Commercial music piracy (generating income from unlicensed sales) and private copying of music are responsible for much of the copyright infringement. The International Federation of the Phonographic Industry estimated the number of files illegally shared at more than 40 billion in 2008, a piracy rate of about 95 per cent. Drawing on industry figures for retail pricing and the volume of illegal downloads, Frontier Economics has estimated the commercial value of all recorded music digital piracy at between USD 17 and 40 billion in 2008, representing a commercial loss to the industry of between USD 3.5 and 8 billion annually.
In the technology sector some companies have evolved business models that are entirely based on inventing new technologies, patenting the invention and then licensing the rights without ever manufacturing goods. Qualcomm, which has a market capitalization of USD 96 billion, has a business model successfully founded on creating and licensing intellectual property rights. The company’s valuation is the result of an estimated USD 12 billion investment in research and development since its foundation in 1985. The value of patents was also recently demonstrated when Google placed a USD 900 million bid for Nortel’s portfolio of 6000 patents, only to lose to a USD 4.5 billion bid by a consortium including Apple, RIM, Ericsson, Sony and Microsoft.
The protective power of patents can be abused. In commenting on its bid for the Nortel patents, Google stated, “The patent system should reward those who create the most useful innovations for society, not those who stake bogus claims or file dubious lawsuits”. This concern about patent “trolls” is widespread. Commenting on the United States 2009 Patent Reform Act, the Coalition for Patent Fairness (whose partners include Apple, Google, Cisco, Verizon, Dell, Intel and SAP) stated that reform is needed to protect “inventors and innovators from unjustified lawsuits and to allow them to continue to make products and services that will help the US economy grow”. In May 2011, Microsoft became a member of a crowdsourcing service designed to challenge and invalidate specious software patents and to avoid litigation costs.
Intellectual property rights provide the foundation upon which innovation is shared, creativity encouraged and consumer trust reinforced. But the digital world poses a new challenge — how to manage the balance when the consumer is the creator, when the marginal cost of copying is zero, when enforcement of existing law is extremely difficult, and when “free” access to information and content is considered by many to be a right.
Estimates by Frontier Economics for the International Chambers of Commerce suggest that digital piracy accounted for about USD 75 billion in 2008, and project that it will reach USD 215 billion by 2015. Music piracy is at the forefront of this activity, but peer-to-peer networks, coupled with higher broadband speeds, are increasingly being used to share television programmes and films.
Lost Series 5 was the most pirated show in 2010, with over 2 million downloads in the first week and reports of over 100 000 people sharing a single “torrent” (metadata file for peer-to-peer sharing). Within 20 minutes of the broadcast of the final episode of Lost, a subtitled version in Portuguese reportedly appeared on a pirate website.
Intellectual property plays an important role in an increasingly broad range of areas, ranging from the Internet to health care to nearly all aspects of science and technology and literature and the arts. Understanding the role of intellectual property in these areas - many of them still emerging - often requires significant new research and study. In an effort to promote informed discussion of the intellectual property issues involved in these fields, WIPO regularly produces various explanatory publications on current issues of interest.
Music IP is legally controlled by copyright. Digital Rights Management (DRM) technology has been used to enforce licensing agreements on digital recordings files. Until 2007, the recording industry only sold digital music with DRM, in an attempt to control copyright violations. The great irony of DRM that has prevented its acceptance by consumers is that by restricting the use of the legally distributed digital music, DRM makes the legal product lower quality than the illegal product. The lack of consumer incentive to use a lower quality product, combined with the impracticality of enforcing copyright agreements on individual consumers makes the appropriability regime in the distribution of music to consumers very weak.
George Harrison’s ‘My Sweet Lord’ was released January 15, 1971 and hit the charts on January 23, 1971 as George Harrison’s first solo single. It was released under the Apple label and enjoyed the number one spot originally for five weeks, then in 2002, again for one week. It remained on the charts for a total of twenty-seven weeks. All of this is the good news. The not so good news involves a song called “He’s So Fine” recorded by the Chiffons in 1962 and then moved under the Bright Tunes Music Corp label in 1971. The Chiffon’s song did well in the United States and received a luke warm reception in the UK.
