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SOFTWARE PIRACY

1. INTRODUCTION
Software piracy is the mislicensing, unauthorized reproduction and illegal
distribution of software, whether for business or personal use. 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.
Software piracy is all but impossible to stop, although software
companies are launching more and more lawsuits against major infractions.
Originally, software companies tried to stop software piracy by copy-protecting
their software. This strategy failed, however, because it was inconvenient for
users and was not 100 percent foolproof. Most software now requires some sort
of registration, which may discourage would-be pirates, but doesn't really stop
software piracy. Some common types of software piracy include counterfeit
software, OEM unbundling, soft lifting, hard disk loading, corporate software
piracy, and Internet software piracy.
According to Nasscom, software piracy involves the use, reproduction or
distribution without having received the expressed permission of the software
author. Software piracy comes in four common forms. The first is end user
piracy, and it occurs when users of software install the software on more
machines than they are entitled to under their license agreements. The second is
hard disk loading, and it occurs when computer dealers install illegal copies of
software onto computers prior to their sale. The third is software counterfeiting,
and it involves the illegal reproduction, and subsequent sale of software in a
form that is nearly identical to the original product. The fourth is Internet piracy,
and it occurs when individuals place unauthorized copies of software on the
Internet for download.
Software piracy, also known as copyright infringement of software, is the
unauthorized duplication or distribution of copyrighted computer software.
Although most computer users today are aware that unauthorized use and

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duplication of software is illegal, many show a general disregard for the


importance of treating software as valuable Intellectual Property
An entirely different approach to software piracy, called shareware,
acknowledges the futility of trying to stop people from copying software and
instead relies on people's honesty. Shareware publishers encourage users to give
copies of programs to friends and colleagues but ask everyone who uses a
program regularly to pay a registration fee to the program's author directly. It is
impossible to combat software piracy as long as the machines on which the
programs execute are indistinguishable; then, any program that can execute on
one machine may be copied for execution on another machine. Recently,
hardware manufacturers have begun assigning unique identifiers to CPU chips,
which make it possible to address the piracy issue in a new light. In this paper,
we suggest schemes that make it nearly impossible to use certain kinds of
software on a machine unless the manufacturer of that software has issued a
license for that specific machine.
The practice of labelling the infringement of exclusive rights in creative
works as "piracy" predates statutory copyright law. Prior to the Statute of Anne
in 1710, the Stationer' Company of London in 1557 received a Royal Charter
giving the company a monopoly on publication and tasking it with enforcing the
charter. Those who violated the charter were labelled pirates as early as
1603.The term "piracy" has been used to refer to the unauthorized copying,
distribution and selling of works in copyright. Article 12 of the 1886 Berne
Convention for the Protection of Literary and Artistic Works uses the term
"piracy" in relation to copyright infringement, stating "Pirated works may be
seized on importation into those countries of the Union where the original work
enjoys legal protection. "Article 61 of the 1994 Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPs) requires criminal procedures
and penalties in cases of wilful trademark counterfeiting or copyright piracy on
a commercial scale. "Piracy traditionally refers to acts of copyright infringement
intentionally committed for financial gain, though more recently, copyright
holders have described online copyright infringement, particularly in relation to
peer-to-peer file sharing networks, as "piracy."
Richard Stallman and the GNU Project have criticized the use of the word
"piracy" in these situations, saying that publishers use the word to refer to
"copying they don't approve of" and that "they [publishers] imply that it is
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ethically equivalent to attacking ships on the high seas, kidnapping and


murdering the people on them."
Copyright holders frequently refer to copyright infringement as theft. In
copyright law, infringement does not refer to theft of physical objects that take
away the owner's possession, but an instance where a person exercises one of
the exclusive rights of the copyright holder without authorization. Courts have
distinguished between copyright infringement and theft. For instance, the
United States Supreme Court held in Dowling v. United States (1985) that
bootleg phonorecords did not constitute stolen property. Instead, "interference
with copyright does not easily equate with theft, conversion, or fraud. The
Copyright Act even employs a separate term of art to define one who
misappropriates a copyright: '[...] an infringer of the copyright.'" The court said
that in the case of copyright infringement, the province guaranteed to the
copyright holder by copyright lawcertain exclusive rightsis invaded, but no
control, physical or otherwise, is taken over the copyright, nor is the copyright
holder wholly deprived of using the copyrighted work or exercising the
exclusive rights held.
According to the Fifth Annual BSA and IDC Global Software Piracy
Study, by the end of 2007 there were more than one billion PCs installed around
the worldnearly half of which contained pirated software. Worldwide revenue
losses due to software piracy were $48billion that same year, an increase of 20%
from the preceding year. Whether intentional or not, a vast amount of revenue is
lost to piracy and diverted from software companies and local governments.
Revenue that otherwise would be reinvested in R&D to develop and improve
legitimate software programs simply does not reach software publishers. This
paper discusses the causes and consequences of software piracy, and presents
software developers with a way
to protect their Intellectual Property and increase revenues,including guidelines
for evaluating software digital rights management (DRM) solutions

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Figure 1: introduction of software piracy

2. TYPES OF SOFTWARE PIRACY


1. End-user piracy:
Using multiple copies of a single software package on several different systems
or distributing registered or licensed copies of software to others. Another
common form of end user piracy is when a cracked version of the software is
used. Hacking into the software and disabling the copy protection or illegally
generating key codes that unlocks the trial version making the software a
registered version creates a cracked version.
The most damaging form of software piracy.
Also known as corporate end-user piracy.
Occurs when businesses, schools, nonprofit organizations and
government institutions make additional copies of software without
authorization.

