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International Roundup: March 8, 2000
Software Industry Struggles To Fight Piracy

     It's just another Wednesday afternoon in Singapore, and that means it's time for a raid. Every other week at 2 p.m., police officers dutifully flock to one of the island nation's thriving business hubs, trolling for pirated copies of software and cheap CD-ROMs. Like clockwork, merchants lay low until police leave and then they return to business as usual an hour later.
     Although the percentage growth of worldwide piracy has slowed, the Singapore scenario told by Peter Beruk, the Software and Information Industry Association's vice president of anti-piracy programs, highlights a major difficulty for software companies. While anti-piracy international agreements and laws exist, enforcement can be difficult, if not impossible. And promises to crack down on piracy often come with flash and fanfare, but little substance.
     "If we see one more steamroller rolling over pirated CDs, we're going to scream," said Beruk, whose employer recently submitted a 100-page report to the United States trade representative on global piracy.
     The report found that Vietnam, China and Indonesia are among the biggest users of pirated software, with estimates that about 85 percent of these nations' business software is illegal. Groups such as SIIA and the Business Software Alliance hope their reports on worldwide piracy can convince the USTR to pressure countries with flagrant intellectual property abuses.

Law Enforcement Behind The Times
     But even if the United States can wield the power of trade sanctions to punish software pirates, technology has made enforcing these laws more difficult, with software and other digital products easily downloaded on the Internet.
     "What's happened internationally is that the Internet has no borders and intellectual property laws do," said Mark Rasch, senior vice president of Global Integrity, a network security company.
     Rasch explained that law enforcement deals with piracy in terms of illegal CDs and software sold from shady vendors. But often, pirated copies are sent via the Internet, making it even more difficult for law enforcement to clamp down on.
     Rasch also noted that the cross-border nature of the Internet muddles which country has jurisdiction over the crime, another factor hampering law enforcement.
     "It's (piracy) a multibillion-dollar problem, and it's not on law enforcement's radar screen," he said.

International Agreements Often Fall Short
     Besides law enforcement deficiencies, international regulations sometimes fail governments looking to eradicate software piracy. Currently, World Intellectual Property Organization (WIPO) treaties and an agreement on Trade-related Aspects of Intellectual Property (TRIPs) govern much of this area. But some countries still have not met the Jan. 1, 2000, deadline to implement TRIPs while others have not brought WIPO's 1996 Copyright Treaty into action.
     Michael Epstein, a lawyer specializing in intellectual property, said that TRIPs and WIPO agreements have done a good job of enforcing intellectual property protection over traditional media but have not kept pace with the digital age.
     "They have not been able to progress the ball to include the Internet and e-commerce," Epstein said.
     But, according to Epstein, treaties won't resolve the issue. Instead, he said as countries develop their own high-tech sectors, better intellectual property protections would naturally follow.
     M. Ravindran, a partner of Ravindran Associates, a Singapore-based firm that focuses on intellectual property law, agreed that when more citizens of developing countries have a stake in intellectual property, less pirating will take place.
     Ravindran, the Software and Information Industry Association's general counsel in Singapore, says enforcing laws against software piracy is failing there. Ravindran points out that Singapore is not Asia's biggest hub for software piracy, but is often targeted as a major battle ground for intellectual property fights given the nation's high penetration of personal computers.
      Software pirates often pay "fall guys" to take the blame for retail piracy while the vendors continue selling after police raids, he explained.
     "There is just too much money to be made from software piracy," he said.

Forget The Stick, Try The Carrot
     To help fight the lure of money from pirating software, Bruce Lehman, president of the International Intellectual Property Institute, said the United States should offer a carrot, not a stick, to countries seeking to comply with intellectual property laws.
     The stick often comes in the form of the government's "special 301" list, which targets countries not following intellectual property rights agreements. The Business Software Alliance recently pinpointed the Philippines, Israel, the Czech Republic, the Dominican Republic and Australia as countries that should be added to, or remain on the government's list.
     But Lehman, who recently returned from Jamaica, where he proposed a plan to bring the government's intellectual property protections up to speed, said the United States should do something to help developing countries comply with TRIPs, not punish them.
     "I think we've got our priorities screwed up. We ought to develop a program of assistance," he said. "Most people accept their obligation to fight software piracy. They need help in meeting that responsibility."
     Lehman, who also is a member of WIPO, pointed out that enforcing software piracy laws can be expensive, a cost developing countries might not be able to afford.
      The Business Software Alliance, a software industry lobby for companies such as Apple and Microsoft, said protecting intellectual property is its own reward. The BSA sponsors educational campaigns in countries such as Malaysia to explain the benefits of fighting piracy.
     "The incentive (to fight piracy) is the economic boost to the economy," said BSA spokeswoman Diane Smiroldo, adding that there are ample international laws to protect intellectual property.
     Peter Lowe, an official with the International Chamber of Commerce's Counterfeiting and Intelligence Bureau, said while most countries have good intellectual property laws, enforcement is still the key issue. The Chamber is examining ways to fight piracy, and it has suggested that a "World IP Court," might be effective. But Lowe said as technology makes pirating software easier, combating piracy will be that much harder.
     "You can have good laws but if they're not enforced, they mean nothing," he said. "Everyone accepts it's an uphill struggle. There needs to be more international cooperation."
- by Caroline Broder




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