There’s a crime wave sweeping the state, the nation, and the world. It’s costing nations billions each year. And yet, some hardly regard it as a crime.
It’s software piracy – the illegal copying and distribution of copyrighted products. And while the problem is nothing new, the attitude of software companies is: They’re getting tough.
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Microsoft, the software giant, is boosting its efforts to nab companies that use more Microsoft software products than they have licenses for. It is also trying to do more to educate consumers on how to avoid buying counterfeit copies – and on the technical and legal troubles that can befall those tempted to use them.
While some estimates say that one in every four software products nationwide is pirated, Microsoft claims that Rhode Island’s problem is even greater: 36.5 percent of all software products used on home and business computers is pirated, compared to the national rate of 27 percent, said Melissa Covelli, spokeswoman for the company.
Covelli declined to speculate on why the state’s piracy rate surpasses the rest of the nation. But Linda Coppess, the company’s anti-piracy marketing manager, said Microsoft is willing to be flexible in negotiating time periods in which companies can become compliant with license requirements.
The problem, of course, is hardly limited to Microsoft. Some $2.7 billion is lost in revenues, jobs, and taxes, is lost each year in the United States, according to the Business Software Alliance.
The alliance is a national coalition composed of Microsoft and 10 other large software producers, including: Lotus Development, Bentley Systems, Corel Corp., Network Associates, Adobe, Autodesk, Novell, Symantec, and Visio.
The companies, which pay dues to the alliance, support its effort to fight pirated software. Working with federal marshals and local law enforcers, the alliance tracks tips called in to its 1-888 hot-line number and takes action against companies using software illegally.
In the past six years the alliance says it has collected more than $35 million in settlements from U.S. companies. Recently, it published a list of the most often caught states. Number one was California, whose companies have shelled out some $6.7 million for violating software copyrights. Texas, Illinois, New York, and Michigan round out the top five. The 10th most nabbed state was Massachusetts, where companies have surrendered $1.07 million. The alliance plows its winnings back into more piracy-fighting efforts
Most often, companies get caught because of a former employee who is just disgruntled enough to pick up the phone and squeal on his or her former company, said Diane Smiroldo, spokeswoman for the organization.
“They’re looking for revenge,” Smiroldo said.
And they’re getting it. Software piracy is “punishable by statutory damages of up to $100,000 for each work infringed, and may result in a felony conviction,” according to the alliance’s Web site at www.bsa.org.
Software piracy takes many forms. Individuals who copy software and give it to friends, or simply download the software onto more than one computer, are guilty. So are computer re-sellers who sell computers loaded with pirated software, in a process known has “hard-disk loading.”
A third form is counterfeiting, which Covelli said has become one of organized crime’s favorite scams. This is the mass marketing of pirated software products. A fourth form, Coppess noted, is the illegal sale of software designed for specific markets, such as education, to the general public.
But while illegal software pervades homes and businesses alike, many people fail to realize the severity of the offense, experts say. Because software is less tangible than, say, a television, and since copying it seems more innocuous than shoplifting, many dismiss it as a peccadillo. Indeed, some people consider it “socially acceptable,” Smiroldo said.
“People think it’s a victimless crime, no one gets hurt,” she said. “The software industry loses billions, and (that) translates into jobs, tax revenues, huge, huge losses.”
Worldwide, the Alliance maintains that nations lose some $11 billion in lost jobs, revenue, and taxes annually because of it.
Experts say companies can avoid legal problems if they ensure that their software licenses are up to date. Licenses can be issued per user, meaning the number of licenses must equal the number of users in the company, or they may be issued concurrently, in which the software comes with an agreement that a specific number of people will be permitted to use it.
But companies often fail to update their license agreements, often because no one in the company has been given the responsibility to do so. Experts say that in most cases, companies do not deliberately set out to violate license agreements. Instead, they simply fail to keep track of their inventory as their company grows.
Michael Davis, vice president of corporate sales at Providence’s UNICOM MicroAge, said companies should have a software management plan to be sure that their licenses are up to date. He noted that there are software products that can help companies better manage their systems and keep track of their inventory. The problem, however, is that the technology is just developing, and that actually tracking the number of software copies versus the number of licenses in a company takes a lot of effort.
”It’s a highly administrative thing to do, and it’s something that easily slips through the cracks with the best of intentions,” Davis said.
Still, more companies are developing software management plans now than before, said Lawrence R. Robins, an intellectual property lawyer with the Providence firm of Hinckley, Allen, & Snyder, who said software users are becoming more sophisticated and now have a better understanding of what their legal rights and obligations are.
