Software Piracy 13809

Software Piracy

What is Software Piracy

The PC industry is just over 20 years old. In those 20 years, both the quality

and quantity of available software programs have increased dramatically.

Although approximately 70% of the worldwide market is today supplied by

developers in the United States, significant development work is occurring in

scores of nations around the world. But in both the United States and abroad,

unauthorized copying of personal computer software is a serious problem. On

average, for every authorized copy of personal computer software in use, at

least one unauthorized copy is made. Unauthorized copying is known as software

piracy, and in 1994 it cost the software industry in excess of US$15 billion.

Piracy is widely practiced and widely tolerated. In some countries, legal

protection for software is nonexistent (i.e., Kuwait); in others, laws are

unclear (i.e. Israel), or not enforced with sufficient commitment (i.e., the

PRC). Significant piracy losses are suffered in virtually every region of the

world. In some areas (i.e., Indonesia), the rate of unauthorized copies is

believed to be in excess of 99%.

Why do People Use Pirated Software?

A major reason for the use of pirated software is the prices of the

REAL thing. Just walk into a CompUSA, Electronics Boutique, Computer City,

Egghead, etc and you will notice the expensive price tags on copies of the most

commonly used programs and the hottest games. Take the recent Midwest Micro

holiday catalogue for example and notice the prices. Microsoft Windows 95: $94,

Microsoft Office 95: $224, Microsoft Visual C++: $250, Borland C++: $213, Corel

Draw 7: $229, Corel Office Professional 7: $190, Lotus Smartsuite 96: $150,

Microsoft Flight Simulator95: $50, Warcraft 2: $30. The list goes on and on and

the prices for the programs listed above were only upgrade versions. Users of

the software listed above include anywhere from large companies like AT&T to

yourself, the average user at home. Although a $30 game like Warcraft 2 doesn’t

seem like much, by the time you finish reading this paper, it will seem like a


Ease of Availability

Since the law states clearly that making a copy of what you own

and distributing it or installing more than one copy of one piece of software on

two separate computers is illegal, then why do the average Joes like you and us

still do it? There are many answers to that question and all of them seem

legitimate except that no answers can be legally justified. A friend borrowing

another friend’s Corel draw or Windows 95 to install on their own PC is so

common that the issue of piracy probably doesn’t even come to mind right away or

even at all.

Pirated Software on the Internet

The Internet is sometimes referred to as a “Pirate’s Heaven.”

Pirated software is available all over the net if you bother to look for them.

Just go to any of the popular search engines like Excite, Infoseek or Yahoo and

type in the common phrase “warez, appz, gamez, hacks” and thousands of search

results will come up. Although many of the links on the pages will be broken

because the people have either moved the page or had the page shut down, some of

the links will work and that one link usually has a decent amount of stuff for

you to leech off of or a better way to put it is for you to download.

Web Sites That we Have Personally Visited:

Jelle’s Warez Collection

Wazh’s Warez Page

Beg’s Warez Page

Chovy’s Empire

The Spawning Grounds


Lmax’s Warez Page

Jugg’s Warez-List

Jureweb Warez Page

Top Warez Page

Why Are They There?

Why is there pirated software on the net? There could only be two

possible answers. Either the people who upload these files are very nice people

or they do it just because its illegal and browsers of the web like us wouldn’t

mind taking our time to visit these sites to download the software. What they

get out of it is the thousands of “hits” their sites get a day which makes them

very happy.

Anonymous and Account-Based FTP Sites

FTP stands for File Transfer Protocol. FTP sites are around so that

people can exchange software with each other and companies like Microsoft can

distribute info and demos to users who visit their FTP site. Something they

don’t want happening is the distribution of their full-release products on

“Pirate” FTP sites. “Pirate” FTP sites come and go. Most sites don’t stay up for

more than a day or two. They are also referred to as 0 day FTP sites. Its

extremely difficult to logon to these sites becasuse they are usually full of

leechers like us or require a username and password.

FTP Sites That we Have Visited:


There are over 20,000 newsgroups on the net. The majority of them

are nonsense but if you happen to stumble upon the right one, you’ll be able to

get almost any crackor serial number for any game or program. Although programs

and games are not abundant on newsgroups, you’ll be able to obtain registered

programs of such popular shareware like Winzip and Mirc and if you post trade

requests, people will respond to your request.

