Tuesday, November 27, 2007

2nd Paper: Software Piracy and the Law

Piracy in general has been an evident problem in the Philippines. Piracy has several manifestations and one of them is Software Piracy. First of all, what makes Software Piracy a crime? The Intellectual Property Code of the Philippines protects literary, artistic, derivative, published editions of work, unprotected subject matter, copyright ownerships, reproduction by libraries and reproduction of computer programs from the very moment they are created. Exclusive rights are given to the software author or owner to replicate, adapt, or rent the program. Every time a legitimate software copy is purchased, a license agreement states all rights given to the user, as well as prohibitions.


The five common types of software piracy are End-user piracy, Client Server Overuse, Internet Piracy, Hard disk loading, and Software counterfeiting, all of which are rampant in the Philippines. The penalties are as follows:

1st offense: Imprisonment of 1 year to 3 years plus a fine ranging from P50,000 to 150,000.
2nd offense: Imprisonment of 3 years and 1 day to 6 years plus a fine ranging from P150,000 to P500,000.
3rd offense to subsequent offenses: Imprisonment of 6 years and 1
day to 9 years plus a fine ranging from P500,000 to P1.5 million.

Several incidents of software piracy crackdowns have occurred over the past decade, one example is shown below:

Call center raided by NBI for use of unlicensed software
Wednesday, May 02, 2007
Makati City, Philippines – A Korean company operating as a “call center” in Makati City was recently raided by the National Bureau of Investigation (NBI) for allegedly using unlicensed business software programs.
Raided was Jigu Corporation/Widespace, located at 2/F & Unit 3-B, 3/F, D'Metyang's Building, 5064 P. Burgos St. corner Guanzon St., Makati City, after investigations revealed that the company has been using unlicensed copies of Microsoft Windows and Office.
Jigu, which shares of stocks are owned in part by Korean nationals, is registered as an "export market enterprise" business with the Securities and Exchange Commission. But further investigation revealed that the company is actually operating as a call center.
With search warrants issued by Judge Oscar Pimentel of the Manila Regional Trial Court Branch 148, the raiding team led by the agents of the NBI Intellectual Property Rights Division (NBI-IPRD) confiscated 45 computers all containing unlicensed software programs. The seized items were worth Php 2.4 million. The raid was a result of a call to the anti-piracy hotline of the Business Software Alliance (BSA).
“Company owners should ensure that their businesses comply with the law. The use of unlicensed software is a violation of the country’s intellectual property laws. We urge companies not to put their businesses at risk of such violation by using only licensed software,” said Atty. Jose Justo Yap, chief of NBI IPR Division.
Last month, the NBI raided another Korean company located in Cavite Economic Zone for using pirated software in its business operation. The NBI is part of the Pilipinas Anti-Piracy Team (PAPT) together with the Optical Media Board and the Philippine National Police.

Although officials have done their part in stopping Software Piracy as seen above, the threat still seems to expand under their very noses. In the Philippines, many laws are implemented but not strictly enforced. This has been the reason for many crimes that go unnoticed among our society.

Among several organizations aiming for elimination of software piracy is the Business Software alliance. Two years ago, BSA reports stated that the piracy rate in the Philippines remained at a steady rate little above 70%. In an interview with Hwee-Chong Ng, Chair of BSA Philippines Committee, He said “With no change in the piracy rate since 2004, software piracy remains a serious concern for the Philippines. It has been a potential roadblock to success for the local IT industry to fully prosper and has continued to be detrimental to the country’s economy. A lot needs to be done, such as continuous cooperation between the public and the private sectors, to significantly reduce software piracy in the Philippines.”

Together with the government, BSA is optimistic in solving the software piracy problem in the Philippines. However, with a huge percentage of the general public choosing pirated software over copyrighted material, the future seems bleak. The availability of software in the unprotected web has also greatly affected software users. Peer-to-peer networking allows users to transfer and replicate programs with just a few clicks. The reasons behind software piracy are somewhat obvious, lots of money is saved in purchasing pirated software. This proves that without the help of the general public in supporting copyrights and software laws, there is little improvement in store for our IT industry.

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