Pranesh Prakash

This blog post is based on a presentation made at the iTechLaw conference held on February 5, 2010. The audience consisted of lawyers from various corporations and corporate law firms. As is their wont, most lawyers when dealing with software patents get straight to an analysis of law governing the patenting of computer programmes in India and elsewhere, and seeing whether any loopholes exist and can be exploited to patent software. It was refreshing to see at least some lawyers actually going into questions of the need for patents to cover computer programs. In my presentation, I made a multi-pronged case against software patents: (1) philosophical justification against software patents based on the nature of software; (2) legal case against software patents; (3) practical reasons against software patents.

Preamble

Through these arguments, it is sought to be shown that patentability of software is not some arcane, technical question of law, but is a real issue that affect the continued production of new software and the everyday life of the coder/hacker/software programmer/engineer as well as consumers of software (which is, I may remind you, everywhere from your pacemaker to your phone). A preamble to the arguments would note that the main question to ask is: why should we allow for patenting of software? Answering this question will lead us to ask: who benefits from patenting of software. The conclusion that I come to is that patenting of software helps three categories of people: (1) those large software corporations that already have a large number of software patents; (2) those corporations that do not create software, but only trade in patents / sue on the basis of patents ("patent trolls"); (3) patent lawyers. How they don't help small and medium enterprises nor society at large (since they deter, rather than further invention) will be borne out by the rest of these arguments, especially the section on practical reasons against software patents.

What are Patents?

Patents are a twenty-year monopoly granted by the State on any invention. An invention has to have at least four characteristics: (0) patentable subject matter; (1) novelty (it has to be new); (2) inventive step / non-obviousness (even if new, it should not be obvious); (3) application to industry. A monopoly over that invention, thus means that if person X has invented something, then I may not use the core parts of that invention ("the essential claims") in my own invention. This prohibition applies even if I have come upon my invention without having known about X's invention. (Thus, independent creation is not a defence to patent infringement. This distinguishes it, for instance, from copyright law in which two people who created the same work independently of each other can both assert copyright.) Patents cover non-abstract ideas/functionality while copyright covers specific expressions of ideas. To clarify: imagine I make a drawing of a particular machine and describe the procedure of making it. Under patent law, no one else can make that particular machine, while under copyright law, no one can copy that drawing.

Philosophical Justification Against Software Patents

Even without going into the case against patents per se (lack of independent creation as a defence; lack of 'harm' as a criterion leading to internalization of all positive externalities; lack of effective disclosure and publication; etc.), which has been done much more ably by others like Bessen & Meurer (especially in their book Patent Failure) and Boldrin & Levine (in their book Against Intellectual Monopoly, the full text of which is available online).

But there is one essentially philosophical argument against software as subject matter of a patent. Software/computer programs ("instructions for a computer"), as any software engineer would tell you, are merely algorithms ("an effective method for solving a problem using a finite sequence of instructions") that are meant to be understood by a computer or a human who knows how to read that code.

Algorithms are not patentable subject matter, as they are mere expressions of abstract ideas, and not inventions in themselves. Computer programs, similarly, are abstract ideas. They only stop being abstract ideas when embodied in a machine or a process in which it is the machine/process that is the essential claim and not the software. That machine or process being patented would not grant protection to the software itself, but to the whole machine or process. Thus the abstract part of that machine/process (i.e., the computer program) could be used in any other machine/process, as it it is not the subject matter of the patent. Importantly, just because software is required to operate some machine would then not mean that the machine itself is not patentable, just that the software cannot be patented in guise of patenting a machine.

Legal Case Against Software Patents

In India, section 3(k) of the Patent Act reads:

(3) The following are not inventions within the meaning of this Act: (k) a mathematical or business method or computer programme (sic) per se or algorithms.

As one can see, computer programs are place in the same category as "mathematical methods", "algorithms", and "business methods", hence giving legal validity to the idea propounded in the previous section that computer programs are a kind of algorithms (just as algorithms are a kind of mathematical method).

Be that as it may, the best legal minds in India have had to work hard at understanding what exactly "computer programme per se" means. They have cited U.S. case law, U.K. case law, E.U. precedents, and sought to arrive at an understanding of how per se should be understood. While understanding what per se means might be a difficult job, it is much easier to see what it does not mean. For that, we can look at the 2004 Patent Ordinance that Parliament rejected in 2005. In that ordinance, sections 3(k) and (ka) read as follows:

(3) The following are not inventions within the meaning of this Act: (k) a computer programme per se other than its technical application to industry or a combination with hardware; (ka) a mathematical method or a business method or algorithms.

Thus, it is clear that the interpretation that "computer programme per se" excludes "a computer programme that has technical application to industry" and "a computer programme in combination with hardware" is wrong. By rejecting the 2004 Ordinance wording, Parliament has clearly shown that "technical application to industry" and "combination with hardware" do not make a computer programme patentable subject matter.

Indeed, what exactly is "technical application to industry"? "Technical" has various definitions, and a perusal through those definitions would show that barely any computer program can be said not to relate to a technique, not involve "specialized knowledge of applied arts and sciences" (it is code, after all; not everyone can write good algorithms), or not relate to "a practical subject that is organized according to scientific principles" or is "technological". Similarly, all software is, by definition, meant to be used in combination with hardware. Thus, it being used in combination with hardware must not, as argued above, give rise to patentability of otherwise unpatentable subject matter category.

In 2008, the Patent Office published a new 'Draft Manual Of Patent Practice And Procedure' in which it sought to allow patenting of certain method claims for software inventions (while earlier the Patent Office objected to method claims, allowing only device claims with hardware components). This Draft Manual was withdrawn from circulation, with Shri N.N. Prasad (then Joint Secretary of DIPP, the department administering the Patent Office) noting that the parts of the Manual on sections 3(d) and 3(k) had generated a lot of controversy, and were ultra vires the scope of the Manual (which could not override the Patent Act). He promised that those parts would be dropped and the Manual would be re-written. A revised draft of the Manual has not yet been released. Thus the interpretation provided in the Draft Manual (which was based heavily on the interpretation of the U.K. courts) cannot not be relied upon as a basis for arguments in favour of the patentability of software in India.

In October 2008, CIS helped organize a National Public Meeting on Software Patents in which Indian academics, industry, scientists, and FOSS enthusiasts all came to the conclusion that software patents are harmful for both the industry as well as consumers.

Practical Reasons Against Software Patents

This is going to be an attempt at distilling and simplifying some of the main practical arguments against patenting of software.

There are traditionally four incentives that the patent system caters to: (1) incentive to invent; (2) incentive to disclose; (3) incentive to commercialize; and (4) incentive to invent substitutes. Apart from the last, patenting of software does not really aid any of them.

1. Patent Landmines / Submarine Patents / Patent Gridlocks / No Exception for Independent Creation

   Given that computer programs are algorithms, having monopolies over such abstract ideas is detrimental to innovation. Just the metaphors say a lot about software patents: landmines (they cannot be seen/predicted); submarines (they surface out of the blue); gridlocks (because there are so many software patents around the same area of computing, they prevent further innovation in that area, since no program can be written without violating one patent or the other).

   Imagine the madness that would have ensued had patents been granted when computer programming was in its infancy. Imagine different methods of sorting (quick sort, bubble sort) that are part of Computer Science 101 had been patented. While those particular instances aren't, similar algorithms, such as data compression algorithms (including the infamous LZW compression method), have been granted patents. Most importantly, even if one codes certain functionality into software independently of the patent holder, that is still violative of the patent. Computer programs being granted patents makes it extremely difficult to create other computer programs that are based on the same abstract ideas. Thus incentives # (1) and (3) are not fulfilled, and indeed, they are harmed. There is no incentive to invent, as one would always be violating one patent or the other. Given that, there is no incentive to commercialize what one has invented, because of fear of patent infringement suits.

