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Journal of Internet Banking and Commerce

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Journal of Internet Banking and Commerce, December 2014, vol. 19, no. 3

(http://www.arraydev.com/commerce/jibc/)

Software Piracy, the Liberalist View, and Sustainable Development of Intellectual Property Rights In Nigeria

OMONEYE OLUFUNKE OLASANMI, Ph.D Lecturer, Department of Management and Accounting, Faculty of Administration, Obafemi Awolowo University, Ile-Ife, Nigeria Postal Address: Department of Management and Accounting, Faculty of Administration, Obafemi Awolowo University, Ile-Ife, Nigeria E-mail: [email protected] Omoneye Olufunke Olasanmi is a lecturer in the Department of Management and Accounting, Faculty of Administration, Obafemi Awolowo University, Ile-Ife, Nigeria. Her areas of interest include E-commerce, Management Information Systems, Electronic Marketing, and Information Systems Security. She is currently carrying out analysis on issues relating to IT innovations and customer satisfaction. Her publications include areas such as e-governance, ICT sustainability, and e-education.

Abstract Software counterfeiting and piracy are problems of global proportions that violate the enforcement of Intellectual Property Rights of software developers, and thus threaten their market viability. The objectives of this study are to determine the attitude of youths towards copying of computer software, highlight factors that have impact on software piracy, and to identify possible future implications on the sustainability of Intellectual Property Rights in Nigeria. Primary data were used in this study. From the results, it was discovered that respondents who believed that they were liberalists opposed intellectual property rights of software developers and thus encouraged the piracy scourge. It was also discovered that as long as software piracy exists, it could lead to fewer jobs, less research and development, and increased costs. The study also found that software

JIBC December 2014, Vol. 19, No. 3 - 2 -

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piracy impacted directly on the profitability of the software industry, thus, undermining the very essence of Intellectual Property Rights. Keywords: software piracy; intellectual property rights; liberalist view; information communications technology (ICT) © Omoneye Olufunke Olasanmi, 2014

INTRODUCTION To an individual who is simply interested in acquiring information and knowledge, file-sharing has become synonymous with a “digital economy”, where it is assumed that anybody can make use of other people’s ideas as put on the web. However, large software-producing conglomerates as well as certain independent software developers and retailers have voiced strong concerns of this impact on their intellectual property rights. Scientists and ICT practitioners have also maintained that self-governance is essential for a well-functioning research system. Authors like Merton (1938) and Stokes (1997) warn that outside actors, like the legal system, are tempted to shape science and technology according to their own value systems and thus jeopardize the mission of scientific and technological innovativeness.

The current scenario therefore paints two sharply contrasting pictures ― the increased intensity of use of shared knowledge and the increased importance that Intellectual Property Rights (IPRs) has been gaining as a competitive factor for the development of nations around the world. Within these contexts, the appearance of the so-called free software (FS) or Open Source Software (OSS) necessitates new modalities of expression and exercise of copyrights, which traditionally protect the inventors of computer software packages. The spread of FS raises certain issues of an institutional nature. It is argued that institution of proper IPR regimes for the protection of software copyrights may become a powerful instrument in the promotion of technological innovation and even in the economic valorization of authors’ intellectual property assets. On the other side of the divide is the argument that by facilitating the generation and spread of innovation, the free software movement would give more opportunities for an author to profit than those allowed by the strict property protection system, in which relatively few “superpowers” tend to appropriate the majority of benefits generated by a developer’s innovation. This research thus analyzes the software industry, which has been heavily impacted by a major technological shift i.e. the invention and rollout of the Internet. A look is taken into the technological shift that has enabled the downloading phenomenon, access how this has gradually led to increased unauthorized copying and use of software, otherwise known as ‘Software Piracy’ and ascertain what this development holds for the ICT industry in Nigeria and the several stakeholders, including the government. By properly assessing the software industry, which is increasingly being influenced by intellectual property rights and plagiarism, an attempt is made to find positive and negative impacts of these developments in the industry. Finally, in view of the marketing slogan which says ‘the customer is always right’, an attempt is also made to indicate a need to find a viable e-commerce solution that will satisfy all parties concerned.


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STATEMENT OF THE PROBLEM In the past few decades, violating Intellectual Property Rights (IPR) has emerged as an important, hot economic and political issue, since most of the world brands face a problem of illegal imitation of their products. The violation of IPR poses a threat to a wide range of products. According to the Buchanan and Cavanagh (2012) in a report for the World Customs Organisation (WCO), 7% ($512 billion) of world trade takes place with fake merchandise and most customers buy fake products unknowingly. Almost nobody in Nigeria, for instance, will believe that a N500 Rolex watch from a roadside hawker is an authentic one, but, on the other hand, hardly does anyone care to find out if a drug at a recognized pharmacy store or a car spare part in a certified dealer service center is a fake. In some cases, even professionals have had difficulties in identifying a particular product as a fake product. The key factor contributing to the creation of illegal imitations are low costs and low technical requirements for mass production, and there cannot be a better motivation in a developing economy like Nigeria. Based on such a view, the leading products among illegal imitations are information products, or what are known as digital content products such as software, movies, music and e-books. These products have two undeniable attributes: imitations are 100% identical to the original and costs of copying are negligible. According to the report of the Business Software Alliance report (2009), the share of software that is pirated climbed to 41% of total units installed in 2008 and the global loss exceeded $50 billion. With about 83 percent piracy rate, according to the global survey, Nigeria remains one of the countries with the highest software piracy rates in the world. Globally, software piracy costs technology firms over $70 billion every year, and puts about 2.5 million legitimate jobs at risk (Tagbo, 2011). Even in the USA where the rate of illegal usage is the lowest, it amounts to 20%, while in Western Europe about one-third of installed software is used illegally (Střelický and Zigic, 2011). This study therefore focuses on one of such digital content products where end users have built a strong reputation for violating the property rights of software owners. More specifically, the objectives of this study are to:

i) determine the effects the liberalist stance of regulatory bodies in Nigeria will have on Software Developers’ Intellectual Property Rights in Nigeria;

ii) determine the general attitude of youths towards the copying and use of computer software in Nigeria;

iii) point out recent trends in Nigeria that have made direct and indirect impact on growth of software piracy in Nigeria; and

iv) identify possible future implications of these trends on ICT development in Nigeria.

