Intellectual Property

Software is intellectual property, which means that it is information which is owned. Music, songs, books, stories, poetry, photos, and movies are all examples of intellectual property.

Even photos snapped on your phone are intellectual property. However, the owner may not be who you think. If I give you my smartphone and ask you to take a photo of me, you might think that I am the owner of the image—it's my phone, and the photo is of me. But no: you own the image, because you were the "artist" who created it.

Licensing vs. Buying

In order to protect the owners of intellectual property, licenses are considered necessary so as to carefully define the legal obligations on both sides. A license is a contract, an agreement which explains the rights of the owner, and the permissions given to the user.

When you buy something, you own it. For example, if you buy an orange, you are allowed to do anything you want with it. Carry it, store it, photograph it, eat it, share it, give it away, throw it in the trash, resell it; all are OK, because you have full rights to that orange.

When you "buy" something which is intellectual property, you may "own" the physical part of it, such as the packaging or the media; however, you do not "buy" the intellectual property itself; instead, you license it.

That license means that you do not own the content. It gives you limited rights concerning the property. For example, if you buy a piece of software on the Internet, you don't "own" anything. Everything you got—software—is intellectual property. You have permission to use the program, that's all. It's more similar to renting than it is to owning, even though you never "return" intellectual property.

Your license makes clear the permissions you have been given. For example, you may have permission to install the software on only one computer, even if you own a desktop and a laptop; to install on both computers, you might have to buy two licenses, or perhaps a "family pack" license. The license may tell you where you can use it—for example, you can use it at home, but not at work; or, you can use it in one country, but not others. The license may restrict you from reselling the software, so you cannot sell it as "used" software. And you are expressly forbidden to copy the software and give it to others. In fact, some licenses make it very clear that you can (or sometimes cannot) make one, and only one, copy for backup purposes, in case the original copy is lost.

Let's look at the orange again. If you buy an orange, you expect that you can do anything you want with it. You become the owner of that orange. You can eat it, give it away, slice it up and share it with your friends, or use the seeds to grow your own orange tree. You can do any of these things anywhere you like. This is normal and natural.

But imagine that you don't buy the orange, but instead you license it. At the supermarket, when you go to pay for the orange, you are handed a long contract, and you are asked to sign it. The contract tells you that you can take the orange home, but not to work; that you may eat it, but you cannot share it with others; that you can peel it and slice it, but you cannot juice it. And you are not allowed to sell it to another person.

That sounds ridiculous, but that is what licensing is. Ironically, an orange could be intellectual property: today, some companies genetically modify foods. They change the DNA in a way that is considered "intellectual property." So you can eat the orange—but if you use the seeds to grow an orange tree, you might be breaking the law!


All of this is spelled out in the EULA (End User License Agreement). You may not recognize that name, but you have probably agreed to many, many EULAs. When you download software and install it, a screen will pop up which shows a long, legal contract; you must click on a button that is marked "I Agree" before you can continue. That is the EULA. Most people never read these, but they are considered legal contracts for which you are responsible. Although it is rare for anyone to pay a penalty for breaking such an agreement, they do sometimes have an effect on people.

In 2005, a man in Washington State bought several copies of software called AutoCAD, a 2-D and 3-D design application. Since the software was erased from the computers of the previous owner, and because the man who bought them had the original packaging and valid serial numbers, he believed he was the owner and could do whatever he liked. The man then tried to sell the software on eBay. Autodesk, the company that made the software, disagreed. They pointed out that the EULA forbade resale, and demanded that eBay remove the item from sale. eBay did so, and the man who had bought the software sued. A recent high court ruling decided in favor of the EULA terms.

Originally, EULAs were drafted for corporate use, where a company would buy a thousand copies of a program. Instead of making a thousand install disks and instruction books, the software maker gave just a few, and created a license agreement that told the purchaser how many machines they could install copies onto, and how the software could be used.

However, EULAs are beginning to be applied to all sorts of media today, including music, movies, and books—usually when they are sold digitally, but even sometimes when they are bought physically in stores. Take, for example, the EULA that Sony BMG included on at least some of their music CDs, which caused many customers to protest. Some of the terms if you copy the music onto your computer:

  • You can only install the music on a PC you own.
  • You can only listen to the music in the country of purchase; if you move to a new country, you must delete it.
  • You must install Sony's music management software onto your computer, which is the same kind of software used by some hackers to remote-control computers.
  • You may never transfer the music to another computer, even if it is with the sale of the original CD.
  • If you lose possession of the original CD—even if it is stolen or you declare bankruptcy--you must erase the music from your computer.
  • You may not use the music in any "derivative" works, such as using it as background music on a video you are making.
License Types

There are a variety of different kinds of ownership.

Commercial Software

This is software which is owned. You must pay for it. You may not change, copy, distribute, or sell it.


This is software which is owned. You do not have to pay for it. However, you may not change, copy, distribute, or sell it. The software may show advertisements, or display messages urging you to buy other software.


