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Instructors comments: I have been unable to contact the author regarding correct citation of this article. His listed email address is no longer valid so I have taken the liberty to update links cited in the original version of this article, and to remove outdated and broken links.
Software piracy is the illegal copying of computer software. It is also the computer industry's worst problem. An example of pirating is copying one's office software to bring home in order to finish up work. Most license agreements do not allow one to bring home a copy of their office software while some software companies allow their buyers to do so. Another example of illegal copying of software would include copying software for another person to use.
Different ways of pirating can be broken down into five basic ways of pirating. These include
An overview of software protection techniques is needed to understand the term "software law". Software law is actually a combination of several well-established fields of law, all of which affect the software industry. There are four main ways in which a company can protect their software. These four different methods include using trade secrets, copyright protection, patents, and trademarks.
Trade secrets are used mainly for unpublished works and source code. This nondisclosure agreement is a contract that obligates the person signing it to keep the project they are wor king on as a secret. Trade secret is a prime example of your having to rely on yourself if you want solid legal protection.
Copyright protection protects the expression of an idea, not the idea itself. This would include the structure and content of a program. Some common misconceptions about copyright laws include:
Trademark laws protect the name of the software, not the software itself. It may be that protecting a name from being used by others is more valuable than other protection. Some examples include: "Lotus 1-2-3", "Apple ", "D-BASE", "Wordperfect", and many others.
The best approach for protection is to have a combination of trade secret protection, copyright laws, and trademark laws for the product being produced because these are cheap, effective, and fast ways of pro tecting a software product from being pirated.
While computer software is a new form of intellectual property, it is covered under the same provisions of the copyright laws that protect music, books, and film from unauthorized distribution. Like the more traditional media, infringement of copyright law carries with it stiff penalties. All software comes with a license which specifically states the terms and conditions under which the software may be legally used. It is important to read and understand the license accompanying the pro gram to ensure that you have sufficient legal copies of the software for your organization's needs.
Unauthorized duplication of software is a Federal offense that can subject one to not only a civil suit for damages, attorney's fees, and other relief, but criminal liability as well, including fines and jail terms up to five years.
The primary legal weapon against software piracy is Federal copyright law. The owner of copyright has the exclusive rights to do and to authorize the reproduction of the copyright work in copies, prepare derivative works based upon the copyrights works, distribute copies of the copyrighted work to the public by sale or other transfer or ownership, or by rental, lease or lending. Anyone who violates any of the exclusive righ ts of the copyright owner is an infringer of the copyright or right of the author, as the case may be. Any person who infringes a copyright willfully and for purposes of commercial advantages or private financial gain shall be punished. When any person is convicted of any violation the court in its judgment of conviction shall order the forfeiture and destruction of all infringing copies and all implements, devices, or equipment used in the manufacture of such infringing copies. Any person who, with fraudulent intent, places on any article a notice of copyright or words of the same purport that such person knows to be false, or who, with fraudulent intent, publicly distributes or imports for public distribution any article bearing such notice or words that such person knows to be false, shall be fined not more than $2,500. Any person who, with fraudulent intent, removes or alters any notice of copyright appearing on a copy of a copyrighted work shall be fined not more than $2,500. Any person who comm its an offense shall be imprisoned not more than 5 years, or fined in the amount set forth in this title, or both, if the offense consists of the reproduction or distribution, during any 180 day period, of at least 10 copies of 1 or more copyrighted works , with a retail value of more than $2,500.
A certificate of authenticity comes with Microsoft's products. The Certificate of Authenticity is an assurance that the software that the customer has purchased with their computer system is legally licensed from Microsoft Corporation. It also states that if the consumer has any concerns about the legitimacy of the Certificate of Authenticity or the software they have received, to call the Microsoft Piracy Hotline at 1-800-RULEGIT or contact a local Microsoft subsidiary. br>
Microsoft's also has a web page containing information on its software piracy policies.