Newsgroups With Cracks, Serial #’s, Programs and Games





Exchanging Through E-Mail

It is illegal to send copyrighted programs and games through e-mail

but does anyone really care? Everyday, there are hundreds and thousands of

illegally attached programs and games sent through the net in the form of e-mail.

Just visit any of the above newsgroups and you’ll see listings of people who

want to trade through e-mail. We placed an ad in news:alt.binaries.cracks

requesting three programs: Magnaram 97, Qemm8.0 and Corel Draw 7. We managed to

receive both Magnaram 97 and Qemm 8.0 through e-mail from some nice person but

did not receive Corel Draw 7 most likely because it was not a reasonable demand.

Modem Speeds

Part of the reason nobody sent us Corel Draw 7 is because of the size

of the program and the many hours it takes to upload and download it. The two

most common modem speeds at the time that this report was written are 28.8kbps

and 14.4kbps. Both speeds are considered to be extremely slow when it comes to

transferring enormous amounts of data. Most of the programs and games nowadays

are on CD-Roms which if full, contain 650MB of data. The new X2 Technology,

Cable modems, ISDN modems and DirecPC satellite dishes could solve the long

download time problems a little better considering that all the above mentioned

modems are two to fourteen times faster in transferring data than the 28.8kbps


Cost of Pirated Software To The Industry

Piracy cost companies that produce computer software $13.1 billion in

lost revenue during 1995. The loss exceeded more than the combined revenues of

the 10 largest personal computer software companies. The dollar loss estimates

were up from the $12.2 billion in 1994 because of the spreading use of computers


Microsoft (The Big Loser)

MS Windows 95 $179

MS Office Pro 95 $535

MS Project 95 $419

MS Publisher 97 $69

MS Visual C++ 4.0 $448

These are the prices they expect people to buy their software at. In Hong

Kong, copies of these lucrative pieces software can be had for about five US

dollars for all of them on one CD very easily. That will be further explained


The Honest Consumer

Software piracy harms all software companies and, ultimately, the end

user. Piracy results in higher prices for honest users, reduced levels of

support and delays in funding and development of new products, causing the

overall breadth and quality of software to suffer.

US Laws

In 1964, the United States Copyright Office began to register software

as a form of literary expression. The Copyright Act, Title 17 of the U.S. Code,

was amended in 1980 to explicitly include computer programs. Today, according to

the Copyright Act, it is illegal to make or distribute copyrighted material

without authorization. The only exceptions are the user’s right to make a copy

as an “essential step” in using the program (for example, by copying the program

into RAM) and to make a single backup copy for archival purposes (Title 17,

Section 117). No other copies may be made without specific authorization from

the copyright owner. In December 1990, the U.S. Congress approved the Software

Rental Amendments Act, which generally prohibits the rental, leasing or lending

of software without the express written permission of the copyright holder. This

amendment followed the lead of the British Parliament (which passed a similar

law, The Copyright, Designs and Patents Act, in 1988), and adds significant

additional protection against unauthorized copying of personal computer software.

In addition, the copyright holder may grant additional rights at the time the

personal computer software is acquired. For example, many applications are sold

in LAN (local area network) versions that allow a software package to be placed

on a LAN for access by multiple users. Additionally, permission is given under

special license agreement to make multiple copies for use throughout a large

organization. But unless these rights are specifically granted, U.S. law

prohibits a user from making duplicate copies of software except to ensure one

working copy and one archival copy. Without authorization from the copyright

owner, Title 18 of U.S. Code prohibits duplicating software for profit, making

multiple copies for use by different users within an organization, downloading

multiple copies from a network, or giving an unauthorized copy to another

individual. All are illegal and a federal crime. Penalties include fines of up

to $250,000 and jail terms up to five years (Title 18, Section 2320 and 2322).

