Running head: INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING

Transcription

1 Running head: INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING Intellectual Property Rights and File Sharing Erwin Solis Antoine Herve Matt Olsen Nikolai Hart Tim Scott California State University San Marcos MIS 304 Professor Fang Fang December 13, 2011

2 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 1 Table of Contents Table of Contents... 1 Introduction... 2 Methodology... 3 Findings... 5 Intellectual Property Rights Definition... 5 Online File Sharing Definition... 7 Digital Download Sites... 7 File Sharing Technology... 8 File Sharing Website Revenue... 9 Pros of File Sharing Cons of File Sharing Effects on Business Security Law Cases Organizations against File Sharing Legality of File Sharing Stop Online Piracy Act Conclusion References... 22

3 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 2 Introduction The topic of this paper is Intellectual Property Rights and File Sharing. Intellectual property rights and file sharing tend to share a negative correlation. As the Internet becomes easier and easier to use and as more information became readily available at lower cost (service providers), the number of user to visit/download file sharing sites increased. This had a negative impact on intellectual property rights because more and more companies (whose rights have been violated) began taking legal actions. As more and more companies began tasking legal actions, the federal government was then involved, and it felt like the FBI was more interested in hunting down copyright pirates than dangerous criminals. However, intellectual property rights are extremely important in both protecting inventions and inventors and giving credits when deserved. After all, no one would invent new things if it were easy for a competitor to take the invention and claim it as their own. Online file sharing services and website s popularity became synonymous with piracy. However, as mentioned later in this paper, file sharing in itself is very legal. It is the content that gets shared that tends to raise some eyebrows. The materials that will be covered in this paper will focus equally on intellectual property rights as well as file sharing. First, the definition of intellectual property rights will be stated as well as anything that is related to intellectual property rights. Also, the definition of file sharing will be stated as well as the two main types of file sharing. Second, the main file sharing websites will be shared as well as their technology, revenue and popularity. Third, the pros and cons of file sharing will be discussed as well as their effect on business. Fourth, security related with file sharing will be discussed as well as some law cases that deal with intellectual property rights violation. Finally, some organizations that exist to protect rights will be listed, and the legality of file sharing as well as Stop Online Piracy Act (SOPA) will be discussed.

4 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 3 Methodology Our research methodology required our group to gather any relevant information related to our topic and present it in a clear and meaningful way. Also, we wanted our questions, even the preliminary ones, to cover not only a broad spectrum of our topic, but also to challenge it as well. On the first two topics, we wanted our focus to be on definitions; specifically defining intellectual property right and all of its components as well as defining file sharing and its components. All of the definitions were based off of a website called World Intellectual Property Organization. The file sharing topic was based off of howstuffworks.com and techopedia.com. The next three topics: Digital Download Sites, their Technology, and Revenue were based off of a variety of websites. The list of the most popular file sharing websites as well as the reason for their popularity was taken off markmonitor.com and P2P blog.com. File sharing technology is based off the actual websites such as rapidshare.com and megupload.com. Finally, their revenue was taken from gigaom.com and torrentfreak.com. The pros and cons of file sharing is a topic that is discussed all over the internet. This is important because people need to know what they can accomplish with the use of file sharing, but they also have to know the drawbacks and the damage that could be done with file sharing. Many websites contain the same pros and cons and share a lot of the same information. The websites chosen for research were trustworthy websites, one of them being part of Homeland Security. Because the topic is widespread across the internet, it is better to have a government official website than one that can be written and edited by random users because it gives reassurance to the reader that the facts provided are legitimate.

5 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 4 The topic of security, specifically security dealing with online file sharing, is a major topic/concern. Many companies want security for their products as well as assurance that their products will not be distributed freely across the Internet. The research on security came from legitimate websites such as a company website that deals with security as well as personal experience. The topic of lawsuits pertaining to intellectual property rights violation as well as illegal file sharing is a very important topic. Most of the research came from websites such as The Wall Street Journal and Gamestop. Finally, the last three topics of discussion will be on the organizations that exist to protect intellectual property rights, whether file sharing is legal, and the Stop Online Piracy Act. The first topic of discussion is the organizations. For this information, each of the organizations websites was visited, and Wikipedia was occasionally used to supplement the lack of information obtained on the organization s websites. To answer whether file sharing was legal or not, personal experiences was used as well as information from articles from computerhope.com. The last topic was the Stop Online Piracy Act. Some information on this subject came from Wikipedia while others came from various other websites, including thewashingtonpost.com.

