One of the most prevalent issues in the business world today is the concept of IPR (intellectual property rights) protection and how due to globalization and the internet companies, countries and indigenous communities are increasingly finding that their intellectual property rights have been utilized without their consent for the benefit of another entity. For example, through the internet literally, billions of files and pieces of data are shared every week.
Yet, a large percentage of this file contains music, movies, and various forms of software shared without the consent of the company they were made by. Countries like China knowingly produce counterfeit goods that cost various businesses worldwide billions of dollars in lost revenue. Such companies cannot seem to stem the tide of counterfeit goods production through established legal channels.
Finally, the traditional knowledge of various indigenous local communities to biological, cultural, and agricultural processes and knowledge is often “stolen” by various corporations for the sake of profit (i.e., pharmaceutical companies stealing local remedies, cultural symbols, and art being marketed as a consumer product, the use of local knowledge in the creation of movies such as Mulan and Pocahontas without the consent of the population it came from, etc.) yet the current methods that are supposed to protect such types of knowledge from being taken without consent are often in favor of developed countries rather than developing countries which has created an unfair state of affairs.
It is based on this that this paper will attempt to investigate the various aspects related to the violation of IPR, copyrights, trademarks, and traditional knowledge and will determine what practices, processes, and established regulations have to lead to the current problems that corporations, countries, and local communities face. This paper will thus attempt to answer the question: are the current practices related to IPR, copyright, trademark, and traditional knowledge protection sufficient, or is the modern-day business environment, when taking into consideration globalization and the proliferation of online internet usage, constraining the ability of corporations and local communities to protect what’s theirs?
The Internet and Intellectual Property Right Infringement
Intellectual property rights are broadly defined as “exclusive rights of distinct intangible creations of the mind, ranging from music, designs and various artistic works to broad categories such as inventions, literature and even phrases.” The basis for intellectual property rights is to protect the creators of unique inventions, concepts, or ideas from having their work arbitrarily utilized without their permission for other individuals/companies’ profit.
Without IPRs (Intellectual Property Rights), various artists, writers, and inventors would be reluctant to release any of their work to the general public due to the possibility of their ideas being subsequently stolen and claimed by others as their work. Companies apply IPR law as a method of protecting their patented and copyrighted products from being subsequently copied and sold by other companies.
Through this method of business law implementation, various corporations have been able to maintain their positions in the global market place due to their protection and control of their patented processes, products, and designs. It is rather interesting to note, though, that within the past 12 years, as a direct result of trends in the digitization of products and services as well as the prolific use of the internet, many digital products such as software, music, and images (taken or created) are increasingly being utilized, shared and distributed online without the consent mentioned above of the holds of their copyright.
Sites such as Piratebay.org, Megaupload, and Rapidshare contain millions of music, video, and software files that were “ripped” illegally from legal sources and then subsequently shared online for free. This has resulted in significant sales losses for hundreds of companies, with estimates placing the amount lost in the hundreds of billions of dollars within a given year. On the other end of the spectrum, billions of intellectual property right infringements are also done on a single day by the sheer amount of videos and images shared on social network sites such as YouTube and Facebook.
Users arbitrarily share images taken from official websites and magazines and post videos online containing copyrighted songs, labels, symbols, and images resulting in practically millions of people being guilty of intellectual property rights infringement. Yet, for the past 12 years, companies have been unable to successfully combat this problem due to its sheer scale and the inherent limits of business law in actually being able to address the issue.
What must be understood is that there are inherent differences between violations of intellectual property rights between a company and an online internet user. When a company violates intellectual property rights, business law becomes more enforceable since the affected party is dealing with a single entity. In online internet users, there are just far too many individuals, too many cases, and not enough enforceable evidence of an intentional violation to implement a successful means of deterring IPR violation on the scale it is seen today.
One of how companies have attempted to combat this issue has been to lobby for stricter laws regarding digital goods and services. The result was the DMCA (Digital Millennium Copyright Act), which in effect criminalized the production and distribution of various technologies, services, or even devices that allowed individuals/groups to illegally access copyrighted works or circumvent the process that prevents digital distribution.
In effect, this law in the US made it illegal to circumvent copyright protection on digital software for the online distribution and made methods associated with an intentional violation of such laws punishable by heavy fines or jail time. It must be noted, though, that the limitations of this particular type of business law are evident in the fact that despite its implementation in 1998, online piracy has continued unabated and has increased within the past decade. One of the reasons behind this is the sheer size of the internet with quite literally billions of websites and trillions of pages devoted to all manner of digital content.
Despite the best efforts of any company or government agency, it would be quite literally impossible to police all known sites. Not only that, even if a company or government agency were to take down a website based on its supposed distribution of pirated content, the fact remains that website addresses can be changed, resulting in the site being transferred to some other corner of the internet where it would take months if not years for it to be found by piracy regulators. Another problem insufficiently implementing IPR law is the fact that when it comes to laws regulating the online distribution of digital content, each country has a different application of IPRs.
For example, though the DMCA is enforceable within the US, it is still a US-based law and thus cannot be enforced in other countries that have a different version and interpretation of what constitutes enforceable action regarding intellectual property rights.
One way of seeing the overall lack of international enforceability can be seen in the case of Piratebay.org, which is the internet’s largest and most well-known site for finding and downloading pirated content ranging from movies, music, and games to movies and software applications. Over the past six years, the Pirate Bay has been able to resist various moves by companies such as Microsoft, EA, Universal Studios, and even Apple Incorporated to shut it down due to the presence of pirated copies of the movies, software, and games of these companies on the website.
The reason it has been able to stay in operation for so long is not only due to the inapplicability of the DMCA since the Piratebay.org’s servers were based in Sweden, but the fact is the site took advantage of a loophole in online IPR protection wherein technically the files weren’t stored on the website itself but rather what was present on the site were torrents in which people could use to download the pirated content from the computers of other people.
Torrents are a method of online file sharing wherein individual files are broken up into smaller aggregates that can be downloaded and uploaded from multiple sources. In effect, this technology allows thousands of users to download from other users that are uploading the file from a background process on their computer. As such, “technically,” the files aren’t present on the Piratebay.org itself, and it merely acts as a collection of torrent files that can be used to download the content from elsewhere.
While it may be true that international pressure on the Swedish government did hamper the Pirate bays servers in 2010 with several of its owners being arrested, the fact remains that the site was able to go back online within a matter of hours as soon as it transferred from its servers based in Sweden to other servers based in other countries (possibly China). Based on this particular outcome, wherein despite the best efforts of the application of business law, no satisfactory outcome was created, this calls into question whether business law involving IPR of digitized content can still be considered effective when taking into consideration the flexibility of the internet grants illegal online content distributors.
Traditional Knowledge and Intellectual Property
Knowledge can be defined as the accumulation of facts, figures, descriptions, and information regarding a particular event, precedent, item, or person and, as such, can be considered a practical understanding of a given subject matter. Yet what must be understood is that there are inherent variances in the types of knowledge available. For example, the thousand-year-old cultural traditions and practices that are prevalent throughout Asia are a form of knowledge, yet they differ greatly from knowledge involving scientific principles or knowledge garnered through the development of a particular process or item (Catley & Kessell-Haak, 2007: 155-156).
It is based on the concept of protecting such developed knowledge from unauthorized usage that the concept of intellectual property rights was developed (Sahni, 2006: 164-165). Intellectual property rights are broadly defined as “exclusive rights about distinct intangible creations of the mind which range from music, designs and various artistic works to broad categories such as inventions, literature and even phrases” (Mashelkar, 2002: 37). The basis for intellectual property rights is to protect the creators of unique inventions, concepts, or ideas from having their work arbitrarily utilized without their permission for the profit of other individuals/ companies (Cunningham, 2002: 34).
