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Software Piracy

When you purchase software, you are actually purchasing a license to use it, not the actual software. The license is what tells you how many times you can install the software, therefore it's important to read and understand it. If you make more copies of the software than the license permits, you are pirating and thus breaking the law. Whether you are casually making a few copies for friends, loaning CDs, downloading or distributing pirated software from the Internet, or buying a single software program and then installing it on multiple computers, you are committing copyright infringement — this is software piracy.

Types of Software Piracy

Corporate Piracy
Corporate software piracy can be defined as the overuse of software in a business setting, typically due to under-licensing of specific software products. In laymen's terms, corporate piracy tends to occur when a program is loaded onto more PCs than is authorized by the license agreement. Corporate software piracy can also occur though what is known as Client-Server Overuse, or instances when too many employees on a company network are using a central copy of a program simultaneously.

Internet Piracy
Generally, Internet piracy refers to the use of the Internet to provide downloadable copies of pirated software or to advertise and market pirated software that is delivered through other means. Internet piracy can also refer to the use of the Internet to transmit codes or other technologies to circumvent anti-copying security features in software products. Auction sites, Peer to Peer (P2P) networks, one-click hosts (Cyberlockers), social networking sites, B2B websites and botnets are all common paths through which Internet piracy occurs. Importantly, the same laws and license agreements that apply to software in physical distribution channels also apply to cyberspace and Internet transactions. The U.S. Copyright Act does not differentiate between offline and online infringement, and those found in breach of the law face penalties, including statutory damage awards of up to $150,000 per copyrighted work.

Why a License Matters

Software development involves a tremendous collaborative effort that blends the creative ideas and talents of programmers, writers and graphic artists. Like most creative works such as books, music and films, computer software is protected by copyright laws. When you purchase software, you do not become the owner of that software or copyright. Rather, you are purchasing the right to use the software under certain restrictions imposed by the copyright owner, typically the software publisher. The precise rules are described in the license agreement that comes with accompanying the software. It is critical that you understand and adhere to this agreement. Most often, the agreements states that you have the right to load the software onto a single computer and make one backup copy. If you copy, distribute or install the software in ways that the license prohibits, whether you are swapping disks with friends and coworkers or participating in widespread duplication, you are violating federal copyright law. Even if you only help someone else make unauthorized copies, you are still liable under the copyright law.

Know the Law

Many businesses, both large and small, face serious legal risks due to software piracy. Under the law, a company can be held liable for its employees' actions. If an employee is installing unauthorized software copies on company computers or acquiring illegal software through the Internet, the company can be sued for copyright infringement, even if the company’s management was unaware of the employee's actions.

Quite simply, to make or download unauthorized copies of software is to break the law, no matter how many copies are involved. Whether you are casually making a few copies for friends, loaning CDs, distributing and/or downloading pirated software via the Internet, or buying a single software program and then installing it on multiple company computers, you are committing a copyright infringement. If you or your company is caught copying software, you may be held liable under both civil and criminal law.

A company or an individual found using unlicensed software and violating copyright laws can pay damages of up to $150,000 for each software title copied. In addition, the government can criminally prosecute you for copyright infringement. If convicted, you can be fined up to $250,000, or sentenced to five years in jail, or both.

What are the economic impacts of software piracy?

In the United States, 20 percent of all business software is unlicensed. Reducing the current rate of software piracy in the United States by just 10 percentage points over four years could generate more than 32,000 new jobs, $41 billion in economic growth, and $7 billion in tax revenues. The information technology (IT) industry is a major contributor to the American economy and the presence of software piracy does nothing to promote the health and well-being of the industry, the general economy, or society at large.

What are your responsibilities as a software user?

Your first responsibility as a software user is to purchase only legitimate software products. When buying software, make sure you get genuine disks, manuals and license documentation. Avoid loose or hand-labeled disks or software offered at prices that are "too good to be true." Be wary of unscrupulous Internet vendors, who advertise attractive deals on "genuine" software. Keep in mind that a high percentage of software sold through online auctions is illegal. Next, you have a responsibility to install and use your software in accordance with the license agreement. Since these agreements differ from publisher to publisher, you need to read them carefully. When someone else installs the purchased software, be sure that individual provides you with proof that the product is properly licensed.

What more can you do to prevent piracy?

You can report software piracy confidentially to BSA by calling the toll-free Anti-Piracy Hotline at 1-888-NO-PIRACY or by visiting www.bsa.org. You may be eligible for a reward of up to $1,000,000 for qualifying reports.