Software piracy holds steady

More than one-third of business software applications being used in Canada are pirated, costing the national economy $289 million in lost retail sales during 2001, according to a new report.

The seventh annual study of global software piracy, commissioned by industry organization the Canadian Alliance Against Software Theft (CAAST), found that at 38 per cent, the rate of unlicensed software was exactly the same as in 2000.

Although a drop in the piracy rate would have been preferable, CAAST director Jacquie Famulak said that the poor economy during the last year likely had many business software users more focussed on short-term costs than on long-range issues such as compliance. She also said that CAAST needs to keep raising awareness of the costs of piracy through information campaigns and event such as this spring’s “software truce” which encourages businesses to turn in their unlicensed software without penalty.

In the United States the piracy rate is much lower, sitting at only 25 per cent, Famulak said. She attributed this difference to a combination of tougher laws and more aggressive education south of the border.

“Our U.S. counterpart, the Business Software Alliance, has been around longer than we have and have done more educational campaigns, even at the [grade] school level. The U.S. also has very strong statutory damage legislation where a court can award up to US$150,000 per work infringed. In Canada that penalty is capped at $20,000. We think that’s quite a bit of a deterrent in the U.S.,” said Famulak, who is also legal counsel for Apple Canada Inc.

Among small and medium business – the most common offenders – Famulak said that a frequent problem is “under licensing.” This is piracy by oversight where businesses grow but neglect to report new users and copies of their software. However, Famulak said, when the oversight is reported, most reputable organizations take action to correct it.

CAAST also reported Monday that Faneuil ISG Inc., a telecommunications company headquartered in Winnipeg has agreed to pay $30,000 to settle a dispute relating to unlicensed copies of software programs installed on its computers. In addition to the payments, Faneuil ISG Inc. agreed to delete any unlicensed copies, purchase any needed replacement software and strengthen its software management practices.

Most of CAAST’s investigations begin with a call to its hotline, 1-800-263-9700, or with a report to the Online Reporting Form on CAAST’s Web site. In this case, CAAST and BSA contacted the firm through its attorney, although in some cases a software raid is pursued.

CAAST is at