Reports of illegal software use on the rise


15 Apr 2004

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The Irish chapter of the Business Software Alliance (BSA) has reported that more than 113 reports of illegal software use were recorded in 2003, resulting in 104 enforcement actions. These actions resulted in High Court orders being granted as well as enabling the BSA to sue for damages.

According to a Global Software Piracy survey conducted by the International Planning and Research Corporation (IPR), Ireland’s piracy rate for business software was 42pc during 2002. As a result, the Irish software industry lost almost US$44m in 2002.

The BSA said that next week it will launch an initiative that will enable companies to take the first step towards implementing effective software asset management processes and ensuring that they are free of illegal software that could put their businesses at risk.

The Software Audit Return form, available from 19 April, enables businesses to review the software in use and the licenses purchased, and acts as an initial step towards gaining control of the software used within an organisation. This allows for significant cost savings, not only in direct expenditure on software, but also in related process and infrastructure costs. It prevents over-licensing, identifies over-deployment of hardware, reduces IT administration and support costs and enables businesses to see where the return on software investment lies.

In terms of the actions taken by the BSA, businesses found to be failing to comply with copyright laws in 2003 ranged from small architectural practices to medium sized engineering firms to large financial institutions. Ironically, the hi-tech industry was one of the worst offenders, accounting for 29pc of the firms reported to the BSA (including internet, software and telco companies). Manufacturing firms were the next worst culprits, accounting for 18pc of the reports made followed by the construction and engineering industry with 15pc of reports made.

In order to incentive the reporting of illegal software usage, the BSA offers a reward of up to €10,000 for information that leads either to a successful settlement or prosecution. People who wish to report illegal software usage can do so via a special hotline or on the BSA’s website at www.bsa.org/ireland.

One of the largest awards came from a case where judgement for damages in excess of €90,000 was made against a Cork-based Internet Café. Early last year the BSA raided two premises from which Colefield Developments Ltd operated and discovered several unlicensed members’ software programs in use. The BSA subsequently obtained a court order stopping the company from using illegal copies of software again and was awarded damages of over €90,000.

BSA Ireland Chair, Julian McMenamin, said: “Illegal software use hurts many entities but most of all the IT industry. Technology related companies that do not put effective software asset management procedures in place are literally shooting themselves in the foot. In 2002 the global software industry lost US$13 billion due to software piracy.”

In terms of the new audit service from the BSA, McMenamin said: “We are here to help businesses avoid software licensing problems and promote a safe and legal digital world. Legal action is the last effort taken by the BSA. But, directors of all organisations must pay careful attention to their software management. What must be realised is that intellectual property infringement is not only against the law but it has broad social and economic implications. Of course, the benefits of business software go well beyond jobs and tax revenues. At the most basic level the use of IT boosts creativity and productivity while reducing costs.”

An IDC Study released last year states Ireland’s economy would increase by €570m, benefit from 2,400 new high-wage jobs and US$236m in tax revenues by 2006 if software piracy was reduced by 10 percentage points.

By John Kennedy