The Internet and Intellectual Property Right Infringement
Intellectual property rights are broadly defined as “exclusive rights pertaining to distinct intangible creations of the mind which range from music, designs and various artistic works to broad categories such as inventions, literature and even phrases” (Woker, 2006).
The basis for intellectual property rights is to protect the creators of unique inventions, concepts, or ideas from having their work arbitrarily utilized without their permission for the profit of other individuals/ companies.
Without IPRs (Intellectual Property Rights) various artists, writers and inventors would be reluctant to release any of their work to the general public due to the possibility of their ideas being subsequently stolen and claimed by others as their work.
Companies apply IPR law as a method of protecting their patented and copyrighted products from being subsequently copied and sold by other companies. It is through this method of business law implementation that various corporations have been able to maintain their positions in the global market place due to their protection and control of their patented processes, products and designs.
It is rather interesting to note though that within the past 12 years as a direct result of trends in the digitization of products and services as well as the prolific use of the internet many digital products such as software, music and images (taken or created) are increasingly being utilized, shared and distributed online without the aforementioned consent of the holds of their copyright (Jameson, 2011).
Sites such as the Piratebay.org, Megaupload and Rapidshare contain millions of music, video and software files that were “ripped” illegally from legal sources and then subsequently shared online for free (Bhattacharjee, Gopal, Lertwachara, & Marsden, 2006). This has resulted in significant losses in sales for hundreds of companies with estimates placing the amount lost in the hundreds of billions of dollars within a given year.
On the other end of the spectrum billions of intellectual property right infringements are also done on a single day by the sheer amount of videos and images shared on social network sites such as YouTube and Facebook (Bhattacharjee, Gopal, Lertwachara, & Marsden, 2006).
Users arbitrarily share images taken from official websites and magazines as well as post videos online containing copyrighted songs, labels, symbols and images resulting in practically millions of people being guilty of intellectual property right infringement.
Yet for the past 12 years companies have been unable to successfully combat this problem due to its sheer scale and the inherent limits of business law in actually being able address the issue. What must be understood is that there are inherent differences between violations of intellectual property rights between a company and an online internet user (Bhattacharjee, Gopal, Lertwachara, & Marsden, 2006).
When a company commits a violation of intellectual property rights business law becomes more enforceable since the affected party is dealing with a single entity. In the case of online internet users, there are just far too many individuals, too many cases and not enough enforceable evidence of an intentional violation to actually implement a successful means of deterring IPR violation in the scale it is seen today.
One of the means in which companies have attempted to combat this issue has been to lobby for stricter laws regarding digital good and services.
The result was the DMCA (Digital Millennium Copyright Act) which in effect criminalized the production and distribution of various technologies, services or even devices which allowed individuals/groups to illegally access copyrighted works or circumvent the process that prevents digital distribution (Grosso, 2002).
In effect, this law in the U.S. made it illegal to circumvent copyright protection on digital software for online distribution and made methods associated with intentional violation of such laws punishable by heavy fines or jail time.
It must be noted though that the limitations of this particular type of business law is evident in the fact that despite its implementation in 1998 online piracy has continued unabated and has in fact increased within the past decade (Grosso, 2002). One of the reasons behind is the sheer size of the internet with quite literally billions of websites and trillions of pages devoted to all manner of digital content.
Despite the best efforts of any company or government agency it would be quite literally impossible to police all known sites.
Not only that, even if a company or government agency was to take down a website based on its supposed distribution of pirated content the fact remains that website addresses can be changed resulting in the site being transferred to some other corner of the internet where it would take months if not years for it to be found by piracy regulators.
Another problem in sufficiently implementing IPR law is the fact that when it comes to laws regulating the online distribution of digital content each country has a different application of IPRs (Miller & Bove, 2011).
For example, though the DMCA is enforceable within the U.S., it is still a U.S. based law and thus cannot be enforced in other countries that have a different version and interpretation of what constitutes enforceable action regarding intellectual property rights. (Miller & Bove, 2011)
One way of seeing the overall lack of international enforceability can be seen in the case of the Piratebay.org which is the internet’s largest and most well-known site for finding and downloading pirated content ranging from movies, music and games to movies and software applications (Morton & Koufteros, 2008).
Over the past six years, the Pirate Bay has been able to resist various moves by companies such as Microsoft, EA, Universal Studios and even Apple Incorporated to shut it down due to the presence of pirated copies of the movies, software and games of these companies on the website.
