The Costs of the Digital Piracy Culture
Allen Ng
University of Wisconsin-Parkside
Abstract
Modern computer technology has caused a fundamental
shift in society. Alongside the promises of a brighter
future, a culture of flagrant digital piracy is growing.
This paper examines the costs of that culture and who’s
paying them. Clear definitions of the involved concepts
and stakeholders are presented as well as the types of
costs, many of which extend beyond the monetary.
Analysis of current and future trends is made and the
culpability of both producers and consumers is
discussed.
Key Words: Ethics, Intellectual Property, Piracy,
Society.
1. Introduction
Pandora’s Box has been opened. For better or worse,
we have woven the computer into the very fabric of our,
now global, society and there is no going back. Modern
technology has brought about the first truly fundamental
change to society since the Industrial Revolution. Then,
as now, the societal adoption of “the new” led to shifts in
the way we define concepts such as “value”, “prudence”,
“fairness” [1]. However, now, unlike then, our
integration of this new technology into our lives has not
only produced a wave of cheap products spurring intense
consumerism, but we have fundamentally altered the
human experience. The transistor has changed the world
and what it means to be human. Never before has it
been possible to connect with, literally, anyone else on
the planet—instantly. Never before has it been possible
to even dream of compiling a record of all human
knowledge and being able to find answers within it.
Near the shores of this New World of limitless
knowledge and global collaboration, sail the digital
pirates. Like their maritime cousins, digital pirates take
from a system to which they do not contribute and
defraud others of their just bounty. Unlike pirates of the
sea-going variety, however, digital pirates often
convince themselves that there is no cost to their actions
—that theirs is a victimless crime.
The ease with which digital media can be distributed
and stored is partly to blame for this. It is difficult to
attach guilt to one’s own actions when all they did was
click a mouse button. This disconnection from the
consequences and costs of digital piracy is characteristic
of the culture of piracy that is emerging. In this paper,
we will examine what those costs are and who’s paying
them.
2. Review of Literature
One of the primary difficulties in attempting to
properly account for the costs of digital piracy is the lack
of clear definitions. Richard Stallman suggests that this
may, in fact, be precisely what copyright holders want
[8]. US copyright law recognizes four main types of
copyright infringement: unauthorized duplication,
creation of derivative works (not covered by Fair Use),
misappropriation, and distribution [4]. Accusations of
infringement can be mitigated by either showing
independent creation, first sale of physical property, and
Fair Use [4]. Additionally, the doctrine of de minimis
non curat lex, "the law does not care about trivial
things"[4], was apparently created during a more rational
age and has since fallen out of fashion. The Fair Use
Doctrine was also conceived during a more rational age,
but to some extent is still employed today. This concept
relies on four main tests [13][6]:
1. The purpose and character of the use, including
whether such use is of a commercial nature or is for
nonprofit educational purposes;
2. The nature of the copyrighted work;
3. The amount and substantiality of the portion used in
relation to the copyrighted work as a whole;
4. The effect of the use upon the potential market for
or value of the copyrighted work.
US copyright law provides for several types of
remedies for demonstrated infringement. These are:
injunctions to halt infringing activities, impounding
infringing materials or products, and ordering monetary
restitution for real damages and/or costs and fees [12].
An equally important aspect in addition to properly
identifying the involved concepts is properly identifying
the involved parties. Who has a stake in all this?
Obviously the companies that frequently are the
copyright holders have a significant fiscal stake in the
copyright landscape. So great is their interest, and so
vast their resources, that they frequently set aside their
competitive stances to unite against their common foe—
the consumers. These unions, such as the Business
Software Alliance (BSA) and the Recording Industry
Association of America (RIAA) are formed to represent
the industry as a whole and seek "more government
enforcement and increased penalties against piracy" [2].
In addition to commercial interests, governments have a
significant vested interest in the copyright debate.
Governments with the capacity to do so (such as the
United States) often use piracy statistics during trade
negotiations to impose other, often unrelated, legislation
on other nations. [8] Another significant stakeholder are
the research and academic institutions that often created
the copyrighted material in the first place.
