The Dilemma of Digital Intellectual Property

James Kelly
8 min readApr 19, 2020

Intro

The rise of the internet since the early 1990’s has created a new way for people to sell, share, and consume content. The days of traveling to a record store and purchasing a CD are long over. Music, movies, and other forms of media are available to anyone with internet access by the swift click of a few buttons. In the current day, software companies such as Spotify, Apple Music, and Netflix provide a streaming model service where people pay a monthly fee to access a wide library of music, movies, and other media. These libraries of content are available to these companies through licensing agreements, where they essentially pay the owners of the content to host the content on their platforms. In the streaming music model, the total amount of ad and subscription revenue is then divided amongst artists, and the artists are then paid a fractional amount for each stream they received. [1] Netflix, Hulu, and other video streaming services follow a slightly different model where they typically pay an initial fee to license the content. [2] These services provide a great way for artists, producers, and creators to benefit financially off of their products. The content creators are able to have their content be accessible to millions of people around the world. However, along with these great streaming services, the internet has given people the means to scrape, pirate, and copy these forms of media and distribute them for free or on black markets for a lower cost. In return, the creators do not earn anything off of their intellectual properties. Many countries around the globe have laws that make such acts of piracy illegal. By law, it is apparent to come to the conclusion that sharing intellectual property with the masses while the owner does not benefit is inherently bad. However, if we consider this from an ethical standpoint, we can analyze a very interesting question from both viewpoints: Once someone legally owns a copy of intellectual property, say a song, why shouldn’t they be able to share that product with others for free?

The Rise of File Sharing Services, Pirating, and The DMCA

The Digital Millennium Copyright Act (1998) is a copyright law that takes parts of two treaties signed by the World Intellectual Property Organization and implements them into a US law. Simply put, the law is intended to criminalize the production and dissemination of technology intended to share access of copyrighted property. [5] This law effectively made it illegal for technology to be used to copy and share digital media that is copyrighted, such as songs and movies, without some sort of licensing agreement. This law, paired with the Copyright law of 1976, would make it illegal to turn a CD into an mp3 file and share it with others.

The first controversial, well known file sharing services was Napster, founded in the late 1990’s by Shawn Fanning and Sean Parker. Essentially, Napster was a program which allowed one person to send any file from their computer to another person’s computer over the internet. As it became more popular, people soon realized that these files included mp3 files, which is the type of file that music is commonly stored as on a compute. If one person had bought a song for .99 cents, or simply had a copy of the mp3 file, they could take the mp3 file and send it to others for free. The song might eventually be forwarded to millions of users, and the creator of the song would only receive profits from the one copy that was bought. [4] As discussed in the paper [6], many people supported this idea that music should be free for people to listen to and obtain. One of their arguments was that this kind of platform helped lesser known artists share their music, and it prevented the major record companies from controlling the music that actually gets released. The record companies and major artists obviously found a problem with this type of platform and in the early 2000’s Napster faced various lawsuits from names such as Dr. Dre and Metallica. In the end, Napster was forced to pay millions of dollars to artists for the distribution of their intellectual property and ultimately shut down its operations.

P2P services allow people to anonymous access files from others.

The other notorious peer-to-peer file sharing service of the 2000’s was LimeWire. LimeWire was very similar to Napster, although its owner initially claimed that it was completely legal. [4] LimeWire faced similar lawsuits, and like Napster, was forced to cease operations. It is worth noting that the downfall of these early file sharing services led to the development of the streaming services that we have today. The main differences are that current services have operated in the bounds of the law. The two important differences to not are: these services pay large sums of money to the intellectual property owners to host their content and it is not easily possible for an individual to obtain a copy of the actual mp3 file that contains the content.

A screen shot of the LimeWire media player.

Currently, it is very easy for a tech savvy individual to obtain a copy of someone’s intellectual property for free. For example, many websites exist for the sole purpose of providing access to movies for free. It is also just as easy to pirate a song. You can find any song you want that is on YouTube, put the URL into a youtube-to-mp3 convertor, and download the mp3 file to your computer for free. These youtube-to-mp3 domains are regularly taken down as they violate US copyright laws, but new ones are created just as easily. It is seemingly impossible to monitor and take down all these websites that allow people to exploit other’s intellectual property. Furthermore, there exist tools called mp3 extractors, which will essentially run a program to rip the mp3 file off of Spotify, SoundCloud, or Apple Music. The past 20 years have proven that the law will not tolerate these types of actions, but little can truly be done to stop an individual that wants to download someone else’s intellectual property for free.

