Ethics in the High Tech Industry

Great changes in digital industry cause quick changes in the distribution of digital goods. The development of this sphere caused tension between copyright holders and consumers of digital goods and services. Rapid development of digital technology   shifted the importance of time and location for the digital entertainment. This is why the industry of entertainment lost its ability to fully control the distribution of digital goods.

Software and other digital goods should be protected as a part of intellectual property.  It is  illegal to copy any form of intellectual property. Copying software or any other kind of digital property is also illegal. The software is produced with special license and with special terms of usage. These licenses may be given to only one individual to use the program or to a hundred users. It is clear that making more than allowed copies is a kind of violation   and is considered to be piracy.

The facts show that annually about 11-12 billion US dollars are lost on software products. Piracy causes great problems for Western Europe as well, Latin America and Central Europe also suffer from piracy, but the amounts are not so huge, as the production of the software is not as much developed there.

The users of the pirated software are also put at risk, their behaviors might have legal consequences and besides they have a wide range of other problems such as: not correct of not long work of the software, lack of access to the customer support, upgrades, technical documents and so on.  getting test versions of the products or nonfunctioning copy users are at risk to get some virus destroying important data and so on.

There are certain categories of product that are pirated.  Software and PC games are among the man objects of speculation. If the user gets a crack he is able to use the program or game without paying license or registration.

There are numerous databases of these cracks in the Internet which enable users to use programs and software without registration.   There are two types of piracy: private and commercial copying. Private copying means that a person bought some program or a game and gave a copy of it to his friend or installed it to more than one computer.

This breaks the EULA (End User License Agreement). In this case there is comparatively little obvious harm to the publisher of the software. Another type of the piracy includes illegal copying of the digital copyright material aiming to earn money. This kind of piracy is especially dangerous because it causes great losses to the real owner of digital property.


In the US digital copyright is protected by law. Congress enacted the Digital Millennium Copyright Act (DMCA) in 1998 as a restriction to the World Intellectual Property Organization (WIPO) treaties.  The law describes rules and regulations of legal operating in digital environment. Unauthorized file sharing is illegal according to DMCA. From the other side Technology, Education and Copyright Harmonization Act enacted by Bush in 2001 allows unauthorized file sharing to nonprofit educational institutions. The Laws in Canada concerning internet and software piracy are very much alike to those in the US. A  person, who got products with license have the right to copy this software to a single computer and make a copy for “backup purposes”. In 1990 the Software Rental Amendments Act was produced. It states that the rent of unauthorized copies of software is also illegal as it leds to creation of pirated products. In Canada, in 1993 Parliament signed the Copyright Act also including the paragraph about illegal rent without authorization of the copyright owner.

Pressure from the side of digital companies and number of court cases made educational and entertaining organizations develop new technological opportunities, which let to use unauthorized digital material through peer-to-peer file sharing system. This system enables legally copy music and many other digital content through internet.

From the other side, according to law fair use of copyright protected materials does not require the permission of the producer. This way anybody, who   legally obtained any copyrighted material, can share it with his friends or other persons he wants.  So, unauthorized sharing can not be prohibited unless it is used with commercial aim. So, there is nothing ethically wrong with unauthorized file sharing unless they are used for commercial purposes.

High Internet speed let sharing digital content directly through Internet. Entertainment companies began fierce resistance because the ability to control the way digital goods get to the consumers is the basic source of income for music, video, television and publishing companies. As soon as the consumer is able to get the goods without their assistance, they lose their profits. All the business of the last century was based on the ability to control the distribution of goods, usually situated in some physical place, i.e. shop or market.  Old business model became not appropriate for the changing surrounding.  Looking for the new means to control the situation, digital companies started talking about ethical issues of unauthorized sharing of digital files. Being not able to perceive the changes and their inability to control the distribution of goods, they turn to different means to save the status quo and not let the changes occur.  At the same time there are companies, which adapt to changing situation and use these new opportunities. New popular services, which provide digital goods in the Internet and ask money for loading files   get much profit from innovations in digital market. In addition, Internet gives cheaper and more mobile opportunities for advertising and this can become the source of additional profit for digital industry.  From the other side, survey made in the US shows that most of the people, who copy files from the Internet do not consider their actions to be illegal. They do believe that non-commercial use of entertaining files placed in the Internet should not be treated like illegal actions.  Development of the newest informational technologies has brought to life new anti”“piracy solutions.

Digital intellectual property is very vulnerable for pirates. Software industry can suffer from both illegal duplication and illegal downloading as this kind of goods do not loose quality after coping.  Secure distribution requires new methods to protect digital intellectual property. Encryption, Adhaero doc, The Mensor service and watermarking are among the latest innovations which are aimed to guarantee the rights of the distributors and protect their intellectual property. Digital encryption  is used in order to prevent   illegal use of digital goods.  Encryption algorithm gives an owner   opportunity to protect his product delivered electronically. Customer needs to register the encrypted product after he starts using it. There are several ways of registration but on-line and through the toll free phone are the most popular ways. It is necessary to put in the unique key to decrypt the product. In the US, the National Information Infrastructure has put forward the amendments to the US Copyright Act. These amendments must prevent the production of the devices, which can break the encryption coding and stop selling services without encryption.

Encryption can not give you a 100% protection from piracy. Many encryption algorithms have counterparts and can be easily broken or cracked. In addition, nothing protects copyrights of the owner after the product is registered and customer receives the encryption key.  After receiving the key, the product can be endlessly copied.

Unauthorized file-sharing is a problem of our age of information. Producers of intellectual property invent new and new methods to oppose illegal distribution of their goods.  Technological interventions, hi-tech developments,  business strategies, and many other techniques meet their requirements but still can not extirpate the problem of piracy. A number of anti-piracy organizations are lobbying the government to pass new laws to increase the level of copyright protection and they are very likely to success in the near future.  But I think, the problem will not be solved completely till they time when, like any crime, it will become not only the problem of intellectual property owners, but the whole society and subject of concern of the government.

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