fallacies, lies, and video pirates

Hello. This is the first of many irregular entries I hope to contribute to this blog. I hope that vibrant discussions ensue, with all points of views being put forth and debated.  As it happens, this is a cross-post from the CIS blog.  The two main points that underlie this post are that: (1) the notion of “harm” should be central to infringement of most forms of IP, as opposed to unauthorized/unpaid gain by someone else, especially if this gain is non-commercial; (2) the idea of public interest should form the crux of the rationale for, and thus limitations upon, IP.

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. 

BSA Bullshit – How 10% reduction of PC Software piracy in India could lead to additional $200 million tax revenues in US

This is in response to the verbal diarrhea periodically expelled by Microsoft and its Business Software Alliance cohorts suggesting that reducing piracy in India will lead to “Economic Benefits” – including enhanced tax collections to the tune of 200 million USD (now who could say no to that).

Fact is, most big software manufacturers never pay tax in India. Here’s how.
1) Most major software houses’ campuses are located in Software Technology Parks which have been enjoying a 10 year tax holiday since 1999 (extended till 2010). This means that any software that they develop in India and transfer to their parent undertakings abroad are 100% exempt from any taxation. (The normal rate of tax on income from royalty payments is about 10%.)

2) The same finished-software is then resold in India in “shrink wrap” packages. Another tax evasion occurs here. Most shrink-wrapped software that is sold to you, is sold via a chain of extensive distribution agreements instead of directly by the company’s unit in India. You buy Ms Windows from a distributor and not from MS India directly. This is done so that the “permanent establishment” in respect of the software unit sold is the US company and not MS India. By virtue of double taxation avoidance agreements (DTAAs), these companies classify such income as “business income” – taxable in the foreign country – rather than ‘royalties’ that are taxable in India. The implications of this loot are staggeringly high. The recent fight between the CBDT and Microsoft is a case in point where Microsoft has refused to pay income tax to the tune of 700 crore rupees (roughly USD 175 million).(Although the Income Tax Tribunal in this case has insisted that Microsoft is liable to pay the amount, the weight of legal authority seems to suggests that this demand will be overturned in appeal)

So in effect, the current BSA “study” (defying any relation to ‘reality’ that the word might ordinarily indicate) proposes to increase the amount of tax it can loot from India in addition to the USD 175 million that it already does to nearly 375 million through curbs on piracy.

Game’s up BSA^TM. Since I don’t want to doubt your OH-so-genuine concern for my country’s “economic benefits”, howzabout you just pay us the nearly $175 million you’re funnelling away to the US? And we don’t even have to touch piracy. Pay up, or Shut up.

UPDATE: There’s a really good article about this at Rediff.

BSA Bullshit – How 10% reduction of PC Software piracy in India could lead to additional $200 million tax revenues in US

This is in response to the verbal diarrhea periodically expelled by Microsoft and its Business Software Alliance cohorts suggesting that reducing piracy in India will lead to “Economic Benefits” – including enhanced tax collections to the tune of 200 million USD (now who could say no to that).

Fact is, most big software manufacturers never pay tax in India. Here’s how.
1) Most major software houses’ campuses are located in Software Technology Parks which have been enjoying a 10 year tax holiday since 1999 (extended till 2010). This means that any software that they develop in India and transfer to their parent undertakings abroad are 100% exempt from any taxation. (The normal rate of tax on income from royalty payments is about 10%.)

2) The same finished-software is then resold in India in “shrink wrap” packages. Another tax evasion occurs here. Most shrink-wrapped software that is sold to you, is sold via a chain of extensive distribution agreements instead of directly by the company’s unit in India. You buy Ms Windows from a distributor and not from MS India directly. This is done so that the “permanent establishment” in respect of the software unit sold is the US company and not MS India. By virtue of double taxation avoidance agreements (DTAAs), these companies classify such income as “business income” – taxable in the foreign country – rather than ‘royalties’ that are taxable in India. The implications of this loot are staggeringly high. The recent fight between the CBDT and Microsoft is a case in point where Microsoft has refused to pay income tax to the tune of 700 crore rupees (roughly USD 175 million).(Although the Income Tax Tribunal in this case has insisted that Microsoft is liable to pay the amount, the weight of legal authority seems to suggests that this demand will be overturned in appeal)

So in effect, the current BSA “study” (defying any relation to ‘reality’ that the word might ordinarily indicate) proposes to increase the amount of tax it can loot from India in addition to the USD 175 million that it already does to nearly 375 million through curbs on piracy.

Game’s up BSA^TM. Since I don’t want to doubt your OH-so-genuine concern for my country’s “economic benefits”, howzabout you just pay us the nearly $175 million you’re funnelling away to the US? And we don’t even have to touch piracy. Pay up, or Shut up.

UPDATE: There’s a really good article about this at Rediff.