   An apt illustration of this is the current difficulty of choosing a royalty-free video format for HTML 5, as it shows, in practical terms, how difficult it is to create a video format without violating one patent or the other. While the PNG image format was created to side-step the patent over the LZW compression method used in the GIF image format, bringing Ogg Theora or Dirac (both patent-free video format) to surpass the levels of H.264/MPEG-4 AVC or VC-1 will be very difficult without infringing dozens if not hundreds of software patents. Chris DiBona of Google, while talking about improving Ogg Theora as part of its inclusion in HTML 5 specifications said, "Here’s the challenge: Can Theora move forward without infringing on the other video compression patents?" Just the number of companies and organization that hold patents over H.264 is astounding, and includes: Columbia University, Electronics and Telecommunications Research Institute of Korea (ETRI), France Télécom, Fujitsu, LG Electronics, Matsushita, Mitsubishi, Microsoft, Motorola, Nokia, Philips, Robert Bosch GmbH, Samsung, Sharp, Sony, Toshiba, and Victor Company of Japan (JVC). As is the amount of royalties to be paid ("[t]he maximum royalty for these rights payable by an Enterprise (company and greater than 50% owned subsidiaries) is $3.5 million per year in 2005-2006, $4.25 million per year in 2007-08 and $5 million per year in 2009-10"; with royalty per unit of a decoder-encoder costing upto USD 0.20.)

   Indeed, even the most diligent companies cannot guard themselves against software patents. FFII estimates that a very simple online shopping website would violate twenty different patents at the very least. Microsoft recently lost a case against i4i when i4i surfaced with a patent covering custom XML as implemented in MS Office 2003 and MS Office 2007. As a result Microsoft had to ship patches to its millions of customers, to disable the functionality and bypass that patent. The manufacturers of BlackBerry, the Canadian company Research in Motion, had to shell out USD 617 million as settlement to NTP over wireless push e-mail, as it was otherwise faced with the possibility of the court shutting down the BlackBerry service in the U.S. This happened despite there being a well-known method of doing so pre-dating the NTP patents. NTP has also filed cases against AT&T, Sprint Nextel, T-Mobile, Verizon Wireless, and Palm Inc. Microsoft was also hit by Visto Corporation over those same NTP patents, which had been licensed to Visto (a startup).

   • Don't These Cases Show How Software Patents Help Small Companies?

     The astute reader might be tempted to ask: are not all of these examples of small companies getting their dues from larger companies? Doesn't all of this show that software patents actually help small and medium enterprises (SMEs)? The answer to that is: no. To see why, we need to note the common thread binding i4i, NTP, and Visto. None of them were, at the time of their lawsuits, actually creating new software, and NTP was an out-and-out "non-practising entity"/"patent holding company" AKA, patent troll. i4i was in the process of closing shop, and Visto had just started up. None of these were actually practising the patent. None of these were producing any other software. Thus, none of these companies had anything to lose by going after big companies. In other words, the likes of Microsoft, RIM, Verizon, AT&T, etc., could not file counter-suits of patent infringement, which is normally what happens when SMEs try to assert patent rights against larger corporations. For every patent that the large corporation violates of the smaller corporation, the smaler corporation would be violating at least ten of the larger corporation's. Software patents are more helpful for software companies as a tool for cross-licensing rather than as a way of earning royalties. Even this does not work as a strategy against patent trolls.

   Thus, the assertion that was made at the beginning is borne out: software patents help only patent trolls, large corporations that already have large software patent portfolios, and the lawyers who draft these patents and later argue them out in court.

2. Term of Patents

   Twenty years of monopoly rights is outright ludicrous in an industry where the rate of turnover of technology is much faster -- anywhere between two years and five months.

3. Software Industry Progressed Greatly Without Patents

   In India, software patents have never been asserted in courts (even though many have been illegally granted), yet the software industry in India is growing in leaps and bounds. Similarly, most of the big (American) giants of the software industry today grew to their stature by using copyright to "protect" their software, and not patents.

4. Copyright Exists for Software

   As noted above, the code/expression of any software is internationally protected by copyright law. There is no reason to protect the ideas/functionality of that software as well.

5. Insufficient Disclosure

   When ordinary computer programmers cannot understand what a particular software patent covers (which is the overwhelming case), then the patent is of no use. One of the main incentives of the patent system is to encourage gifted inventors to share their genius with the world. It is not about gifted inventors paying equally gifted lawyers to obfuscate their inventions into gobbledygook so that other gifted inventors can at best hazard a guess as to precisely what is and is not covered by that patent. Thus, this incentive (#2) is not fulfilled by the current system of patents either -- not unless there is a major overhaul of the system. This ties in with the impossibility of ensuring that one is not violating a software patent. If a reasonably smart software developer (who are often working as individuals, and as part of SMEs) cannot quickly ascertain whether one is violating patents, then there is a huge disincentive against developing software in that area at all.

6. Software Patents Work Against Free/Libre/Open Source Software

   Software patents hinder the development of software and FOSS licences, as the licensee is not allowed to restrict the rights of the sub-licensees over and above the restrictions that the licensee has to observe. Thus, all patent clearances obtained by the licensee must be passed on to the sub-licensees. Thus, patented software, though most countries around the world do not recognize them, are generally not included in the default builds of many FOSS operating systems. This inhabits the general adoption of FOSS, since many of the software patents, even though not enforceable in India, are paid heed to by the software that Indians download, and the MP3 and DivX formats are not enabled by default in standard installations of a Linux OS such as Ubuntu.

Conclusion

Currently, the U.S. patent system is being reviewed at the administrative level, the legislative level, as well as the judicial level. At the judicial level, the question of business method patents (and, by extension, software patents) is before the Supreme Court of the United States of America in the form of Bilski v. Kappos. Judge Mayer of the Court of Appeals for the Federal Circuit (CAFC, which heard In re Bilksi) noted that "the patent system has run amok". The Free Software Foundation submitted a most extensive amicus curiae brief to the U.S. Supreme Court, filled with brilliant analysis of software patents and arguments against the patentability of software that is well worth a read.

CIS Statement on the WIPO Broadcast Treaty at SCCR 19

The Centre for Internet and Society believes that the protection that may be afforded to broadcasters under existing international treaties, including Article 14 of the TRIPS Convention, are sufficient to safeguard the interests of broadcasters, and that the Broadcast Treaty, which has been under discussion for more than a decade without any progress, is, as the WIPO Chair observed, an expenditure of "time, energy and resources to no avail" (SCCR/15/2/rev).

We believe that at any rate webcasting/netcasting should be kept out of the ambit of the broadcast treaty, even if only restricted to "retransmission" of broadcasts as in the current draft, since by its very nature webcasting is very different from broadcasting. Webcasting is currently quite vibrant, with a recent report by Arbor Networks estimating that around ten per cent of all Web traffic is streaming video, making webcasting the fastest growing application on the Internet.  Given this situation, a strong case has to be made to show that an international treaty is required to protect and promote webcasting, which has not been done.

Specifically, we believe that Paragraph 16 of the WIPO Development Agenda, which relates to preservation of a vibrant public domain, will be endangered by a right being given to webcasters which is separate from the underlying content of the transmission.

