Economic Consequences of Software Crime

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HarryG

Dec 28, 2004

Economic Consequences of Software Piracy

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Economic Consequences of Software Crime

In 1996 worldwide illegal copying of domestic and international software cost $15.2 billion to the software industry, with a loss of $5.1 billion in the North America alone. Some sources put the total up-to-date losses, due to software crime, as high as $4.7 trillion. On the next page is a regional breakdown of software piracy losses for 1994. Estimates show that over 40 percent of North American software company revenues are generated overseas, yet nearly 85 percent of the software industry's piracy losses occurred outside of North America. The Software Publishers Association (SPA) indicated that approximately 35 percent of the business software in the North America was obtained illegally. In fact, 30 percent of the piracy occurs in corporate settings. In a corporate setting or business, every computer must have its own set of original software and the appropriate number of manuals. It is illegal for a corporation or business to purchase a single set of original s!

oftware and then load that software onto more than one computer, or lend, copy or distribute software for any reason without the prior written consent of the software manufacturer. Many software managers are concerned with the legal compliance, along with asset management and costs to their organizations. Many firms involve their legal departments and human resources in regards to software distribution and licensing.

Information can qualify to be property in two ways; patent law and copyright laws which are creations of federal statutes, which are subject to Constitutional authority. In order for the government to prosecute the unauthorized copying of computerized information as theft, it must first rely on other theories of information-as-property. Trade secret laws are created by provincial law, and most jurisdictions have laws that criminalize the violations of a trade-secret holder’s rights. The definition of a trade secret varies somewhat from province to province, but commonly have the same elements. For example, the information must be secret, not of public knowledge or of general knowledge in the trade or business. A court will allow a trade secret to be used by someone who discovered or developed the trade secret independently