The reason it has been able to stay in operation for so long is not only due to the inapplicability of the DMCA since the Piratebay.org’s servers were based in Sweden but the fact is the site took advantage of a loophole in online IPR protection wherein technically the files weren’t stored on the website itself but rather what was present on the site were torrents in which people could use to download the pirated content from the computers of other people (Morton & Koufteros, 2008).
Torrents are a method of online file sharing wherein individual files are broken up into smaller aggregates which can be downloaded and uploaded from multiple sources (Norton & Freedmart, 2006). In effect, this technology allows thousands of users to download from other users that are uploading the file from a background process on their computer (Norton & Freedmart, 2006).
As such “technically” the files aren’t present on the Piratebay.org itself and it merely acts as a collection of torrent files that can be used to download the content from elsewhere.
While it may be true that international pressure on the Swedish government did in fact hamper the Pirate bays servers in 2010 with several of its owners being arrested the fact remains that the site was able to go back online within a matter of hours as soon as it transferred from its servers based in Sweden to other servers based in other countries (possibly China).
Based on this particular outcome, wherein despite the best efforts of the application of business law no satisfactory outcome was created, this calls into question whether business law involving IPR of digitized content can still be considered effective when taking into consideration the flexibility the internet grants illegal online content distributors.
IPR Violations and E-commerce
One of the current trends in E-commerce has been the digitization and sale of EBooks via Amazon, iTunes and various online stores.
As seen in the article of Miller (2011), EBooks have gained considerable ground in terms of market penetration and popularity among different age groups due to the proliferation of EBook readers such as the iPad and the Amazon Kindle as well as their considerably lower prices since they easy replicable digital content that costs distributors next to nothing to reproduce and sell (Miller, 2001).
The inherent problem though with this particular method of sale and distribution is that unlike hardcopy version of novels, short stories or textbooks EBooks can be easily copied, transferred and even distributed freely online by the thousands.
The same digitization that allows companies to sell EBooks also allows other people to use the same methods for their gains. A brief Google.com search shows that there are quite literally dozens of sites where EBooks can be illegally downloaded for free.
(Growth of Internet Piracy, 2011). The main question that must be asked in this particular case is what can business law do about?
When examining the possible resources of the law in this particular case, it becomes quite obvious that in the age of digital content distribution and consumption business law has in effect been rendered impotent in terms of its ability to limit illegal IPR violations.
Domain Names and Trademark Violations
Going back to the example mentioned in the previous section involving the illegal distribution of digitized content by the Piratebay.org it can be seen that such a trend in online piracy is not limited to merely movies, music, software and games but extends to other aspects related to digital content (Szuskin, de Ruyter & Doucleff, 2009).
What must be understood is that the internet is now considered one of the best platforms for mass sales and content consumption and as such an online E-commerce site such as Amazon can now be compared to the previous generation of traditional superstores in New York such as Macy’s and Bloomingdales or the equivalent of Dubai’s “Mall of Dubai”.
While there are quite literally thousands of other examples that can be mentioned what all of them have in common is a proprietary trademark. This trademark is an essential aspect of a store or company’s brand image and as such, is protected by various business laws against illegal or unsanctioned reproduction.
In the case of online E-commerce stores such as Amazon, eBay and Alibaba their proprietary trademarks come in the form of their domain name. A domain name is the name of the website with the prefix “www.” and the suffix “.com”; this is the primary method in which sites are visited and searched for on search engines such as Google and as such can be considered the online equivalent of a trademark.
When it comes to business law, what must be understood is that there are inherent differences and limitations to the application of business law in traditional market environments and the application of business law on the internet.
Domain name “copying” is actually a proliferate and frowned upon practice today wherein variations of the suffix or in the name itself are done so as to imitate the trademark of a particular site.
For example, the trademark Amazon.com can use the suffix Amazon.biz, Amazon.net, Amazon.xxx, Amazon.cc as well as a sheer plethora of possible suffixes. Variations to the name itself can result in the following examples as well:
“TheAmazon”, “AmazonShop”, “AmazonStore”, etc. All of these techniques are utilized in order to draw consumers away from the original owners of the trademark to other E-commerce stores that utilize the same site design but are in no way connected to the original trademark owners.
While the traditional response of business has been to sue other companies who have obvious trademark infringements the same cannot be applied to cases of internet domain names since while such names are considered part of the trademarks of companies business law is not applicable to their use or creation unless in particular cases.
For example, misleading domain names which direct users to pornographic sites are in violation of the U.S. Truth in Domain Names Act which was created in 2003 to prevent such actions from continuing.