6 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 5 Findings Intellectual Property Rights Definition When it comes to ideas, there are certain ones that people hold special enough to protect. This helps to give credit where it s due. These ideas can be considered intellectual property. Intellectual property is basically any creation of the mind which includes inventions, literary and artistic works, and symbols, names, images, and designs used in commerce (World Intellectual Property Organization). Because many people can come up with the same idea or, even worse, somebody can intentionally steal the idea of another, it is important to protect intellectual property with intellectual property rights. Intellectual property rights give exclusive rights to the original creator of a certain work (WIPO). The main types of intellectual property rights are as follows: Copyrights - Copyrights give rights to the original creator of literary and artistic works (WIPO). Literary works include novels, poems, plays, reference works, newspapers and computer programs. Artistic work includes paintings, drawings, photographs, sculpture, architecture, advertisements, maps and technical drawings. Under copyrights, the creators of these works are entitled the exclusive right to use or authorize use of their work. Trademarks - A trademark is a distinctive sign which identifies who is providing certain goods or services (WIPO). The most commonly known trademark would be a business logo. Other trademarks can include sounds, smells, or colors. When watching commercials, not only might one see a company logo but that logo might be accompanied by a sound that helps you associate with that company.

7 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 6 Patents - Patents protect inventions (WIPO). Inventions can be either a product or process that provides a new way of doing things. Patents provide protection of inventions for a limited amount of time which is usually 20 years. Industrial design rights - Many companies make the same kinds of products. For example, there are many companies that produce computers and/or cell phones so it helps to have a distinct look. An industrial design constitutes the ornamental or aesthetic aspect of an article (WIPO). Apple has a very distinct look for its Mac Book and its iphone. Industrial design rights makes sure that nobody copies this distinct look in hopes to possibly profit off of it. Trade Secrets - Trade secrets are any information that gives an economic advantage (WIPO). When you work for a company, you most likely will be exposed to confidential information. Part of why this information is confidential is most likely because that information gives the company an upper hand. Trade secrets include company recipes, customer information, and company processes. Geographical indication protection - Geographical indication protection ensures accuracy of product origin (WIPO). Countries develop a certain reputation for the goods and services they provide. This protection ensures consumers that the product they receive is of that quality. Even with these rights in place, there will always be people that won t adhere to them. One main non-adherence is using somebody s protected creation in a manner not authorized by that original creator. One of the more common ways of doing this is by sharing that creator s work.

8 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 7 Online File Sharing Definition Because of technology, it has become easier to share files across the world. One of the easiest ways is by means of the Internet via online file sharing. File sharing in general is allowing access of files and information to others via computers and networks (File Sharing). There are two basic types of online file sharing: peer-to-peer and file hosting services. With peerto-peer (P2P) users are connected to other users through software that allows uploading and downloading through a network of peers (Carmack). With file hosting services, the files are hosted in one place through an Internet hosting service. Users download the files they need from this hosting service (File Hosting Service). As of right now, P2P is not as popular as file hosting. Digital Download Sites Global P2P traffic is declining and is being replaced by digital download sites, also known as one-click hosts. The improvement of fast download speeds, the lower cost of hosting, and new download web sites emerging everywhere on the Internet is helping this shift (Roettgers, 2010). These popular online file storage sites offer more than an online backup for personal files, they also tend to promote piracy. Websites offering pirated data generate billions of visits annually. Researches from markmonitor.com classified 43 unique sites as digital piracy sites. According to their investigation, the traffic generated by these sites was over 146 million visits per day, representing more than 53 billion visits per year. From those 43 sites, if you would regroup the top-three one-click hosting companies together, websites rapidshare.com, megavideo.com, and megaupload.com, altogether would generate more than 21 billion visits per year (Traffic Report: Online Piracy and Counterfeiting, 2011).

