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Knock-off and pirated copies of software are costing software developers and software distribution companies billions of dollars. An organization called Business Alliance Software (BAS) (http://www.bsa.org) conducts software pirating research, maintains statistics and reports on court cases and fines levied against software violators across the world. On its website BAS defines software piracy in simple terms: “The unauthorized copying or distribution of copyrighted software.”

Today there are many ways to obtain software in an unethical way. These methods include copying from disc to disc or hard drive to hard drive, downloading from the Internet, most often through peer to peer file transfer or from unlicensed distributors, sharing software programs whether in the form of discs or peer to peer file transfer, through direct sales in market places, malls, and even parking lots, or, very commonly, simply buying one licensed copy and then installing multiple copies onto personal or work computers.

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In most cases it is obvious to the buyer that something is “not right” with the transaction. Such clues are the very low price, the lack of sealed packing with licence information, and the method it is acquired. In other cases some people are innocent “pirates” since they do not know or take time to learn that when you purchase software you are really not purchasing the program. Rather, you are buying a licence to use that program and that licence applies only to yourself, whether for personal or business use, and the licence will tell you how many times the software can be installed without paying additional fees. If you make or install more copies of that software than permitted by the licence, then you are considered in violation of copyright and user agreements and subject to fines and/or imprisonment depending on the nature and extent of the piracy.

Many people have no doubt become confused between “shareware” which is software which users are free to use without cost, although in many occasions donations are solicited, and licensed software like that sold by companies like Microsoft or Adobe. The rapid proliferation and use of shareware has made many people “lazy” when it comes to verifying whether or not the software is indeed free of licensing costs or whether it is in the public domain and available to everyone free or charge.

In addition, with the growing speed and storage capacity of computers, what would once have been a very time consuming process, that of downloading and installing large software programs, has become easy to do and as a result more widespread. Since much of this activity is conducted from peer to peer or from websites in countries with few or no copyright laws, these people and organizations give little or not thought to the legalities or what they are doing nor to do the costs to business and the software industry as a whole. Accessibility and affordability become the focus and driving force rather than legality.

For example, a comprehensive study undertaken by BAS in 2006 estimated that software piracy defined as a purchased, legal copy that is installed on more computers than the copy is licensed for; as software that is illegally sold or distributed; and as software that is downloaded from the Internet but never paid for, cost an astounding loss of “$34 billion worldwide in 2005, a $1.6 billion increase over 2004.” (http://www.bsa.org/country.aspx). Using a straight line trend analysis, that would translate in to a worldwide loss of more than $40 billion in licence fees alone and would not include the costs of lost jobs, lost productivity and the loss of revenue to fund research and development.

Even with the kind of information provided by BAS it is obvious that people and business are not getting the message. Thus I am thinking the question: Is pirating software really a problem? Is it unethical to buy and use knock-off and pirated products? Arguments The biggest reason to claim this behaviour is not ethical is that in most of countries, purchasing or using those products in this way is against the law, which was built to protect the ownership rights of software developers, designers and distributors.

According to “Intellectual property rights and computer software”(Johnson,1994), property law is built to protect a person’s natural rights with regards to the product, to ensure one can fully acquire the benefits he/she developed with his/her labour. Moreover, it also includes intellectual property rights to protect one’s profit from the product when applied to intangible goods like software or music.

It is not ethical to purchase or use those knock-off and pirated products because it would hurt prevent others from acquiring the benefits from their tangible or intangible inventions. One has only to look at the music industry to see the devastating effect peer to peer file sharing has caused and only in the last year or two, after many years of costly legal battles, have companies like Apple and Amazon been able to develop a pay as you download model that has been fairly widely accepted by users and the industry. The video industry continues to be hurt by peer to peer sharing and illegal copying and as yet no model as emerged to help protect those in that industry.

In addition to protecting people’s ownerships of their creation, intellectual property law also protects people’s motivation to continue to develop and invest in software development by protecting their profits, thus driving forward science and society. Since purchasing knock off and pirated products would generate profits for copiers, not for inventors, it would be unethical for people to encourage copiers by continuing to download, install and use the pirated copies. What they are basically doing is stealing profits that rightfully belong to someone else.

On the surface these arguments appear to be very persuasive and provide a clear reason why engaging in any activity that does not protect the rights of the developers and businesses in the software business is unethical. However, it is not that simple. Many people will argue otherwise either in general or for specific, isolated instances. Most people will argue that their pirating activities (they would describe them as copying) are on a very small scale and that software licences primarily apply to business and large organizations who use the software to make a product.

The people who are being criticized will claim that they are only using the software on a temporary or even experimental basis, unsure whether the product will suit their needs or not. If it does suit their needs and they find it easy and suitable to use then they will consider buying the newest version or the next version that comes out in revised form. Their logic often includes logic and ethical reasoning such as the following: “Most software becomes obsolete quite quickly and newer version often contains operating bugs and security flaws and I am not going to pay company x that much money to be a guinea pig. I am going to wait until they get it right before I buy it.

