The Challenges to IPR Posed by the Internet - Term Paper Example

The Paradox of Intellectual property Law Introduction: Intellectual property Rights extend over several kinds of creations - copyright, trademarks,patents, know how and trade secrets which also fall into the realm of confidential information, including layout designs, plant breeder rights and industrial property. However, they may vary in the realm of protection that they afford. For instance, copyright protection for a literary, dramatic or musical work may extend to seventy years while a patent on a design may offer a short term 20 year period of exclusive monopoly over a product and a trademark will extend that monopoly only to a particular category of goods1. Hedvig points out that while the aim and objective behind providing intellectual property rights is to protect the innovation and labor of the creator of the work, the requirement of competition within the European Union has seriously questioned the scope of IP rights2. The goals of the EC Treaty have been set out as that of fostering competition within the internal market and permitting the free flow of goods and persons throughout its territory3 while IP rights are granted to ensure that the creator is rewarded for his innovative efforts and hard labour by acquiring the exclusive right to economic exploitation of his work through the dispensation of the various rights associated with it. IPR protection versus the rights of the public: Moreover, the exclusivity that is acquired by virtue of possession of an IPR seriously conflicts with the public right to the use of those IPRs. For example, copyrights subsisting on literary work can be freely accessible to the public - without the need to compensate the owner of the copyright – only when the term of its copyright has expired and the property comes into the public domain. However, the term period of copyright protection of such works has been further extended from 50 years to a 70 year period4 before it will move into the public domain and become freely accessible and this constitutes an interference with the rights of the public to benefit from such IPR’s, especially for beneficial purposes such as education and the dissemination of knowledge. The conflict between the public interest and confidential information is an issue that is particularly relevant the freedom of the Press is concerned and involves a delicate balance between the free speech of the media and public interest vis a vis the obligation to protect information of a confidential nature. Thomas J in the case of Beloff v Pressdram held that an obligation to protect confidence cannot be held to be valid when a disclosure of inequity is at issue.5 Lord Denning was of the view that were public figures has deliberately boosted their glamour quotient, it was permissible to break a confidence so that the public could have access to the information.6 However, there may also be instances where a duty will be imputed in common law upon a person who is the recipient of confidential information and Judge Meggary Clark has spelt out a two fold test to determine whether the information was confidential and therefore entitled to protection from disclosure to the public, as follows: (a) did the information have the quality of confidence about it? (b) Was it passed on in circumstances denoting a measure of confidence?7 Thus, in the area of confidential information, it is difficult to establish a balance between the rights of the public and the person who owns the confidential information. The conflict between the rights of the public and copyright holders has been highlighted especially through the abuse of a dominant position by undertakings, which has resulted from the possession of an IPR, which Aashit Shah has dealt with on a comprehensive basis8. He contends however, that the rights of IPR holders are being seriously undermined and that innovation is being stifled in the context of the increasing emphasis that is being placed on competition within the European Union and the activist posture of the ECJ in this regard. The best instance of an abuse of a dominant position is exemplified in the case of Microsoft, where the anti competitive practices were found to violate the extent of protection afforded by IPRs to seriously restrict or distort competition within the internal market.9 This case also demonstrates the difficulty in determining the boundary that will ensure copyright protection to protect innovation and when this boundary will be transgressed. In connection with patents on medicines for example, UK High Court parents judge Hugh Laddie is of the view that as far as access to these medicines by poorer countries is concerned, TRIPS10 “has not resulted in a shrinking of the gap that divides those two sides [the developed world and the developing world], rather it has helped to reinforce the views already held."11 Professor John Barton, Chairman of the Commission on IPR is of the view that the rigorous