Software piracy is defined as the illegal copying of software for commercial orpersonal gain. Software companies have tried many methods to prevent piracy,with varying degrees of success.
Several agencies like the Software PublishersAssociation and the Business Software Alliance have been formed to combat bothworldwide and domestic piracy. Software piracy is an unresolved, worldwideproblem, costing millions of dollars in lost revenue. Software companies haveused many different copy protection schemes. The most annoying form of copyprotection is the use of a key disk. This type of copy protection requires theuser to insert the original disk every time the program is run.
It can be quitedifficult to keep up with disks that are years old. The most common technique ofcopy protection requires the user to look up a word or phrase in the program'smanual. This method is less annoying than other forms of copy protection, but itcan be a nuisance having to locate the manual every time. Software piratesusually have no trouble "cracking" the program, which permanentlyremoves the copy protection.
After the invention of CD-ROM, which until latelywas uncopyable, most software companies stopped placing copy protection in theirprograms. Instead, the companies are trying new methods of disc impression. 3Mrecently developed a new technology of disc impression which allows companies toimprint an image on the read side of a CD-ROM. This technology would not preventpirates from copying the CD, but it would make a "bootleg" copy differfrom the original and make the copy traceable by law enforcement officials(Estes 89). Sometimes, when a person uses a pirated program, there is a"virus" attached to the program.
Viruses are self-replicating programsthat, when activated, can damage a computer. These viruses are most commonlyfound on pirated computer games, placed there by some malignant computerprogrammer. In his January 1993 article, Chris O' Malley points out that ifpiracy was wiped out viruses would eventually disappear (O' Malley 60). Thereare ways that a thrifty consumer can save money on software without resorting topiracy. Computer companies often offer discounts on new software if a person haspreviously purchased an earlier version of the software. Competition betweencompanies also drives prices low and keeps the number of pirated copies down(Morgan 45).
People eventually tire or outgrow their software and decide to sellit. Usually, there is no problem transferring the program from one person toanother unless the original owner had been bound by a license agreement. Inorder for the new owner to legally own the software, the old owner must tell thecompany, in writing, that he would like to transfer the license to the newowner. Most people fail to notify the company when selling software, thus makingthe unsuspecting new owner a software pirate (Morgan 46). Consumers must becareful when dealing with used software.
United States copyright law allowsconsumers to place a copy of a program on their computer and also make anothercopy for backup purposes, in case the original disk fails or is destroyed. Somesoftware companies use licensing agreements to restrict people from making morethan one copy of a program. Such use of agreements can make an average consumerinto a software pirate, in his effort to make sure his expensive software issafe (Murdoch 2). Before 1990 movie rental stores could rent computer software.People who rented the software would copy the software before returning it.
Indefense, Congress passed the Software Rental Act, outlawing the rental ofsoftware. Even though illegal, many stores and even some software companiesstill rent software. Since retail space in stores is extremely limited,companies could rent older software that did not have a good showing in retailstores (Champion 128). Software companies could take an idea from the home videoindustry.
The larger video makers found that if they sold videos in foreigncountries through their own dealerships, the amount of piracy decreased (Weisband33). A rather unique strategy used by American software manufactures helps raiselocal interest in stopping software piracy. Companies invest money to beginsoftware corporations in foreign countries. After a few years, the US companieshope that the new, foreign companies will initiate their own anti-piracyorganizations (Weisband 30). Microsoft has led the venture by creating smallsoftware companies to help battle piracy. By doing this, the companies wouldwant to report piracy because they would be losing money just like Americancompanies are doing now (Weisband 33).
The Software Publishers Association,based in Washington, D.C., was developed to combat software piracy. As of 1993the SPA has brought more than 1300 court cases against software pirates.
The SPAhas a toll-free number that has helped catch many pirates and prosecute them (O'Malley 50). The SPA is not merely a law enforcement agency. It meets twice ayear with representatives from software companies. Together they decide how tomake their software better and also how to better serve the consumer. In thespring 1993 conference the SPA decided that if software packages could develop astandard way to clearly label a software box, the consumer would immediatelyknow if the program would run well on his computer. This labeling would helpreduce the number of software returns in stores (Karnes 4).
Since softwarestores cannot resell returned software, the software companies lose money on thesoftware. Even though only a few of the larger corporations have been prosecutedby the SPA, the penalties are extremely severe. A company that is caught makingor owning illegal software can face jail time and fines of double the cost ofthe software or fifty thousand dollars, whichever is greater (Mamis 127).Companies need to keep good records in order to survive a suprise audit by theSPA.
The SPA is not without heart; they offer companies amnesty if the companiesconfess and pay for all illegally copied software (Davis 50). Unfortunately,there are some people who support software piracy. These people see softwarecompanies as rich, cold-hearted businesses who make so much profit that they canafford to take a loss. While this statement might prove true for large companieslike Microsoft or IBM, smaller businesses can be financially devastated by evena few pirated copies (Hope 40). Supporters of software piracy do not considertheir actions wrong.
They argue that software needs to be freely distributed inorder to speed economic development (Weisband 30). The Software PublishersAssociation and its sister company the Business Software Alliance have succeededwhere the US government has failed. The SPA handles cases in the US, while theBSA works in over thirty foreign countries. In cooperation with local lawenforcement, these two organizations have attacked individual companies withmoderate success (Weisband 31). The toughest obstacle the BSA faces is trying toget local governments to make copyright laws and to get local law enforcement tocooperate in investigations.
