Computer Software Piracy Trends and Issues in the United States Summer 2011 Karen Ferguson Toni Garcia

James Dolina (SMT-273614-01-11SU2) Cyber Crime and Computer Forensics Empire State College

Purpose of Study The purpose of our research is to identify the status of computer software piracy primarily on a national level. We wish to identify what the trends in software piracy are, what counter measures are in place, and what cases and tools exist on this topic. Our purpose is to inform a policy maker or general member of the public of the landscape of piracy issues; by providing an analysis and identifying trends, our reader will have the information to knowledgeably discuss the issue. Our audience is not necessarily a technical one, but readers interested in business and ethics.

Opening Statement, Assumptions or Hypothesis Is software piracy a real threat to the US economy? Are the statistics of the cost of piracy in financial and global security realistic? And, what can be done about it?

Discussion of Findings Why do people choose to undertake software piracy? A recent global study by Bagchi and Cerveny searches for the reasons behind global software piracy. It states the 4 most common causes are assumed to be economic factors, regulatory factors, technical factors, and social/cultural factors. The analysis determines that economic factors are not a key factor alone. Internet use growth rate does not predict rises in piracy until after 2003; at this time, the increase in internet growth correlated with an increase in piracy. The concolusion is it is more than money and opportunity that are at work. The explosion of the internet and availability does correlate with increased use and increased piracy. Scorpecci’s article also examines what drives digital piracy, and the steps which can be taken to combat it. His article states: Even if consumers involved in digital piracy are generally aware that it is illegal, it is not always perceived as un-ethical, so continued emphasis should be placed on education and consumer awareness to overcome this perception. Industry and some governments have instituted extensive campaigns toward this end, and these actions can be paralleled with enforcement campaigns to reduce the likelihood of piracy.

000.000. In January 1992. specifically by electronic means. In 1991. Through this act.S. a Special 301 investigation under the U. International Agreements The U. the bill elevated software piracy from a misdemeanor to a felony. The first offense is punishable by five years in prison and a fine of $250. for example. and if the copies are worth a total value of over $2.000 per title infringed. If the copyrighted works copied had a total retail value of over $1. United States Copyright Act This act holds someone guilty of illegal reproduction of software subject to civil damages of up to $100. and to treat software as . in which it pledged to strengthen its principal intellectual property laws. even when the infringing party derives no direct financial benefit from the infringement. government is committed to fighting software piracy abroad as well. if 10 or more illegal copies of software are made within a six-month period. Program and software developers expect to be compensated for fair use of their intellectual property. Trade Act of 1974 found that the Chinese government has been lax in enforcing software copyright laws. including fines of as much as $250. No Electronic Theft Act The NET Act made criminal the willful infringement of copyrighted works.500.Software piracy is fundamentally a violation of copyright protection. Regulatory Background of relevant laws and acts of the US Government Senate Bill S893 Signed by President Bush in October 1992.000 per title infringed and imprisonment of up to five years. The second offense is punishable by up to 10 years in prison. was now liable for damages.S. a Memorandum of Understanding was signed by China. somebody who made copies of software and distributed them through a web site. and criminal penalties. the infringing party could be imprisoned for up to to 6 years.

The Act creates a new enforcement paradigm for the federal government’s efforts to combat counterfeiting and piracy. The United States has taken a firm stance and has made it clear that it will impose trade sanctions against countries which do not take steps to eliminate software piracy. For example. For example. the President signed the Prioritizing Resources and Organization for Intellectual Property Act into law (Pub. in a generation. One of the highlights of DMCA is to make it a crime to circumvent anti-piracy measures built into most commercial software. or distribution of code-cracking devices used to illegally copy software.literary work. including copies of phonorecords. 2008. sale. This office would be primarily responsible for developing and implementing a Joint Strategic Plan against counterfeiting and piracy and the coordinator would serve as a principal advisor to the President on domestic and international intellectual property enforcement policy. the law amends Section 506 of the Copyright Act to provide for the forfeiture of any property used to commit or facilitate the commission of a criminal offense involving copyrighted works. The Act also outlaws the manufacture. from the United States. an investigation found that the intellectual property practices in China were especially "onerous and egregious. Digital Millenium Copyright Act The DMCA is the most comprehensive reform of the copyright law in the U. The law also clarifies that registration is not a prerequisite for a criminal copyright prosecution and makes it unlawful (civilly or criminally) to export unauthorized copies of protected works." leading to the United States threatening China with trade sanctions. In 1994. 110-403) (the PRO-IP Act). Prioritizing Resources and Organization for Intellectual Property Act Public Law 110-403 On October 13. The Act also provides for improved investigative and forensic resources for . The new statute strengthens the intellectual property laws of the United States in several respects.S. In addition. it creates an Intellectual Property Enforcement Coordinator (IPEC) within the Executive Office of the President. it amends Section 410 of the Copyright Act to codify the doctrine of fraud on the Copyright Office in the registration process. L.

the culminates of 3 operations internationally over the prior years. and games. created an undercover Warez site as part of the investigation. a two-year effort to identify and prosecute groups and individuals involved with illegal access to computer systems and the piracy of proprietary software using Warez storage sites on the Internet. Norway. Australia.000 pirated files. The three operations were as follows: Operation Buccaneer. More than 200 suspects participated in the piracy efforts at the undercover site. The groups decode antipiracy measures in software and release the code on the Internet before or at the time of a new product's launch. worked with authorities in the U. Attorney for the Eastern District of Virginia. along with the Nevada U. Attorney's Office. movies. The History of Software Piracy In 2001. Operation Bandwidth. Customs Service and the Justice Department's Computer Crime and Intellectual Property section.S. including more than 12. . The investigation involved the Defense Criminal Investigative Service. the US government made large-scale news when it issued over 100 arrest warrants worldwide for piracy. causing losses for software companies.S. working in conjunction with the U. The U.000 separate software programs..enforcement of laws related to intellectual property crimes and allocates additional funding for resources to investigate and prosecute intellectual property crimes and other criminal activity involving computers. Thousands of copies of pirated software will be removed from circulation because of the sting. Included in the targets is the piracy group called DrinkOrDie. and Finland in the investigation. Buccaneer involved the simultaneous execution of 58 search warrants against high-level Warez leadership and members around the world.K. The groups. which was used to transfer more than 100. which is made up of about 40 members worldwide. as well as computer hardware seized by authorities.S. a one-year investigation by the U.S. the Environmental Protection Agency Office of the Inspector General and the Federal Bureau of Investigation.