protection afforded to IPRs in developing countries is not necessarily beneficial to public interest within developing countries.12 Most countries are working with the sphere of Copyright Acts that are the tools for maintaining the balance between the interests of the copyright owners in order to protect their creativity vis a vis the public interest of fair dealing. Legitimate use of copyrighted material are generally included with the sphere of national Copyright Acts and some of these purposes could include facts, research, news reporting, judicial proceedings, etc. But at the same time, the unauthorized use of copyrighted material is also prevented by sanctions that are intended to arrest activities that involve the appropriation of copyrighted material for the purpose of making illegal profits. The challenges to IPR posed by the Internet: The Internet has revolutionized the availability of information and legal boundaries of digital property have been subject to increasing uncertainty in a knowledge based economy.13 Information is the new mantra that spells success in the modern world14. Intellectual capital is important and the use of business worldwide webs spells power15. Before the advent of the Internet and technology, it was physically a tedious job to reproduce and distribute plagiarized copied of copyrighted works in a physical environment and making of such copies was also a relatively expensive process. However, as Lawrence Lessig points out, the online environment is so structured that a page can be copied without leaving a trace, so that the footprints of the pirate are difficult to track.16 Hannabuss has highlighted the ethical issues that arise in the realm of intellectual property because through the facility of the Internet, infringement has become increasingly easy, and it is a simple matter to “pass off” someone else’s creation as one’s own17. IP rights that were once deemed to be adequate to exercise the right mix of control between preserving the creativity and economic incentive of the copyright owner vis a vis the use of the material by the public for fair dealing purposes, is being challenged by the jumps in technology. The evolution of the electronic medium for the purpose of transacting business has created a complex set of legal issues that are at variance with already established legal precedents. The major issue is the enormous capacity for copying that is afforded by the digital environment.18 In a digital environment, with free availability of information and the facility for easy duplication of copyrighted material, it is becoming increasingly difficult to clearly demarcate the extent of copyright protection and the legislative and contractual dimensions of intellectual property.19 The use of new technologies that aid in silent plagiarism and copying without leaving any traces, mandate a redefinition of protection of intellectual property rights in their current form. On the one hand are the rights of the owner of the copyrighted material to economic exploitation of his work, which justifies IP protection on grounds of economic efficiency.20 On the other hand is the aspect of public domain rights to copyrighted material, which includes such aspects as the fair use doctrine.21 A property that is in the public domain will include those works to which the public is permitted free and unfettered access, where copyright protection will not exist.22 In general, properties created over seventy years ago will be deemed to be in the public domain and in some instances, this will also include copyrighted material that is deemed fit to be provided accessibility without constraints, on the basis of the fair use doctrine and where such access will be for the purpose of benefiting the public.23 The emergence of the Internet has globalized the business environment and dissolved boundaries between nations, giving rise to issues of legal boundaries of digital property.24 It has been described as “a decentralized, global medium of communication comprising a global web of linked networks and computers.25 The rise of the Internet has presented new challenges, apart from the increased facility of copying which threatens Intellectual property rights.26 There is also the problem of contracts made over the Internet, whereby ambiguities are introduced in distinguishing between an invitation to treat versus an actual offer27 and the acceptance of an offer.28 This creates serious problems for the public and also undermines the protection afforded to original patent or copyright holders who choose to market their goods over the Internet. There are also additional challenges that are posed in terms of confidentiality of financial information exchanged over the net and the security risk that this presents due to ease in money laundering and misappropriation.29 Since software development has been a relatively new area of creative product development, it has been accessible to a large number of users, fairly easily, but