Are YOU a Pirate?


What Everyone Should Know Regarding Software Piracy Laws.

In my practice, I have encountered many situations both with individual and business clients where they received notices from software companies alleging my clients had violated software piracy laws.  These notices are no joke and not for the circular file.

My most recent experience has been with a business client who was accused of illegal and unauthorized use of some engineering design software.  This circumstance resulted from a visitor to my client's business location who had pirated software on his computer and logged on to my client's wireless internet system.  The software manufacturer tracked the software's unauthorized usage to my client's "IP" (internet) address and claimed my client violated federal copyright law.

What is the Law Regarding Software Piracy?

When you purchase software, you do not become the owner of the copyright.  Rather, you are purchasing the right to use the software under certain restrictions imposed by the copyright owner.  The precise rules are described in the documentation accompanying the software - the license.  If you copy, distribute or install the software in ways that the license prohibits, whether you are swapping disks with friends and co-workers or participating in wide-spread duplication, you are violating federal copyright law.  Even if you only help someone else make unauthorized copies, you are still liable under the copyright law.

Many individuals in businesses, both large and small, face serious legal risks because of software piracy.  Under the law, a company can be held liable for its employees' actions.  If an employee is installing unauthorized software copies on company computers or acquiring illegal software through the internet, the company can be sued for copyright infringement.  This is true even if the company's management was unaware of the employee's actions.  There are certain controls that an employer can implement to discourage these types of practices, and those policies and procedures should be pursued.  

What are the Penalties for Pirating Software?

Software theft is a serious matter.  If you or your company would be caught copying software, you may be held liable under both civil and criminal law.  The owner can seek to stop you from using its software immediately and can also request monetary damages which, pursuant to certain statutory provisions, can be as much as $150,000.00 for each program copied.  In addition, the government can criminally prosecute you for copyright infringement.  If convicted, you can be fined up to $250,000.00 or sentenced to jail for up to five years, or both.

Apart from legal consequences, using copied or counterfeit software also means:

  • Greater exposure to software viruses, corrupt disks or otherwise defective software.
  • Inadequate or no documentation and no warranties.
  • Lack of technical product support available to properly licensed users.
  • Ineligibility for software upgrades offered to properly licensed users.

What are Your Responsibilities as a Software User?

Your responsibility as a software user is to:

  • Purchase only legitimate software products.
  • Make sure you get genuine disks, manuals and licensed documentation.
  • Avoid loose or hand labeled disks or software offered at prices that are "too good to be true".
  • Be wary of unscrupulous internet vendors who advertise attractive deals on "genuine" software that was overstocked or otherwise discounted for inventory reasons.
  • Keep in mind that a high percentage of software sold through online auctions is illegal.

So, What Happened to My Client?

The client I mentioned earlier in this article was fortunate.  We were able to assemble, through our firm's network of professional contacts, a law firm specializing in software piracy defense to assist us in navigating a successful resolution in defense of the claim.  We also introduced our client to an information technology firm who was able to assist the client in designing and implementing procedures to help avoid this occurrence in the future.