The dangers of pirated software - part I

October 2013

The dangers of pirated software - part I

bouton-vers-francaisFrançois Marchand
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Stéphanie Thurber
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Several years ago, companies were still able to get away with it. Their IT staff worked to provide all users with the software required to do their jobs. Few questioned the legalities involved in their actions: as long as it worked and costs weren’t too high, it was all for the best. Software infringement continued either through wilful or not so wilful blindness. After all, technology is complicated. Not that long ago, users would tell themselves that a few more copies of software couldn’t do any harm. Some even installed privately purchased software on their work computers without the knowledge of their employers. There were, in fact, few consequences to these actions, since software development companies still lacked the tools to monitor or audit all of the companies using their products. Times have changed, along with the means and tools for monitoring. IT companies banded together and formed an alliance: the Business Software Alliance (BSA). This gave them the means to protect their software copyright and, if needed, to take the necessary legal action against even the smallest companies.

What is BSA?

On its website,, BSA describes itself as a “non profit trade association created to advance the goals of the software industry and its hardware partners. It is the foremost organization dedicated to promoting a safe and legal digital world.”

The organization’s members include Adobe, Apple, Dell, IBM, Microsoft, Oracle and other major computer software and hardware companies that use operating systems and software.
Based in Washington, BSA is active in over 80 countries worldwide. BSA’s global mission is to promote a legislative and legal environment in which the industry can prosper and to act as a unified voice for its members around the world.

BSA is more commonly known for its role in curbing the piracy of software created and sold by its members. Its website also highlights the protection of software makers’ intellectual property as a policy priority. To do this, it tackles copyright violations by companies that have installed software without rights, in other words without the appropriate licenses having been acquired.

BSA encourages employees to report, on a confidential basis, the illegal installation and use of software. An advertising campaign on this topic was broadcasted on Montreal radiostations in recent months. The website offers permanent access to a confidential form for this purpose. Reports may lead to financial reward for the informant. In most cases it is disgruntled former employees who report employers. The risk to them is minimal since their identities are protected, but they inevitably cause costly and embarrassing problems for their former employers.

BSA also uses technologies to uncover illegal software downloading and the distribution of pirated software on the Internet through auctioning websites. After receiving a report, the organization uses these technologies to validate the informant’s information. This validation then allows it to contact the infringing company with sufficient evidence.

Copyright Infringement and legal requirements

It is important for company administrators to understand that the installation and use of software without a license or in default of the terms of the license constitutes copyright infringement for which the company will bear responsibility. Software is a literary work protected by the Copyright Act (hereinafter the “Act”). In fact, when you purchase a piece of software you will, in return for payment, sometimes receive the physical device (DVD, USB key or other) and the right to use the software under specific conditions, which is known as a license. A software license is a contract in which the copyright owner and developer of a software defines, together with the co-contracting party (the user), the conditions under which the software may be used, transmitted, and modified. As a result, all software that has been copied, downloaded, shared or installed on multiple computers in default of the license terms or without a license constitutes what is commonly called “piracy.”

The Copyright Act stipulates that any act committed to a work without the consent of the copyright owner constitutes copyright infringement. The Act states that the copyright owner is entitled to pursue all remedies by way of an injunction, damages, accounts , delivery-up and otherwise that the Act confers for the infringement of a right. Thus, anyone who infringes copyright is liable to pay damages to the owner has suffered due to the infringement and in addition to those damages such part of the profits made by committing this infringement and that have not been taken into consideration in determining damages, as the court considers just.

When seeking remedies, copyright owner must prove the infringement of their rights, show evidence of the damages they sustained as a result, in accordance with what is provided by the Act (profits, etc.) and the proof that these damages were caused by the infringement of their rights. While in some cases evidence of rights infringement can be difficult to find, there is no doubt that BSA and its members have the monetary and technological resources necessary to gather sufficient evidence in these cases.

Prior to the final judgement or order, the Act also provides that copyright owner may, in their capacity as claimant, elect to recover, instead of damages and profits, an award of statutory damages for which any one infringer is liable. The choice to receive statutory damages allows the rights owner to avoid having to present evidence of damages and illegally obtained profits, which can prove to be highly complex in certain cases. Statutory damages  allow the rights owner to receive between $500 and $20,000 per infringed work. For this reason, the compensation mechanisms permitted by law are practical and certainly more dissuasive in most cases than the simple threat of civil damages. The Act also states that exemplary or punitive damages may be awarded by the court, in addition to statutory damages, as a dissuasive measure when the defendant is in apparent bad faith.

It is understood that when the rights owner has met the burden of proof with regard to using its works, it falls to the defendant to demonstrate that it held the necessary licenses or rights to justify its use, using proof of purchase in support. Failing that, the defendant risks paying the damages mentioned above.

By virtue of the Act, criminal remedies can also be pursued against an offender, specifically in the case of counterfeiting that was knowingly carried out with the purpose of selling, renting, or sharing counterfeit copies for commercial purposes or in order to adversely affect the copyright owner.

This bulletin provides general comments on recent developments in the law. It does not constitute and should not be viewed as legal advice. No legal action should be taken on the basis of the information contained herein.



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