HYPOTHESIS OF THE STUDY Ho: The liberalist view poses no threats to the Intellectual Property Rights of

software developers.


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BACKGROUND - THEORIES AND REVIEW OF RELATED LITERATURE

It is of no doubt that several studies have been carried out, especially in the recent past, to critically assess issues of software piracy. This has even become more imperative as the effects of the scourge become more and more daunting and seemingly insurmountable. Several researchers have examined software piracy using several correlates and theories. However, whether all of these theories have been able to provide full explanations for the prevailing trends still remains a question to be answered. Some of these theories will serve as the theoretical framework for this study. Since Parker’s (1976) work, research attention has been focused on identifying the determinants of software piracy. For instance, some studies show that favorable attitudes toward software piracy and associating with peers who engage in pirating software play an important role in the behavior (Eining and Christensen, 1991; Logsdon, Thompson, and Reid, 1994; Reid, Thompson, and Logsdon, 1992; Rahim, Seyal, and Rahman, 2001). Higgins and Makin (2004), in a write-up set out to find out whether low self-control has an effect on software piracy and if social learning theory can condition the effect that low self-control has on college students’ software piracy. Other studies have shown that individuals who did not believe software piracy was a moral transgression were likely to pirate software (Cohen and Cornwell, 1989; Solomon and O’Brien, 1990; Glass and Wood, 1996; Taylor and Shim, 1993). Although these studies are useful in documenting the actual problem of software piracy, they are not useful in contributing to the understanding of the behavior using criminological theory. The application of criminological theory is essential for a comprehensive understanding of software piracy, as it will provide criminologists, professionals, and practitioners with important conceptual frameworks for developing effective interventions. Criminological theories can isolate the important measures to augment the behavior. Zooming down on two of these theories, self-control theory and social learning theory, which have support in the literature, we may be able to explain software piracy and provide information toward reducing its occurrence. The General Theory of Crime, propounded by Gottfredson and Hirschi (1990), which later metamorphosed into the self-control theory, may help in explaining software piracy. The theory claims that rational individuals are attracted to pleasurable acts instead of painful ones. It casts crime as a pleasurable act and claims to explain all the individual differences in crime all of the time. Gottfredson and Hirschi (1990) argue that crimes are acts of force or fraud that an individual pursues to satisfy his own interest. Crimes, in their view, are acts that are simple and easy to perform, and provide excitement and instant gratification. Further, crimes do not require any specific form of motivation. In fact, crime only requires an opportunity and an assessment that the act will provide pleasure. Thus, their view of crime is similar to the aspects that are associated with software piracy. Central to an individual’s assessment that a criminal act will provide pleasure is his time stable propensity for crime or level of self-control. Gottfredson and Hirschi (1990) maintain that an individual’s self-control is his ability to resist temptation when an opportunity presents itself. When individuals cannot resist an opportunity for crime, they have low self-control. Gottfredson and Hirschi (1990) characterize individuals with low self-control as being impulsive, insensitive, self-centered, risk-takers, and likely to engage in acts that are physical, simple, and easy.


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These characteristics fit their assertion that crime is pleasurable, simple, and easy. Thus, low self-control increases the likelihood that individuals will commit crimes such as software piracy, because they do not consider the consequences of their actions for themselves or for others. According to Gottfredson and Hirschi (1990), individuals with low self-control are the products of poor or ineffective parenting (i.e., lack of attachment, monitoring, recognition of deviance, and non-corporal discipline of deviant behavior). The literature has shown that low self-control has a link with general measures of criminal behavior (Pratt and Cullen, 2000). Two longitudinal studies have shown that low self- control remains stable over time (Turner and Piquero, 2002; Arneklev, Cochran, and Gainey, 1998). Further, studies have shown that low self- control has a link with many behaviors, but no study has shown that low self-control has a link with software piracy. Social learning theory (Akers, 1998), however, view things from a different perspective. First, it uses measures (i.e., associating with deviant peers and attitudes about behavior), which are common in the software piracy literatures. Second, it is a general theory that applies to all types of criminal behavior. Third, the measures of social learning theory are dynamic, and do not rely on static measures such as low self-control. This allows for direct policy development from social learning theory. Thus, social learning theory is a suitable and important theory that may condition the hypothesized effect that low self-control has on software piracy. Studies also show the use and support for social learning theory for a wide variety of behaviors. Specific to this study, Skinner and Frearn (1997) have been the only ones who have provided a study that showed that this version of social learning theory had a link with computer crime. Criminologists have shown in tests of self-control theory that associating with deviant peers remained significant when low self-control had a link with crime (Pratt and Cullen, 2000; Winfree and Bernat, 1998; Burton, Cullen, Evans, Alaird, and Dunaway, 1998). Self-control theory and social learning theory may relate in complicated ways to an explanation of crime (Evans, Cullen, Burton, Dunaway, and Benson, 1997). Specifically, Evans, Cullen, Burton, Dunaway, and Benson (1997) stated that “self- control and social learning may be related in complex mutually reinforcing ways. It is suspected, though, that the tendency of persons with low self-control to engage in criminal and analogous behaviors can be exacerbated, or strengthened, by exposure to criminal associates (i.e., deviant peer associations) and criminal values (i.e., favorable attitudes towards crime)”. Exposure to criminal associates may activate latent individual tendencies in several ways. One way that peers may activate these tendencies is to show those with low self-control how “fun” or pleasure can be gained from crime. This view is similar to Gottfredson and Hirschi’s (1990) view who stated that, “people acquire the propensity to delinquency, find delinquent friends, and then commit delinquent acts, including serious delinquent acts”. Thus, social learning theory measures can be the focus of policies to reduce software piracy. Therefore, it appears that individual propensities and some social learning measures may have a complicated link, but it is unclear if this is the case when examining software piracy.


