SOFTWARE PIRACY & WORKPLACE ETHICS SBA’s participation in this cosponsorship is not an endorsement of the views, opinions, products or services of any cosponsor or other person or entity. All SBA programs, services and cosponsored activities are extended to the public on a nondiscriminatory basis. Reasonable arrangements for persons with disabilities will be made if requested at least two weeks in advance. Contact: Jane Boorman, (202) 205-7411. Cosponsorship Authorization #: 06-0763-89.

What Is Software Piracy? Unauthorized copying/installation/use Unauthorized distribution or sale NOTES: Most people would never consider stealing something that did not belong to them. But those who copy software without authorization are, in fact, stealing someone else’s property – their intellectual property. In short, software piracy is theft. Like most creative works, such as books, music and films, computer software is protected by U.S. copyright laws. When you purchase software, you do not become the owner of the copyright. Rather, you are purchasing the right to use the software under certain restrictions imposed by the copyright owner, typically the software publisher. The precise rules are described in the documentation accompanying the software – the license. It’s imperative that you understand and adhere to these rules. Most often, they state that you have the right to load the software onto a single computer and make one backup copy. If you copy, distribute or install the software in ways that the license prohibits, whether you are swapping disks with friends and coworkers or participating in widespread duplication, you are violating federal copyright law. Even if you only help someone else make unauthorized copies, you are still liable under the copyright law. To find out what’s authorized, READ THE LICENSE.

Impact of Global Software Piracy 36% piracy rate $29 billion in lost revenue Hundreds of thousands of job losses Billions in lost tax revenues NOTES: This slide illustrates the global impact of software piracy. In the United States, 22 percent of all business software is unlicensed. The Business Software Alliance (BSA) estimates that in 2003 the industry lost nearly $6.5 billion in revenue in the U.S. alone due to software theft. It’s important to remember that software piracy’s damaging economic impact is not only confined to the software industry. In fact, software piracy has an effect on the economic health of the nation as a whole. “2004 Global Software Piracy Study,” conducted by International Data Corporation, July 2004

Types of Software Piracy End-user copying Electronic distribution Physical distribution NOTES: Whether you’re casually making a few copies for friends, loaning disks, distributing and/or downloading pirated software via the Internet, or buying a single software program and then installing it on 100 of your company’s personal computers, you’re infringing someone’s copyright. End-user copying: Multiple installations of software programs without the same number of licenses. Most commonly this is purchasing one software program and then installing it on many computers. Unless your license permits multiple copies, you can’t do this. License misuse – the installation/use outside the terms of the license. Example, OEM or academic software. Upgrade abuse – installation/use of upgrades without owning prior version. Electronic distribution: Software programs made available on news groups, FTP (file transfer protocol) sites, warez/cracks sites, IRC (Internet Relay Chat), Peer-to-Peer (P2P) Physical distribution: Software programs available on online auction sites, spam advertising, traditional advertising and flea markets. What you typically get when you obtain software from these distribution methods: Counterfeit CDs “Bootleg” CDs “Gray Market” product Software that may or may not work, and may contain viruses

Technical, Legal and Ethical Consequences of Pirated Software Use No upgrades No assurance of quality or reliability No technical support, manuals or documentation Exposure of your network to security breaches Consumption of bandwidth Sends message: It’s okay to steal Serious legal exposure -- $150,000 per program copied NOTES: Many businesses, both large and small, face serious technical and ethical risks because of software piracy. This slide illustrates some of those risks. Technical: When a single employee installs unlicensed software onto an office computer, perhaps by downloading it from the Internet or by bringing in a disk from home, he or she is posing a significant threat to the organization. If that unlicensed software contains a computer virus or an exploitable security flaw, that employee has immediately jeopardized the integrity of the organization’s entire network. The repercussions can be enormous, potentially costing the organization thousands of dollars in damages and/or exposing sensitive information. Apart from greater exposure to viruses, using copied or counterfeit software also means: Ineligibility for software upgrades offered to properly licensed users Inadequate or no documentation and no warranties Lack of technical product support available to properly licensed users Legal/Ethical: If you or your company were caught copying software, you might be held liable under both civil and criminal law. Under the law, a company can be held liable for its employees’ actions. If an employee is installing unauthorized software copies on company computers or acquiring illegal software through the Internet, the company can be sued for copyright infringement. This is true even if the company’s management was unaware of the employee’s actions. If the copyright owner brings a civil action against you, the owner can seek to stop you from using its software immediately and can also request money damages. This can be as much as $150,000 for each program copied and in some instances it could be more. In addition, the government can criminally prosecute you for copyright infringement. If convicted, you can be fined up to $250,000, or sentenced to jail for up to five years, or both.

Avoiding the Risk: Proactive Software Asset Management Policy Education Purchasing Control Budget Self-audits NOTES: Organizations must be proactive in avoiding the risks associated with software piracy. The steps that must be taken include: Establishing software management policies that protect computers from unlicensed software and put purchasing and budget controls in place. Educating employees through discussions like this. Conducting routine audits of all office software to guard against piracy.

Our Office Policy States our company’s intolerance of software piracy Identifies individuals in charge of software installations Identifies procedures for acquiring needed software Specifies rules on Internet usage and prohibits software downloading/uploading Makes consequences for violations clear NOTES: This slide describes the objectives of our office software policy.

Employee Education We provide information on software piracy and the problems associated with it We ensure regular distribution of office management policy We provide an opportunity for questions NOTES: Employee education sessions are intended to make everyone feel more comfortable about knowing how to use the office computers and software more responsibly.

Software Purchasing Controls We centralize purchases in one department We require purchase requests to be in writing, with appropriate approval We confirm requested software is on approved list We specify reputable dealers We ensure complete documentation We prohibit purchases on individual expense accounts NOTES: Purchasing controls are useful in ensuring good software asset management.

Budget Anticipate software needs in coming year Budget appropriately for needed growth NOTES: Budgeting controls are also useful in promoting good software asset management.

Self Audit Process Start with assessment of needs Audit software installed on computers Collect licensing and purchase documents Delete unneeded software Purchase licenses for needed but unlicensed software REPEAT REGULARLY NOTES: Software audits should be scheduled regularly. During an audit, the office information technology manager compares the number of software installations to the number of licenses and obtains any licenses needed for compliance.

Business Software Alliance (BSA) Educates computer users on respect for intellectual property and copyright compliance Advocates strong intellectual property protection, cyber security, e-commerce and trade opportunities Enforces the rights of copyright holders NOTES: BSA (www.bsa.org), a nonprofit organization based in Washington, DC, is the foremost organization dedicated to promoting a safe and legal digital world. BSA is the voice of the world's commercial software industry before governments and in the international marketplace. Its members represent the fastest growing industry in the world. BSA educates consumers on software management and copyright protection, cyber security, trade, e-commerce and other Internet-related issues. BSA members include Adobe, Apple, Autodesk, Avid, Bentley Systems, Borland, CNC Software/Mastercam, Internet Security Systems, Macromedia, McAfee, Microsoft, PTC, SolidWorks, Sybase, Symantec, UGS and VERITAS Software. BSA is primarily focuses on educating businesses about their ethical responsibility to maintain an effective software asset management program. They also offer programs to educate consumers and kids about responsible computer and software use.

Information and Tools www.SmartAboutSoftware.org BSA “Guide to Software Management” Free software audit tools Fact sheets Asset management resources Free, toll-free hotline, 1 888 NO PIRACY NOTES: BSA offers a number of free resources to help businesses and consumers understand what they can do to prevent software piracy.