Piracy impedes growth of Philippine software firms

MANILA – Software piracy not only hurts software giants like Microsoft but it also impedes growth of local start-up developers that may not have the resources and financial muscle to protect their products.

Data from the Business Software Alliance (BSA) and IDC global piracy study pegged the rate of PC software piracy in the Philippines at 69 per cent, down two percentage points from 71 per cent in 2006. However, industry losses due to software piracy in the country rose to US$147 million last year from US$119 million in 2006.

Joey Gurango, chief executive of Gurango Software, said the “general acceptability of piracy” in the country lowers the value that people put on locally developed software products. He said this attitude perhaps hurts local developers even more. He explained that it takes at least two years to develop a good software product and bring it to market and developers could not immediately expect to recoup their investments. Having to cope with software piracy makes the business even more challenging for developers, Gurango noted.

Microsoft Philippines managing director Rafael Rollan said piracy directly and indirectly affects the country’s economic development. “Ata time when the global economy is in bad shape, there is now a need more than ever to promote innovation, economic opportunity and growth. Because of piracy and counterfeiting, our economy is deprived of billions of pesos every year. Piracy prevents the industry from contributing to economic development,” he said.

Microsoft’s anti-piracy efforts in the Philippines have resulted to three successful convictions of copyright infringers involving Microsoft products since 1995. The Philippine subsidiary has recently worked with the National Bureau of Investigation in conducting three raids against system builders that preinstalled PCs with unlicensed copies of Windows XP, Windows Vista or Microsoft Office as an incentive for sale.

Microsoft also conducted education programs to educate system builders about the legal consequences of software piracy.

Although software piracy has slightly improved in the Philippines, BSA Philippine consultant Bienvenido Marquez III said much can still be done to advance intellectual property protection in the country. Speaking in behalf of the commercial software industry, Marquez said the Philippines is still included in the United States Trade watch list, which is composed of U.S. trading partners that have significant shortfalls in IP protection.

Marquez said proposed amendments to copyright treaties and the IP law are still pending in the U.S. Congress. He also pushed for the re-establishment of intellectual property rights courts, which the Supreme Court had set up several years ago but eventually merged with commercial courts for lack of IP cases. Filing IP cases can be a very tedious and complicated process and having dedicated IPR courts could help facilitate the process, Marquez said.

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