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cyber IP _ software piracy by shoaibanjum

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legal essay on IP rights and software piracy.

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									CYBERSPACE
   LAW
MID TERM ESSAY

   SHOAIB ANJUM 9563
       LLB-1 Evening
 Quaid-e-Azam Law College
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ABSTRACT: - (Outline of the Essay)


The object of this essay is to emphasis on
1 (a): Discuss and analyze the issues involved in IP rights in Cyberspace.

 (b): Suggest ways and means to overcome the problems identified above.

2 (a): Explain and criticize protection available for software in cyberspace. Also discuss the
        provisions dealing with this under Pakistani laws.

 (b): Discuss and criticize trademarks and domain names with reference to global intellectual
        property laws.

Main focus has been on intellectual property and its further cyber kinds. I have discussed
definitions of intellectual property, its importance, categories, issues, crimes, magnitude of the
problems and the ways and means to overcome these issues as mentioned in WIPO and TRIPs.

The second part of this essay consists of software piracy and its provisions in Pakistani laws
which are not enough so far as the International Regimes are concerned.

Finally, discussion has been made regarding trademarks and domain names subject to
cybersquatters with some points on future policies and finally a conclusion.




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PREFACE

As Lessig put it,

“Spaces have values. They express these values through the practices or lives they enable or
disable. Differently constituted spaces enable and disable differently.” (Lessig, 1999, p.64)

These spaces are, according to Lessig, shaped by code, which is one of the regulators of the
behaviour in cyberspace (Mitchell, 1996, p.111; Lessig, 1999, p.89). Lessig feared that the code
left uncontrolled might lead to the total control of internet in the future (Lessig, 1999, p.6). 1

 Intellectual-property protection can be good for the technology industry as well as for its
customers, says Kenneth Cukier (interviewed here). But it requires careful handling “The
granting *of+ patents ‘inflames cupidity’, excites fraud, stimulates men to run after schemes
that may enable them to levy a tax on the public, begets disputes and quarrels betwixt
inventors, provokes endless lawsuits…The principle of the law from which such consequences
flow cannot be just.” The Economist may have put it rather strongly in 1851, but its disapproval
of patents represented conventional wisdom at the time. A century earlier, Adam Smith had
described them as necessary evils, to be handed out sparingly, and many other economists
have since echoed his reservations. Patents amount to temporary monopolies on useful new
inventions. In recent years intellectual property has received a lot more attention because ideas
and innovations have become the most important resource, replacing land, energy and raw
materials. As much as three-quarters of the value of publicly traded companies in America
comes from intangible assets, up from around 40% in the early 1980s. “The economic product
of the United States”, says Alan Greenspan, the chairman of America’s Federal Reserve, has
become “predominantly conceptual”. Intellectual property forms part of those conceptual
assets. In information technology and telecoms in particular, the role of intellectual property
has changed radically. What used to be the preserve of corporate lawyers and engineers in R&D
labs has been speedily embraced by the boardroom. “Intellectual-asset management” now
figures as a strategic business issue. In America alone, technology licensing revenue accounts
for an estimated $45 billion annually; worldwide, the figure is around $100 billion and growing
fast. Technology firms are seeking more patents, expanding their scope, licensing more,
litigating more and overhauling their business models around intellectual property. Yet
paradoxically, as some companies batten down the hatches, other firms have found ways of
making money by opening up their treasure-chest of innovation and sharing it with others.2




1
    Fundamental rights in cyberspace and internet customary law Paul Przemysław Polaoski, p 11-12

2
    http://www.warsystems.hu/wp-trackback.php?p=147

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OVERVIEW

“Intellectual property has become more central to the industry,” says Greg Papadopoulos, chief
technology officer of Sun Microsystems. “I don’t know if that is a function of a mature industry,
or simply a confused one.”

IBM alone now earns over $1 billion annually from its intellectual-property portfolio. HP’s
revenue from licensing has quadrupled in less than three years, to over $200m this year.
Microsoft is on course to file 3,000 patents this year, when in 1990 it received a mere five. has
recently started licensing its technology to other firms and plans to do more. And some
companies, such as ARM, a British firm that designs the blueprints for microchips used in
wireless devices, do little other than create and sell intellectual property. According to a survey
of business executives last year by McKinsey, a consultancy, 54% of companies saw growth in
licensing of 10-50% between 2000 and 2002. Almost 75% of executives say they expect to buy
as well as sell more licences over the next two to five years, and 43% expect a dramatic increase
in their licensing revenue. And they think the market is still embryonic. “Many companies
generate a lot of intellectual property and do not capture the value from it,” says Jay Jubas of
McKinsey.3




