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Me? A software pirate?

Is your business unwittingly using illegal software?

Nobody likes to think of themselves as a criminal, but rather like parking tickets, many people think it's OK to use unlicensed software. Even if you don't, it's your responsibility to make sure your software is licensed correctly - and it can be easy to slip into bad habits.

If you thought that piracy was a victimless crime, or simply not a crime at all, think again. If you are using unlicensed software - and according to the Business Software Alliance, 27% of software in the UK is unlicensed - you are stealing it. You might have downloaded it, or bought it in a market. You might simply have bought the rights for 10 licences but taken on more staff.

We are all victims

In the eyes of the law, you are still a software pirate. Like music piracy, stolen software has flourished because enforcement has been patchy. That, according to the software industry, is changing: after all, the BSA points out that pirated software in the UK alone costs companies �1bn every year in lost revenue.

Quote�If you are pirating software, the chances of being discovered have never been stronger.�End Quote

The government is backing the industry's stance. In July 2005, Lord Sainsbury, Minister for Science and Innovation, pledged tougher action on intellectual property crime to a group called the IP Crime Congress. "What many people do not understand is that the production and distribution of counterfeit goods is operated as a large-scale business, a business that costs tax payers and UK companies an estimated �4.5 billion a year. It is a business that harms the economy and consumers, we are all victims," he said.

The Patent Office is coordinating the Government's Intellectual Property Crime Strategy, but what's really relevant to you as a businessperson is that if you are pirating software, the chances of being discovered have never been stronger.

The good, the bad, the ugly

One reason is that the internet has made it easier for whistleblowers to report you. Julian Heathcote-Hobbins, senior legal counsel for the Federation Against Software Theft, says there are three types of software pirate: "The good pirate temporarily falls out of compliance and is keen to put it right. The bad one has software licences that are constantly in disarray. The ugly ones never had any intention of buying licences in the first place."

If your software licences don't match the software that you are running in your business, you are in one of these categories - but whether you are good, bad or ugly, you are breaking the law, and would get the same warning letter from FAST.

It sees examples of all three (it currently investigates around 100 tip-offs a month), and the remedy is the same, says Heathcote-Hobbins: "If you buy the licence straight away when we warn you, then if it got to court, the judge would look leniently on you. If you wait until you are on the courthouse steps, then you are open to having to pay damages."

FAST is an enforcement agency that takes action on behalf of the software company members who fund it, but Heathcote-Hobbins recommends that if your licensing is out of control, you can always make contact and be helped, not punished. "Most companies just need a helping hand," he says, "We are reasonable people."

Why comply?

There are many ways in which your software might not be compliant that aren't obvious. You need to be able to produce the software licences you own, rather like the registration document for a car. If you have bought a secondhand computer, you don't have the right to use the software on it unless you inform the software provider about the change of ownership.

But you shouldn't look on compliance as an obligation or some sort of tax. If you think about how many hours a year you use computer software, it starts to look like good value. Pirated software destroys the smaller software companies first, many of whom are producing innovative business software at cheap prices.

"If people decided to take our software and copy it for their friends, we would have a problem - we couldn't afford to keep producing it," says Phil Hames, MD of The Business Software Centre. He has deliberately priced his software cheaply, often below �100 a package, so that business users on a budget can afford it. Yet Hames accepts that he can't possibly compete with illegally-installed free, or nearly free products, even though those products have no support and no chance of an upgrade or a bug fix.

Ultimately, by paying your licence, you're helping software producers create ever more innovative and useful products; and similarly entitling yourself to the contribution these programs make to your productivity.

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What next?

The concept of software licensing can be very confusing. Our introduction to licensing explains it in plain English, and our Licensing Chooser can help you find out which licence is right for you.

There are people and tools out there to help you keep your software in order. Here's how to stay on the right side of the law.

Microsoft has introduced Windows Genuine Advantage, a way you can check your copies of Windows XP are genuine. Find out more.

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