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The IP Piracy Menace - To Be or Not To Be!

Dinesh Jotwani talks about the serious implications of deploying pirated software.

Today we have easy access to software products in the market with just a single degree of separation between the producer and the consumer. On one hand, it has opened up new vistas for software developers, content producers and publishers; but on the other it has created a host of new problems, foremost among them being counterfeiting and piracy.

Software being one of the most valuable assets of an organization, its illegal reproduction and distribution has significant implications on the industry. An IDC study reveals that 35% of all PCs software installed in 2006 worldwide was illegal, pegging global losses to a whopping $40 billion.

This is compounded by the fact that there is lack of awareness about the intricacies of software piracy and most mistake it to being restricted to software getting corrupt. Additionally, a circulating myth about pirated software usage is that only the original purchaser is in infringement, and subsequent users are not bound to any contract. It is yet to be realised that acceptance of the licensing agreement before installation is sufficient to create a contract between the copyright holder and the end user. Some softwares would stipulate a binding license contract if the box containing the CD is manually opened.

The biggest risk due to the usage of pirated software is the overall security threat to an organizations’ IT infrastructure. In addition to regular system break-downs, pirated software installations are notorious for receiving limited updates and security patches, making the system extremely vulnerable to external security attacks like malicious code, phishing and spam. This does not include the cost of potential loss of proprietary information due to such unauthorized software installations.

The cost to organizations from a single pirated software installation runs into thousands of dollars and the data loss due to such malicious installations can run into thousands of dollars. It is learnt that in India alone, around $566 million was lost in 2005 due to piracy. Eventually, as it may turn out to be, the payback of using pirated software would far exceed the price of purchasing licensed software.

Awareness & Enforcement are Key to Combating Piracy

Awareness is an important tool to counter the epidemic of piracy; the other being law enforcement and industry efforts. Increasing awareness about the economic implications of piracy among end-users is essential, considering the huge influx of new users in emerging markets.

We have stringent laws for Intellectual Property protection, but the challenge is the effective enforcement of the prescribed laws. In a software piracy case, the crime has to be identified, reported and action against it has to be taken immediately.

In order to spread awareness, the government has set up collective administrative societies, which organize seminars and workshops. Handbooks of Copyright law are also circulated free-of-cost amongst public, police, enforcement agencies and officials. Additionally, modules of copyright infringement have been introduced in the training program at national academies and colleges. Special cells for copyright enforcement have been created in almost all states; many of them being implemented on Public Private Partnership (PPP) model with industry leaders. Further, according to law, any police officer having the requisite rank may conduct search and seizure operations as well as effect arrests without the lodging of any formal complaint.

The Government is also making relentless efforts to encourage the use of legitimate software within its own departments; and put its weight behind the industry and enforcement policies.

Software companies eyeing overseas markets will require proving their ability to maintain adequate security levels. Security is not just a mere statutory requirement but an important factor to compete globally. Software giants on their part are engaging students, academicians and Government bodies to educate them about piracy and help safeguard their data against any threats. For individuals, who get affected by piracy the most, software companies offer programs like Digital Rights Management technology, which allows copyright holders to manage and restrict usage of digital media and devices.

In Conclusion

It is difficult to tap the problem at its root of origin due to lack of a fool-proof way of tracking pirated software makers. Hence, continuous efforts are to be made to do away with the channel of distribution of such software by deterring people from selling it. The media is the most dynamic tool that is being aggressively used to spread awareness through advertisements, hoardings, news articles, television programs and celebrity appeals. As India increasingly caters to global clients, it becomes imperative that we continue to adopt world class information security standards and project a better image of the country in the global marketplace.

The author is Senior IP Counsel (Asia Pacific), Symantec Corp.