Law and Justice

Posts Tagged ‘Piracy’

Data Theft in Cyber Space – Issues and Laws

The rapid development of Information technology poses new challenges before the law. These challenges are not confined to any single traditional legal category but arise in, for example, Criminal Law, Intellectual Property Law, Contract and Tort. One such challenge is the growing menace of “Data Theft”. It is the term used when any information in the form of data is illegally copied or taken from a business or other individual without his knowledge or consent.

Data as a valuable asset

Data is a valuable asset in this modern era of Information Technology (IT).  Data is an important raw-material for Call Centers and I.T. Companies. Data has also become an important tool and weapon for Corporates to capture larger market shares. Due to the importance of Data in this new era, its security has become a major issue with the I.T. industry.  The piracy of data is a threat, faced by the I.T. players, who spend millions to compile or buy data from the market.  Their profits depend upon the security of their Data. 

Issues

The major issue regarding Data Theft is its International character, for example Systems may be accessed in USA, the data manipulated in China and the consequences felt in India. The result of this ability is that different sovereignties, jurisdictions, laws and rules will come into play which again is an issue in itself. Further, collection of evidence in such circumstances become another issue as investigation in three different countries, all of whom may not be in talking terms, is almost impossible and poor technical know-how of our cops adds to the woes. Also, the lack of coordination between different investigating agencies and a not-so-sure extradition process is another head ache. However the biggest of all these issues is the lack of specific laws in the country dealing with this crime, so even if the culprit is caught he can easily get away by picking and choosing any of the of various loopholes in our law.           

Does India have sufficient Laws?

The problem of data theft which has emerged as one of the major cyber crimes worldwide has attracted little attention of law makers in India. Unlike U.K which has The Data Protection Act, 1984 there is no specific legislation in India to tackle this problem, though India boasts of its Information Technology Act, 2000 to address the ever growing menace of cyber crimes, including data theft. The truth is that our IT Act, 2000 is not well equipped to tackle such crimes. The various provisions of the IT Act, 2000 which deal with the problem to some extent are briefly discussed below.

Section 43:- This section provides protection against destruction and unauthorized access of the computer system by imposing heavy penalty up to one crore. The unauthorized downloading, extraction and copying of data are also covered under this section. Clause ‘C’ of this section imposes penalty for unauthorized introduction of computer viruses of contaminants. Clause ‘G’ provides penalties for assisting the unauthorized access.

Section 65:- This section provides for computer source code. If anyone knowingly or intentionally conceals, destroys, alters or causes another to do as such shall have to suffer imprisonment of up to 3 years or fine up to 2 lakh rupees. Thus protection has been provided against tampering of computer source documents.

Section 66:- Protection against hacking has been provided under this section. As per this section, hacking is defined as any act with an intention to cause wrongful loss or damage to any person or with the knowledge that wrongful loss or damage will be caused to any person and information residing in a computer resource must be either destroyed, deleted, altered or its value and utility get diminished. This section imposes the penalty of imprisonment of up to three years or fine up to two lakh rupees or both on the hacker.

Section 70:- This section provides protection to the data stored in the protected system. Protected systems are those computers, computer system or computer network to which the appropriate government, by issuing gazette information in the official gazette, declared it as a protected system. Any access or attempt to secure access of that system in contravention of the provision of this section will make the person accessed liable for punishment of imprisonment which may extend to ten years and shall also be liable to fine.

Section 72:- This section provides protection against breach of confidentiality and privacy of the data. As per this, any person upon whom powers have been conferred under IT Act and allied rules to secure access to any electronic record, book, register, correspondence, information document of other material discloses it to any other person, shall be punished with imprisonment which may extend to two years or with fine which may extend to one lakh rupees or both.

Can Data Theft be covered under IPC?

Section 378 of the Indian Penal Code, 1860 defines ‘Theft’ as follows:-

Theft – Whoever, intending to take dishonestly any movable property out of the possession of any person without that person’s consent, moves that property in order to such taking, is said to commit theft.

 Section 22 of I.P.C., 1860 defines “movable property” as follows:-

            “The words “movable property” are intended to include corporeal property of every description, except land and things attached to the earth or permanently fastened to anything which is attached to the earth.”

            Since Section 378 I.P.C., only refers to “Movable Property” i.e. Corporeal Property, and Data by itself is intangible, it is not covered under the definition of “Theft”.  However, if Data is stored in a medium (CD, Floppy etc.) and such medium is stolen, it would be covered under the definition of ‘Theft’, since the medium is a movable property.  But, if Data is transmitted electronically, i.e., in intangible form, it would not specifically constitute theft under the IPC. 

 “Data”, in its intangible form, can at best be put at par with electricity.  The question whether electricity could be stolen, arose before the Hon’ble Supreme Court in the case “Avtar Singh vs. State of Punjab” (AIR 1965 SC 666).  Answering the question, the Supreme Court held that electricity is not a movable property, hence, is not covered under the definition of ‘Theft’ under Section 378 IPC.  However, since Section 39 of the Electricity Act extended Section 378 IPC to apply to electricity, so it so became specifically covered within the meaning of “Theft”. It is therefore imperative that a provision like in the Electricity Act be inserted in the IT Act, 2000 to extend the application of section 378 IPC to data theft specifically.  