Economic impact of piracy Loss of revenues The Business Software Alliance is at the forefront of fighting global software piracy. Attorney's Office to infiltrate several Warez distribution organizations. where the personal computer market is growing fastest Although this makes the scope of piracy on the global level alone seem insurmountable. This was the first recent US study and it t called into question some of the assertions about the effects of piracy on copyright owners including software manufacturers. if not impossible. The driving force behind the trend is piracy in the world’s emerging economies. This figure has nearly doubled in real terms since 2003. some caution and skepticism should be applied when considering these numbers. ―Most experts we spoke with and the literature we reviewed observed that despite significant efforts. the most recent of which reports: The commercial value of PC software piracy leapt 14 percent globally in 2010 to $59 billion. The illicit nature of counterfeiting and piracy . Operation Buccaneer illustrates the cross-national reach of both Internet-based intellectual property crime and the law enforcement response. government estimates of economic losses resulting from counterfeiting cannot be substantiated due to the absence of underlying studie.S. It produces an annual report estimating the cost. The GAO reported. As noted by Urbas. it is difficult.Operation Digital Piratez. including "cracking groups" specifically created for the purpose of pirating software so that it may be distributed over the Internet in violation of U. a yearlong effort by the FBI and the New Hampshire U.S. to quantify the net effect of counterfeiting and piracy on the economy as a whole. as well as some of the complexities that arise in applying jurisdictional concepts such as the ―double criminality‖ requirement for extradition in this evolving prosecutorial landscape. copyright laws.S." "Three widely cited U. The Government Accountability Office completed a report on piracy in 2010 which did note it is of a global impact.

and named the Russian Mafia as being involved as well. view IP crime as a lucrative business. This is impossible to measure per the GAO report but it does offer a counterperspective to the estimates provided by the Business Software Alliance. but the scope of this is almost incalculable. unfounded statement was to convince people of this link in order to push Congress into passing legislation that would increase penalties for intellectual property (IP) infringement.S. and see it as a low risk way to fund other activities. China. and to create a new agency geared at fighting IP theft. Part of the problem lies in the nature of piracy and illegal goods. Mukasey then went on to name several instances in which the United States Justice Department had arrested those involved in piracy and even in which countries the department has worked with other countries via investigations. His motivation in making such a bold.‖ Mr." The GAO review supported the claim that piracy harms industries and consumers and could slow U. Links to terrorism funding It seems debatable whether software piracy and terrorism are or have been linked together. Unfortunately. In a speech presented to the Tech Museum of Innovation he was quoted as saying: ―Criminal syndicates. Back in 2008. . Most people believed that this was just political posturing as a result of pressure from those lobbyists in the electronic media industry. One way that copyright owners calculate the value of lost sale is "substitution rates" to indicate how many people who buy pirated merchandise would have otherwise purchased legitimate products had the illegal material not been available. economic growth. then Attorney General Michael Mukasey made a bold claim that terrorist organizations do indeed sell pirated software as a means of financing their organizations. and in some cases even terrorist groups. so assumptions must be used to offset the lack of data. grant police more power. He noted arrests in Florida. he never once presented any concrete evidence linking software piracy to terrorism.makes estimating the economic impact of (intellectual property) infringements extremely difficult.

and video games along with DVD copying devices. it is believed that this network used piracy as a means of generating millions of dollars which was funneled to Hezbollah. as well as other experts have concluded that the TBA is one of the most influential financing areas in regards to Islamic terrorism outside of the Middle East. and Paraguay and widely thought to be a haven for criminal organizations as well terrorist groups most notably. when the Motion Picture Association. Rand researches. An example of this occurred in 2000 when 3 Irish Customs and Excises officers were searching a suspected fuel-laundering plant just a few feet from the border between the Republic and Northern Ireland. Therefore if merchants tried to sell so called ―registered‖ products they would be subject to extortion which because of the titles he wrongfully received was upheld by the police in that area. Barakat was not the first to be implicated though as Lebanese businessman Ali Khalil Mehri who also had close ties to Hezbollah was arrested after searches of his offices yielded a cache of counterfeit CDs. Organized Crime and Terrorism‖ and suggested that ―the connection between piracy and terrorism may be stronger than previously believed. was a 182 page document entitled ―Film Piracy. They had also noted that the van was seen in a . By 2004 it was believed that terrorist groups controlled over 80 percent of the film and software piracy in the area. Led by Assad Ahmad Barakat. The Tri-Border Area(TBA . CDs.Fast forward to 2009. created by the RAND Corp. Mehri apparently took advantage of the weak government system to gain exclusive rights to the products he manufactured including a title to produce Playstation Gaming Systems. There the officials came upon a van filled with what appeared to be counterfeit DVDs.000 in pirated media. Hezbollah. which is the European equivalent to the Motion Picture Association of America. When the police arrived they noted that the van had over £100.‖ This study produced 3 case studies which identified a direct link from piracy and terrorism which I will expound on further. and video games. paid for a study which again claimed that piracy was fostering terrorism. The study. Northern Ireland – This case involves the Irish Republican Army (IRA) and details the direct connection between counterfeiting and terrorism. Argentina.Latin America) – Consisting of the borders of Brazil. It is thought that the groups here have been active in piracy since the days of the home video explosion and their stranglehold only tightened and as the ease and quality of the media duplication increased.

