Presented by: Rajeshwar Nandan LLM 1st year

Contents

Internet piracy and counterfeiting: Meaning Economic Impacts of Internet piracy and counterfeiting. Prevention of Internet Piracy and Counterfeiting. WIPO Copyright Treaty. SOPA PIPA Criticisms ACTA Indian position. Conclusions.

Hypothesis
Although there are numerous international and

domestic legislations dealing with the issue of copyright infringement yet the issues of Internet piracy and counterfeiting have been largely unaddressed until recently till the US government came up with two legislations namely SOPA and PIPA which have not been implemented and have been highly criticized.

What is Internet Piracy?

Piracy conducted via the Internet
What do the Digital Pirates Do?
Since pirates steal. Digital pirates steal digital data by transferring files back

and forth downloading without paying Stolen files include: music, video, pictures, texts, and software sensitive material, industrial secrets, government secrets

The Types of Pirated Files

Music
2001, music files formed the largest category of

piracy on the Net MP3 files traded using peer-to-peer (P2P) technologies Video Next biggest footprint on the bandwidth scale belongs to video anything from latest DVDs to sports games to music videos to pornographic videos far fewer pirates trade video than audio (bandwidth issues)

Types of Pirated Files (2)

Pictures
The next in the chain, many are pictures of celebrities,

movie stars, rock stars, and pornographic pictures Software Next after pictures Texts least popular form of piracy people dont like to read a large amount most books are cheap compared to music, DVDs, and software much harder to get a book into a file than music or video

Internet Piracy Economic Impacts

Estimated losses: Difficult to estimate OECD estimates 5% - 7% of world trade is in pirated goods Gieschen Consultancy 2006 14% of all internet trade valued at US$100 billion Trend towards using the internet as a medium of distribution

Global Impact
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 software 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.

Global Impact
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.

Internet Piracy -Reasons

Reason for online piracy the ease at which pirates may maintain anonymity; the ability to be located any where in the world; the potential size of the market; and the ability to reach a global audience at marginal costs.

Prevention
Criminal action Reporting the sale of pirated products to police Police investigates Police takes action Civil process Third party discovery proceedings Civil proceedings against infringer

Criminal action
Advantages Exercise of police powers results in greater investigation efficiency Speed of action Deterrent effect Disadvantages Volume and bandwidth

Civil proceedings
Advantages Potentially possible to recover damages and cost Disadvantages Confidentiality issues which prevents disclosure of third party information High legal cost

Industry self-regulation
Take-down provision currently exist Copyright Act Useful against taking down illegal uploads of pirated digital media Less useful against other types of sale of counterfeit products in the internet Some auction sites have implemented take-down provisions: eBay Verified Rights Owner (VeRO) Yahoo report on auction abuse

WIPO Copyright Treaty

In 1996, in direct response to the growing threat of Internet piracy, the World Intellectual Property Organization (WIPO) adopted new copyright treaties to enable better enforcement against digital and online piracy. WIPO lists seventy countries as having ratified the WCT. However, 68% of the countries that the BSA tracks that have ratified the WCT have shown no change or only a minor increase or decrease in software piracy rates. The three countries that showed a significant decrease are Russia (which only ratified in February), China (which ratified in 2007), and Qatar (which ratified in 2005).

SOPA
SOPA places a burden to protect IP rights from foreign

infringement on service providers. Internet search engines, payment network providers, and internet advertising services. It could expand secondary liability under copyright law. Immunizes blocking of websites by service providers, payment network providers, internet advertising services, advertisers, internet search engines, domain name registers, and domain name registrars. Places liability on payment network providers and internet advertising services.

PIPA
The bill is intended to combat rogue websites operated overseas, the text of the bill, as currently written, has a much wider application. The bill is a potential burden on many bootstrapped startup companies, as it imposes compliance requirements on any site that either processes financial transactions, sells or serves online advertising, or provides even a single link to content that somehow infringes upon an intellectual property right.

ACTA
ACTA is a multinational treaty for the purpose of

establishing international standards for intellectual property rights enforcement. The agreement aims to establish an international legal framework for targeting counterfeit goods, generic medicines and copyright infringement on the Internet, and would create a new governing body outside the existing forums, such as the WTO, the WIPO or the United Nations.

Criticisms
The applicable definitions for infringing sites include the word

facilitate, which can encompass a wide array of websites including user generated sites. SOPA imposes on sites in which only a small portion of the site is infringing. Conceivably, an entire website containing thousands of pages could be targeted because of a small part being infringing. Severe practical problems arise for sites with substantial user generated content, such as facebook, twitter and youtube and for blogs that allow users to post videos, photos and other materials. SOPA encourages over enforcement by making companies immune from suit for mistakenly punishing sites outside the bills scope. SOPA is a violation of the First Amendment because it allows a private party to suppress speech without prior notice or a judicial hearing.

Criticisms
Where notice to the owner/operator of the site is required

under the PIPA, there is no corresponding opportunity for the aggrieved site operator to be heard before the allegedly offending site or link is removed from the internet. Under SOPAs private right of action, no notice is necessary before a plaintiff can have a site cut off from payment network providers and internet advertising services. In defining an infringing website, SOPA uses word like facilitate and enable. There is potential that a site could qualify under the statutory definition but not meet the requirements for secondary liability under existing law. In this regard, SOPA could cause a lot of uncertainty in the law.