What do we need and why do we need?

It is imperative in today’s world that an emerging IT super power like India has a comprehensive legislation to protect its booming IT and BPO Industries (worst affected industries) against such crimes. Though the IT Act may appear sufficient in this regard but it is not comprehensive enough to tackle the minute technological intricacies involved in such a crime which leaves loopholes in the law and the culprits get away easily. Since this problem is not confined to one nation and has international dimensions, India must look forward to be a signatory to any international convention or treaty in this regard. Also it high time that our national police organizations are trained to deal with such crimes.    

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Since the rise of Napster and other file sharing services in its wake, most of us have assumed that intellectual piracy is a product of the digital age and that it threatens creative expression as never before. The Motio… More >>

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In victories against piracy, Nintendo Co Ltd (Nintendo) successfully protected its copyright. These cases illustrate that infringers can be tracked down and with serious consequences

The facts

James Burt, 24, of Sinnamon Park, Brisbane copied New Super Mario Bros — one of Nintendo’s new Wii games — and uploaded it to the internet a week before its official Australian release on 12 November 2009.

Under the Copyright Act 1968 (Cwlth), Burt should have sought Nintendo’s permission, as the copyright owner, before copying and distributing its games.

As a result of Mr Burt’s conduct, thousands of people around the world downloaded illegal copies of the game causing substantial loss to Nintendo.

What action did Nintendo take?

Once notified of the breach, Nintendo engaged a private investigator to apply sophisticated technology to determine the identity of the infringer, Burt.

On 23 November 2009, Nintendo obtained a Federal Court order to search Burt’s residence. During the search, Nintendo seized property to use as evidence to substantiate its claims against Burt. The Court ordered Burt to allow access, including passwords, to his social networking sites, email accounts and websites.

What was the outcome?

Nintendo then sued Burt in the Federal Court of Australia. Under an out-of-court settlement in January 2010, Burt is required to pay Nintendo $1.5 million in damages to compensate Nintendo for the loss of sales revenue and a further $100,000 to pay Nintendo’s legal costs.

Copyright infringement is taken seriously by the courts. This case illustrates the broad range of orders and remedies that can be obtained from the courts to successfully protect your copyright.

The lesson

This case highlights the severe penalties that are imposed on individuals or companies that infringe copyright laws. Be cautious when dealing with copyright material. Even if your breach is unintentional, action can be brought against you. Companies such as Nintendo are becoming more pro-active and innovative in pursuing offenders. In a statement, Nintendo commented that it guards its intellectual property rights to protect the interests of its consumers, its own interests and the interests of game development companies.

Another win for Nintendo

Since this decision, Nintendo has won another Australian Federal Court case. This case was against online console and accessory seller IT Solutions Pty Ltd trading as GadgetGear — involving the gadgets known as R4 cards, which pirate games for its handheld DS system.

GadgetGear and its directors have acknowledged that:

the game copying devices infringe both Nintendo’s copyright and Nintendo’s trademarks; and
they are illegal circumvention devices.

As a result of this case, GadgetGear and the directors have agreed to permanently refrain from importing, offering for sale and/or selling game copier devices.

GadgetGear and directors Patrick and James Li were ordered to pay Nintendo $620,000 in damages and hand over all their stock of copiers to Nintendo for destruction.

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Caveat emptor, a pig in a poke, and let the cat out of the bag! Most people are familiar with at least two of these. When dealing with the software industry, all three must be remembered.

Sellers have never had sterling reputations for honesty. lf they had, the three expressions cited above would never have attained a place in common usage. Putting a cat in a bag and selling it as a pig gave rise to the latter two expressions. The smart buyer, the buyer who took the caveat to heart, opened the bag before putting down his money and let the cat out.

Software manufacturers have foisted the impression on the public that software is intellectual property, but there are so many differences between the paradigms of intellectual property and software that only the naive could ever take such claims seriously.

The paradigms for intellectual property are the non-fiction book, the novel, poetry, musical composition, dramatic scripts, sculpture, paintings, in short, fine art. And these range from the absolutely unique item, like a great painting, that only one person can own to multiple itemed works, like books, that many people can own copies of.

Software is certainly not at all like the former. Is it like the latter? First of all, a book has an author or authors, a musical composition a composer, a painting a painter. These are the people who collect the royalties. Who authors software? Do they get the royalties? Ah, don’t they wish it were so.

Secondly, books, except textbooks, musical compositions, paintings, etc., don’t come out in versions. Tolstoy didn’t make a career out of writing War and Peace over and over again, improving a bit here and a bit there, even though I suspect he would have said that it could have been improved upon had he been asked. Michelangelo didn’t sculpt scores of versions of David and sell them as upgrades.