2. Client-server Overuse:
Occurs when too many employees on a network use a central copy of a
program at the same time.

3. Internet Piracy:
Internet Piracy occurs when there is an electronic transfer of copyrighted
software. If system operators and/or users upload or download copyrighted
software and materials onto or from bulletin boards or the Internet for others to
copy and use without the proper license. Often hackers will distribute or sell the
hacked software or cracked keys. The developer does not receive any money for
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the software the hacker distributed. This is an infringement on the developer's


copyright.There are numerous pirate operations on the Internet:
Pirate websites that make software available for free download or in
exchange for uploaded programs.
Peer-to-Peer networks that enable unauthorized transfer of copyrighted
programs.
Internet piracy represents perhaps the single greatest threat to electronic
commerce.

4. Hard Disk Loading:


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.

5. Software Counterfeiting:
The illegal duplication and sale of copyrighted material with the intent of
directly imitating the copyrighted product.

6. CD-R Piracy:
The illegal copying of software using CD-R recording technology

7. Download piracy:
The uploading of software onto an Internet site for anyone to download a
copy.

8. Soft lifting:
Occurs when a person (or organization) purchases a single licensed copy
of a software program and installs it onto several computers, in violation
of the terms of the license agreement.
Another technique used by software pirates is to illegally obtain a registered
copy of software. Pirates purchase the software once and use it on multiple
computers. Purchasing software with a stolen credit card is another form of
software piracy. Unfortunately there are many kinds of software piracy that has
hampered the software industry.

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These types of software piracy have hampered the software industry. For the
software industry to prosper and further develop useful software for consumers
please support and pay for software. This results in better software for all.

3. LAW OF SOFTWARE PIRACY


Under the law, a company can be held liable for its employees actions.
If an employee is installing unauthorized software copies on company
computers or acquiring illegal software through the Internet, the company
can be sued for copyright infringement, even if the companys
management was unaware of the employees actions.

4. EFFECTS OF SOFTWARE PIRACY


When software is pirated, consumers, software developers, and resellers are
harmed. Software piracy increases the risk consumer's computers will be
corrupted by defective software and infected with viruses. Those who
provide defective and illegal software do not tend to provide sales and
technical support. Pirated software usually has inadequate documentation,
which prevents consumers from enjoying the full benefits of the software
package. In addition, consumers are unable to take advantage of technical
support and product upgrades, which are typically available to legitimate
registered users of the software. Pirated software can cost consumers lost
time and more money.
Developers lose revenue from pirated software, from current products as
well as from future programs. When software is sold most developers invest
a portion of the revenue into future development and better software
packages. When software is pirated, software developers lose revenue from
the sale of their products, which hinders development of new software and
stifles the growth of the software company.
Aside from security holes, using outdated pirated software can cause
users to encounter bugs and glitches, leading to lost work, lost time and
frustration. The hacks used to run pirated software can also interfere with
software operation, such as preventing a program from accessing online
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features in order to avoid detection. In addition to problems with the


software itself, pirated programs lack a warranty and access to customer
support, making it more making it more difficult to get help when problems
occur.
Using pirated software carries high penalties under copyright law for
users caught in the act. In the United States, copyright infringement can lead
to up to five years in jail and a $250,000 fine. The owner of the software's
copyright can also sue for damages, which can run as high as $150,000 per
copy. Although the idea of software piracy might evoke an image of an a
home computer user, piracy often occurs in businesses, putting entire
companies at legal risk. Even the U.S. Army was caught in 2013 for using
over $180 million in pirated software, costing it a $50 million settlement. If
you know a company is using pirated software, you can report the crime
anonymously to an industry association, such as BSA or The Software and
Information Industry Association.
Pirated software takes away sales of legitimate software. According to
BSA, piracy in 2011 was responsible for illegally sharing $9.7 billion worth
of software in the United States. Aside from the obvious effect on software
development companies, piracy also harms businesses completely outside
the software industry: A 2011 study by Keystone Strategy found that lawabiding companies are put at a $8.2 billion disadvantage over the course of
five years, due to other companies' willingness to pirate software to save
money.
Pirated software can carry viruses and other types of malware that infect
computers. According to the Harrison Group, 24 percent of pirated copies of
Windows were either infected or they automatically downloaded malware as
soon as they connected to the Internet. Even if a piece of pirated software
isn't infected itself, it can pose a security risk through a lack of updates:
Some copies of pirated software can't update properly, leading users to
continue using old versions with security holes.

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5. SOFTWARE PIRACY: PROTECTION CONSIDERATION


Cost and strength When considering anti piracy protection, cost and
overall strength of the solution are important elements to analyze.
Total development time The time required to implement your antipiracy solutions is also important. Anti-piracy technology is frequently
implemented at the end of the development cycle, when time to market is
limited.
Geographic location Vendors must also consider the geographic
location for software sales. If an application is to be sold into a region
with exceptionally high software piracy rates, it may be worthwhile to
incorporate maximum anti-piracy software protection. Safe Net software
protection solutions enable you to easily alter the levels of security at
fulfilment time without requiring any development change.
Available resources - Finally, total resources available must be
considered to ensure developers are available to add the desired
protection.