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Using data collected from three hundred and eighteen undergraduate college students, Higgins and Makin (2004) carried out a study examining the effect that low self-control has on software piracy and whether social learning measures condition this effect. The results showed that low self-control does have an effect on software piracy and that social learning theory measures could condition this effect. Gunter (2008) also carried out a study in which he both carried out a further and deeper study on the theory of Differential Association and did a thorough treatise on another theory called the theory of General Deterrence. For him, focus on these two theories could provide us with explanations for the spread of software piracy. Though, according to him, many criminological theories could be applied to digital piracy, he zoomed in on these two in his study because both theories have seemingly taken the central stage in most recent studies that have sought to explain the software piracy phenomena. Elements of these theories have been assumed to be relevant to piracy by popular literature and government reports (House of Representatives, 2004) and have been empirically tested in previous studies of digital piracy (Higgins and Makin, 2004; Skinner and Fream, 1997). Though these theories have received much attention in empirical studies of crime in general, it is unclear whether tests of traditional street crime are applicable to digital crimes. Some authors have considered digital piracy a form of white collar crime (Higgins and Wilson, 2006), yet many definitions of white collar crime are restrictive enough to exclude it. Sutherland’s (1940) definition, for example, defines white collar crime as “crime in the upper or white-collar class, composed of respectable or at least respected business and professional men...” Though later research has noted that such respectability can be faked (Shapiro, 1990), respectability or the appearance thereof remains an integral part of white collar crime. Online piracy, which involves only a computer and minimal technical ability, requires no such respectability. Therefore, digital piracy can be considered a unique crime in that it is neither traditional street crime nor white collar crime. As such, the applicability of criminological theories remains questionable. Though recent studies of digital piracy (Higgins and Wilson, 2006; Higgins, Wilson, and Fell, 2005; Hinduja, 2006; Skinner and Fream, 1997) have provided empirical tests of various criminological theories, there is still much progress to be made in this aspect of digital piracy. Looking at the theory of differential association (Sutherland and Cressey, 1960), crime is viewed as the result of social interaction. According to the theory, an individual is only able to commit a crime after being exposed to an excess of definitions favorable to the violation of law. These definitions include the motives, attitudes, and techniques supportive of crime. The most powerful definitions come from intimate primary groups, such as family and peers. Secondary groups, such as schools and government officials, transmit less powerful definitions. The theory has received various revisions throughout the years since its inception (Akers, 1985; Burgess and Akers, 1966), yet the concept of differential association has remained one of the main posits of the theory even in the most recent reformulations (Akers, 1998). Moreover, it has received strong support empirically as applied to more traditional crimes (Hoffman, 2003; Matsueda, 1982; Orcutt, 1987) and, in summarizing the empirical support for the theory, it was stated by Mark Warr that there is “no better predictor of criminal behavior than the number of delinquent friends an individual has” (Warr, 2001).


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Applying the theory to the explanation of piracy, the theory predicts that individuals learn how to engage in piracy and moral justification for piracy primarily from friends and family. Not only might peers introduce the idea of downloading and/or copying without cost, an act that is obviously not advertised, they may also share various neutralizations for the theft. In fact, interviews and focus groups have shown that digital pirates hold many beliefs about the ethics of their behavior and find solidarity with other pirates sharing these beliefs (Gantz and Rochester, 2005). It is be believed by proponents of the theory that these justifications and neutralizations must have been transmitted through the process of differential association. The empirical evidence for using differential association indicates that the theory holds promise as an explanation for involvement in piracy. Previous studies applying differential association to digital piracy have focused predominately on the effect of peer involvement in piracy and found that high levels of peer involvement led to more frequent engagement in piracy (Limayem, Khalifa, and Chin, 1999; Higgins, 2005; Higgins, Fell, and Wilson, 2006; Higgins and Makin, 2004; Higgins and Wilson, 2006; Hinduja, 2006; Skinner and Fream, 1997). Though less research attention has been paid to the influence of family on piracy, findings tend to support this link as well (Skinner and Fream, 1997). These studies have primarily focused on software piracy and, to a lesser extent, movie piracy. The theory of General Deterrence, on the other hand, dates back to the work of Cesare Beccaria in the 1760s (Beccaria, 1985). The original theory applied to the general populace as a whole and predicted that increases in the severity, certainty, and celerity of punishment would cause crime rates to decrease, as people would not choose to commit crimes if they believe punishment is immediate, certain, and severe. More recent works (Clarke and Cornish, 2001) have applied this theory to individuals and acknowledged that not everyone shares the same experience and knowledge. Therefore, it is each person’s individual perception of punishment that can serve as an inhibitor if he or she believes punishment to be likely and severe. In its application to traditional street crimes, general deterrence has received moderate empirical support (Paternoster, 1988). Though punishment severity has received mixed support, perception of punishment certainty is typically a significant predictor of crime, which is actually consistent with Beccaria’s prediction that certainty is the more important element. Moreover, general deterrence has been successfully applied to non-traditional crimes, such as tax evasion and noncompliance (Klepper and Nagin, 1989). Specific to piracy, a combined general deterrence and rational choice perspective would predict that individuals engage in piracy because of the potential benefit of gaining the copyrighted works without a financial cost. If the potential loss due to a threat of punishment outweighs the potential gain, an individual is considerably less likely to engage in such an action. Thus, an individual is less likely to engage in piracy if he or she perceives that the repercussion for piracy, whether by government authorities or by actions through civil law, outweighs the benefits in the illegal act. Interestingly, general deterrence has received mixed support in recent empirical studies of digital piracy. Qualitatively, it is quite clear that statements by pirating individuals on the topic of punishment are consistent with deterrence. Specifically, the pirates interviewed reported very little fear of prosecution, believing that prosecution is extremely uncommon, and the most severe penalty is deactivation of Internet access” (Cooper and Harrison, 2001).