Thirdly, when I buy a copy of a book, etc., it is mine, not the author’s or the publisher’s. I can do what I want with it. I can sell it, rent it, lend it, rewrite it, even destroy it. The manufacturers of software want to prohibit all of this. They even claim to retain ownership and sell only the right to use. But even this claim is specious.

If I rent something to someone, I rent it for a specific period of time. When that time period is over, I want it back. When you go to Blockbuster and rent a CD, you don’t get it indefinitely. Blockbuster wants it back. But Microsoft doesn’t want old versions of Windows back, it doesn’t even want new versions of Windows back, so one can ask what kind of ownership do software manufacturers claim to retain? If I sell something, I have no further claim on it. It I discard something, I have no further claim on it. To retain a claim, I have to want it back, otherwise, I have sold it, discarded it, or given it away. So although software manufacturers claim to retain ownership, it is ownership of nothing.

Finally, software is written with the help of software. An awful lot of it is canned. There are miles of similar code in programs that perform similar functions. Not so in novels, musical compositions, and other fine art. So if software is intellectual property, it is a strange kind of intellectual and a strange kind of property.

In reality, software is a product made by employees in a factory. The software engineer, programmer, coder is no different than the welder or the lathe operator. Each has learned a specific skill. None is involved in an intellectual enterprise, and that is the chief reason software is often so bad. There are no bugs in true intellectual property, it has no security gaps. Authors, painters, composers, sculptors, poets do not include statements absolving themselves from damages as all software producers do.

Then there are the claims of all the money being lost. Perhaps! But not as obvious as many seem to think. There is an assumption behind this claim that is patently false. The assumption is that everyone who pirates software would have bought it if he couldn’t have gotten it otherwise. But that’s not even remotely true.

Distinctions need to be made between those who pirate software in order to sell it and those who pirate it for their own use. Few would disagree that the former are engaged in an improper activity. The same can’t be said of the latter, however. People who pirate software for their own uses do it for many reasons. One prevalent reason is putting software you have legitimately purchased on more than one computer in your own home. If I have a desktop and a laptop, why should I have to buy two copies of a program? If I have two CD players, I don’t have to buy two copies of a CD. I don’t have to buy a separate copy of a book for each member of my family who wants to read it. Why should this be wrong for software but right for CDs and books? The immorality or criminality here eludes me. Are software manufacturers more entitled to protection than authors or artists? Why?

Others often pirate software just to look at it or try it out, something that often results in future sales. The manufacturers of software don’t factor these future sales into their loss calculations though, do they? Why not? And what’s wrong with trying something out before you buy it? Don’t you test drive a car before putting down the cash? Except for those small developers who offer minor programs on the internet, do you know of any way to try out software without purchasing it?

People often pirate software which they really have no intention of using to any degree. Such pirating does not result in any loss of sales, so why should the manufacturers of software care about it? Such pirating is no different than borrowing a CD or a book, and it is perfectly acceptable and legal to do that. So why not software?

So how does software piracy affect the economy and the technology industry as a whole? Damned if I know. It is not obvious to me that the Chinese would be buying Windows from Microsoft if it weren’t available from the sources they now get it from. I don’t know how many Chinese could afford it at Microsoft’s price. Would it mean more jobs for Americans? I have no reason to believe it. We have all heard about off-shored outsourcing and visas for foreign workers. And how does it affect the development of software? Would there be more of it if the rewards were greater? God knows, we’re inundated with it now. No developer seems to be terribly discouraged by the piracy that’s been going on, and the manufacturers themselves are constantly engaged in attempts to comer a market and drive competition out. Does that encourage developers?

Software is a pig in a poke. It never works as promised, often requires more resources than claimed, and is sold under garage sale conditions with a disclaimer absolving the manufacturer of responsibility for any and everything. And these are the people crying crocodile tears about piracy! One can even suspect that software companies deliberately market defective software so they can later market “upgrades.” What do they say about thieves? It takes one to know one!

Didn’t Microsoft literally steal DOS? Oh sure, the guys who developed it were dumb enough to sell it cheap and didn’t deserve what they didn’t get. But shouldn’t anyone dumb enough to put his stake in an industry whose products are easily copied and stolen be prepared to bear the consequences? Capitalism is an economic system that involves risk. A person investing in this system must evaluate the risks associated with the enterprise. And don’t tell me Bill Gates and others didn’t know the risks.

So what’s the upshot? The manufacturers claim that they’re losing money. Maybe, maybe not. They knew what they were getting into. No one twisted their arms, and they’re all using tools developed by someone else. They didn’t invent the computer or devise the programming languages, and if they can use other people’s ideas for their own profit, why shouldn’t others use their ideas for profit? Remember, a penny saved is a penny earned. Ideas, after all, have no owners. Manufacturers lie about their software, why shouldn’t they lie about the effects of piracy?

Would you be so willing to sop up the tears of the seller whose customer let the cat out of the bag that was supposed to contain a pig? Or would you laugh at his embarrassment and say he got what he deserved?

©2009 John Kozy

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