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Forum: Software Piracy Is Not Just Economics Anymore

Communications of the ACM, Vol. 43 No. 12, Pages 11-13
10.1145/355112.355115


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In "Global Software Piracy: You Can't Get Blood Out of a Turnip," (Sept. 2000, p. 82) Gopal and Sanders seem to state the obvious, albeit backed up with impressive facts and figures. To anyone living in countries where the income is significantly below that of the U.S., there can be no doubt that the high price of software, often at or even above normal U.S. rates, is a prime factor in piracy.

The authors, however, neglect to mention a few other very important factors. First, and perhaps foremost, is the view that most software companies are already making sufficienteven excessiveprofits, hence pirating software is not viewed as particularly immoral. Second, the fact that most of these companies are U.S.-based, means that, in pirating software, people may believe they are somehow striking a blow against ever-encroaching U.S. economic and cultural imperialism or, at the very least, "stealing" from the rich. It is only fair to point out, too, that labeling certain countries as needing only "one legitimate copy" is terribly wrong. In most of the countries singled out, it is a gross exaggeration; no legitimate copies are needed whatsoever.

The parallel with other industries, in particular the music industry, is revealing. The Napster phenomena illustrates that price is not necessarily the major factor governing piracy. In downloading MP3 files over the Internet, millions of normally law-abiding U.S. citizensmost with the means to purchase the items legally are openly and knowingly infringing copyright. Yet they do not imagine themselves doing anything particularly immoral. They rationalize their acts by pointing to the excessive profits of the record companies, and believe themselves striking a blow against the march of big business. Once a recording is spirited out of a recording studio, it can be very difficult to sell many legitimate copies of the record.

The Internet could mean that the replication and distribution of intellectual material will no longer be a lucrative source of income. This not only threatens all those employed in such industries, but in turn means that even the authors of such works must find alternative ways to support their endeavors. Ultimately, artists of all sorts will be forced to earn a living either by performance fees or by advertising. Alternatively, they may survive on donations or find other employment to support their creative endeavors. If society values its culturebooks, music, software, and filmsit must find ways to encourage and support those who produce it. Legislation and education must be geared to the fact that piracy is not solely a matter of economics anymore. It is fundamentally a moral issue.

David Davenport
Ankara, Turkey

Gopal and Sanders make made an interesting economic argument. I wish to comment on several ideas from their last paragraph. They state, "...software piracy ... is wrong from both a legal and moral standpoint." Software piracy is wrong because we, in the U.S., have created a social contract, stating, in effect, that "If you create intellectual property that will ultimately enter the public domain and, thus, add to our society's store of knowledge, we will give you an artificial and temporary monopoly over that property." If we hadn't entered such a contract in the first place, we would be under no moral obligation to pay licensing fees.

There are several problems with this social contract (embodied in our copyright laws), particularly as it applies to software. The first is that we have made the copyright terms so long that, by the time software enters the public domain, it is useless, except, perhaps to historians of technology. Thus, we, the public, get nothing of value from the deal. A second problem is that we are losing the ability to keep up our side of the deal (for example, preventing copying, as technology makes it easier and easier). Only significant government effort can limit copying. Global copyright enforcement is an expensive proposition, and the expense is not justified by the negligible return to society of an antique binary entering the public domain.

Here's my suggestion: Limit software copyright terms to 10 years; if you haven't updated your program in 10 years, you don't deserve any protection. Second, require submission of source code at the beginning of the copyright term, and let the copyright office release the source at copyright expiration.

Gopal and Sanders also state that "consumers ... also realize the very positive benefits derived from having supported software." Could it be that software publishers ought to be selling support in the underdeveloped world rather than trying to force users to pay for something that costs near-zero to duplicate?

Michael P. Conlon
Slippery Rock, PA

Gopal and Sanders propose as one cure differential pricing in different markets on the assumption that something is better than nothing, where nothing is a highly likely outcome. Software (and hardware) vendors already engage to some degree in differential pricing (for example, academic/educational pricing as compared to other pricing schemes in the marketplace). Though I am not an economist, I wonder whether some price could compete across all markets to permit software vendors' returns equivalent to what they now receive. Or is the price now demanded and received in some markets high enough to offset and therefore make tolerable pirated software in other markets? To put it another way, are markets in some sectors so small that piracy is less costly to vendors than finding some equilibrium price. Economists weigh in please.

Wallace Koehler
Norman, OK

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Need Stronger Argument for Access Control

"Technological Access Control Interferes with Noninfringing Scholarship" (Sept. 2000, p. 21) seems to me unworthy of a "Viewpoint" column.