Statements by other organizations on WIPO Broadcast Treaty at SCCR 19

• Electronic Frontier Foundation
  
• Public Knowledge
• International Federation of Library Associations, Electronic Information for Libraries, and Library Copyright Alliance (Joint Statement)
  
• Computer and Communications Industry Association
  

The Indian Journal of Law and Technology (IJLT) is an annual law journal published by the Law and Technology Committee of the National Law School of India University, Bangalore. IJLT aims to provide a platform for promoting discussion on issues relating to the interface between law and technology, particularly from the perspective of the developing world.

The Centre for Internet and Society (CIS) is a leading research organisation that engages with issues of digital pluralism, public accountability and pedagogic practices, in relation to the field of Internet and Society, with special emphasis towards South-South dialogue and exchange.  IJLT and CIS are proud to announce the 1st IJLT-CIS Annual Law Essay Competition 2009, which is a competition open to undergraduate law students across India. The competition seeks to encourage creative thinking and promote research and writing about crucial legal issues in the field of Information Technology and the Internet.

Themes

1. Criminality and Second Life: Dr. Jekyll and Mr. Hyde
2. Trademark and the Internet: Cybersquatting and the Google Adwords-Consim Controversy -- Reasonable Limits to Trademark Protection
3. 3G Services and Spectrum Allocation: Fair Competition, Welfare and Freedom of Speech and Commerce on the Airwaves
4. Easier to Be Criminals: Judicial and Legislative Responses to Cyber Crime in India.

Judging

The winning law essays shall be determined through a blind review by a panel of eminent academicians in the field of law and technology.

Prizes

Ist Prize: Rs. 7500 and an internship at CIS

2nd Prize: Rs. 5000

3rd Prize: Rs. 4000

Please note that the terms of the above internship shall be decided by CIS on its own initiative, and as such shall not be negotiable. The winning law essay shall be considered for publication in the next issue of IJLT in accordance with the Editorial Policy of IJLT.

Eligibility

The competition is open to all undergraduate law students in any college/law school in India.

Submission Guidelines

• The entries must be between 5000-7500 words inclusive of all footnotes. The entries that fall short of or exceed the above word limit shall be penalised.
• Substantive footnoting is not permitted and shall be penalised. The use of endnotes or other citation methods is not permitted.
• The entries should be accompanied by a 150-word abstract. The abstract is not counted towards the word limit.
• All entries should be in Times New Roman, size 12, 1.5 line spacing. The footnotes used should be in Times New Roman, size 10, single line spacing.
• The footnotes used should follow a uniform and complete system of citation. However, the use of the Harvard Blue Book (18th edition) system of citation is encouraged.
• The entries must be submitted in the Microsoft Word format and with all identifying information removed from the text of the entries and the file properties. The covering e-mail should contain the name, e-mail address, postal address, institution, course and year of study of the author.
• The entries must be submitted via e-mail to essay@ijlt.in.
• The deadline for entries is 11:59 P.M., 23rd January, 2010.

For any clarifications, please send an e-mail to editorialboard@ijlt.in.

The Confederation of Indian Industry (CII) organized its third annual conference on counterfeiting and piracy, with support from the United States Embassy and the Quality Brands Protection Committee of China (a body comprising more than 80 multinational companies).  Last week we criticised the conference in an open letter.  This week, we examine a few of the recurring themes that came up at the conference.

Something being substandard is not the same as something being counterfeit.

This was a mistake made by many whenever they invoked 'counterfeit' in the sense of something that is violative of one's patent and trademark rights.  The Indian Drugs and Cosmetics Act itself distinguishes between 'misbranded', 'adulterated', and 'spurious' drugs, thus recognizing that something that is made without proper authorization from rights owners isn't necessarily of a bad quality.  Indeed, this was substantiated by an audience member, a lawyer from Dr. Reddy's Lab.  She spoke of a mandi in Agra where they seized medicines being sold under the Dr. Reddy's name, but produced by local manufacturers.  Upon lab testing, it turned out, much to their surprise, that the medicines were of the highest quality and were not substandard.  Similarly, many large companies including trusted FMCG companies like Hindustan Unilever and ITC are upbraided by authorities for violations of the Drugs and Cosmetics Act (for the cosmetics they produce) as well as the Prevention of Food Adulteration Act.  Thus, even legitimate businesses can produce substandard products.  Thus, a product can be unauthorized but not substandard, just as a product can be substandard but not counterfeit.

This distinction becomes very important when we talk about patents, and especially drug patents.  A generic drug is by definition identical or within an acceptable bio-equivalent range to the brand name counterpart with respect to pharmacokinetic and pharmacodynamic properties.  Thus, this entire category of high-quality drugs is often sought to be made illegal or counterfeit by large pharma companies.  Some countries like Kenya have capitulated.  But so far the World Health Assembly has been forced by developing countries to keep the issue of substandard medicines separate from patent-bypassing medicines.

The industry, for all their talk about "out of the box" thinking on the issue, still only consider metrics such the number of piracy raids conducted as measures of success.  A question was put forth by Manisha Shridhar of the Intellectual Property & Trade Unit of the World Health Organization upon learning of the quality of the drugs seized at the Agra mandi: Why not cut a licensing deal with those manufacturers, who obviously have excellent production facilities?  That kind of thinking, which helped HMV in India in the 1980s, and copying innovative features from video pirates and pricing their products competitively has helped an Indian company, Moserbaer, do extremely well.

Counterfeiters and pirates are not always seeking to fool consumers.

Only lawyers hired by the industry would think that a consumer aspiring towards a Rolex watch would actually think that the one he purchased off the streets for one-hundredth the original's price was in fact original.  Street-side DVD hawkers are not thought by the general public to be selling original wares.  Still, despite knowing the difference between the original and the fake, consumers many times opt for the latter.

Having said that, counterfeiting, by using someone else's trademark and trying to pass off fake goods as real ones, is quite obviously wrong.  It harms customers, and it harms the manufacturers.  Thus, a distinction deserves to be made here between the counterfeiters who try to deceive consumers (for instance by copying authenticity marks, like holograms, etc.) and those who are just providing them with highly cheaper alternatives (pirated DVDs, etc.).  In this light, it is also important here to distinguish between counterfeiting, traditionally taken to be trademark violation, and piracy, traditionally taken to be a violation of international law, but now generally meaning a large-scale violation of copyright law.  While the former can lead to consumer confusion, the latter scarcely ever does.  This is ignored by industry people who evoke the image of the consumer quite often, but only when it helps them, and not in any meaningful manner.  They negate consumer choice when it comes to consciously purchasing pirated goods, and consumer freedoms when it comes to usage of copyrighted materials.

While commercial film piracy funds terrorists, so does pretty much every business activity.

A favourite of the MPAA (and by association, the MPA) is the RAND report on Film Piracy and its Connection to Organized Crime and Terrorism.  This report, which was funded by the MPAA, predictably concludes that film piracy funds organized crime and terrorism.  Even if we are to believe its findings wholesale, it leaves us wondering whether all business activities from which terrorists derive funds should be banned.

In India, there is a substantiated link between organized crime and film and music production, and terrorists have been said to make money off the stock market.  If the MPA's arguments are taken to their logical conclusions, then film production and equity trading should also be prosecuted.  Furthermore, while the mafia and terrorists are the ostensible targets, the laws that are brought about to tackle it affect poor roadside vendors and non-commercial online file sharers.  To tackle the funding of terrorists, roadside piracy shouldn't become the target just as film production per se shouldn't.  The invocation of the RAND report is thus only meant for rhetorical effect, as it is hard to find logic in there.

"To copy without authorization is to steal", the death penalty, and drug peddling.