Figure 2: Software protection policy consideration


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6. SOFTWARE PIRACY IN INDIA


In India, the copyright of computer software is protected under the Indian
Copyright Act of 1957. Copyright protection for software with an individual
author lasts for the duration of the author's life and continues 60 years after the
author's death. Government agencies such as the Ministry of Information
Technology and the Ministry of Human Resource Development have played an
active role in aiding the Indian law enforcement authorities in protecting
software copyright holders.
An original software work does not have to be published in order to
receive copyright protection. As soon as the piece of software is committed to a
tangible medium, it automatically receives protection under Indian copyright
law. However, authors of software have the option of registering their original
work with the Copyright Office. Registration of software with the Copyright
Office is not a requirement for receiving copyright protection, but it can be
helpful in an infringement suit where proof of original authorship may be
required. According to Nasscom, software piracy involves the use, reproduction
or distribution without having received the expressed permission of the software
author. Software piracy comes in four common forms. The first is end user
piracy, and it occurs when users of software install the software on more
machines than they are entitled to under their license agreements. The second is
hard disk loading, and it occurs when computer dealers install illegal copies of
software onto computers prior to their sale. The third is software counterfeiting,
and it involves the illegal reproduction, and subsequent sale of software in a
form that is nearly identical to the original product. The fourth is Internet piracy,
and it occurs when individuals place unauthorized copies of software on the
Internet for download.
Software piracy comes in four common forms. The first is end user
piracy, and it occurs when users of software install the software on more
machines than they are entitled to under their license agreements. The second is
hard disk loading, and it occurs when computer dealers install illegal copies of
software onto computers prior to their sale. The third is software counterfeiting,
and it involves the illegal reproduction, and subsequent sale of software in a
form that is nearly identical to the original product. The fourth is Internet piracy,
and it occurs when individuals place unauthorized copies of software on the
Internet for download.
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Punishment:
Under the Indian Copyright Act, a software pirate can be tried
under both civil and criminal law. The minimum jail term for
software copyright infringement is seven days, and the
maximum jail term is three years. Statutory fines range from a
minimum of 50,000 to a maximum of 200,000 rupees.

Remediation
Indian courts can take a variety of measures designed to grant relief to copyright
holders whose rights have been infringed. One of these measures is ordering
that all infringing copies--including master copies--be impounded and
destroyed. Another way that courts grant relief to copyright holders is through
monetary compensation, which can consist of monetary damages, statutory
damages, court costs and attorney fees.

7. SOFTWARE LICENCE AGREEMENT


When installing software via Internet or CD-ROM, users agree to a licensure
agreement before they are able to test out the software. If this agreement is
broken or violated, then the user is guilty of software piracy. The software
licensure agreement is a contract between the software user and the software
developer. Usually, this agreement has certain terms and conditions the software
user must follow. When the user doesn't follow the rules and regulations, they
are guilty of software piracy. Some of these terms and conditions prohibit:
1. Using multiple copies of a single software package on several computers
2. Passing out copies of software to others without the proper documentation
(Not having a multiple site license for more than one computer)
3. Downloading or uploading pieces of software via bulletin boards for others to
copy
4. Downloading and installing shareware without paying for it
Unless otherwise stated, most software licensure agreements allow you to place
one copy on a single computer and make a second copy for backup purposes.
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Software piracy comes in many different forms. The three most common type
are End- User Piracy, Internet Piracy and Reseller Piracy.

Figure 3: Software licence agreement

a. End-User Piracy
End-User Piracy, sometimes referred to as soft-lifting copying, is prevalent in
the workplace. To illustrate, one copy of software has been purchased for a
particular machine and that same piece of software is installed on several
different computers without the proper documentation (multiple site licensures).
In some cases, employees will also install that same piece of software on their
home computers. In addition to installing one software application on several
different computer systems, some organizations/businesses are also guilty of not
reporting the proper number of stations that will actually be using a particular
software application. End-user piracy also deals with individuals swapping
copies of software programs with friends or family members.

b. Internet Piracy
Internet piracy is rapidly becoming the fastest and easiest way to receive pirated
software. Many companies allow consumers to download software from the
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Internet. This eliminates the need to make several trips to the store or sending
out copies of software on CD-ROM or floppy disk. However, these simple and
time saving techniques have also increased Internet piracy. Internet piracy can
occur in many different forms such as downloading or uploading software
from/to a bulletin board, attaching a copy of software via email and/or
transmitting software programs via file transfer protocol (FTP).

c. Reseller Piracy
Reseller piracy, also known as counterfeiting and hard disk loading, happens
when a legal copy of software is duplicated and distributed on a massive
amount of personal computers and/or to consumers as a legal software
application. This type of piracy can be very difficult to identify due to the very
sophisticated manner in which the software is duplicated and presented to the
individual and/or organization.

