Software seizure Canada

The production of counterfeit software, like that which surfaced at last month’s half-million dollar seizure in Toronto, makes life more difficult for legitimate companies trying to retain the trust of consumers, according to one vendor.

A Jan. 21 raid in Toronto followed an investigation by the Toronto police, Microsoft investigators and Investigative Protective Services of America (IPSA) international undercover agents, after word was received that high-quality counterfeit software was readily available and being sold.

Markham, Ont.-based Fuzion Technology Corp. was raided and counterfeit Microsoft software, including Windows 95, Windows 98, Windows NT Workstation and Office 97 Professional Edition, was seized, in addition to stolen video cards and other electronic equipment. Valued at $500,000, the operation is believed to be the largest seizure of counterfeit merchandise in Canada.

Serena Mitchell, marketing manager with Specialized Digital Micro Systems (SDMS), a point of sale hardware specialists in Richmond, B.C., said that kind of piracy compromises the reputation of other technology businesses and puts them on the defensive as they attempt to win consumer approval.

“Our customers are number one and we do everything we possibly can to service them in a professional manner. So when a company like that does what they do, it disillusions your customers and makes them feel that ‘maybe we can’t trust them either,'” Mitchell said.

Unfortunately, it is extremely easy to create a perfect software copy, said Michael Eisen, Canadian director, law and corporate affairs, for Microsoft Canada. “It goes from university students to mom and pop shops to medium-sized businesses to organized crime.”

According to Toronto Detective Ed Follert, 52 Division, high-tech crimes are on the rise and have become a primary focus for the Major Crime Unit.

Microsoft’s Eisen said that in 1997, Canada had a piracy rate of 39 per cent, meaning that close to four of every 10 software products used were counterfeit. Compare this with the U.S. piracy rate and Canada has nothing to be proud of in terms of combating the problem, he said.

According to Eisen, who spoke at a Toronto press conference, part of the reason for this discrepancy is the uneven nature of the laws in the two countries.

“In the United States there is a civil remedy known as statutory damages which permits software publishers to go to court and get a fair result if they establish liability,” he said.

“The solution here is for software publishers and the Canadian government and the police to both educate and enforce in the hope that…software piracy will decline. It will never disappear, unfortunately, but I think we can have as a reasonable goal knocking it down to the U.S. level.”

According to Eisen, the biggest challenge in solving the problem is getting leads.

“In terms of the sort of piracy that’s engaged in by resellers and distributors we can generate our own leads by monitoring the market. In terms of the large scale piracy that goes on within organizations, what we call softlifting, we need the cooperation of honest employees and consultants who deal with them because those people are extremely difficult to detect.”

Eisen said that Microsoft, a member in the Canadian Alliance Against Software Theft, “is seriously considering a civil suit” in the matter.

The owner of Fuzion Technology has been charged with fraud over $5,000, possession of stolen property over $5,000 and faces charges under the Copyright Act for selling, distributing and manufacturing infringing copies of software. He could not be reached for comment.