There are now growing concerns that in trying to protect its profits, the software industry could infringe on rights to copy software.
The software industry’s message is simple: Software piracy costs money. The Canadian Association Against Software Theft (CAAST), a group of major software developers, claims 38 per cent of software used in Canada in 2001 was copied illegally and this cost $289 million in retail sales of business software.
Jacqueline Famulak, CAAST’s president, says that means lost jobs, less software development and less tax revenue for the government.
But there’s another side to this story. While few would legalize wholesale copying of commercial software for profit, there are growing concerns that in trying to protect its profits, the software industry could infringe customers’ legitimate rights. And some argue innovation will gain more from freedom to borrow others’ ideas than from extra revenue in software vendors’ pockets.
Critics of the industry’s standpoint argue that software isn’t like physical objects. If you take my car, now you have a car and I don’t. If you copy my software, now we both have it. Copyright law is meant to recognize this, but grant certain rights to the creator for a limited time — as an incentive to create.
Richard Stallman, president of the Free Software Foundation, says copyright is a bargain between copyright holders and the public, and that bargain should be amended only in ways that serve the public interest.
Stallman argues that software is a functional work, like a dictionary or a recipe, so it shouldn’t be illegal to modify a program to suit one’s own needs and to redistribute that modified program — even commercially. “Imagine that if you made a copy of a recipe for your friend, they would call you a pirate and put you in prison.”
Fred von Lohmann is the senior intellectual property attorney for the Electronic Frontier Foundation, a U.S. lobby group concerned with rights and freedoms in the digital age. He says the EFF believes in copyright protection for software, but feels that in the past 15 years the balance has tipped too far toward copyright holders’ rights.
And there is the widely cited argument that many of those who use copied software would do without rather than paying for it, so the industry isn’t losing as much as it claims. Tied to that is the claim that software costs too much and price reductions would help cut piracy. (Famulak replies that CAAST members don’t discuss pricing among themselves.)
Today, being jailed for giving a friend one unauthorized copy of a commercial software package remains almost as improbable as being arrested for sharing a recipe — but only because enforcement is impractical. The software industry maintains that doing so is illegal, and hopes to stop it by technological means.
Software copy protection has a long and controversial history. It seems to be reappearing, for instance in Microsoft’s registration procedure for its Office XP software, which checks the hardware on which the software is installed and can block reinstallation on a different machine.
But shouldn’t it be legal to remove software from one computer and install it on another? Or, as von Lohmann argues, to sell software you no longer want to someone else? And replacing a hard drive may fool the software into thinking it is being installed on a different PC.
When an individual hands over a tidy sum for a software package, that person reasonably believes he or she has bought the right to use it in reasonable ways. Famulak agrees that copy-protection and digital rights management schemes need to allow for legitimate use. But what is legitimate use?
Does buying one copy of a software package give me the right to install it on my desktop computer and my notebook? Many software licenses say yes. Is it fair for a family to install one package on two PCs, even if both are sometimes used at once? Few software companies say yes, but it happens. Two-PC households are understandably reluctant to buy two copies of a software package. Technology can prevent dual installations, but unless PCs are networked, how do you prevent concurrent use without preventing non-concurrent use — and how much goodwill would software makers lose by trying?
Famulak suggests that in the future, buyers may be able to choose between single-installation versions and slightly more costly multi-installation versions. Maybe consumers should accept a modest premium — or maybe vendors should accept that more than one person in a single household may use a package at once, just as one person or a roomful can watch a rented videotape. “At the very least,” von Lohmann says, “we should have a real robust debate about this.”
With a generation that downloads music rather than buying it, recording companies are now saying that file sharing is simply stealing.
Want to hear your favourite musician’s latest hit? Log on to the Internet, and chances are that even if your tastes are obscure, you’ll find an MP3 file you can download to your PC. The Napster service that started it all is gone, but others like Kazaa, Morpheus and Grokster live on — and file sharing is spreading to video.
This may put a song in music collectors’ hearts, but the recording industry is singing the blues. Recording companies say file sharing is simply stealing, and Matt Oppenheim, senior vice-president of business and legal affairs at the Recording Industry Association of America, says music sales have fallen 10 per cent in each of the past two years, and file sharing is a major reason. “Consumers are indicating they are purchasing less music because they are finding it free online,” Oppenheim says.
The industry is fighting back. Legal action killed Napster, whose central directory of files available for swapping made it easier to hold the company responsible for trading copyright material. Newer services have no central database and argue they are not responsible if people use their services to violate copyrights. That hasn’t prevented lawsuits, such as one against Sharman Networks, parent company of Kazaa, by several music companies and movie studios.
The music companies also hope to co-opt file sharing with their own services, which will charge for the music downloaded. Universal Music Group, for instance, is offering music on the Web at 99 cents per song. Commercial services like Pressplay and MusicNet are the industry’s response to Napster, Kazaa and the like.
The industry is also using technical means to prevent file sharing and copying. EMI has started issuing copy-protected CDs in many countries, though not yet in North America. In January, Microsoft announced technology designed to control copying from CDs to hard drives.
But the industry must tread carefully. Jeanne Meyer, spokesperson for EMI Recorded Music, admits one reason EMI hasn’t brought copy-protected CDs to North America yet is “consumer resistance.” That resistance is partly due to fear that copy protection will interfere with legitimate uses like copying music from your own CD to listen to on an MP3 player or PC.
“It’s preventing you from doing things that are perfectly legal because you might do something that’s illegal,” complains Paul Hyland, director of Computer Professionals for Social Responsibility.
“We’re not saying that personal copies aren’t okay,” Meyer replies. Customers hope not. The industry talks about a generation that downloads music rather than buying it, but that generation’s parents copied music from records to cassettes and eight-tracks. And many are cynical when the industry claims to be protecting musicians, arguing that most musicians see little income from recordings and rely mostly on performances. But Meyer retorts indignantly that EMI’s contracts with musicians are fair, without saying whether they are lucrative for most artists.
Some also argue musicians — and labels — benefit from swapping because it introduces consumers to new music they might not otherwise discover. The industry partly agrees, which is one reason music companies are launching or working with commercial sharing services.
But Fred von Lohmann, senior intellectual property attorney for the Electronic Frontier Foundation, says the commercial services are too little, too late. For instance, he says, none work with Apple Computer’s iPod, “the single most popular digital device of the last two years.” And the selection doesn’t compare with that on the unauthorized services. “Forty million people are voting with their feet that Kazaa is more useful,” von Lohmann says.
He proposes an answer: compulsory licensing. Make file sharing legal, but compensate artists and recording companies for the use of their material. One option is a tax on blank CD-ROM discs — already in the works in Canada — or on CD-recordable drives. Another might be a levy on Internet bandwidth.
Oppenheim isn’t having any of this. “We don’t force individuals to sell things that they don’t want to sell,” he retorts. “We don’t set prices for them…that is something that largely disappeared with Communist Russia.”
That’s how heated the copyright debate has become. On one side, the American religion of property rights, on the other, the argument that copyright law was not originally meant to be as absolute as the right to physical property. And in the middle, technology that opens up possibilities never imagined when copyright was conceived. File swapping will not go away. The music industry may find a way to control it or live with it, but some compromises will be necessary.