February 10th, 1971, Bright Tunes filed a suit against George Harrison inclusive of his English and American companies. The suite also included Apple Records, BMI and Hansen Publications. Though an out of court settlement was approached, including an offer of 148,000.00, but it never reached fruition before the court case proceeded, as the attorneys for Bright Tunes Music Corp. wanted seventy-five percent of the royalties and the surrendering of the copyright for My Sweet Lord.
The case waited to be heard for five years, during which time George Harrison’s attorneys continued to try to settle out of court. The case was heard in court for the first time, in February of 1976, George Harrison’s attorneys tried to prove out the difference between the two songs, but with little success. The judge found that though he didn’t believe George Harrison purposefully plagiarized the song, the two songs were essentially the same, only displaying minor differences to note and chord. George Harrison was found guilty of ‘subconscious plagiarism’ and a judgment was filed against him in the amount of $587,000.00 of which the full amount was paid and the judgment dismissed in 1981
The music industry is the business of performing, recording, and selling music through a number of different methods. There are many different types of people involved in this industry, from musicians who create and play music to sound engineers who work to properly record music and producers who oversee the entire process. While this term typically refers to recording and selling music through physical or digital means, live performances of music are often a part of it as well. The industry in a particular country or area may be overseen by a number of different record labels and companies.
Copyright was initially conceived to protect authors and developers of creative works from having their works stolen and to provide them with a source of revenue, which would hopefully spur creativity. Modern copyright law has its origins in British stationers’ attempts to protect works from piracy through the passage of the Statute of Anne in 1710, which gave the monopoly control over a work back to the author instead of a publisher. In an effort to encourage creativity, the United States Congress enacted the first copyright legislation in the United States in 1790 to provide a mechanism for protection and reward for authors and creators of artistic works. This first law protected maps, charts, and books for a period of fourteen years, with fourteen-year renewals.
Copyright is the right of a creator to control various uses and distributions of his or her creations. It is copyright that protects music created and the creator’s right to make money from such music, and without it, there would be no recorded music industry.
Facing a public backlash against the music industry (and Hollywood's) latest attempt to force lawmakers to intervene on their behalf, the RIAA has come out attacking existing laws for being "wrongly interpreted", and says that the newly proposed Stop Online Piracy Act (SOPA) won't "kill the Internet" as critics have warned.
Instead of selling high quality music the public wanted, the music industry “sold” music riddled with Digital Rights Management “copyright protection,” meaning the music would only play back on certain devices under certain conditions. This practice is a gross mistreatment of customers.
For instance, when Sony got bored of the lack of traction its online music system had generated, they shut it down. This meant that everyone who “bought” music from Sony could only play it on old devices launched to go with it. The customers who invested heavily in Sony’s music were ignored. In short, despite selling the music, you did not actually own what you bought. Essentially, you are not buying music — you are paying to rent it.
Although lawyers might say otherwise, the movie industry is actually booming despite piracy. Some evidence suggests that those who download movies tend to be enthusiasts who spend more on movies in the first place, and if they download a movie, they are likely to see it again in theaters.
Copyright infringement happens when a song is copied, modified, or performed without the song owner's permission. If the song owner did not authorize the use and if no legal principle permitted it, then the infringer can be sued for damages. The main question in such an instance is whether the song owner has been injured (whether he has suffered some financial damages because of the infringement). Because the purpose of an infringement lawsuit is to provide a remedy for the song owner's injury, such a lawsuit should be filed only if actual damages exist.
In the music industry, the test for infringement is whether the songs are substantially similar. The measure to ascertain whether infringement has occurred is the importance of the part taken, not the amount taken. In an infringement lawsuit, a song owner has to prove that the other musical artists had access to the song and copied a portion that was protected under copyright.
Music that is not copyrighted is in the public domain and is free for anyone to copy. Also, songs published prior to the year 1923 are in the public domain and can be copied freely. Familiar chord sequences or instrument patterns are considered to be common elements of the language of music and are free for all to use because what makes a song protectible is the unique way that elements are combined or expressed.