Copyright infringement (colloquially referred to as piracy) is the use of works protected by copyright law without permission, infringing certain exclusive rights granted to the copyright holder, such as the right to reproduce, distribute, display or perform the protected work, or to make derivative works. The copyright holder is typically the work’s creator, or a publisher or other business to whom copyright has been assigned. Copyright holders routinely invoke legal and technological measures to prevent and penalize copyright infringement.

Copyright infringement disputes are usually resolved through direct negotiation, a notice and take down process, or litigation in civil court. Egregious or large-scale commercial infringement, especially when it involves counterfeiting, is sometimes prosecuted via the criminal justice system. Shifting public expectations, advances in digital technology, and the increasing reach of the Internet have led to such widespread, anonymous infringement that copyright-dependent industries now focus less on pursuing individuals who seek and share copyright-protected content online, and more on expanding copyright law to recognize and penalize, as indirect infringers, the service providers and software distributors who are said to facilitate and encourage individual acts of infringement by others.

Estimates of the actual economic impact of copyright infringement vary widely and depend on many factors. Nevertheless, copyright holders, industry representatives, and legislators have long characterized copyright infringement as piracy or theft – language which some U.S. courts now regard as pejorative or otherwise contentious.

Movies, computer software, and music are all forms of intellectual property—products of human intelligence. As technology has evolved from analog technology to digital technology, it has become easier to store and transmit types of intellectual property over the Internet from one computer user to another. This new technology sometimes results in a collision between quickly evolving technology and decades-old copyright law.

Computer technology makes it easy to share digital files between users. A file is a block of information stored on a magnetic media, such as on a hard disk, a tape, or a flash drive; examples of files are computer programs, documents, music, and movies. The practice of sharing files illegally exploded when a format for audio compression produced a type of file known as an MP3 file. This audio compression was important because it significantly reduced the amount of data that needed to be sent over computer networks, but did not affect the perceived quality of the sound or image being transmitted. For example, the MP3 format can reduce the digital recording of a song by a ratio of up to 12 to 1.

File-sharing services allow web users to find and download files from hard drives of other computers. File-sharing is often accomplished through peer-to-peer networks. Pure peer-to-peer computer networks use the computing power of its participants, rather than relying on servers. However, other peer-to-peer networks use a server to communicate the host user’s Internet address to a requesting user. The requesting user utilizes this information to connect to the host user’s computer. Once the connection is made, a copy of an MP3 file may be downloaded to the requesting user’s computer. In a peer-to-peer network, anyone on the network may access files stored on other network computers. Legal issues arise when peer-to-peer networks and other methods are used for the unauthorized transfer and copying of copyrighted materials, such as music, books, and movie files. The illegal duplication and distribution of copyrighted files is known as piracy.

Copyright infringement issues also arise with regard to streaming media. Streaming media is the transmission or transfer of data that is delivered to an online viewer in a steady stream in near real time. Copyrighted content may not be streamed without the express authorization of the copyright holder.

Copyright infringement and piracy issues implicate both criminal and civil law. Most issues are handled under federal law, although state laws sometimes play a part. On the civil side, copyright holders may sue for monetary or statutory damages. In addition, the government may file criminal charges.

The scope of piracy and illegal file-sharing is vast. According to the Motion Picture Association of America (MPAA), more than 1.8 million illegal movies and 3,059 duplicating machines were seized in North America in 2004.

On October 12, 2005, the United States Attorney’s Office of the Northern District of California handed down indictments charging several individuals with a scheme to pirate more than 325,000 illegal copies of copyrighted CDs and software. Reportedly the largest CD manufacturing seizure in the country to date, authorities allege that counterfeit copies were made with sophisticated replicating equipment that made the copies look legitimate in every way, even down to affixing the FBI Anti-Piracy warning label that states, “Unauthorized copying is punishable under federal law.”

Piracy issues are by no means confined to the United States. For example, in December 2005, officials in Jakarta, Indonesia, announced that they had seized 2.35 million pirated optical discs in three raids over a ten-day period. In the Asia-Pacific region alone, the MPA (the international counterpart of the MPAA) estimated annual losses of approximately $900 million. In 2004, approximately 49,000,000 illegal optical discs were seized in the area.