Dawood Ibrahim’s D-Company organization has been able to create a monopoly controlling the master copies of pirated Bollywood and Hollywood films. and making it available for download at the same time it’s being released to retail outlets. home video manufacturing and eventually film piracy." The informant went on to say that "management knew about the issue from Day One and recommended it to save cost.’s terrorist watch list and his assets being frozen. Customs seized a large shipment of counterfeit discs in Virginia and the threat of trade sanctions did their authorities begin cracking down on this pirating outfit. "[The] response was that [my employer] was too cheap to buy all the licenses. then moving into film distribution. comes a corresponding increase in the tools and techniques necessary to catch the wrongdoers. and maintains the confidentiality of the informant. and since most informants are disgruntled employees. This was . Indian officials were well aware of DCompany’s piracy operation but did not intervene. The organization became a terrorist one when they conducted the ―Black Friday‖ Mumbai bombings in which 257 were killed and 713 were injured. This led to Ibrahim being added to the U. to make sure that there is a case worth the time and money to pursue: i "I was the IT coordinator and questioned higher up why I was installing the same CD on all the computers even though we bought one license.com to enable users to easily report fraud.S.S. It was then in 2005 when U. The company will contact the person to ensure that they get as much information as possible before pursuing the case." wrote an informant. Software piracy can range from using a licensed copy of a program on multiple (sometimes hundreds) computer stations to cracking the security on an eagerly awaited game release. Also at that time several vehicles pulled up and masked gunmen appeared demanding the return of everything that was seized. When preparing to return to their district with the property two rockets were fired from the Northern Ireland side of the border. With the tremendous growth in software piracy. They later developed ties with al Qaeda and the Kashmiri terrorist group Lakshar-e-Taiyiba (LeT). First by loan sharking in the film production industry. The police did not resist and the men fled with the merchandise. South Asia – Originally a crime syndicate. The police were convinced that the men belonged to the Real Irish Republican Army (RIRA). The BSA has a website at www.nopiracy. Apparently.local marketplace selling merchandise out of it.

Earlier this year. Once all the evidence is gathered. In 2008. It requests the company perform an audit of the use of the software in question. saying the game would crash a few seconds after start-up. What they didn’t know was that the error only affected those who were playing pirated copies of the game. after one of the game updates. and the numbers were used to identify the user accounts and ban them from the game forums. the creator took to Twitter to ask if anyone was ―unable to shade polygon normals‖.5 million in settlements. and looks to settle out of court.brought up several times among the IT staff and was pushed off. and on the game’s forums. enough licenses corresponding to the number of PCs. while keeping the informant’s identity confidential. and collected $9. and decide whether to go forward. a team consisting of employees and attorneys from the BSA’s member companies review the case. basing the settlement on the retail price of the software. with the error." The BSA also needs to know the number of computers at the company. ii Computer games make up a huge part of the pirated software market. People responded on Twitter. ―Engine Error: Unable to shade polygon normals‖. They will then contact the software vendor to find out if there are.500 leads. law enforcement and developers must find new ways of stopping them. Any documentation the informant may have of meetings. One game developer came up with a unique way of identifying those who are using pirated copies of his game – he intentionally inserted an error into the game . followed by a series of numbers in parentheses. in fact. notes and emails regarding the use of the unlicensed software is also used to support the case. went to court in 1 case. requested 920 audits. and as the hackers or thieves get more sophisticated. The first step is to notify the CEO of the offending company written notice of the allegations. Garry’s Mod is not a typical game – there are no objectives to attain – but a game in which the player manipulates and creates objects. iii Obtaining and releasing highly anticipated games in the days before the official release is one of the main goals of software pirates. and how many software licenses were purchased legally. the BSA received 2. called an open world or sandbox physics game. as it was considered no big deal. These suppliers may obtain the software from employees of the software .

Just as police use ballistics to match bullets to a suspect's gun. and got a hit to a profile of a software ―modder‖. The subject was arrested. He'll then try to trace the counterfeit disc to the factory and the crime syndicate that produced it. and analysts—many with experience in narcotics and Mafia cases—in nine labs around the world. The local police department got involved at that point.company. and the owner’s teenage son was the prime suspect. it turned out to be a computer business.com. they have been able to identify and break up counterfeiting rings worldwide. software that identifies digital fingerprints on discs. v Another posting for the game on a piracy forum led investigators to run the email address through Facebook. They're armed with maps that help pinpoint where suspect products are bought or seized by law enforcement. lawyers. After several days of negotiation. Microsoft employs 75 investigators. who then admitted they had stolen the games from the storage area of a local retail store. Keating. or by obtaining a demo from the company and cracking the ―demo‖ license & generating a retail license. iv A review of Craigslist postings helped identify a person selling Modern Warfare 2 for Xbox two weeks before the game was to go on sale. a deal was made. By gathering the information on where the fakes originate. a raised ridge around the disc's center. Microsoft has several labs around the world dedicated to defeating counterfeiters. similar to the way ballistics can match the markings on bullets: vi At a crime lab in Dublin. One of the methods they use to identify the counterfeit software is to match the markings on the rings around the center of the disc with others to trace it back to the source. The high-tech probing is part of a campaign by the world's largest software maker to vanquish counterfeiters. and the investigators were able to get a business address from the seller. or of the packaging warehouses. they were able to use a social networking site to connect the two sellers. When they looked into the address. Microsoft has lost the largest share of the estimated $10 billion dollars per year in revenue that counterfeiting costs the software industry. . and set up a sting. When another Craigslist ad appeared. who contacted the seller and arranged to buy the software. Microsoft's (MSFT) Donal Keating uses a custom-built microscope to take 72 high-resolution images of a counterfeit software disc. to match it to other fakes. will use the abrasions and grooves on the stacking ring. The game’s publisher called in IPCybercrime. with a phone number. by snooping on the company’s FTP site. and a program that scours the Web for downloadable fakes. but not before the game was hacked and leaked on torrent sites. a firm specializing in online investigations. As the world’s largest software producer. the company's senior forensics manager.