8. THE IMPACT OF SOFTWARE PIRACY


Software is a necessary requirement in todays world of technological
development. While continuously sought after, software is the intellectual
property of the developer or the organization that produces it. While individual
countries experience different levels of piracy, the Business Software Alliance
(BSA) has reported that in 2001 about 40% of the software in use globally was
pirated. The revenues lost to developers and organizations well exceed $10
billion for 2001. Even in the United States where the piracy rate was estimated
to be 25% for 2001, the impact of software piracy is significant. Developers and
organizations need an option to exercise control over their intellectual property
to prevent it from being altered, distributed or used by unlicensed, unregistered
users. The lost revenue ultimately results in lower returns for stakeholders,
developers, and employees. It culminates in a lack of additional funds that could
be used for research and development, hiring of senior developers or for
marketing of a new product. With the current global average of software piracy
rates it would seem possible that business and marketing plans could be
seriously flawed when identifying projected sales or revenues for a new
software application. Additionally, large-scale illegal software distribution has
taken place on Usenet and Internet bulletin boards and Internet users can easily
locate pirated versions of software packages online.
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Figure 4: impact of software piracy

9. WHO PIRATES SOFTWARE..??


There are a number of different types of application pirates, most of who fall
into two categories unintentional and intentional pirates.
Unintentional pirates are individuals who purchase applications and are
unaware of licensing and registration issues. People who are either not exposed
to software development practices or do not understand the ethical obligations
of using software comprise the majority of these unintentional pirates. This
group includes the loyal employee who installs a corporate copy of a word
processing application on his or her home computer for personal use or a
spreadsheet application to manage a home budget.
Some organizations purchase or obtain applications and intentionally violate the
licensing and registration requirements. Organizations without an active security
policy that stipulates that only software received from MIS can be installed on
the company computer may be unknowingly accountable for pirated software.
Employees who download or bring pirated applications from home into work
are putting their employers at risk by running unlicensed software in the
workplace.
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Intentional pirates can be casual copiers, individuals or organizations


that copy unprotected software with no intention of financially profiting from
this action or of infringing on intellectual property rights. Counterfeiters are
individuals or organizations that copy unprotected software with the intention of
financially profiting from their actions or to inflict harm. Hackers break into
applications for the fun of it and usually have no initial intent of financially
profiting from their actions or causing harm, but these individuals may become
crackers. Crackers copy or break into applications with the objective of
financially profiting and have the intent of causing harm.
Developers and organizations should give due consideration to the target market
for which the software was developed. Will the intended users of the software
have enough technical resources or expertise to hack a specific application? An
engineering application used by technical users is more likely to being hacked
than a word processing application used in an office environment.

Figure 5: software pirates

10. REASONS OF PIRATING SOFTWARE APPLICATIONS


In addition to the fact that technology has made software piracy as simple as
connecting to the Internet, downloading the application and burning the
application to a CD, there are other reasons why software is pirated. Crackers
like to resell the application through an online auction at a substantially reduced
price or take the time to increase their personal expertise on a specific
application and provide knowledge transfer for financial gain. Crackers can
pirate applications to steal features and include these features in their own
products. Ex-employees can have issues with a specific co-worker or their exJECRC UDML, Jaipur
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employer and break an application, distributing the software for free or perhaps
gaining notoriety themselves by damaging the credibility of the manufacturer or
the application.
Individuals and organizations may be unwilling to pay what they perceive
as high prices for additional licenses or there may be no money left in the
budget and they feel a need to copy or crack the application. The application
may be copied for a short-term solution to an existing problem such as a project
overrun of scope and budget. In this case, individuals or organizations can copy
and deploy the software, which allows the hiring of additional resource(s) to
complete the project within scope.
Hackers perceive breaking the application as a personal challenge and get
personal satisfaction when theyve hacked the application. Hackers have broken
into applications to highlight the applications weakness in hopes that the
software developer rectifies the identified weaknesses and produces a more
secure product. Convenience is often a factor for individuals and organizations
that will copy an application for immediate use, making the copying process
more convenient than obtaining a new license. While believing this one off
event will not have any ethical or financial impact, the accumulation of these
events leads to severe piracy issues worldwide.
A lot of people cited the cost of games as a major reason for pirating.
Many were kids with no cash and lots of time to play games, but many were
not, wrote Harris. Postiches games are priced between $19-23, and Harris said
that he was surprised that so many people thought that was too high.
Although there were many and varied complaints about tech support,
game stability, bugs and system requirements, it was interesting to hear so many
complaints about actual game design and gameplay, Harris said. Many people
agreed that though todays games look fantastic, they got boring too quickly,
were too derivative, and had gameplay issues. Another quality complaint:
Demos are too short and people feel that theyre often not representative of the
final product. People dont like DRM, we knew that, but the extent to which
DRM is turning away people who have no other complaints is possibly
misunderstood. If you wanted to change ONE thing to get more pirates to buy
games, scrapping DRM is it.

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Software piracy is a serious issue that impacts the bottom line for
software developers. By implementing a security plan for software protection,
software developers gain the benefits of protection from piracy as well as obtain
the ability to implement additional license models. A security implementation
plan that balances the time and resources with the desired outcome is possible
given the wide range of security options. Developers can additionally choose a
phased approach to the security implementation if time or resources are
constrained in the short term.

