Firms face high cost of software piracy

Roland Chan, Asia-Pacific senior director of marketing, Business Software Alliance

The Business Software Alliance, a global trade association representing the software industry, recently entered into a settlement agreement with a Japanese manufacturer based in Kansai for software licence infringement.

The settlement of around US$3.6 million made this the largest settlement ever for BSA worldwide for a case involving the software piracy in a commercial environment.

Software piracy is the reproduction, use and/or distribution of software applications, whether for business or personal use, without the prior consent of the copyright owner.

The case against Kansai originated from a confidential report lodged with the BSA software piracy hotline in Japan, followed by a software audit of the company’s premises. About 3,913 copies of unlicensed software were found, including applications from Adobe, Autodesk, Filemaker and Microsoft.

Even without a piracy hotline in Viet Nam, this has not prevented piracy leads from reaching the ears of the law. On July 1, enforcement authorities, led by the Inspectorate of the Ministry of Culture, Sports and Tourism, raided a foreign-invested information technology company in HCM City and found US$100,000 worth of unlicensed software belonging to Adobe Systems, Autodesk and Microsoft on 147 computers.

A little over a month later, another foreign-invested company – this time in the automotive industry – was raided in the city of Vinh Phuc and $664,000 worth of software belonging to Adobe Systems, Autodesk, Lac Viet Microsoft and SolidWorks was found. That’s right! Lac Viet – a local, home-grown software development company – also suffering the ravages of piracy in its own market.

In Viet Nam, most organisations still think that all they need to do when caught for software copyright infringement is to buy licences for that illegally used or installed software.

Serious consequences

But there are more serious consequences to consider when using pirated software. First, the conduct constitutes a criminal offence under Article 170a of the Penal Code, which provides that those who infringe upon copyright or related rights on a commercial scale may be imposed a fine of VND50-500 million or subject to up to two years in prison.

In cases of organised or repeated offenses, penalties are even more severe, with the infringer being liable to a fine of VND400 million to VND1 billion, or imprisonment of 6 months to 3 years.

In addition, copyright owners also have at their disposal civil remedies to address infringement of their intellectual property rights. They can either commence legal proceedings before a competent court pursuant to Article 198.1d of the Law on Intellectual Property, or request a court to require the infringer to cease infringement, make formal apologies and rectification, and pay damages (including material damages) as well as legal fees under Articles 202, 204, and 205.

The level of damages would be determined on the basis of the actual losses suffered by the intellectual property rights holders, due to the infringement of their intellectual property rights. While the Government remains vigilant in enforcing the copyright law, businesses must be equally vigilant in managing their software assets carefully. Enforcement efforts should also be a reminder to larger organisations, particularly foreign companies with a presence and operations in Viet Nam, that their possible indifference to software copyright could lead to serious legal ramifications and financial risk.

While their parent companies or overseas affiliates may be operating with legitimate software licences, those licence agreements may not extend to usage in Viet Nam. To this end, all companies are strongly urged to review their software usage meticulously to ensure full compliance with the law. — VNS

Tags: software piracy