District Judge Michael Davis lowered that verdict to $54. to one count of criminal copyright infringement. The U. Under the Copyright Act.000 between July 2008 and January 2010 by selling over 7. a third trial was held. the Minnesota Court’s jury awarded the RIAA $1. 2011.000 IN COUNTERFEIT BUSINESS SOFTWARE: Jacinda Jones.html: vii August 15. U. That trial was declared a mistrial when the judge revealed he had incorrectly instructed the jury on the law. also was ordered by U.gov/ip. The second trial resulted in an award of $1.S. including Microsoft.Prosecution: Recent cases In a case that began in 2010 file sharer Jammie Thomas-Rasset became the first defendant in a Recording Industry Association of America lawsuit to go to a jury trial. She was found guilty of downloading 24 songs from the music sharing site Kazaa.cheapdl.92 million dollars which was reduced to $54.000 per infraction are allowed.000 being levied against her.cybercrime.S. Lawson in Detroit to serve three years of supervised release following her prison term and to pay $441. Intuit and Symantec.MICHIGAN WOMAN SENTENCED TO TWO YEARS IN PRISON FOR SELLING MORE THAN $400. Adobe.500 for each of the illegally downloaded songs. of Ypsilanti.S.com. 31. The history of this case began in 2007 when a judgment of $222. Jones’ activities came to the attention of the U. Jones pleaded guilty on April 20. 2011 . Immigration and Customs Enforcement (ICE) agents.Cincinnati Man Pleads Guilty to Selling More Than $1 Million in Counterfeit Tax Preparation Software: . June 7.5 million or roughly $62. Since Thomas’ lawyers have said they would appeal any decision that they considered excessive damages. The judge then ordered a new trial to be held if the parties could not agree to that amount or settle. District Court Judge David M. In that trial. The software had a retail value of more than $2 million and was owned by several companies. Jones grossed more than $400.S. I’m sure this won’t be the last we hear of this case as an appeal is likely to occur. Mich. The judge cited fairness as his reasoning for reducing the verdict to a ―mere‖ $2.250 per illegal download.000 much to the dismay of the RIAA who maintain that judges do not have the jurisdiction to reduce jury verdicts when it comes to cases involving the Copyright Act..000 copies of pirated business software at discounted prices through the website www. According to documents filed in court. damages as much as $150.035 in restitution.000. 2011 . Just last month. who made several undercover purchases of the pirated business and viii utility software. Department of Justice puts out the latest press releases on Intellectual Property crimes at http://www.

According to court documents. Recommendations The software manufacturers and developers will need to continue to be vigilant and work on building a better mouse trap to combat software piracy.-based purchasers through a Virginia-based company called JDC Networking Inc. Within the packaging. Davis purchased by downloading or on a CD. May 26. without permission. The current US economic malaise cannot be attributed solely to the impact of intellectual property rights violation. Davis also falsely represented on the online eBay auctions that he was selling original Intuit software. Casual attitudes towards piracy in society are a factor in the widespread use of software piracy. Postal Service. . and created labels and packaging in order to mislead consumers into believing the products it sold were genuine Cisco products. received payment and then mailed the counterfeit software to the purchaser via the U. but instead he sold counterfeit Intuit software. usually at prices below ix manufacturer’s suggested retail price. and hid millions of dollars of counterfeit proceeds through a web of bank accounts and real estate held in the names x of her family members in China. but there is likely to be more developments in the future. Recent court decisions and prosecutions of the more recent US intellectual property acts will work hand in hand with improved anti-piracy tools to help manage this activity in the future. JDC Networking Inc. The efforts by the US and the anti-pirateers have had some success. The breadth of the impact from terrorist organizations from this venue is unclear but worthy of ongoing surveillance. Davis sold the counterfeit Intuit software on eBay.S. Zhao used various names and addresses in importation documents. To evade detection. Davis copied the original software multiple times to CDs. According to court documents.TWO INDIVIDUALS CONVICTED OF IMPORTING AND SELLING COUNTERFEIT CISCO COMPUTER NETWORKING EQUIPMENT: Zhao and her associates used a number of sophisticated schemes to defraud U. with accompanying labels and packaging that were protected by copyright.S. altered Cisco products by using pirated software. Quicken and Turbo Tax software manufactured by Intuit Inc. It’s hard to ascertain how much financial damage is done to intellectual property with software piracy.. and created counterfeit packaging and labeling for the CDs. 2011 . Conclusion/Summary Software piracy in the US and the world are an ongoing threat. New media and growth of access to and use of the internet will continue to pose challenges. Davis sometimes included a false disclaimer claiming that he was merely acting as a broker for another seller.

REFERENCES-Annotated Bibliography Group 2: Jury – Annotated Bibliography Eighth Annual BSA 2010 Piracy Study.***[insert pages]***. the progress has declined causing serious challenges to the information technology sector in the U. BSA Survey: Emerging Markets Boost Software Piracy to $59 Billion in 2010s. May). This article is an executive level summary that shows the scope of software piracy by nation. The driving force behind the trend is piracy in the world’s emerging economies. In the Sixth Annual BSA-IDC Global Software Piracy Study released by the Business Software Alliance (BSA). In brief.1 billion." spyware. 3-7. progress has made in slowing the illegal use of computer software products. Losses have risen steadily in recent years while the piracy rate has hovered around 20-21 percent. region. PC SOFTWARE PIRACY POSES CHALLENGES TO CYBER SECURITY. The United States has the lowest PC software piracy rate in the world.bsa. (Document ID: 2348656141).org/globalstudy 1. Software piracy also increases the risk of cyber crime and security problems. 10(6). it has the largest dollar losses from piracy. www. (2009). because it is by far the world's largest software market. from ABI/INFORM Trade & Industry. 20 percent. particularly the member software manufacturers and researchers interested in statistics about the breadth of global software piracy.S. IDC found that 29 percent of Web sites and 61 percent of peer-to-peer sites offering pirated software tried to infect test computers with "Trojans. 2011. . It further states that despite the effort of the U. Wireless News. May 2011. and financial value. It summarizes some of the extensive information available from the BSA (Business Software Alliance) website.S. It is a snapshot of economic impact and of trends. Computer Security Update. -------------------------------------------------------------------------------------------------------------------------2. Retrieved July 29. where the personal computer market is growing fastest. And in a 2006 study. its negative impact has gone beyond the software industry as well as in the information technology sector.S. For example. Retrieved from EBSCOhost. The intended audience is general. This figure has nearly doubled in real terms since 2003. (2011. The article focuses on the issues concerning increasing computer software piracy which poses challenges to cyber security in the U. However. Quote: The commercial value of PC software piracy leapt 14 percent globally in 2010 to $59 billion. the recent global spread of the Conficker virus has been attributed in part to the lack of automatic security updates for unlicensed software. and other tools of identity theft. government in battling piracy. keyloggers. However. $9.