Domain name seizures also occur when the use of a particular domain has been proven to be connected to a specific form of criminal activity (Joe, N.D.).
As seen though, in the case of the Piratebay.org, there are limits to the application of this particular form of the law since U.S. law is not applicable to domain names registered, applied or transferred to companies outside the U.S. In fact there is an underground business currently booming online wherein domain names are held “hostage” so to speak.
This practice is done by buying and registering a domain name which has the same name as that of a company, organization, or brand. Since such institutions would want to create their own online presence, they would need to subsequently purchase the domain name in order to ensure proper online brand recognition.
This usually leads to the company paying several thousand dollars (more than 300 times the worth of the domain) in order to acquire it from the person that had “legally” acquired the company’s online trademark by being the first to purchase it.
Based on this it must be questioned whether there need to be subsequent changes in business law in order in order to mitigate the apparent problems related to online practices that are in clear violation of not only a company’s IPR but their trademarks as well.
While it may be true that domain name providers do give companies a certain degree of preferential treatment when it comes to purchasing specific domain names related to their company when new suffixes are created (such as the recent.xxx suffix) the fact remains that this does not bode well for companies that will be created in the future that find their online presence hijacked by an unscrupulous individual looking to make a profit.
Copyright Infringement in Website Posting and Development
Copyrights are defined as “laws which give the creator of a certain work exclusive rights towards sale, distribution or development over a predetermined period of time”. This can encompass various literary works, artistic works and even film or music. What a copyright does is that it in effect, allows the creator of a particular piece of work the right to profit over what he/she created.
Without sufficient copyright protections in place artists, writers and moviemakers would be unwilling to create any new work since they wouldn’t be able to profit from it in the long term due to alternative channels of sales and distribution that other individuals or groups would utilize in order to tell the created work themselves.
While this paper has so far delved into the topic of illegally downloading copyrighted content from websites what hasn’t been discussed is how the process behind the creation of websites can actually fall under various aspects of copyright violation as well.
Ever since the implementation of Web 2.0 which transitioned websites from the static domain of the solitary programmer to the dynamic world of the normal user the creation of sites through the use of numerous types of online and offline website making software has made copyright infringement a norm rather than rarity (Kahandawaarachchi, 2007).
Thousands of websites utilize “borrowed” content from other sites in the form of pictures, banners and even written information. Not only that, online services such as Photobucket allow users to store copied copyright content from other websites to utilize on their sites and blogs (Kahandawaarachchi, 2007).
When attempting to examine the sheer proliferation of copyright infringement and the ability of business law to resolve this issue it becomes evident that there is actually no way to stop it. Just as there are hundreds of websites which allow users to illegally download ripped content, there are millions if not billions of sites where copyrighted content has been utilized in order to add some “pizzazz” to the site (Kahandawaarachchi, 2007).
There are just far too many sites, too many internet users and internet technology have become too accessible resulting in no possible way to even make a small dent in the degree of infringement. It must also be noted that the general anonymity connected to the internet helps to proliferate the practice of copyright infringement online.
Studies such as those by Hinduja & Ingram (2009) indicate that while internet users are aware that their activities are a form of copyright violation some users still post copyrighted images online since they are under the apparent assumption that their anonymity grants them a certain degree of immunity from direct prosecution, they are unfortunately right in this case due to the fact that it is quite literally impossible to examine all aspects related to what individual users are doing online (Hinduja & Ingram, 2009).
Internet Anonymity and the Application of Business Law
One of the current problems in the application of business law in online cases of IPR infringement is the level of anonymity granted by the internet which not only makes methods of prosecution against violators difficult but also encourages criminal behavior.
As seen in the study of Hinduja & Ingram (2009) which attempted to explain the reason behind the popularity of online IPR infringement it was seen through numerous interviews and accounts that anonymity played a massive role in encouraging the behavior.
As Hinduja & Ingram (2009) notes, social identity plays a huge factor in limiting criminal or anti-social behavior yet when the concept of social identity and thus accountability is taken away people are more likely to commit acts related to IPR infringement as they otherwise would have done if there was a distinct level of identity and accountability related to their online presence (Hinduja & Ingram, 2009).
In other words, the Hinduja & Ingram (2009) study showed that people were more likely to commit acts of online copyright infringement and the promotion of online piracy since they knew that the level of anonymity afforded to them by the internet allowed them to act without negative consequences.
This, in turn, explains the depth and proliferation of online piracy and copyright infringement and shows how the problem cannot be so quickly resolved merely by applying laws which state that a particular action is illegal.
