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University Name
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E-Commerce Economic Essay
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IPR-Case Study
Your Name
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During past decades, it has been seen that most of the economies are moving towards capitalist
economies, but now the trend has transformed its pace and it has taken turn to move to the new
system which is intellectual capitalism. In broad terms, intellectual capitalism (Article 2) can be
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interpreted as resulting from a confluence of a capitalist economy and a knowledge or
information economy in which intellectual capital (Non Tangible Capitalized Assets) in some
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sense is dominant. This industry, these days especially, has become the most important and vital
for all the developed economies, on the whole, because this is the most growing and feasible
industry; as it has highest potential for growth both domestically and internationally, as well. The
Intellectual capital industry, with its highest growth prospects, is also prone to many important
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issues related to creation, use, and distribution of the digital content through e-commerce
channels.
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Intellectual Capital needs Intellectual Property Rights (IPRs), to motivate and secure the return
of the person behind the innovation of the product or producing a valuable document or coming
up with amusing sound tracks. The argument goes with the discussion that intellectual property
rights are causing harm to the society as a whole because they restrict the flow of products which
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are representation of our culture so they restrict the flow of sharing the culture (Article 2). On the
contrary, it is argued that IPRs are the baseline for motivating the individuals to come up with
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the innovative products and hence they contribute to the well being of whole of the society in the
form of growth and newer technologies (Article 2).
This issue is apart, initially the main problem is discussed which is the protection of this industry
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and safety from the malpractices which surpass the security barriers and misuse or steal the
material from online libraries or wherever they are stored (Form: B2C or B2B). This has been
done with the use of technology, as technology provides opportunities for convenience and
growth, at the same time it also pose threats because new technology brings new methods of
malpractice with it. The Digital media in the form of still images, video, sound, and multimedia
shows potential for growth and improvements in their use because of higher enhance human
machine interaction in almost all the form of business. E-commerce (B2C and B2B) channels
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have become a primary distribution channel for the digital media market, which in turn has seen
a dramatic growth in the last few years or so (Article 2). Keeping in view the growth and
challenges of Intellectual Capital market, the international intellectual property alliance
estimated the annual loss of revenue in the U.S. motion picture industry due to piracy amounting
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to US$1.5 billion, and in the record and music industries amounting to US$2.3 billion for the
financial year of 2003 (IPR, 2005). It is also worth discussing that a large portion of Internet
bandwidth (approximately 30%) is consumed by users exchanging illegal copies of digital media
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(Article 2).
To save the market and materialize the challenges in the form of profits, IPRs has been emerging
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as safety measures of the intellectual capital from all malpractice activities and it is worth to
discuss the safety procedures here (Article 1). Two major categories of IPR protection are: copy
prevention and copy detection. Copy prevention methods include software techniques such as
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cryptography, password authentication, and physical media protection techniques such as
CD/DVD copy prevention systems. Copy detection methods, such as digital watermarking are
becoming extremely popular (Article 2). They do not directly avert theft but rather discourage it
by supporting detection of stolen copyrighted material. Complete solutions to IPR protection and
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management in e-business such as digital rights management (DRM) systems have been
proposed for the efficient and complete protection of digital content and management of licenses
throughout its lifecycle (Article 2).
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The protection techniques for different aspects are shown in a figure of the article which is
shown below; through the pyramid whole of the procedure of protection is described and which
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comprises of whole of the DRM process of Intellectual Property Protection. According to this
table the first stage self protecting level comes then metadata protection that includes MPEG1
and MPEG2. At the third stage it takes us to the level of the watermarking in which data hiding
is used. The fourth level emphasizes upon the encryption level of the digital signatures and the
hash functions. At the final stage and in the bottom the physical level comes that means the CD,
DVD and other physical equipment protections.
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The initial stage of pyramid is associated with the IPR protection techniques associated with the
storage mediums. Next level is related to encryption techniques; here the digital signature of
hash functions or both of the techniques are used for data security and protection. Next level is
data hiding level which is the most important because the relevant technique of watermarking is
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most reliable, efficient and convenient to use. Next level is the metadata level; it is relatively new
method to overcome the problems related to the protection of data having protection rights to be
protected. The final stage on the pyramid is the self protecting level of the content (Article 2).
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This includes special logic and it offers solution for ever increasing problem of immature
economy. All of the methods on the pyramid collaborate to offer an effective solution for the
protection of digital content available on internet and accessible by almost everyone in the world.
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(Article 1)
Digital Rights Management Systems (DRM)
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A new and complete system to protect the content online, offers opportunities and a complete
solution set to manage IPR (Article 2). The benefit of this system is that it can be used with the
software a company uses to manage its online selling business, so the DRM system integrates
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with the current corporate system easily offering opportunities for growth and increasing
efficiency. This is also very cost effective because to implement this software, there is no need
for process reengineering, current system is well integrated and the software costs less; payments
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for the software are paid according to the usage of the service like the content which is saved for
the company, instigate cost savings of the company in the form of saved content misuse and steal
of the product available online, further distribute costs for the usage of the software; the cost
incurred for safety is minimal compared to the costs and misuse saved.
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DRM woks as independent software, because the DRM service provider authority gets the data
from the company to be sold on net and then takes on the responsibility of safety and proper
distribution with the usage of tailored business model. According to Rossenbalt (2002),
explained in the Article 2, there are two major definitions of DRM systems: one encompasses the
encryption techniques mainly, which is referred as narrow technique, and the other one is
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broader one which extends to the rights management by using the techniques shown above in the
pyramid.
Digital Watermarking: A promising solution
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The relatively new technique related to the image processing is also seen as a perfect solution for
images and videos related content on the web (Article 1). This can be used to stop the illegal
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attempts to access the digital content available on net. Sometimes watermarks are visible to the
humans and sometimes they are hidden and not brought on screen but the software confirms its
authentic source and access the site which initiates the illegal usage.
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Security is naturally one of the main concerns of each company in a decision to adopt DRM
system. There is no DRM system which can offer perfect security from the misuse and
malpractice of the content available online, especially because of the reason that perfection asks
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for more and higher costs. Some technologies either prevent the illegal use and other the reuse of
digital Content, so total protection is a challenge most of the time with the usage of one selective
technology keeping in view the cost constrains (Article 2).
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Watermarks offering the advantage by offering multiple watermarks which run check more than
once, but they are not always reliable alone. It is necessary to work with other procedures, and
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companies’ business model must adapt and check for durability. The major problem with
security and protection is related to the deadlock, when a fake watermark is inserted and it
becomes difficult to track the true ownership (Article 2).
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The extensive growth of digital media usage has offered a lot of challenges for security
problems, related to distribution and sales, most of the time. This need has given birth to the
extensive need of the development of new security methods, which extensively adapt to the
current business model and reduce the costs to its optimum level. The major challenges are
offered in the B2C model, where human interaction is more frequent than B2B, that’s why
companies are more concerned about the source and reliability of the model and software used
(Article 1,2).
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References:
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Article 1:
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Rick Carnes & Coley Hudgins, (August 2009), COPYRIGHT IS CRUCIAL FOR CULTURE;
Strong Intellectual-Property Rights Have Helped The Arts And The Economy, Nielsen Business
Media.
Article 2:
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Bill Vassiliadis & Vassilis Fotopoulos, (2007), IPR Protection for digital media distribution:
Trends and solutions in the E-Business domain, Hellenic Open University, Greece.
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