9 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 8 Those web sites are boosting digital piracy and attract huge number of users every day. The most popular one, rapidshare.com, has on average 32 million daily visits. If we look at the annual numbers, the traffic of Rapidshare easily reaches more than 11.8 billion visits per year. Similar figures can be found with the two main competitors, the second and third most visited file sharing sites, megavideo.com and megaupload.com. On an average, each of them is visited about more than 13 million times per day, or more than 4.9 billion visits per year respectively (Roettgers, 2010). The gap between the amounts of users of direct download (DDL) and peer-to-peer (P2P) technologies are increasing every day. Around the years 2005 and 2006, peer-to-peer technology saw the new type of competitor rising with sites like Rapidshare and Megaupload. These two direct download websites are now the most successful and largest free online file hosting companies, which later became real brands. File Sharing Technology The technology used with one-click hosts is different compared to peer-2-peer. Everything is centralized on servers, which host the files and send them back at the user s request. The advantage of direct download is that once you start your download it won t stop until it is finished, unless you get disconnected from the Internet. It is very different from P2P because when the uploader(s), also known as seeders, disconnect, it becomes impossible to continue the download or can slow down your download speed significantly. Even if most online storage sites offer similar services, they do have their differences. For example, with Megaupload free users are allowed to download and upload files up to 1024MB in size, while with Rapidshare the maximum upload limit is 200 MB for free members and 2 GB

10 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 9 for paid ones. Most Internet users like to use one-click hosting sites because it is easy to use, faster, and safer. On Rapidshare and Megaupload, most of the users are called leechers, which means that these Internet users just use the service to download what they want but don t provide anything back to the community by uploading some new files. This is in opposition to P2P, where you are more likely to be forced to share something in return. A particularity of these websites is that they don t have a search engine. Therefore, people can t search for the file they want from these sites. As a consequence, the search function is made by third party web sites, blogs, or forums that list and reference the links to music files, movies, video games, ebooks, etc. However, most of the searches are made on the most famous web search engine, Google. If you type a name of an album or movie, the Suggest function of Google will show you the most popular search associated to it and usually refers to direct download web sites. On the other side, Rapidshare and Megaupload try to remove as many illegal files as possible when the users signal them. Deleting the files is somehow hypocritical because people are mainly using them to host pirated data. Also the sites know someone else will re-upload the files in the near future. File Sharing Website Revenue Direct-Download sites are primarily a way for owners to make money on the backs of copyright holders at the expense of all ethics. They are not doing all of this to share culture to a community, but to earn as much money as possible. However, it is really hard to know if these free online sharing websites are profitable businesses. These companies offer both free and paid services, and make its revenue from subscription fees paid by its users. The stability and reliability of the infrastructure is an important factor in the location of hosting sites. North

11 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 10 American and Western European countries represent the host location for 67 percent of the sites classified as digital piracy. Rapidshare is based in Switzerland and Megaupload in Hong-Kong and refuse to communicate about their financial numbers. Their economic model is a freemium model (free and premium). All Internet users can download everything for free, but if they want downloading advantages (such as increased speed, parallel download at the same time, and no commercials on the site...) they will have to pay. For larger downloads, it is a good investment, since the memberships are inexpensive and give you access to a lot of files. Rapidshare also has their own virtual online currency, which is sold at gas stations and news stands in Germany. The drawbacks to the sites mentioned above, are that they are full of commercials and pop-ups. Rapidshare previously had a rewards program for their members, but this was stopped in March Unfortunately for them, a lot of members decided to move to another file storage solution. Megaupload gives users one reward point for every download of an uploaded file. However, a user will have to be a paid subscriber to earn something, and is restricted from uploading illegal content. Files larger than 100 MB also do not get user reward points. Record labels and movie makers have often sued the direct-download companies. Courts have had differing opinions and long debates about the legality of these types of sites (Roettgers, gigaom.com). To show the will to fight piracy, the leader Rapidshare tries to collaborate by sending users to VOD websites if they arrive on a deleted file page. Recently, Rapidshare has opened an online shop where they are selling games. They are also planning to rent movies online. This might help Internet users discover how to legally get their movies, music, games, etc. Even though many people associated file sharing with piracy, there are, nonetheless, pros of file sharing.

