SPA Spearheads Effort To Make Software Piracy a Felony

August 12, 1992 (Washington, DC)-- The Software Publishers Association
(SPA), the principal trade association of the personal computer software
industry, testified today on behalf of S.893, a bill that would elevate
the willful copying of computer software from a misdemeanor to a felony.
The hearing was held by the House Intellectual Property and Judicial
Administration Subcommittee of the Judiciary Committee under the direction
of Congressman William Hughes (D-NJ).

The bill, S.893, targets professional software pirates who make many copies
of software and resell them at low prices, illegal bulletin board
operators who distribute pirated software, and PC dealers who offer "free"
but illegal software to hardware purchasers.

Gail Penner, an attorney with Autodesk, Inc., who appeared on behalf of the
SPA, stated that S.893 is an important piece of legislation for three
reasons: First, because computer programs are so easy to copy, the
software industry is particularly vulnerable to theft. Second, civil
remedies and misdemeanor criminal penalties have been inadequate to deter
professional software pirates. And third, despite the economic seriousness
of the crime, it is extremely difficult to interest federal prosecutors
and law enforcement agencies in pursuing software piracy because the
extensive resources required for investigations yield only misdemeanor
convictions.

On June 4, 1992, the Senate passed S.893, which was introduced by Senator
Orrin Hatch (R-UT). S.893 builds on legislation enacted by Congress in
1982 to address organized criminal copying and distribution of
phonorecords, sound recordings, and motion pictures. This bill requires
that copying be "willful" and "for purposes of commercial advantage or
private financial gain," and calls for a fine of up to $250,000 and
imprisonment up to five years for unauthorized reproduction or
distribution of 50 or more copies of one or more computer programs during
a 180 day period. For software piracy involving between 10 and 50 copies
during the same period, the penalties are a fine of up to $250,000 and
imprisonment up to 2 years.

In 1990 the software industry lost $2.4 billion to software piracy in the
United States alone. Worldwide, revenue lost by US software publishers to
piracy was between $10 to $12 billion. This level of piracy threatens the
ability of the US to remain competitive by depriving publishers of revenue
to fund the extensive R&D necessary to develop new software products. It
also deprives retailers and distributors of legitimate revenue,
jeopardizing American jobs, and forcing consumers to pay higher prices for
legitimate software products. Finally, piracy threatens one of this
nation's major export industries. Currently, 75% of all software is
produced in the United States.

"This bill is important because civil remedies are simply not adequate to
deter professional pirates" said Ken Wasch SPA's Executive Director .
"Software pirates are adept at skirting the system. Too often they go
underground when served with a civil complaint, only to resurface later to
continue stealing software. By making the willful copying of software a
felony, the Congress will be sending a strong message that software piracy
is just not worth the risk."

The Software Publishers Association is the principal trade association of
the personal computer software industry. Its over 900 members represent
the leading publishers in the business, consumer, and education software
markets. The SPA has offices in Washington, DC, and Paris, France.

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