11. MONETARY LOSSES DUE TO SOFTWARE PIRACY


Software pirates can destroy the revenue stream of small companies that have
successfully found a niche in the industry. Without this revenue stream, these
small companies lack the resources for development of new software
innovations which decreases the chances of making a profit. The inevitable
result is that these small companies often become economically unstable and
often go under, all because software pirates have decided to steal their
software and make it available to others.
Although some computer users may actively seek pirated software in
hopes of saving money, the chances of infection by unexpected malware are one
in three for consumers and three in 10 for businesses, according to a new study
commissioned by Microsoft Corp. and conducted by IDC. As a result of these
infections, the research shows that consumers will spend 1.5 billion hours and
US$22 billion identifying, repairing and recovering from the impact of
malware, while global enterprises will spend US$114 billion to deal with the
impact of a malware-induced cyberattack.
The global study analysed 270 websites and peer-to-peer networks, 108
software downloads, and 155 CDs or DVDs, and it interviewed 2,077
consumers and 258 IT managers or chief information officers in Brazil, China,
Germany, India, Mexico, Poland, Russia, Thailand, the United Kingdom and the
United States. Researchers found that of counterfeit software that does not come
with the computer, 45 percent comes from the Internet, and 78 percent of this
software downloaded from websites or peer-to-peer networks included some
type of spyware, while 36 percent contained Trojans and adware.
The cybercrime reality is that counterfeiters are tampering with the software
code and lacing it with malware, said David Finn, associate general counsel in
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the Microsoft Cybercrime Center. Some of this malware records a persons


every keystroke allowing cybercriminals to steal a victims personal and
financial information or remotely switches on an infected computers
microphone and video camera, giving cybercriminals eyes and ears in
boardrooms and living rooms. The best way to secure yourself and your
property from these malware threats when you buy a computer is to demand
genuine software.
The IDC study, titled The Dangerous World of Counterfeit and Pirated
Software, was released today as part of Microsofts Play It Safe campaign, a
global initiative to bring awareness to issues related to software piracy.
Our research is unequivocal: Inherent dangers lurk for consumers and
businesses that take a chance on counterfeit software, said John Gantz, chief
researcher at IDC. Some people choose counterfeit to save money, but this
ride-along malware ends up putting a financial and emotional strain on both
the enterprise and casual computer users alike.
In addition to piracy problems, the copy protection schemes themselves
can be expensive. Dongles are not an option for many software companies since
they add an additional manufacturing expense of between $5 and $20 to each
copy of the program. Dongles also do not facilitate Internet based distribution
of software since a dongle must be shipped to each customer to allow operation
of the software. In addition to the expense, copy protection can drive users
away. Bob Lentini of Innovative Quality Software, maker of the SAW (an audio
program) says the following:
We don't use copy protection on any of our current products. It has been my
experience that in the long run the pirates do not cause as many lost sales as you
might expect. Those of the pirate mentality would never have purchased the
product anyway if they could not steal it. Many of our customers came to us
after running a pirated version for a short time, and then decided that they could
not live without the product and wanted to register for access to support and free
downloads and other product discounts. Others have purchased after seeing a
pirated version running in some other location...free advertising.

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Figure 6: monetary losses due to software piracy

12. EFFECTS OF SOFTWARE PIRACY ON USERS


Experts say that pirated software often includes incomplete or damaged
programs, which can function incorrectly or hurt productivity. Consumers using
illegal software generally cannot get access to product support, instructional
materials, or low-cost product upgrades. Businesses using illegal software are
subject to legal action, fines, and low productivity. In addition, experts say that
pirated software can also include computer viruses which can destroy data on a
users hard drive. Computer viruses can have a devastating impact on any
computer user -- from the home user to a large business, according to Larry
Bridwell, virus expert at the National Computer Security Association. "One of
the best ways to avoid computer viruses is to only use legitimate software from
reputable sources. Using pirated software is an open invitation for computer
viruses

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Any copy protection scheme that requires intervention from the


publisher has the potential to cause you disaster. Suppose you're working on a
project and your hard disk fails. So you go to Staples and buy another, only to
find that your Key disk is no longer readable or it reports that you already used
up your two allowable installations. Even the seemingly benign method of
calling the vendor for an authorization number is a burden if you're working on
a weekend and can't reach them on the phone. Or suppose the dongle simply
stops working? You're in the middle of a project with a client paying $200 per
hour, and you're hosed because even with overnight shipping: the new dongle
won't arrive until tomorrow.