Authors Appel and Felton say that technological protection "will hinder legitimate noninfringing uses vital to scholarship and science." They state as fact things that might happen but do not show that any of them have happened to any significant extent. They go on to make the unproven assertion that the supposed problems will hinder work "vital to scholarship" (their phrase). This may or may not be the case, but a Communications "Viewpoint" on such a tender topic should be required to make a good argument that the alleged damage is in fact occurring or very likely to occur. The authors apparently believe that saying so makes it so.

The authors ignore the availability of information from other sourcespossibly less convenient ones but sufficient enough to accomplish the work allegedly hindered. Nor do they argue that, in an area in which conflicting interests must be balanced, the DMCA anticircumvention clause upsets the balance.

Finally, by implication and tone, they take for granted that the scholars in question have a right to the work. There is an undecided debate as to whether fair use is an affirmative right or merely a defense in an infringement action. (An eminent intellectual property attorney taught the authors of the recent NRC book, The Digital Dilemma: Intellectual Property in the Information Age, that it was a lawyer's trick to act as if the answer to an undecided legal question was in fact the answer favorable to the advocate's case. Arguably, Appel and Felton have tried this trick; if so, it needs exposing for what it is.)

The underlying principles were addressed eloquently in the Capentier Lectures at Columbia University, summed up as follows: "Now it is no wonder that teachers and others who would be deprived by the new detailed code of some existing benefit are making a loud moan; at the same time publishers claim to see their own eventual extinction in . . . the use of devices which can make one tangible copy serve in place of many" (Kaplan, B. An Unhurried View of Copyright, Columbia University Press, 1966).

In this criticism, I eschew stating any position on the anticircumvention legislation; a carefully considered view can be read in the consensus argued in The Digital Dilemma.

My objection to Appel's and Felton's "Viewpoint" is that it is too shallow to be helpful in the debate.

Henry Gladney
Saratoga, CA

The Authors Respond
Gladney takes us to task for writing about possible future harms on the grounds they are not happening yet. We chose to write about future harms precisely because, having not happened yet, they can still be prevented.

Second, one point of our essay is that the DMCA closes information routes that would have been open under traditional copyright law. We are not arguing that scholars need new rights under the law; we are merely pointing out the DMCA took away some of their existing rights.

Third, Gladney accuses us of "taking for granted" that the DMCA recognizes the value of scholarly fair use. In fact, the DMCA explicitly states the rule-making process should consider "the impact that the prohibition on the circumvention of technological measures applied to copyrighted works has on criticism, comment, news reporting, teaching, scholarship, or research."

Finally, although we find The Digital Dilemma a useful book, we think its authors would agree it was not meant to be the last word on copyrights in the digital age. We endorse its recommendation that stakeholders "begin a discussion" of these difficult issues and its conclusion that "fair use ... should continue to play a role in the digital environment."

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Most Enlightening Ever

Phil Armour's column, "The Case for a New Business Model," ("The Business of Software," Aug. 2000, p. 19) is outstanding. As a reader of Communications since 1966, I would count this among the most enlightening and important half-dozen or so articles I have ever read in the magazine. His deep insight into the nature of software will benefit our profession for years to come (but not concretely, of course, until practitioners start to act on what he has identified). I look forward to Armour's future contributions.

Mark Wallace
Los Angeles, CA

What a great column by Armour. Truly groundbreaking; it will rank beside Vannevar Bush's "As We May Think" in changing the world. (I hope it doesn't take as long to see its fruition.) I'm glad that Armour's ideas are reaching a wide and (I hope) influential audience.

Fred Ballard
Highland Park, IL

I greatly enjoyed "The Case or a New Business Model." I think Armour has quite a bit to say about how we should approach software development. Whether anyone will listen is, of course, problematic.

In any event, the column makes the point that software is not a product, a point Eric Raymond also makes in The Magic Cauldron (though for different reasons). As I don't see any cross-references in the two essays, I thought I should point out the overlap.

Rich Morin
Pacifica, CA

I agree completely with Armour's point about failure being as valuable as success. I've been working with a new intern who just graduated from high school. He's smart and self-motivated. He had been hitting a brick wall with a problem in a program he was working on. After a few weeks of repeatedly trying to solve the problem the way he thought it would be solved, he finally got a suggestion (via a Web discussion group) to try a different approach. When he tried it and found it worked, he apologized for taking so long to solve what was ultimately an easy solution. My response was that it was probably the best experience he could have had during his internship. The solution ultimately required a simple shift of perspectivestepping back from the problem and approaching it fresh.

At the end of our discussion I asked him if he would ever attack a problem in the same, brute force, single-focus way. His answer: "No way!" My response was to tell him he had just learned a valuable lesson that will stick with him for the remainder of his software development career.

Steve Green
Minneapolis, MN

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