this has raised legal issues of protection of the rights of the owners of the intellectual property and their right to economic benefit from the fruits of their creativity. This is however, pitted against public values and the need for citizens to access digital content in a spirit of education and innovation. Regulation of web content which has been affected by the rise of companies such as Napster and the concept of file sharing30. Through this device, it was possible for music to be downloaded by thousands of users, thereby resulting in losses to recording companies in the United States and other countries from loss of revenues gained through record and CD sales. Moreover, it was also possible for users to easily modify the content, so that it became difficult to detect the tracks of infringement. Bit Torrent technology created a stir because it became possible to download entire movies at lightning speed, thereby removing the incentive for users to pay for the viewing31. P2P networks have created an arena where large scale copying and duplication of matter is as easy as the click of a mouse. Moreover, concepts such as file sharing make it difficult to pin down the infringement on to a particular source, because at any period of time, the content can exist on the computers of different users and the path of transmission is also difficult to trace because its scale is so enormous and decentralized.32 Since Copyright Law generally requires a specific target to be identified to bear the liability of infringement, a copyright infringement action becomes almost impossible, even when such infringement is discovered. In the case of Napster, it was possible to identify a central source from which the infringement originated33, however this is not possible in every case. However, the reverse was the case in MGM v Grokster34. In this instance, decentralized file sharing resulted in an ambiguity in defining physicality, as a result of which liability could not be effectively established35. Solutions and recommendations on regulation of IPR : In the context of the protection of IPRs versus the rights of the public, it has become necessary to redefine the traditional notions of IPR and its regulation. The Internet has changed the face of IPR and has mandated the adoption of new and novel ways to tackle the problems involved with infringement of IPRs. Hannabuss has mentioned the assignment of certain kinds of licenses that are classified under those issued for fair dealing purposes, which set out the criteria for permitted acts35a. These include use of copyrighted material for purposes of research or study, reporting or insubstantial use, including allowing photocopying under a license. These would include Newspaper Licensing Agency licenses, design and Artists Copyright Society Licenses and Christian Copyright Licenses, among others. These licenses contain guidelines on how much copying is permissible. Similarly patent law has also made provision for finding infringement, even when modifications and additions are carried out – in the UK, the law on patent also includes the scope for finding indirect infringement, through Section 60(2) which states: “an individual will infringe another’s patent where a person contributes to but does not directly take part in the infringement.” This allows enhanced protection for patent owners, even in instances where they are unable to trace the source of the infringement, because the indirect user of the infringed patented product can be sued instead. In two recent cases before the EU, the likelihood of confusion resulting in determining the extent of protection in a particular trademark similar to another has also been set out, in order to provide additional guidance on the issue of IPR. In the case of Canon KK v Metro Goldwyn Maye36r, the ECJ held that while considering the likelihood of confusion between two marks and whether or not one infringes on the other, “the distinctive character of the earlier trademark and in particular its reputation must be taken into account….for the purposes of article 4(1) (b) of the Directive, registration of a trademark may have to be refused….” Similarly, in cases involving infringement of copyright, it has been held by the Courts that it is the similarity of expression of an idea rather than ideas themselves that will be entitled to copyright protection37. In the recent case of infringement that was alleged in respect of a book written titled “How Opal Mehta got kissed, got a life and….” 