Figure 7: effects on users

13. PREVENTING SOFTWARE PIRACY


This report is for software developers and organizations that are considering
protection and licensing of their software applications. It provides basic
information that can be used to support and plan a decision to protect an
application from piracy. This document explores the impact piracy has on
developers and organizations as well as identifies who pirates software and the
reasons behind those actions. Additionally, it identifies what makes an
application attractive to pirate and covers basic points that both developers and
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organizations need to consider when exploring the options for software


protection and licensing.
By submitting your personal information, you agree to receive emails regarding
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United States, and that you have read and agree to the Terms of Use and the
Privacy Policy.
Software publishers have several options to protect their intellectual
property from thieves. Unfortunately, none of them are foolproof and all risk
negatively affecting the user experience.
The most widely used method is the license key; code that is built into an
application to require a valid key to unlock the software. This key can be
distributed via packaging or some other online mechanism. There are a variety
of tool kits available to allow corporations to easily build this capability into
their products. Just search the Web for "software licensing toolkits" and you'll
be busy for a few days wading through options.
Some shopping cart providers, such as Digital River Inc., include these
kinds of licensing capabilities, offering an end-to-end method for everything
from hosting a store, to distributing software, to managing licensing keys (so
you don't have to). But be ready to part with a percentage of your sales for that
privilege.
If organizations are worried about someone stealing their source code,
then they need to look into a code-theft and antipiracy package. This is a
nascent market, with players like V.I. Laboratories Inc., Arxan Technologies Inc.
and Aladdin Knowledge Systems Inc., which actually encrypts the source code
within an application so it can't be reverse engineered or stolen in any other
way. These products tend to be pretty pricey (since it's an early market) and they
aren't mainstream.
When dealing with Web applications, corporations should think about
running PHP code using a tool like Zend Technologies Inc.'s Zend Guard, which
provides a run-time environment to compile Web applications and thus shield
the source code from the browsers.
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From a technical standpoint, it would seem theoretically impossible to


completely prevent users from making copies of the media they purchase, as
long as a "writer" is available that can write to blank media. The basic technical
fact is that all types of media require a "player" a CD player, DVD player,
videotape player, computer or video game console. The player has to be able to
read the media in order to display it to a human. In turn, then, logically, a player
could be built that first reads the media, and then writes out an exact copy of
what was read, to the same
At a minimum, digital copy protection of non-interactive works is subject
to the analog hole: regardless of any digital restrictions, if music can be heard
by the human ear, it can also be recorded (at the very least, with a microphone
and tape recorder); if a film can be viewed by the human eye, it can also be
recorded (at the very least, with a video camera and recorder). In practice,
almost-perfect copies can typically be made by tapping into the analog output of
a player (e.g. the speaker output or headphone jacks) and, once re-digitized into
an unprotected form, duplicated indefinitely. Copying text-based content in this
way is more tedious, but the same principle applies: if it can be printed or
displayed, it can also be scanned and OCRed. With basic software and some
patience, these techniques can be applied by a typical computer-literate user.
As mentioned earlier, the top level of the taxonomy yields the classes of
legal, ethical and technical anti-piracy measures. Each of these classes has one
or two associated means of preventing piracy. Following on from these means,
the methods can be more finely separated, to the point where each example
system for piracy prevention can be assigned to a single category.

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Figure 8: measures adopted for prevention

a. Legal Measures
The law prevents piracy by creating a fear of the consequences that being
caught pirating will bring. Legal systems in the United Kingdom, the United
States of America, and countries that have inherited much of their legal systems
from these two countries and their earlier origins provide legislation to allow
prosecution of pirates through copyright, software patents (Nichols 1999), and
software licensing. To impose a fear of consequences, there must be some form
of liability for the act of software piracy and this liability must be able to be
proven in a court of law. The liability may rest with the pirate, the provider of
the distribution channel, the end-user, or a combination of these (Stern 1996).
Historically, copyright evolved out of the printing revolution that followed
Gutenbergs invention of the printing press. Copyright law is based almost
entirely around this print paradigm and its associated concepts of the
permanence of a publication and its repeated availability.

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Software licences are essentially a contract between the user (and users)
of a given item of software and the manufacturer or distributor. Most
commercial software requires some form of acknowledgement from the user
that they have read and understood the terms of the accompanying licence and
agree to abide by these terms when they use the software. Many types of
licensing are available, ranging from site licences that allow all users in a
given geographical location or set of network addresses to use copies of
software, to simple single-user agreements that prevent any duplication at all.
Some software licences include clauses that require the owner of the software
licence to submit to regular audits of their premises to determine their
compliance with the licence conditions. While such clauses are not usually
found in single end-user licences, an attempt to do so was recently made.
Inprise the manufacturers of the Borland brand of development products
(Borland 2002) inserted a compulsory audit clause in the single-user licence
for JBuilder 5 and Kylix 2. After much protest from the user communities of
these products the clause was withdrawn.

b. Ethical Measures
Pointing out the ethical issues of software piracy to members of the piracy
supply chain is another way to counter piracy. Pfleeger suggests that the right
to fair compensation is a basic principle of universal ethics (Pfleeger 1997).
If we consider that purchasing software is the only fair compensation for the
authors and distributors of that software, then software piracy is in breach of
this set of ethics.
One type of ethical piracy counter-measure is an appeal in which a
publicity campaign attempts to persuade pirates, distributors or end-users of the
error of their ways. Another measure is an amnesty, where possessors of
illegitimate software are encouraged to surrender the goods with no risk of
prosecution. Shareware may also be considered an ethical counter-piracy
control, where the software itself presents an appeal to the user to pay for the
products they are using if they like it and continue to use it. The BSA fund
frequent advertising campaigns in an attempt to steer public thinking towards
the view that software piracy is an illegal and economically damaging activity.
These campaigns are in the form of letters to legislators and prominent
newspapers, and paid print and media advertising.
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c. Technical Measures
A large number of ways to prevent software piracy at the technical
level have been researched and implemented. A distinction can be
drawn between those controls that act to prevent the duplication of
software, and those that increase the likelihood of offenders being
caught and prosecuted.