It offers education and rewards for identifying software pirates. many U. at this time. Attitudes about copying also play a major role in piracy. Even in developed Western nations. Bsa. It states the 4 most common causes are assumed to be economic factors. strong intellectual property policies. "The progress seen in so many nations is proof that this anti-piracy strategy works.org) is the voice of the world's commercial software industry and its hardware partners before governments and in the international marketplace This web page is a premiere source of information and publishes annual reports on piracy. (2006). . reducing piracy by 10 points would generate $24 billion in higher government revenues without a tax increase. Communications of the ACM. The example of piracy in the music industry is worth noting in this context.------3. Kirs.Software piracy also lowers tax revenues at a time of increased fiscal pressures on governments worldwide.S.org The Business Software Alliance (http://www. effective law enforcement." Holleyman said. P. The implication is that in order for piracy rates to decrease there must not only be a change in economic conditions. The analysis determines that economic factors are not a key factor alone. individuals in many uncertainty-embracing nations may feel that the injustices inflicted by the manufacturers justify piracy. in many Asian nations. but also in societal structure and attitudes. where copying is generally equated with cheating. Asian art students are required to diligently copy the work of masters as an exercise in learning. Since the price of a CD is frequently considered exorbitant relative to the cost of producing one. technical factors. regulatory factors.. Copyright laws are not well understood or even recognized in many of these nations [10]. citizens who could otherwise buy a copy of a popular music CD regularly downloaded pirated music from sites such as Napster and Kaaza [3]. Unlike countries such as the U. Bagchi. GLOBAL SOFTWARE PIRACY: CAN ECONOMIC FACTORS ALONE EXPLAIN THE TREND?. -------------------------------------------------------------------------------------------------------------. and social/cultural factors. not an immoral practice.bsa. Retrieved from EBSCOhost. & Cerveny. copying is often viewed a cultural exercise.." ----------------------------------------------------------------------------------------------------------------------------.S. 49(6). Internet use growth rate does not predict rises in piracy until after 2003. R. According to the 2008 IDC study noted above. 70-75. K. and legalization programs by software companies and government agencies.---------------4. the increase in internet growth correlated with an increase in piracy. "The proven 'blueprint' for reducing piracy is a combination of consumer education.. This article searches for the reasons behind global software piracy. some people believe that pirating software is not wrong. Success is measured by the similarity of the copy to the original.

To combat software piracy. All rights reserved. P. It explores the personalities and motivations of those behind much of the illegal software distribution on the Internet. and other aspects of the software piracy scene. Microsoft Crosses Swords with Pirates Describes the use of computer forensics by Microsoft to identify counterfeit software discs and the organization responsible for producing them. Danny Stryszowski.com/magazine/content/10_31/b4189040984263. Everyone seems to know about P2P networks. "Combating Online Software Piracy. Gregory M. Bass. ..ebrary. Even if consumers involved in digital piracy are generally aware that it is illegal. Paul’s aggressive investigation and reporting of this world allowed him to explore the inner depths of the software piracy scene and gained him exclusive interviews with some of the most notorious individuals in the scene. and the attitudes which foster its growth. and these actions can be paralleled with enforcement campaigns to reduce the likelihood of piracy. Rockland. July). (2009). Business Source Complete.htm?chan=magazine+channel _news+-+technology 8. Throughout the course of his year-long investigation. Craig. it is not always perceived as un-ethical. a three prong approach of 1) monitoring online software activities." Journal of Internet Commerce 2. Retrieved August 5. France: Organisation for Economic Cooperation and Development (OECD).1. P. EBSCO.. Paris.. Piotr What drives digital piracy. & Honick.com/lib/empire/Doc?id=10326185&ppg=14 Copyright © 2009. 2011. http://www. Scorpecci. 7.p 12.Scorpecci. Web. 2) preserve evidence and 3) take action. D. 2011.businessweek.3 (2003): 3. Hess.5. (2005). Software Piracy Exposed This book dives into the unique world of software piracy. & Stryszowski. http://site. couriers. Microsoft Crosses Swords with Pirates. 6. D. (2010. but few are familiar with top sites. Industry and some governments have instituted extensive campaigns toward this end. Business Week. so continued emphasis should be placed on education and consumer awareness to overcome this perception. from ABI/INFORM Global. MA: Syngress Publishing. Piracy of Digital Content. (Document ID: 2094511861). R. Inc. Organisation for Economic Cooperation and Development (OECD). Software Piracy Exposed. and the steps which can be taken to combat it. Focuses more on the social aspects of piracy. Piracy of Digital Content . 3 Aug. Paul sought out the individuals behind this highly organized collection of individuals who somehow flew under most of the public’s radar.