38 the discovery of infringement of IRP centered upon the similarity of expression of certain passages of the book, although the novel was not substantively the same. However globalization and the dissolution of trade and technological boundaries have created a situation where the protection of IPR has become a hotly contested issue, since it is difficult to regulate IPR within a cyber environment. In recognition of the need to regulate IPR within an international context and afford protection, the constitutional definition of intellectual property by international standards is set out through the TRIPS agreement.39 Under the TRIPS international agreement, software is protected on par with literary texts, under copyright law.40 After the developments that resulted from Napster offering musical material that had not been released to its customers based on a P2P (Peer to Peer network), several Companies that create content have woken up to the dangers of the online environment, which in turn led to legislative reforms in the form of the Digital Millennium Copyright Act in the United States41, that is also being adopted by other countries such as the UK and Australia. This Act has five main provisions: (a) broad based technology right of communication to public (b) extension of fair dealing measures (c) Provision for copyright owners to introduce TPMs (Technological protection measures) (d) limiting liability of ISPs for third party infringement in certain circumstances (e) licensing for free to air transmission broadcasts. Provisions have also been made under the Act for prosecution of those why try to circumvent TPMs.42 The DCMA contains a provision for the issue of take down notices43 , whereby a notice is issued to an ISP by a valid copyright holder. This has been deemed to be the first step in the issue of subpoenas to identify the infringers.44 Moreover, ISPs are bound to expeditiously act upon a take down notice45 which has generated concerns among them46 that they will be inundated with subpoenas that could slow down or stop the provision of services, which in turn will impact adversely upon institutions such as educational facilities during an exam period. According to Dale Clapperton of Electronic Frontiers Australia, “[i]n the four years since the DMCA became law in the United States, it has become a tool of censorship and harassment in the hands of big business.47 The indiscriminate issues of subpoenas has resulted in errors and therefore gives rise to the issue of bogus copyright infringement claims aimed at eliciting private information about subscribers from ISPs, and could even be used for other purposes, such as stalking or gaining access to confidential information.48 In general, it has been the economic incentive which has been the prime mover behind copyright protection. However, with the evolution of OSS software, the concept of economic gain is under question. Although the founder of Linux Software, Richard Stallman qualifies the fact that GNU and OSS licenses are not completely free49 nevertheless most material is provided at almost negligible cost. The Open Source Initiative promotes free access to source code and distribution of the software.50 While licenses are required for the use of the material, they are generally easily obtained and are particularly useful in regard to fostering competition and easy access of the public to Government information. Where OSS and open source software is used, the issue of piracy is also reduced because the operating systems are geared to allow for the security choices of the user, and this critical security aspect has also been emphasized by the United States National Security Agency.51 Since security is enhanced with use of such software while simultaneously allowing for procurement at low rates, the economic incentives for copyright infringers are reduced. Barlow argues that it may be the common perception that people share about the overblown prices of copyrighted content which has resulted in such massive copying and reproduction of online material47. Hence, part of the solution to the copyright dilemma may lie in re-defining the economic aspects. The efficacy of Open Source Software is being demonstrated in these early stages and this is the reason why Governments are increasingly availing of this option in order to make necessary information available to the public free of cost or at a nominal price and thereby eliminate the economic root causes of IPR abuse. The Creative Commons Project: Another innovative concept that is being mooted by Lawrence Lessig takes into account the fact that regulating the Internet is a mammoth task, however as he points out, technology itself provides the means to regulate access to information in the digital environment, which he presents as the “code of law.”49 He has formulated the concept of the “digital Commons”50 wherein he quotes Litman and states that instead of clamming down and closing up online content out of fear of unauthorized replication, copyright holders should think about moving copyright “back to its roots”51 by re-defining the differences between fair use dealing and commercial exploitation. Lessig also suggests that the problem of IPR theft may be partly resolved by limiting the duration of the copyright52 so that all copyrighted material becomes public domain material in a reasonable period of time rather than the present state, where copyright protection continues for ever, through the descendants