While global losses caused by software piracy increased by 15 per cent, in China the overall piracy rate has dropped significantly, according to a recent survey.

Incidence of piracy in China dropped at least 10 percentage points over the past three years from 92 per cent in 2003 to 82 per cent last year, according to a poll by research firm IDC Inc. of Framingham, Mass.

Canada’s software piracy rate went up by one percentage point from 33 per cent in 2005 to 34 per cent last year. The figure is slightly below the worldwide average which remains at 35 per cent.

The country remains among the top 20 countries with the lowest software piracy rates.

According to one analyst, the survey results belie perceptions that Canada is soft on piracy.

“While there are doubts about the methodology of the survey, the data further rebuts the claims that Canada is a piracy haven,” said Dr. Michael Geist, Canada chiar of Internet and E-commerce Law at the University of Ottawa.

CAAST estimates Canadian economic losses from software piracy at around Can$890 million.

The survey results, which covered 102 countries across the globe, were announced yesterday by The Canadian Alliance Against Software Theft (CAAST) and its U.S. counterpart the Business Software Alliance (BAS).

CAAST is a software industry coalition of vendors and manufacturers against piracy.

A press release from the organization attributed the reduction in the piracy rate (and savings realized as a result) to the Chinese government’s “efforts to increase the use of legitimate software”, and the country’s education and enforcement campaigns.

As a result of the slump, the legit software market in China grew to nearly US$1.2 billion (Can$1.3 billion) in 2006, an increase of 88 per cent over 2005 figures, CAAST said.

The survey said global losses from piracy in 2006 totaled US$39 billion (Can$42.8 billion), an increase of 15 per cent or US$5 billion (Can$5.4 billion) from the previous year. According to the survey, the five countries with the highest piracy rates were: Armenia (95 per cent), Moldavia (94 per cent), Azerbaijan (94 per cent), Zimbabwe (91 per cent), and Vietnam (88 per cent).

Countries with the lowest piracy rates were: U.S. (21 per cent), New Zealand (22 per cent), Japan (25 per cent), Denmark (25 per cent), and Australia (26 per cent).

The five countries with the highest losses were: U.S., China, France, Russia, and Brazil.

The study indicates that even relatively low piracy rates can translate into huge losses in large markets.

For instance, while the U.S. had the lowest piracy rate, it had the largest total losses.

A number of factors such as intellectual property protection, availability of illegal software and cultural attitudes contribute to the regional differences, according to John Gantz, chief research officer, IDC.

“Currently more than one third of PC software put into use in Canada in 2006 was obtained illegally,” said Michael Murphy, president of CAAST.

The study covered all packaged software that runs on personal computers including desktops and laptops, but did not include other types of software such as those used for servers and mainframe machines.

IDC used proprietary statistics for software and hardware shipments, the release said.

An open source software advocate in Canada, however, expressed doubts over this survey method.

“I believe CAAST considers the installation of open source software as piracy and is uses this to skew survey results in their favour,” said Russell McOrmond, policy coordinator for the Canadian Linux Users Exchange (CLUE), Ottawa.

Geist said he was not aware if this is the case with the recent poll but added: “if OSS (open source software) is treated as pirated software, it would completely undermine the legitimacy of the survey.”

McOrmond said CAAST’s methods involve the following:

• Counting the number of computers shipped to a region;

• Estimating the demand for CAAST member software based on the number or machines shipped;

• Counting the actual number of CAAST member software products installed in computers and;

• Subtracting software products installed from the number of machines shipped and “labeling the difference as software piracy”

McOrmond pointed to “weaknesses” in this method. “The estimated demand for software can be a made-up number based on wishful thinking.”

Besides, he said “not all non-CAAST software products are pirated since they could be open source products.”

Geist pointed out that there is room in the market for both proprietary and open source software products.

“I think it is important for government to offer a balanced playing field so that OSS can compete (with proprietary software products).”

The professor also expressed doubts over the effectivity of CAAST’s and BSA’s piracy campaign.

“I think it is more likely to drive people towards open source alternatives,” Geist said.

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