http://www.businessweek.com/stories/2007-07-23/the-net-gets-real-on-copyrightsbusinessweek-business-news-stock-market-and-financial-advice

Technology

The Net Gets Real on Copyrights


The Harry Potter ending is the latest example of how Web sites are more willing to take down copyrighted material and identify infringers

Everyone knows it's hard to keep a secret when it comes to Harry Potter plotlines. So it's no wonder that copies of the highly anticipated last installment of the book series could be found floating around the Web before its July 21 release date. As is well known by most Potter fans, pictures of the ending were posted on sites such as News Corp.'s (NWS) photo-sharing site Photobucket and Gaia Online, an Internet community site for teens, robbing incautious Web surfers of the surprise ending (see BusinessWeek.com, 7/18/07, "So, Does Harry Potter Live?").

What was a surprise, however, is how quickly many Web sites appeared to respond to requests to take down copyrighted material and hand over information regarding alleged copyright infringers. On July 16, Scholastic (SCHL), which publishes the Harry Potter books in the U.S., filed a subpoena for information about the identity of a user who posted copies of the book on Gaiaonline.com. The company immediately supplied the information, took down the infringing material, and banned the user from the site for two weeks. "Gaia Online's terms of service prohibit the use of Gaia Online for any illegal purpose and requires all users to comply with its terms of service," the company said in a statement, explaining its swift compliance.

Court documents filed by Scholastic also say that copies of the book appeared to be on Photobucket. News Corp.'s Fox Interactive Media, which operates MySpace.com and Photobucket, declined comment, but the material is no longer on the site.

Changing IP Attitudes

Not long ago, such thorough compliance from sites that thrive on user-generated content might have been unthinkable. While many sites did immediately remove material in response to takedown notices, as is required by law, they did little to keep the same material from being uploaded moments later. Many sites have typically been adamant about ratting out users.

But attitudes toward copyright and intellectual property have changed. One reason is that the industry has matured. Sites that depend on users for content are no longer simply trying to prove their value by grabbing tons of Web traffic in any way possible. They are now trying to prove their mettle as legitimate businesses that can make money by working in concert with content providers and playing ball with marketers that are understandably wary of paying for ad space on sites they fear might get sued or, worse, shut down. "There are a lot of U.S.-based venture-backed businesses that are trying to be compliant," says Eric Garland, chief executive officer of BigChampagne, a technology and market research company that tracks illegal downloading of copyrighted material.

In some cases, the new emphasis on intellectual property has come as the sites have been purchased, or evaluated for acquisition, by large public companies such as News Corp. and Google (GOOG), which respectively acquired social networking site MySpace and video-sharing site YouTube. Large companies, in general, have more to lose from a lawsuit and more respect to squander should the public perceive them as disrespectful of intellectual property (see BusinessWeek.com, 10/10/06, "YouTube's New Deep Pockets,"). "Sites that spring to mind like MySpace and YouTube are doing what they can to quickly remove infringing content from their sites," says Garland.

Large Players Helping to Stem Abuses

Make no mistake: Copyrighted material is still ending up on user-generated sites, even those owned by big companies. In March, Viacom (VIA) sued Google for the frequent appearance of its material on YouTube, despite multiple takedown requests (see BusinessWeek.com, 3/14/07, "Viacom's Suit Won't Snuff Out YouTube,").

Yet by and large, companies are doing far more to stem abuse, and allowing nowhere near the level of infringement in years past, piracy experts say. Google has worked with content identification companies such as Audible Magic to better keep copyrighted material from its site. "We are beginning tests on an automated system to identify and match specific videos," YouTube co-founder Steve Chen wrote in a June blog post. "We are working with some of the major media companies to test what we have developed."

In response to a January subpoena, Google and community site LiveDigital cooperated with News Corp.'s Fox network concerning the illegal leak of unaired episodes of the hit television show 24, as well as several episodes of The Simpsons (see BusinessWeek.com, 1/26/07, "Google and YouTube: A Catch-22,"). The information they gave on the alleged source of the leak led to a criminal complaint against a Chicago man by the Federal Bureau of Investigation. If convicted, the man could serve up to three years in jail.

Foreign Players Not as Respectful

The Justice Dept. has won more than 100 felony convictions for copyright infringement in the U.S. in the past five years, thanks in part to large-scale FBI operations and the increased cooperation of Web sites that turn over information on users who post illegal material. Last month, for example, it won a conviction against a Los Angeles man who uploaded the movie Walk the Line on the Internet before it was available for home viewing.

Despite evidence that content creators' hard-fought efforts to get U.S. businesses to respect intellectual property are working, copyright violations are still rampant on the Web. The reason, says Garland, is that there are still many non-U.S. businesses that don't have the same respect for intellectual property and many more technologies that allow people to share files but are not part of any business entity that can be held accountable. In fact, the amount of pirated material on the Web is growing, says Garland. For example, from June, 2006, to June, 2007, the number of users at any given moment on just one prominent peer-to-peer network that primarily handles illegally uploaded content grew 186%, to 1,246,705.

So what are content creators to do when there's no large company to sue? Garland says high-profile suits are a deterrent if done correctly, but they're unlikely to stem the problem. Another suggested tactic is to demand the Internet service providers to watch what their users do and terminate accounts that upload pirated material. However, such a move is unlikely, given that ISPs are reluctant to take steps that would be seen as an intrusion on their customers' privacy.

Once content is in the public domain, Garland says there is little that content creators can do to keep it from being uploaded to the Web. Their best hope may be to try to track it and make money from it by appending advertising. However, companies can do something about leaks such as the one that led to rampant online spoilers of the Harry Potter ending: Keep copies to a minimum and only give them to trusted executives with locked briefcases. Adds Garland: "Protect it the old fashioned way."


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