Without IPRs (Intellectual Property Rights), various artists, writers, and inventors would be reluctant to release any of their work to the general public due to the possibility of their ideas being subsequently stolen and claimed by others as their work (Patently problematic, 2002: 75). Companies apply IPR law as a method of protecting their patented and copyrighted products from being subsequently copied and sold by other companies. It is through this method of business law implementation that various corporations have been able to maintain their positions in the global market place due to their protection and control of their patented processes, products, and designs.
Yet, while the protection of IPRs of businesses is clearly defined and regulated by law, aspects related to the IPRs of indigenous people an local communities, which take the form of traditional knowledge (a form of inherited knowledge consisting of cultural processes, traditions, artistry, environmental knowledge, etc. which have been passed from generation to generation for hundreds if not thousands of years) has as of late not received the same level of equanimity regarding proper protection and regulation as seen in the case of business law applied to IPRs.
It is in this regard that before this paper explores aspects related to the protection of traditional knowledge and intellectual property, it is deemed important to first clarify certain fundamental pieces of knowledge related to this particular subject matter and current attempts in protecting it before proceeding on how individual international organizations implement their means of protecting traditional knowledge.
Traditional knowledge can be comparable to the inherited traditions and long-standing practices inherent within a particular culture, society, or community (Sunder, 2007: 97-124). One of the most succinct explanations defining traditional knowledge came from the Director-General of the United Nations Educational, Scientific and Cultural Organization in 1994 in which he regarded traditional knowledge as the “immense accumulated body of knowledge that indigenous people within a particular environment developed regarding the complexities of their local ecosystem, the special properties of particular plants and animals, and the unique techniques each indigenous community utilized to coexist with nature” (Baer, 2002: 15-26).
Another way of looking at traditional knowledge is from the concept of “adaptively acquired knowledge” wherein the various processes and techniques inherent to a particular indigenous community were developed as a response to the unique environmental and topographical situation they found themselves in (Traditional knowledge and the international context for protection, 2005: 142). This can be seen in the different weaves and means of producing traditional clothing that is unique to particular regions, such as the “sarong” in the Philippines, the Kimono of Japan, and the thickset clothing developed by the indigenous people of Tibet.
In a way, traditional knowledge can be defined as a form of claimed ancestral heritage wherein cultural traditions, societal norms and customs, methods of preparing food and clothing as well as aspects related to medicine, agriculture, and fishing are all a result of hundreds if not thousands of years of shared oral and written traditions which are inextricably bound to the people that inherited them and can be considered their “property” so to speak since for them it is a form of cultural inheritance (Baer, 2002: 15-26). For example, while countries such as the US may accumulate a variety of different types of food, words, and cultural nuances from its multitude of immigrants it cannot claim ownership of these traditions any more than the countries that these traditions originated from can claim ownership over 4 July independence celebration which is a uniquely American tradition.
Yet over the years, the process of globalization and cultural assimilation has increasingly placed a strain on the concept of “ownership” of traditional knowledge. Aspects related to traditional symbols, designs, distinctive cultural crafts, artwork, songs, stories, and even knowledge related to traditional medicine have been misappropriated by corporations, schools, and opportunistic individuals to market an aspect related to another society’s traditional knowledge with no regard to the concept of “intellectual ownership” of the “product” that they are distributing (Traditional knowledge and the international context for protection, 2005: 142).
Of particular interest is the patenting of traditional knowledge and its by-products under the ownership of a particular brand. This comes in the form of various clothing styles, medicinal techniques, songs, symbols, and artwork being unilaterally claimed by various parties (whether part of a corporate infrastructure or sole proprietorship) as either being a result of their own uniquely crafted design or a by-product of research accomplished (Protection for African folklore, 2010: 24).
In response to these actions, various indigenous communities have attempted to protect traditional knowledge where they have not given express permission for usage or do not derive some form of equitable compensation (Ssenyonjo, 2007: 283-285). The origin of this particular problem lies under the issue of the public domain, which is defined as information whose intellectual property rights are inapplicable or have subsequently been forfeited as a direct result of the passage of time (Lotz, 2002: 71).
Since various forms of traditional knowledge have been around for hundreds if not thousands of years, they, by definition, fall under the realm of the public domain, especially in cases where traditional knowledge has been sufficiently “repackaged” to be represented in the modern-day era (ex: the Disney films Pocahontas, Mulan, and Tarzan). What must be understood, though, is that the local communities who “own” their unique form of traditional knowledge don’t acknowledge it as being part of the public domain.
They state that the open sharing of traditional knowledge does not necessarily give others the right to use it for their means. Not only that, they go on to argue that even though various forms of traditional knowledge exist within the public domain, they are not there as a direct result of a failure of local communities to sufficiently protect such knowledge under some form of intellectual property right (since such aspects related to the culture of an indigenous population often don’t require registration to confer a degree of ownership) but rather the misuse of such knowledge by others for profit is a direct result of the failure of governments to rightfully acknowledge traditional knowledge as being an inherent part of a particular culture and as such are under customary laws which should (but often don’t) regulate their use by the general public (Barraclough, 2008: 58-61).
Intellectual Property Rights
One of the inherent problems in protecting traditional knowledge under the context of intellectual property rights within international law is the fact that Intellectual Property Laws (IPL) vary from country to country in nature and scope in which they acknowledge IPRs (Intellectual Property Rights). It is due to these inherent differences and their subsequent protection under IPLs that is at the center of the current debate regarding the rights of indigenous people and cultures over their inherited traditional knowledge (Drahos, 2011: 233-252).
When examining the current debate over the proper application of IPLs on IPRs, it is seen that the absence of a sufficient consensus to properly apply for IPR protection on traditional knowledge is actually due to differences in conceptual treatment and the subsequent lack of clarity between the concepts of traditional knowledge and intellectual property and how one should be applied under the other based on “ownership.” Contributing to this problem are the rather scant laws and regulations, whether local and international, which directly impact the proper regulation and protection of traditional knowledge under the context of IPRs (Frankel, 2011: 253-267).
Since international law is at times an externalized implementation of local laws yet within a globalized perspective, it is thus not surprising that there is an insufficient means of IPR protection for traditional knowledge in the realm of international relations when the local laws of countries themselves severely lack in sufficient context and history in actually upholding the rights of indigenous people and cultures over traditional knowledge (Brahy, 2006: 259-282).
China and the Production of Fake Goods
When looking at the vast amount of fake goods around the world (i.e., bags, electronics, clothes, etc.), most of them originate from one location, China. As of late, China has received intense criticism for allowing various local businesses to continue to produce a variety of goods and products under the brand name of various corporations without their approval. This has resulted in billions of dollars in lost revenue as a direct result of China’s actions and is one of the most well-known instances of intellectual property right violation in the world to date.
On the other hand, it must be noted that the problem originally stemmed from the fact that many of these corporations that suffer billions of dollars in lost revenue are actually in part responsible for their current state of affairs due to their propensity to outsource their means and methods of production to countries such as China which as a result increased the possibility of intellectual property right theft.
What is Outsourcing?
Outsourcing is a term used to describe the practice of contracting a particular business function, whether in the form of manufacturing, accounting, customer service, etc., to an outside provider for the express purpose of reducing operating costs. For example, as indicated by Smith (2006), the main costs of doing business within the US are related to local taxes, employee salaries as well as federally required health benefits and insurance services (Smith, 2006: 596).
Such factors drive up the cost of doing business within the country due to the amount of money that goes into them. On the other hand, outsourcing aspects of the company’s functions to locations such as China, India, and the Philippines reduces these particular costs due to lower tax rates, lower minimum wage requirements as well as different far lower costs of employee benefits (Smith, 2006: 597 – 599). In the case of China, the low minimum wage combined with the low cost of doing business within the country resulted in more companies outsourcing their manufacturing services to the country between the period of 1990 to the present (Brown, 2010: 30).
