Software association paid $57K in 2010 to piracy whistleblowers

Some 27 per cent judged reliable enough to pursue

In 2010, the Software and Information Industry Association received 157 reports of alleged corporate end user software piracy. Of the 157 reports, 42 (or 27 per cent) were judged sufficiently reliable to pursue. Of these 16 qualified for rewards totaling $57,500.

READ MORE: Ballmer to Hu: 90 per cent of Microsoft customers in China using pirated software

The profile of sources reporting software piracy indicates that most reports come from former IT staff – these are the people who typically witness the illegal use of software. 75 per cent of all reports come from IT staff or managers, 11 per cent from the company’s senior management and four per cent from outside consultants. More than 59 per cent of those reporting are no longer employed by the target company. In fact, many of SIIA's sources report that their primary reason for leaving the target company was the company’s lack of ethical behavior related to software compliance.

Nearly 94 per cent of the reports were made online on SIIA's web reporting forms, and four per cent were reported through SIIA’s Anti-Piracy hotline. The remaining share came in through fax, e-mail and postal mail.

Cases are not concentrated by industry – while 12 per cent involve "IT", 10 per cent involve healthcare and education, no other category rises above seven per cent. Most corporate cases pursued by SIIA represent relatively larger companies – the average number of employees is over 567 with average annual sales of nearly $441 million.

The largest states, naturally, are home to the largest number of corporate piracy cases. California and Florida lead with 15 per cent each. Utah and Illinois follow behind with 10 per cent and seven per cent respectively.

The largest number of software titles pirated fall in the Productivity category. This share is the percent of total titles audited in each category that were found to be unlicensed. The share of pirated software varies by category, as illustrated in the table below.

36 companies settled software and content infringement cases with SIIA over the past year.

In 2010, SIIA shut down over 41,000 online marketplace listings worldwide offering more than 4.5 million software products with a total value of more than US$90 million. The estimated value of listings enforced is calculated by the sum of the Buy It Now price multiplied the quantity for each listing per product.

SIIA settled its first cases involving graphics software (clip art) for over $200,000.

In all, SIIA filed 17 cases against online sellers in more than a dozen different states.

In 2010, SIIA sent approximately 1400 demand letters, collected close $40,000 in restitution. Source information from the sellers revealed that a majority of the software purchased by these sellers outside of the U.S. actually came from China through sites such as DHGate, Tradetang.com, and Alibaba.

Read more about software in Network World's Software section.

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Carolyn Duffy Marsan

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