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Conversely, quantitative studies (Higgins et al., 2005; Skinner and Fream, 1997) have found only weak or non-significant effects by punishment on piracy. It is quite possible that these reported differences in findings are actually describing the same conclusion; both pirates and non-pirates seem to agree that prosecution is unlikely. As with empirical studies of differential association, the quantitative studies (Higgins et al., 2005; Skinner and Fream, 1997) of deterrence have focused almost exclusively on software piracy, unlike the audio piracy discussed in the qualitative study (Cooper and Harrison, 2001). Software Piracy The importance of studying piracy has often been ignored in empirical studies. In 2005, copyright piracy in the United States software industry alone accounted for $6.8 billion in revenue lost (Business Software Alliance, 2006). Estimated losses in wages and tax revenue reflect similar importance. The music industry faces dire piracy problems as well. In 2004, the total amount of estimated sales for pirated music worldwide was $4.6 billion (International Federation of the Phonographic Industry, 2005). Moreover, these figures do not include the vast number of illegal files exchanged over the Internet without cost via peer-to-peer (P2P) file sharing programs. The total number of media files transferred through these programs has reached approximately 27.6 billion annually (House of Representatives, 2004). Though the legality of such files cannot be ascertained due to the private nature of the exchanges, a large portion of the transfers is nonetheless illegitimate. In Nigeria, the quest to join the world’s technology new frontier zones stands threatened by the problem of software piracy, which a new study says costs the economy at least N15 billion annually. With about 82 percent piracy rate, according to a global survey (5tul Annual BSA and IDC Global Software Piracy Study, 2007), Nigeria remains one of the countries with the highest software piracy rates in the world. Globally, software piracy costs technology firms over $70 billion every year, and puts about 2.5 million legitimate jobs at risk. The violation of law and loss of potential revenue to “big business” are not, in and of themselves, considered harmful by the average citizen. The impact of digital piracy, however, still has a severe impact. First, governments worldwide are already spending millions of dollars to combat copyright piracy. These attempts often specifically outline goals consistent with deterrence-based law enforcement (House of Representatives, 2004). Empirical evidence of the antecedents of digital piracy would undoubtedly assist in these efforts. A study commissioned by International Chamber of Commerce this year projects that global economic and social impacts of software counterfeiting and piracy will reach $1.7 trillion by 2015. Another study by the Business Software Alliance notes that a reduction in the worldwide piracy rate by 10 percent points in four years, can create as much as $142 billion in new economic activities, and add nearly 500,000 new high-tech jobs around the world. Furthermore, tax revenue would increase if sales and the industry’s taxable profits likewise increase. One study indicated that a ten percent decrease in the piracy rate would increase tax revenue by an estimated $21 billion in the United States alone (IDC, 2005).

Though using the word ‘Piracy’ to describe certain copyright violations has existed for over centuries, it is a relatively new concept as a widespread phenomenon.


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With the digital revolution came a new form of theft, digital piracy, which is unauthorized and illegal digital reproduction of intellectual property. Given its recent conception, few studies have addressed the causes of digital piracy and fewer still explicitly use a criminological theory as a foundation for research. The recent advancement of fast, easily accessible forms of electronic piracy has quickly outdated many of the few studies that have addressed this topic. More specifically, the rapid increase in popularity of P2P file sharing software since 1999 has dramatically increased the accessibility of music and video files. Presently, the average individual with minimal experience and broadband Internet access, which is common on virtually all college campuses, can download a music file in under a minute (Cooper and Harrison, 2001). In light of this recent, rapid increase in accessibility, piracy has become more widespread than it ever has been. The technological access provided to college students and prevalence of piracy at universities is well documented and often the target of government actions (Cooper and Harrison, 2001; House of Representatives, 2004). Using survey data from college students from two mid-Atlantic higher learning institutions, this study will empirically test whether variables derived from social learning theories affect digital Internet-based piracy among college students. More effective prevention strategies or the elimination of actions not consistent with the theoretical fmdings are some of the potential implications.

