Last year the Indian music industry lost Rs 400 crore to pirates. The Indian film industry lost ten times more. These are ballpark figures because there can be no empirical study on the subject and one has to be guided by market surveys and sentiments.
Theft of intellectual property is as serious as, say, theft of cars or mobile phones. After all, owners of intellectual property have invested their skills and talents and, in the case of music companies or film producers, have put in money much like manufacturers of cars or mobile phones. This is not often appreciated by purchasers of pirated music or videos because intellectual property is intangible.
<b1>It is often asked why the music and film companies do not reduce their prices to compete with the pirates. Here again, reducing prices could mean selling at a loss, since it is difficult to compete with pirates who have just the expense of copying. Music and film companies have to scout for talent, nurture this talent, market it and pay not only royalties to the artistes but also income tax, sales tax and excise duties to the Government.
The price tags on music and video CDs in the West is much higher in rupee terms than what the same products command in India. This encourages some operators to purchase legal goods in bulk in India and indulge in what is known in technical parlance as parallel imports into Britain, the US, Europe and Canada where the product sells at a higher price in rupee terms. The industry frowns on such business and customs regulations in many countries prohibit the practice.
The problem of enforcing the Copyright Act, like in enforcing the patents and trademarks laws, is that it is wholly dependant on political will and police cooperation. If the Government and its coercive arm, the police, are serious there is no reason why enforcement should not be as good as that in the West, where corruption is under check and intellectual property rights are by and large respected.
We have excellent laws to protect intellectual property but our enforcement mechanism is very, very indifferent. The police consider it low priority. Besides, they see here an opportunity to make a killing in bribes. These two factors, low priority and corruption, together make nonsense of the law on copyright and encourage crooks to brazenly hawk their illicit wares. On every pavement in busy commercial districts or near railway stations pavement vendors sell pirated music and film videos with impunity. Defiance of the law is so blatant that one wonders how the police can claim that they are in charge of the streets.
In desperation, the Indian music industry pressed state governments to extend their stringent detention laws to piracy of their products. Some states, like Tamil Nadu and now Maharashtra, have obliged but the end results are still uncertain.
Driven to the wall by the growing volume of piracy, the Indian music industry became pro-active and set up its own investigative mechanism to find out where commercially viable pirated music was being manufactured, stored, distributed and sold. The music industry felt that it should find a solution for survival by relieving the police of the burden of making inquiries to which they could not devote time when more pressing problems came their way.
The industry hired retired police officers in each state and they in turn hired a few investigators to go out on the streets and trace the origins of pirated stuff. Then, armed with the intelligence they had gathered, the retired police officers approached their former colleagues, now in charge of the police stations and districts, to get them to act against the pirates. They did succeed to a great extent in the beginning but later found the going difficult when police officials in the lower echelons voiced their reluctance to help in what they felt was a purely commercial matter. But the fact of the issue is that piracy is as much a crime as any theft and should be dealt with as such.
Workshops had to be held with the blessings of senior officials to educate the lower levels of the force about the importance of protecting intellectual property in music and films, which are a part of the cultural heritage of a society. It had also to be impressed on these gentlemen that every law in the statute books has to be enforced if the state is to be perceived as strong and effective. Good governance demands upholding the rule of law and opposing its defiance, however small the crime. This is the ‘Zero Tolerance’ theory put into practice so effectively by Governor Rudi Guiliani of New York in the last decade and which set the standard for police enforcement and good governance worldwide.
The film industry relies more on government machinery to enforce its own rights. Sometimes individual producers employ fly-by-night operators to investigate violations and coax the police to act. These operations are often led by unscrupulous elements that do not hesitate to bribe police officers to do their duty! Corruption has become a motivating factor for enforcement but can never replace true commitment. The Government should seriously think of setting up an oversight body to monitor and guide the investigators and enforcers and associate industry representatives with this body so that a much higher level of commitment and involvement is ensured.
If piracy is not fought more effectively and with more determination the music and film industry will suffer permanent damage. The music industry is bleeding and, with improved technology, things can only get worse.
The judiciary too has an important role to play in this scheme of things. Magistrates and judges should understand the importance of intellectual property and its protection when applying their minds to the quantum of punishment that needs to be imposed on offenders. At present there is a very tolerant attitude which prompts magistrates to be lenient by applying the provisions of the Probation of Offenders Act instead of imposing the minimum sentence of six months prescribed by the Copyright Act.
Julio Ribeiro is former Commissioner of Police, Mumbai, and former DGP, Punjab.