Articles on GIs and creativity

Some interesting articles in the papers this last week.

Latha Jishnu’s written a characteristically insightful and analytical piece about GI registration in India. Excerpts:

In recent months there has been practically a stampede for GI registration in India. Unlike the developed countries which use it primarily for food products (Champagne, of course, and things like Parma Ham), India has extended GI protection to products across the spectrum, from handicrafts to flowers and spices. Thus the Aranmula mirror, along with assorted silks, saris, textiles and embroidery styles, joins soaps, incense, different varieties of jasmines, several strains of rice, tea, betel leaf, pepper and chillies to get the GI tag.

The GI Registry at Chennai, where right-holders can register their products, is getting inundated. The question, however, is how much of a protection a GI offers. For one, other WTO members are not obliged to ensure the same kind of protection to all Indian GIs because there is a problem of hierarchy. Although TRIPS has a single definition for all GIs, it has authorised a two-level system of protection: one, a general protection under Article 22, and the other, a higher level under Article 23 that is applicable only to wines and spirits.

According to some experts, Article 22 is not good enough. It is simply a law against unfair trade practices and for consumer protection and is not really for IPR protection. A producer not belonging to a specific geographical region could still use the GI as long as the product’s true origin is indicated on the label. In other words, an Aranmula mirror could be turned out from, say, Houston in Texas, thus allowing an American producer to free ride on the reputation and market goodwill created by Keralite artisans over two centuries. Tellicherry pepper and Udupi jasmine thus far are not in the same class as wine from Champagne.

Lawrence Liang’s article in the Indian Express covers the recent Rakesh Roshan V Ram Sampath row in the Bombay High Court and makes some poignant comments on creativity, copying and copyright.

The language of the case and the reportage around it rely very heavily on the language of theft, property and damages for infringement of copyright and plagiarism in music. This rather hasty leap of faith to stricter enforcement of music copyright does not seem to find too much support in the history of music itself. While there was surely a violation of propriety in the Ram Sampath case, the important question that emerges is the impact of thinking of creativity only in terms of property. The history of copying, appropriation and plagiarism is in fact central to the history of various forms of cultural production, including music. We should therefore be a little cautious when we celebrate this case for the quick remedy it provided to an act of copying.

The act of copying has been central to the ways in which culture has flowed through various parts of the world, transcending the limitations set by space and time. Thus a Polish folk song, “Szla dzieweczka do gajeczka”, becomes a part of Indian popular consciousness through its adaptation as Salil Chaudhury’s “Dil Tadap Tadap Ke” from Madhumati. Secondly, the creation of music has always relied on adaptations, influences and inspirations, whether conscious or unconscious. It would be unfortunate if as a result of aggressive copyright suits, we reach a situation like the United States where even subconscious copying is held to be infringement. In a case brought by a band, The Chiffons, against former Beatle George Harrison, the court held that Harrison’s “My Sweet Lord” was in infringement of The Chiffons’ “He’s so fine”, even though the judge believed that Harrison did not intentionally copy the song and had only been inspired by it subconsciously.

In our enthusiasm to protect the creator and ensure that he gets his just rewards, let’s not forget that the sense of touch is not limited to the hand, but extends to our eyes and ears. It is only natural that when we create something, it will be influenced by things we have read, heard or seen, even if they are not our property. Walter Benjamin describes this form of mimicry as a form of learning as a “sensuous similarity”, a right to copy, which should be as jealously guarded as copyright.

Pirate networks

A piece in the Hindu today about the ‘piracy menace’ presents an interesting glimpse into the informality of the networks within which ‘pirates’ operate.

“Sir, it is three-in-one,” said Rasheed, displaying about 100 DVDs in a compartment of the Mumbai–Kanyakumari Express. The the ‘three-in-one’ comprised Mammootty’s Roudram, Mohanlal’s College Kumaran and Suresh Gopi’s Sound of the Boot.

Contrary to claims made by the film industry, pirated VCDs and DVDs sell like hot cakes in the market. The piracy lobby is exploring all possible routes to boost sales. Like Rasheed, hundreds of youngsters are employed to market these DVDs in trains, bus stations and temporary outlets.

I cannot imagine Sony selling original DVDs on trains. A second class train ticket from Hyderabad to Bangalore costs just over Rs.250. By contrast, an original CD/DVD of a mainstram Hollywood film can cost between Rs. 400-600. No market analysis would ever recommend second class passengers as a target consumer group to focus on. And yet in audacious opposition to market analysis, the ‘pirates’ are making good business here.

Karnataka HC to decide whether free software is stifling competition

In a case that has potentially far reaching implications (always wanted to use that phrase – far reaching implications),”some software companies” have filed a petition before the Karnataka High Court challenging its use of the Nudi software font for egovernance purposes. The Government claims that the software is free and the ” best among the softwares available.”. The Companies on the other hand allege that there is no “scientific basis for the State to prefer Nudi over other compatible softwares” and insist that the Government “prescribe uniform standards for bilingual fonts for developing software in Kannada”.

