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What is Intellectual Property? > Study Aids > Copyright Notice > Software Piracy: the Facts Software Piracy: the Facts
This Contribution is Courtesy of the Business Software Alliance
What is Software Piracy? The PC industry is barely 20 years old. In that time, both the quality and quantity of available software programs have increased dramatically. Although approximately 70% of the worldwide market is today supplied by developers in the United States, important development work is carried out in scores of nations around the world. But in both the United States and elsewhere, unauthorized copying of personal computer software is a serious problem. On the average, for every authorized copy of PC software in use, at least one unauthorized copy is made. Unauthorized copying is known as software piracy, and in 1993 it cost the software industry in excess of US$12.8 billion (about HK$100 billion). Software theft is widely practiced and widely tolerated. In some countries, legal protection for software is nonexistent, laws are unclear or not enforced with sufficient public commitment to cause those making unauthorized copies to take legal prohibitions on copying seriously. Significant piracy losses are suffered in virtually every region of the world. In some areas the rate of unauthorized copies is believed to be in excess of 99%. Software piracy harms all software companies and ultimately the end-user. Piracy results in higher prices for honest users and reduced level of support. Why is piracy so prevalent? Software presents a unique problem because it is so easy to duplicate and because the copy is often indistinguishable from the original. Unlike other work such as audio and video tapes, there is no degeneration in quality from copy to copy. A program that reflects many years of effort by a team of software developers, and millions of dollars investment, takes only a few seconds to copy. Also software is expensive to develop, it costs little or nothing to duplicate and virtually any PC can be used to make unauthorized copies. Software piracy takes many forms. The reasons for unauthorized software copying range from pure profit motives to carelessness, lack of awareness of the law and general disregard for the importance of treating software as valuable intellectual property. Even in the 'west' countries, piracy remains a significant and extremely costly problem for the individual, local economies and the software industry as a whole. Forms of software piracy The forms of software piracy seen around the world include:
Hard disk loading Hard disk loading occurs when computer dealers load unauthorised copies of software onto the hard disk of personal computers as an incentive for the end-user to buy hardware from the particular dealer. These dealers do not provide original disks, documentation or the end-user license agreement that comes with a legitimate copy of the product. Hard disk loading is a widespread problem, but this form of piracy is easy to detect. Some end-users unwittingly receive illegitimate software already installed, but the absence of disks, documentation, registration forms and software licensing should alert them to the problem. Hard disk loading leaves enough evidence to make prosecution straightforward. Industry focus on hard disk loading over the past two years has begun to reduce the practice in countries around the world. Dealer cases involving hard disk loading are often the first enforcement efforts undertaken in many countries due to the relative ease of proving infringement. Softlifting Unauthorized copying of personal computer software within organizations, also called 'softlifting' occurs when extra copies are made within an organization for employees to use in the office, or to take home. Disk swapping among friends and associates outside of the corporate environment is also included in this category. Software is often copied from the corporate workplace and distributed to friends outside the workplace, but other sharing of software is also quite common. Unauthorised copying of software within organizations is the most pervasive form of software piracy faced by many software publishers. It is estimated to be responsible for more than half of the total revenues lost by the personal computer software industry worldwide. This practice is widespread not only in corporations, but also within institutions such as schools, public agencies, government offices and nonprofit organizations. Software Counterfeiting Software counterfeiting is the illegal duplication and sale of copyrighted software in a form usually designed to make it appear to be legitimate. Unlike corporate violators, software counterfeiters operate purely for profit. Counterfeiting occurs in all regions of the world, but the problem is particularly acute in Pacific Rim areas. Counterfeiters range from individuals running mail-order operations out of their homes to dealers who duplicate and sell software. There are several forms of counterfeiting. One involves copying the entire product package, whereby end-users are deliberately misled into thinking that the product they are buying is the legitimate product from the original source. Another form includes the sale of illegal duplicated software marketed under a completely different name, with no attempts made to represent the copy as having been distributed by the original software developer. Software Rental The industry has encountered three forms of pirate software rental: product rented from a retail outlet for use on the renter's home or office computer; product rented through mail order 'lubs' and product installed on computers which are in turn rented for temporary use. Those establishments which rent software only, whether a retail storefront or mail order operation, operate in much the same way as video rental stores. The customer chooses software, pays a small sum and takes the product away for a limited period often to make a another copy for permanent use on their personal computer. Some companies have asked for and been granted permission to provide software with rented computer hardware, as there are clearly circumstances under which such arrangements are legitimately required. The explicit right to restrict rental is unfortunately often unclear or absent from national copyright laws. Bulletin Board Piracy Downloading copyrighted software to users connected by modem to an electronic bulletin board is another form of piracy. Piracy of copyrighted software via electronic bulletin boards should not be confused with sharing public domain software or with providing 'Shareware.' Shareware is software that may or may not be copyrighted but is specifically offered by the author for nearly unrestricted use, including copying and sharing with others, with usually a small fee given to the developer if the user finds it useful. The Business Software Alliance in Asia Formed in 1988, the Business Software Alliance (BSA) represents the software industry in its efforts to eradicate the illegal copying, sale and distribution of computer software around the world. It achieves this through educational initiatives and legal proceedings. The BSA believes that inadequate intellectual property rights impede economic growth by discouraging business investments and hampering the development of new industries. Working with governments and law enforcement agencies, the BSA brings legal actions against companies suspected of copying software. To help companies establish responsible software acquisition and management policies, the BSA publishes a range of guides and booklets in English and a number of Asian languages. The BSA also operates hotlines in many Asian countries to provide information on the dangers of illegal software copying. Thinking of copying? Think again Call the BSA on: (852) 2865 3318
The BSA's members include software producers Autodesk, Bentley Systems, Intergraph, Lotus Development, Microsoft, Novell and the WordPerfect Applications Group, and the Santa Cruz Operation. In Taiwan, affiliate members comprise Eten, Good Point, PADS, Ultima and U-Lead. |
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