Software Piracy: What You Don't Know CAN Hurt You

Business owners must continuously upgrade their firms' software to compete in today's fast-changing, information-rich economy. But new software can be expensive: For example, you'll pay around $450 for the latest Microsoft Office suite, and some companies license hundreds or even thousands of copies

As a money-saving tactic, you might be tempted to use free or cheap pirated software. Avoid that temptation. Even apart from ethics, there are good reasons to stay on the straight and narrow. Such reasons range from potential computer problems to hefty fines for getting caught.

When you open the software box, you enter into a license agreement with the person or company that owns its copyright, usually the software publishing company. You don't buy the software itself — only a license to use it. The license agreement allows you to make backup copies of the product, but prohibits you from distributing it.

As a software purchaser, here are some of your obligations:

• Buy only genuine, nonpirated software. That means buying from authorized dealers. Watch out for too-good-to-be-true advertisements in computer catalogs — software pirates often sell through such publications. Be suspicious of software with labels that are handwritten or contain a company name other than the software maker's.
• Read the license agreement. This will tell you the proper way to install the software to comply with copyright laws.
• Make sure the vendor provides you with the certification to use the software. The vendor also should supply you with the software's original disks and manuals. If they can't provide such documentation, the software could be pirated.
• Tell your employees not to use pirated software. Your company is liable for your employees' actions, regardless of whether or not you're aware of them.

If a guilty conscience isn't enough to dissuade you from stealing software — which is what using pirated software amounts to — then consider these potential consequences:

Civil suits. The owner of the software copyright can sue to stop you from using the software and to seek damages. Damages might include the cost of the program, any profits you made as a result of using the program, and statutory damages of up to $150,000 for each pirated program.

Criminal prosecution. Fines for criminal copyright infringement can run as high as $250,000. What's more, guilty parties can spend up to five years in jail. And you don't have to have made a profit from such piracy to be found guilty.

Bad software. Pirated software doesn't come with product support or the availability of upgrades, and it might carry viruses.

For more information about software piracy, check out the Business Software Alliance's Web site.