pictures and videos of children 13 and younger engaged in sexual activity. followed by Operation Fastlink. Politics. the Berne Convention for the Protection of Literary and Artistic Works. The United States Government is the world's largest purchaser of computer-related services and equipment. The U. Clinton W. and . (2) determining what computer software the agency has the authorization to use. Weekly Compilation of Presidential Documents [serial online].9. 1998.S.org). The crackdown hit authors of spare. the federal regulator said last week.34(40):1941. purchasing more than $20 billion annually. Accessed August 6. message-board postings and Web site operators. Thirteen people have been arrested and more were expected to be arrested in the breakup of an Internet child pornography ring that reached across two oceans. by the authority vested in me as President by the Constitution and the laws of the United States of America. These procedures may include: (1) preparing agency inventories of the software present on its computers. distribute. online newsletters. 2011. it is hereby ordered as follows: Section 1. October 5.wipo. MA. including the Copyright Act. Available from: Academic Search Complete. President Clinton last week signed into law a bill designed to protect copyrighted material from the increased threat of piracy posed by advances in digital technology. November 2. Executive Order 13103--computer software piracy. and relevant provisions of Federal law. Ipswich. Accordingly. 2011. or transmit computer software in violation of applicable copyright laws. 1998. Inter@ctive Week [serial online]. Called tile Digital Millennium Copyright Act. it is incumbent on the United States to ensure that its own practices as a purchaser and user of computer software are beyond reproach. Accessed August 6. Participants called themselves "faculty members" at "Pedo University" and used nicknames in trading information.sec. At a time when a critical component in discussions with our international trading partners concerns their efforts to combat piracy of computer software and other intellectual property. P 186-88 and the Operation Buccaneer are some of the early federal cases against pirates. including applicable provisions of the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights. No Electronic Theft act (NET) was first used in the 1990s against the pirate „warez‟ group Pirates With Attitude (PWA). or junk e-mail. Available from: Academic Search Complete. It shall be the policy of the United States Government that each executive agency shall work diligently to prevent and combat computer software piracy in order to give effect to copyrights associated with computer software by observing the relevant provisions of international agreements in effect in the United States. said New York State Attorney General Dennis Vacco and State Police Chief James McMahon. the bill is based on treaties by the World Intellectual Property Organization (www. MA. re produce. (b) Each agency shall establish procedures to ensure that the agency has present on its computers and uses only computer software not in violation of applicable copyright laws. Policy.gov) charged 44 stock promoters with Internet securities fraud in 23 cases. Ipswich. Securities and Exchange Commission (www. (a) Each agency shall adopt procedures to ensure that the agency does not acquire.5(43):52.

Available from: Academic Search Complete. the infringing party could be imprisoned for up to to 6 years. Houston Journal of International Law [serial online]. Through this act. United States Copyright Act Holds someone guilty of illegal reproduction of software subject to civil damages of up to $100. (d) Executive agencies shall cooperate fully in implementing this order and shall share information as appropriate that may be useful in combating the use of compute software in violation of applicable copyright laws.500. operate.(3) developing and maintaining adequate recordkeeping systems. International Agreements .000. Ipswich. somebody who made copies of software and distributed them through a web site.edu/~eroberts/cs181/projects/software-piracy/government.33(1):227-233. and if the copies are worth a total value of over $2. The first offense is punishable by five years in prison and a fine of $250. 2011. and criminal penalties. (c) Contractors and recipients of Federal financial assistance. if 10 or more illegal copies of software are made within a six-month period. If agencies become aware that contractors or recipients are using Federal funds to acquire.html Partly due to the lobbying of major software producers. If the copyrighted works copied had a total retail value of over $1. including the use of certifications or written assurances. as the agency head deems appropriate and consistent with the requirements of law. MA. Senate Bill S893 Signed by President Bush in October 1992. the government has began cracking down on software piracy. even when the infringing party derives no direct financial benefit from the infringement. -------------------http://www-cs-faculty. -----------10. The second offense is punishable by up to 10 years in prison.stanford. or maintain computer software in violation of copyright laws and determine that such actions of the contractors or recipients may affect the integrity of the agency's contracting and Federal financial assistance processes. Accessed August 6. was now liable for damages. agencies shall take such measures. like Microsoft and Adobe. for example.000.000 per title infringed. has been very adamant about protecting the rights of software manufacturers and distributors. the bill elevated software piracy from a misdemeanor to a felony. Fall2010 2010. including fines of as much as $250. The Clinton/Gore administration. operate.000 per title infringed and imprisonment of up to five years. No Electronic Theft Act The NET Act made criminal the willful infringement of copyrighted works. should have appropriate systems and controls in place to ensure that Federal funds are not used to acquire. specifically by electronic means. Burke L. in particular. or maintain computer software in violation of applicable copyright laws. and have enacted laws that proscribe harsh penalties for those who infringe on software copyrights. including recipients of grants and loan guarantee assistance. THE UNITED STATES TAKES CENTER STAGE IN THE INTERNATIONAL FIGHT AGAINST ONLINE PIRACY & COUNTERFEITING.