Is there a scientific basis to prefer free software over proprietary alternatives? Hm.

After some scouting around the web, I’ve stumbled upon some history of the dispute. All is not well, it seems, in the Karnataka Font Development industry. I’m going to use internet sources to try to piece together this sordid saga of hope, suspicion, treachery and betrayal that is the Kannada Font.

Two websites are going to be my primary sources: The Government of Karnataka and some vitriol on a site called Ella Kannadaabhimanigala Antharrashtriya Vedike In (Ekavi)

So it turns out, the Karnataka Government mandates the use of a font called ‘Nudi’ for use in all e-governance projects. The Karnataka Government asserts that this is freeware:

The Karnataka Government owned Kannada Script enabling software NUDI, developed by Kannada Ganaka Parishat, is a freeware. Most of the fonts with NUDI can be used for dynamic font embedding purposes. Since the fonts and the software are available free, these can be used in the no font-embedding situation as well. Regarding R&D, it is a continuing activity to move with the changing technological conditions, mainly so with NUDI. As per the requirements, new features will get implemented in NUDI, of course maintaining compatibility with earlier versions. Futher, it is to be noted that enthusiatic and innovative font developers can develop any number of fonts for NUDI engine using standard software like Fontographer, Fontlab, Font creator etc.

Turns out, Nudi was created by copying a software called Baraha – which it turns out, was a rehashed, pirated – murder most foul! – version of a font called Akruthi. According to this rambling invective on Ekavi, this sinister design was apparently executed by an evil genius/tyrant called ‘VASU of BARAHA’ who is ‘PRIMARILY responsible for all the problems KANNADA SOFTWARE DEVELOPMENT is facing TODAY’.

VASU has allowed Srinatha Shastry, Narasimha Murthy and Dr. Panditharadhya of Kannada Ganaka Parishat “KGP” to COPY BARAHA Fonts and name it NUDI Fonts and sell NUDI Fonts to Govt. of Karnataka “GoK”. So GoK is using STOLEN PROPERTY and forcing all Departments to use NUDI FONTS. This made other KANNADA SOFTWARE DEVELOPERS to GO OUT of BUSINESS.

Who knew.

NEXT question, we all need to think is,
If BARAHA and NUDI Fonts are being offered FREE like this to KANNADIGAS,
Why BARAHA and NUDI fonts are not in OPEN SOURCE PLATFORM ??? WHY ? WHY ? WHY ? WHY ? WHY ? WHY ?

Oh dear.

Copyright in fonts is untested in India and needs a closer look.In the US, in 1998, a federal district court held in Adobe Systems, Inc. v. Southern Software, Inc that copyright law protects “software programs” that create fonts that are distinct typefaces. But the question of originality can still be raised in the Indian context.The artwork involved in fonts is language itself – not something elaborately conceived independently by the developer. ‘Sweat of brow’ alone is not a determinant of copyrightability in India.

More on this later.

Karnataka – Bangalore

Nudi software: court asks Government if uniform standards can be applied

Staff Reporter

BANGALORE: The Karnataka High Court on Wednesday sought to know from the State Government why it could not prescribe uniform standards for bilingual fonts for developing software in Kannada.

The court was dealing with a petition by some software companies that had questioned the rationale of the Government going in for Nudi software for e-governance.

They claimed that Nudi is creating a monopoly and stifling competition. They said there is no scientific basis for the State to prefer Nudi over other compatible softwares.

The Government argued that Nudi was a free software and that it was essentially being used by Government departments. It said it was the best among the softwares available.

An official of the Department of e-governance, who was present in the court, said more developed and sophisticated tools are now available. Justice A.S. Bopanna, who is hearing the petition, asked why it could not formulate a uniform bilingual font. He asked the State to look into the suggestion.

© Copyright 2000 – 2008 The Hindu

Govt actually against curbing piracy with policy?

Business Standard reports this extremely startling and welcome assertion, by Asha Swarup, Secretary , Union Ministry of Information & Broadcasting has apparently rejected the recommendations of the “draft optical disk policy on grounds that it would lead to the creation of a regime of inspectors, and thus go against the grain of the liberalisation policy.”

Acknowledging that the menace of piracy in the entertainment and media industry was huge, she said the problem had to be tackled by closing the gaps in the supply. “A possible way,” she said, “is to release films in ‘C’ and ‘D’ class towns in digital formats.”

A Daniel come to judgment!

In its characteristic presumptuousness, the FICCI is apparently preparing a draft Optical Disc Bill (including a code of regulations for content) which, spares no efforts to curb piracy – if it happens to involve constables breaking down your door at will, to inspect whether you have any pirated cds lying around, then that’s a small price to pay.

