Page 174 -

Chapter 4 Ethical and Social Issues in Information Systems 173

nonobviousness (e.g., the work must reflect some special understanding and con-
tribution), originality, and novelty, as well as years of waiting to receive protection.
In what some call the patent trial of the century, in 2011, Apple sued Samsung
for violating its patents for iPhones, iPads, and iPods. On August 24, 2012, a
California jury in federal district court delivered a decisive victory to Apple and
a stunning defeat to Samsung. The jury awarded Apple $1 billion in damages.
The decision established criteria for determining just how close a competi-
tor can come to an industry-leading and standard-setting product like Apple’s
iPhone before it violates the design and utility patents of the leading firm. The
same court ruled that Samsung could not sell its new tablet computer (Galaxy
10.1) in the United States. This was not just a loss for Samsung but a warning
shot across the bow for Google, which developed the Android operating system,
and all other makers of Android phones, including Google’s newly purchased
Motorola Mobile Devices, makers of Motorola Mobility phones.

Challenges to Intellectual Property Rights
Contemporary information technologies, especially software, pose severe
challenges to existing intellectual property regimes and, therefore, create
significant ethical, social, and political issues. Digital media differ from books,
periodicals, and other media in terms of ease of replication; ease of transmis-
sion; ease of alteration; difficulty in classifying a software work as a program,
book, or even music; compactness—making theft easy; and difficulties in estab-
lishing uniqueness.
The proliferation of electronic networks, including the Internet, has made it
even more difficult to protect intellectual property. Before widespread use of
networks, copies of software, books, magazine articles, or films had to be stored
on physical media, such as paper, computer disks, or videotape, creating some
hurdles to distribution. Using networks, information can be more widely repro-
duced and distributed. The Ninth Annual Global Software Piracy Study conducted
by International Data Corporation and the Business Software Alliance reported
that the rate of global software piracy climbed to 42 percent in 2011, represent-
ing $63 billion in global losses from software piracy. Worldwide, for every $100
worth of legitimate software sold that year, an additional $75 worth was obtained
illegally (Business Software Alliance, 2012).
The Internet was designed to transmit information freely around the world,
including copyrighted information. With the World Wide Web in particular, you
can easily copy and distribute virtually anything to thousands and even millions
of people around the world, even if they are using different types of computer
systems. Information can be illicitly copied from one place and distributed
through other systems and networks even though these parties do not willingly
participate in the infringement.
Individuals have been illegally copying and distributing digitized MP3 music
files on the Internet for a number of years. File-sharing services such as Napster,
and later Grokster, Kazaa, and Morpheus, sprung up to help users locate and
swap digital music files, including those protected by copyright. Illegal file shar-
ing became so widespread that it threatened the viability of the music recording
industry and, at one point, consumed 20 percent of Internet bandwidth. The
recording industry won the legal battles for shutting these services down, but it
has not been able to halt illegal file sharing entirely.
While illegal file sharing still goes on, it has actually declined since the open-
ing of the iTunes Store in 2001. As legitimate online music stores expanded, and
more recently as Internet radio services like Pandora expanded, illegal file shar-
ing has declined. Technology has radically altered the prospects for intellectual

MIS_13_Ch_04_Global.indd 173 1/18/2013 10:27:41 AM