Wednesday, July 3, 2013

Thoughts on Piracy and Patents

Recently I came across this link shared on a social bookmarking site: https://reporting.bsa.org/r/report/add.aspx?src=us&ln=en-us&cmpid=nopiracy. This got me thinking about piracy in general, which in my mind is inextricably linked to patent violations and patent trolls. All together these ideas are referred to as intellectual property rights and intellectual property theft.

Several years ago I heard a speaker at a conference talk about catching his son illegally downloading a Star Wars movie. His son, the speaker said, defended himself by saying that he had already paid for the movie at the movie theater twice (probably at around $10 a ticket) and he had purchased the DVD, and when the blu Ray version was released he planned to purchase that too. At that moment, however, he wanted to watch the movie on his computer. He figured that he had already paid to see it three times and planned to pay for it a fourth time. This anecdote got me thinking. When you buy intellectual property or protected content sometimes you buy a term license, other time, as with the purchase of most music and video, you purchase a perpetual license. There are some different perspectives on whether or not a person, library, school or other entity who purchases a CD or DVD owns only that copy or has the right to convert it to another format for single use. These laws get complicated and can be vague. Furthermore, perceived value vs. cost seems to be directly related to piracy. When consumers believe that the price of an item outweighs the value that it holds for them, then they are more likely to pirate.

Software piracy research suggests that increasing software prices increases piracy [3, 6, 8]. Also, consumers with a high value for a product typically tend to purchase rather than pirate [3, 4, 7]. Additionally, in the face of increasing preventive controls (encryption and other technologies), individuals who do not legitimately own the digital good simply do without it [6]. This represents an opportunity loss on producer profits. http://utopia.csis.pace.edu/dps/2007/jkile/DCS891A/2004-10-08%20Assignment/Digital%20Music%20and%20Online%20Sharing%20-%20Software%20Piracy%202.0.pdf

Then we get to academic, non-profit, and other secondary uses. I'm sure you've heard the 10% rule and that copyright doesn't really apply when something is used for academic purposes, but that really isn't accurate. If you want to read the law, here is a link: http://www.copyright.gov/title17/, good luck. What I am really concerned with here, though, is fair use. The copyright office has been kind enough to publish a fact sheet on fair use: http://www.copyright.gov/fls/fl102.html, which explains the basics of how copyrighted materials may be used without express permission from the copyright holder. I've also heard fair use summarized as something that adds value without directly competing with or removing value from the original work. There aren't any hard and fast rules here, and not a lot of legal precedent. The purpose of copyright and patent law is to encourage innovation by protecting the innovator's intellectual property from those who would steal the innovation and therefore that individuals ability to profit from the innovation.

This brings me to the more recent patent troll discussion. Are those patenting innovations actually 1. Creating the innovations themselves, 2. Contributing an innovative product or idea to the marketplace, and 3. Inspiring, or at least not inhibiting the ability of, others to innovate? For most so called patent trolls the answer to all three of these is a resounding no. Furthermore, the innovators themselves are often not benefitting the most from patents and copyrights as may have once been true, and copyright and patent laws are growing ever more complex to the point where only larger bureaucratic entities such as music and movie production companies and large corporations are able to benefit. Even in the case of large corporations it can impede progress and innovation, such as with the recent case between Samsung and Apple. Apple is by no means a patent troll. On the contrary this is a successful, highly innovative company, as is their competitor Samsung. This case was a waste of resources of both companies, not to mention taxpayer resources consumed by seemingly endless hearings. Maybe these accusations came from the fear that Apple was losing market share, or maybe they legitimately felt that Samsung was trying to make their devices look and feel like iOS devices. At one time Apple would have put its resources into further innovation in order to outpace its competitors rather than trying to win the battle by stopping its competitors. In an age of patent trolling, however, the powers that be at Apple made the decision to fight the battle with lawyers rather than innovators.

In the end none of this is good for any of us,except maybe the lawyers and the politicians. We all lose out when individuals and corporations fight rather than innovate. It is in my best interest and yours to have fair but reasonable laws which protect intellectual property, but none are served when the laws are used to restrict the very innovation which they are intended to protect.