals process. Despite strict sentencing in copyright infringement, Internet piracy is far from being quashed. MarketingVox has reported a 3% increase in illegal music downloads over the last couple years, even as prison for piracy escalates. Copyright infringement litigation will be tossed and turned in the courts with unexpected prison sentences and damage awards until the district courts develop consistent sentencing precedents based on the motivations of the piracy and severity of the crimes that adhere to the constitutional principals. Until Congress, the Courts and the Constitution speak the same language, Internet pirates are likely to be facing some federal jail time in the years to come.

Illegal Music Downloads And The Law

July 23rd, 2009 at 06:41am Under music copyright

Ever since broadband was set up and made readily available to the general public, illegal music downloads have gone through the roof. Today, approximately 95% of all downloads are illegal and some 6.5m broadband users illegally download music on a daily basis.
Earlier this year, the music industry decided that enough was enough and that this multi million pound purge needed to stop. Discussions with John Hutton (The Business Secretary), Andy Burnham (The Culture Secretary) and major internet service providers (ISPs) resulted in tough new proposals governing the illegal download scene.
At this point, it is perhaps worth outlining the law when it comes to downloading music. The Copyright, Designs and Patents Act 1988 (CDPA) is the current UK copyright law and gives the creators of literary, dramatic, musical and artistic works the right to control the ways in which their material may be used. These rights cover broadcast and public performance, copying, adapting, issuing, renting and lending copies to the public. By downloading music files illegally, you are in breech of the copying part of this law.
ISPs have been pressurised into clamping down on persistent illegal downloaders and in June of this year, Virgin Broadband (one of the largest ISPs in the UK) agreed to take steps towards culling downloads. Virgin expect to send out more than 12,000 letters over the course of the summer to internet users warning them to stop their illegal downloads or face restrictions on their service.
So what does this mean for internet downloaders? Well, Virgin are keen not to punish their users, they would rather ‘educate’ them on the wrongs of downloading illegally. Sounds like a cop out and a good way round enforcing the law, but they might not have much choice on this in a year’s time.
Huttin and Burnham, along with bosses from the music industry want tighter rules surrounding illegal downloads. One of the proposals includes placing a 30 GBP annual charge on people who want to download files. This would give users unlimited access to download files from anywhere on the net, without the worry of facing up to law. 30 GBP may not sound a lot, but as Peter Jenner stated; “If you get enough people paying a small amount of money you can turn around the wheels of the music industry.” The funds from these fees are worth almost 1.2bn GBP and would be channelled back to the industry and distributed proportionally back to the relative rights holders.
Obviously looking for the toughest penalties for repeat offenders, industry bosses are calling for a ‘three strikes and you’re out’ policy, similar to the scheme currently employed in France. Persistent offenders would be warned and banned if they didn’t stop. Other proposals include preventative filters which stop the possibility of any illegal download activity or, illegal downloaders’ details being given directly to the music industry for punishment.
Sites like Napster brought illegal downloads to the masses and were relatively untouched by officials for many years until they realised just how much impact illegal downloads were having on the music industry. In 2001, the company were forced to shut down after being found guilty of copyright infringement laws.
Today, Napster is a legitimate trading company and sells downloads instead of offering them for free. iTunes are the biggest players in this market and dominate the scene with a 70% share of legal music downloads. It took less than five years to reach 1bn downloads, and keen to show that legal downloads are the way forward, the company rewarded the downloader, Alex Ostrovsky, with a brand new iMac, ten iPods and a 10,000 USD (5,700 GBP) iTunes voucher. Not a bad return on his 99p investment.
In 2006, the download market really came up trumps when Gnarles Berkley had a hit with Crazy. The song hadn’t even been released on CD when it hit the top spot in the UK charts after Zane Lowe championed the song on his New Music Show.
So will pressure from the industry actually have any effect on downloads? ISPs have already cleared themselves of any wrong doing as they are merely ‘conduits’ of information – they don’t personally hold the files.
Illegal downloads will inevitably continue as new methods of file sharing are discovered and employed. At the end of the day, rules are there to be broken and problems are there to be solved. As long as CDs cost as much as they do, downloaders will see no reason to stop what they are doing. If a CD costs less than 1GBP to produce, the question remains: Why are we charged the earth to purchase them?