Intellectual Property Rights Intellectual property rights are at the foundation of the software industry. The term refers to a range of intangible rights of ownership in an asset such as a software program. Wikipedia defines Intellectual property (IP) is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law. Under intellectual property law, owners are granted certain exclusive rights to a variety of intangible assets, such as musical, literary, and artistic works; discoveries and inventions; and words, phrases, symbols, and designs. Common types of intellectual property rights include copyrights, trademarks, patents, industrial design rights and trade secrets in some jurisdictions (Wikipedia, 2011). Richard Platts (2011) presents a layman’s view of those aspects of Intellectual Property Rights that have particular relevance to the software industry. Intellectual property rights (IPR) is the term applied to the legal protection afforded to innovative and creative materials. The intention is to allow the owner of IPR to gain from the use of the material and thereby to encourage innovation and creativity. IPR can be thought of as property and can be bought and sold. Owning IPR in material gives the owner a monopoly for a period of time. During the last two decades violating Intellectual Property Rights (IPR) emerged as an important and hot economic and political issue since most of the world brands face a problem of illegal imitation of their products. The violation of IPR poses a threat to a wide range of products from fashion such as Etro or Vuitton to Intel chipsets or Yamaha motorbikes. Hardly anybody in Nigeria, for instance, believes that a N500 Rolex watch from a road side shop is an authentic one, but, on the other hand, hardly anyone assumes that a drug at a pharmacy or car spare parts in dealer service centers are fake. In some cases, even professionals have difficulties to identify a particular product as fake. It has been discovered that key factors contributing to the creation of illegal imitations are low costs and low technical requirements. Based on such a view, the natural leaders among illegal imitators are the poor countries and natural leaders among illegal


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imitations are information products or what are known as digital content products, software, movies, music or e-books. These products have two idiosyncratic attributes: imitations are 100% identical to the original and costs of copying are negligible. According the report of the Business Software Alliance, the share of software that is pirated climbed to 41% of total units installed in 2008 and the global loss exceeded $50 billion Even in the US, where the rate of illegal usage is the lowest, it amounts to 20%, while in Western Europe about one-third of installed software is used illegally (5t1 Annual BSA and IDC Global Software Piracy Study, 2007). The law provides different methods for protecting these rights of ownership based on their type. There are essentially four types of intellectual property rights widely recognized in literature and relevant to software: patents, copyrights, and trademarks. Each affords a different type of legal protection. Patents and copyrights can be used to protect the technology itself. Trademarks do not protect technology, but the names or symbols used to distinguish a product in the marketplace.

Patents A patent is an exclusive monopoly on the right to make, use and sell a qualifying invention. It confers on the patent holder a monopoly of the exploitation of the invention for a limited period. This legal monopoly is considered a reward for the time and effort expended in creating the invention. In return, the invention must be described in detail to the Patent Office, which publishes the information, thus increasing the amount of technological knowledge available to the public. To obtain a U.S. patent, an inventor must apply to the Patent Office and demonstrate that the invention is new (as compared to prior technology), useful, and “non-obvious.” An invention is non-obvious if it is more than a trivial, obvious next step in the advance of the technology. The invention must be inventive, that is it must involve a step of creativity not obvious from current knowledge. The invention must also have industrial application. The stance of the UK government (2001) is that: ‘...patents should be for technological innovations. A new machine tool should be patentable but a non-technological invention such as grammar checking software for a word processor should not be.’ The government also indicates that ‘the law is not clear enough’ and that ‘urgent European action to clarif’ is needed.’ Generally, the view is that the decisive factor is the role played by the software. In the machine tool we can presume that software is an intrinsic part of the operation without which the equipment would be non-functional. Ownership is similar to copyright in that the patent is granted to the inventor unless it was discovered in the normal course of employment in which case it is granted to the employer. A patent may be assigned or licensed to others by the owner. Software patents can be extremely powerful economic tools. They can protect features of a program that cannot be protected under copyright or trade secret law. For example, patents can be obtained for ideas, systems, methods, algorithms, and functions embodied in a software product: editing functions, user-interface features, compiling techniques, operating system techniques, program algorithms, menu arrangements, display presentations or arrangements, and program language translation methods. Since patent rights are exclusive, anyone making, using or selling the patented invention without the patent owner’s authorization is guilty of infringement. Penalties are stiff and include triple damages. Once a patent for an invention is granted, subsequent


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“independent” (i.e., without access to the patented technology) development of the invention by another inventor is still considered infringement.

Copyrights A copyright is an exclusive right granted to an author of a literary, musical, audiovisual or artistic work, giving the author the sole right to reproduce and distribute that work. While a patent can protect the novel ideas embodied in a software program, a copyright cannot. Copyright protection extends to the particular form in which an idea is expressed. in the case of software, copyright law would protect the source and object code, as well as certain unique original elements of the user interface. The owner of a copyrighted software program has certain exclusive rights (with some exceptions): the rights to copy the software, create derivative or modified versions of it, and distribute copies to the public by license, sale or otherwise. Anyone exercising any of these exclusive rights without permission of the copyright owner is an infringer and subject to liability for damages or statutory fines. As with patents, the exclusive rights afforded under copyright law are intended to reward the creative and inventive efforts of the “author” of the copyrighted work. The exclusive right to control duplication protects the owner of copyrighted software against the competition that would result from verbatim copying of the program’s code. Copyright law also protects against indirect copying, such as unauthorized translation of the code into a different programming language. Copyright protection arises automatically upon the creation of an original work of authorship. There is no need to “apply” for a copyright or register the copyrighted work in order for protection to exist. Generally, the duration of a copyright is the author’s life plus fifty years. In the case of software created by an employee in the course of his or her employment, the resulting “work made for hire” would be protected by copyright law for seventy-five years from publication. In contrast with patents, independent development of a copyrighted work is a defense to an allegation of copyright infringement. Imagine, though, how unlikely it would be for the same thousands of lines of code to be created independently by one not engaged in unauthorized copying. Unlike patents, copyright law affords no protection to the ideas underlying the program. Ideas and concepts are fair game for competitors to the extent they are not protected by patents or trade secrets. In UK law, copyright exists in original creative material in many forms including: written, music, art and photographs. Other non-original works such as sound recordings, films and broadcasts may also be covered. Copyright is automatically conferred and is not registered. Copyright is regardless of the medium, essentially covering the expression of an idea and not the idea itself. Usually the copyright in a work is owned by the author although there are exceptions, for example, if the owner is an employee and the work is created in the course of their employment, then the copyright would normally be owned by the employer. Copyright can also be assigned or licensed by the owner to a third party. With particular reference to software, the act of holding a piece of software on a computer will generally require that the software be copied - perhaps from the machine