Ethical Dilemma

Clearly, in the presence of US law, sharing of intellectual property that has been legally copyrighted is strictly illegal. Using different schools of thought, we can analyze this dilemma and come up with two different, yet justifiable solutions. The dilemma we are faced with is: Once a person legally obtains a copy intellectual property, who owns that property? On one side we have the individual who should be able to share his legally purchased copy with others through the use of software. He can copy and send the file to millions of people, for free. In this situation all the people benefit by receiving a copy of the intellectual property. We also have the creator of the intellectual property who is losing lots of money. On the other hand, we have the scenario where each person must obtain their own copy for some form of money from the owner. The individuals lose but the creator prospers.

Ethical Analysis

We can analyze this ethical dilemma considering a Utilitarianism point of view. Under this school of thought, something is considered to be good if its net effect produces more happiness than unhappiness. We would want to make the decision that will benefit the greatest amount of people. [7] In this analysis we consider two groups of people, the intellectual property consumers and creators. Letting people freely share intellectual property, such as music, will allow a greater amount of people to access the music. People who may not have been able to afford or purchase the music due to restrictions (eg. A UK version of a song) can easily access the music for free. However, the creators and owners of the intellectual property will be negatively impacted by this choice. If people are required to purchase intellectual property, less people will be able to access it, but the few creators will be able to make huge profits off it. In this scenario, following Utilitarianism principles, the best thing to do would to allow services like Napster to operate, so that the greatest amount of people would be able to access the intellectual property.

If we consider Kantianism while analyzing this dilemma, we may come to a different conclusion about what should be done. Kantianism is an ethical theory where we must consider an underlying principle when making decisions. Kant’s categorical imperative can be simmered down to one rule: “act so that you always treat both yourself and other people as ends in themselves, and never only as a means to an end.” [7] We can use Kant’s categorical imperative to formulate conclusions where no person is being taken advantage of. In our scenario, allowing people to freely share, copy, and distribute another’s intellectual property is clearly taking advantage of that person. This person created something that other people are using and in return they receive nothing. The creators would be treated as a means to an end, where the end is the intellectual property that they have created. When analyzing this scenario using Kantianism, it is clear that we should allow the creators to benefit off of their intellectual property so that they are not being treated just as a means to an end.

Conclusion

Considering the dilemma brought forth by intellectual property is no simple task. As analyzed in this paper, there seem scenarios where on might consider either side of the dilemma. However, the world as a whole has slowly come to the conclusion that the benefits of having the right to protect intellectual property outweigh the benefits of having people freely copy, distribute, and sell intellectual property. Most governments have implemented some sort law regarding intellectual property. Intellectual property rights drive competition and innovation in markets, promote economic growth, and protect people’s ideas. Many of the great services like Netflix, Spotify, and Apple Music would not exist today without the existence of intellectual property rights. However, it is a fact that the rise of the internet has made it very easy to pirate and distribute intellectual properties. As new technologies like Napster are created, it is inherently important that we consider the new dilemmas at hand and come to the best educated conclusion that we as a society see fit.

References

1. https://www.businessinsider.com/how-apple-music-and-spotify-pay-music-artist-streaming-royalties-2020-1

2. https://www.investopedia.com/articles/investing/062515/how-netflix-pays-movie-and-tv-show-licensing.asp

3. https://www.inventorsdigest.com/articles/short-song-the-rise-and-fall-of-napster/

4. https://melmagazine.com/en-us/story/an-oral-history-of-limewire-the-little-app-that-changed-the-music-industry-forever

5. https://www.copyright.gov/legislation/dmca.pdf

6. https://kb.osu.edu/bitstream/handle/1811/70499/OSLJ_V63N2_0799.pdf?sequence=1&isAllowed=y

7. Michael Quinn, Ethics for the Information Age, 7th edition, Pearson, 2016.

8. https://www.ipwatchdog.com/2017/05/29/musicians-protect-music-intellectual-property/id=83619/

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