At the conference, Dominic Keating of the US Embassy pointed out that "to copy without authorization is to steal" and David Brener of US Customs and Border Protection kept emphasising, on at least two occasions, that "drug peddling merits an automatic death sentence in many countries".  There are numerous arguments one can make to show the lack of thought in the former.  One could point out that 'stealing' and 'theft' are things that happen to tangible property, and that not only is copyright not tangible, but it is barely property.  Copying without authorization creates one more of what existed, without depriving the authorizer (usually a corporation) of its original.  This goes against our notion of 'stealing'.  If the argument is to be shifted to the terrain of control over one's property/copyright, Mark Lemley in an illuminative article shows how the economic theories behind externalities in property and copyright are vastly different, and that complete control over either has never been, nor should it ever be, an aim of the law.  Simply put, someone free riding on your property leaves you worse off than earlier, while someone free riding on your copyright usually doesn't.

One could also point out that 'stealing' is endemic in activities involving human creativity.  T.S. Eliot notes that "Immature poets imitate; mature poets steal; bad poets deface what they take, and good poets make it into something better, or at least something different".  He does not even consider the possibility that artistic borrowing, whether by imitation or by 'stealing' does not happen.  Even Y.S. Rajan, Principal Adviser to CII recognized this when during the conference he noted that "imitation and innovation have an interesting and intertwining philosophical history".  If we are to take Mr. Keating's admonishment seriously, we would indeed have a very illustrious list of thieves on our hands, including the Walt Disney Corporation, William Shakespeare, Vladamir Nabokov, Public Enemy, and pretty much every creative person who has ever lived.  Books can be written about this (and indeed, numerous books have been), so we shall not dwell on this issue.

Mr. Brener's repeatedly spoke of how drug peddling attracts death penalty in many countries (though in neither the US nor in India has anyone ever received capital punishment for drug peddling), but he also clarified that he is not advocating for the death penalty for copyright violations.  That made one wonder why he was bringing up the death penalty at all.  He also made the dubious, non-substantiated claim (noting it as "true fact") that pirating movies is more profitable than selling heroin.  This claim appears in an article about a report produced by the Australian Federation Against Counterfeit Theft (AFACT), but the original report is nowhere to be found.  The article about the AFACT report also claims that the pirates are using their illicit profits promote drug smuggling.  The seeming contradiction of film pirates investing in something that is riskier and less profitable doesn't seem to have caught the eye of the writers.  One version of the 'drugs are less profitable than pirated DVDs' claim (with marijuana taking heroin's place) was debunked on the Commons Law mailing list.  Pirated DVDs are sold for a fraction of the cost of the original.  It would be obvious to anyone that DVDs that are typically sold for Rs.30-50, where the cost of manufacture alone may be estimable to be around Rs. 10, cannot be more profitable than heroin peddling.  That apart, most online file sharing (deemed to be "piracy") is non-commercial.  Thus the question of profit does not really arise.  Still, for the industry, absence of a profit is equal to a loss.

Thus, the rhetoric of crime, and that too heinous crime, is continually used, despite its being completely inapposite. Why does used to try to make IP enforcement a matter of state concern, rather than a matter of private, and civil, interest.  This way, illegitimate statistics and factoids are used to make individual file-sharers who earn no money get lengthy prison sentences.  This and other ways in which IP enforcement has expanded are carefully documented in this paper by Susan Sell.

Repeating false 'statistics' does not make them true.

Again, we were subjected to a number of dubious claims during the conference: If only counterfeiting and piracy were eliminated, India's fiscal deficit would disappear; the Indian entertainment industry loses 16000 crore (USD 4 billion) yearly to piracy; 820,000 direct jobs are lost due to film piracy; software piracy costs the industry USD 2.7 billion annually, etc.  These reports' methodologies have been thorougly discredited.  Even The Economist, a very conservative and pro-industry newspaper, believes that the BSA-IDC annual reports on software piracy are utterly distorted.  Similarly, in the U.S., the figure of 750,000 jobs (around 8% of the U.S. unemployed in 2008) being lost due to piracy were touted by everyone from the Department of Commerce, the Chamber of Commerce, U.S. Border and Customs Protection, and the MPAA, RIAA, and BSA.  The amount of money lost each year in the U.S. due to IP infringement has been estimated to be between USD 200-250 billion (that's more than the combined 2005 gross domestic revenues of the movie, music, software, and video game industries).  In a lengthy piece in Ars Technica, Julian Sanchez traces back the history of both these figures, and shows how they are just large numbers used for lobbying, and are not based on actual studies.  The industry-commissioned Ernst & Young  report ("The Effects of Counterfeiting and Piracy on India's Entertainment Industry") was never made available to the public at large, thereby making it impossible to judge the methodological soundness of the survey and the veracity of the figures.

IP expansion and more stringent enforcement is counter-productive.

Chander Mohan Lall, copyright lawyer to various film studios (including Warner Bros.) in India, used a number of short film clips in presentation during the conference.  Upon being questioned about it, he admitted that he did not have permissions of the copyright holders, but claimed that his use fell under "the education exception" in Indian copyright law.  While I wish he were correct (because what he was doing was indeed educational use), as per the law he is wrong.  Section 52(1)(i) of the Copyright Act only exempts educational usage of cinematograph film recordings when "audience is limited to such staff and students [of an educational institution], the parents and guardians of the students and persons directly connected with the activities of the institution".  While there are other arguments he could seek to use to make his usage of the film clilps non-infringing, being excepted by the educational fair dealings clauses isn't one of them.  Thus, more stringent enforcement of IP rights actually engenders such unauthorized, but perfectly legitimate copying and communication to the public such as that done by Mr. Lall.

Another way in which IP enforcement is being sought to be increased is by way of the so-called Goonda Acts.  These are generally statutes aimed at criminals and lumpen elements in society.  The Maharastra version, the Maharashtra Prevention of Dangerous Activities of Slumlords, Bootleggers, Drug-Offenders and Dangerous Persons Act, 1981, just became the Maharashtra Prevention of Dangerous Activities of Slumlords, Bootleggers, Drug-Offenders, Dangerous Persons and Video Pirates Act.  The term "video pirate" is very widely defined, to include any copyright infringement-chargesheeter who is "engaged or is making preparations for engaging in any of his activities as a video pirates, which affect adversely or likely to affect adversely, the maintenance of public order". Public order is deemed to be disturbed by "producing and distributing pirated copies of music or film products, thereby resulting in a loss of confidence in administration".  Thus video pirates can possibly be interpreted to include individual sitting at home and using P2P networks to share films.  The only requirement is that they should have had a chargesheet lodged against them previously -- they needn't even have been convicted; being chargesheeted suffices.  Thus, non-commercial activities of file-sharing are equated to bootleggers and drug smugglers, and preventive detention (an anti-civil rights relic of India's colonial past) is applicable to them.

IP expansion is happening without the ostensible justifications for IP being kept in mind. That Tirupathi ladoos are going to get GI (geographical indicator) protection was announced at the conference with great pride.  Geographical indicators are used to protect consumer interests, to ensure that no one outside a particular region (Champagne) can lay claim to be producing that product (Champagne) if the production of that product is intrinsically linked to special features found in that region (climate, etc.).  However, no devout person would want to purchase anything advertised as "Tirupathi ladoo" if it were produced outside the Venkateswara temple at Tirupathi, thus the question of consumer confusion does not arise.  What if someone malignantly advertises something as Tirupathi ladoo and claims it was made in Tirupathi (and not just that it tastes like the ladoo made there)?  Such a person can be taken to task for deceptive advertising, and there is no need for something to have IP protection to do so.  This represents a senseless expansionism of IP.  It is now IP for IP's sake.

