1. What Is IP Infringement?
2. The Problem of Digital Piracy
3. The Industry's Response to Piracy

Intellectual property rights pirating is the process of infringing on someone else's IP rights. This happens when one party infringes on someone else's copyright, trademark, or patent. It can include stealing or copying music, printed works, or art. It may also involve illegal distribution of work. The underlying issue is that the infringing parties don't seek the necessary permission to use another's work.

What Is IP Infringement?

IP rights are infringed upon when a work that's protected by IP laws is copied, used, or otherwise exploited without getting permission from the party who holds those rights. Examples of infringement are piracy and counterfeiting.

Piracy is the unauthorized use, copying, reproduction, or distribution of products that have IP rights protection. It may include stealing, transmitting, selling, and copying without express consent and/or written approval. It also may involve not paying royalties to the rights owner.

Piracy can include buying IP products at extremely low prices. Because the person committing piracy has put no money into creating the product, only copying it, he or she is only out for the minimal cost of reproduction.

Pirated products may include the following:

  • Books
  • Music
  • Movies
  • Software
  • Works of art

Counterfeiting, on the other hand, is the process of imitating genuine goods. Counterfeit items are often of lower quality than the originals. People create counterfeit goods to take advantage of the superior value of the original product.

The Problem of Digital Piracy

The corporate world is becoming more aware, and wary, of the problem of IP theft and digital piracy because they eat away at a company's profits, negatively affecting their bottom line.

As an example of how piracy impacts businesses, take a look at a brand like Microsoft and what happens when it releases a new version of its bestselling Office suite or proprietary operating system. If someone pirates this software, Microsoft loses money since the infringing party doesn't pay any money to Microsoft. Brands like Microsoft can lose large sums of money they would have otherwise earned.

Digital piracy is a huge, global problem. In Asia, for example, the problem is widespread. It's estimated that approximately 30 to 40 percent of all software is pirated. Corporations are teaming up with government agencies and industry bodies to combat piracy.

Furthermore, in some countries, such as China, over 50 percent of all computer games, music, videos, and software are pirated. Companies that rely heavily on sales revenue from software lose a great deal of profits as a result.

The Industry's Response to Piracy

The industry has responded to the piracy problem by pointing out that they spend large amounts of money and invest considerable resources in bringing their IP products to the market. Their significant investments often include the following:

  • Creator royalties
  • Marketing expenses
  • Other expenses

Corporations contend that if people continue pirating IP, creators lose incentives to continue creating. They won't want to invest their time and efforts into original works because they don't reap the benefits.

Businesses insist that piracy is a crime and should be treated as such. Just as historical pirates were viewed as robbers and exploiters, modern-day pirates are viewed similarly. In recent years, some digital pirates have suffered consequences. The U.S. Supreme Court shut down Napster, the file-sharing site. The FBI also teamed up with other agencies to bring down the owners of similar file-sharing sites and shut their sites down. Around the world, more governments are taking action to crack down on pirates and those who illegally copy and distribute books, music, movies, and software.

While these actions have had some success in offsetting digital piracy, there still needs to be a significant change, starting with how many people feel about piracy. There needs to be a consensus between governments, the IP industry, and adherents who promote a free IP movement. Until an agreement is reached, piracy will go on.

Despite the protections that IP rights give individuals and companies, there's always going to be someone attempting to profit off of another's hard work. If piracy and counterfeiting go unchecked, creative types may be discouraged from creating new works, which would negatively impact innovation and advancement. 

If you need help with intellectual property, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.