This particular situation is not unique to China but can similarly be seen in India and the Philippines, where business process outsourcing has become a $100 billion a year industry (Dutta et al., 2011: 6 – 10).
Influences of Outsourcing on China and the Resulting Economic Progress
What is unique in the case of China was the resulting technological exchange that occurred as a direct result of the outsourcing industry, which, as a result, enabled local manufacturers to develop their product lines. Chung et al. (2009) note in their study of technological changes in China’s manufacturing infrastructure that the various manufacturing technologies and processes that were brought into China by various multinational companies were copied by local manufacturers, which enabled them to produce the same type of product (Chung et al., 2009: 1133 – 1137).
With a diverse array of companies outsourcing their means of production to China, this resulted in an equally diverse array of technologies and processes that were copied and established by both local entrepreneurs and other corporations, which brought about a manufacturing boom within China. Consumer Reports (2008), in its study examining the proliferation of copied goods coming from China, notes that it was a direct result of the outsourcing industry that China’s manufacturing industry was able to grow as fast as it did compare to other countries since China didn’t need to wait for technologies to develop within the country but rather copied the necessary technologies and processes needed to market their goods (Real or Fake, 2008: 12).
What must also be taken into consideration is the fact that due to the low cost of doing business in China, local manufacturers that copied the technologies and processes of companies that had outsourced to China were able to undercut prices resulting in a situation where more international consumers chose to buy from these new companies due to the relatively lower prices for the same product. The Economist (2004) states that it was the culmination of these events that brought about the development of a new Chinese upper class composed of businessmen and entrepreneurs that increased local demand for high-end real estate development as well as high-class foreign goods (Safe as houses, 2004: 41).
This paper aims to investigate and determine the extent of the exploitation of copyrights, trademarks, and intellectual property rights in the modern-day business.
The main research objectives of this study are the following:
- To prove the importance of protecting copyrights, intellectual property rights, trademarks, and traditional knowledge.
- To identify any generally accepted good practices in protecting copyrights, intellectual property rights, trademarks, and traditional knowledge.
- To ascertain the factors that prevent the proper protection of copyrights, intellectual property rights, trademarks, and traditional knowledge.
- To suggest the proper methodology to achieve the goal.
- To identify further study/research areas under the same subject.
Are the current practices related to IPR, copyright, trademark, and traditional knowledge protection sufficient, or is the modern-day business environment, when taking into consideration globalization and the proliferation of online internet usage, constraining the ability of corporations and local communities to protect what’s theirs?
The present study will utilize a quantitative research design to explore IPR, copyright, trademark, and traditional knowledge violations. This methodological approach will objectively answer the key research questions. Various studies have noted most quantitative research designs are concerned with determining the relationship between independent variables and dependent variables in a study framework. In this study, understanding the correlation between IPR protection within the context of globalization and the proliferation of online internet usage will be instrumental in designing and implementing effective methodologies aimed at improved methods of IPR protection.
Scope and Limitations
This study will primarily focus on traditional knowledge protection, online IPR violations, and the case of China involving the production and sale of counterfeit goods. As such, this paper will only delve into such aspects and will not go into extensive detail regarding the effects of such violations in the global context but will rather show the individual problems that come as a direct result.
Presentation and Analysis of Data
IPR Violations and China
China’s “Bandit” Culture
Seven years ago, various Japanese and European companies such as Kawasaki Heavy Industries, Siemens, Alstrom, and Bombardier pioneered the creation of China’s high-speed rail system in the belief that they would gain access to a lucrative multibillion-dollar market. Instead, the various business partnerships they had with local Chinese companies resulted in shared technology being utilized to establish new high-speed train companies that rivaled not only the foreign train companies within China’s domestic market but within international markets as well.
Any foreign company that establishes a production base within China has to deal with what is known as “shanzhai” or “bandit culture” in that their manufacturing processes will most likely be stolen, replicated, and utilized to produce the same product at a far lower cost than the original.
It must also be noted that most banks within China are controlled by the state, and as such, due to China’s current domestic policy of supporting entrepreneurship should the business seem viable, the individuals who have obtained the means of utilizing the stolen technology can, in effect, bankroll the start of their own companies with the full support of the government. This creates an incredibly problematic situation for any company, even thinking of attempting to enter into business markets within China.
It must also be noted that intellectual property rights are often not as strictly enforced within China as compared to other locations such as the US and Europe, and as such, even though the technology has been stolen, it is unlikely that the perpetrators will even be prosecuted. The business-to-business market in the US, on the other hand, has a plethora of different rules and regulations specifically preventing the theft of intellectual property rights.
Selling Counterfeit Goods Online
One of the more interesting developments regarding violations of IPR, copyright, and trademarks has been the use of E-commerce platforms as a way in which counterfeit goods are sold and distributed to international customers in bulk shipments. While the IPR, copyright, and trademark violations in this particular case are quite obvious, the audacity in which the products themselves are sold is indicative of the limitations of the reach of business law in such cases.
For example, numerous websites utilizing the name “China Portal,” “import from China,” or a variation thereof utilize online advertisements seen in prominent websites such as YouTube to convince online consumers to go to their website and purchase counterfeit goods online. The reason why businesses haven’t be able to shut these websites down is that their servers, domain names, and ISP providers are all based in China, and as such become yet another example of the limits of business law in combating IPR violations.
It is quite interesting to note that there is an ongoing trend wherein services that engage in online IPR violations are increasingly transferring their domains and servers to China as a direct result of US and European based legislation that seeks to prevent such websites from going online in the first place. This is particularly interesting to note since certain studies indicate that nearly 40 to 50 percent of all counterfeit goods sold in markets today come from factories based in China.
As such, not only is China becoming a harbor for the production of counterfeit goods, but it has also become a refuge for illegal online services that distribute copyrighted content. It now becomes a question of why businesses haven’t been able to do anything regarding China’s actions, which, in effect, cost them billions of dollars a year in lost revenue.
One way of explaining this particular situation is to examine it from the Realist theory of international relations, which specifically explains that “States are the primary actors in international relations and as such, there is no entity above a state” (IRTheory, 2011: 1). Foreign policy, according to Professor Daniel W. Drezner of the Fletcher School of Law and Diplomacy at Tufts University, “is conventionally defined as how a nation-state advances and protects its interests in the world.
It includes fashioning alliances, establishing trade relationships, negotiating treaties, shoring up domestic support for international policies, bargaining with international organizations, crafting military doctrines, and waging war”. From this, it can be seen that foreign policy is the manner with which a state interacts and relates to other states and actors to protect and secure a state’s national interests. Moreover, foreign policy is “something that a state and its machinery produce on behalf of a nation using all the instruments they can muster in competition with other similar actors in a world that is dominated by the logic of Realpolitik.”
Taking this into consideration, it now becomes obvious that the reason why businesses cannot do anything to resolve this particular situation is that they don’t have the right or the capability to actively force the domestic policy of a foreign state towards their ends. While it may be true that in the case of the US, lobbyists within Congress can influence the decisions and laws implemented, the fact remains that such a system does not exist in China and as such, companies have next to no ability to prevent the current server and domain transfer towards Chinese based services from perpetuating the release of illegal copyrighted content. Furthermore, this also prevents companies from actively targeting websites that sell counterfeit goods since they are not located within countries that have strict IPR regulations.
The Internet and Intellectual Property Rights Violation
IPR Violations and E-commerce
One of the current trends in E-commerce has been the digitization and sale of EBooks via Amazon, iTunes, and various online stores. As seen in various online article reviews, EBooks have gained considerable ground in terms of market penetration and popularity among different age groups due to the proliferation of EBook readers such as the iPad and the Amazon Kindle as well as their considerably lower prices since they easy replicable digital content that costs distributors next to nothing to reproduce and sell.
