Court fines man $210,563 for selling pirated software online

A U.S. judge has ordered a Delaware man who sold copies of software packages on an Internet auction site to pay $210,563 in damages and court costs, the Business Software Alliance (BSA) announced today.

Judge Susan Illston of the U.S. District Court for the Northern District of California signed the order against Matthew Miller of Newark, Del., in May, but the BSA didn’t get legal clearance to announce the decision until now, a spokesman for the vendor trade group said.

Miller sold copies of software by Adobe Systems Inc., Autodesk and Microsoft Corp. on the online auction site iOffer, the BSA said in a press release.

Miller, the BSA said, downloaded software, burned copies onto CDs and sold about 200 copies to customers for $8 to $12.

The BSA and its member companies accused Miller of offering nearly $11,900 worth of software to an undercover investigator for $52, with the investigator agreeing to pay $45 after some haggling.

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Illston’s judgment included $195,000 in statutory damages, with the remaining $15,563 in lawyer’s fees and court costs. The judge also ordered Miller to immediately destroy any infringing copies of the software in his possession.

Miller sold copies of software by Adobe Systems Inc., Autodesk and Microsoft Corp. on the online auction site iOffer, the BSA said in a press release. Miller, the BSA said, downloaded software, burned copies onto CDs and sold about 200 copies to customers for $8 to $12.The BSA and its member companies accused Miller of offering nearly $11,900 worth of software to an undercover investigator for $52, with the investigator agreeing to pay $45 after some haggling.Illston’s judgment included $195,000 in statutory damages, with the remaining $15,563 in lawyer’s fees and court costs. The judge also ordered Miller to immediately destroy any infringing copies of the software in his possession.BSA has sought to emphasize that its member companies rarely take action against individuals, and their focus is promoting public awareness about the negative consequences of software piracy.

BSA has sought to emphasize that its member companies rarely take action against individuals, and their focus is promoting public awareness about the negative consequences of software piracy.

But in some cases, “the activities of individuals are both reprehensible and blatant,” noted Jenny Blank, BSA’s senior director of legal affairs, said in a statement.

The Alliance has urged users to be aware of software offers that appear too good to be true.

BSA’s Canadian anti-piracy drive

BSA says its damages imposed on organizations found to be using unlicensed software “illustrate that it is more expensive to copy software than … to acquire a sufficient number of licenses.”

It’s a message the Alliance sought to get across to five Canadian organizations when, in April this year, it collected a total of $270,091 from them to settle claims of their using unlicensed copies of software on their computers.

While four of the five organizations paid the BSA less than $25,000 to settle, one of them – Chinook School Division – had to fork out $191,543 in damages.

Based in Swift Current, SK, he Division serves more than 6,000 students through 62 schools in south-western region of the province.

BSA says its software investigations usually start with a lead either provided via its anti-piracy hotline, 1-888-NO-PIRACY, or through its online reporting form at www.nopiracy.ca.

Most of such leads come from current or former employees. Upon receiving a tip off, the BSA says it contacts the company to explore the matter further by performing an audit of its software assets.

If a settlement cannot be reached, it says, both parties have the option of turning the matter over to the courts.

Canada’s software piracy rate drops

A study published by the BSA in April states that Canada’s PC software piracy rate dropped marginally from 33 per cent to 32 per cent in 2008.

However it says losses to the Canadian economy due to software piracy increased from US$1.071 billion to $1.222 billion.

The study conducted by analyst firm IDC in Framingham Mass. ranks Canada seventeenth among the top 25 countries with the lowest software piracy rates worldwide.

But it places Canada behind the U.S. and Japan, which it says have the lowest software piracy rates in the world at 20 and 21 per cent, respectively.

BSA Canada has called for a blend of tougher intellectual property policies, consumer education, and effective law enforcement to curtail software piracy.

“The progress seen in countries like China and Russia is proof that software piracy can indeed be reduced through a combination of [these methods],” said Michael Murphy, BSA Canada Committee chairman in a statement.

He suggested software piracy still remains a significant problem in Canada. “Despite the slight decline, Canada’s software piracy rate is nowhere near where it should be compared to other advanced economy countries.”

This assessment, as well as the IDC study’s piracy numbers, have been challenged by Michael Geist, Canada Research Chair in Internet and E-commerce Law at the University of Ottawa.

“What the BSA did not disclose is that the 2009 report on Canada were guesses since Canadian firms and users were not surveyed,” Geist wrote in his blog.

“While the study makes seemingly authoritative claims about the state of Canadian piracy, the reality is that IDC, which conducts the study for BSA, did not bother to survey in Canada.”

Geist said after learning that Sweden wasn’t surveyed either, he asked the Canadian BSA media contact about the approach in Canada.

He reproduced the media contact’s response in his blog.

It went as follows:

“Countries that are included in the survey portion are chosen to represent the more volatile economies. IDC has found from past research that low piracy countries, generally mature markets, have stable software loads by segment, with yearly variations driven more by segment dynamics (e.g. consumer shipment versus business shipments of PCs) than by load-by-load segment.

“IDC believes that in mature markets, piracy rates are driven less by changes in software load than other market conditions, such as shipment rates and volume licensing errors. Canada is also a country that IDC studies regularly using confidential, proprietary methodology to examine PC deployment, software revenues and distribution channel dynamics, all of which help determine both software load and piracy rates.”

This response, Geist noted, “is an express acknowledgement that the Canadian data this year is a guess.”

In another blog post, Geist questions the methodology used in the study, which he says “only surveys about 5,000 people in 24 countries and then extrapolates the data to 110 countries.”

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