of the creators of the material, denying access to the public except at prohibitive terms. Lessig has started an organization that is known as Creative Commons, which also exists in Australia and provides simple licenses to copyright owners, under the terms of which they can provide their material to the public based upon terms which they set out themselves.53 Lessig presents the concept of “digital Commons” as being a common, community of on line users who want to acquire fair use of the available content.54 There is a fine line that exists between copyright protection versus the fundamental rights of citizens to enjoy private property. In response to the threat of copyright infringement suits, the Creative Commons Project has therefore presented a solution through the availability of special licenses which are simple and easy to obtain, whereby the owners of copyrighted property can elect to make their material available according to terms for which they lay out the parameters.55 In this way, access is provided to users, provided they duly credit the creator of the property and adhere to minimal terms specified by him/her. Utilizing software such as Linux which exist under the purview of legitimate GNU licenses is also permissible, without contravening copyright.56 Additional measures mooted by some countries: In countries such as the United States, digital monitoring is also being advocated as a means to deal with piracy. But this digital monitoring, which may be classed under the heading of anti-circumvention law, has been largely developed by private companies and which they seek to get enacted as legislation. This may not prove to be a solution unless it is regulated so that the general public is not locked out in their quest for information. The concerns about over-reaching anti circumvention law was expressed in the decision that was handed down by the Court in the case of Stevens v Kabushiki Kaisha Sony Computer Entertainment.57 Brian Fitzgerald has also pointed the ambiguities inherent in the exercise of legislation on anti circumvention.60 Conclusion: From the foregoing, it may be observed that there is a clear conflict that is presented. On the one hand, there is a need to protect the rights of the IPR holders in order to foster creativity and promote innovation by providing them the economic incentive to profit exclusively from their creations. However, on the other hand, there is also the issue of public benefit and access to information. Globalization has thrown open two disparate aspects – on the one hand, there is free movement of goods and persons and transfer of information which is in line with the aims and objectives of free trade agreements that are geared towards enhancing competition and a free market. However on the other hand, the facilities afforded by technological advancements have also meant that information and copyrighted material can be easily pirated and misused. In trying to achieve that delicate balance, there is an increasing recognition of the need to develop new and innovative solutions to deal with the online electronic medium, since existing measures as mooted under the copyright laws of various countries may no longer be adequate to cope with the problem and afford protection to IPR holders while simultaneously allowing public access to material. GNU licenses and the Creative Commons Project advocated by Lawrence Lessig have provided viable options to achieve that delicate balance. While there is an increasing need for regulation of the online environment, the every nature of the medium presents difficulties, which are likely to be addressed only through innovative techniques rather than excessively clamping down and encroaching upon the rights of the public. The fact that the Gnu licenses have attacked the every root of piracy – the economic incentive offers an interesting and intriguing solution to the problem of IPR piracy, however the long term effects of such a policy are yet uncertain. But on an overall basis, these measures are more likely to be successful as opposed to measures such as digital monitoring, employee surveillance or the provisions of the DMCA, which are already the subject of controversy in their encroachment upon privacy of individuals. Bibliography * Articles 2,3,28,29 and 30 of the EC Treaty * Article titled “How Copyright uses license rights to succeed in the Open Source Revolution and the Implications for Article 2B” (1999) 36 Hous. Law. Review 179, which contains Richard Stallman’s famous phrase:”free as in speech – not free beer” * Argy, Michael, Gilbert + Tobin (2003).”Review of Digital Agenda Copyright reforms” New South Wales Journal of the Society for Computers and the law. Issue 53, September. [Online] Available at: http://www.nswscl.org.au/journal/53/Argy.html; accessed 4/29/2006 * A&M Records Inc v Napster, 239 F 3d 1004 * ACLU v Reno 929 F Supp 824 (ED Pa 1996). * B Fitzgerald “The Playstation Mod Chip: A Technological Guarantee of the Digital Consumer’s Liberty or Copyright Menace/Circumvention Device?” (2005) 10 Media and Arts Law Review 89. * Barlow, J.P. (2003). “The Economy of Ideas”. WIRED News Volume 2.