Microsoft's Windows packages also come with a license agreement for the end user. The license agreement reads,
"This Microsoft End-User L icense Agreement (EULA) is a legal agreement between you and Microsoft Corporation for the Microsoft product identified above, which includes computer software and associated media and printed materials, and may include "online" or electronic documentatio n. By installing, copying, or otherwise using the Software Product, you agree to be bound by the terms of the EULA. If you do not agree to the terms of this EULA, promptly return the unused Software Product to the place from which you obtained it for a full refund. The license goes on to say, The Software Product is protected by copyright laws and international copyright treaties, as well as other intellectual property laws and treaties. The Software Product is licensed, not sold. The license grants the user the right to install and use one copy of the Software Product on a single computer. If the Software Product includes functionalities that enables your single computer to act as a network server, any number of computers or workstations may access or otherwise utilize the basic network services of that server. To install the Software Product on other computers you must acquire and dedicate a license for each separate computer on which the Software Product is installed or run from. A license for the Software Product may not be shared or used concurrently on different computers. You may not reverse engineer, decompile, or disassemble the Software Product, except and only to the extent that such activity is expressly permitted by applicable law no twithstanding this limitation. The Software Product is licensed as a single product. Its component parts may not be separated for use on more than one computer. You may not rent or lease the Software Product. Without prejudice to any other rights, Microsoft may terminate this EULA if you fail to comply with the terms and conditions of this EULA. In such event, you must destroy all copies of the Software Product and all of its component parts."
The license ends by saying,
" All title and
copyrights in and to the Software Product (including but not limited to any
images, photographs, animations, video, audio, music, text, and "applets,"
incorporated into the Software Product), the accompanying printed materials,
and any copies of the Software Product, are owned by Microsoft or its
suppliers. The Software Product is protected by copyright laws and
international treaty provisions. Therefore, you must treat the Software Product
like any other copyrighted material except that you may either make one copy o
f the Software Product solely for backup or archival purposes, or install the
Software Product on a single computer provided you keep the original solely for
backup or archival purposes. You may not copy the printed materials
accompanying the Software Product."
The software industry loses millions of dollars each year in projected sales
because of pirates. In 1993 it has been estimated that the software industry
had lost $1.5 billion in the United States alone to software pirating. It has
also been e stimated that 40% of the software used in the United States is
illegal. By losing the potential sales the industry also loses out on potential
profits. By not knowing the users of pirated software they also lose the
opportunity to cross-sell their other products, market upgrades, and they don't
receive suggestions from pirates. There are three main ways in which legal
users are effected by pirates.
There was another case involving computer piracy which was printed in the New York Times, February 20, 1996. The headlines read, "Copyright Pirates Prosper In China Despite Promises". The author was talking to a Mr. Wang who is a pirate, and when asked about his business Mr. Wang replied, "Pirating is not so bad, if it means selling compact disks at prices ordinary Chinese can afford, like $1. Exports made up most of the five million disks copied at the Cai Ling Audio and Video Company, where Mr. Wang is the chairman and general manager. A year after a landmark agreement between the United States and China promised to fight intellectual property violations and pirates like Mr. Wang aggressively, factories like his in Guangdong Province are still flouting enforcement efforts. In the meantime, 220 million cassette tapes and 45 million CD's, worth a total of $250 million, were copied illegally in 1995. Although a few compact disk companies were finally suspended by Chinese Government officials last year, not one has been prosecuted, nor has a business license been revo ked. In fact, it is increasingly evident that pirates like Mr. Wang are protected by powerful forces, military, secret police, and organized crime, which the central Government has failed, or simply declined, to rein in. One piece of evidence is a CD-ROM compiling Windows 95, OS/2, and other computer software on a single disk, that is widely sold for $2.50 in Shenzhen.
During the conversation with Mr. Wang, he lost his composure when asked about the federation's representatives. He said, "Those people are snakes!". He goes on to say, "I tried to help them when they first approached me, even arranging a lunch with his friends in the local government to introduce them. I help them, and what do they do?", he said, "they send people here undercover to buy CD's to see what we are making! They are spying". Mr. Wang admitted that what he had sold the federation's buyers was pirated, and said he understood that it was against the law. And he did not seem sheepish about displaying his closeness to local of ficials whom he invited for lunch. But he seemed to be most offended by what he saw as a violation of a code of honor. Mr. Wang goes on to say, "They want to protect intellectual property rights. I have no problem with that. But it is wrong for them t o spy". I would ask Mr. Wang, "Isn't wrong to break the law to begin with and there would not be a reason to spy if you did not break this law?".
