STUDY ON COPYRIGHT PIRACY IN INDIA

Chapter IX

Introduction 

Copyright piracy, as mentioned earlier, is a theft and therefore is a crime.  But because of its white colour nature, many a time copyright piracy is not perceived as a crime at all, or at least not as serious as thefts are ordinarily considered. This is perhaps one of the greatest problems associated with the effective control of the piracy phenomenon, more so in a developing country like India. Our society condemns a bank robbery or even a small household theft. But when a software, on the development of which large investments were made, is copied illegally by millions, no serious note is being taken. This is because copyright piracy unlike most other thefts may not involve physical products and, therefore, in many occasions it remains 'intangible'. What is stolen may not be the physical product itself but the 'intellectual property', which go unnoticed or ignored in many instances.  That is why from a societal angle the copyright piracy is not always treated as a serious crime, even though it has far reaching consequences, both social and economic.

Is it true that piracy occurs because our society treats it rather casually? Or is it a phenomenon purely guided by economic motives? It has been argued by many that in the final analysis, the motive behind any piracy is the economic gains. But it is also true that the occurrence of  a crime like copyright theft is influenced by the society's outlook towards the crime. This is perhaps to a large extent applicable to the copyright piracy phenomenon in India. In this chapter we propose to probe on this issue in the context of India through the identification of social and economic factors which contribute to  the incidence of copyright piracy in the country.

Socio Economic Factors affecting Piracy

The socio economic dimensions of a country can be represented by factors like its population size, gross domestic product, literacy level, per capita income, occupational structure of labour force, quality of life enjoyed by people etc.  Table 9.1 presents a brief socio-economic profile of the country. It is difficult to establish any direct causal link between these socio-economic variables and piracy.  However, some of them are expected to exert their influence on piracy phenomenon - directly or indirectly. Such factors include literacy, per capita income, poverty level etc. In the following paragraphs an attempt is made to examine how piracy is linked to some of them.

Illiteracy & Piracy 

India houses the largest number of illiterate persons in the world. The extent of illiteracy is alarmingly  high at 48 per cent level.  Such a high degree of illiteracy is expected to have some impact on copyright matters, more specifically with respect to their effective protection. At the outset, higher illiteracy means lesser demand for books and other printed copyrighted materials. Going by this logic, in a less literate society, piracy rate is likely to be low especially with respect to books, journals and other literary works. This logic can be extended to software piracy as well. A country with low computer (hardware) penetration is expected to have lower incidence of  software piracy.  Because pirates would like to venture into only those segments of the copyright industry where the market is attractive either in terms of high volume and/or high prices. The lower demand for books and software may act as a disincentive for the pirates. But, on the other hand, illiteracy may boost the prospects of piracy in different ways. Illiterates cannot read, and are therefore, not in a position to judge the originality of products like the way an educated person can do such as by noticing copyright notifications etc. Besides this, the illiterate persons heavily depend on audio-visual media for satisfaction of their needs for entertainment and information, thus rendering a variety of audio-video copyright products susceptible to wide spread piracy.  The low level of awareness which ,in turn, is the result of a high degree of illiteracy among a large number of endusers, might be exploited by a few crooks by selling pirated audio-video products.  

The above discussion is a pointer to the fact that a country's literacy level has some impact on the extent of piracy prevailing there.  In a highly literate society the consumers are expected to have a reasonably high degree of awareness on copyright and, therefore, there  may be less tendency among the endusers to buy and/or use pirated products.  But this is not true always, as is evident from data presented in Table 9.2.  All the countries referred there are having higher literacy rates than India.  But some of them experience higher incidences of piracy with respect to audio products and/or computer softwares.  This suggests that piracy prevails not necessarily because of illiteracy or lack of awareness on copyright alone.  There may be some other causes behind the phenomenon.

Poverty & Piracy 

The economic gain is certainly one of thee motives and perhaps the most important among all.  Copyright piracy after all is an economic phenomenon.  The pirates have only one objective i.e. to make pecuniary gains from others' creative efforts. They can do this because pirated products find ready demand from a few sections of the society whose demand remained unfulfilled by the normal sources of supplies.  The pirates can afford to sell their products at lower prices because, unlike the legitimate producers, they need not pay any levy e.g. excise duty and sales tax etc. and also need not spend on advertising and other marketing infrastructure.  For most of the ordinary endusers also the price of the product remains the main consideration while buying.  They tend to buy cheaper products irrespective of their literacy levels and the levels of their copyright awareness. 

