The Hunt For Software Pirates Continues

The proliferation of pirated CDs has sent alarm bells ringing in the entertainment industry where millions of dollars are lost everyday to illegal copies. However, there is a much larger form of piracy that threatens the fabric of the local economy as it directly encroaches into the flourishing IT industry – software piracy.

Most local computer users take it for granted that they are illegally using pirated software in their machines. Both to the tech-savvy and the not-too-tech smart, the only difference between the original and the counterfeit copy, is that the former comes in a "box." But with the growing sophistication of duplicators, even this is no longer a fool-proof distinction. Many imitation copies are designed to look identical to the original packaging.

In this country, the main lure of pirated software is not the look but the price. If illegal software can be purchased off the shelf at prices "too good to be true," why does one have to shell out so much more when money is so hard to come by these days?

Not too many people know, however, that one of the greatest dangers of using counterfeit software is that valuable data can be destroyed because it is more likely to contain computer viruses and corrupt files which could bring your machine, or worse, your network to a grinding halt.

With no original documentation, no technical support and no quality assurance, a number of computer users, however, are deterred by these hazards. In fact, according to the Business Software Alliance (BSA), an international organization dedicated to fighting software theft, piracy is at its highest level in the corporate world where a large number of corporate end-users are guilty of using illegal and unauthorized software.

The cost of software theft

The consequences of using illegal software are varied. In 1999 alone, the software industry lost P1.4 billion in revenues, and the government, P170 million in taxes.

In the Asia-Pacific region, a recent survey conducted by an independent research firm commissioned by the BSA and the Software and Information Industry Association (SIIA) showed that software piracy has cost software publishers $2.8 billion in 1999 and $17 billion in the last five years.

Much more than the economic blow, the much larger issue in software piracy is that the act infringes on the intellectual property rights of the copyright owners, deters local software development and stifles regional innovation and the advancement of technology.

Software piracy, according to Jeffrey Hardee, BSA’s newly appointed vice president and regional director for Asia, occurs in many forms. The first and most common occurs at the retail level when illegal shops duplicate a copy of a software and distribute them at cheap prices to end-users. The second one occurs when a computer distributor loads onto the hard disk a counterfeit software which is, in turn, sold to consumers. And the third and most crucial is software piracy in the business environment. Here a corporate end-user loads the software into more workstations or terminals than what was specified in the license agreement.

Understandably, it is in this area where BSA’s campaign is focused. Ironically enough, economics is not the main issue here as software piracy is present even in economically advanced countries. "There is software piracy in the United States, Europe or Australia. There is piracy everywhere," he says. "The need right now is to promote awareness on the need to respect copyrights, the advantages of the legal use of software in a business environment, and to implement the full force of the law in cases of violations."

What the law says

In the Philippines, intellectual property rights are currently governed by the Intellectual Property Code of 1997. Under this code, computer programs and their copyright in manuals and packaging are expressly protected. Among others, the code grants the owners of the computer program the exclusive right to copy the whole program or a substantial part of it, adapt or translate the program, and lease the program to another person.

This means that a person or a corporate entity may only copy, adapt or rent a computer program if the copyright owner gives the permission in the form of a license. Every time you purchase a legitimate copy of a computer program, you receive a license agreement which tells you how you may use the computer program. If you do anything not permitted under the license agreement, then you breach the code.

To infringe upon someone else’s copyright is considered a crime and carries with it penalties under the law. For the first offense, there is a minimum mandatory sentence of one-year imprisonment and a fine of at least P50,000, but this can be increased to three years in prison and a fine of P150,000 depending on the extent of the offense. For the second offense, the jail term ranges between three and six years imprisonment and the fine, from P150,000 to P500,000. For third and subsequent offenses, the penalty ranges from six to nine years imprisonment plus a fine of between P500,000 and P1,500,000.

The battle rages on

With a piracy rate pegged at a high 70 percent in the Philippines, needless to say, majority of computer owners in this country, including big businesses, are thriving on the use of illegal software. It is for this reason that BSA is intensifying its campaign against software piracy in the country.

The BSA is an international organization that operates in more than 60 countries. In the Philippines, it is your local source of information on software theft and is a member of the Information Technology and E-Commerce Council’s International Advisory Board. It maintains a memorandum of understanding with the Philippine Software Association and the Philippine Internet Service Organization.

Its members represent the fastest growing industry in the world: Adobe, Apple Computer, Autodesk, Bentley Systems, CNC Software/Mastercam, Compaq, Dell, IBM, Intel, Intuit, Lotus Development, Macromedia, Microsoft, Network Associates, Novell, Sybase, Symantec and Unigraphics Solutions. In Asia, its members include AccTrak21 and Inprise.

Last year, the BSA launched the 90-Day Grace Campaign to make more people aware of the consequences of using illegal software. It also has resulted in raids by the National Bureau of Investigation on more than a dozen companies and computer stores in the last four months.

In a press briefing last week, Hardee revealed that the BSA is about to launch a new campaign designed to help more companies realize the importance of proper software management, and audit and legalize their software. The BSA, in fact, recently conducted training for several leading auditing firms on how to audit software assets of companies which they can offer as an added service to their clients.

"The growth of the IT industry can be accelerated if Filipino information and communications technology (ICT) companies can team up with foreign partners who can provide the necessary financial and technological resources," Hardee said. "However, the still high level of software piracy in the country has proven to be a deterrent to foreign investors in ICT and will continue to be a hindrance so long as the rate remains high."

The BSA is offering a reward of up to P100,000 to anyone who can provide information leading to a successful action against a corporate end-user. P5,000 is immediately paid to anyone with such information who takes the time to visit and discuss what he knows with the BSA’s attorneys.

The BSA’s hotlines are 811-5897 (Metro Manila) and 1-800-1-888-8797 (Philippines). More information on software piracy is also available at www.nopiracy.com.