The BSA has to rely on diplomatic threats incountries like China and Thailand where the governments are totallyuncooperative. While the US government has the power to impose trade sanctionson guilty countries, they rarely use this power (Gwynne 16). Many Asianbusinesses are not used to copyright laws, so the consider violations as minorinfractions, much like exceeding the speed limit. The BSA tries to educate thesecompanies by holding software seminars (Gwynne 16). Asian retail centers alsofrequently give away pirated copies along with their new computers. Thesecrooked dealers are the main targets of Microsoft, developer of MS-DOS, the mostwidely used operating system in the world (Gwynne 15).
Asian software piratesare so good that they are able to release pirated software copies before thereal copies are released to the market. Pirate prices, which are usuallyninety-five percent lower than retail, still nets the pirates a good profit. Inmost countries, including the US, the public is more interested in a lower priceinstead of a clear conscience (Gwynne 15). The largest case of Asian piracyinvolved Microsoft in Taiwan. A large pirate ring had made perfect copies ofMicrosoft's MS-DOS.
Microsoft traced the copies through five Asian countriesuntil they found the source in a Chinese government supported "researchinstitute." Microsoft confiscated 450,000 fake MS-DOS stickers. Microsoftwas shocked when they discovered these stickers, which were made out of metalembossed with a hologram and thought to be uncopyable. Microsoft also foundrecords showing orders for three million more copies (Weisband 33). After thismonumental case, China introduced a copyright law.
The law is very weak and onlyprotects Chinese produced software. Microsoft is still tying to recover some ofthe millions of dollars they and many other companies lost in China (Young 42).In most foreign countries software costs more than a worker would make in amonth. These high prices combined with a disregard for copyright laws, drive theamount of software copied in foreign countries into the high thousands. The mainquestion to be asked is: "Why would anybody want to pay seventy dollars foran original copy when they could buy the same program for fifteen dollars on thestreet?" (Weisband 30).
Extremely expensive hardware in the United Kingdomhas led to mass piracy by most of the computer users. The main problems are thehigh costs that software vendors have to pay for American software. IBM brandPCs are not the mainstay as they are in the US. In the UK technology tends tolag behind the US by two to three years.
This lag, combined with high prices forAmerican hardware, has led Europeans to purchase older Amiga brand computers.Piracy between the one million Amiga owners has forced manufacturers to stopproducing software for the Amiga. Since the Amiga software and the IBM softwareare incompatible, the software companies have shifted to producing software forthe smaller IBM market (Nelson S-15). Mexico's software police is agovernment-sponsored agency called the National Association of the ComputerProgram Industry. In conjunction with large software firms like Microsoft andLotus they have successfully prosecuted over thirty companies. The Associationhas made other Mexican companies better educated on software laws and has gottenmany companies to confess and pay for their pirated software before theAssociation prosecuted them (Hope 40).
One of the most blatant examples ofgovernment supported piracy is in Cuba, where any Cuban can call the NationalSoftware Interchange Center and download any foreign software for free (Weisband30). The US government has failed, in most cases, to act against countries foundguilty of software piracy. Fear of starting trade wars and the US need to keepgood relations with hostile countries keep the government from trying toprosecute these countries. Even when the US acts on countries with large scalepiracy, America's actions are! so weak they have no effect on the offendingcountry (Weisband 30). Piracy is not just a foreign problem. The largest exampleof US piracy happened in 1993 when the FBI and the SPA joined together to raidthe headquarters of Rusty and Eddy’s Bulletin Board System, a privateoperation, one of the largest in the world, with 124 phone lines.
The FBIreceived tips from the SPA's 1-800 line that the bulletin board was distributingpirated software. The FBI confiscated the equipment and arrested the owners (Chamption128). As more people buy computers, software piracy will increase. When softwarecompanies develop new ways to protect their software, software pirates will findways to defeat these protection schemes and ways to avoid weak copyright laws.
Perhaps in the future the US government will help the software designers bypassing stronger laws and penalizing countries that do not abide byinternational copyright laws.BibliographyChampion, Jill. "Not Such a Glorious Thing." Compute! May 1993:128.
---. "Software Rental." Compute! July 1992: 128. ---Davis,Stephen. "The Crackdown on Corporate Pirates." Working Woman March1990: 50.
---Estes, Billy. "3M Technology Helps Prevent Piracy."CD-ROM Professional February 1995: 89. ---Gwynne, Peter. "Stalking AsianSoftware Pirates.
" Technology Review February/March 1992: 15-17. ----Hope,Maria. "Mexico vs. the Software Pirates." World Press Review December1993: 40.
---Karnes, Clifton. "Editorial License." Compute! May 1993:4. ---Mamis, Edward A.
"Don't Copy That Floppy." Inc. June 1992: 127.---Morgan, Phillip.
"The Great Software Bargain Hunt." Compute! May1994: 42-47. ---Murdoch, Guy. "Sneaking Software." Consumers' ResearchMagazine February 1993: 2.
---Nelson Mike. "How PC Games Play InEurope." Compute! January 1994: S-15--S-16. ---O'Malley, Chris.
"Copying the Floppy." Popular Science December 1993: 50. ------"Stalking Stealth Viruses." Popular Science January 1993: 54-60.
---Weisband, Suzanne P. and Seymour E. Goodmannery. "Subduing SoftwarePirates.
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