New Legislation and Consumer Education May Help Stem Digital Piracy

As the entertainment and software industries struggle with the widespread problem of digital piracy, the U.S. government is wrestling with ways it can address the epidemic without infringing on free speech.

Recent attempts to address the problem-including the Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA)-were met with widespread disapproval. The acts would have curbed access to foreign websites that traffic pirated content and software. The Obama Administration on Jan. 14 responded to two petitions against the acts stating that it does not support "legislation that reduces freedom of expression, increases cybersecurity risk, or undermines the dynamic, innovative global Internet." Wikipedia went dark for one day in protest of the act, while other Internet giants such as Facebook®, GoogleTM and Twitter® voiced their disdain for it. Proponents quickly withdrew their support of the act.

"Much of the concern with, SOPA and PIPA was because they suggested criminal penalties for hosting or even linking to pirated materials. Many were concerned they could be prosecuted because their website was included in a chain of links through which someone could get to pirated material. The potential risk was so great in an area that would be very difficult to control-your company could face fines and even criminal sanctions-it was too much risk," said David Katzenstein of McGivney & Kluger in New York.

Responding to the public reaction, Sen. Ron Wyden of Oregon (D) and Representative Darrell Issa of California (R) introduced the Online Protection and Enforcement of Digital Trade (OPEN) Act on January 18, 2012 as an alternative. This act addresses online infringement as an international trade issue as opposed to a domestic law enforcement issue.

"The OPEN Act takes a much narrower and more targeted approach to combating online infringement than other proposed legislation by targeting only sites 'primarily and willfully' engaging in infringement. By employing such a clear and targeted definition of infringement, the OPEN Act will ensure that only legitimate cases are pursued while giving ITC [International Trade Commission] commissioners clear standards to follow in enforcing IP rules," the bill's creators said on their website KeepTheWebOPEN.com.

Katzenstein said that the OPEN Act has not been met with the same level of concern because it shifts the burden to the ITC, which could take steps to shut down or impose sanctions for unfair trade practices rather than criminal sanctions.

"So far, the Internet community seems to be much more comfortable with the potential of the OPEN act than they were with SOPA or PIPA," he said.

Societal Attitudes

Other organizations, including the Recording Industry Association of America (RIAA) and the Business Software Alliance are taking steps to combat digital piracy through education aimed at changing societal attitudes towards piracy.

In a study titled "The True Cost of Sound Recording Piracy to the U.S. Economy" published by the Institute for Policy Innovation in 2007, it was shown that piracy costs the U.S. economy $12.5 billion annually, as well as 70,000 lost jobs and $2 billion in lost wages to American workers.

"While downloading one song may not feel that serious of a crime, the accumulative impact of millions of songs downloaded illegally- and without any compensation to all the people who helped to create that song and bring it to fans- is devastating," the RIAA says on its website www.riaa.com.

Katzenstein said studies have shown several psychological factors that contribute to Americans' attitudes about digital piracy.

"When person copies a song to an iPod®, they might think 'I could pay for this, but why should I pay-when other people I know also copied it? If everybody's doing it, it doesn't feel illegal,'" said Katzenstein.

"Anonymity also contributes. You don't copy the song in a store where there's a security guard and the potential of the police being called. People also feel 'rewarded' when they learn and then overcome barriers someone else has put between you and your goal," said Katzenstein.

"American society figured out how to make smoking relatively disrespected. We have codes preventing smoking in restaurants, public buildings, airplanes ... because society accepted and adopted the idea, that smoking was a bad thing. Some people still smoke but they are sometimes considered scofflaws or people that don't care about themselves or the people around them. If there was a way of putting software piracy under the same level of rejection as smoking it could be worth a lot of money to a lot of companies," said Katzenstein.

Gain more insights by listening to the recording of this month's webinar Digital Piracy, Intellectual Property Rights and Content Protection in 2012

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