14. SOLUTIONS

Ensure that people who work in production, marketing, and


management are paid for the time and effort they put in.

Ensure the protection of entertainment industry, publishers and


software companies investments expected.

Apply existing laws, rules, and/or guidelines or develop new ones,


to protect copyright owners, but also to protect fair use,
reasonable public access, and the opportunity to use new
technologies to the fullest to provide new services.

Figure 9: solution of software piracy

15. PREVENTION OF DUPLICATION


Technical measures that increase the difficulty of duplicating software can be
categorised as obfuscation, encryption and simple checks.
Code obfuscation is the deliberate altering of program code, whether at the
source, object or machine code level. The idea is to hide the very purpose of the
code, thereby making it more difficult to understand and alter. This is a
protection against reverse engineering, which may allow a pirate to duplicate
more easily by analysing the code for protections against duplication and
circumvent these. Obfuscation may be carried out statically, or it may be
introduced as part of the executing code.
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Encryption techniques include systems where the code to be executed is


encrypted in some way and requires the correct key and subsequent decryption
to run. Lee and Kim propose a system based on the World Wide Web
Consortiums Public Key Infrastructure (Public Key Infrastructure 2002). Users
of software must possess their own unique public key certificate. The software
provided by the distributor is encrypted with the users own public key. Only
the user possesses the private key and is therefore the only person who can
execute the software.
This system is of course vulnerable to key loss and assumes that all users
of a given piece of software have a public key certificate issued by a trusted
certification .
Encryption can also be used to encipher program input and output
streams, whether they are streamed to disk files or to other devices. A key is
then required to be able to make use of the encrypted matter.
Simple checks include the infamous dongle, a hardware device connected
to a port on a computer whose presence is probed for by a program that will
only execute if the dongle is found. Dongles have a reputation for unreliability,
inconvenience to legitimate users and high cost. Ralph Merkle suggests a
system where a billing computer is used for the simple checking. The billing
computer communicates with the distributor of the software to discover whether
the user has paid for what they intend to use and the software checks with the
billing computer before it will run.
Another simple check is registration systems, which involve the user of
the software acquiring a special unique string of characters and digits that the
program demands are entered before it is first run, or at the time of installation.
From my own observation, this occurs in most popular business and
development software, for example Microsoft Office (Office 2002) and
Macromedia Dreamweaver (Dreamweaver 2002).
Guards are hardware or software modules that monitor the running
program and ensure that it has not been tampered with in any way. Chang and
Attalla propose a system to guard against illegitimate modification of code by
implementing a network of mutually reinforcing software agents within an
executable program. The guards use checksums on key areas of code and on
each other to ensure no modifications have taken place and take some action
such as crashing the program if a modification is detected
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Software piracy occurs when people copy, sell, share, or distribute


software illegally. It can vary from a limited case of installation of a single-user
license on multiple computers to a more chronic problem of widespread online
distribution. Regardless of the rationale or delivery method, it is still software
piracy.
Although most computer users today are aware that unauthorized use and
duplication of software is illegal, many show a general disregard for the
importance of treating software as valuable intellectual property: Over half of
the worlds personal computer users 57 percent admit to pirating
software. Thirty-one percent say they do it all of the time, most of the time,
or occasionally, and another 26 percent admit to having stolen software, but
only rarely. These are among the findings of a survey of nearly 15,000
computer users across 33 countries conducted as part of the ninth annual BSA
Global Software Piracy Study.
According to the BSA (Business Software Alliance) and IDC 6th Annual
Global Software Piracy Study, the retail value of unlicensed software
representing revenue losses to software companies broke the $50 billion
level for the first time in 2008. Worldwide losses grew by 11 percent to $53
billion. Excluding the effect of exchange rates, losses grew by 5 percent to
$50.2 billion.
Tethering is the practice of associating a piece of software with a
particular piece of hardware. For example, on installation, the program may
read the CPU ID found on newer processors and record this ID. The program
can then refuse to operate on any machine other than the machine it originally
recorded the ID from.
Microsoft uses a form of tethering branded as Product Activation. A
number is generated based on a hash function that makes use of the computer
hardware, most likely the CPU ID or an Ethernet card MAC address if it is
present. The number is transmitted to Microsoft and a further non-invertible
function is applied to it to create a second unique number. The product will only
function when both these two numbers have been entered (Product Activation
2002).