3
    http://www.warsystems.hu/wp-trackback.php?p=147

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          PRELUDE: -




                                                     4


          Who owns what information on the Internet? Who should own what information on the
          Internet? As usage of the Net intensifies, these questions are becoming increasingly
          important and controversial. Lawyers, legal scholars, judges, lawmakers, and Internet
          users disagree concerning how the existing set of legal rules should be applied to this
          new medium -- and disagree even more sharply concerning whether and how those
          rules should be modified to manage the medium better.5

          HISTORY OF INTELLECTUAL PROPERTY
          Modern usage of the term intellectual property goes back at least as far as 1888 with the
          founding in Berne of the Swiss Federal Office for Intellectual Property (the Bureau
          fédéral de la propriété intellectuelle).
          CASE LAW: -
          October 1845 Massachusetts Circuit Court ruling in the patent case Davoll et al. v.
          Brown., in which Justice Charles L. Woodbury held "only in this way can we protect
          intellectual property, the labors of the mind, productions and interests are as much a
          man's own...as the wheat he cultivates, or the flocks he rears." (1 Woodb. & M. 53, 3
          West.L.J. 151, 7 F.Cas. 197, No. 3662, 2 Robb.Pat.Cas. 303, Merw.Pat.Inv. 414). 6




4
  www.images.google.com
5
  http://cyber.law.harvard.edu/property/
6
  www.wikipedia.com

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DEFINITIONS OF INTELLECTUAL PROPERTY: -



            Intellectual Property can be regarded as a single generic term that protects applications
            of novel ideas and information that are of commercial value. As per the Competition Act
            of India, Intellectual Property includes:

            a. Copyright and Related Rights             




            b. Trade Marks             




            c. Geographical Indications



            d. Industrial Designs

            e. Patents




            f. Semiconductor Layout-designs of the Integrated Circuits7




7
    www.competitioncommission.gov.in

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     a. WIPO
        “Intellectual Property means the legal rights resulting from the intellectual activity in the
        industrial activity in the industrial, scientific and artistic fields”

     b. Wikipedia
        Intellectual property (IP) is a term referring to a number of distinct types of legal
        monopolies over creations of the mind, both artistic and commercial, and the
        corresponding fields of law.8

     c. 'Lectric Law Library Legal Lexicon'

           "INTELLECTUAL PROPERTY - Property that can be protected under federal law, including
           copyrightable works, ideas, discoveries, and inventions. Such property would include
           novels, sound recordings, a new type of mousetrap, or a cure for a disease." 9

     d. Black’s Law Dictionary: -
        A category of intangible rights protecting commercially valuable products of the human
        intellect. The category comprises primarily trademark, copyright and patent rights, but
        also includes trade secret rights, publicity rights, moral rights and rights against unfair
        competition. 10



QUOTE: -

John Perry Barlow

Just as limited bandwidth was the excuse for applying censorship to broadcast media, it
appears that the zealous protection of intellectual property presents the greatest threat to free
digital expression. - 1990 11




8
  ^ Intellectual Property Licensing: Forms and Analysis, by Richard Raysman, Edward A. Pisacreta and Kenneth A. Adler. Law Journal Press, 1999-
2008. ISBN 973-58852-086-9[
9
  The 'Lectric Law Library Legal Lexicon', intellectual property, retrieved from the World Wide Web, August 5,
2002, http://www.lectlaw.com/def/i051.htm
10
   Black’s Law Dictionary 8th edition, p 824.
11
   www.elon.edu

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IMPORTANCE OF INTELLECTUAL PROPERTY: -

Trade Marks, Patents and Copy Rights affect the growth and prosperity of
almost every industry and fami liarity with the law relating to these subjects
has thus become fundamental to business strategy. For effective day to day
functioning and success of business enterprises, entrepreneurs including their
managers are required to have adequate knowledge of al l the relevant
business laws. The laws governing the various aspects relating to business are
not only numerous, but also complex. 12



WHAT ARE INTELLECTUAL PROPERTY RIGHTS?

Intellectual property rights are like any other property rights – they allow the creator, or owner,
of a patent, trademark, or copyright to benefit from his or her own work or investment.13




The Convention Establishing the World Intellectual Property Organization (1967) gives the
following list of subject matter protected by intellectual property rights:

         literary, artistic and scientific works;
         performances of performing artists, phonograms, and broadcasts;
12

http://images.google.com.pk/imgres?imgurl=http://www.omanilaw.com/images/Lawhammer1.gif&imgrefurl=http://www.omanilaw.com/Wha
twedo.html&usg=__uIurC839OdfcPaO2HEx8XtSpbGg=&h=127&w=125&sz=2&hl=en&start=449&um=1&tbnid=3qD91J2Q7HxTmM:&tbnh=90&t
bnw=89&prev=/images%3Fq%3Dissues%2Binvolved%2Bin%2BIntellectual%2BProperty%2Brights%2Bin%2BCyberspace%26ndsp%3D20%26hl%
3Den%26sa%3DN%26start%3D440%26um%3D1
13
   WIPO