11. The Act creates a new enforcement paradigm for the federal government’s efforts to combat counterfeiting and piracy. it amends Section 410 of the Copyright Act to codify the doctrine of fraud on the Copyright Office in the registration process. Computerworld Dec 13. in which it pledged to strengthen its principal intellectual property laws. For example. games. This office would be primarily responsible for developing and implementing a Joint Strategic Plan against counterfeiting and piracy and the coordinator would serve as a principal advisor to the President on domestic and international intellectual property enforcement policy.copyright. One of the highlights of DMCA is to make it a crime to circumvent anti-piracy measures built into most commercial software. a Special 301 investigation under the U. the U. the President signed the Prioritizing Resources and Organization for Intellectual Property Act into law (Pub. The Act also outlaws the manufacture. from the United States. and to treat software as literary work. In 1991. In January 1992. in a generation. an investigation found that the intellectual property practices in China were especially "onerous and egregious. Department of Justice says three separate federal investigations over the past two years had targeted international groups that illegally distributed pirated .S.gov/newsnet/2008/354. 110-403) (the PRO-IP Act). By Todd R. http://www. Digital Millenium Copyright Act The DMCA is the most comprehensive reform of the copyright law in the U. In addition. The new statute strengthens the intellectual property laws of the United States in several respects. The law also clarifies that registration is not a prerequisite for a criminal copyright prosecution and makes it unlawful (civilly or criminally) to export unauthorized copies of protected works." leading to the United States threatening China with trade sanctions.The U.S. including copies of phonorecords. it creates an Intellectual Property Enforcement Coordinator (IPEC) within the Executive Office of the President. and movies online.S. For example. The United States has taken a firm stance and has made it clear that it will impose trade sanctions against countries which do not take steps to eliminate software piracy. In 1994. the law amends Section 506 of the Copyright Act to provide for the forfeiture of any property used to commit or facilitate the commission of a criminal offense involving copyrighted works.S. The Act also provides for improved investigative and forensic resources for enforcement of laws related to intellectual property crimes and allocates additional funding for resources to investigate and prosecute intellectual property crimes and other criminal activity involving computers. In an announcement. L. 2001 10:00 am A two-year federal investigation into international software piracy over the Internet culminated earlier this week in the serving of more than 100 search warrants against suspects allegedly involved in piracy syndicates. Feds Crack Software Piracy Rings Two-year probe targeted international groups illegally distributing software.html Prioritizing Resources and Organization for Intellectual Property Act Becomes Public Law 110-403 On October 13. Trade Act of 1974 found that the Chinese government has been lax in enforcing software copyright laws. Weiss. or distribution of code-cracking devices used to illegally copy software. a Memorandum of Understanding was signed by China. government is committed to fighting software piracy abroad as well. 2008. sale.

The groups. says the federal actions marked a "banner day" in the fight against software theft. the Environmental Protection Agency Office of the Inspector General and the Federal Bureau of Investigation. "Many of these individuals and groups believed the digital age and the Internet allowed them to operate without fear of detection or criminal sanction. Customs Service and the Justice Department's Computer Crime and Intellectual Property section. worked with authorities in the U.S. and around the world.000 separate software programs. The U. Thousands of copies of pirated software will be removed from circulation because of the sting. including more than 12. Norway. as well as computer hardware seized by authorities.S. Three Campaigns The three operations were as follows: Operation Buccaneer.gov/blog/2011/06/20/fighting-worldwide-counterfeiting-requires-internationalcooperation .S. and movies. Today. and movies. Attorney's Office. the government says. Australia. a Washington. computer games. More than 200 suspects participated in the piracy efforts at the undercover site.S." says Attorney General John Ashcroft. along with the Nevada U. and games. Additional suspects are expected to be identified and targeted. The investigation involved the Defense Criminal Investigative Service.S. D." The targets of the three operations included both individuals and organizations known as "Warez" groups that operate in the U. "Today. causing losses for software companies. which is made up of about 40 members worldwide.whitehouse. working in conjunction with the U. a one-year investigation by the U. copyright laws. vice president of enforcement for the Business Software Alliance.S. games. Included in the targets is the piracy group called DrinkOrDie. which was used to transfer more than 100. http://www. Buccaneer involved the simultaneous execution of 58 search warrants against high-level Warez leadership and members around the world. movies. Operation Bandwidth. a yearlong effort by the FBI and the New Hampshire U. law enforcement in the U. The groups decode antipiracy measures in software and release the code on the Internet before or at the time of a new product's launch. Operation Digital Piratez. law enforcement initiated the most aggressive enforcement action to date against illegal software piracy. Warez groups specialize in the illegal distribution over the Internet of copyrighted software programs. as well as individuals and groups who had illegal access to computer systems and distribution networks. U.S.S.000 pirated files.C. including "cracking groups" specifically created for the purpose of pirating software so that it may be distributed over the Internet in violation of U. Attorney's Office to infiltrate several Warez distribution organizations. "We do view this as probably the most extensive and aggressive law enforcement action to date against software piracy.-based antipiracy industry watchdog group..K." Kruger says.software. a two-year effort to identify and prosecute groups and individuals involved with illegal access to computer systems and the piracy of proprietary software using Warez storage sites on the Internet. created an undercover Warez site as part of the investigation. in the statement. and Finland in the investigation.S. and around the world proved them wrong. Attorney for the Eastern District of Virginia. Bob Kruger.

April 10. (2006).S. Patrolling the Web for Pirated Content. . Government’s efforts to create jobs for American workers and increase U. which hurts innovators and brands here in America. as well as foreign governments. This website is relevant in my research because it contains the facts of information that will help me prove the effects of piracy in the music industry. as well as some of the complexities that arise in applying jurisdictional concepts such as the ―double criminality‖ requirement for extradition in this evolving prosecutorial landscape. recognize that we all have a stake in maintaining a safe and secure global marketplace. working with the private sector. I recently travelled to Europe to press for greater cooperation in fighting intellectual property theft overseas. extended to several European countries and Australia. I met with members of the European Commission and European Parliament. so that the work can be taken down or properly attributed. RIAA . I met with members of UK’s Parliament and the UK IP Crime Group. These private-sector companies. a group of enforcement agencies and industry groups which seek a collaborative approach to fighting intellectual property crime.com/ The RIAA is the industry that is most concerned and vocal when it comes to piracy in the music industry.S. as well as American businesses.S. my office has been working closely with Internet Service Providers. some contested prosecutions in the United Kingdom. advertisers. I spoke about the need to work with foreign governments and the private sector to stop criminals who attempt to evade intellectual property laws by operating overseas. with numerous suspects pleading guilty in the United States. search engines. from Law Module. 13. Retrieved August 6. At the World Copyright Congress in Brussels. 2011. In London. This paper contrasts the legal consequences that flowed. MA. led by the US Customs Service and Department of Justice. January 2010. Counterfeiting and piracy is a global crime.113(1):63. I welcome their cooperation and will continue to engage with them as we fight worldwide counterfeiting together. Victoria Espinel is the U. ―Operation Buccaneer‖ was the name given to a law enforcement operation against ―DrinkOrDie. Contained within this article are the statistics of how piracy negatively impacts the recording industry. Operation Buccaneer illustrates the cross-national reach of both Internet-based intellectual property crime and the law enforcement response.‖ a highly organised but globally dispersed Internet-based software piracy group. This collaborative approach. Technology Review [serial online]. Available from: MasterFILE Premier. 207-221. Gregor Urbas.As part of the U. ------------12. is something that my office has been engaged in here in the U.riaa. (Document ID: 1255296681). Case Study with company Attributor and the MDCA. Over the last several months. domain name registrars and registries taking voluntary action against online piracy. Intellectual Property Enforcement Coordinator. Crime. Cass S.Recording Industry Association of America .S. Cross-national investigation and prosecution of intellectual property crimes: the example of "Operation Buccaneer". payment processors. Attributor was founded in 2005 to find unauthorized uses of the client’s copyrighted works on the internet. The RIAA website details the effects and consequences with regards to piracy. 46(4-5). 14. Ipswich. and a sole Australian suspect facing extradition to the United States to face charges. 2011. exports to overseas markets. In Brussels. http://www. The concerted enforcement action. and it requires a global solution. 2011. Law and Social Change. credit card companies. Accessed August 6.