The revelations from the field survey conducted during the course of this study supports this argument.  The endusers of copyright products, as have been observed by most of the sellers of such products, insist more on price than other product attributes at the time of purchase.  As can be seen from Table 9.3, a large number of endusers looked more at price than the other features such as name of the manufacturer(s), year of production etc. while buying a variety of copyright products.  Another note worthy finding from the survey was that in many occasions buying pirated products was a 'deliberate decision'  rather than a result of ignorance on copyright.  All the endusers interviewed during the survey are not only literates but also have achieved a reasonably high degree of education. About 82 percent of them claimed that they were aware of copyright and more than three fourths (about 78%) knew punishments for copyright violations.  In spite of all these, a majority of endusers admitted buying pirated copyright products with the full knowledge of the implications (Table 9.4).  More interestingly, among the reasons cited for buying pirated products knowingly,  'such products being cheaper than original' topped the list (Table 9.5).  If similar products are also available at lower prices, the consumers have a tendency to buy the cheaper ones irrespective of other considerations.  This perhaps explains, to a large extent, the genesis of the piracy phenomenon.  Illiteracy or the lack of awareness on copyright, though is a contributory, is of secondary importance as far as the incidence of piracy is considered. So long as the pirates can sell their products at a price lower than that of the original producers, there would not be any dearth of buyers provided the products are of some 'acceptable' quality or standard.

Is the tendency to buy cheaper products something peculiar to Indian consumers alone or is it applicable elsewhere?  While economies of piracy is justified in any society, the phenomenon is undoubtedly more prevalent in developing countries like India.  The obvious reason for this is that India is a poor country.   Its GDP per capita is one among the lowest in the world; lower than even most of the Asian countries (Table 9.6).  A sizeable section  (36%[2]) of the country's population live below the poverty line.  More over, most of the copyright products are treated here as luxury items. Naturally 'affordability' acts as the main constraint in the buying decision. The pirated products being cheaper than the originals, therefore,  become the obvious choice for the majority consumers.  Another contributory factor in this context may be the consumers' attitude towards quality. As of now the quality consciousness among Indian consumers is rather poor.  Therefore, they do not mind buying cheaper products even if they are of lower quality.  This helps the pirates to concentrate only on quantity and not on quality.  It would be difficult for the pirates to compete with the legitimate producers in terms of quality.

High Price Level & Piracy 

The ill affordability of Indian consumers is not due to low income level alone.  As has been pointed out by many respondents during the Survey, especially from the endusers group, that prices of copyrighted items are high and thus remain unaffordable not only to the poorer sections but also to the majority of the prospective customers.  In India, an application computer software, on an average, is sold at US $ 250, a good quality audio CD is not available below Rs. 200. The text books for professional courses such as engineering, medical and management remain beyond the buying capacity of many students.  Under such circumstances, piracy provides the natural escape route for all those who cannot afford to buy the originals. The awareness of copyright is, therefore, of less material consequence.  Almost a similar sentiment has been aired by the sellers of copyright products and even some of the rightholders notably the publishers.  The sellers group was unanimous that high price of original copyright products was the main culprit behind the occurrence of piracy in India (Table 9.7). 

Unemployment & Piracy 

Besides illiteracy and poverty, unemployment can be another economic evil affecting piracy incidence in India, even though it is very difficult to establish a direct link between piracy and unemployment.  Copyright based industries are  labour intensive.  But given the high volume of unemployment in the country, the legitimate segment of the industry can absorb only a fraction of the labour force.  As a result, the unemployed persons venture into all kinds of activities including the illegal production and sale of copyright products. The immediate provocation to do so is influenced by the possibility of making "quick" and "high" returns from less investment and efforts, a feature typical to piracy. 

Poor Enforcement & Piracy 

The other important factor which may attract unemployed people to piracy field is the laxity in the country's copyright enforcement machinery. Copyright piracy is a cognigable offence as per the Copyright Act.  But as in the case many similar laws, anti-piracy enforcement of law has remained very ineffective.  In India, there is no serious threat of being caught and punished when found involved in piracy.

The laxity in enforcement is the result of slackness on the part of the enforcement machninery, viz. the police on one hand and the passive attitudes on the part of rightholders on the other. There is no denying the fact that catching the pirates is not among the priorities of the police force.  A plausible reason for this, as pointed out by the State Departments of Police, is the greater involvement of the force in more demanding areas such as controlling murders, riots and terrorist activities etc.  The strength of the force and the enforcement infrastructure are also not adequate to tackle effectively the problems of India's size and complexity. As a natural consequence,  low order crimes like copyright piracy do not receive the highest attention from the police.  Another problem admitted by the department is the lack of familiarity among the police personnel with country's copyright laws and inability of the personnel to distinguish a pirated product from the original. 

The rightholders are also to be blamed for their "not so serious" attitude towards the piracy phenomenon.  In any incidence of piracy, it is the rightholders, whose interests are at stake, should take more active part than others in combating it.  But unfortunately the Indian rightholders lack this zeal.  The rightholders across the segments of the copyright industry claimed that their copyrights were subjected to large scale violations.  Simultaneously, the findings from our field survey indicated that only a small section among the rightholders volunteered to lodge a complaint with the law enforcement authority.  The kind of active role played by the affected persons in booking the culprits involved in thefts of their physical properties is conspicuous by its absence in case of copyright violations.  At the best the rightholders had remained vocal occassionally just to blame the government in general and the police in particular for their alleged failures in controlling piracy.  The organised efforts in combating piracy have been lacking from the rightholders except from the producers of audio products and computer softwares to some extent.