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16. INCREASED LIKELIHOOD OF GETTING CAUGHT


The two classes of controls that increase the likelihood of an offender being
caught are observation and watermarking. I use the term observation to
describe the inclusion of monitoring programs in a software package that check
whether or not the program is a legitimate copy and report the offence to
another party if it is not.
Software watermarking is the hiding of messages in program code.
Watermarks may or may not be visible and have varying degrees of robustness
to tampering. One approach to watermarking as piracy prevention is to embed a
robust and invisible watermark that states the rightful owner of a given piece of
software. Applying a unique watermark (unique in that the watermark bears the
name of each individual owner) to each distribution of the software is known as
fingerprinting. later extraction of this watermark can then be used as evidence
of piracy in a court case.
Observation is the monitoring by software agents of the state of installed
software and the logging and perhaps reporting of this state. Monitoring is
currently employed in some commercial software to track users activities and
report the two advertising agencies to aid in profiling audiences and other
marketing intelligence. Naturally this practice raises privacy issues as far as
legitimate users being unaware what information is being transmitted and to
whom, as would any form of monitoring.
Pirating software you don't own is always illegal. But there are times
when you do own software that you can't access without pirating it. The cruel
irony is that in those times, you're probably more at risk of getting slapped with
a lawsuit than real, actual pirates. Here's a guide to pirating like a pro to get
back what's rightfully yours.
This guide is intended to help people who have already purchased
software, but are for whatever reason unable to access their credentials, either
temporarily or permanently. Gizmodo does not support software piracy. Further,
this is general information, and you should proceed at your own peril.

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17. FIVE MYTHS ABOUT SOFTWARE COPY PROTECTION


a. Software Piracy Is A Victimless Crime
Nothing could be further from the truth. According to industry statistics, illegal
software use costs publishers worldwide nearly $48 billion a year in lost
revenues, with more than $8 billion lost in the North America alone. In Central
and Eastern Europe, an average of 68% of the software in use is illegal. In some
Asian and Eastern European markets, over 88% of software is unlicensed.

b. Software Copy Protection Makes Software More Expensive


On the contrary, the price publishers pay for software copy protection is
negligible compared to the losses they incur through the pirating of their
software. In fact, the vast majority of cases have shown that investment in
protection is offset entirely by increased sales and profit. By protecting their
software and thereby increasing their revenues, publishers can afford to supply
better software at more competitive prices. True, not everyone who copies
software today would buy it tomorrow if it were available only in a protected
format. But, the ensured quality, support and functionality that comes with a
manufacturers copy is generally well worth an incremental fee.

c. Software Copy Protection Gets In The Way Of The Legitimate


User
The new, more sophisticated types of software copy protection in no way hinder
legitimate end-users, but instead work to benefit them. One important reason for
this is because protection safeguards the integrity of the software; the end-user
is assured that the software cannot be tampered with in any way. Additionally,
higher revenues for developers mean that down the line, users will benefit from
better, higher quality software. Large organizations are legally liable for the
software they purchase and have a clear interest in preventing the unauthorized
distribution of that software. Often, the users themselves request that the
software be protected, to ensure that it wont be used illegally, thus preventing
future litigation.

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d. Inexpensive Software Is Not Copied


Some people attack the concept of software protection by arguing: Make
software cheaper, thats all. People dont copy inexpensive software, and youll
sell more copies of your product. The argument is inherently false. People who
are inclined to copy software will copy the inexpensive as well as the expensive
software programs. The same people that are saying, if software were cheaper
we would buy it, are copying software that costs as little as $10. The reality is
that developing a software product requires a substantial investment of time and
money, and most software publishers simply cannot afford to lower their prices.

e. Any Protection System Can Be Cracked. Therefore, Software


Copy Protection Is Useless
Only the first part of this myth is true: any software protection system can be
cracked, just as any lock can be picked or any door can be broken. However, the
aim of software copy protection is to provide protection for a reasonable period
of time. Software cannot be protected forever, but it can definitely be protected
long enough (i.e., until the next version of the software product is released).
This new software version should again be protected, with a strong and fieldproven protection technology that has also been improved in parallel, thus
ensuring a long and profitable sales life for the protected software application.

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Conclusion

Software piracy is a common crime which can have serious consequences.


Companies around the world lose billions in revenue each year. As a result
people lose jobs, and those of us who buy original software have to pay a higher
price because of software piracy. Software piracy is a world-wide problem that
is increasingly becoming more of a threat to businesses, economies, and
shareholders. Although, students awareness of its legal issues and punishment
was positive, many individuals are unaware of the impact software piracy has
on the economy. With many motivating factors, it is not surprising that software
piracy is a global problem. Because the software industry has a high demand,
software piracy is costing these industries billions of dollars each year. Even
with many disadvantages of pirated software many people will continue to
pirate software.
There has yet to be a realistic solution to the problem of piracy that meets
both the needs of the software vendor and the end user. Some solutions were
serial keys and digital rights management (DRM). Many software companies
however, have discarded the use of DRM as many users found it to be
irritating. With such a negative reaction from users to DRM open source
proponents have noted that if software companies adopted an open source
license they would no longer have to worry about software piracy (Is Open
Source). Pirated copies of software, including downloaded movies, music and
more, affect everyone. These illegal copies are hurting the software companies
and are making everything more expensive for the end users. As software
companies endeavour to make copying software more difficult in an effort to
stop piracy, software may become so expensive that the average user will no
longer be able to afford to purchase software.
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References

http://www.studymode.com/essays/Software-Piracy-132251.html
http://www.rfidjournal.com/
http://www.gesturetek.com/
www.google.com
http://www.slideshare.net/Mbradber/software-piracy-powerpointpresentation-774396
http://www.webopedia.com/TERM/S/software_piracy.html
http://www.microsoft.com/en-us/piracy/default.aspx
http://en.wikipedia.org/wiki/Copyright_infringement_of_software

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