[Online] Available at: www.wired.com/wired/archive/2.03/economy.ideas_pr.html * Bowrey K and Rimmer M. (2002). “Rip, Mix, Burn: The politics of Peer to Peer and Copyright Law” First Monday 7(8). [Online] Available at: www.firstmonday.org/issues/issue7_8/bowrey/index.html * Biegel, S. (2001). “Beyond our Control? Confronting the limits of our legal system in cyberspace” Mass: MIT Press, at Chapter 11 * Benkler, Yocahi. (1999). “Free as the air to Common use: First Amendment Constraints on the Public Domain.” 74 NYU Law review at 354 * Bernadette E. Lynn (2000) “Intellectual Capital: Unearthing Hidden Value by Managing Intellectual Assets” Ivey Bus. J., Jan.-Feb, * Beloff v Pressdram (1973) 1 All ER 241 * Canon KK v Metro Goldwyn Mayer 1999 RPC 117 * Coco v Clark (1969) RPC 51 * Cornish, W.R., 1996. Intellectual Property 3rd edition. Sweet and Maxwell * Digital Millenium Copyright Act (DMCA) 17 USC (2002) * http://www.bittorrent.com/introduction.html * E S Perdue (1996) “Creating Contracts Online” in T J Smedinghoff (ed), “Online Law, the SPA’s legal guide to doing business on the Internet, Addison-Wesley Redding, Mass * Fitzgerald Anne and Fitzgerald Brian (2002) “Cyber Law: cases and materials on the Internet, Digital Intellectual property and e-commerce”, Sydney: Prospect Publishing, Butterworths.ch 13, pg 53-54 * Fitzgerald, Brain F. (2001). “Intellectual capital and law in the Digital environment”. Ivey Business Journal, Mar-Apr, pp 22 * GUARDIAN (Article), 2006. Harvard Student’s novel withdrawn from sale Associated Press, April 28, 2006. [Online] available at: http://books.guardian.co.uk/news/articles/0,,1763700,00.html * Hannabuss, Stuart, 1998. Issues of Intellectual Property New Library World, 1998: 99(1143), p 185 * http://www.copyright.cornell.edu/training/Hirtle_Public_Domain.htm * Kmietowicz, Zosia, 2002. Patent laws are keeping poor countries in poverty British Medical Journal (International Edition) London: September 14,2002: 325(7364) at pp 562 * Landes, William M and Posner, Richard A (1989). “An economic analysis of Copyright Law” 18 Journal of Legal Studies at 325 * Lawrence Lessig (1999). Code and other Laws of Cyberspace” Basic Books * Lessig, Lawrence (2004) “Grokster Wins.” [Online] Available at: http://www.lessig.org/blog/archives/002102.shtml * Lessig, Lawrence. (2001). “The Future of ideas: The fate of the Commons in a digital world.” New York: Random House. * Litman, Jessica (1990). “The Public Domain” The Emory Law.Journal at 965 * MGM v Grokster243 F. Supp. 2d 1073, 2003 U.S. Dist. LEXIS 800 (C.D. Cal., 2003) (decided April 25, 2003) * Manjoo, Farhad. (2003). “AOL’s Jekyll and Hyde Act” . Salon Article. February 10 * Media release, January 30 2003. Electronic Frontiers Australia “EFA outraged over possible ISP liability changes” * O Hance. (1996). “Business and Law on the Internet” McGraw Hill: Best of Editions * O’Shea & Skeahan (1997) “Acceptance of Offers by E-mail – How Far Should the Postal Acceptance Rule Extend?” 13 QUTLJ 247). * O’Dell, Justin, 2001. Trouble abroad: Microsoft’s Anti trust problems under the law of the European Union 30 Ga. J. Int’l & Comp. L. 101, 119 * Press release dated 2 January 2001 at www.nsa.gov/releases/selinux_01022001.html and information about SE Linux at www.nsa.gov/selinux/index.html. * Principles of the Open Source Initiative at: www.opensource.org/docs/definition_plain.html * RECORDING INDUSTRY ASSOCIATION OF AMERICA, INC. v. VERIZON INTERNET SERVICES, INC. 351 F.3d 1229 (DCCir., 2003) ( Judge Bates, District of Columbia) * Schmidt, Hedvig, K.S., 2002. Article 82’s exceptional circumstances that restrict intellectual property rights. 23(5) European Competition Law Review at 210, * Stephan Bernhut (2001). “Measuring the Value of Intellectual Capital” Ivey Bus. J., Mar.-Apr, * Shapiro, Carl &. Varian, Hal R. (1999) “Information Rules: A Strategic Guide to the Network Economy 2” * Shah Aashit, 2003. The Abuse of dominant position under Article 82 of the Treaty of the European Community: Impact on licensing of Intellectual Property Rights 3 Chi. Intellectual Journal of Property at 41 [online] available at: http://jip.kentlaw.edu/art/volume3/3-1-3.htm * Stevens v Kabushiki Kaisha Sony Computer Entertainment (2005) HCA 58 * Thurow, Lester C.(2000). “Building Wealth: New rules for individuals, companies and nations in a knowledge based economy. Harper Business Edition .* Universal City Studios v Corley, 273 F 3d 429. * Woodward v Hutchins (1977) 2 All ER 751 End Notes: 1. TRIPS - The agreement on Trade-Related Aspects of Intellectual Property Rights, dated Apr. 15, 1994, framed under the Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, Legal Instruments – Results of the Uruguay Round vol. 31, 33 I.L.M. 81 (1994) , referred to as TRIPS, which deals with the issue of intellectual property rights Read More