Business Software Alliance (BSA)

The Business Software Alliance (BSA) promotes the continued growth of

the software industry through its international public policy, enforcement, and

education programs in 65 countries throughout North America, Europe, Asia, and

Latin America. Founded in 1988, BSA’s mission is to advance free and open world

trade for legitimate business software by advocating strong intellectual

property protection for software. BSA’s worldwide members include the leading

publishers of software for personal computers such as Adobe Systems, Inc.,

Apple Computer, Inc., Autodesk, Inc., Bentley Systems, Inc., Lotus Development

Corp., Microsoft Corp., Novell, Inc., Symantec Corp., and The Santa Cruz

Operation, Inc. BSA’s Policy Council consists of these publishers and other

leading computer technology companies including Apple Computer Inc., Computer

Associates International, Inc., Digital Equipment Corp., IBM Corp., Intel Corp.,

and Sybase, Inc. Statistics of Software Piracy.

Court Cases

Inslaw vs. Dept. of Justice

-Sued Justice Dept for Software piracy.

-In 1982, Inslaw landed a $10M contract with the Justice Dept.

to install

PROMIS case-tracking software in 20 offices.

-They allegedly spent $8M enhancing PROMIS on the assumption

that they

could renogotiate the contract to recoup the expenses.

-But after the Justice Dept. got the source code, they

terminated the contract

pirated the code

-By 1985, Inslaw was forced into bankruptcy.

-Owners kept fighting and the case ended up in the US

Bankruptcy Court

-In Feb. ’88, Inslaw was awarded $6.8M in damages plus legal


Novell and Microsoft Settle Largest BBS Piracy Case Ever

-Scott W. Morris, operator of the Assassin’s Guild BBS, agreed

to pay

Microsoft and Novell $73,00 in cash and forfeit computer

hardware valued at

More than $40,000

-In the raid, marshals seized 13 computers, 11 modems, a

satellite dish, 9 gigs

of online data, and over 40 gigs of off-line data

Novell Files Software Piracy Suits Against 17 Companies in California

-The suits allege that the defendants were fraudulently

obtaining Novell

upgrades and/or counterfeiting NetWare boxes to give the

appearance of a

a new product

-The suit follows Novell’s discovery that the upgrade product

was being sold

in Indonesia, the United Kingdom, United Arab Emirates, as

well as the US

F.B.I. Reveals Arrest in Major CD-Rom Piracy Case

-The first major case of CD-Rom piracy in the United States

-A Canadian father and son were found in possession of 15,000


copies of Rebel Assault and Myst that were being sold at

25% of the retail


-Both men were free on bail

Pirated Software in Asia and the Rest of the World

Pirate Plants in China

The Chinese government says there are 34 factories in China producing

compact discs and laser discs. Authorities say most have legitimate licenses to

produce legal CDs. But production capacity far outstrips domestic demand.

According to the International Intellectual Property Alliance, a Washington,

D.C.-based consortium of film, music, computer software and publishing

businesses, China produces an estimated 100 million pirated CDs a year, while

its domestic market is only 5 million to 7 million CDs annually. Where is the

oversupply going? To Hong Kong, and then overseas. Another major problem is that

Chinese officials and soldiers have money invested to these factories so no

matter how hard the US pushes China to close down these factories, the Chinese

government will have a laid back approach. Software piracy in Asia is connected

to organized crime.

Vendors in Hong Kong

The Golden Shopping Arcade in Hong Kong’s Sham Shui Po district is a

software pirate’s dream and software companies nightmare. Here you can buy Cd’s

called Installer discs for about nine dollars US. All volumes of these

installers contain 50+ programs each compressed with a self-extracting utility.

Volume 2 has a beta copy of Windows 95 as well as OS/2 Warp, CorelDraw! 5,

Quicken 4.0, Atari Action Pack for Windows, Norton Commander, KeyCad, Adobe

Premier, Microsoft Office, and dozens of other applications, including a handful

written in Chinese. The programs on this disc cost around $20,00-$35,000 US

retail. It is very common for a store to be closed for a portion of the day and

then reopen later because of raids from authorities. These stores as you can

expect are extremely crowded with kids and tourists.

US Tourists

A good number of Americans who travel to Hong Kong or another part

of Asia will bring home pirated software of some sort because of the very low

prices for expensive pieces of software here in the US. The usual way to do it

is to stuff the cd’s in clothes and hand carried luggage. Another approach is

sending them back to the US using the postal service. Both of these methods work

very well. We have had relatives who have done this for us and the success rate

thus far is 100%. The United States Customs Service has been trained in the

apprehension of software pirates at ports of entry but this is a joke because

they are more worried about illegal immigrants and terrorists rather than

software pirates.

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