This is software which is owned. It is commercial software, but you do not have to pay for it. The software is limited in some way (some features are turned off, or the software stops working after a limited time), so you cannot use it like regular commercial software. As before, you may not change, copy, distribute, or sell it.

Open Source

This is software which is owned. Usually you do not have to pay for it, but you might. Depending on the license, you may or may not be able to copy, distribute, or (less common) even sell it.

The central idea of open source software is the idea that people who are not part of the ownership can and will modify the software, making improvements, and contributing those improvements to the owners of the software. Open source is mostly about collaboration, about a community of software users and authors working together to improve the software.

The expression "open source" is even used more widely today to refer to any project—intellectual property or otherwise—where many people freely help to improve something.

One version of this is called crowdsourcing, where the public is invited to volunteer help in developing a project. Wikipedia is the most famous example of crowdsourcing.

A fascinating example of crowdsourcing is Foldit. Biochemists need to understand how complex proteins "fold," a very difficult and tedious line of research—but understanding it can help develop medicines and cure diseases. So they made a game where players can score points by successfully folding computer simulations of proteins. Surprisingly, hundreds of thousands of people registered to play the game, and have solved many puzzles. One protein had puzzled scientists for 15 years; the gamers solved it in 10 days!

Public Domain

Public domain means that there is no owner. It is free, anyone can do anything they like with it: change it, copy it, distribute it, or sell it. Shakespeare's plays, for example, are public domain. You can copy the original text and then do anything you like with it.

There is very little public domain software that most people would use. Mostly, public domain software is available for researchers and specialists.

Creative Commons License

This is a new, special license intended to make material freely usable on the Internet. Usually, it tells people that they can copy, change, and distribute intellectual property, so long as they give credit to the original creator. There are various versions of the license; for example, use and change, use but do not change, use for any purpose, or use only for non-commercial purposes.

Lawrence Lessig is one of the chief figures associated with the CC license. Lessig is a professor at Harvard Law School and proposes that laws regarding copyright (ownership of intellectual property) should be weakened in order to allow for creative and popular use of valuable cultural properties. Below is his TED speech on the topic (with Japanese and many other subtitles), running just under 20 minutes. You are not required to see it, but it's a great speech.

Wikipedia, for example, marks most of its content under the CC license, as do many other popular open source or crowdsourced projects.

Usually, photographs are copyrighted and the owner forbids anyone to make use of it. However, many photographers will allow others to use their photos under a CC license; you can search for such photographs and other media with the CC Search engine.


Piracy is an important topic in modern society and culture. It is all about intellectual property, and the laws regarding it.

Piracy is, in short, when you get any kind of intellectual property without following the license agreement rules. Typically, piracy refers to a person copying commercial intellectual property and using it without paying for it.

The most well-known type is music piracy. You go online, find a web site which allows you to download commercial music for free. You download it and use it. You just committed an act of piracy.

The most famous recent source for piracy was The Pirate Bay, a web site that made it possible to download a huge number of intellectual property items. The Pirate Bay, however, was taken down in December 2014, and has not yet fully returned. In the meantime, many other pirate sites have picked up the traffic.

Piracy, the Law, People's Views

Piracy is illegal. If someone owns intellectual property and demands payment, then you are stealing from them if you get a copy without paying for it. In a very real way, it is not any different than going into a store and stealing a piece of merchandise.

However, people do not think of it that way. Intellectual property is fundamentally different from physical property. For example, if I steal your music CD, then you no longer have it. You have lost it. I stole it. Bad! On the other hand, if I "borrow" your music CD, copy the songs onto my computer, then return the CD before you noticed, then it gets less clear. I did not take your CD, you did not lose it. So, did I "steal" anything?

The answer is, "Yes." I did not steal from you (although you might be upset if you knew I had taken the CD without permission), but I stole from the person who owns the music on the CD. I should have paid them for it. I did not.

But that is not the reaction people have. If your friend sees that you have a CD, and they ask if they can rip the songs to their computer, would you say "no"? Most people would agree to such a request.

Here's another comparison: if your friend tells you he downloads music for free from the Internet, would you reject him, or tell him that what he did was wrong? Probably not. However, what if your friend says that he often goes into music stores and steals CDs? Would your reaction be different? Almost certainly.

Piracy is usually considered a "soft crime," like going 5 kph over the speed limit: people see it as somewhat wrong, but not seriously wrong.

One reason why people see it as a soft crime is because the ways to acquire content are variable. For example, you can go to the library and borrow a movie DVD. You can take it home, watch it, and then return it. You never paid for it. That's legal. How is that different from downloading the movie from The Pirate Bay, watching it, and then erasing the movie from your computer?

Another example: a new book comes out. Your friend buys it. Your friend then lends the book to you, and you read it for free. That's legal. How is that different from downloading the book from the Internet?

In the case of the library rental, the owners of the material gave permission (either directly or indirectly) for these events to happen. Libraries are allowed, under certain terms, to lend out such content for free. If you pirate the movie online, you are violating the license.