Criticisms
The DMCA provides a take-down and counter-notice

procedure. There is no counter notice procedure contemplated in PIPA, and thus no chance for an aggrieved site operator or owner to protest the removal. The DMCA also provides for immunity for system caching, while PIPA do not contemplate system caching. Furthermore, the DMCA also provides penalties for those who knowingly misrepresent a copyright violation, which are absent in PIPA and can lead to abuse of claims. Under certain situations, SOPA and PIPA may require a service provider to block access to a foreign infringing sites domain name. Some have argued that DNS blocking could compromise the architecture of the internet.

Indian Position
The International Intellectual Property Alliance has

recommended in their Special 301 report that India remain on the Priority Watch List in 2011.

Priority Actions
Priority actions to be taken in 2011: Enforcement Create a national anti-piracy task force with goals to reduce piracy, inter alia, by working with State nodal officers, providing them with significantly increased resources; provide more accountability and power to the recently constituted task force by FICCI under the aegis of the Ministry of Human Resource Development (MHRD). Reinvigorate IP cells within the state police, provide them with significantly increased resources, and establish specialized IP prosecutors.

Priority Actions
Continue training police authorities to be more effective in

addressing rapidly growing mobile device and Internet piracy Increase the number of suo-moto raids, including against corporate end-user software piracy. Encourage judicial reform, including accelerating the adjudication process in criminal and civil cases, and imposing deterrent fines and imprisonment; and establish specialized IP courts, judges, and prosecutors. Legalize use of books and journals at educational institutions. Empower customs to effectuate ex officio seizures, followed by destruction, of pirate goods.

Priority Actions - Legislation

Ensure the Copyright Bill 2010 contains WCT- and WPPT

consistent protections, and takes into account right holders comments to the Standing Parliamentary Committee. Adopt effective anti-camcording provision, either as part of Copyright Bill or as standalone bill. Adopt statutory damages in civil cases; allow restitution to be awarded in criminal cases; and establish enhanced penalties for pre-release piracy. Reject attempt to recast unauthorized imports as non-infringing, as would result from the proposed revision of Section 2(m). Adopt an optical disc law.

Priority Actions Market Access

Eliminate market access barriers, including those

imposed on motion pictures, entertainment software and business software.

Legal Position - Counterfeiting

The primary legislation in India that deals with counterfeiting are: The Trademarks Act 1999; The Copyright Act 1957; and

Trademarks Act, 1999

The Trademarks Act provides remedies for the infringement of a registered trademark, as well as a common law remedy of passing off to protect against infringement of an unregistered trademark. Section 27(2) recognizes the common law remedy of passing off against any person dealing in counterfeit goods. Section 29 mentions the various acts that amount to the infringement of a registered trademark.

Trademarks Act, 1999

Section 135 provides for civil remedies in case of either

infringement or passing off. These remedies include injunction, damages, delivery up and rendition of accounts. Section 103 provides for criminal remedies such as imprisonment of up to three years and fines of up to Rs200,000 (around $5,000) in case of counterfeiting.

Copyright Act
Section 51 of the Copyright Act envisages the various acts

that amount to infringement of copyright vested with the owner. Further, Section 53 restricts the importation of copies which would infringe copyright. The act also provides both civil and criminal remedies against software counterfeiting. Section 55 provides for civil remedies by way of injunction, damages, rendition of accounts and delivery up. As far as criminal remedies are concerned, Section 64 empowers the police to seize all counterfeit software copies, while Section 63 provides for imprisonment of up to three years and fines of up to Rs200,000 in case of infringement or abatement.

Judicial Position
The Indian judiciary has become diligent in

dealing with software piracy. The Delhi High Court, in particular, has granted in numerous instances ex parte ad interim injunctions, as well as Anton Piller orders in software counterfeiting cases. In 2005 the Delhi High Court also put an end to the Indian courts culture of refusing to award damages. Since then, the court has awarded damages in various IP cases, including software piracy cases such as the following:

Cases
Microsoft Corp v Pawar (Case 530/2003) in this case the

court awarded Rs20 million to Microsoft; Microsoft Corp v Vahi (Case 817/2004) in this case the court awarded Microsoft Rs23.62 million plus 9% per year from the date of the order until payment is made; Microsoft Corp v Mayuri (Case 1027/ 2005) in this case the court awarded Microsoft Rs500,000 in compensatory damages and Rs500,000 in punitive damages, as well as costs; and Microsoft Corp v Popat (Case 2005 (30) PTC 245 (Del)) in this case the court awarded Microsoft Rs19.75 million plus 9% interest per year from the date of the order until payment is made. Other Indian courts have since followed suit and now award damage s to IP owners in counterfeiting and piracy cases

Conclusion
India has adequate IP laws and an effective judicial

system in place to tackle counterfeiting. However, much has still to be done to curb the problem, in particular with regard to software piracy. To counter piracy, a four-pronged approach should be adopted. Firstly, efforts should be made to increase IP awareness throughout the country. This could be achieved through education programmes, newspapers, circulars and pamphlets organized or distributed by government agencies and non-governmental agencies.

Conclusion
Secondly, it is of paramount importance that the legal fraternity and

the enforcement agencies are fully aware of and equipped to deal with the various aspects of IP law. This could be achieved by organizing training programmes for judges and police personnel on a regular basis. Thirdly, efforts to speed up trials should be made; this would enhance the efficiency of the legal system by ensuring the early prosecution of counterfeiters and pirates.

Conclusion
Lastly, more specialized police cells should be created to deal with IP and other economic offences in various cities around the country. Existing specialist departments should be given adequate powers. Further, the courts should be equipped with modern technologies to handle various IP issues more effectively.

THANK YOU