The inherent problem, though, with this particular method of sale and distribution, is that unlike hardcopy versions of novels, short stories, or textbooks, EBooks can be easily copied, transferred, and even distributed freely online by the thousands. The same digitization that allows companies to sell EBooks also allows other people to use the same methods for their gains. A brief Google.com search shows that there are quite literally dozens of sites where EBooks can be illegally downloaded for free.
The main question that must be asked in this particular case is what business law can do about? When examining the possible resources of the law in this particular case, it becomes quite obvious that in the age of digital content distribution and consumption, business law has in effect been rendered impotent in terms of its ability to limit illegal IPR violations.
Domain Names and Trademark Violations
Going back to the example mentioned in the previous section involving the illegal distribution of digitized content by Piratebay.org, it can be seen that such a trend in online piracy is not limited to merely movies, music, software, and games but extends to other aspects related to digital content. What must be understood is that the internet is now considered one of the best platforms for mass sales and content consumption, and as such, an online E-commerce site such as Amazon can now be compared to the previous generation of traditional superstores in New York such as Macy’s and Bloomingdales or the equivalent of Dubai’s “Mall of Dubai.” While there are quite literally thousands of other examples that can be mentioned, what all of them have in common is a proprietary trademark.
This trademark is an important aspect of a store or company’s brand image and, as such, is protected by various business laws against illegal or unsanctioned reproduction. In the case of online E-commerce stores such as Amazon, eBay, and Alibaba, their proprietary trademarks come in the form of their domain name. A domain name is the name of the website with the prefix “www.” and the suffix “.com”; this is the main method in which sites are visited and searched for on search engines such as Google and as such can be considered the online equivalent of a trademark.
When it comes to business law, what must be understood is that there are inherent differences and limitations to the application of business law in traditional market environments and the application of business law on the internet.
The domain name “copying” is a proliferate and frowned upon practice today wherein variations of the suffix or in the name itself are done to imitate the trademark of a particular site. For example, the trademark Amazon.com can use the suffix Amazon.biz, Amazon.net, Amazon.xxx, Amazon.cc, as well as a sheer plethora of possible suffixes. Variations to the name itself can result in the following examples as well: “TheAmazon,” “AmazonShop,” “AmazonStore,” etc.
All of these techniques are utilized to draw consumers away from the original owners of the trademark to other E-commerce stores that utilize the same site design but are in no way connected to the original trademark owners. While the traditional response of business has been to sue other companies who have obvious trademark infringements, the same cannot be applied to cases of internet domain names since while such names are considered part of the trademarks of companies, business law does not apply to their use or creation unless in very specific cases. For example, misleading domain names that direct users to pornographic sites violate the US Truth in Domain Names Act, which was created in 2003 to prevent such actions from continuing.
Domain name seizures also occur when the use of a particular domain has been proven to be connected to a particular form of criminal activity. As seen, though, in the case of Piratebay.org, there are limits to the application of this particular form of the law since US law does not apply to domain names registered, applied, or transferred to companies outside the US. There is an underground business currently booming online wherein domain names are held “hostage,” so to speak.
This practice is done by buying and registering a domain name that has the same name as that of a company, organization, or brand. Since such institutions would want to create their online presence, they would need to subsequently purchase the domain name to ensure proper online brand recognition. This usually leads to the company paying several thousand dollars (more than 300 times the worth of the domain) to acquire it from the person that had “legally” acquired the company’s online trademark by being the first to purchase it. Based on this, it must be questioned whether there need to be subsequent changes in business law to mitigate the apparent problems related to online practices that are in clear violation of not only a company’s IPR but their trademarks as well.
While it may be true that domain name providers do give companies a certain degree of preferential treatment when it comes to purchasing specific domain names related to their company when new suffixes are created (such as the recent.xxx suffix), the fact remains that this does not bode well for companies that will be created in the future that find their online presence hijacked by an unscrupulous individual looking to make a profit.
Copyright Infringement in Website Posting and Development
Copyrights are defined as “laws which give the creator of a certain work exclusive rights towards sale, distribution or development over a predetermined period.” This can encompass various literary works, artistic works, and even film or music. What copyright does is that it, in effect, allows the creator of a particular piece of work the right to profit over what he/she created. Without sufficient copyright protections in place, artists, writers, and moviemakers would be unwilling to create any new work since they wouldn’t be able to profit from it in the long term due to alternative channels of sales and distribution that other individuals or groups would utilize to tell the created work themselves.
While this paper has so far delved into the topic of illegally downloading copyrighted content from websites, what hasn’t been discussed is how the process behind the creation of websites can fall under various aspects of copyright violation as well.
Ever since the implementation of Web 2.0, which transitioned websites from the static domain of the solitary programmer to the dynamic world of the normal user, the creation of websites through the use of numerous types of online and offline website making software has made copyright infringement a norm rather than a rarity. Thousands of websites utilize “borrowed” content from other sites in the form of pictures, banners, and even written information. Not only that, online services such as Photobucket allow users to store copied copyright content from other websites to utilize on their sites and blogs.
When attempting to examine the sheer proliferation of copyright infringement and the ability of business law to resolve this issue, it becomes evident that there is no way to stop it. Just as there are hundreds of websites that allow users to illegally download ripped content, there are millions, if not billions, of sites where copyrighted content has been utilized to add some “pizzazz” to the site. There are just far too many sites, too many internet users, and internet technology has become too accessible, resulting in no possible way to even make a small dent in the degree of infringement.
It must also be noted that the general anonymity connected to the internet helps to proliferate the practice of copyright infringement online. Various studies indicate that while internet users are aware that their activities are a form of copyright violation, some users still post copyrighted images online since they are under the apparent assumption that their anonymity grants them a certain degree of immunity from direct prosecution, they are unfortunately right in this case because it is quite literally impossible to examine all aspects related to what individual users are doing online.
Internet Anonymity and the Application of Business Law
One of the current problems in the application of business law in online cases of IPR infringement is the level of anonymity granted by the internet, which not only makes methods of prosecution against violators difficult but also encourages criminal behavior. An assortment of studies that attempted to explain the reason behind the popularity of online IPR infringement showed through numerous interviews and accounts that anonymity played a huge role in encouraging the behavior.
As such studies note, social identity plays a huge factor in limiting criminal or anti-social behavior, yet when the concept of social identity and thus accountability is taken away, people are more likely to commit acts related to IPR infringement as they otherwise would have done if there was a distinct level of identity and accountability related to their online presence.
In other words, this shows that people were more likely to commit acts of online copyright infringement and the promotion of online piracy since they knew that the level of anonymity afforded to them by the internet allowed them to act without negative consequences. This, in turn, explains the depth and proliferation of online piracy and copyright infringement and shows how the problem cannot be so easily resolved merely by applying laws which state that a particular action is illegal.
Another way of looking at this concept is to look at it from a prosecutor’s point of view. While there are many instances where users download illegal IPR content, there is no way to prosecute them for the act since there is no way of knowing who they are. Not only that, services such as Rapidshare, Megaupload, and Torrent technologies enable users to anonymously upload content and distribute it to millions of other users, which further complicates the problem. The sheer number of users and the amount of available online services, which allow illegal IPR violations to continue shows just how impotent business law is, at present, in actually resolving this issue.
It must be noted, though, that one way in which companies have attempted to fight back against online piracy has been to directly attack the sites themselves through their ISP (Internet Service Providers), however just as Piratebay.com has been able to say operational by shifting ISPs and servers other websites have done the say which makes any attempt at even trying to resolve the issue a losing battle for companies due to the sheer number of servers available that are not under the jurisdiction of IPR law.
International Organizations and the Protection of Traditional Knowledge
World Intellectual Property Organization
“The World Intellectual Property Organization (WIPO) is a specialized agency of the United Nations that deals specifically in promoting creative activity through the promotion of intellectual property rights throughout the world.” (May 2006: 435-445)
When examining the WIPO in the context of its protection of traditional knowledge, it can be seen that the mandate of the organization in its implementation of intellectual property rights regimes as the only viable path to protecting traditional knowledge is inappropriate and even inadequate in protecting the inherited knowledge of indigenous people and local communities (May 2008: 97-113) (International Environmental Law and Human Rights: Towards the Explicit Recognition of Traditional Knowledge, 2001: 37).