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             inventions in all fields of human endeavor;
             scientific discoveries;
             industrial designs;
             trademarks, service marks, and commercial names and designations;
             protection against unfair competition; and
             “all other rights resulting from intellectual activity in the industrial, scientific, literary or
             artistic fields.”14



CATEGORIES OF INTELLECTUAL PROPERTY RIGHTS: -

       a. INDUSTRIAL PROPERTY
Includes patents for inventions, trademarks, industrial designs and geographical indications.

       b. COPYRIGHT
Includes literary works such as novels, poems and plays, films, musical works, artistic works
such as drawings, paintings, photographs and sculptures, and architectural designs.




                                                                                 15




14
     http://www.wipo.int/freepublications/en/intproperty/909/wipo_pub_909.html
15
     www.images.google.com

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       16




ISSUES INVOLVED IN INTELLECTUAL PROPERTY: -

Copyright laws were created to prevent unauthorized copying of ideas, but the premise is in
"serious trouble" for two reasons:

             "It seems that copying is endemic to a networked digital world in such a way that trying
             to prevent it may well cost more than it gains; and perhaps more important,
             "The thing being copied is hard to pin down. The work doesn't stay put. It
             metamorphoses as it proliferates."17

The copying of software, movies, video games, and music in ways that deny publishers and
authors their legal rights have drawn the most attention, but trademark and patent
infringement, corporate espionage, computer intrusions, theft and sale of trade secrets,
copyright violations, and international smuggling and transmission of copyrighted materials also
have been identified as problems. 18




16
     Diagram courtesy of The IP ADR Blog

17
     http://news.stanford.edu/pr/95/950403Arc5300.html
18
     Addressing Global Scope of Intellectual Property Law Hedi Nasheri, p1

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               “Imagination is more important than knowledge” (Albert Einstein)

         IPC are serious crimes in their own right, not typically because they inflict
 physical injury or death upon a person, but rather because they steal a creative work
 from its owner.11

 INTELLECTUAL PROPERTY CRIMES

         IPC refers to counterfeited and pirated goods, manufactured and sold for profit
 without the consent of the patent or trademark holder. The terms “piracy” and
 “counterfeiting” are often used interchangeably. However, piracy is generally related to the
 theft of IPRs by some form of copying the original. Whereas, counterfeiting is the copying of a
 product’s trademark or the distinctive way the package looks. IPC involve a wide range of
 criminal actors ranging from individuals to organized criminal groups and terrorist
 organizations.
         There is now a strong belief that there is an even greater threat posed by the
 organizations involved in counterfeiting and piracy. IPC includes the manufacturing,
 transporting, storing and sale of counterfeit or pirated goods. Organized crime involvement
 in the manufacture, distribution and sale of counterfeit and pirated merchandise is no longer
 denied.




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                  Frauds Considered Most
                         Prevalent
               Compared With Future Concerns
                       (worldwide)




               Lost Sales Revenues In Selected
                           Sectors




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It is difficult to get an accurate overview of the worldwide magnitude of the IP theft problem.
Those who commit acts of counterfeiting and piracy generally do not file official reports on
their sales. Seizures affect only a percentage of the overall market, and the extent of
counterfeiting and piracy, including that which occurs in businesses, homes and in private
situations, may never be known with certainty.

Average financial loss by type of fraud from 2001 to 2003 (worldwide)




MAGNITUDE OF THE PROBLEM: -

Piracy and counterfeiting of copyrighted products in digital, print (e.g., books, journals and
other printed materials) and other analogue formats, as well as counterfeiting of all types of
trademarked products, have grown to such a scale because these illegal activities offer
enormous profits and little risk for the criminal element of society.

 DIFFERENT TYPES OF PIRACY

               a.   Digital Technology
               b.   Optical Disc Piracy
               c.   Internet Piracy
               d.   Hard Goods
               e.   Signal Theft
               f.   Broadcast Piracy




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HOW DOES DOWNLOADING AFFECT THE MARKETS?

With free downloads cultural goods stop being “experience goods” – or something that reveals
its true value after the consuption. They become “search goods” – something that has a known
value from the first moment.19

PIRACY DOES MAKE A DIFFERENCE




Ever wondered what is the point in piracy (besides providing free access to things that are too
expensive/late/unavailable on the market?) They teach corporations the new rules. Reuters
reports: “Hollywood studio Warner Bros. is taking on the pirates in China’s film market, using
lightning-fast home video release and low prices to beat DVD counterfeiters at their own game.

This is what it means not to be in a monopoly position and exposed to competition. But at least
it has turned out, that $1.25 is still a price worth going after. Talking about a nearly pure
information good this should be natural, shouldn’t it.20



19
     http://www.warsystems.hu/wp-trackback.php?p=43
20
     http://www.warsystems.hu/wp-trackback.php?p=30

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                                                             SECTION ‘B’



                                    WAYS AND MEANS TO OVERCOME PROBLEMS

The Internet is an international community of people who police themselves and orient new
members to the rules of using a shared resource. No one owns it, but like grazing land, Radin
said, the Internet could quickly become a "tragedy of the commons" where "everybody grabs as
much as she can as fast as she can, and the resource becomes overcrowded and useless,"

"Cyberspace is a big place; we ought not to be afraid to draw lines between primarily
commercial and primarily non-commercial forms of interactions, even if the lines must be fuzzy.
We ought not to be afraid to develop different schemes adapted to different purposes
involved. If we can do this, both economic and non-economic interactions will benefit." 21

ENHANCING COMPETITIVENESS THROUGH IP PROTECTION

Many new products or services embody different types of intellectual property. Forward-
looking enterprises face the challenge of extracting the latent value of their IP and using it
effectively in their business strategy. Companies that dedicate time and resources to protecting
their intellectual property assets can increase their competitiveness in a variety of ways.
Intellectual property protection helps in:

             preventing competitors from copying or closely imitating a company's products or
             services;
             avoiding wasteful investment in research and development (R&D) and marketing
             creating a corporate identity through a trademark and branding strategy
             negotiating licensing, franchising or other IP-based contractual agreements
             increasing the market value of the company
             acquiring venture capital and enhancing access to finance
             obtaining access to new markets

In addition, enterprises which search systematically for conflicting IP rights of others prior to
seeking IP protection are able to avoid unnecessary litigation, thereby saving time and
resources.22




21
  Stanford law Professor Margaret Jane Radin. Speaking on Wednesday, March 29, at the fifth annual Conference on Computers, Freedom
and Privacy, co-sponsored by the Stanford Law School's Law and Technology Policy Center and the Association for Computing Machinery,
http://news.stanford.edu/pr/95/950403Arc5300.html

22
     http://www.wipo.int/about-ip/en/studies/publications/ip_smes.htm

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                             23




23
     www.images.google.com

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In order to comply with the national IPR policies and keep up with the rapidly changing rules of
the game, public research institutes in developing countries have to take up many
organizational and management challenges that require more human and financial resources,
and knowledge, skills and expertise in non-agricultural fields of study. The challenges and
options include:

• Establishment of an IP management office

• Developing negotiation skills and bargaining power

• Understanding and honoring IPR legislation and agreements

• Meeting the costs of IP management24



ENFORCEMENT OF RIGHTS
PRINCIPAL FACTORS

The Berne Convention contains very few provisions concerning enforcement of rights, but the
evolution of new national and international enforcement standards has been dramatic in recent
years due to two principal factors.

The first concerns advances in the technological means for creation and use (both authorized
and unauthorized) of protected material. Digital technology in particular makes it easy to
transmit and make perfect copies of any information existing in digital form, including
copyright-protected works.

The second factor is the increasing economic importance in the realm of international trade of
the movement of goods and services protected by intellectual property rights. Simply put, trade
in products embodying intellectual property rights is now a booming, worldwide business.

WIPO COPY RIGHT TREATY

This is acknowledged in the WIPO Copyright Treaty (WCT), which requires Contracting Parties to
ensure that enforcement procedures are available under their law so as to permit effective
action against any infringement of rights covered by the Treaty, including remedies to prevent
or deter further infringements.

AGREEMENT ON TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS: -

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which contains
more detailed provisions on the enforcement of rights, is ample evidence of this new link
between intellectual property and trade. The following paragraphs identify and summarize

24
     http://www.wipo.int/export/sites/www/about-ip/en/studies/pdf/study_k_maredia.pdf

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some of the enforcement provisions found in recent national legislation. They may be divided
into the following categories: conservatory or provisional measures; civil remedies; criminal
sanctions; measures to be taken at the border; and measures, remedies and sanctions against
abuses in respect of technical devices.

Conservatory or provisional measures have two purposes: first, to prevent infringements from
occurring, in particular to prevent the entry of infringing goods into the channels of commerce,
including entry of imported goods after clearance by customs; and second, to preserve relevant
evidence in regard to an alleged infringement. Thus, judicial authorities may have the authority
to order that provisional measures be enacted without advance notice to the alleged infringer.
In this way, the alleged infringer is prevented from relocating the goods to avoid detection. The
most common provisional measure is a search of the premises of the alleged infringer and
seizure of suspected infringing goods, the equipment used to manufacture them, and all
relevant documents and other records of the alleged infringing business act
								
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