We now turn our attention to the cost of all this. The
BSA claims that “business software losses [in Singapore]
were estimated at nearly $86 million in 2005”. [9] We
previously mentioned the tendency of rich and powerful
governments to punish lesser nations for not complying
with their copyright laws. "Countries whose laws,
policies, or practices are deemed to adversely affect U.S.
producers or products may be subject to investigation,
trade sanctions, or other penalties." [2] This, despite the
inherited wisdom of our Founding Father, Thomas
Jefferson. “...it may be observed that the nations which
refuse monopolies of invention, are as fruitful as [those
that don't].” [7] Their attentions are not limited to
foreign nations. The No Electronic Theft (NET) Act
added criminal penalties for digital piracy. [4] Nor are
the costs limited to just the monetary. Amazon’s 1-click
patent case threatens to stifle innovation just when the
technology is becoming capable of bringing it about. [5]
Our sudden infatuation with “Intellectual Property” is
threatening to spill over the digital border and into the
real world. Metabolite vs. LabCorp’s patent
infringement case is not over digital recordings or video
games, but over the right to treat illness in patients. [3]
Clearly, there is more to consider here than the RIAA’s
bottom line.
3. Analysis and Trends
Without a doubt, consumers must accept a significant
portion of the responsibility for this culture of piracy.
Consumers as a group have begun ignoring the laws and
ethics of the society of which they are a part, focusing
only on what they want without regard to the costs. If
this culture of digital piracy, begun in this generation,
continues, the next generation will grow up in a world
where taking things that are for sale without paying for
them is simply the smartest way to shop. It doesn't take
much imagination to picture the world to which this will
lead us. Members of a society can not ignore the laws
that govern their collective behavior; to do so leads to
chaos. Further, in our consumer society (aspersions of
which are omitted for brevity) the sole requirement of
citizenship is consumption. In that type of society, the
citizens absolutely can not ignore their responsibility to
vote with their dollars. However, easy credit has made
the votes cheap and this makes the producers very
happy.
The remainder of the responsibility must then lie with
the producers. Like an unwanted uncle who comes to
visit when there's a special occasion involving free food,
the term "Intellectual Property" has been riding the
coattails of the digital revolution. It has been suggested
that this term is not only incorrect, but purposefully
obfuscating. [8] Just as the consumers have been
ignoring the responsibilities of ownership, the producers
have begun ignoring their responsibilities towards their
customers. Rather, their attentions have been focused on
one thing—control. Instead of utilizing new
technologies to develop improved products (another
must for a consumer-based society), they are seeking to
restrict the very freedoms these technologies could
provide. This control is an act of corporate piracy; it is
taking by force something that does not belong to them.
Consumers must pay for products; ideas belong to all
mankind. Take as an example the source code for a
piece of software. This code represents a set of
instructions for what you would like your physical
device, which you legally and rightfully own, to do.
"Intellectual Property" advocates would suggest that this
code can be owned. Imagine for a moment though that
every recipe, household "how-to", or "something my
grandfather taught me" could likewise be owned (and are
they not simply sets of instructions?). According to the
Church-Turing thesis, any well-defined set of
instructions performed by a human is computationally
equivalent to the work performed by a computer. [10] If
source code can be owned, then so can thoughts. Is this
what the digital revolution has brought us? One must
now pay for the things that they know? "Intellectual
Property" advocates would like to suggest that thought
control is not the result of their efforts, but their actions
would suggest otherwise. [3] Rather, they claim they are
"incentivizing" investment in order to promote
innovation. Not only is this not necessary—who
invested in the wheel, the book, or penicillin (or any of
the many glorious accidents that had useful results)?—it
distracts from the simple, time-tested solution. If the
intent is truly to promote innovation, then we must once
again begin funding pure research.
Like blood in the water, the declining education
levels of consumers is inviting producers to, rather than
produce high quality products, convince people to be
satisfied with inferior products. For example, consider
the quality of the music on which the RIAA is so
desperate to collect. In the 1980's, mainstream radio
stations were not playing Jerry Lee Lewis, Bobby Darin,
or Harry Belafonte. Yet, turn on a mainstream rock
station today and the playlist is likely to sound like a
Top 100 countdown of 80’s rock (just Google "80's rock"
for comparison). This trend suggests that there isn't any
new music of comparable quality currently being
produced. [11]
 The mutual contract we call society is being violated
by both producers and consumers. Companies have
already begun responding with more and more restrictive
technologies. [14] Over time, more and more control
will be given to the producers and the consumers will
give it because how else will they be able to upgrade
their cell phones every 3 months?
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