What must be understood is that the World Intellectual Property Organization advocates the use of IPR regimes and patents as a generalized way of addressing all issues regarding intellectual property rights infringement, yet many within the indigenous community of nations around the world have stated that alternative means of protection must be implemented that take into consideration both indigenous practices, and customary laws since the current mandates and provisions created by the WIPO are incompatible with the concept of traditional knowledge (Kapp, 2001: 1510) (Hrbata, 2010: 1-47).
For example, article 27.3(b) of the TRIPS agreement (The Agreement on Trade-Related Aspects of Intellectual Property Rights) in effect legitimizes the usage of intellectual property rights over life and the processes utilized in modifying life forms, yet such rights are more for corporations, states, and private researchers and do not encompass indigenous people and local communities (Nair, 2011: 35-37) (Woodward, 2012: 33-61).
The article itself possesses a significant degree of “danger,” so to speak, over the rights of local communities (particularly farmers) over the indigenous innovations and traditional farming techniques, which are all aspects related to traditional knowledge (Nair, 2011: 35-37). The cause for concern regarding the current methods of the WIPO and the TRIPs agreement is not without merit since over the past century, there have been numerous cases where medicinal plants, genetic resources, an assortment of seeds, processes, and techniques have all been subsequently stolen by a variety of individuals and corporations and subsequently rebranded or repurposed for their ends (Finetti, 2011: 58-66) (Garcia, 2007: 5-28).
The fact that article 27.3 (b) allows the patenting of such processes and biological resource and that the TRIPS agreements prevent indigenous and local communities from actually applying for the patenting of various aspects related to traditional knowledge since it doesn’t fulfill the requirements in the provisions of TRIPS (to be discussed in the next section) shows how one-sided the current system is wherein it favors private over community interests (International Environmental Law and Human Rights: Towards the Explicit Recognition of Traditional Knowledge, 2001: 37).
On the other hand, there are treaties such as the CBD (Convention on Biological Diversity), which emphasize the ownership of traditional knowledge by indigenous populations and local communities as well as the necessity of protecting such rights by the state through the creation of local laws and policies which emphasize on IPR protection for traditional knowledge (Kariyawasam, 2008: 73-89).
It is based on these two conflicting treaties as well as the other agreements which will be examined within this study that attempt to encompass or exploit traditional knowledge that governments and international organizations find themselves mired in what can be described as a “bog” of conflicting ideas and statements regarding what can and cannot be applied in regards to traditional knowledge (WIPO learns from tradition, 2000: 7) (Wendland, 2004: 97-107).
It is expected that as this study continues to progress, the conflicting ideas and ideologies will make themselves more apparent and will show the necessity of an all-encompassing agreement that can be considered equitable and fair for the parties involved, whether such an agreement is possible within this lifetime is yet to be seen however based on the various facts and accounts that will be presented an apparent method of resolving the issue may present itself.
United Nations Educational, Scientific and Cultural Organization (UNESCO)
“The United Nations Educational, Scientific and Cultural Organization (UNESCO) is a specialized agency belonging to the United Nations to contribute to worldwide peace and security through the promotion of various means of international collaboration such as through science, education, and culture to promote aspects related to the rule of law, human rights and the freedoms inherent to all people as indicated within the UN charter.” (United Nations Educational, Scientific and Cultural Organization, 1955: 280-285)
In regards to the mandate of UNESCO, what must be understood is that there is currently a state of affairs within the global community that holds back various kinds of scientific, educational, and cultural activities about traditional knowledge (Hartmann, 2010: 307-318). First and foremost, what must be understood is that while TRIPS imparts a sense of obligation for those that ratified it to respect within their borders the IPRs (Intellectual Property Rights) granted by other countries, such an obligation doesn’t exist for countries to recognize the knowledge within another country’s public domain (Desai, 2007: 185-197).
This means that various types of public domain knowledge (of which traditional knowledge is a part of) that may have existed within a particular country for hundreds if not thousands of years has the potential to be privatized and then subsequently placed under the IPR of another country (Venkatararnan & Latha, 2008: 326-335). The result is that the country where the knowledge originally came from will not benefit at all from any developments that come about as a direct result of such knowledge and, in a rather cruel twist of fate are obliged under the TRIPS agreement to acknowledge and honor the resulting IPR even though the processes, items or methods of production originally came from them.
This has to lead to a particularly volatile situation where not only do countries at times refuse to share data on particular plants and animal specimens, but it has also greatly diminished the sharing of educational and cultural knowledge (Kongolo, 2001: 349).
Technically, the appropriation of traditional knowledge that exists in the public domain of another country for self-serving purposes isn’t necessarily illegal (biological samples and resources that were collected before the establishment of the CBD are not bound to its rules since it was before the process of ratification and as a result, various collectors do not have to acknowledge the sovereignty of the country where the resource came from nor give any form of benefit whether financial or otherwise to the indigenous population/local community that had initially experimented with it) however from a moral and ethical standpoint it is highly immoral and speaks of self-serving motivations which would cause considerable strife within the international community (it has already) (Patent protection and traditional knowledge associated with biodiversity, 2007: 524) (Swaminathan, 2001: 40).
When taking into consideration the fact that there are few guidelines present that effectively curtails such behavior, it isn’t surprising that this particular state of affairs is a troubling yet ongoing problem which has limited many scientific, educational, and cultural activities since various states and local researchers are hesitant to share what knowledge they have due to it possibly being “stolen.” Another troubling fact that should be taken into consideration is that no country can ensure with absolute certainty that another country will respect the internal regulations within its public domain (Robinson, 2010: 38-56).
As such, due to the mandates of UNESCO, which promote scientific, educational and cultural activities, it falls upon this organization, the WIPO, and possibly the WTO to create a sufficiently capable international agreement that allows for the sharing of public knowledge (this encompasses traditional knowledge) with provisions that specifically stipulate that such information, whether processes or specimens, cannot and will not be privatized in other countries and that should there be a commercial or private initiative involving such knowledge the indigenous people or local community that it came from would derive some form of adequate compensation or benefit from such an endeavor (Gómez-Baggethun et al.,2010: 721-729).
World Trade Organization: The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
“The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is a set international agreement created by the World Trade Organization that encompasses a wide variety of agreements and laws about copyrights, designs, patents, trademarks and undisclosed types of information and specifies methods of enforcement and dispute resolution.” (Cardwell & Ghazalian, 2012: 19-36)
TRIPS is widely considered to be one of the most comprehensive agreements on intellectual property to this day, yet, unfortunately, is rather lacking insufficient ability and capacity when it comes to the protection of traditional knowledge. While it may be true that article 1 of the TRIPS agreement doesn’t expressly mention the term “Traditional Knowledge,” it still actually allows member states that have ratified it to implement their means of traditional knowledge protection, as evidenced by the first paragraph in the article: “members may, but shall not be obliged to, implement in their domestic law more extensive protection than is required by the Agreement, provided that such protection does not contravene the provisions of the Agreement.”
The inherent problem though is that the TRIPS agreement doesn’t specifically enforce this “more extensive protection” (which refers to traditional knowledge) and as such results in most states neglecting, whether intentionally or not, the protection of the traditional knowledge base of their local indigenous people and communities. Another factor that should be taken into consideration when it comes to the patenting of traditional knowledge is that the TRIPS agreement specifically states that member states that have ratified the treaty must provide patent protection for “any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application” (Dent, 2011: 73-78).
