Stealing intellectual property hurts people and companies!
But there always seems to be the issue of making people understand the value of it to those who create it and own it.
It’s a hot topic in the world of advancing technology. There is ongoing litigation around the world over smartphones, just one example.
It is easy for people to reason, why pay for something like computer software or a movie when you can download it for free, or at least pay a lot less for it.
Paul Einarsson is all too familiar with that. For the COO and Chairman of Calgary-based Geophysical Service Incorporated his company’s intellectual property is seismic data. He knows the cost of intellectual property piracy. He has been fighting it for years.
“In my experience the behaviour of governments and large companies and even worse the ignorance and entitlement attitudes of public and private people in leadership roles is astonishing. Simply put, if you did not pay for something you have no right to use it. But they don’t seem to know what this means, although most of us learn this at a young age.” says Einarsson.
Trying to protect your intellectual property from being used illegally or trying to fight copyright infringement is not always easy.
Most people attempt to rationalize and justify their actions when it comes down to it.
Some businesses do the same.
In recent years there are various stories of the high cost of university textbooks in Canada driving students and copy shops to contravene federal copyright law.
One case involved copy shops near the University of Ryerson willing to either photocopy full textbooks or allow customers to use self-serve copy machines before binding the pages together – creating books as good as new at a fraction of the cost.
Some copy shop employees said they did it as a favour to the students, already burdened with high education costs. Some students said they know it was wrong, amounting to stealing from publishers but couldn’t afford to shell out for a $300 textbook.
In a similar case in Montreal a dozen people were arrested by the RCMP at four copy shops producing counterfeit textbooks that looked close to the real thing, but were sold at a fraction of the cost.
Publishers say the underground industry across Canada costs $75 million annually in lost revenue, a quarter of their business. Both large and small copy shops have been accused of the practice.
This is only one example of hundreds of cases of not only bending the rules but blatant counterfeiting of products which runs into losses in the billions of dollars.
In a way the black market text book example is much like the GSI fight.
It’s even more difficult trying to protect your intellectual property when you have to fight aggressive government bureaucrats determined to disclose it to attract the energy industry.
Geophysical Service Incorporated has gone to court with federal and provincial offshore regulators like the Canada-Nova Scotia Offshore Petroleum Board (C-NSOPB) the Canada-Newfoundland Labrador Offshore Petroleum Board (C-NLOSPB), the National Energy Board (NEB), and even Natural Resources Canada.
“What the government agencies did is try to take advantage of the 2008 crash, by massively expanding their unauthorized, and we allege illegal, disclosure of our Intellectual Property to the very digital products we license to our customers, hoping that GSI would not be able to defend itself.” states Einarsson.
GSI is currently bringing actions against government boards in Newfoundland and Nova Scotia, where their governments have passed legislation entitling them to require submission of highly valuable data as a condition of permitting. Then, they unilaterally announce that this data shall be kept confidential for periods of five, ten or fifteen years.
“After these time limits expire they consider themselves entitled to release it into the “public domain”. GSI’s position is that its seismic data is still the property of GSI and GSI still has registered Copyright.” according to GSI Corporate Counsel Catherine Butlin. “The company may have been forced to submit its data to these boards as a condition of permitting, but it did so in confidence and without waiving its ownership, copyright and confidentiality rights. “
Einarsson feels the government agencies read into the law what they “wished” for. In this case that GSI’s ownership rights would end, but the argument is that copyright is not extinguished under other applicable laws of Canada.
The Canadian Association of Geophysical Contractors represents the business of seismic in the Canadian Oil and Gas Industry.
“The issue of seismic data confidentiality is an important tenet in the business of seismic in Canada.
In Alberta it is enshrined in the Mines and Minerals Act.” explains CAGC president Mike Doyle.
“For the companies that have built a business on speculative seismic either on land or ocean the protection of their intellectual property is of paramount importance. Data appropriation by Governments from such business entities is misguided and becomes ultimately detrimental by discouraging further investments in their jurisdictions.”
According to the RCMP website Intellectual Property Rights (IPR) crime – copyright piracy and trademark counterfeiting – is a growing international phenomenon that generates huge losses for legitimate industry, the economy and the Government of Canada. Interpol has confirmed links to organized crime and terrorism. A lot of this is centered on importing counterfeit items into Canada.
But the RCMP was not much help when it came to GSI trying to track down pirates of its seismic data. At first Paul Einarsson thought that would be a logical place to start.
Einarsson says he has experienced only ongoing frustration looking for support from law enforcement and the media and politicians.
“When you are talking about government abuse of power, bending or violating the laws of Canada, coupled with the $700 million dollar replacement cost of the data, you get even good and honest government officials running for cover who have zero interest in getting involved even after they proclaim they will help GSI.”
Geophysical Service Incorporated had to do the detective work and investigating on its own, through access to information and the courts.
Paul Einarsson has become an expert at it.
Catherine Butlin lays out the basics of the case this way.
“The seismic data is the intellectual property which has been created by GSI at great risk, investment and effort, and which it licenses for the livelihood of the company and the benefit of oil and gas exploration in frontier areas. Ownership of such property has been well-established by long-standing common laws of copyright and confidentiality.” says Butlin. “GSI is challenging the authority of legislators to sweep these legal framework protections away with dubious regulations or guidelines which are subject to change from time to time.”
Butlin offers this example. “It is as though they took your car in for an inspection and they kept it so long that, despite your protests, they advise you no longer own it. “
Butlin explains that these challenges have had to be launched by way of litigation, and for consistency, all breaches, conversions and unauthorized usages have to be pursued once confirmed.
“The litigation further has seriously damaged GSI’s relationships with customers, some of whom will not do business with us because of it.” says Butlin.
How much is the damage.
The costs in terms of dollars and effort are enormous.
In one smaller case GSI has filed a statement of claim with the Supreme Court of Newfoundland alleging that an oil exploration partnership capitalized on seismic data belonging to the company and is seeking nearly seven million dollars in damages.
“This case is one of abuse of intellectual property because the company and individual both knew GSI’s position but they went ahead anyway. They copied information from the C-NLOPB. Even with the following warnings on the forms they had to sign to “borrow” the information.” says Einarsson.
The warnings read
The C-NOPB makes no representation or warranty as to the existence or absence of any trademark, copyright or other ownership rights in respect to the disclosed information and data.
The applicant understands and agrees that information and data contained in these materials are being disclosed in accordance with the Accord Acts and that such disclosure could be challenged under the intellectual property laws of Canada. The applicant agrees to use materials in a manner consistent with those laws.
GSI has over the years invested hundreds of millions of dollars in the offshore to collect valuable seismic data that laid the foundation for billions of dollars in downstream royalties and taxes collected by the federal and provincial governments.
Intellectual property theft hurts everyone.
Scientists, creators, investors, artists and performers lose the income that is rightfully theirs, and corporations lose money and pass the additional costs along to consumers. People may be hurt by shoddy goods used in the manufacture of cars and airplanes or be made ill by counterfeit drugs. Governments at all levels suffer from the loss in tax revenue programs and the economy suffers.
People are hurt when crime escalates in the neighborhood, the result of profits made by gangs that traffic in counterfeit and stolen goods, providing them to retailers at hefty markups.
Intellectual property piracy is a very serious business, but a business that needs to be stopped.
Guest Columnist Greg Bohnert is a freelance writer, communications consultant and broadcaster in Calgary, Alberta
