Intellectual property is not a new issue facing lawyers and lawmakers. In fact, intellectual and patent law originated in an 1800s court decision which was the first documented attempt at protecting labors of the mind. As the economy changed and embraced more and more intellectual products, intellectual property lawsuits have become a standard part of doing business. But in the past few years, the protection of intellectual property has taken on new forms never before seen. Information goods have become more prevalent, but so has information theft and piracy. Intellectual property lawsuits are no longer the business of corporations but have moved on to target consumers themselves. What has changed?
Mix tapes and pirated software had been hallmarks of the 1980s and early 1990s. Sharing music, software, and movies among friends or colleagues cost the companies money, but it didn't threaten their business model. With the advent of the Internet, however, the consumer's capability for sharing information exploded. And as people began to store music on their computers, the natural next step was sharing it. Enter Napster.
Napster, a simple program written by college student Shawn Fanning, let users share music across the Internet easily, quickly, and most importantly: for free. Since a central server, however, was needed to administer the network, music companies were eventually able to sue those running the servers, and the network was shut down. But new networks based on "peer-to-peer" technology emerged. These new networks thrived on the fact that they had no central server, only a network of users sharing information. Their decentralized nature made them much more difficult to sue.
It was not long, however, until these networks also came under fire. The Supreme Court recently ruled unanimously that by not preventing users from sharing copyrighted property, Grokster had actually encouraged piracy. Grokster, in defense, had maintained that this prevention was impossible, but the law disagreed. The company allowing downloads of the software was shut down, but the decentralized nature of the network allowed those already possessing the software to continue sharing in an unadministered fashion.
Of course, legal alternatives to file sharing do exist. Apple, Napster, Rhapsody, and others have launched legal services, offering downloads at a price, with royalties going to the record companies. These represent sincere attempts by the record companies to reconcile intellectual property with consumers. These files contain protection known as Digital Rights Management (DRM). This special encoding only allows the file to be played by a specific owner in order to prevent sharing. Unfortunately, this protection can also prevent consumers from playing their content in the format they'd like, or from accessing content on different computers. For example, Microsoft uses DRM known as PlaysForSure, but Apple uses its own DRM, called Fairplay, that it refuses to share with other vendors. This means that if customers buy a song from Microsoft, they can't play it in iTunes or on their iPod. This lack of compatibility can discourage customers from paying legally for content, since they might have to buy the same song twice.
To add to the problem, some content providers have been overzealous in enforcing their copyrights. Sony, which both operates an online music store and is also a record company, has recently been exposed for installing hidden spyware on users' computers known as a root-kit. This software installs automatically when users insert a Sony music CD and hides from the user, as well as from any antivirus software. Customers have become concerned because harmful viruses could use this Sony installed root-kit to hide from virus software, and then attack a user's computer. Sony has since been forced to release a patch to uninstall the root-kit, but it has caused considerable outrage among consumers, and rightfully so.
As networked computers allow more and faster sharing, content providers must protect their information. But a balance must be struck between regulating content and allowing consumers to enjoy it in a fair manner. Standards need to emerge, and companies need to cooperate, or they will end up alienating consumers and encouraging new methods of illegal file sharing. Record companies need to change their business model; in my opinion, they will obtain greater revenues by being consumer friendly and encouraging usage than by heckling consumers and penny pinching.
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