Tackling Software Piracy an Uphill Battle

The battle against the distribution of counterfeit copies of popular
software products continued this week with authorities swooping down on a
ring in Queens, NY, and seizing about $10 million worth of software
from Symantec and Microsoft .

The bust, though small in scale, signals an escalation of the ongoing
fight against counterfeit copies of software which are being hawked on
auction sites and via e-mail spam. Authorities say Symantec software valued
at $3.2 million and copies of Microsoft products with a retail value of $3.2
million were seized along with counterfeiting paraphernalia like shrink
wrapping machines, CD cases and heat guns.

After the bust, Symantec officials said the company has leapfrogged
Microsoft as the single most pirated commercial software maker. Popular
products being copied and sold at less than half the retail price include the
$99 Norton SystemWorks Pro and, because Symantec’s attempts at copyright
protection have been hampered by the need to satisfy legitimate users,
company officials said it will always be an uphill task to keep
counterfeiters in check.

William Plante, Symantec’s director of worldwide security and brand
protection, said the company made a conscious decision not to be too rigid
in its digital rights management (DRM) efforts because it was more important
for the products to work properly for clients.

By contrast, Microsoft’s DRM initiatives have made it tougher to properly
copy CDs of its most popular software (Microsoft Office) and, with Palladium
coming down the pike, analysts say Microsoft will likely win the fight
against counterfeiters and pirates.

In the New York bust, copies of Norton Antivirus, Utilities, Firewall,
Ghost, and pcAnywhere were found and Plante told internetnews.com the
utility tools that do not require paid activation are always going to be a
lucrative target for counterfeiters.

“Last January, we were talking internally about DRM solutions but unless
it works perfectly for our paying consumers, we won’t implement anything too
rigid. Yes, we need it to protect our intellectual property but one of the
biggest problems is that we cannot guarantee the stability of the software,”
Plante explained.

He estimated the company was losing “tens of millions of dollars” to
software pirates.

Gartner analyst John Pescatore said Symantec will always be a favorite
target of counterfeiters because the company scores poorly on protecting
its products. Pescatore echoes the sentiments of Plante, suggesting that
it’s tough to balance IP protection against customer satisfaction.

“They [Symantec] haven’t been protecting their software very well so it’s
easy for counterfeiters. Microsoft has included holographic labels and DRM
but Symantec doesn’t want to go too far because they want the products to
work properly for the real (paying) users,” Pescatore told
internetnews.com.

“Piracy is a tough thing to fight. If you make it too hard for
counterfeiters and make piracy controls too strong, it can hurt,” he
added.

The Business Software Alliance (BSA),
which handles enforcement and anti-piracy education for a slew of big-name
firms, estimated firms lost almost $2 billion in 2002 through piracy,
particularly from enterprises that violate licenses.

BSA vice president of enforcement Bob Kruger said security software
piracy is among the highest because they are so popular and pervasive on
desktops. “All of our companies have serious piracy problems. It is a
backhanded compliment in that people are interested in what you make. But
it is a serious issue and our members are losing billions of dollars,” he
declared.

He said BSA enforcement activities have centered around educating
enterprises about the penalties for software license violation. In
addition, the alliance runs a program that target Web-based distribution of
counterfeit products, particularly via e-mail sales and on auction sites
like eBay and Yahoo.

“Very often, we’ll seek to have the infringing content removed by
requesting it from the ISPs. If it’s on an auction site, we’ll go to the
company and get it removed there,” Kruger said, noting that eBay was a
fertile marketplace because it puts the pirated software before millions of
potential buyers.

“We believe we’ve made some significant progress in reducing piracy round
the globe. But, it’s a major struggle. You cannot, at any point, stop
making an effort at enforcement. But I won’t say we are losing the fight.
I’m a little more optimistic than that,” Kruger added.

Worldwide members of the BSA include Microsoft, Adobe , Apple , Borland ,
Macromedia and Symantec.

The BSA recently launched a grace period
program
in major U.S. cities to give businesses an opportunity to review
their software programs and acquire the licenses they need to get legal
without facing penalties for past infringement imposed by BSA.

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