Software piracy: What can you do about it?

You spent days, nights, weekends and holidays to develop your software and finally released them. Then you found that the software is cracked within hours of its release. What can you do? You can contact some organizations who claim to fight piracy. You are lucky if they even respond to your email or phone call.
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Our Story

We launched our shareware business in 1999. Right from the time we started, we noticed a significant number of downloads from crack sites and immediately realized that the "cracking" problem was very severe. The web access log showed that a lot of the traffic was from crack sites. At that time, for our product, a single registration key worked for all computers. We then modified the registration system so that the key was dependent on the computer name and user name. The licensed users would now generate a valid registration key from our website that would work only on their computer. However, this did not do much to prevent piracy. A key generator for our software was available on the crack sites within a few days after our new release. Most of the crack sites are located in Russia and China, and there is nothing we could do about them. We ignored the piracy issue, hoping that businesses are honest, and assumed that most of the piracy was being done by individuals at home.

Then one day, we received an anonymous email informing us that her company (in United State of America) was using at least 25 copies of our software without paying for it. She also informed us that the company actually put the software into their clients' systems. We did not know how much money they made out of our product, or how many other people were also doing similar things. We first consulted with several copyright attorneys. We were told that it was very difficult to pursue this case, since we did not have conclusive evidence except for an anonymous email.

Piracy Tracking

This incident lead us to the decision of actively pursue piracy of our software. Tracking code was incorporate into our software to track installations and registrations of our software. When a user enters a possible false registration key and unlocks the software, non-sensitive information about the computer is posted to our website. This information includes username, computer name, IP address, product name and version, registered name and organization. Our license agreement explicitly states that this information is being posted to our website if someone uses a false registration key to register the software. We only need to track the registration by those use possible false registration keys.

This tracking code provided us with a great deal of information. It allowed us to monitor the installations by country, product and other variables. We could also monitor and detect legal and illegal registrations. It is fairly easy for programmers to implement the tracking source code.

The magnitude of the problem

Based on the data we collected from our own software, and our clients', for every copy of legally registered software, there are 20 - 150 detectable pirated copies. Software product can be characterized in three categories:

Type A - Non-internet enabled software that include but not limited to business, finance, graphics, multimedia, screen savers, etc. The number of detectable pirated copies per purchased copy is about 20 - 70.
Type B - Internet enabled software that includes but not limited to software that supports ftp, e-mail, web download, etc. In these cases, the user may allow the software access to the Internet. The number of detectable pirated copies per purchased copy is about 40 - 80.
Type C - Internet-must-on type of software where the user has to allow the software access to the Internet at all time for it to function. This type of software includes but is not limited to network monitoring, network file system utilities, etc. The number of detectable pirated copies per purchased copy is about 70 - 150.

In order to catch the pirates, the user's computer has to send information back to us at registration. If the user is behind a firewall, or if the user is not on the internet when he/she registers, no data will be collected. This is why the detectable piracy is the highest, since the user has to allow the software full access to the internet

Piracy by region

Figure 1. shows the piracy by region. North America contributes to about 25% of the total detectable shareware piracy. On the other hand, the ratio of licensed copies to pirated copies in the US is one of the highest in the world. China has the highest piracy rate (pirated copies vs. licensed copies). Considering the increased number of people online (100 million) in China, this is a very serious growing problem.

Copyright law

Internet related laws are still in their infancy. Specific laws regarding shareware do not exist. But the basic is the same in every country's law - Software Piracy is a crime. The protection and the remedies are different from country to country. It is out of the scope of this article to discuss in detail about copyright law. However a brief discussion of US copyright law as it pertains to obtaining settlements is important.

In the United States, software products owned by American and foreign authors are protected under the law (in theory). However, when it comes to pursuing copyright infringers, a registration though the US copyright office is a must. All of the US attorneys we have contacted will not pursue a case without a US copyright. Anyone found to have willfully infringed a copyrighted work may be liable for statutory damages from $750 to $150,000 for each work infringed. Additionally, the copyright holder can be awarded all his/her legal fees. For more information, please visit www.copyright.org.

Obtaining settlements or award (Our Story Continued)