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on which it was created or from some storage medium. This requires the consent of the copyright holder. Executing software on a computer may imply that it is copied onto the machine. The consent of the copyright holder is also required. Typically these permissions are conferred in a license agreement between the copyright owner and the user of the software. But if someone obtains a pirated copy of software then transferring it on to a computer may breach copyright.

INTELLECTUAL PROPERTY RIGHTS IN A DEVELOPING ECONOMY Apparently, there is a digital divide between the developed countries and the developing world. In the knowledge-based global economy, computer technologies are an essential requirement for accessing and using information, accelerating technology transfer and boosting the growth of productivity. At the same time, computer software products are perhaps the most ‘endangered’ of all forms of knowledge-based products. Under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), computer programmes now qualify for copyright protection just as any other literary work, as well as for other forms of IP protection, including by patents in some nations, such as the US. Developing countries, of course, have a range of requirements for computer software applications in their industries, hospitals, schools and government offices. But most commonly, they need affordable access to off-the-shelf business software packages, such as word- processing, spreadsheet, e-mail and Internet browsing products. Companies in Europe and North America, with Microsoft being the major player, dominate the global market for these products. Copyright matters most in the computer software industry to the off-the-shelf business applications sector. Unlike bespoke software applications, these products have a mass market and can be easily copied. Copyright protection enables companies to prevent copying, limit competition and charge monopoly prices for these products. In developing countries, this presents two main problems. First, as there is currently widespread copying together with low local purchasing power in developing countries, there is a concern that stronger protection and enforcement #could mean a more limited diffusion of such technologies. This may be a particular risk because the network effects of business applications tend to re-enforce the dominance of existing software producers. The second problem is that where the source code of software is also protected, this may make it harder to adapt the products for local needs. It may also restrain competition in development of inter-operating applications, through follow-on innovation by reverse engineering. Evidently, in a developing economy like Nigeria’s, the need now arises for a middle ground to be struck between creating a free and liberal environment for the spread of software for the sake of establishing a solid foundation for a technologically strong economy viz-a-viz ensuring that the environment is not made conducive for widespread infringement on the Intellectual Property Rights of the IP owners.

RESEARCH METHODOLOGY This study, as carried out, examines the impact of the liberalist view of regulatory bodies in Nigeria as it concerns software development, with special focus on the software piracy


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scourge currently rocking the intellectual property market in Nigeria and the impact, whether positive or negative, it has had on the ICT sector of the Nigerian economy in general and the software development sector, in particular. The specific area of study is within the confines of Covenant University (CU), Ota, in Ogun State, Nigeria. Covenant University, rated by the National Universities Commission as the best private university in Nigeria, runs a collegiate system. CU, also rated as one of the best ICT-compliant Universities in Nigeria, poses a near-ideal environment to measure the spread of ICT and ICT- related materials in Nigeria. This explains the choice of CU as the area of concentration for the purpose of this study. Data for this study were collected from primary sources using a well-structured questionnaire. The selection of the sample population was based on intensity of the use of specific software products. Respondents were restricted to undergraduates, comprising majorly of a population of literate, but widely non-profit oriented group of software users. Respondents were randomly chosen from the students of the College of Science and Technology in the school. A sample population of 250 respondents was randomly chosen with the aim of reflecting a variety of views from different parts of the CU population. For the purpose of this research, the Liberalist View will be measured based on respondents’ attitude towards the copying and use of computer software and recent trends that have made direct and indirect impact on growth of software piracy in Nigeria, e.g. poor internet infrastructure, bad exchange rate, poverty, etc. On the other hand, threats to Intellectual Property Rights in software will be measured based on possible future implications of piracy on the economy and on the attitude of consumers to unauthorized copying. The data that was generated from the respondents were properly encoded, scored and analyzed using simple percentages and Analysis of Variance (ANOVA). This is used to test the significance of linear relationship between the variables.

