BSA 'piracy' report dismissed as scaremongering

The Business Software Alliance (BSA) urged the UK government on Wednesday to take tougher action against copyright violation to combat the spiralling rate of unlicensed software.

The trade group, which counts Microsoft, Apple and Adobe among its members, commissioned analyst firm IDC to carry out a study of software use within businesses. The study found that the value of unlicensed software in the UK had increased from £820m in 2003 to £1bn in 2004, although the proportion of such software declined over the same period from 29 to 27 percent of all software in use.

"The level of software piracy remains unacceptably high," said Siobhan Carroll, a BSA regional manager, in a statement.

Despite the percentage decline in the ratio of unlicensed software, the BSA claimed it was important the UK government take tougher action against intellectual property violations by implementing the Intellectual Property Rights Enforcement Directive. This Directive, which was adopted by the EU in April 2004, requires all member states to apply "effective, dissuasive and proportionate remedies and penalties against those engaged in counterfeiting and piracy," according to a statement on the EU Web site. Member states have two years to adopt the directive's provisions into national law.

"The BSA is now urging the Government to follow through its pledge," said the BSA. "It has a responsibility with its presidency of the EU to implement the Enforcement Directive in the UK and set a standard to other members of the EU, many of which have an even higher piracy rate."

But Ross Anderson, the chair of the Foundation for Information Policy Research and a professor at Cambridge University, dismissed the study as 'scaremongering'. Anderson claimed that BSA is focusing on the issue of unlicensed software as a decoy, while companies are actually more likely to use the enforcement directive to crack down on legal activities such as grey market trading.

Grey market trading is a legal form of trading where companies or individuals circumvent the authorised channels of distribution to sell goods at a lower price than intended by the manufacturer in a certain market. For example, a company may take advantage of a software vendor setting particularly high prices for its products in one country by reselling legitimate copies purchased in a market where the manufacturer has priced them lower.

"What companies object to isn't counterfeiting but grey marketing," said Anderson. "Counterfeiting is a complete distraction — it's not what this is about. [The directive] is an assault on free trade."

In a report on the potential risks of the Enforcement Directive, Anderson explained that the directive criminalises intellectual property infringement, rather than treating it as a civil offence. This means that a company accused of copyright infringement could have their stock seized as evidence or their bank accounts frozen. This could impact companies that are merely trying to make products that interoperate with their competitors' products, such as companies that make replacement printer cartridges or manufacture games for a particular games console, according to Anderson.

A BSA spokesman said the strict measures contained within the Enforcement Directive are needed to tackle those it describes as software 'pirates'.

"There are a group of individuals active on the Internet that use counterfeit products to make money," said the spokesman. "The reason this happens is because it is seen as a soft crime. For people who are making millions of dollars, the full force of the law needs to be brought down on them."

The BSA spokesman said he was unable to comment on how the directive would impact companies that try to interoperate with monopoly products, but said he assumed it would be beneficial. "Everything the EU does is about opening competition," said the spokesman. "So I would be amazed if it reduced competitiveness."