The inherent problem with this particular provision is that the terms utilized, namely “inventive step” and “industrial application,” are more in line with concepts related to being “non-obvious” and “useful,” which traditional knowledge oftentimes doesn’t encompass. Furthermore, traditional knowledge cannot be placed under the same category as the term “new” since, in most cases, it has been around for hundreds if not thousands of years.
As seen in the terms utilized in the provisions of TRIPS, which encompass the necessity for countries to implement means of intellectual rights protection, traditional knowledge doesn’t encompass any of the requirements and as such is not applicable under the terms of TRIPS to be able to apply for intellectual property right protection. Furthermore, under Article 29.1 of TRIPS, it is expressly stated that a patent application needs to disclose a sufficient degree of information regarding a particular product or invention to let another individual or organization that is “sufficiently skilled in the process” to be able to reproduce it completely (Dent, 2011: 73-78).
The inherent problem with this particular article provision is that given the financial and organizational inadequacies of local communities and indigenous people, the disclosure of information regarding a particular process could be utilized without them realizing it or without the community obtaining sufficient compensation for a process that they own (Wendland, 2004: 97-107). The problem lies in the fact that the disclosure of particular processes, which are an inherent part of traditional knowledge, makes it easier for commercial entities to unscrupulously utilize the process for their ends.
This was seen in the case of China, wherein the processes utilized to create many traditional Chinese and Asian antiquities were in effect copied and mass-produced, resulting in a literal bonanza of fake Asian “antiques” flooding various global markets. It must also be noted that the reproduction of traditional knowledge isn’t limited to mere antiques, but it can also encompass aspects related to traditional stories, symbols, artwork, and even clothing (Garcia, 2007: 5-28). Clothing outlets and fashion brands around the world have appropriated signs, symbols, and various designs from various cultures and utilized them in their brands.
It is only once they have incorporated such processes and “reinvented” them to suit modern tastes that these companies often apply for patent protection for these “new” products, which becomes enforceable since they comply with the provisions indicated by the TRIPS agreement (Ssenyonjo, 2007: 283-285). Unfortunately, it is also the case that the local community from which this particular process originated often doesn’t know their designs have been misappropriated and don’t even benefit at all due to their inherent limitations in being able to observe various new products and processes that have been created in the present-day globalized economy (Kariyawasam, 2008: 73-89).
It is based on this that the inherent problem with article 29.1 of the TRIPS agreement becomes obvious since it opens the doors to potentially anyone reproducing aspects of a process under traditional knowledge with little possible repercussions.
Article 27.3 (B) of the TRIPS Agreement
Of particular interest to the topic of traditional knowledge is article 27.3 (b) of the TRIPS agreement, which has generated quite a bit of controversy given the nature of its provisions. It states the following:
“Members may also exclude from patentability… plants and animals other than microorganisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by a combination thereof. The provisions of this subparagraph shall be reviewed four years after the entry into force of the WTO Agreement.” (Muriu, 2009: 409-429)
When examining these particular agreements, readers are immediately drawn to the thought of “what is an effective sui generis system?” It is not clearly defined and as such is left to the member states to define it on their terms, which result in a wide variety of possible policy choices which at times may not necessarily lead to correct policies (Protecting traditional knowledge-is a sui generis system an answer? 2005: 64).
For example, under article 27.3 (B), it can be assumed that a variety of multinational companies and developed countries (i.e., the U.S., France, Germany, etc.) may most likely promote the rights of plant breeders as the chosen sui generis system required by the article (since article 27.3 b was in effect a response to concessions from multinational agricultural corporations) (Protecting traditional knowledge-is a sui generis system an answer? 2005: 64).
The problem with this is that by utilizing plant breeders rights (patents for the development of specific methods of agriculture or creation of plant species) under the TRIPS agreement, this in effect limits the ability to develop countries (i.e., the Philippines, Indonesia, and various South American countries) to effectively develop a system that properly reflects their inherent social and economic needs. Various studies state that as a direct result of the ambiguity inherent in article 27.3 (b) and the possibility of various developed countries pushing for plant breeders rights as the sui generis system could result in these countries pushing developing countries to adopt the UPOV arrangement (International Convention for the Protection of New Varieties of Plants (Brush, 2007: 1499-1514)).
As a result, this could severely undermine the rights of farmers within local communities as well as subsequently limit or altogether remove the benefits that could be derived from the sharing of plant genetic resources fairly (i.e., grains that have greater yields, disease-resistant strains of rice, etc.) (Brush, 2007: 1499-1514). Going even further in examining the article and its possible implications, it can be seen that it does not at all cover the potential inventions and contributions that have come about as a direct result of traditional knowledge (i.e., local medicines and cures based on century’s old medicinal practices) (Kimmerer, 2002: 432).
As a direct result, the traditional knowledge of local communities and indigenous people is not even considered as intellectual property as seen in the previous part of this section, which detailed the problems inherent in the TRIPS agreement regarding traditional knowledge as not being able to apply for patentability since it fails to meet the criteria established by the provisions of TRIPS (Van Overwalle, 2005: 585-607).
What must be understood is that article 27.3 (b) blurs the distinction between what can be considered an invention and what can’t resulting, in the possibility of any corporation misappropriating traditional knowledge and patenting it as an internal development. Not only that, when taking into account article 27.3 (b) and article 29.1, it can be seen that if a local community or indigenous population did attempt any form of a patent for an agricultural or medicinal practice based on traditional knowledge, not only would it be rejected on the grounds of its incompatibility with the provisions of TRIPS but it could result in such knowledge being utilized by foreign companies for their gain (He, 2011: 827-863).
Such a situation has been seen in countries such as the Philippines, Kenya, China, Malaysia, etc., where traditional knowledge on the properties of local plants and organisms has been subsequently utilized to develop a variety of medicines without due credit or benefit being given to the cultures where the knowledge came from (Van Overwalle, 2005: 585-607) (Protection of traditional knowledge by geographical indications, 2010: 93).
Convention on Biological Diversity (CBD)
“The Convention on Biological Diversity (CBD) is a legally binding international treaty with the goals of conserving biological diversity, ensuring sustainable use of bio-resources, and promoting fairness and equitability in terms of the benefits derived from such resources.” (Schroeder & Pogge, 2009: 267-280)
In terms of its impact on protecting traditional knowledge, the CBD can be considered an important instrument for various indigenous people and local communities since it aims to not only promote fair and equitable use but promotes a certain degree of protection and benefit for advances derived from traditional knowledge. For example, the preamble (introductory statement of the CBD provisions) of the agreement explicitly states that the CBD recognizes “the close and traditional dependence of many indigenous and local communities embodying traditional lifestyles on biological resources” (Chandra & Idrisova, 2011: 3295-3316).
The words “traditional” and “dependence” in the context of this statement shows that the agreement expressly agrees with the viewpoint of various indigenous tribes and local communities over the value of the traditional knowledge they inherited by emphasizing that there is a certain degree of indivisibility between traditional knowledge and the people that it originates from. The treaty goes on to state the need to share “the benefits arising from the use of traditional knowledge, innovations, and practices relevant to the conservation of biological diversity and the sustainable use of its components” (Heink, Bartz, & Kowarik, 2012: 3-17).
Based on this statement, it can be seen that unlike TRIPS, the CBD expressly states the phrase “traditional knowledge” and adds further emphasis on the need to share the benefits attained from the use of traditional knowledge. In the context of the CBD (which focuses on benefits derived from biological processes and specimens), this can come in the form of possible financial compensation from various pharmaceutical companies (or other companies in general) towards indigenous tribes and local communities from which they have derived certain aspects of traditional knowledge that they have utilized in their products and services (Myburgh, 2011: 844-849).
