Software piracy and sales of pirated software are increasing worldwide, particularly in the areas of Asia rife with counterfeiting operations, with the most intense activity occurring in Indonesia, Malaysia, China, Taiwan and Hong Kong.
At a technology conference being held this week in Jakarta, Microsoft Corporation issued this statement, along with other warnings about the growing software piracy industry. Citing lax and often unenforced or nonexistent government intellectual property laws in many countries as a contributing cause to software piracy's rise, Microsoft's senior corporate counsel, Katherine Bostick, also touched upon another key factor: "It involves organized crime. When you are dealing with high-end counterfeits, you are talking about organizations that have a full supply chain, a full distribution chain, full manufacturing tools all in place, and it is all based on profits." The Business Software Alliance, of which Microsoft is a key member, cited statistics such as a global piracy rate as high as 40% of all software programs sold in 2001. Bostick noted that just in Asia, the loss of software sales revenue to pirates in 2001 was $4.7 billion, with Asia Pacific's piracy rate estimated to be at 54%, and the piracy rate in Vietnam estimated at an 'out of control' rate of nearly 95%. Indonesia and Thailand were not far behind with estimated piracy rates of 88% and 77%, respectively.
"Right now, the cost of violating intellectual property rights is not that high. There is really no penalty for that major person, and they will be right back in business the next day or the next month," Bostick went on to say, "At one time, they may have been doing drug trafficking, which is highly profitable, but there are huge penalties for that ... while you can do this stuff (counterfeiting) and make just as much money and the penalties are light or don't exist at all." A driving factor in the software piracy business can also be attributed to consumer demand for cheap software, according to Bostick. "Consumer desire for stolen goods, everyone loves a bargain....education [of intellectual property rights] and awareness is very important," she said, "The problem will not go away by itself. In five to ten years, the problem will be massive."