I like this Asha.

Piracy and Cinema in Orissa

Two contradictory accounts of cinema halls in Orissa have been carried by the Hindu in the last week alone.
On the 14th, the Hindu carried this piece lamenting the decline of cinema halls in Orissa, blaming, mainly, piracy.

Orissa: It’s curtains for many cinema halls

BHUBANESWAR: Unable to cope up with the onslaught of television channels and video piracies, more than 65 cinema halls in Orissa have been closed down while a majority of these are on the verge of adorning new avatars.

Replying to a question, Industry Minister Biswabhusan Harichandan told the State Assembly that as many as 177 cinema halls were running while more than 25 per cent of these could not keep pace with the time.

However, Orissa Cinema Hall Owners’ Association (OCHOA) disputed the figure saying the scenario was worst than being depicted. “Not more than 120 cinema halls are running in Orissa while more than half of it have been shut down,” OCHOA president Bijendra Mohanty said.

There was a time when Ganjam district was cine goers’ paradise, but condition of cinema halls presented a depressing picture. Out of 26 cinema halls, 10 buildings were locked. The first cinema hall of the State, SSVT at Berhampur has long been closed down, though the State government’s paper show that it is running.

Similarly, Jyoti cinema hall of Berhampur, the highest seat capacity hall of the State, has now been converted into a hotel. Moreover, an apartment is coming up in Vijaya Hall complex and Vijay cinema hall has got new address of a marriage mandap in the town.

In Cuttack district, six cinema halls have been shut down.
Shopping malls

As the cinema halls are situated in prominent places, offers are flowing in thick and fast from shopping mall chains to switch over the trade.

Gone are the days when a cinema hall ticket used to be considered as a prize catch for film buffs. The crowds are gradually disappearing.

“Absence of strict laws on video piracies in the State is the single most important reason behind gradual decline of cinema hall culture. In Tamil Nadu and Andhra Pradesh, film complexes are doing very good because, as they are strict on piracies,” Mr. Mohanty pointed out.

About eight years ago, a high-level committee was formed to propose a law on video piracies. Even Orissa Film Development Corporation (OFDC) had also updated favouring enactment of law. But the government’s approach on the subject has so far been passive.

The situation has worsened to such an extent that cinema halls see a sizeable crowds only during first two or three days of release of a film. Fearing that number of viewers would come down further if prices of entry tickets were raised, cinema hall owners are sitting helplessly. As a result, they have not been able to take up renovation work for years. “It is a vicious circle. Government must take appropriate step. We are missing quality crowds,” Mr. Mohanty lamented.

Then today, there’s this piece in the Hindu on how ‘Oriya films continue to pull crowds to theatres‘ despite the ‘invasion of pirate CDs’

BERHAMPUR: Oriya films still continue to draw large crowds to ticket counters of film halls. Oriya films guarantee full houses at theatres for at least three weeks despite the invasion of pirated VCDs and DVDs, say the workers of film halls in the city.

Earlier Oriya films used to be released coinciding with the festive seasons. But now producers and distributors of Oriya films are daring to release their movies even during March, which happens to be the examination season. Oriya film ‘Mote Ta Love Hela Re’ has been released this week. And it is running packed houses and people could be seen vying with one another to get tickets at a theatre in the city where it was released.

A large chunk of the audience of Oriya films is women. Even film halls prefer to have reruns of Oriya films at their theatres before releasing a new Oriya film.

Some Oriya films draw more crowd for continuous weeks than several Hindi blockbusters. For rural audience and traditional Oriya women Oriya movies are better attraction than Hindi or English movies. Groups from villages hire vehicles to have a trip to Berhampur to watch Oriya movies.

According to an ardent cinema fan Saroj Mohapatra, Oriya films strive on rural public and lower middle class audience.

The Oriya films that are remakes of Hindi or Telugu movies draw crowd for their masala histrionics rather than good Oriya films that receive critical acclaim, said Mr Mohapatra. Recently critically acclaimed Oriya movie ‘Kathantara’ was released in the city but it could run for only a week.

So.. what exactly is going on here?

Over 5,000 pirated CDs seized in Vizag

Date:15/03/2008

From The Hindu

Andhra Pradesh

The police conduct raids following tip-off by music industry

HYDERABAD: Police have conducted nine raids in Visakhapatnam and seized a total of 5,024 CDs, following a tip-off given by the Indian music industry’s anti-piracy team.

The CDs comprised 2,507 MP3 players, 2,517 DVDs, seven CD writers and six each mobile chips, PCs and card readers.

A press release issued by the industry here on Friday said the raids followed a successful training programme conducted by it on February 13 here for the law enforcers to raise awareness about protecting the intellectual property rights.

The raids reflected the initiatives taken by the industry towards achieving its objectives.

The programme was the biggest one ever conducted in the country by the industry for police.