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Intellectual property theft is one of the major concerns for global business leaders. In an era of globalization and fast dissemination of information, fraudulent manufacturers employ sophisticated means of acquiring patented information and exploit it for commercial gain. As Catherine Holahan notes in her article for Business Week, pirated goods now account for nearly 7 percent of all commercial activity across the world. Developing economies such as India, China, Brazil and Russia are proving to be hotbeds for this trend as Intellectual Property laws are either vague or poorly developed here. Moreover, in the era of the Internet, online commercial transactions across borders are especially difficult to bring under the purview of cyber law, as there is no consensus between different participant nations. It is due to this reason that Digital Rights Management (DRM) has been conceived and implemented. (Holahan, 2008) The rest of this essay will look into some of the mechanisms for protecting Inellectual Property rights, especially that of DRM.

In this era of globalization, intellectual property rights face their greatest threat through the open and free transmission of information in the cyber world. The case for enterprise DRM is synonymous with the case for a well-articulated, role-based technology and data protection policy. DRM simply moves the point of data security from that of the network hardware or the computer software down to the individual document, or even right down to document-based operations (Compton, 2005). Simon Halberstam, a noted expert on the subject gives an interesting insight:

“Legal protections for digital IP theft have been generally strengthened in the UK and in major jurisdictions such as the EU and US, but a lack of synchronization between them and dubious enforceability in many other markets, keeps companies looking for more proactive protections. It’s difficult to impose UK laws on someone operating in Eastern Europe or China. In other words, if you want people to respect your rights, you need technological means of achieving it” (Compton, 2005).

As the current enforcement environment is full of loop holes, it becomes easy to pirate intellectual property. But the flaws inherent in the system, which is largely as a result of Information Technology industry’s lack of foresight and rigorous testing of the new business model, has been drawing concerns from commentators right from its inception. Since most business transactions take place with the aid of the Internet in the globalized era, the initiation of DRM is of special importance. The Digital Rights Management (DRM) initiative is an industry wide agreement on a robust and fool-proof data security technology. The necessity for such a sophisticated technology is the rapid growth in online commerce, especially the businesses related to entertainment. This includes downloadable movies, music albums, electronic books, etc. A very successful application of DRM technology is seen in Apple’s iTunes service. Music offered for purchase is encrypted and the unlocking the encryption is only possible by a “compatible player with the correct password” (O’Brien, 2004). For example, when a new song is bought, the buyer is required to send the unique code of his music player to the iTunes technical department. After this, the iTunes manufacturing unit encrypts the music file based on the customer’s unique music player code. This way, the file could not be opened by any other player than that of the customer’s (O’Brien, 2004).

The Digital Rights Management technology was hailed as an ingenious and fool-proof method of protecting intellectual property rights when it was first proposed to online music companies. But, its practical success did not seem to match the high expectations that it created initially. What could be the reasons? Well, while there are a myriad of factors contributing toward this result, one significant one is the inadequate domain knowledge of people in the music manufacturing industry. In a world that is becoming ever smaller, specialization in one skill and ignorance in allied areas will no longer work. For example, the Information Technology gurus of music manufacturing industry are proficient in fitting high volume, high quality data in the most convenient of mediums at the cheapest of prices. But unless a broader understanding of the context of the business in terms of its legal, economic and social aspects is paid heed to, success will be difficult to achieve. Let us look at the reasons why this is the case.

The following is a classic example of creative application of technology but poor commercial results. For example, if a customer buys a film DVD from an online shop, he/she could be charged for each view of the film in a video player that does not correspond to the encryption code. While this restricts customers from benefiting from someone else’s purchase, it turned out to be a bad public relations exercise. Circulating DVDs among friends is a popular way of maintaining social contact and exchange of information. But, the fact that the customer could never really “own” the DVD unless he views it with his own player can be very offensive to the customer. Secondly, reselling is a longstanding tradition associated with all retail content – be it entertainment or information. The DRM makes it impossible for second-hand sale of the content it offers, irking the customers again. This case of failure to protect intellectual property is due to a lack of understanding on part of the manufacturers (basically Information Technology professionals) about the social aspects of digital data consumption (O’Brien, 2004).

A review of the scholarly literature on the subject lays open to the reader layer upon layer of poor perspective on part of Information Technology professionals. Let us leave alone all the other negative implications of the DRM systems in place presently. The least we can expect from DRM is a little progress toward curbing digital piracy in general and music piracy in particular. But DRM has failed to achieve its bottom-line in even the most liberal of evaluations. All DRM implementations ranging from Apple’s FairPlay to Advanced Access Content System employed for HD DVD versions have been circumvented by the resourceful. All entertainment content – be it music or movies – could be tapped off air. In other words, one need not hold a doctorate in electronic communication to record/copy protected content as it is playing. It is hard to believe, but nevertheless a fact, that the best brains of the Information Technology industry could not fathom this, let alone trying to address it (Goodman, 2007).

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