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Education needed on IP rights in the cloud

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Companies need to work on implementing procedures and policies in order to protect themselves against potential abuse of infringement of intellectual property by consumers in cloud computing,, warns PwC.

“As giant technology companies roll out free digital lockers, many consumers are still not aware that they may be infringing copyright violations, particularly in circumstances where they are used to sharing video material with people outside of their homes,” says Johan Potgieter, PwC assurance audit technology industry leader for southern Africa. “Organisations need to educate consumers about the legal rights and risks associated with the video content of digital locker ownership.”

Potgieter says the concept of storing content in digital lockers raises a number of legal issues with regard to the protection of intellectual property, particularly in terms of companies protecting their ideas and the possibility of third parties exploiting those of others. “Many of these concepts have yet to be tested worldwide in the courts.”

Pria Chetty, Head of PWC’s technology legal advisory practice for southern Africa, says that challenges facing businesses are around the issues regarding privacy laws and the need for more effective data protection. Cloud technology gives businesses the opportunity to store digital content. For consumers there is a wide range of opportunities to choose from, such as the streaming of music content, uploading family and friends’ photos into a digital locker, or even downloading e-books.

“However, some people are unlikely to care as to where the service provider is based. They are more focused on receiving a quality product, either for free or at a competitive price.

“On the other hand, companies operating digital locker services need to consider the law,” says Chetty. “Different countries apply different contract and consumer laws, especially in the media and entertainment sector.”

A recent global study carried out by PwC’s Entertainment, Media and Communications Practice on Digital Rights and Cloud Storage, found that 90% of participants are “somewhat” to “very interested” in the idea of storing and accessing content from a digital library.

Surprisingly, the oldest age group (50 -59) expressed significantly more interest than the younger two (18-24; 25-34) age groups. Consumers ranked movie and TV shows as the two most likely to be stored in a hypothetical digital library or locker.

Although an awareness of cloud digital storage appears to be increasing, many consumers still lack an understanding of the true benefits and value proposition of such services, as the personal value of digital locker ownership has not yet been effectively communicated by companies.

Potgieter says consumers do not know enough about the concepts of rights of ownership and management of digital lockers. Furthermore, legal rights in cloud computing are not yet clear globally due to the fact that different jurisdictions may have their own interpretation of consumer protection and contractual law. There may be gaps in the law when it is applied to cloud computing.

He says technological companies need to be more proactive in focusing on educating consumers regarding the benefits of digital lockers, and in ensuring that the benefits of such services match what consumers want.

“Given the increased interest by the older age demographic, digital locker services should increase initial marketing spend and focus on this group.”

Although consumers are taken in by the concept of digital lockers, few of them actually want to pay for it, says the PwC study. Potgieter says one only has to look at market trends and note how many of the big players have woken up to this fact. Unless there is mass consumer adoption of digital lockers it is vital that digital locker offerings remain free. No doubt any attempts by tech companies to implement costs at this stage will in all likelihood be met by a backlash from consumers, he says.

The PwC study also found that consumers are not interested in the benefit of sharing access to content with other members of their households, as they are more likely to share content with people outside their homes.

There may be an opportunity to increase an interest in digital rights locker “ownership”, including a willingness to pay, if the sharing of content is a benefit, says the report.