12 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 11 Pros of File Sharing The ability to download files through the internet has become an important factor to millions of people all over the world. People download files that they need for work, school, or personal reasons every day. There are multiple advantages of using the internet to download files that can have an effect on any kind of user. The main advantage of file sharing is the ability to collaborate with others on certain projects, whether it is for work or educational purposes. Software developers can share files so that it can easily be tested and the users can give free feedback about any glitches or bugs in the new software (Buenaventura, 2010). This is a huge benefit for software developers because they do not have to pay for extra tests; there are a lot of people out there who are smart enough and willing to help out a fellow software developer. Another industry that can benefit from file sharing is the music recording industry. Recording companies and their distributors can use file sharing to send previews of upcoming albums to customers (Buenaventura, 2010). This gives customers a sneak peak of the album they are looking forward to and it can excite them even more about purchasing the album when it comes out. Families can also use file sharing to pass on personal information to other family members, which could include pictures, important files, and even invitations for family gettogethers. Although there are very good advantages of using file sharing, the disadvantages of sharing files over the internet could be very devastating to people.

13 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 12 Cons of File Sharing The people who share files over the internet have the ability to install malicious code into their files. It is difficult to tell if a certain person who is sharing files is someone that you can trust. A lot of times, applications used to share files are used by attackers who try and send viruses to other people s computers (McDowell, 2010). They incorporate spyware, Trojan horses, or worms into their files and once it is downloaded, the computer is immediately infected (McDowell, 2010). This is a huge problem because viruses and spyware damage numerous numbers of computers and costs money to fix. It has become an annoyance to a lot of people. Another malicious act that these attackers can do is getting a hold of personal information on someone s computer. They can gain access to financial information, medical information, sensitive corporate information, or any other information someone keeps private (McDowell, 2010). This is one of the major causes of identity theft. Once an attacker gets this information, it is very difficult to tell how many people they could have passed it on to. The next disadvantage of file sharing is denial of service. Downloading large files can cause major traffic over a network, which can slow down the speed of certain programs and also limit access to using the internet (McDowell, 2010). The last major con of using file sharing is the threat of prosecution. If someone downloads pirated software, copyrighted material, or pornography, they are in danger of legal action (McDowell, 2010). They can be subject to paying fines for the things they have downloaded or face other serious actions such as jail time.

14 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 13 Effects on Business The main positive affect file sharing has on a business is the ability to collaborate. Collaboration at work is one of the most important aspects of a thriving business. People working on big projects can use to send files back and forth so each person can manage their work. Blogs could also be used to work on projects as well. One of the best file sharing tools for working on projects is open source software. It allows multiple users to view and edit a document, as well as see what changes have been made to the project. A negative effect this has on business is the threat of important corporate or customer information being leaked. If an employee s computer is on a company network and exposes customer information, both the employee and the company will be liable (McDowell, 2010). Employees could also be fired or receive other punishment if they accidentally send out information that the business is keeping from the public.

15 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 14 Security Security today, is extremely important and thus protecting ones Intellectual Property Rights are equally important. Due to an increased amount of piracy on the Internet, many media companies nowadays include a certain form of Digital Rights Management (DRM) with their products. So, what is DRM? According to a website called DefectiveByDesign.org, DRM is a form of technology that is used to restrict user s access to purchased media such as ebooks, movies, music (Brown, 2011). A DRM could come in many forms such as.dll files stored on hard drive, files stored in the computer s registry, or even programs that run in the background of a computer. Some forms of DRM tend to be very light such as a disk check for video games or file encryption for software. However, other forms of DRM tend to be considered overkill or even downright unethical. An example of heavy DRM could be the constant Internet connection requirement for single player games or a device manager that restricts the use of media to one computer or an account. According to many restrictions could be considered DRM. The inability to make legitimate, personal backups of owned media is usually due to DRM. Also, programs that need to be authenticated via the company s servers could be considered DRM (DRM, 2011). There are many discussions on the topic and many interpretations of what DRM is and what it is not. The most common form of DRM in video games is called SecuROM. SecuROM was developed by Sony DADC and it prevents piracy via software (in the form of strong encryption) and hardware (in the form of coding applied to a CD-ROM/DVD-ROM during manufacturing) (SecuROM Frequently Asked Questions, 2006). Apple s itunes used to use a form of DRM called FairPlay. With Fairplay DRM, music is encrypted with a special.m4p format, instead of MP3 format, and a decryption key is required to listen to the music (How Apple s FairPlay