DATA PRESENTATION, ANALYSIS AND INTERPRETATION For this study, two hundred and fifty (250) questionnaires containing 22 questions, divided into 3 sub-sections were distributed to the students of Covenant University, Ota, Ogun state, Nigeria. 218 out of the 250 questionnaires administered, representing 87.2% of the questionnaires, were actually retrieved with the remaining 32, representing 12.8%, being lost in transit and not returned. Out of the 218 questionnaires filled and returned, 8, representing 3.2% were badly filled and rendered unusable as the data filled in them will not be valid information for the purpose of this research. The research data analysis and interpretation hereby presented is, therefore, based on the 210 questionnaires properly filled and returned since this percentage can be considered high enough to be considered as sufficient to represent computer users in the generalization of data. Gender Distribution of Respondents Table 1.1 below shows the gender distribution of the respondents from the data gathered from the questionnaires. It shows that 175, representing 83.3%, of the 210


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respondents, are male while 35, representing 16.7%, of them are female. This shows a higher percentage of responses from the male students than their female counterparts. Table 1.1 Sex Distribution of Respondents Item Frequency Percent Male 175 83.3

Female 35 16.7 Total 210 100.0

Source: Field Survey, 2012 Distribution of Respondents According to their Level of Computer Usage Table 1.2 below shows the distribution of the respondents according to their level of computer usage from the data gathered from the questionnaires. It shows that 157, representing 74.8%, of the 210 respondents use the computer often; while 53, representing 25.2%, use the computer occasionally. This shows a high level of computer usage among the respondents. Table 1.2 Distribution of the respondents according to their level of computer usage

Item Frequency Percent Often 157 74.8 Occasionally 53 25.2 Total 210 100.0

Source: Field Survey, 2012 Distribution of Respondents According to their Income Level Table 1.3 below shows the distribution of the respondents according to their income level from the data gathered from the questionnaires. It shows that 44, representing 21.0%, of the 210 respondents earn between N5000 and N10000 per month; 19, representing 9.0%, of them earn between N10001 and N15000 per month; 54, representing 25.7%, of them earn between N15001 and N20000 per month; while 93, representing 44.3%, of them earn above N20000 per month. This shows the higher percentage of the respondents (about 70%) earning above N15000 per month. Table 1.3 Distribution of the respondents according to income level

Item Frequency Percent 5000 - 10000 44 21.0

10001 - 15000 19 9.0 15001 - 20000 54 25.7 20001 - above 93 44.3

Total 210 100.0 Source: Field Survey, 2012


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Analysing the Liberalist View via Students’ Attitude towards the Copying and Use of Computer Software, Recent Trends in Nigeria that have made Direct or Indirect Impact on Growth of Software Piracy in Nigeria, and Possible Future Implications of the Piracy Trend on ICT Development in Nigeria

Table 1.4 Students’ Attitude towards the Copying and Use of Computer Software, Recent Trends in Nigeria that have made Direct or Indirect Impact on Growth of Software Piracy in Nigeria, and Possible Future Implications of the Piracy Trend on ICT Development in Nigeria

Items Description

Strongly Disagree

Disagree Indifferent

Agree Strongly

Agree

Freq

uenc

y

%

Freq

uenc

y

%

Freq

uenc

y

%

Freq

uenc

y

%

Freq

uenc

y

%

Students’ attitude towards the copying and use of computer software It is easier to copy software from friends than purchasing off-the-shelf software 2 1.0 3 1.4 5 2.4 53 25.2 147 70.0

I see no need to purchase an original software when I could get it free though pirated copies 28 13.3 30 14.3 24 11.4 58 27.6 70 33.3

I do not see any reason why I should stop using copied software 18 8.6 31 14.8 34 16.2 64 30.5 63 30.0

My income level is too low to be able to afford the purchase of original software products 50 23.9 40 19.0 24 11.4 37 17.6 59 28.1

I do not see it as a crime to copy software products 37 17.6 36 17.1 29 13.8 46 21.9 62 29.5

Recent trends in Nigeria that have made direct or indirect impact on growth of software piracy in Nigeria It is very expensive getting software directly from the developers 11 5.2 11 5.2 15 7.1 66 31.4 107 51.0

Controls set by software producers make it more technical to install original software than the cracked versions

11 5.2 21 10.0 34 16.2 71 33.8 73 34.8

It is much easier getting pirated software from off-the-shelf than getting the original versions 7 3.3 15 7.1 18 8.6 92 43.8 78 37.1

I am aware of legal restrictions that stops me from using pirated software 36 17.1 47 22.4 26 12.4 52 24.8 49 23.3

The rate of poverty in Nigeria could be an encouraging factor for software piracy 17 8.1 11 5.2 25 11.9 67 31.9 90 42.9

There is no need to stop the use of pirated software since everybody around them uses it 23 11.0 40 19.0 45 21.4 51 24.3 51 24.3

The bad exchange rate of the Naira (N) to the Dollar ($) and other foreign currencies makes it 5 2.4 12 5.7 41 19.5 63 30.0 89 42.4


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expensive purchasing software online from the original makers Poor internet infrastructure in Nigeria makes it difficult purchasing software online via downloads 9 4.3 17 8.1 21 10.0 58 27.6 105 50.0

Possible future implications of the piracy trend on ICT development in Nigeria There is no need to purchase original software for use as far as I could get them free from friends 10 4.8 21 10.0 11 5.2 66 31.4 102 48.6

Software piracy should not be punished as far as it helps the spread of software 19 9.0 33 15.7 31 14.8 60 28.6 67 31.9

I will not go the extra mile to buy original software especially when it is available for free 22 10.5 36 17.1 38 18.1 63 30.0 51 24.3

Even if the price of original software is reduced, I will prefer to use the pirated ones as far as I can get them free or pirated

49 23.3 50 23.8 38 18.1 41 19.5 32 15.2

I will only stop using copied software if I am sanctioned for using it 42 20.0 42 20.0 37 17.6 51 24.3 38 18.1

Software piracy as detrimental to the growth of ICT in Nigeria 21 10.0 13 6.2 25 11.9 42 20.0 109 51.9

Software piracy is not a discouraging factor to software development in Nigeria 39 18.6 33 15.7 32 15.2 42 20.0 64 30.5

Source: Field Survey, 2012

Test of Hypothesis

H0: The liberalist view poses no threats to the Intellectual Property Rights of software developers in Nigeria.