Another way of looking at this concept is to look at it from a prosecutor’s point of view. While there are many instances where users download illegal IPR content there is no way to prosecute them for the act since there is no way of knowing who they are.
Not only that, services such as Rapidshare, Megaupload and Torrent technologies enable users to anonymously upload content and distribute it to millions of other users which further complicates the problem. The sheer number of users and the amount of available online services which allows illegal IPR violations to continue shows just how impotent business law is at the present in actually resolving this issue.
It must be noted though that one way in which companies have attempted to fight back against online piracy has been to directly attack the sites themselves through their ISP (Internet Service Providers) however just as the Piratebay.com has been able to say operational by shifting ISPs and servers other websites have done the say which makes any attempt at even trying to resolve the issue a losing battle for companies due to the sheer number of servers available that are not under the jurisdiction of IPR law (Nelson, 2010).
Selling Counterfeit Goods online
One of the more interesting developments regarding online violations of IPR, copyright and trademarks has been the use of E-commerce platforms as a way in which counterfeit goods are sold and distributed to international customers in bulk shipments
(Internet IP: Review of UDRP begins, 2011). While the IPR, copyright and trademark violations in this particular case are quite obvious the audacity in which the products themselves are sold is indicative of the limitations of the reach of business law in such cases.
For example, numerous websites utilizing the name “ChinaPortal”, “importfromChina” or a variation thereof utilize online advertisements seen in prominent sites such as YouTube in order to convince online consumers to go to their website and purchase counterfeit goods online (Internet IP: Review of UDRP begins, 2011).
The reason why businesses haven’t be able to shut these websites down is due to the fact that their servers, domain names and ISP providers are all based in China and as such becomes yet another example of the limits of business law in combating IPR violations
(Internet IP: Review of UDRP begins, 2011).
It is actually quite interesting to note that there is currently an ongoing trend wherein services that engage in online IPR violations are increasingly transferring their domains and servers to China as a direct result of U.S. and European based legislation that seeks to prevent such websites from going online in the first place.
This is particularly interesting to note since the study of Johnson (2008) indicates that nearly 40 to 50 percent of all counterfeit goods sold in markets today actually come from factories based in China (Johnsonn, 2008).
As such, not only is China becoming a harbor for the production of counterfeit goods, but it has also become a refuge for illegal online services that distribute copyrighted content (Johnsonn, 2008). It now becomes a question of why businesses haven’t been able to do anything regarding China’s actions which in effect cost them billions of dollars a year in lost revenue.
One way of explaining this particular situation is to examine it from the Realist theory of international relations which specifically explains that “States are the primary actors in international relations and as such, there is no entity above a state” (Hall, 2011).
Foreign policy, according to Professor Daniel W. Drezner of the Fletcher School of Law and Diplomacy at Tufts University, “is conventionally defined as the means by which a nation-state advances and protects its interests in the world.
It includes fashioning alliances, establishing trade relationships, negotiating treaties, shoring up domestic support for international policies, bargaining with international organizations, crafting military doctrines, and waging war”. From this, it can be seen that foreign policy is the manner with which a state interacts and relates to other countries and actors with the aim of protecting and securing a state’s national interests.
Moreover, foreign policy is “something that a state and its machinery produce on behalf of a nation using all the instruments they can muster in competition with other similar actors in a world that is dominated by the logic of Realpolitik”.
Taking this into consideration it now becomes obvious that the reason why businesses cannot do anything to resolve this particular situation is due to the fact that they don’t have the right or the capability to actively force the domestic policy of a foreign state towards their ends (Hall, 2011).
While it may be true that in the case of the U.S., lobbyists within Congress are able to influence the decisions and laws implemented the fact remains that such a system does not exist in China and as such companies have next to no ability to actually prevent the current server and domain transfer towards Chinese based services in order to perpetuate the release of illegal copyrighted content.
Furthermore, this also prevents companies from actively targeting websites that sell counterfeit goods since they are not located within countries that have strict IPR regulations.
Discussion
Based on the facts presented in this paper so far it becomes quite obvious that necessary changes in the application of business law need to be implemented in order for it to apply to the challenges described so far.
In response to this particular situation two new proposed acts of Congress by the U.S. namely PIPA (Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011) and SOPA (Stop Online Piracy Act) are currently being deliberated and should they go into effect would resolve many of the problems described in this paper.