16 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 15 Works, 2006). However, the DRM never worked for several reasons, the main one is that many people came up with a M4P to MP3 file converter. This allowed people to freely listen to music on any MP3 supported devices as well as share their music with anyone. In January 6, 2009, Apple announced that itune s major music labels will sell their music DRM free (Neumayr and Roth, 2009). This news was appreciated by many people around the world. Ultimately, DRM s function is to stop piracy and stop file sharing. However, it is generally proven that DRM does not prevent piracy, only slows it down and is generally believed, by many people, that DRM s true function is to eliminate third party sales of products. Companies lose profit if a product is resold by third party, thus the newer form of DRM require an account tie in, thus making it virtually impossible to resell the products. An excellent example is a video game called The Elder Scrolls V: Skyrim. Skyrim comes with a form of DRM called Steam which requires the user to create an account and then tie the video game (Skyrim) to that account. After the account is tied to, Skyrim can be played but never sold because only one account is permitted and only one player can have that account. With the elimination of third party selling, companies make more money by requiring customer to purchase the products new and at a higher cost; essentially creating a monopoly. As mentioned before, there is an enormous amount of discussion on the legality, ethicality, as well as practicality of DRM and what is covered here is only a brief glimpse on the discussions.

17 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 16 Law Cases There are countless, countless law cases that deal with violation to Intellectual Property Right as well as piracy, and illegal file sharing. Some companies sue for legitimate reasons, such as clear violation of patents or trademarks, while other companies tend to sue their competitors for what seems like trivial things. In this section, three law cases will be discussed: Apple vs. Samsung, Bethesda vs. Mojang, and Everybody vs. Napster. Apple vs. Samsung is a very big case in 2011 and it is still going on. According to The Wall Street Journal, Apple sued Samsung on the claim that Samsung s Galaxy cell phones and tablets slavishly copied Apple s iphone and ipad tablet (Kane and Sherr, 2011). Apple claims that Samsung not only copied the look of Apple s products, but also the product design, packaging, and user interface as well. This clearly violates Apple s patents and trademarks. The law suit was filed on April 22, 2011, in the U.S District Court of Northern California (Kane and Sherr, 2011). The trial is set to begin on July 30, Bethesda vs. Mojang is a law case that deals with violation of trademark. According to Gamespot.com, Bethesda Softworks, a multi-million dollar video game producer and designer company, came up with a successful video game called The Elder Scrolls. Mojang, an independent game company, is coming up with a card trading game called Scrolls (Sinclair, 2011). Bethesda felt that because Mojang s game contains the word Scrolls, it is a direct violation of Bethesda s game called The Elder Scrolls (Sinclair, 2011). This kind of law case holds no value to Bethesda whatsoever and is perceived by many people as a vindictive and trivial case. The only purpose that this case serves, other than the trademark violation, is putting Mojang out of commission through heavy legal fees and time spent on the case. Bethesda most

