MANTECH: Project #2

Software Piracy in the Philippines

What is software piracy?

The unauthorized copying of software. Most retail programs are licensed for use at just one computer site or for use by only one user at any time. By buying the software, you become a licensed user rather than an owner. You are allowed to make copies of the program for backup purposes, but it is against the law to give copies to friends and colleagues.

What are the most common types of software piracy?

End-user piracy

This is the most damaging form of software piracy, and is also known as “corporate end-user piracy.” This occurs when businesses, schools, nonprofit organizations and government institutions make additional copies of software without authorization.

Client-server Overuse

This occurs when too many employees on a network use a central copy of a program at the same time.

Internet Piracy

While there are many publishers who offer authorized versions of their software for sale online, there are also numerous pirate operations on the Internet as well:

· Pirate websites that make software available for free download or in exchange for uploaded programs.

· Internet auction sites that offer counterfeit, out-of-channel, infringing copyright software.

· Peer-to-Peer networks that enable unauthorized transfer of copyrighted programs.

Hard Disk Loading

This occurs when the business who sells you a new computer loads illegal copies of software onto its hard disk to make the purchase of the machine more attractive.

Software Counterfeiting

This is the illegal duplication and sale of copyrighted material with the intent of directly imitating the copyrighted product. In the case of packaged software, it is common to find counterfeit copies of the CDs or diskettes incorporating the software program, as well as related packaging, manuals, license agreements, labels, registration cards, and security features.

The internet makes software piracy spread in a much faster rate. Instead of buying pirated copies of software from illegal retailers people only need to go to the internet and download pirated copies for free. Thus, significantly participates in this problem. It is obvious that software piracy is indeed an illegal activity and it is certain that there are laws against it.

What is the law?

Intellectual Property Rights in the Philippines are currently governed by the new Intellectual Property Code of the Philippines. The Philippines is also a member of the Berne Convention for the protection of Literary and Artistic Words.

Under the new Code, “original works” are protected by the sole fact of their creation. It is not necessary to register a work, or to do anything else to obtain the protection of the code. Further more, original works are protected regardless of their content, quality, purpose, or the form of their expression.

Among other things, the Code expressly protects computer programs as literary works. The Code also protects the copyright in the manuals and packaging, which accompany the software.

Intellectual Property Rights Code protects the copyright owner’s rights by giving the copyright owner the exclusive right to do certain things with the “works”, which in this case are the computer program, the manuals, and the packaging.

These “exclusive rights” include:

· The right to copy the whole program or a substantial part of it.

· The right to adapt or translate the program.

· The right to rent the program to another person.

This means that you may only copy, adapt or rent a computer program if the copyright owner gives you the permission to do this. This permission is given in the form of a license.

Every time you purchase a legitimate copy of a computer program, you will receive a license agreement. This agreement will tell you how you may use the computer program. If you do anything with the computer program, which is not permitted under the license agreement (or the IP Code), then you will have breached the Code and will be liable for the penalties.

What are the penalties?

1st offense: Imprisonment of 1 year to 3 years plus a fine ranging from P50,000 to P150,000.
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.

Under Philippine law, the copyright owner may also bring a civil action for infringement of copyright. If the court finds that a breach of copyright has occurred, then it may award an injunction prohibiting further breaches, and/or either monetary compensation for the damage suffered, or an account of profits made as a result of the infringement. The court may also award the copyright owner moral and exemplary damages.

Under the new Code, the Intellectual Property Office may order the cancellation of any permit, authority or registration that the Office had granted. The Office may also impose various penalties including cease and desist orders, condemnation or seizure of the products, administrative fines and award of damages.

A new study reveals that the software piracy rate of the Philippines has remained unchanged at 71% from 2004 to 2006. However, losses from piracy have gone up from US$76 million in 2005 to US$119 million (P5.59 billion) last year.

These are among the findings of the fourth annual global PC software

piracy study released today by the Business Software Alliance (BSA), an international association representing the commercial software industry. The study was conducted independently by IDC, the information technology (IT) industry's leading global market research and forecasting firm.

"The Philippines is among the countries in the world with a projected fast growing ICT industry. However, the unchanged software piracy rate prevents the industry from advancing further. Software piracy has remained a serious concern which should be promptly addressed," said Ronald Chua, Chair of BSA Philippines Committee.

The problem of software piracy in the Philippines has not changed for at least three years now. It is hard to understand why this is the case since there are laws against this and the Philippine government is aware of the seriousness of this problem.

The leading reason for the unchanging status of software piracy in the Philippines is that the enforcement of the laws that have been established has been severely lacking. This enables participants of software piracy to continuously pirate software and reap monetary gains.

Sadly, this problem will not be solved unless the problem of corruption in the Philippines is also solved. The places where pirated software is sold are not hidden. They can be found is some malls and in “tianges.” Some are even found near police precincts. It is hard to understand why this is possible. There are occasional raids to deter pirates from selling their stolen software but this is not enough.

Looking at this problem, it is disheartening to know that after I graduate from college the software that I will develop will eventually be pirated and I will not receive rightful compensation for my work. This could also deter other programmers to develop software.

The solution being tried at the moment is the anti-piracy campaigns. These campaigns try to convince people to stop patronizing pirated goods. If people stopped buying pirated software then no one would still want to sell it. However, the temptation of being able to use software that could cost thousands of Pesos for free or for only a few hundred Pesos is too much for any average person to refuse.

Software companies have their own ways to try to deter if not solve the problem of piracy. Some companies offer a freeware version of their product containing most of the features of the software. This enables people to take advantage of their product for free. Other companies create software that requires updates and these updates are available by downloading them from their site. However, a person cannot download this update unless the version of their software is registered in the company’s database.

In any case software piracy must be solved as soon as possible. Software is becoming more and more a necessity in our daily lives. If the Philippines is able to enforce their software piracy laws, IT investors will come and will aid in solving their economic problems. So far there has been no change, but hopefully the software piracy rate in the Philippines will significantly decrease.