Article 8 (J)
Of particular interest to the topic of protecting traditional knowledge is article 8 (j) of the CBD, which states the following:
“for each contracting party shall, as far as possible and as appropriate subject to its national legislation, respect, preserve and maintain knowledge, innovations, and practices of indigenous and local communities embodying traditional lifestyles relevant for the conservation and sustainable use of biological diversity and promote their wider application with the approval and involvement of the holders of such knowledge, innovations, and practices and encourage the equitable sharing of the benefits arising from the utilization of such knowledge, innovations, and practices.” (Muzaffar et al., 2010: 1587-1601)
Based on this particular provision, it can be seen that article 8 (j) affirms the rights that indigenous and local populations have over traditional knowledge, which consists of practices and innovations which have some merit in medicinal, industrial, or creative fields even if such practices are not necessarily under a form of IPR protection.
Taking this into consideration, article 8 (j) emphasizes the necessity for foreign governments to safeguard the knowledge/entitlements of the owners of traditional knowledge through some form of new IPR law or through other legislative and policy measures designed to accord a certain degree of ownership and entitlement towards the inherited knowledge and practices of the indigenous and local communities within their borders (Mirandah, 2007: 76-78).
Even though the CBD was created a few months before TRIPS, it can be seen that it addresses several of the concerns that have been brought up regarding the provisions within the TRIPS agreement. For one thing, the CBD emphasizes a greater degree of concern for community control of genetic and biological resources, unlike TRIPS, which focuses more on private monopoly rights, patents, and industry innovations.
From a certain perspective, it can be seen that the CBD asserts the necessity of national sovereignty when it comes to protecting traditional knowledge while, on the other hand, TRIPS seems more like a threat to indigenous populations and local communities due to how its provisions effectively prevent proper patenting of traditional knowledge and the fact that the vagueness of Article 27.3 (b) in effect has the potential to promote the rights of corporations over that of indigenous populations which it was designed to do (Renner et al., 2012: 81-98).
United Nations Conference on Trade and Development (UNCTAD)
The United Nations Conference on Trade and Development (UNCTAD) is specialized promotes the analysis and consensus building in regards to issues that could yield benefits to developing countries. It is in this regard that the UNCTAD specifically states that the various stipulations and provisions that have been mentioned by the CBD and TRIPS should be taken into consideration to “protect traditional knowledge, innovations, and practices of local and indigenous communities and enhance cooperation on research and development on technologies associated with the sustainable use of biological resources.” (Gardner, 1968: 99)
In its position as a steward for fair trade practices, UNCTAD has on occasion been asked to provide statistical and background support to help developing countries in their negotiations involving anti-dumping measures and various methods of protection of traditional knowledge. What is interesting to note regarding the assistance that UNCTAD could potentially provide to developing countries regarding the aforementioned activities is that it was summarily blocked by the US (Taylor, 2003: 409 – 18).
The US refused to agree to the UNCTAD, providing any form of assistance in arbitration and intervention regarding cases involving traditional knowledge. Rather it advocated that the UNCTAD should merely work towards helping developing countries improve their understanding of the variety of rules and procedures already in place (Taylor, 2003: 409 – 18). The obvious problem regarding this action is that this, in effect, prevents developing countries from having the much-needed assistance they require to protect their traditional knowledge.
In examining why such actions were taken by the US, various studies have implied that corporate influences within the governing body of the country had a vested interest in ensuring that developing countries lacked the support needed to summarily prevent the continued “piracy” of their traditional knowledge (World Investment Report 2005: Transnational Corporations and the Internationalization of R&D, United Nations Conference on Trade and Development United Nations, 2007: 1288). This comes in the form of pharmaceutical companies and other such industries that have thrived over the past few decades from knowledge gained and patented from traditional knowledge sources.
When examining the impact of the decision of the US to summarily block the ability to develop countries to attain outside assistance in regards to protecting their traditional knowledge, this is indicative of what can potentially be construed as the “western” world summarily wishing to protect its interests in terms of its continued exploitation of the traditional knowledge of the developing world.
Discussion on Business Law and Intellectual Property Rights Management
Based on the facts presented in the section on online IPR violations, it becomes quite obvious that necessary changes in the application of business law need to be implemented for it to apply to the challenges described so far. In response to this particular situation, two new proposed acts of Congress by the US, namely PIPA (Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011) and SOPA (Stop Online Piracy Act), are currently being deliberated and should they go into effect would resolve many of the problems described in this paper.
The first act, SOPA, allows copyright holders to utilize a court-ordered agreement which would, in effect, ban US-based advertising networks from advertising on such sites, would prevent online payment transaction services such as PayPal from processing payments on behalf of that site, and it also prevents search engines from displaying the site during an online search as well as requires ISPs to in effect block the site from being accessed by anyone within the US or if the site is based within the US allow all users to visit the site. The Stop Online Piracy Act effectively neutralizes all possible avenues by which a sight with either pirated or IPR violating content from continuing to exist by strangling all means by which it could derive an income or attract users.
This proposed act is the culmination of all the various facts presented in this paper regarding the inadequacies of business law thus far regarding violations of IPR and, as such, resolves many of the problems indicated in this paper. What must be understood is that a vast majority of online internet users are from the US and, as such, by blocking their ability to access to create sites with infringing content this could create a cascading effect where due to reductions in income due to a lack of visitors, sites with illegal copyrighted content would in effect have to shut down.
As such, this particular application of business law not only affects violators within the US but violators on an international scale as well since it limits their ability to conduct business. On the other hand, SOPA has continued to receive widespread derision and contempt from a vast majority of internet users due to the limits it imposes on the consumption of online content. What must be understood is that many of today’s users have grown used to various websites having infringing content in the form of photos, graphics, music, and files and, as such, have considered their presence as a ubiquitous right to online internet usage.
What must be understood is that the broad definitions of the act itself could result in thousands of sites being shut down as a direct result of copyright infringement. This involved not only illegal sites but legitimate sites such as Facebook, where users share copyrighted images by the thousands daily. Not only that, the implementation of the bill itself has numerous pundits concerned about how it would affect the ability of internet-based entrepreneurial businesses to operate due to the increased liability which may have to face due to the exposure to possibly copyrighted content.
The best way of examining this particular issue is from the words of blogger James Alworth who works at the Harvard Business Review. He states the following quote, which reverberates throughout all the problems and concepts presented in this paper: “Is this really what we want to do to the internet, shut it down every time it doesn’t fit someone’s business model?” This very statement calls into question business law itself as it is applied on the internet today.
What must be understood is that the internet is widely acknowledged as the single greatest innovation within the past century due to its ability to not only encourage communication but information sharing on a massive scale. Implementing solutions to the problem of applying business law solutions to the cases presented in this paper, unfortunately, has the effect of stifling the ability of the internet to continue to be an effective platform of communication and the sharing of ideas since as seen in the case of SOPA the implementation of the most effective solution prevents the proper functioning of the open and freestyle of communication and collaboration the internet is known for. It can even be argued that copyrights and IPRs constrain innovation and the subsequent application of new methods to use old technologies.
With copyrights and IPRs securely in the hands of companies that want to keep them to perpetuate the success of their business models, they, in effect, stifle potential new applications of the technologies they so religiously guard. Evidence of this can be seen in the way in which open-source software projects such as Linux, Mozilla, and Google’s Android software application have practically done leaps and bounds in their ability to not only rival but exceed the capabilities of proprietary based systems.
While it may be true that under business law, companies have a right to profit from the copyrighted and trademarked content that they created, it is at times questionable whether the perpetuation of practices that allow old business models to continue to operate is truly the most effective path to pursue. It was stated by the director of Valve (one of the largest computer game companies in the world) that the popularity of online IPR violations isn’t an issue that involved business law but is rather a service issue.
Examining the Concept of IPR Violations as a “Service” Issue
When the head of Valve mentioned that IPR violations are a service issue, he meant that certain licensed content, whether in the form of media, games, software, or pictures, was either unavailable in a particular region or unaffordable by people that wish to utilize the copyrighted content. What must be understood is that a vast majority of IPR violations done today through the illegal consumption and use of copyrighted content is done by individuals who can’t afford to get the software or media in another fashion. As such, they turn towards IPR violation as the only recourse they have to gain the content they need.