One of the speakers, Mr. V.N. Deshmukh, who though pro-stringent IP enforcement, astutely noted that, "When local demand is not met, they [consumers] turn to counterfeiters and pirates."  Local demand can be unsatisfied because of lack of supply, or because the supply is overpriced, or because the supply is not easy to access, or because what is supplied is inferior to what is demanded.  At the end of the day, as William Patry, Google's lead counsel, has noted, what companies sell to the public are products and services, and not IP.  It would thus be wise for businesses to be innovative and compete rather than trying to extend their monopolies and engaging in rent-seeking behaviour that is economical harmful to consumers.  They would also do well to remember that IP is not only a product but an input as well, so they are ultimately consumers themselves.  All the harsher laws and enforcement mechanisms that they push for right now will have unintended consequences, and come to affect them adversely.

An Open Letter to the President of Confederation of Indian Industry (CII) on the Third International Conference on Counterfeiting & Piracy

To
Mr. Venu Srinivasan
The President 
Confederation of Indian Industry (CII)
The Mantosh Sondhi Centre, 23, 
Institutional Area, Lodi Road
New Delhi - 110 003 

Dear Mr. Srinivasan,

We understand that Confederation of Indian Industry (CII) is hosting the Third International Conference on Counterfeiting and Piracy from 19-20th August 2009 in partnership with the Embassy of the United States and the Quality Brand Protection Committee (QBPC), China. As stated in the invitation letter the primary objectives of the conference are: 1) to initiate coordinated action for cross border enforcement; 2) to highlight the importance of protection of intellectual property rights (IPRs); 3) to combat the growing threat of piracy and counterfeiting; 4) to facilitate a global meeting of customs officials across the globe; 5) to recommend the creation and setting up of a governmental “National Brand Protection” group; 6) to serve as a forum to discuss legal guidelines related to the prosecution of IPR infringement and to eliminate ‘loopholes’ within the existing laws; and 7) to strengthen cooperation between enforcement agencies and chalk out strategies for enforcement agencies a industry action both at national & international level. We also understand that this international conference is part of CII Intellectual Property Division’s special initiative on enforcement of IPRs. As part of this special initiative CII aims at “engaging government to create conducive legislative measures, policy levels reform and impressing [upon them] to adopt stringent enforcement initiatives and exemplary punitive and monetary measures to further safeguard and secure the interest of industry”. CII also wants to “create a global partnership to synergise efforts of international community and to support and participate in India's efforts in combating counterfeiting both at domestic and international levels”.  We, the undersigned, representing various civil society organizations in India, write this letter to express our strong reservation on the conference as well as on CII’s special initiative on IP enforcement. Without raising any question on CII’s right to organize events we would like to convey the following concerns with regard to the conference and CII’s initiative on IP enforcement.

Many of the above mentioned objectives of the conference and the special initiative are directed towards the enhancement of intellectual property (IP) standards like coordinated action on border measures, common guidelines for prosecution of IP infringement, exemplary punitive and monetary measures, etc. In other words, enhancement of IP standards means using more public money to protect private rights; very often protecting the monopoly over intangible property rights of multi-national corporations (MNCs).

As you may be aware, MNCs and their developed country hosts are currently engaged in the implementation of a multi-pronged strategy to enhance IP enforcement standards.[1] This is similar to the MNC’s initiatives in the mid 80s to enhance international IP protection, which resulted in the Agreement on Trade-Related aspects of Intellectual Property Rights (TRIPS). Unlike the 80s, now MNCs and developed countries use multiple forums to pursue the objective of enhancement of IP enforcement standards. Some developed countries have unilaterally enhanced their IP enforcement strategy to force other countries, especially developing countries, to accept the same through various multilateral organizations, namely the World Customs Organization (WCO), World Health Organization (WHO), Universal Postal Union (UPU), Interpol, WIPO and WTO. Developed countries are also using Free Trade Agreements (FTAs), Bilateral Agreements on IP Enforcements as well as financing lobbyist studies, conferences and policy recommendations to impose higher IP enforcement standards. These efforts for the enhancement of IP enforcement standards are a matter of grave concern for the people of developing countries and their governments. By partnering with the US Embassy and Quality Brand Protection Committee of China (QBPC)[2] in the organization of this conference, CII is allowing itself to play in the hands of MNCs and some developed countries, whose interests do not match with that of India industries and that of the Indian people.

As you are aware, the Government of India is taking a very strong position in resisting enhancement of IP enforcement standards in all the multilateral forums. India along with like-minded developing countries successfully pushed back TRIPS-plus[3] IP enforcement agenda at WCO and WHO. India is also trying its level best to convince other developing countries the need to stick to TRIPS-compliant standards rather than adopting TRIPS-plus enforcement standards. In the wake of the controversial generic drug seizures by EU customs authorities, India has also raised the issue of TRIPS-plus IP enforcement standards contained in the EU IP Enforcement Directive at least two times at the TRIPS Council.[4]  The Indian political leadership has unequivocally raised its concern over the enhancement of IP enforcement standards at other forums also.[5] In adopting this stance, the Government of India has cited public interest as well as the operating freedom of Indian industry as its justifications.[6]  By partnering at this vital stage with an MNC lobby group and a heeding to developed country governments, CII is not acting in furtherance of the legitimate public interests of Indian domestic industry and the Indian people.

It is a well-evidenced fact that TRIPS-plus enforcement standards adversely impact not only legitimate trade between nations (as shown by the EU seizures) but also the day-to-day life of millions of people especially in India and other developing countries.[7] Unfounded IP enforcement measures would adversely impact access to life saving medicines and educational materials. Thus the IP enforcement measures also have the potential to deny right to development to people in the global South. Hence an organization like CII should not view IP as only a business tool but should look at the larger scheme of things especially in the social and economic realities of India. In fact, by promoting enhancement of IP enforcement standards CII is advocating a policy, which would violate the right to health, the right to knowledge, as also the right to development.

We would also like to point out that Indian pharmaceutical industry is one of the victims of TRIPS-plus IP enforcement standards. In 2008 alone, 17 consignments[8] were seized in transit at Europe using the EU Directive on IP Enforcement, which allows seizure of goods in transit.[9] These consignments were being exported from developing countries (such as India and Brazil) to other developing countries, and the contents of the consignments are perfectly legal in both the exporting as well as the importing nations.  These highly questionable seizures resulted in the crisis of health programmes as it resulted in delays in   and prohibitive costs of access to life-saving medicines in developing countries of Africa and Latin America. CII can barely claim to be representative of the interests of Indian industry if it ignores such episodes and partners with self-promoting MNCs and developed countries’ governments to advocate for the enhancement of IP enforcement standards.

In the light of above-mentioned issues, we request you to consider the following:

• Rejecting the TRIPS-plus enforcement agenda in toto.  We demand CII, Federation of Indian Chambers of Commerce and Industry (FICCI), Associated Chambers of Commerce and Industry(ASSOCHAM) and other Indian business associations to  reject any and all attempts of  bringing in a TRIPS-plus enforcement agenda in India, in the interests of Indian industry and the Indian people.
• Completely disengaging from any collaborative efforts with foreign institutions to further TRIPS-plus standards of IP protection in India and also abstaining from any engagements on the anti-counterfeiting efforts with foreign agencies.  CII should attempt to engage with domestic institutions and build national consensus before engaging with foreign institutions with the claim of representatives of Indian industry.
• Taking necessary proactive steps to safeguard the interests of access to medicine and access to knowledge along with interest of the Indian domestic industry.
• Participating in a more creative discussion on IP and development rather than simply accepting the simplistic and largely discredited view that stronger IP regime leads to more innovation and is a necessary condition for socio-economic development.

