Effective challenges to internet counterfeiting, piracy and illegal file-sharing

Instant exchange of music, video and computer games through online file-sharing technologies pose policy challenges which are further complicated by the increasing array of user-generated content (UGC) available through the internet. The COUNTER research project highlights the need for more effective strategies aimed at combating counterfeiting, piracy and file-sharing. COUNTER recommends that education, while essential, should be balanced by engagement with consumer perceptions, practices and demand. It also needs to be balanced by innovation in legal online distribution channels for media content and retail of physical products.

The two-year project brought together researchers from the UK, Austria, Sweden, Italy, and Slovenia to address the issue of counterfeit goods and protecting IP while recognising the originality inherent in UGC. It drew upon economics, sociology, law, psychology, and management and information science to integrate the demands of consumers and the actions of industry, and investigate policy implications for national, EU and international anti-piracy and IP protection regulations.

Among the objectives were to identify best practice in challenging counterfeiting, piracy and file-sharing; deepen understanding of consumer attitudes; contribute to the innovative development of legal channels for online distribution of media content, and examine the legal challenges associated with the increasing popularity of UGC.

Recommendations from consumer perspectives

COUNTER’s model of consumer behaviour on counterfeiting, piracy and file-sharing was tested through stakeholder focus groups and questionnaires. Most participants regarded the internet as a channel to exchange information and ideas on a global scale, blurring traditional boundaries of ownership. Focus group discussions showed clear evidence of consumer desire for media content on demand, so counterfeiting, piracy and file-sharing cannot be examined in isolation from wider consumption practices.

  • Increase the utility of legal products, content and distribution channels – This should address the perceived limitations of legitimate products and distribution channels, and develop innovative strategies to increase their utility thereby reducing levels of file-sharing.
  • Increase transparency and consumer trust - Consumers want transparency on costs of production, distribution and profits. Many participants distrust government sanctions as serving corporate rather than consumer interests.
  • Increase consumer engagement - An open and engaged dialogue is essential to build consumer trust.
  • Increase consumer understanding of copyright law – The disconnect between users and copyright law is a barrier to creative and cultural uses of UGC and its potential to generate revenue for service providers. Educational strategies and clear guidelines, such as European good practice guidelines for users are needed.
  • Develop mechanisms for evaluating consumer education strategies – The effectiveness of educational campaigns aimed at reducing levels of counterfeiting, piracy and file-sharing should be properly evaluated by establishing both qualitative and quantitative performance indicators, and baseline measurements.

Recommendations from legal/industry perspectives

COUNTER examined the licensing regimes of 538 websites legally distributing digital media content online, including payment methods, technical restrictions, licensing and uploading regimes, and privacy policies to identify best practices for managing IP rights online and to find ways that UGC platforms can incentivise user submissions through monetary reward schemes.

  • Harmonise copyright limitations and exceptions to address the increasing use of streaming in content distribution - Streaming technology is a possible alternative to file-sharing. However, there is a lack of clarity in copyright law as to whether streaming content on a home computer without authorisation of the copyright owner amounts to infringement. It is unclear whether streaming amounts to ‘temporary reproduction’ of the work under art. 2 of Directive 2001/291 and whether the exception for ‘temporary acts of reproduction’ in art. 5(1) would apply. Private copying exceptions are fragmented across the EU so streamed content could be lawfully accessed in one country and not in another, or a copyright holder could successfully enforce their rights in one Member State and not in another.
  • Increase transparency and standardisation in use of “browse-wrap” agreements - There is no agreement about the legal enforceability of ‘terms of use’ or ‘terms and conditions’ - these cover ownership and licensing conditions of content uploaded by users and there is a need for EU best practice guidelines.
  • Reform copyright law to accommodate the rise of participatory culture and UGC - The current copyright regime is viewed as ill-suited to the rich potential of the internet for consumer expressivity, and this belief underpins positive attitudes towards piracy and file-sharing.

Recommendations regarding copyright, cultural heritage and education

Counterfeiting, piracy and file-sharing are part of a wider debate about IP and copyright in relation to digital forms of cultural production, distribution and consumption. COUNTER reviewed international and EU copyright law, focusing on mass-digitisation projects in the cultural heritage sector and publication in academic and educational institutions.

  • Recognise the need for legal solutions - Copyright is a significant barrier preventing online access to a large proportion of cultural content from the 20th century, particularly ‘orphan works’2 and out-of-print works, but the current polarisation between major stakeholders hinders development of appropriate legislative initiatives.
  • Increase the copyright awareness of cultural heritage institutions - In-service training within cultural heritage institutions can prepare them to meet the challenges of digitisation and develop strategies for tailor-made copyright management.
  • Develop proactive solutions for orphan works - Publishing orphan works without complete certainty of their copyright status is a potential strategy to release a large amount of locked-in and valuable content to users and make contact with unlocated rights holders.

The increasing popularity of UGC means service providers could develop platforms and business models which combine content produced by users with distribution of content from established rights holders. These platforms and services could utilise creativity, interactivity and social networking to monetise UGC in a way which incorporates users as both producers and consumers. To do this, users must be sufficiently clear about associated copyright and IP issues, but there is a lack of consumer clarity about the existing legal regime in relation to illegal distribution, re-use of copyrighted material and ownership of content. A balance is needed between commercial interests of rights holders and involved industries, and the rights and responsibilities of consumers and users. These issues must be addressed sufficiently flexibly to accommodate changes in technological developments and consumer behaviour.

An observatory of the research data will be made available as an open platform to enable development of future statistics and trends and as an important resource for industry, academics, policy makers and stakeholders.

The recommendations should assist policy makers at EU and national levels to ensure that legal and regulatory responses to protecting IP are transparent and provide equal protection to rights holders, consumers, cultural creation and heritage.


1 See: http://www.wipo.int/wipolex/en/details.jsp?id=1453

2 'Orphan works’ are works where the right holders are not known and/or cannot be located. They are a particularly difficult issue when digitising large collections and threaten to lock in important parts of 20th century cultural heritage, particularly in Europe.

COUNTER – Socio-economic and cultural impacts on the consumption of counterfeit goods (duration: 1/4/2008 – 31/3/2010). FP7 Socio-economic Sciences and Humanities, Activity 8 "Strategic activities", Research area 8.1 "Emerging needs". Collaborative project (small and medium scale focused research project).

See: http://www.counter2010.org/

Contact: Joanne Bryce, jbryce@uclan.ac.uk