Warez and the Crack Factor of Internet Piracy Can Piracy Law Stop Crack Addiction?

July 22nd, 2009 at 12:44am Under copyright law

Warez often originates from hackers that crack a code for the thrill of the challenge. But “crackers,” those in the hacker world who crack and profit from software piracy, have capitalized on the efforts of hackers and their cracked codes – successfully building a billion dollar international underground economy. This underground community of “cracker” pirates thrives on international software and Internet piracy. Litigators, copyright holders, and media giants are working together with law enforcement agencies to beat down the doors of the pirates’ virtual underground warehouses. New copyright laws and international piracy treaties are on the table at nations across the world, awaiting rewritten code to revitalize current piracy laws and keep up with the swift currents of Internet technology. FBI operations go undercover by names such as the 2001 Operation Buccaneer, Operation Bandwidth, and Digital Piratez, and the more recent Operation Site Down, Operation Copycat, Operation Jolly Roger and Operation Fast Link. Warez Operation Buccaneer resulted in 58 search warrants worldwide – which was the “largest” crackdown of 2001. Operation Bandwidth corralled the pirates by setting up a fake warez software piracy website. The Digital Piratez operation resulted in only 9 warrants. This was just the beginning of the Warez crackdown and the FBI’s foray into the world of crack addiction. The warez pirates continue to circumvent the piracy laws that are on the verge of crumbling down their underground economy. As they continue their overseas pirating escapades – so to does the FBI continue their undercover operations. A 2008 United States Department of Justice report summarizes the statistics of the warez operations Sitedown and Fastlink – which resulted in 108 felony convictions, confiscation of over one-hundred million dollars worth of pirated software, and 200 search warrants that traveled to over 15 countries. Far more than the 58 search warrants that served the pirates of 2001. In 2007, there were 217 intellectual property cases filed. Letters from hackers under investigation litter the Internet – warning their co-conspirators to “get out” before it’s too late. The FBI wasn’t alone in the warez crackdown operations. Fifteen countries assisted the US in their search for warez piracy. Suppliers who supply the hardware to a warez website, Scripters who help build a website, Brokers who develop active groups, and Encoders who overwrite the copyright protection, have all been held liable in federal court. Charges included not only copyright infringement, but also conspiracy to commit copyright infringement, circumventing copyright infringement and trafficking illegal goods. Piracy law will continue to gain attention by law enforcement agencies and warez pirates. The US House unanimously approved the Prioritizing Resources and Organization for Intellectual Property Act which allows for current federal law to be rewritten for liberal seizure procedures and the creation of a position for a presidentially appointed U.S. Intellectual Property Enforcement Representative. It also creates a new division in the Department of Justice for intellectual property enforcement and ten positions within embassies. Internet piracy is being tracked daily by the feds. But the heat won’t be putting out the pirates completely anytime soon. The warez scene is addictive. Hackers live for the challenge of cracking a code – even if there isn’t any financial gain. Warez groupies get a rush from seeing how fast a cracked file can start spreading like wildfire. Pirates that serve international traffickers prey on these addictions – offering slick trades of expensive hardware and digital ware that feeds the warez scene. Piracy laws are building up strength to fight billions of dollars of intellectual property theft and copyright infringement. But they are also fighting an addiction. And addictions can skew perceptions. The hackers and crackers of the warez scene might not see the reality of piracy law until the Feds come knocking at their door. Reality will then strike as hard as the clang of iron bars.