In the case of Valve, they resolved the problem of IPR violations being a service issue by establishing a service that both addressed the issue of availability and affordability of video games. Through their proprietary “Steam” portal, players from all around the world were able to find the games they wanted and pay for them at a fraction of the cost that they otherwise would have if they had bought the game through traditional methods. Based on this, it can be seen that there are alternative solutions that other companies are not event attempting since they seem more concerned in perpetuating their old business models instead of attempting various methods of innovation to address the issue of IPR violations.
Losing Touch with their Customers
It can be stated that based on the words of the Valve CEO that the inherent problem in this particular case is the fact that companies have in effect lost touch with their customers based as a direct result of the internet, and as such, have begun to rely on business law as a way of reversing an unfavorable situation. One way of looking at this is by comparing the case of Netflix and Blockbuster and how one business model was affected by changes to consumers and the effects of innovation.
When examining what company has lost touch with its consumer base, the best example that can be seen at present is the fall of Blockbuster and the subsequent rise of Netflix within the past ten years. What is notable in this particular case is that Blockbuster originally had a dominant position in the US market. It has 3,000 stores and controls 95% of the video rental market. However, it is interesting to note that its business model did little to change over time.
Blockbuster stores were notable for their large selection of movies and games. However, they tended to be overly spacious and placed in an equally large parking lot with a few surrounding stores. Such a scheme did result in high sales over 15 years. However, it must be questioned whether the sales were a result of its business model or just the sheer proliferation of its stores and the dominant position it enjoyed in the market.
When examining how Blockbuster dealt with the local competition, it was obvious that they did so by offering a wider selection, lower prices, and more attractive-looking stores to gain more consumers. Not only that, but Blockbuster also enjoyed a rather healthy relationship with several studios, which enabled it to release movie rentals faster than its competitors could have, which resulted in more consumers coming to Blockbuster as a result.
The fall of Blockbuster
By the late 1990s, though, it is obvious that Blockbuster was so competitor-centered in maintaining its dominant position that it neglected to examine changes within its consumer base. By this time, faster internet speeds were becoming available to the general public, which, along with the proliferation of home computer systems, resulted in more people turning towards the internet for their needs. It was at this point that online e-commerce systems that enabled consumers to make purchases online started to proliferate, which enabled new companies to enter into previously hard to enter markets due to the flexibility and low-cost nature of online sales and consumer marketing.
When Netflix began its online video rental service in the latter half of the 1990s, this gave consumers a faster and more convenient method of video rental, which subsequently eroded Blockbuster’s market position till by 2005 to 2009 when Netflix released its online video streaming service this could be considered the “final nail in the coffin” so to speak resulting in the dominance of Netflix and the complete erosion of Blockbuster’s previously dominant position.
Based on this example, it can be seen that companies that don’t innovate in light of subsequent changes to markets very likely could go under as a direct result of their actions.
Examining the Issue
The case of Blockbuster and Netflix is an example of the wider state of all businesses today and as such is evidence as to why the fight against online IPR infringement should not be considered one based on business law but one where companies are reluctant to innovate in light of the changes needed and are utilizing business law as a means of “resisting the change” so to speak. The reason behind this is the fact that businesses don’t operate within a vacuum and have to deal with intense competitive environment forces on an almost daily basis. What must be understood is that there are three components to a market orientation that dictate how a company acts within a competitive environment.
These are customer orientation, competitor orientation, and inter-functional coordination. In the case of customer orientation, a company spends what resources it has in gathering data on the needs and behaviors of various consumers. The same can be said for competitor orientation. However, it focuses on competitors instead. What must be understood is that either method has a distinct weakness. Focusing too much on consumer orientation can blind a company to changes in the market or may stifle innovation since the company focuses too much on consumer satisfaction rather than changing based on trends.
Focusing too much on competitor orientation, on the other hand, results in too much time and capital being placed on competitive activities, which results in companies at times neglecting their consumer bases and focusing too much on getting ahead of the competition. On the other hand, both methods also have their respective strengths, such as the customer orientation strategy being more effective in uncertain markets, whereas competitor-oriented strategies become effective in fast growing markets.
The best way to maintain a balance between the orientations is to first create a market intelligence mechanism that gathers consumer information and disseminates it within the company, and secondly is to encourage the free flow of information within the organization. What must be understood is that market orientations tend to become ineffective when organizations are mired in bureaucratic nuances which prevent information from being passed on quickly. This is exactly what is happening to companies at present, wherein they are mired in the bureaucratic entanglements of IPRs, copyrights, and trademarks.
They have become so concerned with maintaining their positions that they have neglected to take into account current market intelligence and customer orientation to innovate their products in such a way that it allows the company to both profits from online IPRs while at the same time allowing consumers to enjoy the current level of freedom they enjoy online. The creation of SOPA is merely evidence of this resistance and, as such, should not be encouraged to go into effect since it not only negatively impacts online users but also prevents companies from forcefully innovating themselves.
Discussion on the Protection of Traditional Knowledge
When examining the various factors presented by this section so far, two pressing concerns become immediately evident: the first is the necessity of creating a system that differentiates between a global IPR system and the various local regimes of traditional knowledge to create a system that is fair and equitable to all the parties involved. The second concern is a question of how to integrate into such a system the ability to both distribute public domain knowledge while at the same time ensure that such a method of distribution doesn’t result in the knowledge being utilized for self-serving purposes that don’t have the permission of the local community or indigenous tribe where it came from nor benefit them in any way.
Treaties such as TRIPS are far too one-sided in terms of the ability of local communities or indigenous tribes from being able to derive sufficient benefit from it due to inherent limitations in the applicability of traditional knowledge under its requirements for patentability. While it was not specifically elaborated on within the various parts researched, it must also be noted that special interest groups (such as pharmaceutical companies and bio-research firms) had a hand in influencing the creation of the TRIPS agreement and as such is indicative of the potential such self-serving provisions finding themselves into future agreements.
Not only that, particular attention should be paid to how the generalized approach towards IPRs done by the WIPO and WTO at present are inapplicable to the case of traditional knowledge since they neglect to take into account indigenous practices and customary laws when applying provisions that can apply to traditional knowledge. It is based on the factors presented that what is necessary is the creation of a standardized body of rules and regulations that embody all aspects regarding the regulation and distribution of traditional knowledge and have such an agreement encompass aspects related to the fair use and equitable compensation for the origin of the knowledge in question.
Such a body of knowledge must indicate an appropriate separation between traditional knowledge and IPRs as they are known today and emphasize the necessity of respecting the public domain knowledge of other states and implement sufficient means of control and resolution to prevent the situation of continued mistrust that pervades international relations when it comes to matters such as these. It is only by doing so that the current problems surrounding the protection of traditional knowledge be tackled and effectively resolved within this lifetime.
Based on the data that has been presented in this study, it can be seen that the current problem of resolving IPR violations involving traditional knowledge, the internet, and the production of counterfeit goods has no effective means of resolution at present. Businesses cannot order a state (i.e., China) to cease its actions since states have primacy in all aspects regarding international relations, and as such, businesses cannot directly influence the actions of states.
On the other hand, indirect methods of influence, as seen in the case of violations of traditional knowledge, are possible as seen in the way corporations have influenced the creation of the TRIPS agreement, which in effect benefits them at the expense of local communities.
Furthermore, due to the current breadth and depth of the internet, along with the necessity of upholding the rights of internet users, businesses are finding it increasingly harder to prevent online violations of copyrights and intellectual property rights. When considering all these factors and the fact that till now there has been no effective means of actual resolution, it can be stated that unless some all-encompassing means of fair and equitable protection of IPR is established that protects consumers, companies, and local communities, it is unlikely that any resolution to the various issues presented in this paper will come to pass.
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