What is the Law Regarding Software Compliance?
Most people would never consider stealing something that did not belong to them. But those who copy software without authorization are, in fact, stealing someone else’s property – their intellectual property; in addition to breaking the law.
Software development involves a team effort that blends the creative ideas and talents of programmers, writers and graphic artists. Like most creative works, such as books, music and films, computer software is protected by U.S. copyright laws.
Purchasing software does not mean ownership of software. Rather, the purchaser is acquiring the right to use the software under certain restrictions imposed by the copyright owner, typically the software publisher. The precise rules are described in the license accompanying the software. It is imperative to understand and adhere to the terms of the license agreement. Most often, the license agreement states that a software purchaser has the right to load the software onto a single computer and make one backup copy. If someone were to copy, distribute or install the software in ways the license prohibits, whether it be providing copies to friends and coworkers or participating in widespread duplication via the Internet, that person is violating the license and copyright law.
Many businesses, both large and small, face serious legal risks because of software piracy. Under the law, a company can be held liable for its employee’s actions. If an employee is installing unauthorized software copies on company computers or acquiring illegal software through the Internet, the company can be sued for copyright infringement. This is true even if the company’s management was unaware of the employee’s actions.
To make or download unauthorized copies of software is breaking the law, no matter how many copies are involved. Regardless if someone is casually making copies for friends, distributing and/or downloading unauthorized software via the Internet, or buying a single software program and then installing it on one or 100 of a company’s computers, this is copyright infringement. It doesn't matter if copyright infringement is done for profit or not – software piracy exposes oneself to civil and potentially even criminal penalties.
Unlicensed software is a serious matter. If an individual or company get caught copying software, a person may be held liable under both civil and criminal law.
If the copyright owner brings a civil action against a software pirate, the software owner can seek to stop the pirate from using the software immediately and can request monetary damages. The copyright owner may then choose between actual damages, which include the amount lost because of infringement as well as any profits attributable to the infringement, and statutory damages, which can be as much as $150,000 for each program copied.
In addition, the government can criminally prosecute software pirates for copyright infringement. If convicted, a pirate can be fined up to $250,000, sentenced to jail for up to five years, or both.
Apart from legal consequences, using copied or counterfeit software also means:
- Greater exposure to malware and security risks;
- Inadequate or no documentation with no warranties;
- Lack of technical support available to properly licensed users; and
- Ineligibility for software upgrades offered to licensed users
Software User Responsibilities
The first responsibility as a software user is to purchase only properly licensed software. When acquiring software, make sure to get genuine materials, including, manuals and license documentation. Avoid loose or hand-labeled product or software offered at prices that are “too good to be true.” Be wary of unscrupulous Internet vendors, who advertise attractive deals on “genuine” software that was overstocked or otherwise discounted for inventory reasons. Keep in mind that a high percentage of software sold through online auctions is illegal.
Next, the software purchaser has the responsibility to install and use the software in accordance with the license agreement. Since these agreements differ from publisher to publisher, read each agreement carefully. When someone else installs the purchased software, be sure that the individual provides you with proof that the product is properly licensed. If information technology is outsourced, to a consultant or application service provider, the software licensee is still responsible for software license compliance.
Unlicensed software is not a victim-less crime. Unlicensed software denies the publisher its rightful revenue and harms consumers and the industry as a whole. All software developers spend years creating software. A portion of every dollar spent in purchasing the original software is funneled back into research and development, so that newer, more advanced software can be produced. When illegal or counterfeit copies are purchased, that money goes straight into the pockets of software pirates, not developers.
Economic Impact of Software Piracy
In the United States, nearly one in five pieces of business software is unlicensed. BSA | The Software Alliance estimates that in 2011 the commercial value of unlicensed software was over $9.7 billing in the United States alone due to unlicensed software.
Download this page as a PDF
More Information to Prevent Piracy
For more information about unlicensed software, to obtain a free software management guide or to report piracy, call the toll-free BSA Anti-Piracy Hotline at 1-888-NO-PIRACY or log on at www.bsa.org. Qualifying reports may be eligible for a reward of up to $1 million.
BSA | The Software Alliance
20 F Street, NW, Suite 800
Washington, DC 20001