Decision Rule: Reject H0 if Fc > Ft

Table 1.5 The Solution ANOVA Table

Model Sum of Squares Degree of Freedom Mean Square F Sig.

Regression 3030.938 2 1515.469 74.953 .000a

Residual 4185.328 207 20.219 Total 7216.267 209

Source: Field Survey, 2012

a. Predictors: (Constant), Attitude of the youth towards Software Piracy, Factors causing Growth of Software Piracy b. Dependent Variable: Future implications of Software Piracy

Fc=74.953 Ft

3, 210 at 5% level of significance = 2.62


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Decision: At 5% level of significance Since Fc >Ft, we therefore reject the null hypothesis and conclude that the liberalist view poses a significant threat to the Intellectual Property Rights of software developers in Nigeria.

SOLUTIONS AND RECOMMENDATIONS In view of the findings revealed by this study in relation to the effect of the Liberalist view on Software Piracy as a threat to Intellectual Property Rights in software, the following solutions and recommendations are hereby put forward:

• A review and amendment of all existing IPR related legislations to ensure better enforcement in the country;

• Provision of adequate human resources, specialized in IPR and copyright, IT related issues, such as e-security to ensure adequate enforcement;

• Encouraging universities and research centres to conduct research on computer software infringement in Nigeria to identify appropriate preventative actions and remedies;

• Enhancement of support to the awareness campaigns about IPR and copyright organizations. Specific awareness seminars must target software developers, and mainly exporters to educate them about these laws and resources and how to utilize them to protect their intellectual property interests domestically and abroad;

• Laying emphasis on capacity building for Nigerian judges to become capable of handling computer software infringement cases; and

• Coordinate and establish collaborations with international organizations like the World Trade Organization (WTO), the World Intellectual Property Organization (WIPO), or the United Nations to learn from developed countries’ experiences in combating computer software infringement.

Respecting intellectual property rights laws benefits everyone. From strengthening economies, creating job opportunities, protecting honest workers from losing their jobs to criminals, stimulating technological progress to giving customers the genuine software experience they deserve while protecting them from becoming victims. Piracy should not be encouraged.

FUTURE RESEARCH DIRECTIONS Future researches in software piracy and counterfeiting can be carried out among software vendors and developers, to find out the exact impact they have on the market viability of their products. Since it has been discovered in this study that software piracy and counterfeiting can result in job losses, it is better to address the issue right on time. This will lead to pronounced growth in world of digital enterprise, and the economy in general.

CONCLUSION In recent times, piracy, as a threat to Intellectual Property Rights in software, seems to have metamorphosed into a hydra-headed monster that has bedeviled economies globally without the hope of a safe port in sight in the near future. Seemingly, the search for a panacea to this epidemic has stretched on like a never-ending story and every new turn seems to turn out to be a turn for the worse.


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Though, both in the past and in recent times, several research works have been conducted in the quest to find out what could be responsible for the surge of piracy in the underdeveloped world, part of which Nigeria is. However, there seems to be little work done on finding out the relationship between the seemingly liberal, non-committal disposition of most countries in the third world―most of which have taken the liberal stance towards establishing and enforcing Intellectual Property laws―and the observed prevalence of the piracy scourge in most of these countries. Looking past this major factor could be very costly as a developing country like Nigeria could just be doing herself a lot of harm by looking the other way in our search for a solution. Nigeria has not shown enough commitment that will see a properly working legal framework being put in place to tackle this problem. This reluctance or outright refusal to be signatories to special international agreements like the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and of recent, The Anti-Counterfeiting Trade Agreement (ACTA) has proven to be an indictment on the lip-service been paid to tackling this problem. This research work, therefore, provides a framework for investigating the relationship that exists between this liberalist stance and the piracy threat affecting Intellectual Property Rights in Nigeria. In summary, the findings of this research based on the data gathered from the respondents and the result of tested hypothesis has proven that the liberalist view poses a significant threat to the Intellectual Property Rights of software developers in Nigeria. The hazards of software infringement remain large, particularly for those software producers who export their programs. However, combating this threat requires combined efforts of policy-makers, software developers and publishers, businesses, journalists, domestic and international bodies, an active group of non- governmental organizations as well as concerned individuals. As long as software infringement exists, there will be fewer jobs, less research and development and increased costs in the IT sector. Copyright infringement of software directly affects the profitability of the software industry. Money being lost to pirates means fewer resources to publishers to devote to research and development of new products, undermining the very essence of Intellectual Property Rights. Aside from the legal consequences of using pirated software, organizations and individuals that use them forfeit some practical benefits such as increased chances that the software will not function correctly or will fail completely; forfeiture of access to services like customer support, upgrades, technical documentation, training, and bug fixes; no warranty, which means that it is highly vulnerable; risk of exposure to a debilitating virus that can destroy valuable data; or an out-dated version of software or a non-functioning copy. In all, the conclusion here is that software piracy is a threat to all concerned, including the software manufacturer, the consumer and the government. Even the economy is not the better for it in the long-run as a lot of legitimate income is lost into the hands of a few unscrupulous elements that benefit from this illegality. Therefore, proper efforts have to be taken by all to fight this piracy monster and bring it down on its knees.


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