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Software ̇Piracy ̇OLE ̇revised WL040/Bidgolio-Vol I WL040-Sample.cls June 20, 2003 13:8 Char Count= 0
Software PiracySoftware Piracy
Robert K. Moniot,Fordham UniversityIntroduction 297
Modes of Software Piracy 297
End-User Piracy 297
Commercial Piracy 298
Motivations for Software Theft 298
Implications of the Studies 299
Organizations That Combat Software Piracy 299
Scope and Impact of Piracy 299
Estimated Piracy Rates 299
Methodology of the Study 301Financial Impact of Piracy 301
Mechanisms for Protection of Software 302
Introduction 302
Legal Protection Mechanisms 302
Enforcement Efforts 303
Conclusion 305
Glossary 305
Cross References 305
References 305INTRODUCTION
“Don’t copy that floppy!” is the rallying cry of the software
publishers’ organizations. Perhaps nowadays the slogan
needs to be updated to “Don’t copy those warez!” as the
focus of activity shifts to the Internet. But whatever form
it takes, there is no question that piracy is a major prob-
lem facing the software industry. In the year 2001, an esti-
mated 40% of all copies of business software applications
installed worldwide were pirated, having a retail value of
some $11 billion. This lost revenue deprives software com-
panies of the remuneration to which they are entitled for
their efforts in developing and distributing software. It po-
tentially may increase prices for software and inhibit in-
novation of new products and may also cause some com-
panies to go out of business.MODES OF SOFTWARE PIRACY
Software piracy is any copying of software in contraven-
tion of its license. One of the biggest obstacles to reduc-
ing piracy is the widespread ignorance of what actions
constitute piracy. Here are some ways that piracy can
occur:Downloading proprietary software from an unauthorized
Internet bulletin board or Web site, or directly from
another user via a peer-to-peer file sharing program.
Purchasing counterfeit software in a store or at an Inter-
net Web site or auction.
Borrowing the medium containing an application pur-
chased by an employer for use at one’s place of work
and installing it on a personal computer at home.
Borrowing a program from a friend, a co-worker, or a
library, and installing it on one’s own computer.
Selling or giving away an old version of a program after
receiving an upgrade.
Leaving an installed program on an old computer after
installing it on a new computer without purchasing a
new copy of the program.
Installing more copies of a program on the computers in
an enterprise than the license allows, or installing it ona server for use over a local area network if this is not
permitted by the license.Note that it is always permissible to make a copy of soft-
ware for backup or archival purposes, but any such copy
must be destroyed if the user no longer can legitimately
use the program. Also, users may sell or give away pro-
grams they legitimately own to someone else, provided
they do not retain their copies. For instance, users can
leave installed software on old machines that they sell or
give away if they purchase new computers with new soft-
ware preinstalled.
The term “piracy” has long been used to mean acts of
infringement of copyright. Thus in recent times it was nat-
ural to adopt the term to include the illicit copying of soft-
ware, even before the application of copyright law to soft-
ware was fully clarified. However, piracy is a broad term
encompassing many diverse forms of infringement, only
some of which are listed above. Each of these forms has its
own legal and ethical ramifications, as well as distinct per-
ceptions by its practitioners. One important distinction is
between copying for private use only, or end-user piracy,
and copying for sale. Many people consider copying for
personal use as either acceptable or having only minor
ethical significance, whereas most recognize copying for
sale as both unethical and illegal. Another distinction is
between small-scale and large-scale piracy. Although each
act of small-scale piracy is relatively minor, the aggregate
effect is quite large. In fact, small-scale copying for per-
sonal or corporate use is said to be the most widespread
form in practice and to account for over half the total
value of pirated software (Software and Information In-
dustry Association, 2000). The growth of the Internet as
a medium for exchange of software has greatly facilitated
this form of piracy.End-User Piracy
Small-scale piracy mainly takes the form of “softlifting,”
which means copying by individuals for their own per-
sonal use. Softlifting can be done in a wide variety of ways.
Probably the most common method is to borrow the in-
stallation media from a friend or co-worker. Or instead of297