Pirated software represents lost sales for national and
international software publishers based in the UK of around $1.6
billion, according to the BSA.
Conducted for the first time by global technology research firm
IDC, this year's BSA global piracy study incorporates major
software market segments including operating systems, consumer
software and local market software. The inclusion of these new
categories, says the BSA, paints a broader, more accurate picture
of the software piracy problem.
In the EU region the piracy rate was put at 37%. The cost to
software publishers in the region is valued at over $9.7 billion.
The figures are similar to those of recent years; but due to the
different methodology used this year, the new results suggest that
piracy is getting worse, according to IDC.
For its analysis, IDC drew upon its worldwide data for software
and hardware shipments, conducted more than 5,600 interviews in 15
countries, and used its in-country analysts around the globe to
evaluate local market conditions.
The BSA today announced a five-point plan to tackle the issue of
software piracy in the region. It includes engendering respect for
IP, starting from an early age in all schools, universities and
businesses. In Ireland a scheme is already underway to promote the
value of software and the need to be licence compliant to teachers
and secondary school pupils.
Another part of the plan is to increase appreciation of software
as a fundamental business asset. Mike Newton, UK spokesperson for
BSA, gave the example of a typical finance director: if asked how
many company cars the company has, he will know the answer; if
asked how many software licenses the company has, he won't.
Duncan Brown, the IDC's UK Consulting Director, told OUT-LAW
that they believe only 5% of the software piracy problem is with
the home user – who may be downloading illegal software using P2P
or installing from counterfeit discs.
The remaining 95% is business piracy, said Brown, and, at least
within the UK and Western Europe, the biggest problem seems to be
license-creep. This typically happens when software is installed by
a company on more PCs than it has purchased licenses for.
Some businesses do fall into the trap of buying counterfeit
software, often without knowing it. "They think they've bought
legitimate software," explained Newton, "but they haven't."
Newton said that many successful sellers of counterfeit products
will price their products only slightly below the normal retail
price of the official product to fool purchasers into thinking they
are simply getting a good but genuine deal.
The BSA has developed tools to help businesses put in place the
policies and procedures required for effective software asset
management, or SAM, including the JustAskSam web site.
Enforcement continues to be an important part of the BSA's
remit. Newton told OUT-LAW that the BSA averages one settlement
every week with a company that has been found breaking copyright
laws through software piracy and wants to avoid a court
appearance.
Legislative change
Newton and his team are also campaigning for a change to
European laws.
At present, many European countries allow copying of copyright
works for private use, and compensate rights holders with a levy on
blank media. The UK does not allow such copying, so does not have
such a levy on blank media. The recent Copyright Directive left
each Member State of the EU free to decide whether or not to allow
private copying, asking only that there is fair compensation to
rights holders if copying is allowed.
Newton says that such levies on digital media are outdated.
"These levies were introduced to add a few cents to the cost of a
cassette, to compensate the music industry for home copying of
albums," he explained. "But now that you can copy thousands of
pounds' worth of software onto one DVD, these levies just don't
make sense."
The BSA instead wants a uniform approach across Europe, so that
private copying is forbidden, as in the UK.
Without this harmonisation, says Newton, the uptake of Digital
Rights Management (DRM) is being stifled.
Effective DRM prevents private copying of copyright-protected
material; so there should be no need for the levy approach to
compensating media companies.
Another argument against levies is that, with DRM, consumers
have a good argument that they're being taxed for something they
cannot do even if they want to. Without DRM, there are still many
who would not use their blank media or recording devices to
infringe copyright, so they also have an argument for not paying
compensation.
The BSA is also calling on EU Governments to ensure swift,
faithful implementation of the recently adopted Enforcement
Directive.
The UK is still to consider how to implement the Directive. No
major changes are required to comply with the Directive, but the
BSA recommends using the Directive as an opportunity to review
certain legal procedures in the UK.
OUT-LAW spoke to Graham Arthur, a lawyer with US firm Covington
& Burling, who advises the BSA. He gave an example of a change
to English law that would help his client.
Arthur explained that if, say, a company gets a tip-off about a
warehouse full of counterfeit DVDs, the company can ask the police
for help.
If the police cannot or will not get involved due to lack of
resources, the company may want to act in its own right. So the
company would apply to a court for an order giving it the right to
inspect the warehouse.
However, under current procedures, Arthur says the identity of
the whistle-blower would need to be revealed to the court. And when
the court papers are presented at the warehouse for the surprise
inspection to begin, the identity of that person will be
revealed.
Clearly, that is a significant deterrant for anyone who may be
thinking of sharing their inside information with an organisation
like the BSA.
But that's not the position in Ireland or in much of Continental
Europe, explained Arthur, where it is possible to keep confidential
the identity of the individual. It also differs from the position
in Scotland.
The Directive, he argues, presents a good opportunity to change
that procedure. It also presents an opportunity to reconsider the
remedies available to those whose software is used without
licence.
"If you use software for several years without a licence, you
can escape simply by buying a licence for that use," said Arthur.
"But the current level of damages that UK courts will award does
not reflect the cost of the investigation; arguably, it only covers
the licence fee."
He contrasts this with the position in Ireland, where the
damages will be whatever the court sees fit, because Irish legal
procedure has more scope for so-called additional damages and
exemplary damages.
"We have additional damages," said Arthur of English law, "but
the courts interpret this very narrowly in the case of end-user
piracy."
The Enforcement Directive only requires that the UK has a
damages remedy. It already does. But Graham Arthur and the BSA are
making the point to the UK Government that now is a good time to
review that remedy. The BSA would also like the right to bring
actions in its own name - rather than in the name of its individual
member software companies.
"We don't want to see wholesale changes to intellectual property
rights," concluded Arthur. "But discrete fixes to the laws and
procedures that govern how those rights are protected would be very
helpful."
