Robin Hood versus the bullies: software piracy and developing countries.

AuthorKopczynski, Mary
  1. INTRODUCTION

    The discussion of globalization, a term laden with confusion, has filled volumes of political science, economics, and sociology journals. However, the effect of globalization on the legal community has yet to be fully explored. With the birth of the General Agreements on Tariffs and Trade (GATT) after World War II and the subsequent creation of the World Trade Organization (WTO) in the early 1990's, the entire arena of international trade changed shape. (1) Issues formerly considered the sovereign business of nation-states to enforce are suddenly fair game for global adjudication. (2) The rise of private actors, usually described with a multitude of acronyms such as TNC's, MNC's, NGO's, or IGO's (and variations thereof), suddenly have a role to play in international legal enforcement. (3)

    Furthermore, the rise of the Internet has increased the ease with which intellectual property can be pirated overseas. (4) Countries such as Thailand, China, and even Canada are under fire from the Office of the United States Trade Representative (USTR) for piracy of United States intellectual property. (5) In order to protect their interests, many multinational corporations have teamed up to fight for their right to profit from their intellectual property. (6) This is significant because without any initiation from nation-states or world governments, private actors have become, in essence, a world police for hire. (7) The implications of this practice are worrisome: if too many infant businesses are penalized for their illegal use of intellectual property, the economies of developing countries can be negatively impacted. (8)

    The purpose of this note is to explore the complex web of international enforcement mechanisms for intellectual property in developing countries, especially in the area of software piracy. In order to discuss this, however, it is important distinguish between the de jure intellectual property regime (the law in the books) and de .facto regime (the law that is actually enforced). Put simply, many developing nations have domestic laws protecting software, but they do not enforce those laws as much as others. (9)

    Why would a country fail to enforce all of its own laws? As this note will explore, many reasons exist. However, as the tension rises between those who desire intellectual property enforcement and those who do not, a line between developed and developing countries emerges. (10) Software creators, who tend to come from highly-developed economies, want to charge a fee for their product, yet users in developing countries do not want to pay for software (and in some cases cannot pay), especially when the money goes to the already "rich" software creators. (11)

    From here we have a clash: a conflict between the "Robin Hood" mentality of developing countries--who want to steal from the rich to help their own poor--and the "Bullies"--players in the developed countries who want tougher international enforcement for their hard-earned software creations. (12) In classic economics, this is called the logic of collective action, wherein free riders-individuals who "rely on others to bear the costs of a program from which [they benefit]"--have no incentive to pay for something they can get for free. (13) In the case of software piracy, software users who find these products available for free or discounted rates will most often select that cheaper option. (14)

    According to the logic of collective action, the only way software creators can prevent widespread infringement is to create regulations declaring such behavior illegal and then "bully" the infringers into compliance. (15) This explains why many of the intellectual property laws in developing countries did not originate domestically, but were required by the international community. (16) Until developing countries start to see tangible benefits from enforcing anti-piracy laws, it is unlikely that they will take intellectual property laws for software seriously. (17) To explore this issue thoroughly, Part II will cover the evolution of intellectual property protection, including the recent incorporation of protection for software into international law. Part III will discuss the de facto system of enforcement for software protection in developing countries and the barriers that must be overcome for enforcement Success.

  2. SOFTWARE PROTECTION "DE JURE"

    1. History of Intellectual Property

      The general concept of protecting intangible ideas as property is a relatively new phenomenon in the history of the world: the first law protecting ideas was established in the Republic of Venice in 1474. (18) It was motivated by the logic that, if inventors had the right to profit from their ideas, they would be motivated to continue inventing and increase technological advancement. (19) After realizing the benefit of recognizing intellectual property rights, other European countries, most notably England, passed intellectual property laws. (20) Taking from its predecessors in England, the United States codified the concept in its Constitution: "The Congress shall have Power... To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." (21) Since then, intellectual property has become commonplace among Western powers: by 1883, fourteen states had joined the Paris Convention, the first international intellectual property treaty, which protected trademarks, patents, and industrial designs. (22) By 1886, the international community protected copyrights for artistic works with the Berne Convention. (23)

      The modern concept of intellectual property rights primarily includes three major types: patents, copyrights, and trademarks. (24) A patent is protection for an invention that is new to the world, such as a chemical compound or a new type of computer equipment. (25) Patent holders are allowed exclusive profit and use of their invention for a fixed period of time. (26) After that period, others may use the technology or create new inventions from it. (27) A copyright is protection for a creative expression of an idea, such as a song, a poem, or other artistic creation. (28) Typically, the American rule is that the idea itself, such as a song about love, cannot be copyrighted, but the expression of the love song, such as the words, melody, etc., can be copyrighted. (29) Finally, a trademark is any recognizable device that is associated with the quality of the owner's product (such as, say, Mickey Mouse ears, associated with the Walt Disney Company). (30)

      As the registered owner of the intellectual property, the creator may profit exclusively from his or her invention or creation. (31) If another uses the property without permission from the owner, this is an illegal infringement of the owner's intellectual property rights. (32) The owner can then, ideally, sue for damages. (33) Regardless, the typical procedure for protection of any of these creations is to first register the item with some sort of central body in order to clearly identify the owner of a particular product. (34) However, as will be discussed at length later, being registered with an agency by no means guarantees any recovery of damages, especially overseas. (35)

      The World Intellectual Property Organization (WIPO) was developed by the United Nations in 1967 "to contribute to better understanding and cooperation among States [and] to promote the protection of intellectual property throughout the world." (36) However, despite WIPO's overarching goal of harmonizing international intellectual property legislation, (37) there are no worldwide registration offices. (38) Intellectual property owners must still register with each individual country (such as with the United States Patent Office or the United Kingdom Patent Office) or a regional office (such as the European Patent Office, or the African Regional Intellectual Property Organization). (39)

    2. History of Intellectual Property Rights for Software

      Even with the growing international support for intellectual property, the concept of protecting software as intellectual property had not even been considered prior to 1976, when Bill Gates was one of the first to address the issue. (40) In an open letter to computer hobbyists accusing them of "stealing" software, he wrote, "The value of the computer time we have used exceeds $40,000" while "[t]he amount of royalties we have received from sales to hobbyists makes the time spent on [the program] worth less than $2 an hour ... [m]ost directly, the thing you do is theft." (41) Prior to then, neither WIPO nor the existing international trade regime, the General Agreements on Tariff and Trade (GATT), had made any provisions for software as intellectual property. (42) While domestic countries scrambled to work software protection into their existing copyright treaties, the United States was the first country to grant official copyright protection for software (43) with the Computer Software Copyright Act of 1980. (44)

      Despite the progress of protection for software on the domestic front, it took until the mid-1990's for the international community to realize the economic benefit of protecting software as intellectual property. The first GATT document regarding intellectual property (not including software) was not produced until 1986, and it circulated under special distribution to member countries. (45) It was the first time the international community publicly drew a link between intellectual property protection and free trade: "Technological progress is an increasingly important aspect of international competitiveness ... [t]rade distortions and impediments arise when a country's sales of products of innovation and creation are lost to foreign infringement activities." (46) Because of this realization, the contracting parties of the GATT argued that "The GATT can and should play an...

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