Canadian firms pay $170,000 to anti-piracy group

The Business Software Alliance (BSA) has exacted fines from seven more Canadian businesses, while continuing to refer to questionable statistics measuring piracy.

Companies in Ontario, Quebec, and British Columbia were fined a total of $172,699 in damages for unlicenced software found on company computers. The companies fined cooperated with BSA lawyers by conducting software audits, and agreeing on a settlement rather than face a potentially costly court battle.

BSA doesn’t have any enforcement attorneys based in Canada. Iva Mills, a senior enforcement attorney based in Washington, D.C. oversaw correspondence with the firms named in the announcement.

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“I find the Canadian market is so much more friendly and they’re very ethically moored,” she says. “If they are aware of who the BSA is and what they do, they are generally compliant.”

Major software industry firms including Adobe Corp., Microsoft Corp., Apple Inc. and Hewlett-Packard L.P. are members of the BSA. The organization educates businesses about software piracy, and enforces penalties against those who commit it.

It is most often former employees who tip off BSA about unlicenced software use.  Tipsters have their identities protected and can leave information at or by calling 1-888-NO-PIRACY.

Did ex-employee load pirated software?

Vince Lally, president at Lally Sales & Service Ltd. near Windsor, Ont., suspects it was a former employee who reported his car dealership. He settled with BSA in December to pay a $50,000 penalty, the highest of the seven companies listed in the press release.

“My suspicion is it’s the same employee who put [the illegal software] on,” he says. “I was shocked to find out I had illegal software on these computers and we had no use for it.”

Lally’s first response to the BSA was that he didn’t have a software piracy problem. He was unfamiliar with the organization and wary of their request. Later he received a follow up letter that a gold-certified Microsoft Partner would have to conduct the audit at his expense.

“I’ve got nothing to hide, but I’m not willing to pay for the audit,” Lally says, recalling his reaction.

A third letter from the BSA was more strongly worded, Lally says. It mentioned that the Canadian Copyright Act allows for fines up to $20,000 for each piece of illegally copied software.

So Lally decided to conduct the audit, and was surprised to discover unlicenced installations of Microsoft Office Professional on about half of his 72 computers.

“I felt I couldn’t afford to take it to court,” Lally says. “If the full limit of the law had been used against me, the fine would have been even higher.”

Once the BSA receives a tip, it cross-checks the information with other sources, Mills says. The tip is reviewed by BSA lawyers and forwarded to member companies who compare it to their own information. Most often, unlicenced software is reported at smaller companies that don’t have stringent IT policies in place.

“We find piracy is concentrated in businesses where there isn’t a rigorous software asset management focus,” she says.

Computers at the dealership didn’t have proper safeguards in place to prevent employees from loading pirated software, Lally says. Employees did have to sign an Internet and computer usage policy warning against such activity, but that didn’t prove to be good enough.

“This can happen very easily to anybody,” he says.

The dealership has now put practices in place to prevent installation of software by employees, and plans to conduct quarterly software audits.

BSA makes online tools and resources available to companies to avoid ending up on a future press release announcing fines.

Questionable claims about piracy in Canada

In its press release, BSA referred to a controversial 2009 study that it sponsored from Framingham, Mass.-based consultancy IDC Corp. The report depicts Canada as a “piracy haven” and claims 32 per cent of all software installed on Canadian PCs in 2008 was pirated, with a retail price tag of $1.2 billion.

But that study didn’t even survey Canadian companies. Michael Geist, Canada research chair of Internet and e-commerce law at the University of Ottawa has previously debunked the study’s claims, questioning its methodology.

“These statements have become par for the course as groups ramp up their lobbying efforts and seek to convince Canadians that they reside in a piracy haven,” Geist says in an e-mail interview. “Yet many of these claims don’t stand up to scrutiny.”

But the BSA stands behind the study, says Rodger Correa, compliance marketing director with the BSA.

“It is good or better than any other methodology for measuring piracy today,” he says. “No one has ever come to us, including our critics, with a suggestion of any better way to measure piracy.”

Canada had been surveyed in past years, Correa adds. Software load wouldn’t change dramatically from year to year, and Canada is going to be surveyed for the next study released on the issue.

BSA exacted fines of about $1 million against Canadian businesses in 2009, Mills says.

The seven companies named in the BSA announcement are:

Tilbury-based Lally Ford Sales – $50,000
Ajax-based Lifestyle Sunrooms – $40,000
Toronto-based Performance Solutions – $23,751
Markham-based EPM Global Services Inc. – $16,876
Toronto-based Envision Sales Inc. – $14,372

Ville Saint-Laurent-based ColbaNet – $20,200

British Columbia
North Vancouver-based WebServe Canada – $7,500

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