CC:
Shri Anjan Das
Senior Director & Head
Technology, Innovation, IPR & Life Sciences
Confederation of Indian Industry (CII)
Plot No. 249-F, Sector-18; Udyog Vihar, Phase-IV,
Gurgaon-122015, Haryana

Shri. P. Chidambaram
Minister
Ministry of Home Affairs
Government of India
North Block, Central Secretariat
New Delhi 110001

Shri G. K. Pillai
Secretary Justice
Department of Justice
Ministry of Home Affairs
Government of India
North Block, Central Secretariat
New Delhi 110001

Shri Naresh Dayal,
Secretary, Dept. of Health and Family Welfare
Ministry of Health and Family Welfare
Government of India
149-A, Nirman Bhawan, New Delhi – 110 011 

Shri Ajay Shankar
Secretary
Department Of Industrial Policy & Promotion
Ministry of Commerce and Industry
Room 153, Udyog Bhavan,
New Delhi – 110 011

Signatories to this letter

• Centre for Trade and Development (Centad), New Delhi
• Centre for Internet and Society, Bangalore
• National Working Group on Patent Laws, New Delhi
• Lawyers Collective (HIV/AIDS Unit)
• All India Drug Action Network (AIDAN)
• International Treatment Preparedness Coalition (ITPC), India
• Consumers Association of India, Chennai
• IndoJuris Law Offices, Chennai
• All Indian People’s Science Network, New Delhi
• Delhi Science Forum
• Alternative Law Forum, Bangalore
• Knowledge Commons
• Moving Republic
• IT for Change
• Centre for Health and Social Justice(CHSJ), New Delhi
• Navdanya, New Delhi
• Support for Advocacy and Training to Health Initiatives (SATHI)
• Centre for Enquiry Into Health and Allied Themes (CEHAT)
• Initiative for Health Equity & Society
• International Peoples Health Council (South Asia)
• Drug Action Forum – Dharwad, Karnataka
• Dr. Mira Shiva, New Delhi
• Tina Kuriakose, PhD Scholar, Jawaharlal Nehru University, New Delhi
• Dr Gopal Dabade, Dharwad
• Dinesh Abrol, Scientist NISTADS, CSIR, New Delhi
• Madhavi Rahirkar, Lawyer/Consultant, Pune
• Gautam John, Bangalore
• Achal Prabhala, Bangalore

Endnotes

[1] See Susan K Sell, The Global IP Upward Ratchet, Anti-counterfeiting and Piracy Enforcement Efforts: The State of Play.
[2] QBPC barely qualifies as a representative of Chinese interest, as it comprises more than 180 multinational member companies.
[3] ‘TRIPS-plus’ refers to any protection of IPRs that surpasses the standards and requirements spelt out in WTO-TRIPS provisions.
[4] See Jonathan Lyn, India Brazil raise EU drug Seizures issue at WTO, available at http://www.livemint.com/2009/02/04232721/India-Brazil-raise-EU-drug-se.html
[5] Indian Minister of State for External Affairs Broaches Seizures of Generics at ECOSOC, available at http://www.keionline.org/blogs/2009/07/08/india-ecosoc-seizures/#more-2404
[6] Indian Commerce Secretary’s Speech to the African Community Ambassadors. available at http://www.centad.org/focus_77.asp.
[7] For two very recent examples, see Intellectual Property Enforcement: International Perspectives, Xuan Li & Carlos Correa (eds.) (2009); Anand Grover, Report of the Special Rapporteur on the Right of Everyone to the Enjoyment of the Highest Attainable Standard of Physical and Mental Health, A/HRC/11/12 (2009).
[8] Jyoti Datta, 16 out of 17 drug consignment seizures in the Dutch were from India available at http://www.thehindubusinessline.com/2009/06/08/stories/2009060851700300.htm
[9] The EC Regulation No 1383/2003 allows for seizure of goods in transit.

Every year the Office of the United States Trade Representative (USTR) publishes a report known as the Special 301 Report, documenting IP regimes in various countries, and publishing a list of those countries which do not afford 'adequate and effective' protection for US intellectual property.  This year Consumers International, which set up the A2K Network, published a counter-report, the IP Watch List 2009 for which the India report [pdf here] was prepared by the Centre for Internet and Society.  While the Special 301 Report labels India a "Priority Watch List" country (meaning that it has an IP regime least conducive to the trade interests of the United States), the Consumers International report holds India to have the most consumer-friendly and balanced IP regulation amongst the sixteen countries surveyed.  The CI report lambasts the USTR's attempts to make countries comply with unreasonable demands which go over and above the countries' international obligations.  For instance, the WIPO Internet Treaties, which have been criticised by many, is sought to be imposed on countries like Israel, India, and Canada.  Prof. Michael Geist of the University of  Ottawa even notes that piracy levels and accession to the WCT and WPPT do not seem to be correlated: "In fact, only five countries that have ratified the WIPO Internet treaties have software piracy rates lower than Canada."  Still, the USTR has placed both India, whose IP laws are being praised by Consumers International and Canada, which has low piracy rates even by the accounts of the notoriously propagandist BSA, have both been placed in the Priority Watch List.  The reasons for doing so are not all that unclear if we look at who really shapes the USTR's Special 301 report.

The India section of the USTR Special 301 report [pdf] (pp. 18-19) notes:
"India will remain on the Priority Watch List in 2009. India has made progress on improving its IPR infrastructure, including through the modernization of its IP offices and the introduction of an e-filing system for trademark and patent applications. Further, the IP offices have started the process of digitization of intellectual property files. In addition, the Indian ministerial committee on IPR enforcement has supported the creation of specialized IPR police units. Customs enforcement has also improved through the implementation of the 2007 IPR (Imported Goods) Enforcement Rules as well as by seizures of unlicensed copyrighted goods intended for export. However, the United States remains concerned about weak IPR protection and enforcement in India. The United States continues to urge India to improve its IPR regime by providing stronger protection for copyrights and patents, as well as effective protection against unfair commercial use of undisclosed test and other data generated to obtain marketing approval for pharmaceutical and agrochemical products. The United States encourages India to enact legislation in the near term to strengthen its copyright laws and implement the provisions of the WIPO Internet Treaties. The United States also encourages India to improve its IPR enforcement system by enacting effective optical disc legislation to combat optical disc piracy. Piracy and counterfeiting, including of pharmaceuticals, remain a serious problem in India. India’s criminal IPR enforcement regime remains weak. Police action against those engaged in manufacturing, distributing, or selling pirated and counterfeit goods, and expeditious judicial dispositions for IPR infringement and imposition of deterrent-level sentences, is needed. As counterfeit medicines are a serious problem in India, the United States is encouraged by the recent passage of the Drugs and Cosmetics (Amendment) Act 2008 that will increase penalties for spurious and adulterated pharmaceuticals. The United States urges India to strengthen its IPR regime and stands ready to work with India on these issues during the coming year."

Large chunks of it seem to have been 'borrowed' from the IIPA submissions.  The IIPA (International Intellectual Property Alliance), which is made up of US-based IP-maximalist lobbyists like the Motion Picture Association of America, Recording Industry Association of America, National Music Publishers Association, Association of American Publishers, and Business Software Alliance, is a body that was created to lobby the USTR to impose trade sanctions on those countries which did not follow the path that IIPA thought best for those countries.
Interestingly, the IIPA submissions talk not of IIPA's concern about weak IPR protection and enforcement in India, but instead states: "the United States remains concerned about weak IPR protection and enforcement in India".  This exact line even manages to finds itself in the USTR Special 301 report.  Many IIPA complaints find themselves as USTR recommendations, including: a) fast-track judical dispositions of IP cases; b) special laws against optical disc piracy; c) ratification of the WCT and WPPT (the "WIPO Internet Treaties"); d) increased criminal enforcement of intellectual property.