18 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 17 likely has their own legal department; however, Mojang does not and must rely on expensive layers to settle the law case. Napster, in the short time that it operated, received so many law suits that it eventually went out of business, hence the title: Everybody vs. Napster. According to Wikipedia, Napster was founded as a pioneering peer-to-peer (P2P) file sharing service. It was co-founded by Shawn Fanning, John Fanning, and Sean Parker and the website operated between June 1999 and July In 2000, however, Napster received a slew of lawsuits from music bands to record companies (Napster, 2011). Metallica sued Napster because a demo of their song I Disappear as well as their entire back catalogue appeared on Napster. Following Metallica s lawsuit, the rapper Dr. Dre sued Napster for the same reasons. Finally, A&M Records as well as other record companies sued Napster for directly contributing and violating intellectual property rights (Napster, 2011). After Napster went out of business, it was eventually bought by BestBuy and now functions as a legal online music store and music subscription service. Currently, Napster has joined with Rhapsody to bring even more music to the table. These three law case examples are just a very small part in a larger battle against intellectual property rights infringement and illegal file sharing. As companies lose more money to piracy, they tend to overreact and sue everybody they can find. While most cases tend to be legitimate, a small percentage, as seen in the case of Bethesda vs. Mojang, tend to be irrelevant, spurious, or downright unintelligent.

19 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 18 Organizations against File Sharing The reason why Intellectual Property Rights has become such an issue in the last ten years is due to the rapid advancement of file sharing technologies. The advancement of the Internet and cheap, fast computers has made it easy to copyright material and transfer it around the world. There are three organizations that have huge campaigns against these types of file sharing. These organizations are the Motion Picture Association of America (MPAA), Recording Industry Association of America (RIAA), and the World Intellectual Property Organization (WIPO). The MPAA was founded in At the time they were mainly a nonprofit organization who focused on film ratings. Whenever you watch a film, you will notice in the beginning, a warning about copyright infringement, that is the MPAA. In most recent years they have been a big force to battle online file sharing and copyrighted materials. One of the main websites they have legally been after is Piratebay.org. The next organization is the RIAA. They were founded in They consist of mainly the recording industries distributors in the United States. On their website, riaa.com, they state their main goals as: To protect intellectual property rights and the First Amendment rights of artists To perform research about the music industry. To monitor and review relevant laws, regulations and policies. This group is more active in the fight against copyright infringement and online file sharing because it directly has members of each section of the music industry. If they don t fight piracy, they lose money. Last, but not least, is the World Intellectual Property Organization. This group is mentioned because it is an international organization that fights for intellectual property rights worldwide. The WIPO was created in 1967 to encourage creative activity, to promote the protection of intellectual property throughout the world (Wikipedia). In the About

20 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 19 WIPO section of their website, wipo.int, they state their nine strategic goals for intellectual property rights are: Balanced Evolution of the International Normative Framework for IP. Provision of Premier Global IP Services. Facilitating the Use of IP for Development. Coordination and Development of Global IP Infrastructure. World Reference Source for IP Information and Analysis. International Cooperation on Building Respect for IP. Addressing IP in Relation to Global Policy Issues. A Responsive Communications Interface between WIPO, its Member States and All Stakeholders. An Efficient Administrative and Financial Support Structure to Enable WIPO to Deliver its Programs. The WIPO has 185 current Member States in their organization who contribute to the battle to protect intellectual property rights worldwide. Legality of File Sharing These organizations are having such a hard time fighting against online piracy and copyright infringement because the technologies used for doing it are not illegal. Every peer-topeer website, online streaming website, or file transfer website, is legal. Most lawsuits are against these types of websites but it s hard to win these cases because their website isn t illegal. The only illegal part about it is the sharing of copyrighted materials. A big argument by most file sharing companies is if they are going to be punished then search engines like Google or Yahoo need to be held accountable for allowing copyrighted material available. As stated on Computerhope.com, some illegal file sharing examples would be:

21 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 20 Downloading or sharing a copyrighted movie. Sharing copyrighted songs (music) to other people who have not purchased those songs or downloading songs from other people when you ve not purchased that song. Sharing or downloading computer software (programs, games, etc). Downloading or sharing a copyrighted TV show or program. Stop Online Piracy Act The most recent battle against online file sharing is the Stop Online Piracy Act. Back in October 2011, Congress proposed this bill that would allow the US department of Justice, as well as copyright holders, to seek court orders against websites accused of enabling of facilitating copyright infringement. The bill gives the Government the right to restrict any website they feel violates these rights (Wikipedia). Basically, if this bill passes, Internet as we know it would not exist. The innovative minds that flourish with the Internet will be restricted from freely creating new things. The Government would have the right to take down any website and restrict any content they pleased. Even search engines would be held responsible for preventing access to infringing sites. According to the Washington Post, Internet giants including Yahoo, Google, Facebook, and the Consumer Electronics Association have joined forces to oppose the legislation, which they say would give the government too much power to shut down Web sites accused of pirating or counterfeiting content. Michael O Leary, a representative of the MPAA, stated that this act is fundamentally about jobs (Washingtonpost). Although piracy results in billions of dollars lost by the record labels and publishing houses, the restriction of the Internet would result in even more loss of money worldwide. There definitely needs to be something done about online file sharing and the copyright infringement involved, but to pass such a bill as S.O.P.A. would ruin the Internet as we know it.

