The annual Business Software Association (BSA) report into global piracy rates of packaged software was released last week. Interestingly enough the BSA claim that Australia’s piracy rates have dropped slightly by one percent making 31% of all packaged software pirated. The Australian arm of the BSA, called the Business Software Association of Australia (BSAA) claim the losses through piracy cost Australia $446 million in 2005.

Here at Builder AU we’ve always been curious on how the BSA can gather statistics on things such as piracy rates. We are pretty sure the alleged pirates would be unwilling to share such information on their stolen booty to either IDC who conducted the research or the BSA.

This week I sent a few questions to Jim Macnamara, Chairman – Business Software Association of Australia, and he was kind enough to offer some insight into the annual report and the role the BSAA take in our country.

Below is a transcript from the e-mail interview.

Builder AU: I assume you aren’t hacking into individual’s computers or that
infringing companies are letting you know they are using pirated
software? So, how accurate are these figures [in the global piracy study]?

Jim Macnamara:
Hacking into computers! Of course we have to collect data legally. We
use IDC, a well-known IT research firm. The methodology involves a
combination of statistics on shipments of hardware and software and
interviews in 39 countries by IDC’s team of analysts. In interviews, we
ask users what software they use and determine the average number of
applications per PC. Then by comparing this with PC shipments, we are
able to determine with reasonable accuracy the number of applications in
use and the number sold by software vendors (pooling OEM, channel and
direct sales). The figures are not 100% – no research is. But also we
occasionally conduct in-depth research in countries interviewing
computer users confidentially on what they use, what they have
installed, what is paid for, etc. This research has been conducted in
Australia as well as other countries and it has confirmed the IDC
figures quite closely.

Builder AU: What changes in Australian law do you think could reduce piracy in
this country?

Jim Macnamara: The law in Australia is strong. We have strong copyright
protection in the Copyright Act. Particularly with recent amendments
(effective from 1 January 2005) which provide for making and using
unlicensed software to be a criminal offence when it is for sale OR when
it is used in commercial quantities OR for commercial gain. Most
business use of illegal software constitutes commercial gain, so
business use can now be a criminal offence as well as a civil offence.
No criminal cases have been brought in Australia under the new law yet
(it has only been in place 12 months) but this may occur in future. In
addition to possible criminal charges for commercial use of illegal
software, ‘pirates’ (intentional or accidental) face civil legal action
by the software owners which can result in awards of damages and costs
to an unlimited amount.

The key issue with the law in Australia in enforcement. The law is
there, but use of unlicensed software is not seen as a serious offence,
even when it is for commercial gain or in commercial quantities. The
Federal Police lack resources and have not taken any criminal actions in
the past five years or more. We would like to see more action to enforce
the law we have which would send a message to the market that use of
unlicensed software in a commercial environment is not acceptable.

Builder AU:
Do you think Australian’s have a cultural tendency for being
software pirates? If so, how do we change this?

Jim Macnamara: We do not believe Australians have any greater propensity to
act illegally than any other culture. Compliance occurs through a
combination of (a) people being aware of the law and the penalties (and
there is still a need to raise awareness in Australia; (b) people seeing
the issue as serious and as a problem – this is also an area where
Australia has to better recognise the negative impacts of high levels of
illegal software, not just on the vendors, but on the channel who lose
sales, on local developers, on employment in the industry, and even on
tax revenue; and (c) at least occasionally have severe penalties handed
down to act as a deterrent. Australia does have a tendency to see making
and use of unlicensed software as a ‘victimless crime’ which is
short-sighted and deleterious to becoming a significant player in the
Information Age.

Does the BSAA support extradition of software piracy and copyright
infringement to other countries such as the United States? In
particular, does the BSSA support the extradition of Hew Raymond
Griffiths for his alleged role in the the Drink or Die software
cracking and warez group?

Jim Macnamara: The BSAA respects and operates within the laws of the land and
international laws that we are signatory to. If people commit offences
in another country or internationally, we cannot legally harbour them
under international agreements we are party to – nor should we.

According to the BSAA Web site there are no Australian owned
companies as members. Why is this the case?

Jim Macnamara: BSAA membership is open to any software developer. We have had
Australian owned members at various times. However, there are not many
large Australian software developers in the packaged software market.
(Large and specialist systems producers of software usually do not have
the same problems with piracy that packaged software producers have.) We
welcome local companies. But the other reality is that education
campaigns, assistance programs such as developing software asset
management programs, and particularly legal action are very expensive.
Our members bear the costs of the BSAA’s campaign fully in proportion to
their turnover. The BSAA is an industry association fully funded by the
industry. The costs of meeting even a proportional share of our costs
are beyond the capacity of many small software developers.

This is a very real issue and highlights the problem. I am a small
Australian software developer myself in fact. Small local developers
have their software pirated too. And they cannot afford the hefty legal
costs to protect their copyright. Hence, we argue that the campaign of
the BSAA is vital to the industry as a whole. Without the BSAA, there
would be even higher rates of software piracy and little if any effort
to reduce piracy rates in this important and growing market.