The rightholders argue that the inactive role on their part is not deliberate but emerges largely out of compulsions.  Even if complaints are lodged with the police, no action is  initiated against the culprits in most of the occasions.  Sometimes taking the matter to the highest authority in the police also did not yield desired results.  If, in some cases, pirates are booked by the police, the clumsy and sluggish  judicial system ensures that the culprits remains unpunished for long if not for ever.  This demotivates the rightholders from involing themselves actively in the battle against piracy.  Many of them feel that it is better to tolerate the monetary losses  due to piracy than to undergo sufferings involved in chasing the police and attending court cases with no definite outcomes in the foreseeable future. It is important to note that the "casual" attitude is not confined to copy right violations alone; it has now become universal to a significant part of Indian populace to other evils  e.g. corruption. In this background crimes like copyright theft is not taken very seriously by all concerned.  

Lack of Infrastructure & Piracy 

The lack of infrasrtuctural facilities in India is also expected to influence copyright piracy in some way or the other.  It is a well known fact that available infrastructures in India fall short of actual requirement in the country and are of lower qualities when compared to international standard. The World Competitiveness Year Book  1998, brought out by Lausanne (Switzerland) based International Institute of Management Development (IMD) has accorded India the last rank in infrastructure among 46 countries whose performance were reviewed in the year book.  The World Economic Forum's (WEF) Global   Competitiveness Report 1998 also depicts a similar dismal picture for India in the infrastructure front; with India ranking at 50 out of 53 countries.   Apart from shortages of basic infrastructures like roads, railways etc., India lacks in people's access to communication and information.  India is lagging behind not only the developed countries like the USA, UK etc. but even some of the countries from the developing world are much better placed than India in this respect (Table 9.8).    

This may be the reason for India not emerging as an integrated market place. The markets in India have remained fragmented ; thus giving enough scope to the local suppliers/sellers to manipulate the conditions in their favour.  This provides an ideal environment for piracy to breed in.  The pirates in India are seen more to operate at the local levels. Many rural and semi urban markets in the country are characterized by demand supply gaps which, in turn, exist due to a variety of reasons including shortages of infrastructure.   Such  markets are captured by the pirates who swing into action in the absence of  concerted efforts from the legitimate producers.  Footpath and petty shops selling audio-video products are too common a scene in India to go unnoticed. It is not a mere coincidence that a significant part of these products are pirated.

Conclusion

In this chapter we have attempted to identify a  number of socio-economic factors which influence the incidence of copyright piracy in India. While it is very difficult to establish the extent to which these factors contribute to  piracy, it can be surmised that each one of them, individually or collectively, has some influence on the phenomenon directly or indirectly. The factors identified here include social handicaps like illiteracy, poverty, unemployment on one hand and economic maladies like the high price, low per capita incomes, lack of infrastructures etc. on the other alongwith poor enforcement of copyright law. The list, however, is not exhaustive but only  indicative.

The conclusion that emerges is that though social factors like illiteracy, unemployment etc. influence piracy, the phenomenon occurs more because of economic reasons than anything else. For pirates it is an easy way of making quick bucks. For the endusers it is a gainful arrangement for buying/using a variety of info-entertainment products which otherwise remain unaffordable at least to a vast majority.  Basically, this "Win-Win" situation for pirates & endusers keep the piracy alive and active in the society. Other socio-economic variables like poverty and high prices etc. only add to the degree of the problem.   

But piracy entails a high cost to the creative people and also to those who invest their scarce resources in bringing out copyrighted materials for use by millions. Until the pirates are scared by giving exemplary  punishments in cases of copyright violations and the common endusers realize that in the long run protection of copyright is beneficial not only to those who are involved in creation and commercialization of intellectual properties, but to all including themselves, piracy will prevail. What is needed, therefore, is an effective enforcement machinery along with a wide spread propaganda highlighting the adversities associated with piracy.  

Table 9.1: A Brief Socio-economic Profile of India

* Provisional (Quick Estimates)

Source : Economic Survey 1997-98, GOI (for economic indicators a to g), World Development Report 1998/99, The World Bank, Human Development

Report 1998, UNDP &  Monthly Review of Indian Economy, Sept. 1998, Centre for Monitoring Indian Economy (CMIE).

Source : Human Development Report 1998, UNDP (for column 1), IFPI Pirate Sales '95, May 1996, IFPI (for column 2) & The Software Industry in India 1997-98, NASSCOM (for column 3)

Table 9.3 : Product Attributes insisted by Endusers at the time of Buying 

Source: NPC Survey

Table 9.4: Endusers Admitted buying Pirated Copyright Products

Source : NPC Survey

Table 9. 5 : Reasons for Buying Pirated  Products Knowingly

Source : NPC Survey

Table 9.6 : Comparison of Per Capita GDP among Asian Nations

Source: Computed using Data available from World Development Report 1988/99 

Table 9.7 : Main Reasons for Copyright Piracy in India as Perceived by the 

Sellers of Copyright Products

A: Genuine Copies Not Available, B: High Price of Original, C: Lack of Public Awareness

D: Rightholders Not Taking Enough Precaution to Protect Copyright,  E: Ineffective Copyright Law

F: Poor Enforcement of Law

Source : NPC Survey

Table 9.8 : People's Access to Communication and Information in Some Select Countries