Software piracy

Software piracy is the unauthorized and illegal duplication of copyrighted software. There are four main practices associated with software piracy:

• Creating a copy to serve as a backup[?] — seen as a fundamental right of the software-buyer in some countries, i.e., Germany; it can nevertheless represent an illegal act, depending on the laws and the case law interpretations of those laws, currently undergoing changes in many countries.
• Creating a copy and giving it to someone else for free — normally not legal. May be legal under special circumstances such as fair use and fair dealing.
• Reselling or renting the original software (and maybe keeping a copy) — also not necessarily legal. The buyer does not buy the software but pays for the right to use the software. It is not a simple transfer of property as buying and then selling again e.g. a car, however sometimes it is possible to transfer the license if it was not purchased with a limitation (i.e. the lower cost for educational/registered student use only).
• Creating a copy and selling it — This is the act most people refer to as software piracy. Illegal in most countries.

The term "software piracy" is more correctly described as copyright infringement: Some object that copyright holders' use of the term "piracy" is a dysphemism, making the unauthorized reselling of copyrighted works morally equivalent to the violent actions of pirates -- robbers on the high seas, who often murder and rape their victims. Another complication of the pirate analogy is that pirates actually deprive their victims of their property, whereas software pirates only deprive proprietary software companies of potential revenue, which may not actually exist because of market elasticity. For example, if one hundred copies of a product are sold, and five hundred copied illegally, it does not necessarily follow that five hundred extra copies would have been sold at the full price if unauthorized copying became impossible. Sometimes the unauthorized copies may in fact encourage the marketing of the software and allowing some piracy may create an interest and encourage corporate and institutional users to purchase site licenses for their students or employees who may recommend purchase of these licenses after their trial of the pirated software.

See Software Piracy as Price Control for the possible role that Software Piracy in moderation plays in keeping prices down.

However, the use of "piracy" to refer to copyright infringement is well accepted by those uninvolved in the practice; it is the second meaning of the term given by the Oxford English Dictionary and the first documented use is from the 18th century:

1771 LUCKOMBE Hist. Print. 76 They..would suffer by this act of piracy, since it was likely to prove a very bad edition.

1808 Med. Jrnl. XIX. 520 He is charged with "Literary Piracy", and an "unprincipled suppression of the source from whence he drew his information".

1855 BREWSTER Newton I. iv. 71 With the view of securing his invention of the telescope from foreign piracy.

Some people believe that, in some jurisdictions, unauthorized users may not be violating any software license that is created on consent by contract. By using an unauthorized copy, they do not become parties to the sales contract, and hence not bound by the license. Only the original purchaser may be found in infringement. However, most software requiring installation has a licensing dialogue that requires the end user to accept the license before installation is completed (referred to as a "click-through license"), which obviously protects subsquent installations. Most, if not all software now has a first installation license that a user agrees to by opening the shrink-wrap around the product (a "shrink-wrap license"), and even though such installation is gratuitious it may nevertheless be enough to create a contract between the copyright holder and the end user (who benefits from the use of the software). However, as the second installation in the shrink wrap licence may not be done by the person who removed the original shrink wrap (or opened an sealed envelope or some such variation), the click-through licence is preferred because it will bind all subsequent installations.

Although the question hasn't been addressed in court, some journalists have questioned whether such a license is enforceable if a minor completes the licensing dialogue, since minors are not allowed to enter into contracts in some jurisdictions and any contracts they do sign are legally void unless confirmed, though many jurisdictions do recognize that rental and sales contracts to minors made in the regular course of business as being valid (otherwise children could take candy from candy stores without any legal consequences and their parents could ask for money back after playing video games in shopping malls).

To many of these attempts at circumventing these end user licencing agreements(EULA) software vendors counter that if a user somehow obtains software without agreeing to or becoming bound by the end user license agreement, then they do not have any license to use the software at all.

Under the American The Uniform Computer Information Transactions Act, (UCITA), a proposed but controversial model law that has been adopted in Virginia and Maryland, software manufacturers are granted broad rights to shutdown software pirates without court intervention similar to some of the provisions found in the Online Copyright Infringement Liability Limitation Act (1998) (17 U.S.C. sec. 512) that allows copyright holders to demand that an ISP removing infringing or pirated materials placed on the ISP's servers by any client who maintains a site on the ISP if a complex notice procedure is followed by the copyright holder but without court order. If the ISP removes the material within ten days they will not be responsible for any damages for any copyright infringment actions brought by the copyright holder. This effectively prevents much infringement but most software pirates are able to bypass this provision of the law by maintaining their own servers or by using the ten day window to disseminate copies until shutdown by the ISP. The Digital Millineum Copyright Act (DMCA) (17 U.S.C. sec. 1201) also has provisions that prevent persons from "circumvent[ing] a technological measure that effectively controls access to a work" and thus if a software manufacturer has some kind of software, dongle or password protection device installed in the software any attempt to bypass such a copy protection scheme may be actionable — though the US Copyright Office is currently reviewing anticircumvention rulemaking under DMCA — anticircumvention exemptions that have been in place under the DMCA include those in software designed to filter websites that are generally seen to be inefficient (child safety and public library website filtering software) and the circumvention of copy prevention mechanisms that have malfunctioned, have caused the software to become inoperable or which are no longer supported by their manufacturers.

In some developing countries, software piracy is not considered illegal. In Russia, which is not a signatory to the Berne Convention it is legal to copy any software as long as it is not in the Russian language. Most commercially exploited software is being made in the United States, Japan and Europe, hence for those located in economically disadvantaged economies it can be prohibitively expensive to pay for all the end user licenses for those products rather than to purchase just one license and then copy the software without paying any additional licensing fees. Some critics in the developing countries of the world see this as an indirect technology transfer tax on their country preventing technological advancement and they use this type of argument when refusing to accept the intellectual property laws that are in force in most technologically advanced countries. This idea applies to patent and trademark laws as well.

Some approaches used for prevention of software copyright infringement:

• Copy protection and Digital rights management: The addition of software or hardware systems to make the copying and/or distributing more difficult.
• Legal action against infringers or those who make infringement possible: penalties can be extreme and vary from country to country. The recent RIAA settlement with students operating music download file servers from several universities in the US (inlcuding Princeton University, Rensselaer Polytechnic Institute and Michigan Technological University is an example of this type of agressive protection policy (though not software piracy but just plain digital music copyright piracy).

See also: Warez, Copyright, Copyleft, Abandonware