Thus, the Special 301 report emerges as a discredited report that the US's trade partners should not (and by many accounts do not) pay attention to.  Measurement of IP balance and consumer-friendliness such as the Consumers International IP Watch List are more important, and should eventually lead to a measurement index for Access to Knowledge.

First, we wish to applaud the Ministry of Information and Broadcasting for holding this stakeholders' meeting, which is a definite step towards greater transparency, and are grateful for having been invited to provide our input.  The meeting was attended by representatives from various government offices and ministries, including the Ministry of Human Resource Development (which administers the Indian Copyright Act), broadcasters, broadcast associations, law firms, and civil society organisations.  The Secretary of the Ministry of Information and Broadcasting inaugurated the session by talking of how the Broadcast Treaty involved the assessment and balancing of various interests while keeping 'public interest' foremost.  This was followed by Mr. N. P. Nawani, Secretary General of the Indian Broadcasting Foundation (IBF), presenting on the concerns of the broadcasting industry. After this Prof. N. S. Gopalakrishnan, head of the School of Law, Cochin University of Science and Technology, spoke.

Prof. Gopalakrishnan covered many areas of relevance: the concept of broadcasting and the legal rights involved; the scheme of legal protection over broadcast signals and over the content of the signals, and the difference between the two; gaps in the international law covering broadcasting; details of the proposed broadcast treaty; the implications of the broadcast treaty and concerns of the Indian government; and unresolved issues.

Amongst the unresolved issues mentioned by Prof. Gopalakrishnan was that of webcasting and the problems related to that.  The discussion below aims to shed some light on some of the problems created by the inclusion of webcasting in the broadcast treaty.

Legal regimes for broadcasting

At the national level, the law governing broadcasting is the Indian Copyright Act, 1957.  Broadcasting is covered by many sections of the Indian Copyright Act, including: ss. 2(dd) (definition of "broadcast"), 2(ff) (definition of "communication to the public"), 37 (the section granting a special "broadcast reproduction right"), and 39A (containing exceptions to s.37).  At the international level, broadcasting is covered by the Rome Convention, 1960 (which India has signed, but hasn't ratified); the Brussels Convention, 1974 (only pre-broadcast satellite signals); the TRIPS Agreement, 1994 per Article 14 (which doesn't mandate that broadcasting rights be granted directly to the broadcasters); the WIPO Performances and Phonograms Treaty, 1996 (WPPT) in Articles 2(f) and 15; and the proposed WIPO Treaty on the Protection of Broadcasting Organizations ("Broadcast Treaty").  In May 2006, provisions for webcasting were brought back into the Broadcast Treaty as part of the non-mandatory Appendix after having been excised in 2004 owing to protests by many countries on their inclusion.  The current draft (SCCR/15/2 rev.) was prepared in September 2006 as an attempt to put together an all-inclusive document (with alternative versions of proposed provisions present in the document), and a diplomatic conference was planned to push the treaty through.  In August 2007, WIPO released a 'non-paper' (SCCR/S2/Paper1) and dropped plans for the diplomatic conference, as there was still significant disagreement about the treaty.  In November 2008, the WIPO chair released an informal paper (SCCR/17/INF/1), which advocated technological neutrality, and hence, presumably, that webcasting to be covered by the treaty.

Meaning of broadcasting and netcasting

Broadcasting is generally taken to be a point-to-multipoint transmission of audio-visual content.  Hence, cable transmissions and Internet/Web transmissions (which are point-to-point) are usually not included when one uses the term "broadcasting".  But there is no one common definition of "broadcasting". As things stand in the WIPO Broadcast Treaty, the definition of broadcasting (Art. 5(a)) does not cover cablecasting, which is separately defined in Art. 5(b), neither does it cover webcasting.  However, the definition of "retransmission" as provided in the draft treaty is broad enough to cover Internet-based transmission, and hence could provide a backdoor via which webcasting is included.  The rights covered by the all-inclusive draft WIPO Broadcast Treaty include the rights of and over: retransmission; communication to the public; fixation; reproduction; distribution; transmission following fixation; making available of fixed broadcasts; and pre-broadcast signals.  The treaty also mandates legislative protection to systems of digital rights management (DRM) and technological protection measures (TPMs).  This, coupled with post-fixation rights, grants broadcasters the rights to dictate what one can and cannot do with a broadcast, thus negating all fair dealing rights and possibly restricting the public domain as well.  It may be noted that even content creators are not provided such rights in the vast majority of the world, and that fair dealing rights are much better safeguarded by copyright law.  The latest proposal by the U.S. on the term "netcasting" is to be found in an informal paper presented at SCCR 15 [MS Word document], and has been criticised as overly expansive by civil society organisations such as Consumer Project on Technology (now Knowledge Ecology International).

Non-justifications for webcasting's inclusion

Webcasting is sought to be included within the Broadcast Treaty for a number of reasons, all of which are problematic.  Firstly, there is the argument of technology neutrality, which advocates say is to ensure that the treaty is relevant into the future as well.  However, adopting technology neutrality as the basis for doing so amounts to wilful blindness to technological advancements, and the benefits that such advancement provides, including lowered costs of infrastructure.  Secondly, advocates argue that thanks to media convergence, the same content (which is usually digital) can be delivered through various communication networks.  This disregards the need to establish the requirement for a new right to be created, and simply assumes that just because the function that the two (broadcasters and webcasters) perform are similar means that they operate in similar economic and social environments.  In fact, webcasters work in a very different environment from broadcasters. 

This is an environment where intense innovation and competition already exist, and don't need to be artificially created by means of a new property right in an international treaty.  Furthermore, the United States, a country with extremely large and hugely profitable broadcasting networks, does not have a specific statute to protect broadcasters’ rights.  Even it only has laws protecting the conditional-access regime.  Second, much less investment is required to reach a set number of people through webcasting than through broadcasting -- and these people can be spread throughout the globe.  Typically, a computer with a fast internet connection is all that is required.  Given this, anyone can become a 'broadcasting organisation'.  Additionally, IP addresses (in IPv6) are not limited, unless one considers 340 undecillion addresses to be 'limited'. This is a big difference from terrestrial broadcasting, where Hertzian frequencies are limited, and hence one has to pay a premium for them.  Lastly, signal appropriation does not happen for sake of the signal, but for the content.  Protection, thus has to be given to the content (and already is given, in the form of copyright law).  Copyright owners who object to such appropriation, and who are often large multinational corporations, have proven more than willing to pursue those who appropriate their works – broadcasters are not necessarily in a better position to do so.  This situation is aggravated with webcasting.  Indeed, on the Web, something akin signal appropriation is not only not frowned upon, but often encouraged: embedding of audio and video from other servers on your own website is prevalent.

Problems if webcasting is included

Apart from the lack of justifications for going ahead with the treaty, especially when it seeks to create a separate property right over signals instead of merely providing for signal protection and includes webcasting (at least upon 'retransmission'), there are many problems that the treaty creates.  Firstly, transaction costs will increase vastly, leading to a tragedy of the anticommons where no one ends up using the content because clearing all the surrounding rights is too difficult.  On top of clearing and making payment for rights from the copyright holders, a person wishing to use parts of any content that has been broadcast/webcast would have to get the rights cleared from the first broadcaster/webcaster as well.  This is inevitable if property-like rights are bestowed upon the act of distributing signal in the form of a broadcast or hosting audio and visual content for webcasting.

