Software Pirates Fined by Watchdog Group

The BSA, an industry watchdog group, said it is spreading out details of the penalties this week in order to highlight the problem of software piracy in small to medium-sized companies.

"The larger corporations are much more aware of this problem than before," the BSA told the E-Commerce Times. "It's the small and medium-sized companies that are far behind. We really see this as a rampant problem in that segment."

Unlicensed Programs Illegal

The typical software pirate is not aggressively breaking the law, BSA officials said. Rather, the theft is usually copying programs or using unlicensed copies of software programs.

Companies that buy new computers, for example, are supposed to get licenses for the software. The BSA has an education program and also has set up a hotline for reporting violations.

"Almost every one of these cases began with a call to the piracy hotline from current or former employees," said Bob Kruger of the BSA's enforcement division.

Global Problem

A study released last month by International Planning and Research showed that global piracy losses exceeded $12 billion in 1999 and $59 billion over the past five years. The study estimated that in 1999, more than one of every three business software applications were pirated.

"No industry would or should tolerate such a high rate of theft," BSA president Robert Holleyman said. "The explosive growth of the Internet is making piracy even more prevalent, since pirated copies of software can be distributed and downloaded quickly and globally, with the click of a mouse."

U.S., Canada Lead in Losses

Though the rate of piracy in the U.S. and Canada has declined from 32 to 25 percent over the last five years, total losses are still greater because of the sheer volume of the software market. Piracy losses totaled $3.6 billion in 1999.

"Too many U.S. and Canadian businesses are getting a free ride on pirated software," said Ken Wasch of the Software and Information Industry Association (SIIA). "Business owners that fail to respect copyright law and pay for software should be prepared to incur fines that could have a significant impact on their bottom line."

The BSA, in existence since 1988, is made up of some of the largest names in the high-tech industry, including Adobe, Corel, Microsoft (Nasdaq: MSFT) , IBM (NYSE: IBM) , Intel (Nasdaq: INTC) and Compaq. In addition to fighting software piracy, the association tries to educate users on copyrights as well as advocating "public policy that fosters innovation and expands trade opportunities," according to a company release.

The organization settled with companies in 11 U.S. states overall.