One-third of Canada

Too many Canadian businesses are still engaging in software piracy, but there is renewed hope that the industry’s message is getting through as overall piracy rates across the country fell in 2001, according to Microsoft Canada.

Thirty-eight per cent of software used in Canada last year was pirated, down from 41 per cent in 1999. Worldwide, five million software products were seized with a total loss of over US$800 million, said Diana Piquette, anti-piracy manager for Microsoft Canada, during a Tuesday press briefing.

Half of those losses were attributed to Microsoft products such as Windows XP and Office, which were being sold on the streets of Bangkok for less than US$3 per copy.

Provincially, P.E.I. leads the way with 49 per cent pirate software use, while Alberta and Ontario came in below the national average. Piquette’s said those two provinces have a more developed information technology sector, and hence more of an awareness of the harm piracy can cause.

And, clearly, there is a one-headed monster responsible for the epidemic, she added.

“Microsoft has identified the Internet as the fastest growing medium for distributing counterfeit software. This has pushed it into the hands of unsuspecting buyers,” she said.

A whopping 90 per cent of software products that are being sold illegally can be traced back to the Internet. While southern California was once considered the hotbed for high-quality distributed goods, new locations such as Indonesia, Malaysia, Thailand and the Philippines are now emerging as the source for pirated software.

Piquette said this trend is directly related to the U.S.’s commitment to cracking down on piracy. Unlike Canada, which is considered one of the worst countries in the Western world for use of pirated software, the U.S. had a rate of 25 per cent for last year. Although copyright laws have made strides in Canada, in the U.S “intellectual property laws are taken more seriously,” said Piquette.

The penalty in Canada under new statutory damage legislation, in effect since 1999, equates to a fine of approximately $20,000 while south of the border, it is US$150,000.

Microsoft says the consequences of piracy are severe, responsible for an estimated 32,000 lost jobs and $1.2 billion in lost wages, numbers she said were directly linked to piracy.

Under the Copyright Act in Canada, if a consumer or business is caught with pirated software, they face fines of up to $20,000 per infringed title; criminal fines can escalate upwards to $1 million dollars and jail terms of up to five years. Still, Piquette said, “virtually everywhere, law enforcement does not put a high priority on intellectual property crime. Criminal penalties are often grossly inadequate.”

While Microsoft continues to work with regional authorities and the RCMP, they have also implemented an Internet monitoring tool, which searches Web sites suspected of selling illegal software. In the first half of 2001, there were 47,000 Internet takedowns resulting from the tool.

Still, the fact that piracy rates are on the decline was taken in a positive light at the Canadian Alliance Against Software Theft (CAAST). “Any decrease is a step in the right direction. It’s not where our brothers to the south are at 25 per cent, no, but we’re making movement,” said Allan Steel, president for CAAST in Toronto.

Microsoft Canada is at

The Canadian Alliance Against Software Theft is at