The first act, SOPA, allows copyright holders to utilize a court-ordered agreement which would in effect ban U.S. based advertising networks from advertising on such sites, would prevent online payment transaction services such as PayPal from processing payments on behalf of that site and it also prevents search engines from displaying the site during an online search as well as requires ISPs to in effect block the website from being accessed by anyone within the U.S. or if the site is based within the U.S. allow all users to visit the site (Nagesh, 2011).
The Stop Online Piracy Act effectively neutralizes all possible avenues by which a sight with either pirated or IPR violating content from continuing to exist by strangling all means by which it could derive an income or attract users (Nagesh, 2011).
This proposed act is the culmination of all the various facts presented in this paper regarding the inadequacies of business law thus far regarding violations of IPR and as such resolves many of the problems indicated in this paper.
What must be understood is that a vast majority of online internet users are from the U.S. and as such by blocking their ability to access to create sites with infringing content this could possibly create a cascading effect where due to reductions in income due to a lack of visitors, sites with illegal copyrighted content would in effect have to shut down (The Internet, 2011).
As such, this particular application of business law not only affects violators within the U.S. but violators on an international scale as well since it limits their ability to conduct business. On the other hand, SOPA has continued to receive widespread derision and contempt from a vast majority of internet users due to the limits it imposes on the consumption of online content (The Internet, 2011).
What must be understood is that many of today’s users have grown used to various websites having infringing content in the form of photos, graphics, music and files and as such have considered their presence as an ubiquitous right to online internet usage. What must be understood is that the broad definitions of the act itself could possibly result in thousands of sites being shut down as a direct result of copyright infringement.
This involved not only illegal sites but legitimate sites such as Facebook where users share copyrighted images by the thousands on a daily basis. Not only that the implementation of the bill itself has numerous pundits concerned on how it would effect the ability of internet-based entrepreneurial businesses to operate due to the increased liability that may have to face due to the exposure to possibly copyrighted content.
The best way of examining this particular issue is from the words of blogger James Alworth, who works at the Harvard Business Review. He states the following quote which reverberates throughout all the problems and concepts presented in this paper: “Is this really what we want to do to the internet, shut it down every time it doesn’t fit someone’s business model?” (The Internet, 2011).
This very statement actually calls into question business law itself as it is applied on the internet today. What must be understood is that the internet is widely acknowledged as the single greatest innovations within the past century due to its ability to not only encourage communication but information sharing on a massive scale.
Implementing solutions to the problem of applying business law solutions to the cases presented in this paper unfortunately has the effect of stifling the ability of the internet to continue to be an effective platform of communication and the sharing of ideas since as seen in the case of SOPA the implementation of the most effective solution prevents the proper functioning of the open and freestyle of communication and collaboration the internet is known for.
It can even be argued that copyrights and IPRs actually constrain innovation and the subsequent application of new methods to use old technologies.
With copyrights and IPRs securely in the hands of companies that want to keep them in order to perpetuate the success of their business models they in effect stifle potential new applications of the technologies they so religiously guard.
Evidence of this can be seen in the way in which open-source software projects such as Linux, Mozilla and Google’s Android software application have practically done leaps and bounds in their ability to not only rival but exceed the capabilities of proprietary based systems.
While it may be true that under business law companies have a right to profit from the copyrighted and trademarked content that they created it is at times questionable whether the perpetuation of practices which allow old business models to continue to operate is truly the most effective path to pursue.
In fact, it was stated by the director of Valve (one of the largest computer game companies in the world) that the popularity of online IPR violation isn’t an issue that involved business law but is rather a service issue.
Examining the Concept of IPR Violations as a “Service” Issue
When the head of Valve mentioned that IPR violations are a service issue he meant that certain licensed content whether in the form of media, games, software or pictures were either unavailable in a particular region or unaffordable by people that wish to utilize the copyrighted content.
What must be understood is that a vast majority of IPR violations done today through the illegal consumption and use of copyrighted content is actually done by individuals who can’t afford to get the software or media in another fashion (Khouja & Park, 2007). As such, they turn towards IPR violation as the only recourse they have in order to gain the content the need.
In the case of Valve, they resolved the problem of IPR violations being a service issue by establishing a service that both addressed the issue of availability and affordability of video games. Through their proprietary “Steam” portal, players from all around the world were able to find the games they wanted and pay for them at a fraction of the cost that they otherwise would have if they had bought the game through traditional methods.
Based on this it can be seen that there are alternative solutions that other companies are not event attempting since they seem more concerned in perpetuating their old business models instead of attempting various methods of innovation to address the issue of IPR violations (Khouja & Park, 2007).
