The perils of software piracy — are you legal?

When money is tight, the thought of making illegal copies of software can seem appealing. Here we explain why this is such a false economy for any small business.

Is your software legal? Software piracy the act of illegally copying and selling software is a problem that costs Europeans thousands of lost job opportunities and millions in tax revenues each year. By definition, illegal software is a program that has been copied without the manufacturer's authorisation, sold on, and/or installed on a user's hard disk without a licence. Anyone involved, from the person copying the software to the owner of the shop selling it, can be prosecuted in the courts. Over half of the software in Western Europe is thought to be illegal. The Business Software Alliance (BSA) estimates that the cost of this to the European software industry is $550 million (£367 million) a year. An estimated 43% of the software in Britain is illegal, 50% in Germany, 57% in France and a staggering 73% in Spain. Software piracy doesn't just cost software developers money. If European software piracy could be reduced to a level similar to the US – 39% – the BSA estimates that 90,000 new jobs would be created in Europe and tax revenue would increase by $2.3 billion (£1.53 billion).

Legal aids
Closer to home, legal software is much safer for you and the PCs in your business. Not only do illegal software programs often contain bugs and viruses that can corrupt hard disks, they isolate you from technical support offered by software developers. Moreover, you cannot upgrade legally. Legal software, on the other hand, is bug free, virus free, comes with free technical support, disks and help manuals. Plus, being registered entitles you to future upgrades and maintenance releases as they become available.

Identifying illegal software
So how can you tell if your Microsoft software is illegal? The first thing is, don't panic. It's relatively easy to tell if your software is genuine and, even if it's not, Microsoft can help you. The most important thing is to make sure you have a valid licence for every piece of software you have installed on your PCs. Whenever you buy a piece of software, you effectively buy the licence – the right to use the product. If you are not in physical possession of the licence, your software is illegal – a photocopy will not do. You must have a licence whether you bought the software new, pre-installed on a PC or second-hand. The rule is simple. Only the owner of the licence is the legal owner of the software.

Legal entitlements
Always note what the licence entitles you to do and what it prevents you from doing. Owners of older Microsoft software, such as Microsoft Windows 3.x, Microsoft Word 6.0 and Microsoft Excel 4.0 are allowed to install their software on a 'primary' PC, at work for example, and on a secondary PC, say at home, as long as the two PCs are not used at the same time. As with the audio tape and CD industry, users of newer Microsoft programs, such as Microsoft Windows 95 and Microsoft Office for Windows 95, are not allowed to do this and are only allowed to install the software on one machine.

Certificate of Authenticity
The second thing to look for is the Microsoft Certificate of Authenticity (COA). It is found either on the outside of the software box or manuals, and is a blue square with a 3D hologram. It is your guarantee that the software was manufactured legally. However, don't panic if you bought your software already pre-installed on a PC and you cannot find the COA. Legal software is often sold through hardware manufacturers without the box and manuals, and therefore without the COA.

Safety in numbers
Every legal piece of Microsoft software also comes with a product identification (PIN) code, which is displayed on the screen when you install the software. Each copy of the software has its own unique code number and without this code, your software is illegal. This means you will not be entitled to receive technical support for the software, future upgrades or maintenance releases.

Is the price right?
The price you pay for software can also help indicate whether it is legal or not. Legitimate software takes millions of pounds of investment, research and development, and any Microsoft software sold for £10 is unlikely to be bona fide. Legal software usually comes with disks and manuals – if your software has none, investigate. Some hardware manufacturers who pre-install software on PCs do not give disks and manuals to the buyer and are quite within their rights. If you bought your software on a PC and have no disks or manuals, call the manufacturer and ask whether you can have them. You sometimes have to pay extra for them but, the point is, you will always have the option; provided the software is legal. You do not need to own the disks or manuals for the software to be legal. It's the licence that counts.

All that glitters…
Be wary of gold coloured CDs containing more than one application. These are usually illegal and often contain bugs and viruses. Microsoft typically sells one application on one disc and never sells its programs on a CD that also contains programs from other manufacturers. So, although it may be tempting to buy a CD with more than 20 programs on it, you could be breaking the law if you do so.

Reporting illegal software
If you think you have bought or been given illegal Microsoft software, the first thing to do is call Microsoft's Sherlock Holmes hotline. The 24-hour hotline lets you check the authenticity of your products and report shops and dealers selling Microsoft software illegally. Calls are confidential and all users who phone the hotline will be sent a free booklet on consumer rights and software copyright laws.
If you find your software is illegal, Microsoft will not prosecute you. If you bought the software believing it was legal, you have the choice of either removing it from your hard disk and not using it again or paying Microsoft to license the software legally. Unfortunately, no software vendor, Microsoft included, will reimburse users for money spent on illegal software.


Catch the culprits
Like any form of crime, software piracy affects us all. While software pirates continue to deplete the market of revenues, and Europe of tax and jobs, consumers and businesses are suffering. With your help, organisations such as Microsoft, the Business Software Alliance and FAST can catch the culprits and stamp out software theft. And, the less software theft there is, the better software and lower prices there will be for the rest of us.

BSA Hotline: 0800 510510 Microsoft Sherlock Holmes Hotline: 0345 300125 Ext 1001
For more details, visit the Microsoft Anti-Piracy site