Software Pirate Gets 41 Months in Prison

The long arm of the law finally caught up to a 46-year-old Falls Church, Va., man last week when a U.S. district court judge sentenced the convicted software pirate to 41 months in prison and ordered him to pay more than $743,000 in restitution to Adobe Systems.

Gregory William Fair, who pleaded guilty to one count of criminal copyright infringement and one count of mail fraud for selling pirated software on eBay in April, admitted that he was selling bogus copies of various Adobe (NASDAQ: ADBE) applications worth more than $1.4 million on eBay from 2001 through 2007.

eBay (NASDAQ: EBAY) for years has been a target marketplace for the illegal sale of stolen, counterfeit or otherwise misappropriated copies of popular software applications.

According to IDC, legitimate software vendors lost more than $53 billion to software pirates in 2008 — an astonishing amount considering the worldwide PC software market represented a little more than $88 billion last year.

Fair, who also was forced to forfeit $144,000 in cash, a BMW 525i, a Hummer H2, a Mercedes CL600 and a 1969 Pontiac GTO, was raking in cash hand over fist by selling outdated, pirated copies of Adobe Photoshop, Illustrator and PageMaker applications for between $100 and $120 apiece.

But his booming illicit business came under scrutiny when U.S. Postal Inspection Service (USPIS) workers began noticing a “large volume” of Adobe applications sold during eBay auctions under different user names and PayPal accounts.

To bust Fair, inspectors purchased several copies of software from Fair in 2007. Those applications were tested to functioning versions of the software and verified by Adobe to be copyright-infringing reproductions, according to court filings.

In March 2008, USPIS conducted a search warrant at Fair’s residence where agents say they found “a significant amount of evidence” linking him to the counterfeiting operation, including written instructions for the processing of eBay orders, blank CD-Rs, records of past sales, thousands of pre-printed labels ready to be applied to the pirated software, plus computer equipment “that was obviously being utilized to conduct the illegal business.”

Prosecutors said Fair sold more than $1.4 million in pirated software—a figure that Fair and his attorney disputed.

“It is wildly speculative to assume that each and every buyer of Mr. Fair’s $100 out-of-date product would have spent a similar amount with Adobe, somehow,” wrote Fair’s council, Thomas Heslep in a filing dated September 2009. “In fact it would have been impossible for them to spend just $100 with Adobe. Adobe offered a newer product at a much higher price. Adobe did not offer cut-rate, outdated products as did Mr. Fair.”

The Software & Information Industry Association trade association, which has long maintained a high-profile campaign against software pirates, said Fair’s incarceration sets an important and appropriate precedent as it and other industry watchdogs continue to battle the steady flow of pirated software through eBay and other online marketplaces.

“This case is a huge victory for Adobe—a member of SIIA—and in the fight against software piracy,” said Keith Kupferschmid, SIIA’s vice president of intellectual property policy and enforcement. “Software piracy on eBay and similar online marketplaces is rampant and we believe much more needs to be done to protect American businesses and consumers.”

The SIIA for several years has used its Web site as an online hotline for reporting suspicious software sales and a sounding board for victims of software piracy.

The U.S. Justice Department said Fair’s conviction is just one of several software piracy cases it has and will pursue and claims to have garnered 39 convictions in the past three years.

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