Internet Piracy of the Nations: Piracy Law Treaty Negotiations

July 20th, 2009 at 06:43am Under copyright law

Internet piracy disrupts economic growth across the continents. How nations react to Internet piracy could well define the future economic health of a nation. Piracy laws and copyright infringement laws have reached global attention – and international treaties continue to grow that seek to give credit to the originator and encourage economic gain while still promoting freedom, progress and education.Copyright laws have existed for centuries but have been weak in international standards. The swell of Internet Piracy clearly advanced the heightening necessity of developing international standards. In 1994, the General Agreement on Tariffs and Trade (GATT) resulted in the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), which provided a foundation for standards in copyright infringement laws and regulations. Internet piracy law, copyright infringement, and intellectual law were addressed globally at the World Intellectual Property Organization (WIPO), a division of the United Nations, in 1996. As a result, 184 nations have now signed the World Intellectual Property Organization Copyright Treaty – a modern predecessor of the 1883 Paris Convention for the Protection of Industrial Property and the 1886 Berne Convention for the Protection of Literary and Artistic Works. WIPO strives to develop “a balanced and accessible international intellectual property (IP) system, which rewards creativity, stimulates innovation and contributes to economic development while safeguarding the public interest.” Nations are joining forces to protect the rights of their creative citizens and increase their potential for international economic gain – but not without strife. Many nations still resist the stringent copyright infringement laws of the West. Other nations, such as Canada, develop creative solutions, such as placing a levy on blank CD purchases. However, the US, Japan and the European Union began negotiating towards a tougher Anti-Counterfeiting Trade Agreement (ACTA) in 2007 to combat Internet piracy and toughen piracy law. The US has substantial financial interest in combating Internet piracy. The RIAA, one America’s largest advocates for overhauling the current state of Internet Piracy and Piracy Law, has given the US valid concerns over stifled economic growth due to Internet piracy and copyright infringement – and statistics to support it. The RIAA invested substantial resources to support their strong stance on religious adherences to piracy law. A verified report by the Institute for Policy Innovation (IPA) declared that Internet piracy accounts for a $2.7 billion loss in workers’ earnings and a $131 million in lost corporate income and production taxes – not to mention a loss of $291 million in personal income tax that the US could surely use to offset its deficit. Internet piracy laws and the definitions of copyright infringement are at the top of international trade agendas across the continents. Piracy law will continue to undergo substantial review as the Internet and other forms of technology progress. The United Nations has already developed task force groups to analyze the Internet-driven economy of the future – and the potential for new and stronger surges of Internet piracy and copyright infringement that will come with it. When the nations can peacefully recognize both state and international copyright protections that give credit to the originator and promote a healthy economy, while still retaining the freedoms of the Internet, then perhaps global trade agreements might run as smoothly as a website visit to a country that’s just an ocean away. Until then, the transitioning copyright infringement and intellectual property agreements will continue to determine the future state of our Internet-driven economy.

How to Protect Your Intellectual Property

July 9th, 2009 at 12:42pm Under intellectual property

     Be it a patent, trademark, or copy-written material, your intellectual property is at risk of being pirated. In fact, billions of dollars in losses each year can be attributed to the theft of this most precious commodity.  In the United States and other developed countries, a company’s intellectual property is protected by various laws. Enforcement of those laws, however, can be another matter entirely. Often, the victim of piracy must bring the theft to the attention of authorities, and, even then, may be forced to pursue the case on their own until a settlement is reached. What steps should you take to protect your intellectual property? 

1. DISCOVERY. The first thing a company should do is institute an ongoing monitoring program that searches for the theft of its’ intellectual property. Regular checks of internet sites like Ebay and Amazon, as well as tradeshows and retail locations, may reveal the unauthorized use of your material.  

2. DOCUMENTATION. Once violations have been detected, you must take steps to document your findings. Physical and photographic surveillance, witness interviews, and undercover purchases of the pirated material are several ways in which evidence of the theft can be obtained.  

3. LITIGATION. Whether you choose to pursue a civil remedy or refer the matter to law enforcement, your company must continue to support the action by providing documentation of your rights to the protected material. You must remain firmly committed to the defense of your intellectual property.  

4. RECOVERY. Obtaining a settlement is one thing, actually recovering damages can be quite another. Oftentimes, further investigation is required to locate hidden assets and force the payment of restitution.  

While the steps listed above may seem daunting, keep in mind that there are several investigative firms throughout the world that specialize in combating intellectual property theft. The cost of hiring one of these firms is usually far more cost effective than remaining a victim of piracy.