22 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 21 Conclusion In Conclusion, many topics were covered in this term paper. First, the definitions of intellectual property rights including patents, copyrights, trademarks, industrial design rights, trade secrets, and geographical indication protection were given and discussed. Also, the concept of file sharing was defined and discussed. Next, several main file sharing websites were listed and their technology and revenue were discussed. Furthermore, the topic of how business is affected by file sharing was discussed and pros and cons of file sharing were compared. Next, internet security (mainly dealing with anti-copyright protection such as DRM) were discussed and several law cases showing some form of intellectual property rights violation were listed and briefly discussed. Finally, several organizations against file sharing were listed and discussed as well as the overall legality of file sharing and the new Stop Online Piracy Act. Intellectual property rights and file sharing is a topic that is very complex and will get even more complex as time goes on. As The Internet become easier and easier to use and computers become cheaper, more user will surf the net and the more users there is, the greater the chance of someone breaching intellectual property rights. Yes, online piracy is a great concern and a growing crime, and many companies, especially in the media field, are including greater and greater security/drm requirement. However, as seen in this paper, the main and popular file sharing companies such as Rapidshare and Megaupload are doing their best monitoring their site and taking down illegal files. The last thing that the file sharing sites want is to end up like Napster, covered in lawsuits and applying for bankruptcy. As of right now, new acts such as SOPA and Protect IP are being considered by the government and voted by the congress. If passed, they will change how The Internet functions for a long, long time. Whether the change is for the better or for the worse will be up to the reader to decide.

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24 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 23 How Apple FairPlay Works. (2006, June). Retrieved December 9, 2011, from TinHat: Is File Sharing Illegal? Retrieved 2011 from Computerhope Kane, Y. I., & Sherr, I. (2011, April 19). Apple: Samsung Copied Design. Retrieved November 6, 2011, from The Wall Street Journal: Marlowe, Beth. November SOPA (Stop Online Piracy Act) debate: Why are Google and Facebook against it? Retrieved from McDowell, M., Wrisley, B., & Dormann, W. (2010, May 19). Risks of File Sharing Technology. In United States Computer Emergency Readiness Team. Retrieved November 13, 2011, from Napster. (2011, December 7). Retrieved December 1, 2011, from Wikipedia: Neumayr, T., & Roth, J. (2009, January 6). Press Info - Changes Coming to the itunes Store. Retrieved December 8, 2011, from Apple: Roettgers, J. (2010, April 1). P2P traffic still in decline, one-click hosters are benefiting. Retrieved November 15, 2011, from P2P Blog: html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:%20p2pb log%20%28p2p%20blog%29 Roettgers, J. (2011, May 2). RapidShare Starts Selling Games. Are Movies Next? Retrieved December 1, 2011, from Gigaom: SecuROM Frequently Asked Questions. (2006). Retrieved December 8, 2011, from SecuROM:

25 INTELLECTUAL PROPERTY RIGHTS AND FILE SHARING 24 Sinclair, B. (2011, August 5). Minecraft studio target of legal action from Bethesda. Retrieved December 9, 2011, from Gamespot: Stop Online Piracy Act. Retrieved 2011 from Wikipedia Traffic Report: Online Piracy and Counterfeiting. (2011, January). Retrieved November 12, 2011, from MarkMonitor: _Traffic_Report_ pdf World Intellectual Property Organization. Retrieved November 23, 2011 from Wikipedia: