Presented by: Rajeshwar Nandan LLM 1st year

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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.

 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.

and software  sensitive material. government secrets .  Digital pirates steal digital data by transferring files back and forth  downloading without paying  Stolen files include:  music. industrial secrets. texts. video. pictures.What is Internet Piracy?  Piracy conducted via the Internet  What do the Digital Pirates Do?  Since pirates steal.

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) .

and pornographic pictures  Software  Next after pictures  Texts  least popular form of piracy  people don’t like to read a large amount  most books are cheap compared to music. DVDs. rock stars. many are pictures of celebrities. and software  much harder to get a book into a file than music or video . movie stars.Types of Pirated Files (2)  Pictures  The next in the chain.

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 .

3 billion in 1995.  In fact.  According to a study of Software Publishers Association. . more than any other region including the number two Asia. In Europe alone the software industries lose an estimated $ 6 billion a year.2 billion.  In 1996. a US based body.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. piracy costed the software industry US $ 11. losses due to piracy of personal computer business application software’s nearly equalled revenues earned by the global software industry. a 16 percent decrease over the estimated losses of US $ 13. Europe holds the dubious distinction of accounting for about 50 per cent of world wide losses from software piracy.

.3 million) showing about 60 per cent piracy rate in India. According to a survey conducted jointly by Business Software Alliance (BSA) and NASSCOM in May 1996.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. 500 crores (US $ 151. Russia (91%). Thailand (80%) etc.  In India software piracy is costing the IT industry quite dear. total losses due to software piracy in India stood at a staggering figure of about Rs. followed by China (96%).

and  the ability to reach a global audience at marginal costs.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.

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 .

and Qatar (which ratified in 2005). the World Intellectual Property Organization (WIPO) adopted new copyright treaties to enable better enforcement against digital and online piracy. China (which ratified in 2007). 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).  WIPO lists seventy countries as having ratified the WCT. in direct response to the growing threat of Internet piracy.WIPO Copyright Treaty In 1996.  However.

internet advertising services. and internet advertising services.SOPA  SOPA places a burden to protect IP rights from foreign infringement on service providers. internet search engines.  Immunizes blocking of websites by service providers. payment network providers. . domain name registers. and domain name registrars.  Places liability on payment network providers and internet advertising services.  It could expand secondary liability under copyright law. payment network providers. Internet search engines. advertisers.

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

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. such as the WTO. . and would create a new governing body outside the existing forums. the WIPO or the United Nations.

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

Criticisms  Where notice to the owner/operator of the site is required under the PIPA.  Under SOPA’s private right of action. There is potential that a site could qualify under the statutory definition but not meet the requirements for secondary liability under existing law. SOPA could cause a lot of uncertainty in the law. 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. SOPA uses word like ‘facilitate and enable’.  In defining an infringing website. In this regard. . no notice is necessary before a plaintiff can have a site cut off from payment network providers and internet advertising services.

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

Indian Position  The International Intellectual Property Alliance has recommended in their Special 301 report that India remain on the Priority Watch List in 2011. .

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

and establish specialized IP courts. including against corporate end-user software piracy. . followed by destruction. Encourage judicial reform. including accelerating the adjudication process in criminal and civil cases. and 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. and imposing deterrent fines and imprisonment. judges. Empower customs to effectuate ex officio seizures. of pirate goods. Legalize use of books and journals at educational institutions.

Reject attempt to recast unauthorized imports as non-infringing. and takes into account right holders’ comments to the Standing Parliamentary Committee. Adopt an optical disc law. and establish enhanced penalties for “pre-release” piracy. .and WPPT    consistent protections.Legislation  Ensure the Copyright Bill 2010 contains WCT. Adopt effective anti-camcording provision. either as part of Copyright Bill or as standalone bill.Priority Actions . as would result from the proposed revision of Section 2(m). allow restitution to be awarded in criminal cases. Adopt statutory damages in civil cases.

. including those imposed on motion pictures.Priority Actions – Market Access  Eliminate market access barriers. entertainment software and business software.

Counterfeiting The primary legislation in India that deals with counterfeiting are: • The Trademarks Act 1999. and .Legal Position . • The Copyright Act 1957.

 Section 27(2) recognizes the common law remedy of passing off against any person dealing in counterfeit goods. . as well as a common law remedy of passing off to protect against infringement of an unregistered trademark. 1999 The Trademarks Act provides remedies for the infringement of a registered trademark. Section 29 mentions the various acts that amount to the infringement of a registered trademark.Trademarks Act.

Trademarks Act.000) in case of counterfeiting. 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. damages. .  These remedies include injunction. 1999  Section 135 provides for civil remedies in case of either infringement or passing off.000 (around $5.

Copyright Act  Section 51 of the Copyright Act envisages the various acts that amount to infringement of copyright vested with the owner.  Section 55 provides for civil remedies by way of injunction. Section 53 restricts the importation of copies which would infringe copyright. Section 64 empowers the police to seize all counterfeit software copies. .000 in case of infringement or abatement. The act also provides both civil and criminal remedies against software counterfeiting. rendition of accounts and delivery up. Further. while Section 63 provides for imprisonment of up to three years and fines of up to Rs200. damages. As far as criminal remedies are concerned.

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

75 million plus 9% interest per year from the date of the order until payment is made. as well as costs.  Microsoft Corp v Vahi (Case 817/2004) – in this case the court awarded Microsoft Rs23.  Microsoft Corp v Mayuri (Case 1027/ 2005) – in this case the court awarded Microsoft Rs500.000 in punitive damages.62 million plus 9% per year from the date of the order until payment is made.Cases  Microsoft Corp v Pawar (Case 530/2003) – in this case the court awarded Rs20 million to Microsoft. Other Indian courts have since followed suit and now award damage s to IP owners in counterfeiting and piracy cases .000 in compensatory damages and Rs500. and  Microsoft Corp v Popat (Case 2005 (30) PTC 245 (Del)) – in this case the court awarded Microsoft Rs19.

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

efforts to speed up trials should be made. .  Thirdly. This could be achieved by organizing training programmes for judges and police personnel on a regular basis.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 would enhance the efficiency of the legal system by ensuring the early prosecution of counterfeiters and pirates.

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


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