The audio/video/software/digital books markets are facing an unprecedented global crisis that challenges our global legislative, social, legal, and economic structures. This crisis was created by the emergence of new Internet technology – most notably, peer-to-peer (P2P) networks and widely available high-speed Internet bandwidth.

Today, any person with a computer and network connection can gain access to and create illegal copies of any digital song, album, movie, TV program, PC game, software, or book, even those not yet released, without paying a penny to the owners of the copyrighted works. It is not difficult to perform and does not require any special knowledge. It is all made possible through the use of P2P networks.

At one end of the spectrum, rapid technological progress in Internet technologies poses new issues for digital copyright law enforcement. Today, digital files, i.e. music and movies, are illegally copied and instantaneously distributed to millions of users worldwide via P2P networks (The Darknet), thus depriving copyright holders of revenue from licensed sales. Losses are increasing in the audio, video, software, and digital book industries, and as a result, copyright holders are contesting consumers’ rights to make legal copies of digital copyrighted files for personal or backup use.

At the other end of the spectrum, consumers are beginning to chafe at copyright owners’ use of technologies to prevent or deter non-authorized uses of copyrighted works. Current Federal law makes provisions for legal uses of copyrighted works in the “Fair Use Doctrine”. Under Fair Use, a consumer may play copyrighted music at a private party, for example, but prohibits distribution without monetary remuneration.

In response to this global crisis, the Recording Industry Association of America (RIAA), as well as many similar organizations around the world, has pursued an aggressive policy of litigation (Schedule 1) against violators of copyright laws, including users and developers of illegal P2P networks. The RIAA has been very successful in these legal pursuits; however, this policy has proven ineffective, impractical, non-preventive, and strategically non-remedial to the problem of the illegal downloading of copyrighted digital files. In fact, the RIAA’s aggressive approach in eliminating illegal P2P networks has encouraged P2P developers to move development of their networks overseas, out of reach of the U.S laws, to protect themselves from being sued or shut down by the RIAA.

Furthermore, the Darknet poses another threat: making the RIAA policy of litigation unattainable and redundant. Darknet participants use encryption, anonymization, and proxies to hide their true identity, making their file-sharing activities encrypted, anonymous, and untraceable. As a result, the RIAA is unable to pursue them.

Colleges and universities contribute a significant part to this dilemma. Students have found a way to remain untraceable and avoid litigation from the RIAA by using their college local area networks (LAN) to share copyrighted digital files amongst their fellow students. These “home turf” piracy rings enable students to illegally transfer files within their school network and avoid detection RIAA is using in public networks.

In effort to stop students from pirating copyrighted digital files, nearly 120 colleges and universities provided free or subsidized access to legal subscription services like, Napster and Ruckus, in their campus networks. However, because of the inherent limitations of such offerings and the continued availability of illegal P2P networks, these legal alternatives have gotten negative results and lower-than-expected demand (Schedule 2). A majority of schools that have made investments in these services have even made the decision to cancel their subscriptions.

As a result of this trend, U.S Senate recently passed a resolution May of 2006, recognizing “institutions of higher education should adopt educational policies and programs on their campuses to help deter and eliminate copyright infringement occurring on their computer systems and networks.”

Another recent failure to provide a solution to eliminate Internet piracy of digital copyrighted files was the introduction and deprecation of Digital Rights Management (DRM) developed by Microsoft. DRM software placed a license on digital copyrighted files that prohibited a user’s ability to illegally pirate protected digital files.

DRM software was intended to be the gateway for the entertainment industry to shed their fear of using the Internet as a distribution channel. In fact, many industry companies put their trust in DRM protection, offering a vast amount of copyrighted files to be licensed with its protection. However, their fear of the Internet to be used for distribution became a reality very quickly.

Two years DRM’s introduction, technology hackers overseas released anti-DRM software allowing users to strip DRM from copyrighted digital files. This was a disaster for DRM development companies. Microsoft, a major player in DRM software development, recently got hit hard with the release of FairUse4WM software that disabled their Windows Media DRM software. Microsoft quickly provided a patch, but FairUSE4WM immediately struck back, making the patch useless. Now, Microsoft faces serious security breach in their software with enormous legal challenges to fill.

In summary, emerging trends in technology that are fueling the anarchy of copyright laws and the wide-spread Internet piracy and theft of digital files are:

1. Illegal P2P network technologies with as many as 80 protocols, over 571 different client applications, and 1000 websites for magnets and torrents.
2. Internet technologies using anonymizing and encrypted methodologies to hide and disguise user’s true identity and any information sent and/or received.
3. Entra and Enter LAN based file transfer methodologies using a direct connect method on and between subnets without the need for a public network.
4. Web based hubs and sites for magnets, torrents, and web download using web browser technology.