Losing Touch with their Customers
It can actually be stated that based on the words of the Valve CEO that the inherent problem in this particular case is the fact that companies have in effect lost touch with their customers based as a direct result of the internet and as such have begun to rely on business law as a way of reversing an unfavorable situation.
One way of looking at this is by comparing the case of Netflix and Blockbuster and how one business model was affected by changes to consumers and the effects of innovation.
When examining what company has lost touch with its consumer base, the best example that can be seen at the present is the fall of Blockbuster and the subsequent rise of Netflix within the past 10 years. What is notable in this particular case is that Blockbuster originally had a dominant position in the U.S. market.
It has 3,000 stores and controlled 95% of the video rental market; however, it is interesting to note that its business model did little to change over time. Blockbuster stores were notable for their large selection of movies and games; however, they tended to be overly spacious and placed in an equally large parking lot with few surrounding stores.
Such a scheme did result in high sales over a period of 15 years however it must be questioned whether the sales were a result of its business model or just the sheer proliferation of its stores and the dominant position it enjoyed in the market.
When examining how Blockbuster dealt with local competition, it was obvious that they did so by offering a wider selection, lower prices and more attractive looking stores in order to gain more consumers.
Not only that Blockbuster also enjoyed a rather healthy relationship with several studios which enabled it to release movie rentals faster than its competitors could have, which resulted in more consumers coming to Blockbuster as a result.
The fall of Blockbuster
By the late 1990s though it is obvious that Blockbuster was so competitor centered in maintaining its dominant position that it neglected to examine changes within its consumer base (Gandel, 2010). By this time, faster internet speeds were becoming available to the general public which, along with the proliferation of home computer systems, resulted in more people turning towards the internet for their needs.
In fact, it was at this point that online e-commerce systems which enabled consumers to make purchases online started to proliferate which enabled new companies to enter into previously hard to enter markets due to the flexibility and low-cost nature of online sales and consumer marketing.
When Netflix began its online video rental service in the latter half of the 1990s this gave consumers a faster and more convenient method of video rental which subsequently eroded away at Blockbuster’s market position till by 2005 to 2009 when Netflix released its online video streaming service this could be considered the “final nail in the coffin” so to speak resulting in the dominance of Netflix and the complete erosion of Blockbuster’s previously dominant position.
Based on this example, it can be seen that companies that don’t innovate in light of subsequent changes to markets very likely could go under as a direct result of their actions.
Examining the Issue
The case of Blockbuster and Netflix is actually an example of the wider state of all businesses today and as such is evidence as to why the fight against online IPR infringement should not be considered one based on business law but one where companies are reluctant to innovate in light of the changes needed and are utilizing business law as a means of “resisting the change” so to speak.
The reason behind this is the fact that businesses don’t operate within a vacuum and have to deal with intense competitive environment forces on an almost daily basis. What must be understood is that there are three components to market orientation that dictate how a company acts within a competitive environment; these are: customer orientation, competitor orientation, and inter-functional coordination.
In the case of customer orientation, a company spends what resources it has in gathering data on the needs and behaviors of various consumers, the same can be said for competitor orientation however it focuses on competitors instead. What must be understood is that either method has a distinct weakness.
Focusing too much on consumer orientation can actually blind a company to changes in the market or may actually stifle innovation since the company focuses too much on consumer satisfaction rather than changing based on trends.
Focusing too much on competitor orientation on the other hand results in too much time and capital being placed on competitive activities which results in companies at times neglecting their consumer bases and focusing too much on getting ahead of the competition.
On the other hand, both methods also have their own respective strengths, such as the customer orientation strategy being more effective in uncertain markets, whereas competitor oriented strategies become effective in fast-growing markets.
The best way to maintain a balance between the orientations is to first create a market intelligence mechanism that gathers consumer information and disseminates it within the company and secondly is to encourage the free flow of information within the organization.
What must be understood is that market orientations tend to become ineffective when organizations are mired in bureaucratic nuances which prevent information from being passed on quickly. This is exactly what is happening to companies at the present wherein they are mired in the bureaucratic entanglements of IPRs, copyrights and trademarks.
They have become so concerned with maintaining their positions that they have neglected to take into account current market intelligence and customer orientation in order to innovate their products in such a way that it allows the company to both profit from online IPRs while at the same time allowing consumers to enjoy the current level of freedom they enjoy online.
The creation of SOPA is merely evidence of this resistance and as such should not be encouraged to go into effect since it not only negatively impacts online users but also prevents companies from forcefully innovating themselves.
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