^Co-sponsors:         

Thank you for coming to the Microsoft Big Day

Software Piracy and Intellectual Property Protection

www.microsoft.com/piracy

 The Software Industry is a significant contributor to the economic prosperity of the United States and other countries around the world. According to a recent study by the Business Software Alliance and the Software and Information Industry Association, on a global scale, sales revenue losses as a result of software piracy topped $12 billion dollars in 1999 - revenue that could have greatly contributed to positive economic results worldwide.

Emerging technologies that enable the sharing of movies, music and software have raised the issue of various types of intellectual property (IP) protection to new levels. The ubiquitous nature of computers demands the software industry - as well as other industries - take responsibility to protect against the squandering of intellectual property. The shortsightedness of the current debate surrounding intellectual property protection threatens our nation�s economic prosperity and devalues our nation�s greatest thoughts and ideas, ultimately impacting consumers, businesses and the general public.  

The Internet all at once brings great hope and great challenge. Unfortunately, it has enabled the wide distribution of pirated software and other types of works, yet it is also a powerful medium for fueling our nation�s economy through the evolution of secure and efficient e-commerce transactions. Microsoft believes strong intellectual property protection is vital for the health of the economy. 

To thwart piracy and protect intellectual property through education and awareness, Microsoft works independently as well as through industry organizations such as the Business Software Alliance. The company also works with law enforcement agencies around the world to address organized criminal counterfeiting, and pursues civil legal actions to protect its intellectual property, maintain the integrity of the distribution channel and shield consumers from spending good money on bad software. 

Fortunately, the U.S. has demonstrated an important commitment to anti-piracy enforcement, including an announcement made in July 1999 of the Intellectual Property Rights Initiative. Established jointly by the Department of Justice, the FBI and the U.S. Customs Service, this Initiative aims to combat intellectual property crime, both domestically and abroad, through increased enforcement, training and penalties.

Additionally, following the President�s lead, governors across the nation are issuing executive orders to protect intellectual property and value the contributions that the software industry has made to their local economies. 

In addition to enforcement, security features are another important measure against piracy. Such features include Microsoft�s innovative edge-to-edge hologram embedded in Microsoft^� Office and Windows^� 2000 CD-ROMs, as well as effective copy-protection technologies like Microsoft�s Office Registration Wizard, designed to thwart end-user copying.

 Government                 

Intellectual Property Laws

 Federal Copyright Law.

This U.S. law, based on a constitutional provision, protects a person�s right to control the reproduction and distribution of his or her creative products. The owner of the copyright is entitled to control how and under what circumstances the IP may be reproduced, distributed and installed. When an individual or company acquires software, they are purchasing the right to use it, under certain restrictions imposed by the copyright owner (provided in the license agreement). Software publishers typically give permission to make only one copy of the program on a single PC.

No Electronic Theft (NET) Act.

Signed into law in December 1997 to address the reality that software piracy is rampant on the Internet, the NET Act allows law enforcement officials to criminally charge individuals who distribute software and other copyrighted materials over the Internet, even without a profit motive.

The agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

TRIPS,  which came into effect Jan. 1, 1995, is the agreement among all World Trade Organization members requiring protection and enforcement of intellectual property rights.

Anti-Piracy Executive Orders.

States that have implemented anti-piracy executive orders mandating the legal use of software in government agencies: California, Colorado, Hawaii, Maryland, Nevada

Penalties                                            

If caught with pirated and/or counterfeit software, the copyright owner can choose between actual damages, which include the amount the owner has lost because of the infringement plus all amounts profited, and statutory damages. Statutory damages can be as much as $150,000 for each work copied. In addition, the government can criminally prosecute for copyright infringement. If convicted, the penalty can include a fine of up to $250,000, a jail term of up to five years or both. 

Harm to Consumers            

Software piracy can harm consumers and businesses in many ways. Some of the most common include the following:  

�         Viruses, corrupt disks or otherwise defective software 

�         Missing or inadequate documentation

�         Customer ineligibility for technical product support

�         Customer ineligibility for software upgrades

�         Harm to R&D, innovation and, subsequently, the quality of software

Most Common Types of Piracy

Although piracy can take many forms, some of the most common are as follows: 

�         End-user copying. Simple, unlicensed copying by individuals or businesses

�         Hard-disk loading. Installation of unlicensed software on PCs sold to consumers  (often practiced by dishonest computer resellers)

�         Counterfeiting. Software piracy on a grand scale, in which software and its packaging are illegally duplicated - often by organized crime rings - then redistributed as supposedly legal product

�         Mischanneling. Software distributed under special licenses - either to high-volume customers, computer manufacturers or academic institutions - that is then redistributed to others who do not hold or qualify for these licenses 

Anti-Piracy Shopping Tips for Consumers

�         Consumers should be aware of the following to protect themselves when acquiring software products:

�         Prices that are �too good to be true�

�         Suspicious methods of delivery and/or payment

�         Retail software distributed in jewel cases only, rather than in full-color retail boxes

�         Software marked with a phrase, such as �For distribution with a new PC only� or �Special CD for licensed customers only,� that does not describe the transaction                                                                    

For More Information,

Press Only

Laurie Rieger, Waggener Edstrom, (408) 986-1140, laurier@wagged.com

Tara Gajadhar, Waggener Edstrom, (425) 637-9097, tarag@wagged.com