Secondly, materials in the public domain and openly-licensed content will become more difficult to gain access to, and the exercise of fair dealings with copyrighted content will be hampered.  Since rights over signal are independent of rights over content, a copy of the public-domain work will have to be procured from an archive, which negates the very purpose of broadcasting and webcasting, which is to make content more easily accessible to a large number of people located over great distances.  Additionally, limitations and exceptions are extremely difficult to negotiate and are of the 'ceiling' kind, limiting the limitations and exceptions that national legislatures can prescribe.  Thus, the fair dealing rights over the signal will probably end up being more limited than the fair dealing rights over content.  This makes the situation akin to anti-circumvention measures, which (in countries where they are legally recognised) have fewer limitations and exceptions than the content they protect.

Thirdly, public benefit and access will seriously be harmed.  It is conceivable that this treaty might hamper the Indian legislature's ability to pass statutes such as the Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act, 2007, which mandate sharing of certain kinds of signals.  Lawyers will claim that such statutes go against India's international obligations.

Differences between webcasting and broadcasting

To sum up, there are a large number of differences between broadcasting and webcasting.
Infrastructure: The expenditure required to establish the infrastructure for a webcasting unit is much less than that required for an equivalent (in terms of reach in terms of listeners).  Even traditional broadcasting is not that expensive: fixed-frequency radio transmission kits have been known to cost as little as Rs. 50 (<http://news.bbc.co.uk/2/hi/south_asia/4735642.stm>.  Thus, one of the biggest arguments for protection ('to recover investment') is taken away.  The content producers' 'investment' is protected by copyright law.
Competition: Providing incentives to increase competition and hence public benefit is often a reason cited as a reason for introduction of a new property-like right.  However, such incentives seem utterly redundant in the online market where becoming a webcasting organisation is trivial, and immense competition already exists.
Broadcasting vs. Uni- and Multicasting: The notion of 'broadcasting' does not exist in IPv6.  The closest that a webcaster can come to broadcasting is 'multicasting' to a specific range of IP addresses.  What one sees on the Web today is "unicasting", which is initiated by a request from the recipient and not by the webcaster.
Temporal limitations: Unlike traditional broadcasting (which does not include cable), content on demand is possible over the Web.  By this, the temporal limitations faced by traditional broadcasting, which is ephemeral, are overcome.  This opens up many possibilities that should not be hampered by creating an excessive legal regime (and that too a property regime) over webcasting.
Geographic limitations: While terrestrial broadcasting is limited in geographic scope (which satellite and cable-casting are less susceptible to), webcasting knows no geographic limitations.  As long as an Internet connection is present, the content can be viewed anywhere.  Additionally, granting a separate webcasting right will open up a jurisdicational can of worms.
Marginal costs of subscribers: While in terrestrial broadcasting, adding an additional receiver does not cost the broadcaster anything, in satellite television (direct-to-home), cable television and webcasting, each additional receiver means either additional infrastructure (cables and set-top boxes) or additional server load.  In the case of webcasting, this marginal cost is small enough to ignore, especially given all the other reasons mentioned previously.

Conclusion

There are still a number of uncertainties surrounding the inclusion of webcasting in the Broadcast Treaty.  Michael Nelson of the Internet Society points out that questions such as who the broadcaster is in a download grid, in distributed gaming, for webcasts of surveillance videos, etc., are unanswered.  As the example of the download grid (a situation where the 'casting' is multipoint-to-point) shows, many Internet-specific scenarios have not been contemplated by the treaty negotiators.  Situations which might soon be reality, such as peer-to-peer relaying of webcasts are also not contemplated, and the treaty would become a policy document preventing such technological innovations.  Whether IPTV would be included within webcasting is also unclear. The WIPO chair in his informal paper noted, 'Finally, if after consideration of the options above (A/B) and possible other options, it will not in the present situation be possible to decide on the establishment of a new treaty, the SCCR should end these discussions through an express decision in order to avoid further spending of time, energy and resources to no avail. Such a decision could include a timetable for later revisiting and reconsidering the matter.' (SCCR/15/2 rev)  SCCR should end these discussions which have gone on for more than a decade without any progress.

Saturday, December 13, 2008 had Mishi Choudhary and Eben Moglen of the New York-based Software Freedom Law Center speaking to the students of the National Law School of India University in Nagarbhavi, Bangalore, in a talk organized by CIS.

Mishi Choudhary, who will head the Software Freedom Law Center in New Delhi, spoke on "Globalising Public Interest Law: The SFLC Model".  She told the students about the importance of non-profit legal work as well as its viability as a career choice.  She also laid out the background to the work that SFLC does, and traced a brief history of software patent cases

Eben Moglen chose to speak on "Who Killed Intellectual Property and Why We Did It?".  He started off by talking of the interconnections between law and societal change: how law can't keep pace with the changes we see around us, and how law actually sometimes changes in the reverse direction, while trying to maintain the status quo. 

This is not a new phenomenon, he noted, and that when law is responsive to anybody, it listens to the 'people of the past' more carefully than the 'people of the future'.  This, he says, is compounded by the fact that the primary mode of change in the law is not legislation (since there is nothing legislators hate more than legislating), and that the better lawyers usually represent only those who can afford to pay them, hence resulting in systemic injustice.  He emphasised that the clients of the SFLC, on the other hand, are people who create software worth billions of dollars, but who do not own it.

On that point of creation for the purpose of sharing and not owning, a student raised the question of why proprietary rights shouldn't exist in creations of the intellect.  In response Mr. Moglen pointed out that while his personal opinions might be different, the Software Freedom Law Center does not seek to bring into dispute the concept of property rights in software, nor the fundamentals of patent law: it is merely concerned with the scope of patent law, and seeks a literal enforcement of patent law as it exists in most jurisdictions.

Another question that cropped up was on the economics of software creation and the anti-competitive nature of free software.  To this, Mr. Moglen provided a brief summary of the tragedy of the anticommons by using land to be acquired for public works in the centre of a city as an example.  In software, this problem is only exacerbated, he pointed out.  Most physical creations over which patents are granted have something like 8 or 10 steps.  Software code is different because it contains thousands of instructions.  Even big companies face the anticommons problem; but they manage to evade it by cross-licensing agreements which results in efficient transactions for them since it involves no exchange of money whatsoever.  Small companies are in a worse situation, since they don't have those kinds of patent portfolios to be able to enter into cross-licensing agreements, no matter how innovative they are.  Thus, in effect, the system is rigged against them.  This provides a partial answer to the antitrust question, he noted.  Competition law is actual in favour of free software.  The right to practise a trade or profession, and the right to speech get implicated in any case where a FLOSS-based company is hauled up before a court being accused of conspiring with other to take cost to zero.

Mr. Moglen further explained that when it comes to software, the problem of patenting is very different.  A 20-year monopoly is more reasonable from the viewpoint of physical creations.  Patent law, however doesn't tailor the rights that are granted by a patent.  The problem starts right from the process of granting a patent.  The job of a patent office being to apply the tests of non-obviousness, novelty and utility, most patent offices can do a reasonable job in most fields of technological endeavour, since there is a large body of innovation with which the proposed patent can be compared.  Software, however, is a recent field with a large number of applications coming in all at once.  While the patents that are sought might include claims on ideas and applications that existed in software in 1956, those aren't easy for the patent offices to dig up, since the field of software patents and software itself have not existed for the same length of time.