The underworld has a new kind of crook: the software
In the past year, counterfeit copies of dozens of popular
computer programs have been popping up on store shelves. The fakes
are good enough to fool retailers.
"This is not the back streets of Hong Kong," says Anne Murphy, a
Microsoft attorney investigating software counterfeiting. "We have
an indigenous counterfeiting industry in the United States."
"Everyone believes there's no problem in the United States,"
adds Ron Barker, a former piracy investigator and now spokesman for
Novell Inc., the Provo, Utah, manufacturer of the leading
networking software for desktop computers. In fact, so much
software is sold in the US that overall losses dwarf other
Or at least they appear to.
Counterfeiting losses are hard to estimate. Overall software
piracy - which includes illegal copying of software for friends and
colleagues as well as outright counterfeiting - cost the software
industry nearly $2.9 billion in US sales last year, according to
estimates by the Business Software Alliance (BSA), a Washington,
D.C., trade group. That's $800 million more than the No. 2 country
for piracy: Japan.
So far, much of the activity is in California. For example:
*This month, investigators for the Los Angeles district attorney
arrested a computer-software dealer and seized some $1 million of
illegally copied software. The district attorney alleges that the
dealer, Thomas Nick Alefantes, is "Captain Blood," a counterfeiter
who has operated for at least five years.
*This summer a federal court issued preliminary injunctions that
barred five California companies from selling any more counterfeit
copies of software named in the suit. The suit, initiated by the
Software Publishers Association (SPA), marks the first time the
association has taken legal action against alleged counterfeiters.
"It's a growing problem," says Peter Beruk, litigation manager for
the SPA, the principal trade group representing the software
For several years, software counterfeiters have churned out fake
copies of operating systems and graphical interfaces, especially
the DOS and Windows programs from Microsoft. Now counterfeiters are
replicating other software programs. Mr. Beruk says he has seen
counterfeits of some 20 titles. "It's not a lot, but a year ago we
weren't seeing this. My suspicion is that it's going to go up," he
The counterfeit operations are not only branching out, they're
getting more sophisticated. Instead of making one-by-one copies of
software on easy-to-spot recordable disks, illegal shops stamp out
the optical disks just as legitimate software companies do. …