PIRACY OF INTELLECTUAL PROPERTY: PAST, PRESENT, AND FUTURE By Michael Waldman Johnson Graduate School of Management Cornell University Sage Hall Ithaca, NY 14853 (607) 255-8631 firstname.lastname@example.org
* I would like to thank Ying Wang for research assistance.
The last few decades have seen enormous growth in piracy of copyrighted goods and, in particular, an enormous growth in piracy of creative works that employ a digital format. In this paper I discuss classic theory related to the piracy issue, provide a brief history of the growth of piracy over the last few decades, and then discuss issues concerning the present situation. I conclude with speculation about the future of piracy, where one of my main points is that, at least for the developed world, there are important reasons for believing that piracy is likely to continue to grow.
I. INTRODUCTION The ability to make illegal copies has long been a concern in the area of intellectual property and copyright. But the problems have become magnified in recent years as the march of progress has resulted in various types of creative works being stored in digital formats while at the same time the capability of making illegal copies of works stored in this way has widely diffused and the costs have fallen. The result has been substantial growth in digital piracy and reduced revenue flows to the copyright holders of various types of creative works. In this essay I describe this growth, discuss the current situation, and then speculate, hopefully in an informed way, about the possibility of future growth in piracy. When I was a college student in the 1970s it was possible to make an illegal copy of a book or record and sell the copy which could hurt the profit of the copyright holder of the original work. But, although making an illegal copy was possible, there were important limits on the extent to which such copying could hurt the copyright holders. One important constraint was that, at...