New figures show that almost one in two software packages used by Irish companies is an illegal copy. Peadar Browne looks at the campaign to crack down on unlicensed products, which includes offering rewards of up to €10,000 to whistleblowers

Illegally copied software has, at one time or another, passed through most computer users' hands, and many of us don't see it as a crime, yet software piracy costs Irish retailers up to €42 million a year in lost sales and company owners found guilty can face heavy fines or even a jail sentence.

Software piracy in Ireland increased last year, according to figures released this week, giving Ireland (one of the world's leading exporters of software) the fifth highest piracy rate in Europe - despite an on-going campaign to eradicate piracy in Irish business.

Business Software Alliance (BSA), a global organisation representing software companies, began operating in Ireland in 1995. By promoting awareness of the need for proper software licensing, and by cracking down on businesses with unlicensed products, the BSA hopes to wipe out piracy in Ireland.

After five successive years in which the piracy rate decreased - from 71 per cent in 1995 to 41 per cent in 2000 - the rise to 42 per cent last year has come as a shock.

"Year on year, since the BSA has been active in Ireland, the piracy rate has decreased," says the BSA chairman Julian McMenamin. "To see an upturn now is extremely disappointing."

As part of its armoury for combating piracy, the BSA offers rewards of up to €10,000 for information leading to the successful prosecution of businesses using illegal software. Tips from informants are sufficient grounds for the BSA to get court orders, under the Copyright and Related Rights Act 2000, empowering them to conduct surprise "raids" on offices in search of contraband software.

Last year, the BSA received 175 leads from the public, leading to legal actions against dozens of Irish firms.

However, the illegal use of software can be a less than black-and-white issue. Despite the rewards and the "flying squad" nature of raids on offices, which suggest a seedy and criminal business underworld, many offenders are unaware of their breaches of the law - because of sloppy management practices. McMenamin sympathises: "We understand how easy it is to let software management slip. Therefore, we will be offering company directors advice on how to minimise the risk that this problem poses to their business."

When a software product is bought for use in an office with multiple workstations, a licence is usually required for every computer operating that software. There can be a shortfall between the number of licences and the number of copies of the software installed. Often that's down to poor management.

But ignorance has never been an excuse before the law, as McMenamin emphasises: "Over the last five years, BSA has invested heavily in initiatives designed to increase the awareness among directors of the dangers of software piracy. Copyright infringement is a crime, pure and simple. And the BSA is serious about protecting the copyright of its members' products."

A variety of licence types is available for software including open licences and volume licences, whereby a user can license multiple copies of a product under one licence. Many companies, though, purchase one licence for each copy of a software product they use.

In Ireland, if purchasing Microsoft Office XP Professional OED, for example, a user can expect to pay about €395 for a single licence. If buying greater numbers of Office the cost of each subsequent licence is reduced on a sliding scale by between 5-10 per cent.

Managers or businesspeople whose companies operate illegally copied or unlicensed software can face up to five years in jail or a fine of up to €127,000.

In one recent court case, an e-learning company was raided and found to be in breach of the Act, by using more than 100 items of software without licences. The director claimed that the breach of copyright was "unintentional" and that "considerable expenditure had been incurred obtaining Adobe and Macromedia licences". He added: "I was quite simply staggered by the extent of the alleged breach of copyright," and concluded "some members of staff installed software that was neither authorised nor needed."

In the end, the firm had to spend more than £33,000 on new licences. The raid on the company's offices was the result of a lead given to BSA by an informant - whom the director suggested was an employee who had recently left the firm.

The offices of a popular media website were also raided by BSA agents and gardaí. A spokesman said that the company was "baffled" by BSA's "premature and unnecessary" action, as it had agreed to disclose details of its compliance with software licensing agreements, subject to a confidentiality agreement.

So does a financial incentive offered to informants, with the added attraction of anonymity, attract spurious reports from disgruntled ex-employees or competitors? According to Edwina Spaight, a spokesperson for BSA: "Some of the reports are made by ex-employees but, disgruntled or not, most of the reports are genuine." She also points out: "IT managers themselves may report employers as they are forced to copy software due to budget restrictions imposed by management."

A recent Internet survey found that 53 per cent of respondents believed that stealing or "cracking" software is not a crime because the software is vastly over-priced. But the software industry argues that if everyone purchased legitimate software, prices would not be so high.

Philip Grant, who recently bought the Rochford Brady group of companies in Ireland, had to purchase dozens of licences to legitimise existing software. He agrees that software is expensive but "if you are running a business and running it properly, then paying for software licenses is part and parcel of that process".

Certainly, the recent Copyright Act - which permits surprise searches and introduces stiff penalties for software theft - will help the BSA to regulate software licensing.

The legislation is considered to be the strongest in Europe and prompted the BSA to award Taoiseach Bertie Ahern with the Cyber Champion Award in 2000. Ahern is the first European leader to receive the award. BSA president and CEO Robert Holleyman stated: "By imposing deterrent penalties against software theft and making it easier for courts to track down infringers, Ireland is sending a strong signal to the rest of Europe about the importance of strong copyright protection to the development of a robust technology economy."

Since the BSA began its operations in Ireland in 1995, the piracy rate has dropped steadily - until last year.

The BSA had considered the downward trend in Ireland "encouraging". But McMenamin adds: "Ireland must reduce its piracy rate dramatically to bring itself below the EU average. Intentional and careless license abuse by Irish companies must stop now."

Website: www.bsa.org/ireland