Wednesday, October 18, 2006 Invasion of the pirates By Lady Ochel Espinosa
FORGET the eye-patch wearing, stump-bearing, hook-sporting mate of the seven seas. There's a new breed of pirates, braving the currents of the consumer market, still doing what they do best: stealing profits.
And in a third world country with a society dictated by consumerist ideals, there's nowhere better to do business than here in the country.
Market marauders
Defined as the unauthorized reproduction or use of anything with a copyright, piracy is probably the easiest moneymaking venture of Filipinos today. And because the laws against piracy are ill-enforced, pirate ways are endless and the profit forecast always bright.
The common classifications of piracy are hard disk loading (buying a single original software and letting others download it to their own computers for free), retail piracy (counterfeit goods sold in the market), and end-user piracy (buying and using pirated goods).
The ease by which pirated goods can be manufactured and acquired is a key factor for its rampant proliferation in the market. As Antonio*, a former pirate states, "There are many possible sources [for templates], but if you have access to the Internet, you can do it yourself-download stuff from the net, burn them on a CD, and then sell them."
Pirating software and music has become so easy through the PC and the Internet that any individual with the right equipment can churn out a couple of pirated goods in an hour. This act of infringing a copyright has become so rampant, convenient, and affordable that individuals easily overlook the legality and ethical issues that come with it.
Setting sail
Another factor why piracy is extremely popular is the low price at which the goods are sold. "If the original product is overpriced, why buy it, especially during these hard times? [But buying pirated goods is] like a compromise, you get something of lesser quality at a significantly lower price," Antonio maintains.
Piracy has also led to the expansion of the market. Not only does it cater to the lower and middle classes, those from the upper class have become constant customers, too.
"Especially here in the Philippines, very few people can afford the real thing, and we are generally oriented to save because of our economic status," Antonio continues.
With the government's leniency in enforcing the law, piracy has become the trend. In any free market, CDs can be purchased for as low as P30, a bargain considering that it would sell for approximately P500 in a legitimate record store. Even better is that some counterfeit MP3 CDs contain 152 songs, or 13 entire albums.
All aboard
Students are often in need of software programs such as Windows XP, Adobe Premiere and Photoshop, and Macromedia Flash for their school assignments.
However, the original copies of these programs cost thousands of pesos, and students, who have other expenses to worry about, would rather buy the pirated version and disregard the law.
No matter what happens, pirates will always have lower prices because their only job is to copy. Legitimate enterprises cannot do without copyrights or artists' shares, thus accounting for the cost difference.
In addition, there is no real assurance that pirated goods are free from defects. Because software pirates offer no guarantees and no technical support, they have little incentive to offer a safe quality product.
The real victims of piracy, however, are the industries that create the original CDs. Because majority of the profits are being redirected to the counterfeiters, the original creators fail to be rewarded for their innovative endeavors, and companies are unable to fund more creative works. Piracy is stunting the growth of every industry it enters because it steals the revenue meant to support that industry.
Stolen treasures
In an issue of Readers' Digest, it was noted that recent European Union estimates found that globally, counterfeiting and piracy have risen from 5-7 percent of world trade, or up to $300 billion in lost revenue.
The study also states that most of the fakes originate from Asia, where piracy is carried out by organized syndicates with powerful patrons in the government or armed forces.
Although China probably ranks as the world's No. 1 counterfeiter, with more than P800 million worth of fake goods in its market in 1998, other Asian countries are not far behind.
"Throughout Asia, counterfeiters are a step ahead of the law. When CD pirates began feeling the heat in Malaysia, they moved their factories to Indonesia and the Philippines," the study states.
Disk plants that can churn out more than a million pirated CDs a month can be legally imported from Germany or Taiwan. With an initial outlay of P250M for a single machine, pirates can easily regain their expenses within three months' time. With such huge profits, pirates can effortlessly pay off the stiff penalties imposed by the government when they are caught.
To combat piracy, the Intellectual Property Rights law was created. It grants creators of the patented products the exclusive right to produce the same product and provides for the creation of task forces to give sanctions to counterfeiters. Under this code, copyright violators face a penalty of up to nine years imprisonment and a fine of up to P1.5 million, if found guilty.
Unfortunately, piracy remains rampant and the law, ineffectual. In fact, according to the Inter-agency Committee on Intellectual Property Rights, as the number of monitored pirated products in the Philippines increases, the number of those penalized by the government decreases.
Coast Guards ahoy!
Because of the government's failure to take down the culprits, big-name companies are going after the pirates themselves by hiring international detective agencies, lawyers, ex-police investigators, and former military men skilled in special operations. Some companies even spend up to $10M a year to combat piracy.
However, no matter what safety measures they employ-adding holograms, encryptions or key and registration numbers-the master counterfeiters are never far behind. "There are a lot of ways to get around it. Anyone who has the necessary skills can easily hack bogus serial numbers from the Net, or crack files," Antonio says. He adds that pirates are not hesitant about breaking the law because they are not easily caught, "and enforcers can easily be bought to dismiss what they saw."
The proper way to address this problem is to "change the attitude of the people towards piracy. People should be made to understand that upholding intellectual property rights is all about respect for the individual business of any institution that creates or manufactures the original goods.
Our modern-day pirates may be more technologically advanced than their predecessors, but their business remains the same, and so do the damages it creates. Our silent support for pirated products may have further aggravated the situation, but we can start making a difference by refusing to be tempted by anything but the real thing.
* Some names have been changed to protect individuals.
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