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Piracy and the effects it has on the Music Industry in relation to Intellectual Property Law

Written by Condon Associates in November, 2010


Piracy and the effects it has on the Music Industry in relation to Intellectual Property LawPiracy is such a large and important issue covering the world in more ways then one would think. There are two major effects piracy has on businesses within any industry. Piracy allows individuals to access any file or documentation, able to tamper with documents and undervalues your product. Piracy also exposes your business to legal issues and possible damage to your company. It is something to always be mindful of and to always make sure that your network is secure.

Music is such a large part of every community around the world. Whether it is through a cultural aspect or a social aspect, music is incorporated into the everyday lifestyle of individuals around the world. However, with this positive creation come the negative attributes that are established through these creations. Music’s social phenomenon has enforced engineers and designers to create new technology to implement this music for differing individuals for their daily routine. The iPod is one of the most significant creations for music usage and organisation, created in 2001. Through this creation iTunes Music Store was created in 2003 to enable songs to be purchased online and transferred straight to one’s iPod. As this process of transferring files was so simple, so was the possibility of transferring illegal files onto iPods and other music devices.

Piracy is defined as being creations that have been replicated, stolen, arranged, distributed or altered without permission of the creator or owner of the file. It is a criminal act that is the deliberate infringement of the Intellectual Property Law constituted by the Australian Government. Piracy has been an issue ever since music has been created – music and piracy are one in the same – where there is one the other follows. Piracy has only become so public due to the advancement in technology. The difference is the amount of piracy over time periods – where Compact Discs were used, piracy had increased due to the capability of simply burning pirated music onto a data disc, it has now become even easier by being able to just transfer the file onto the hard drive of an iPod – no cost, no wastage, and always available and mobile. Software like Napster and LimeWire have been the main contributors to piracy. Napster was the first file-sharing network software that became available over the World Wide Web (www) and created such uproar that lawsuits were carried out by most of the major recording companies, in addition to major recording artists such as Metallica, Madonna and Dr Dre.

As a result of the legal proceedings, Napster incurred significant legal costs in addition to which the Court imposed certain restrictions to the manner in which Napster would operate in the future. Because Napster failed to comply with the Orders of the Court, further Orders were provided by the Court, which resulted in the Napster website being removed from the Internet. Napster was subsequently placed into Liquidation, albeit referred to as Bankrupt in the United States. LimeWire and many other file-sharing networks have since surfaced around the web since Napster’s decline in 2000. The variance in these newer networks is the licensing and copyright filtering proposed in their user agreements that must be agreed upon before allowing one to use the software. The variance is the ability to share copyrighted files within the network to many users, however all non-copyrighted material must be found and destroyed upon upload. However, how is this still a legal arrangement – by using this software, users are still able to not purchase the software, not purchase the music or files, and still use these files on their own devices. So has LimeWire and these other softwares actually assisted in preventing piracy or are they actually the major causes of it? In a way of helping to protect the creative artists and their work for a bit longer, the United States legislation The Sonny Bono Copyright Term Extension Act of 1998, that was later made legislation internationally, extended ‘copyright protection from the life of the author plus fifty years to the life of the author plus seventy years’, as clarified by Dr Matthew Rimmer in his publication Digital copyright and the consumer revolution: Hands off my iPod, 2007. This legislation may differ by the varying role of the owner within the music industry, be it the author of the music, the recording company, or an inheritor.

Intellectual Property Law is that which relates to trademarks, patents, designs, copyright, circuit layout rights, plant breeder’s rights, and confidentiality/trade secrets as identified by IP Australia, which is a body of the Australian Government that deals with all issues relating to Intellectual Property. Intellectual Property is defined as the protection of the possessions from one’s mind in material form. It is a way to protect creators, those that make their living by inventing and generating new and exciting ideas for everyday users, however there are people who want to steal this intellect in order to make some money for themselves. Copyright is established at the time of creation – paperwork and authority approval is not necessary, but worthwhile.

Today, piracy is becoming a major issue not only in the music industry but also in all Intellectual Property industries. Filmmakers have actually assisted the anti-piracy action by creating short advertising videos about the punishment of pirating films through copying for personal use or selling for personal gain in order to hopefully scare some individuals out of committing the crime. The music industry is so badly affected by piracy that it has caused an annual six percent decline in CD sales in from 1999 to 2003; and has now caused a massive ten percent decline which is forever increasing annually on all music sales. An amazing ninety percent of software in China is downloaded over the Internet. Artists are now selling their albums for free over the Internet in order to try and advertise their music and place a non- downloadable file within the music making them urge the consumer to buy the album – the artists are paid through income derived from advertising on the website. Through research conducted by Darren Levin in 2010, eighteen percent of Australia’s population download music annually. In 2010, the Australian Bureau of Statistics with the Music Industry Piracy Investigations listed the amount of people who download music to be 2.8 million Australians, which is approximately twelve percent of our current population. Whilst the percentage has greatly decreased, the population increases by almost half a million Australians every year, meaning the actual amount of piracy has greatly increased.

Piracy is expected to dramatically increase over time, although many governing companies are working towards ways of preventing its escalation. The major challenge in preventing piracy is the extensive possibilities created by the Internet – its large population, its ever- growing capabilities and the amount of users who are increasingly becoming experienced in the degrees of Internet technology and software. Piracy is monitored by Internet provider companies such as TPG and also by governing companies such as APRA, but this large task is being performed with only limited resources. This unfortunately means that piracy is continuing, and artists and recording studios are being denied royalties which rightfully should be paid to them. It is also contributing to the decline of retailers in the music industry.
 

Copyright © 2010 Condon Associates, All rights reserved.

PLEASE NOTE: All information contained in the articles below was correct at time of publishing.