By Pelland, Dave
Risk Management , Vol. 43, No. 12
It's no secret by now that as technology changes the way we do business, familiar exposures are transformed and new ones emerge. Copyright infringement of software products has not only kept pace with the times, it's actually grown tremendously as the illegality of duplicating a computer program has been widely swept aside by the ease of doing so. Many otherwise law-abiding people and organizations routinely (and often inadvertently) break the law by duplicating copyrighted software programs. To stem a riptide of infringement that it estimates cost member companies more than $1.05 billion annually in the United States alone, the Software Publishers Association (SPA) is aggressively trying to educate organizations about the importance of respecting copyrights, providing tools to help companies identify any problems and suing suspected violators.
Peter Beruk, the association's director of domestic anti-piracy, says that most copyright violations stem from employees either bringing in pirated software to use in the office or making illicit copies of programs their company has paid for. In some instances, managers duplicate software to stretch a department's budget.
While companies in many industries are exposed to the theft of their intellectual property, the software industry is especially vulnerable because its products are so easy to duplicate. And unlike audio tapes or videotapes, there is no degeneration in quality from copy to copy-the duplicated software is just as effective as the original. It takes only a few minutes and costs virtually nothing for users to duplicate a program that reflects years and millions of dollars of development. In fact, the widespread nature of software piracy erodes any stigma for many users.
In most cases, companies don't know that they have a problem, Mr. Beruk says. "In an effort to get their jobs done, employees may take it upon themselves to go to a friend's computer, copy the software and install it on their own machine. We also see companies that mistakenly believe they only have to buy one copy for all of their computers."
For companies careless about copyright infringement, the discovery of illicit software can become an expensive and embarrassing surprise. Since 1985, the SPA has received more than $16 million in settlements from its anti-piracy actions. In a typical case, a Florida junior college paid $135,000 this year to settle a suit filed by SPA. Before the settlement was reached, the association received permission to, accompanied by deputy U.S. marshals, conduct an audit of the programs installed on the college's computers. …