An argument often heard in third world countries, especially in China; those countries that are economically disadvantaged, is that purchasing and using pirated copies or unlicensed knock-is ethical since the price being asked by the developer/distributor is itself unethical, based on maximizing profit and not reflecting real or true value. Buying the “real thing” is simply far too expensive. In fact it would be unaffordable and unless they can use a pirated or knock-off the person and/or business would be unable to benefit from the technological advances, thereby putting them at a continuing competitive disadvantage and making the gap between rich and poor even greater.

They will argue that companies, such as Microsoft, are monopolists who place far too many restrictions on the marketplace and who gouge customers on the price for a product that could be obsolete or outdated tomorrow. For example, many companies and businesses may only need the software package for one application. They may only have a single use that has occurred or they may be going to change their entire system in the near future and they will buy and licence the software then, if it is still the best available. They will claim that it is illogical to except them to pay the same as others who will use all the applications and who are going to be using it on an ongoing basis.

By pursing this course of action they will be able to purchase many more things or hire more people with the money they save by obtaining/purchasing the knock-off and pirated products. According to the theory of consequentialism, (http://en.wikipedia.org/wiki/Consequentialism) such actions are ethical because everybody’s happiness is counted equally, that happiness in society as a whole would definitely increase by saving money like that, plus it would ensure the happiness of people who could not or cannot afford the legal copy otherwise.

Furthermore, some people purchase/use knock off or pirated products because they are forced to because of the very limited choices they have. Perhaps the software they wish to use is not available in stores in their country or community. The only way they can obtain a copy in a timely way is by borrowing or copying from someone else in a different country, perhaps even someone who has bought the copy and is paying the licence fee.

For instance, people will want, and should be able to “test” it before they spend all the money, so even though it is an “illegal” copy they “really” don’t plan to use it all the time until they find if it works properly or not and they are simply maximizing utility. Other companies will be aware that competitors in their marketplace are using knock-off and pirated software. For the company to pursue a different course and purchase and licence all the copies would put them at a competitive disadvantage. They also know that their competitor has not been fined or prevented from their actions so obviously no one cares or can be bothered to pursue such limited uses.

They are doing it simply to try and stay in business and not to be unethical. In fact it would be unfair to their employees and customers if they had to incur expenses and delays that their competitors are not facing; if they are not competitive they will cease to exist and the cost to their economy, their communities and their employees would far exceed any licensing fees that would need to be paid to multi-billion dollar companies like Microsoft.

The result:

Individuals would likely argue that since they are using knock-offs and pirated copies for their personal use and entertainment, that the cost to society is not large and the developing company will not suffer. The number of people in that category is simply not large enough to even show any impact to a company’s revenue. Those companies make their money from big business who can afford it.

Individuals simply can’t afford a program like Adobe Photoshop and besides they are not using the program to sell products or develop a business; they are simply using it for fun and a few photos for their family or their personal web page. In such cases I would support their argument since their use is likely going to be temporary, most will tire quickly of the product or lack the training and skills to properly use it and nor will not fully utilize the full features of the software. To expect them to them to buy and register a licensed would be unnecessary punitive and unfair.

For many business however the ethical questions are more difficult and complex. BSA recently reported on 12 Canadian companies who were fined a total of more than $430,000 software licence violations. (http://www.bsa.org/country/News%20and%20Events/News%20Archives/enCA/2009/enCA-09142009-damagespaid.aspx) I don’t think it can be easily argued that a company who came in to violation by way of a takeover of another company that was using unlicensed software could be said to be acting unethically.

The same would apply to a company that had expanded so rapidly that its IT department could not keep pace and due to the complexity of licensing issues and the large and varied number of software programs being used it was a matter of oversight, not intention. The same could not be said, however, for a firm that needs a specific type(s) of software in order to conduct its business and that knowingly acquired and used knock-off and pirated copies with the intention of maximizing profits and/or for commercial advantage. For example an internet development firm should by the very nature of its business understand the nature and reasons for software licences more than many other types of companies who would lack the experience and internal expertise..

As a result, I do not believe there is a clear ‘black and white’ perspective. I think each case would need to be examined on its own merits and a decision reached accordingly. A student who uses a software program to download some music to listen to while studying is hardly in the same category of a student who uses the same software program to download music, burn copies of CD’s and sets up a stall at a Flea Market to sell those discs at a discount to the “real product” to unsuspecting customers.

While we need to protect the interests of inventors, companies and distributors, we must also keep in mind that not all people live in equal circumstances and nor are their motivations commonly shared. The goal should be as close to utilitarian as possible where through common sense and wisdom we can maximize the happiness of everyone involved and minimize the damage or negative results to the individual or wishes to use the product and those who develop, produce and distribute software.

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