An article in Computerworld read, "Microsoft tries to quash European software piracy". Saying it is tired of losing money to European software counterfeiters, Microsoft Corp. recently kicked off a multi-national campaign to fight the growing crime of software piracy. Microsoft's European president Bernard Vergnes said the company is committed to cracking down on counterfeiting operations that have spread from Asia into Europe's established software markets. There is $5 bi llion in Europe not being made by the software industry because of counterfeiting. Vergnes also went on to say that a number of new organizations have begun to sell high-quality imitations of Microsoft's DOS and Windows programs with the Microsoft label, but without a license. Microsoft hopes to curb the counterfeiting trend by heightening awareness of local and international enforcement authorities; lobbying governments to classify software violations as copyright infringement; educating users about co unterfeit software and the benefits of buying original programs; and taking legal action against know violators.
The Software Publishers Association (SPA) (now a Division of SIIA)and the Business Software Alliance (BSA) are the two major organizations which fight against software piracy. The SPA is the leading international trade association for the personal computer software industry. It is also the largest international network of software professionals representing over 90% of the US packaged software industry. The SPA and its members are dedicated to serving the needs of the software publishing community, in addition to addressing relevant i ssues and providing solutions to specific industry concerns. The SPA collected $2.7 million worldwide and the BSA collected more than $4 million in North America alone from companies last year. The SPA initiated action against 447 organization in 1994. The SPA reports that the vast majority of anti-piracy cases are initiated by hot-line calls from current or former employees. Of these, 80% or more are from former employees. The SPA reports that almost 30 times a day their anti-piracy hot lines ring u p a new tip. As a part of its ongoing mission to promote compliance with software license agreements, the SPA has developed an eight point program for ensuring software compliance.
Note: BSA will provide you with free download of software (SoftScan) which can search a computer for registered and unregistered versions of software.
One can reach the Software Publishers Association (now SIIA) by clicking here. The SPA offers information on subjects such as Membership Benefits and Information, SPA Europe, Anti-Piracy, and the Certified Software Manager Courses.
The SPA has come up with an eight point program which allows for companies to ensure software compliance with the law. This program includes :
Implementing a software code of ethics involves the organization having its employees sign a Software Code of Ethics agreement. It should be made a condition of employment and should be documented as such in employee handbooks and organization hiring policies. Employ ees should also be educated about this code of ethics.
The next topic is to establish procedures for acquiring and registering software. There are eight steps to this process.
Today there are many ways in which companies are trying to beat pirates. Copy protection and license management are technical ways of protecting software. They are practical responses to a technical problem, software piracy. One of the new technologies which does this is a program known as network license manager which roams a network and keeps track of programs in use. When a user attempts to use more programs than they paid for this program makes them wait until a copy becomes free. Another technique is known as mode locking. This is that a program is encouraged to be copied and freely distributed but the program runs only in demo mode and if a person wants the full copy of the program they can call the company and get a password to do so with a phone call and money. A new product from Link's is CopyLock II whi ch makes software able to distinguish between seemingly identical computers, therefore only one computer can have the software. Once protected, the program or data cannot be copied by software utilities or hardware devices. SoftLock is another product o ut on the market today which encourages users to freely pass software person to person. SoftLock carries a password so that demo copies are passed on and that the software will only work on the system that the product was purchased for. Another new tech nology is the CD-ROM. Software companies, mostly gaming companies, can now sell their products on CD-ROM and require the user to have the CD in their drive while using the purchased software. This in turn allows only one copy of the program to be in use at one time. While the CD technology is new and preventing software piracy, it only really effective in the gaming industry because on most application packages sold the CD is not required to run the program and therefore people can still copy the softw are. It has been said that copy protection helps keep honest people honest by removing the temptation to copy.
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There are two main reasons why pirating is an issue.
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