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Home > Risks > Piracy

Piracy at Work

Piracy refers to the illegal copying, distribution, or use of software, music, movies or any other media that can be digitally stored and transferred. In 1998, revenue losses from software piracy were estimated at $11 billion worldwide (1998 Global Software Piracy Report, May 1999). The Recording Industry Association of America reported a loss of $4.2 billion in 2001 and the Motion Picture Association of America projects a loss of $3 billion annually due to piracy. Illegal piracy causes significant lost revenue for publishers, which in turn results in higher prices for the consumer.

Approximately 38% of all software currently used within the United States is stolen.

1998 Global Software Piracy Report, May 1999

Users may create backups of CDs, DVDs, and computer programs in case the originals fail. Distributing these backups however, is illegal.

On the surface, piracy doesn’t seem to harm anyone. Expensive software applications are sometimes “loaned” between users to avoid licensing costs. In much the same way, digital music has made trading songs online commonplace.

Most of the piracy on the Internet is carried out using Peer-to-Peer (P2P) network applications such as Kazaa, Bearshare, and Gnutella. These programs facilitate the sharing of copyrighted files quickly, seamlessly, and virtually anonymously. Unfortunately, these programs can cause many problems including inadvertently downloading a computer virus. Most importantly, if they are not properly configured, these programs may share files on your computer that you never intended anyone else to see.

"Peer-to-Peer" file sharing users have inadvertently given banking information to anonymous users online. 

There are four specific categories of piracy:

  1. Social piracy is the unauthorized duplication of only the media, not including any of the packaging, original art, label, title, etc. There is no pretense that these are legitimate products. Examples of social piracy include mixed music discs that friends share with one another and software applications that are copied for coworkers.
  2. Counterfeit piracy describes unauthorized copies of media as well as the unauthorized duplication of original artwork, label, trademark, and packaging. Counterfeits are passed off as legitimate and are often used by the pirate for monetary gain.
  3. Bootleg recordings are the unauthorized recordings of live concerts, movies, or musical broadcasts on radio or television.
  4. Online piracy is the unauthorized uploading of copyrighted material to be made available to the public. Downloading copyrighted material from an Internet site or a Peer-to-Peer network is illegal.

In the United States, software pirates can be punished with statutory damages of up to $100,000. If you are convicted of a felony charge of software piracy, you can get up to a five-year prison sentence plus fines of up to $250,000 for each work that is infringed.
The No Electronic Theft (NET) Act

How Piracy in the Workplace Can Damage Your Business

  • Performance may suffer from the lack of user manuals, reference materials, and product support
  • The company is liable for all pirated materials within its doors
  • The business may get a bad reputation if found guilty of copyright infringement
  • The business forfeits all product warranties and upgrades
  • Viruses introduced by illegal software can damage or even destroy systems
  • Serial number clashes can cause serious system disruption
  • Back-ups and recovery are often not possible when there are no original disks
  • The business receives no assurance of product authenticity or reliability
  • Using corporate networks for file sharing can be a hazard to network security
  • Misuse of bandwidth can slow down the entire network

How to Fight Piracy in the Workplace

The first step in fighting piracy is to make sure you don't contribute to it knowingly or unknowingly.

  • If you are a business owner, create a policy preventing the duplication, distribution, and use of copyrighted materials within your office doors
  • Create detailed procedures telling employees how to handle original software, and what steps to take to ensure that it is not copied illegally
  • Buy media only from authorized dealers

If you discover that you might have a counterfeit copy of a software application, movie, or CD, contact the dealer you bought it from. Keep in mind that they may have been fooled, too.

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