The second example is less clear. In that case, the friend did not get "permission" to lend the book to anyone. Lending books to friends is a centuries-old tradition. Legally, it is acceptable because when you buy the book, you own the physical item—and that is what you lend to a friend, the bound paper volume which you own.

Many people are simply used to free access to materials. Borrow books, magazines, music, and movies from the library. Watch TV shows and movies on TV (skipping past commercials if you record them). Borrowing books, DVDs, and other media from friends. And currently, with the web, get free media from countless web sites—not to mention listening to songs and watching shows for free on sites like YouTube. All of our lives, we have gotten used to the concept of information being free, even if the physical media is not.

As a result, we do not feel the same way about piracy as we do about theft. How can you get so worried and frightened about pirating an artist's new songs if they are freely available on YouTube? Why should you feel bad about pirating a TV show when you simply missed recording it off of TV, fully intending to skip the commercials anyway?

It is simply difficult to see it as a serious thing only because the owner of the material wrote on a piece of paper, "You can see my work for free here but not there."

Nevertheless, that's the law. If the owner says that you have to buy it, then you are legally obliged to either buy it or just not get it somewhere else.

People often come up with "reasons" why piracy is OK:

  1. I'm not taking anything;
  2. I would not have paid for it anyway, so the owner didn't lose anything;
  3. I pay too much for other things, so I deserve this;
  4. I could get it for free elsewhere;
  5. I pay for it in other ways, such as higher prices on other items;
  6. It's not worth the price;
  7. I'll probably buy it in the future somewhere;
  8. The corporation that owns this cheats other people;
  9. I'm not hurting the artist, just the bad corporation;
  10. Information should be free;
  11. I won't pay any penalty for this;
  12. Everybody does it;
  13. I just want to.

Will the Police Arrest Me?

Piracy, in a way, is not "stealing," but rather it is "copyright infringement," a different crime. If you do not sell stolen media but instead distribute it for free, some countries do not make this a criminal offense. Instead, it is seen as a civil crime, where the offender could be sued in court. However, there are a variety of conditions which make big differences.

There is also a difference between downloaders: those who download a file and then share the download with other for a period of time are called seeders. Those who only download and do not share are called leechers.

U.S. law, for example, considers it a criminal offense if (1) you sell the media for money; (2) if you distribute a large enough amount of content over a certain period of time; or (3) you make copyrighted content available over a computer network.

If you download copyrighted material from the Internet and share that file (which most file-sharing software does automatically), you could face (1) criminal fines, or (2) civil lawsuits which could rise to as much as $150,000 per item shared.

So, what if you download a movie from the web, but you do not share that data? Probably nothing will happen; the law does not yet clearly cover that.

In fact, any punishment for downloading and sharing copyrighted content is uncommon, and is usually reserved for the worst cases (e.g., someone makes 10,000 copies and sells them on the street).

In Japan, however, the law is different. In 2010, downloading (but not sharing) was made illegal; however, there was no penalty. If anyone caught you, you would not have to pay any penalty. That changed in 2012, when a new law (which was pushed for by Japan's music industry) made simple downloading a criminal offense, with the penalty being up to 2 years in prison and/or a ¥2 million fine. Sharing could result in 10 years in prison and a ¥10 million fine.

Still, most people are not affected by these laws, at least not yet. In early 2013, 27 people in Japan were arrested for piracy, though it appears that most or all of them were large-volume uploaders, people who make the most trouble for copyright holders. There is a case of a man who downloaded only being arrested—but he turned himself in.

Still, the law may be used less to arrest people and more to threaten them. One opinion is that people in Japan, frightened of going to jail, will stop downloading illegally. Another opinion is that the threat of the law will make it easier for copyright-holding corporations to force people to pay settlements, as has been done in the United States.

Public messages in Japan are somewhat mixed, however. For example, CD rental shops (which are not even allowed in the United States) often sell blank CDs and even rental dubbing machines at the main counter.

In many ways, the distribution of intellectual property over computer networks is, to say the least, a "gray" area—a topic which has not been clearly settled in society.

Terms to Know

intellectual propertyinformation which is owned.
licensean agreement to allow someone to use copyrighted material.
EULAthe End User License Agreement; the typical "contract" a person agrees to (usually by checking or clicking "I agree") when acquiring intellectual property.
commercial softwaresoftware which is owned and is sold; users may not copy, change, share, or sell.
freewaresoftware which is owned but given away for free; users may not copy, change, share, or sell.
demoalso called "trial software"; software which is owned and usually sold, but is distributed in a limited form for free; users may not copy, change, share, or sell.
open source softwaresoftware which is owned but is usually given away for free; users may copy, change, and share. The main point is to get users to contribute to improving the software.
crowdsourcingasking anyone in the public to volunteer their help in a task.
public domainsoftware which is not owned; users may copy, change, share, or sell.
Creative Commons licensea popular license scheme in which the owners of copyrighted material allow anyone to copy, change, use, and share their property.
piracycopying and/or sharing copyrighted property without permission.
seedersomeone who uses filesharing software and allows others to copy the files they possess.
leechersomeone who uses filesharing software to download, but never shares or uploads.

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