This page provides basic information on software piracy and its negative effects on businesses and consumers, including the risks associated purchasing or using counterfeit software.
What is software piracy?
Software piracy is the duplication, distribution or use of software without authorization from the copyright owner. It includes:
- Downloading unlicensed copies of software from the Internet.
- Making copies for, or loaning disks to, friends or associates.
- Installing one licensed copy onto multiple computers (where not allowed by license terms).
- Selling counterfeit or back-up copies online or elsewhere.
- Using unlicensed or counterfeit copies.
It's important to understand that software is not owned by an end-user, but rather licensed to the end-user by the copyright owner through an End-User License Agreement, often referred to as the EULA. The EULA contains the terms and conditions for using the software. Software publishers maintain ownership of the software they create, and control the right to duplicate and distribute their products.
Why is software piracy an important issue?
Piracy is not just a concern for software publishers; it also affects consumers and the economy as a whole. Both the Software and Information Industry Association (SIIA) and the Business Software Alliance (BSA) estimate that up to 40 percent of installed business software worldwide, and 23 percent in the U.S., is illegally copied. Software theft and its related effects -- including lost jobs, wages and tax revenues -- totaled an estimated $8.7 billion in the U.S. in 2002.
Other negative effects of piracy:
- Virus threats - When users install software from counterfeit CDs, they expose themselves to risks that such CDs might also contain other material, including potentially destructive material like computer viruses. Obviously there are no quality control guarantees when buying and using counterfeit CDs.
- Impact on research and development - Piracy undermines software companies' ability to invest in research and development, slowing the industry's ability to bring new and innovative solutions to consumers.
- Identity theft risks - Piracy can expose end-users to potential risks of identity theft if criminals who sell counterfeit software CDs obtain a buyer's name, address, credit card and other information during purchase.
- Support and maintenance - Piracy deprives consumers of the basic protections offered by properly licensed software like money-back guarantees, installation support, maintenance releases, and upgrade rebate
What are the different types of piracy?
Here are three primary types of piracy:
Organized counterfeit sales - This is the illegal duplication and sale of copyrighted software without authorization from the copyright owner and can result in both civil and criminal penalties. These sales frequently occur online, including through online auctions and online storefronts, as well as through physical venues like flea markets and swap meets. To protect yourself from counterfeit software, please see the section below entitled "What you should watch out for when buying software".
Unlicensed use - This occurs when people and companies (including their employees) reproduce or share copies of software without adequate licenses. Unlicensed use can occur when:
- The product has a single-user license but is installed on more than one computer.
- The product is a counterfeit or restricted-use version of software and is used or sold in violation of the license terms or without proper qualifications. This includes non-qualified use of academic, not-for-resale, hardware-prebundled or trial versions.
- The product is shared over the Internet or downloaded from a peer-to-peer network in violation of federal law and license requirements.
Hard-disk loading - This is the unauthorized installation of software onto new or used computers by another person or company, typically to make the purchase of the computer a better deal.
What are the legal penalties for software piracy?
Actual damages experienced by the copyright owner, including recovery of the profits from any illegal sales.
Federal statutory damages of as much as $150,000 per infringement.
For criminal piracy, felony prosecution with fines up to $250,000, and prison terms up to five years.
What should you watch out for when buying your software licenses?
If you are buying a license to use Intuit software from someone other than Intuit or a well-known, trusted retailer, you should watch out for the following warning signs:
Previously registered software - If the product is being advertised as "used" or "previously registered," its license is generally not transferable. Any attempted resale would therefore be prohibited. If you have questions about a particular auction or a copy of Intuit software you received from an online seller, please contact Intuit via e-mail at email@example.com.
Restricted-use software - Restricted-use versions of Intuit software, such as academic, not-for-resale, hardware-prebundled or trial versions, may only be acquired by qualified users and generally cannot be resold. Sales of these versions on auction sites, so-called "discount software" sites or elsewhere, may violate the EULA and may not be permitted by law.
Multi-license packs - Some Intuit software products are available in 5- or 10-license packs or other configurations. As explained in the license terms, such packages cannot be broken up and sold separately.
"CD-ROM only" sales without proper packaging - Authentic Intuit software CDs that are sold by legitimate resellers are always packaged in Intuit-manufactured and branded packaging and never packaged for resale in plain-white sleeves or plastic jewel cases. Software offered for sale without legitimate Intuit-branded packaging may indicate that it is not genuine or legally licensed.
Additionally, authentic Intuit software CD-ROMs are always manufactured using a sophisticated printing process where the ink is screened directly onto the surface of the CD-ROM. Intuit does not use paper or plastic CD labels that merely stick to the top surface of the CD. Additionally, Intuit software is always manufactured on CD-ROM media, not so-called CD-R media -- a recordable disk medium that is typically used to "burn" copies of music and movies and which often has serial numbering on the plastic inner ring of the CD.
"Too good to be true" pricing - While some offers may seem like a "great deal," buyers may not get what they expect. Those victimized by purchasing counterfeit software may expose themselves to the risks noted above. Additionally, buyers will ultimately need to purchase a legitimate license (or licenses) to continue using the software lawfully. As the old adage says, "If it looks too good to be true, it usually is!"