Piracy investigators responding to a tip recently "raided" Orem software developer 2021.- Interactive and found unlicensed copies of Adobe, Microsoft, Novell and Symantec software running on its computers.
The company settled a federal copyright lawsuit by agreeing to pay $75,000 in fines and buy legitimate replacement software. The firm is also recovering the amount of the fines from the company's previous owners, who had the illegal software in place when the company was sold early in 1997.The investigation and settlement are examples of the ongoing work of an international team of piracy investigators for the Business Software Alliance, a watch dog for major software developers in the United States.
Alliance enforcement vice president Bob Kruger told the Deseret News it has six other Utah companies under investigation.
Nationally, the alliance estimates 27 percent of all business software in the United States is being used illegally. The amount of American-made software illegally in use overseas skyrockets to 90 percent and more in some countries, Kruger said.
Revenue losses due to piracy add up to $2.8 billion per year in the United States and $11 billion worldwide.
Kruger, recruited by the alliance from his former job as a federal prosecutor, heads an office of 30 investigators with offices in Washington, D.C. The alliance also has offices in London and Singapore. Court-ordered judgments against piracy offenders totaling $8.5 million in the past year and membership dues from software companies the alliance represents pay for the team of investigators.
Utah-based network software developer Novell is an alliance member but also has its own 21-member piracy investigation team. "We have people both here in the U.S. and in Europe, Latin America and Asia," said former FBI agent Ed Morin, who manages Novell's worldwide anti-piracy campaign.
The alliance and most major software companies advertise toll-free numbers and e-mail addresses for piracy tipsters to use. The alliance's tip line is 1-888-NO PIRACY and its e-mail address is firstname.lastname@example.org, while Novell's tip line is 1-800-PIRATES and its e-mail address is pirates@novell.
com. Morin said Novell initiates more than 1,200 piracy cases each year - some of them duplicates of cases already under investigation.
Calls come from a number of sources, such as people who bought a new computer and later found software that came with it wasn't legitimate, and whistle-blowers who either work or used to work for a violating company.
Morin said the anti-piracy division costs Novell "several million dollars a year" to operate. "We seized $9 million in counterfeit product a couple of years ago - that more than takes care of the costs."
There is some redundancy in a software company investigating piracy cases and having the alliance investigate cases for it, but the in-house and contract investigators usually complement each other, Kruger said.
Novell would be more likely to investigate cases of software being pirated or altered by resellers, where the alliance would be more likely to investigate businesses that are using illegitimate software.
Software developers are the first in line to loose money when their product is pirated. "But it hurts the honest businessman, the honest resellers," Morin said.
2021.Interactive said being "busted" ended up being a positive experience. The company had problems when the new owners bought it, and officers were tending to other problems at first - not counting software licenses.
"The persons responsible for the copying that occurred are no longer with the company," said president and CEO Earl McKinzie. "We fully support the efforts of the (Business Software Alliance) to fight software piracy in the workplace."
"Many businesses don't know there is a watchdog organization out there that is willing to pursue complaints," Kruger said. "We have a problem getting companies to take this as seriously as they should."
Ten countries with the highest losses due to software piracy:
Country Dollar loss* % used illegally
United States $2.8 27
China $1.4 96
Japan $0.8 32
Korea $0.6 67
Germany $0.5 33
France $0.4 44
Brazil $0.4 62
Italy $0.3 43
Canada $0.3 39
United Kingdom $0.3 31
*Loss to software developers in billions
SOURCE: Business Software Alliance 1997 Global Software Piracy Report.