Retrieved from http://blogs.pcworld. 2011.computerworld. (2009.. "Introduction. (2009 March 3).computerworld. The purpose of this article details the government study of piracy and compares it to claims that were made by the various media regarding the actual effects of piracy in terms of costs and damages.com. 16.15. April 2). from www. & Ridgeway. Retrieved from http://www. & Wong. G. K.com/threatlevel/2009/03/hollywood-funde/ Gralla.rand. September 14)." At Issue: Internet Piracy. J. Organized Crime. [Supplemental Material] Wired. & Cunningham.com/article/116842/mpaa_movie_piracy_is_the_new_plague.pdf Kavets.gamepron. 17. (2009) Film Piracy. San Diego: Greenhaven Press.computerworld. J. Gotcha! Pursuing software pirates. James D. The finding by the Government Accountability Office questions how the media actually came up with the costs and damages that piracy has on the industry. This article examines piracy and the media including its’ history and how piracy of media became about.com/internet-piracyarticle/54083>. Retrieved August 20. “Fed‟s raise questions about big media‟s piracy claims”. 12 April 2010. September 14).gamepron. The Government Accountability Office had also stated that there was a possibility that piracy did not effect to the economy as badly as thought by media industry and the consensus is that more investigation is needed as more questions needed to be addressed.F. 9 July 2004. August 2004. 1 April 2011.. & Matthies.enotes. Torr. C-Net News. It identifies the worrying trends that the movie industry is facing and the estimated effects that these trends will have on movies. G. Pruitt. 2005. Retrieved from http://www. Greg.com/feds_lie_about_link_between_software_piracy_and_terrorism Kravets. Sandoval.. 2011.com/threatlevel/category/riaa-litigation/ Sources: i King. Hollywood-Funded Study Concludes Piracy Fosters Terrorism. Torr.cnet. A. Retrieved from http://www. It contrast’s the effect of rising ticket prices on the consumers that actually go to the movies and spend the money versus going on the internet and downloading or streaming movies. J. 1 April 2011. (2008. from Computerworld: http://www. PC World. July 22). Ed.. Retrieved August 20. C. from Computerworld: http://www. 2011..com: http://www. Seeing through windows [Web log post]. RIAA Litigation [Web log post].J. Scarlet.com/s/article/print/342035/Gotcha_Pursuing_software_pirates? iii Garry’s Mod catches pirates the fun way. (2011.wired. <http://www. Retrieved August 20. Sources: Treverton.com/s/article/print/342035/Gotcha_Pursuing_software_pirates? ii King.org/content/dam/rand/pubs/monographs/2009/RAND_MG742. <http://www. (2011. D. <http://news. P.com/news/2011/04/12/garrys-mod-catches-pirates-the-fun-way/ . beginning with VHS and tapes. James D. D. “MPAA: Movie Piracy is the New Plague”. Gotcha! Pursuing software pirates. and Terrorism. (2009.com/8301-31001_3-20002304-261. It also does a good job of defining piracy in all its form as well as gives a look in the evolution of piracy software programs on the internet and their effects. & Goulka. It looks at how the ways the MPAA and RIAA are trying to fight piracy as well as what those individuals who copy media are using as their rationale when it comes to the court systems and prosecution. April 12). 2 April 2011.html>.html> This article outlines the increasing trend in people’s use of the internet or other options in order to illegally watch movies.wired.

August 15). Retrieved August 20.cybercrime. (2005). 2011. D.businessweek. Rockland. 2011. Inc.html viii U. 2011.gov/zhaoConvicted. & Burnett. 2011.gov: http://www. from Cybercrime. (2009. from Cybercrime.cybercrime. P. MA: Syngress Publishing.pdf. November 6). (2011.gov/zhaoConvicted. from Cybercrime.com/magazine/content/10_31/b4189040984263. Department of Justice.htm vii U.cybercrime. Computer Crime & Intellectual Property Section. http://www. from United States Department of Justice: http://www.gov: http://www.). May 26). Retrieved August 23. Software Piracy Exposed.com: http://venturebeat. Department of Justice. July 22). http://www. June 7). Retrieved August 23.iv Craig.cybercrime.gov/davisPlea. How investigators tracked down a Modern Warfare 2 cyber pirate.gov: http://www.pdf.pdf .com/2009/11/06/how-investigators-tracked-down-amodern-warfare-2-cyber-thief/ vi Bass.. Microsoft Crosses Swords with Pirates. R. Retrieved August 20.cybercrime. (2011. 2011.d. http://www. M. D. Retrieved August 23.. Honick. from Venturebeat.gov/jonesSent.cybercrime.S. 2011. (n. v Takahashi.pdf x The United States Attorney's Office.S.pdf ix The United States Attorney's Office. (2011.cybercrime.gov/jonesSent. from Bloomberg Businessweek: http://www.gov/ip. Retrieved August 23. (2010.pdf.gov/davisPlea.

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