India winning software piracy battle, but war far from over

by Sharon Lobo    Aug 24, 2010

SoftwarePiracy Software piracy is perceived as a victimless crime that gives buyers a cheap substitute to an expensive product. However, unlicensed software, whose worldwide value is over $51 billion, not only helps fund local crime and international terrorism but also threatens the growth of the software product industry.

Software piracy is unauthorized copying and use of software without proper license. Similarly, simultaneous use of single user license software by multiple users or loading of single user license software at multiple sites, also amounts to software piracy.

It is a grave issue and has alarming consequences across the world, especially in India. To address this and other issues related to counterfeiting, the Confederation of Indian Industry (CII) organized the “4th International Conference on Counterfeiting & Piracy: Measuring and addressing the Cost of the 21st Century Crime” in Mumbai.

One of the roundtable discussions at this event was on software piracy in which one of the panelists - Keshav Dhakad, chair - Business Software Alliance (BSA) India Committee said that the value of the Indian IT industry was over $70 billion to which software and services contributed a major portion, with estimates putting losses faced by the Indian IT industry last year due to software piracy as $2.03 billion.

Currently, BSA estimates that about 65% of the software being used in India is pirated. As of now, Software companies can use section 63B and section 69 in The Copyright Act 1957, to bring software pirates to justice. Where the problem lies is that laws are hardly enforced, with no coordinated efforts between the center and state governments to combat piracy. “We have to give local policemen the power to apprehend software pirates. In some countries like Greece, Italy, and Cyprus, software piracy is being treated as a tax evasion. We can have something like this in India too,” Dhakad argued.

The Institute of Chartered Accountants of India (ICAI) recently came out with a technical guidance note for internal auditors to check use of intangible assets like copyrights, IPs of the company as well as those of others that the company might be using. Dhakad welcomed this move, but said more remains to be done. “The copyright laws in India are pretty good. In fact, we have some very innovative clauses. For example, one of our clauses reads - ‘knowing use of computer programs is a violation’. This kind of a clause is not found in any other country,” he said.

Software makers and BSA itself prefer to adopt a carrot and stick approach in combating piracy. But could reducing price of software help in reducing software piracy? Dhakad does not agree with this reasoning. According to him, piracy is more a question of mindset, so no matter how cheap you make a product, piracy will still occur. “Take the example of Astrovision, a BSA member from India. They create one of the cheapest astrology software products in the market, but still their products are pirated,” he said.

BSA itself conducts investigations and legal proceedings against defaulting companies on behalf of member companies. Complaints against companies using pirated software can also be filed on the BSA website.

While curtailing software piracy seems to be a daunting task, there have been positive signs on this front. State governments have shown interest in educating organizations on the benefits of using authentic software. Initiatives, like the one taken by ICAI, will also help to combat piracy in the future. No wonder then, that India has seen a gradual decline in software piracy in the last six-seven years - in 2003 piracy rates in the country were 74%, by 2009, this had dropped to 63%. In fact, India was one of only three countries to show more than 2% drop in software piracy last year.

It seems as if we are winning the war against software pirates, however it would not do to become complacent at this stage. A lot still remains to be done and the government, users, and software companies will have to work together to ensure India’s piracy rates keep decreasing.

With additional contribution from Abhinna Shreshtha