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Implications of Software PiracyEssay

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¶ … Software Piracy)

According to the Business Software Alliance (BSA), piracy is any unauthorized copying, downloading, sharing, or installing of copyrighted software. Software piracy is one of the most common areas of copyright infringement. Due to its prevalence, it is difficult to measure the exact magnitude of the worldwide piracy problem. Software developers estimate more than $3 billion is lost in the United States alone due to piracy (Christensen and Eining). Software piracy taxes from developers, distributors, and from the worldwide economy as a whole.

Russell (2001) cites Article 27 of the Declaration of Human Rights. "Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author." Traditionally this definition only covered scientific discoveries, literature, art, and music. Copyright protection is supposed to keep such intellectual property safe so that it cannot be incorrectly distributed or claimed by someone else. One could argue, however, that computer software should not fit into this definition. Currently the theft of noncommercial computer software is illegal. Nonetheless, this theft can be justified ethically, economically, and socially. Therefore, one might argue that it should be allowed. However, the line between software piracy being ethically viable or absolutely, non-negotiable theft, is a gray line to walk (Russell, 2001).

1. Ethical Implications

Where it may seem ethically black or white that downloading music illegally, for free, is stealing from the musician who made the music in question. Yet, the line becomes arguably less clear in regards to software. Some users argue that software piracy is not theft, but one's right to obtain and share software as he or she sees fit. In addition, a user may not see software piracy and sharing as morally wrong for this reason, but simply a choice (Zamoon and Curley, 2008). A wide variety of computer users assert nothing to be morally wrong with unauthorized distribution of software. In fact, sixty-six percent of college students in a survey taken between two campuses said that it is okay, for ordinary people such as them, to copy commercial software from the internet without purchasing it (Zamoon and Curley, 2008; pg. 2).

Due to the legal system developing at a much slower pace than internet and sharing, people must rely mostly on academic research and public opinion to decide for themselves, essentially, what is right or wrong in this case (Zamoon and Curley, 2008). Therefore, users rely on the opinions of their professors, colleagues, and others to decide the moral right where the law seems ambiguous. Software creators and large corporations do not see this as an ambiguous or blurred issue. For creators, developers, and distributors it is clearly theft, and therefore illegal. Bill Gates confronted this issue directly in 1976 telling "hobbyists" that the unauthorized duplication of software was "theft," and only discouraged software developers from producing more, out of fear, their production will only be stolen (Donnelly, 2012).

2. Economic Implications

Out of all the software programs installed on computers around the world last year, 4 out of 10 were pirated copies. The majority of unauthorized use requires a legal purchase that may be overextended beyond the appropriate licensure. For example, a business may purchase software with the appropriate licensing to install on 10 computers, but ends up installing it on 100 computers. Although the business bought the software legally, overextending their licensure qualifies as piracy on the improperly licensed computers. In other cases, software piracy can include criminals that reproduce counterfeit, copyrighted programs to sell for a profit both online and off. These two means to theft added up to a whopping $51 billion in 2009. This common piracy is not often mentioned as an inhibitor of worldwide economic growth, yet these people are starving markets of spending that could go to create new jobs, and generate needed tax for the government. However, attempts at curbing piracy do the opposite. It sends ripples through the whole information technology (IT) economy (IDC).

As Bill Gates noted, software piracy creates lost opportunities for creators and developers but also for the public. According to the IDC, $45 billion worth of unlicensed PC software spread across 42 countries, caused $110 billion in lost revenue, employment, and taxation. The IDC analyzes the relationship between a company's spending on software, IT services, distribution, employees, and taxes with the rate of software piracy at commercial value. However, to be most successful at combating software piracy, reduction needs to be accomplished quickly. New spending on legal software has the ability to create new jobs that will produce revenue and tax in the global economy, compounding the initial benefit over time (IDC).

3. Legal Implications

In regards to software piracy, businesses can face serious trouble regardless of their size. Some companies do not realize they can be held liable for the actions of their employees. For example if a member of staff runs illegal software on office-computers or gets hold of unauthorized software by way of a company computer, the firm can be held liable for infringement of copyright, whether or not the company was aware of their worker's actions. Making or downloading copies of software without authorization is a violation of the law. It does not matter how many copies are made whether it was just one or one hundred. Copyright infringement does not discriminate between those casually loaning disks, distributing to friends, selling for profit, or buying one copy of a specific software and installing it on 100 computers (Business Software Alliance).

Many people do not take copyright infringement or software theft seriously, but it is a serious issue. Should you or your company be caught copying software or downloading illegally, you can be held liable in civil or criminal law. Should the copyright owner bring a lawsuit against you, not only can the owner require you to cease using the software all together, but also request payment for damages. The aforementioned damages can include profits lost due to your theft and can be upward of $150,000 per program copied. On top of this, the government reserves the right to prosecute you in a criminal court for copyright infringement. If you are convicted, you can be fined a maximum of $250,000, sentenced to five years in jail, or both (Business Software Alliance).

Separate from the aforementioned legal consequences, using copied or counterfeit software also includes:

i. Possible exposure to viruses, corrupted disks, or defective software

ii. Inadequate or missing documentation. No warranties.

iii. Lack of technical support available to authorized users.

iv. No software upgrades available to authorized users.

The United States Supreme Court actively defends intellectual property and copyright. The court upheld the above four components of software ownership in both Sega v. Accolade and Galoob v. Nintendo (Samuelson as cited in Russell). However, the assumed supremacy of copyright was overthrown in the case of Sony Bentax (1984 as cited in Russell). Sony took on both Universal Studios and Walt Disney Productions for allegedly attempting to sell the VCR in the United States. Samuelson concluded, "The principal charge against Sony was that of contributory copyright infringement, for it was providing the instrumentality by which customers were able to infringe copyrights and Sony knew they'd do so" (As cited in Russell). The court surprisingly allowed Betamax machines to be sold. There reasoning ruled noncommercial copying to be just. In continuation the court argued that by Universal Studios and Walt Disney Production allowing their copyrighted product to be shown on TV, the studios were previously aware that Betamax viewers could get the same for free. In result the U.S. Supreme Court concluded noncommercial copying was fair and did not infringe on copyright (Russell).

4. Social Implications

A nation's social atmosphere and characteristics have an effect on the software piracy rate. For example, some societies place a higher importance on the individual rights and benefits, as compared to collective societies, which place a higher importance on the greater good of the collective unit. Whether the country aspires itself to be an individualist or collective, society effects how a country enforces copyright infringement. Since collectivist societies find greater importance in the communal benefit of pirated software more so than individualist societies, this influences the usage of pirated software (Karakaya and Uluturk).

Governments without possession in the domestic software industry are aware of the benefits pirated software generates for the economy. With more pirated software available to the populous, citizens are able to use the newest versions of software at a much lower place, or for free. IT capital stock (including hardware, data communications, software, and services) impressively returns 70.6% on the original investment. Therefore, it is obvious that software piracy puts governments around the world in an awkward dilemma concerning the implementation of established copyright laws (Karakaya and Uluturk).


Christensen, A.L. And Eining, M.M. Factors Influencing Software Piracy: Implications for Accountants. Retrieved from: http://beta.orionshoulders.com/Resources/articles/26_22224_%20().pdf

Donnelly, C. Software Piracy. 2012. Retrieved from: http://piracyonthewww.blogspot.com/

IDC. Piracy Impact Study: the economic Benefits of reducing software piracy, 2010.… [END OF PREVIEW]

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