Internet piracy was thought to be an unstoppable blight on the digital market as recently as five years ago. As quickly as music, movie, and video game companies could shut down pirates and pirate sites, new ones would appear. The notorious Pirate Bay website, for example, is practically indestructible, having survived being forcibly taken down almost a dozen times. Entertainment and software companies began to prophesize the end of their industries due to lost profits from piracy if they weren’t given the tools to fight internet piracy, leading to attempts by the federal government to pass draconian internet laws like SOPA and PIPA. These bills defined internet criminal activities incredibly broadly and would have allowed companies to bring down sites with a single complaint, with the burden of proof passing to the allegedly infringing site. When those attempts failed, companies began to attack individual pirates and pirate enablers by bringing lawsuits against them. For the pirates, these lawsuits could result in enormous fines relative to the value of what they downloaded. As for the enablers, one only needs to look at the history of Napster and Megaupload to see how far these companies were willing to go to stop illegal downloads. Napster and Megaupload’s businesses were shut down by lawsuits, while the owner of Megaupload, Kim Dotcom, was violently arrested during a raid of his home in New Zealand, had his assets seized, and was extradited to the U.S. to face charges. Yet, while predictions were that internet piracy would increase, over the past few years we’ve heard fewer and fewer outbursts from these production companies.

As it turns out, the total amount of illegal downloading has been steadily decreasing for the past few years. In particular, the use of torrents to illegally share files has been decreasing drastically. Torrents operate as a peer-to-peer file distribution system and are one of the preferred ways for pirates to illegally copy copyrighted materials due to how easy it is to use them and how secretly people can download illegal copies with them. So what caused illegal downloads to decrease?

The most popular theory is that when primary distributors make their copyrighted work as easily accessible as pirated material, people will switch back to acquiring the work through legal channels. In other words, companies have begun to embrace the convenience of the digital marketplace and are offering safer and faster services than pirates could provide, which has drawn people away from acquiring the work illegally. Pirating always contains a few risks that these services avoid. First, there is always a risk when pirating that a pirate might be caught and sued. Second, when pirating there is no guarantee that the product downloaded is what it says it is. Oftentimes, individuals will maliciously disguise malware as songs or movies and place it on pirating sites. New legal distribution systems avoid these risks while being faster (usually) than their illegal counterparts. In particular, subscription streaming services such as Netflix and Spotify have provided incredibly convenient access to television shows and films, and music, respectively, and have single handedly had a notable effect on illegal downloads of videos and songs.

That is not to say that internet piracy has gone away. First, just because streaming services are available, doesn’t mean that product will not be pirated. For some consumers, even a minimal payment is too much. Second, certain types of products are difficult or impossible to stream, such as computer software, books, and video games. These products will often rely on different types of digital rights management (DRM) software to protect the goods from copying. This software is sometimes a double-edged sword and can encourage potential customers to turn to piracy. This is particularly apparent with video games. Games running with DRM can experience extreme technical issues or can be completely unplayable, while a pirated copy will have the DRM removed and will run without complications, creating a situation where the only people who can play the game properly are pirates.

What’s more, pirates have begun to compete with streaming sites by streaming content themselves. These sites illegally host streams of television shows or movies for anyone to watch. This causes new problems for companies going after end users of these sites as they never actually download anything on their computer. The sites themselves are near impossible to completely take down. Some people even illegally stream on popular sites, like Facebookand YouTube. These sites have methods of taking down illegal content, but it is nigh impossible for them to monitor everything that’s uploaded to them and remove all uploaded illegal content.

Internet piracy will never go away. Some people will always pirate movies, songs, games, and software. The only question is how to combat this theft. Right now, it looks like the best method is to improve service to the customer and emulate the success that services like Spotify and Netflix have had in regards to reducing internet piracy. Most people just want to get their entertainment as easily and as quickly as possible. Certainly some products cannot be streamed like books or video games (though that might change in the future), but they can still be offered on services that are easy to use and access like Amazon. So long as piracy is the fastest and easiest way, people will pirate. But, if procuring entertainment becomes easier through legal means than illegal ones, then, hopefully, the piracy problem will be minimized.