Piracy practicalities

PIRACY is a hot topic of debate. Usually the reports are of vendors selling DVDs coming under arrest, but the new development of crackdowns on companies has brought the issue to a new level and the ethics behind piracy are contending with the practical aspects of development.

Sri Lanka has one of the highest levels of piracy in the world. Surveys have repeatedly placed Sri Lanka as the second highest in Asia and among the top 10 in the rest of the globe.

One study done last year showed that nine out of 10 software programmes installed on personal computers in 2008 in Sri Lanka were unlicensed or obtained illegally through software theft. The Business Software Alliance (BSA) study noted that Bangladesh is the biggest culprit at 92% piracy while Sri Lanka came second in line with 90% and Pakistan at 86%.

Japan had the lowest piracy rate at 26% and China’s had eased off by two per cent, dropping to 80%. According to the study, software piracy led legal software vendors to lose US$ 15.26 billion in 2008, up 8.3% from US$ 14.09 billion the previous year. The global average of unlicensed software worsened to 41% in 2008 from 38% the previous year, causing losses of almost US$ 53 billion.

Ironically, with the popularity of the personal computer, piracy levels also grow so that even if there is a marginal increase in legal software usage, the regional average does not drop. Furthermore, the increased penetration of broadband means that more people can download pirated software, including operating systems, systems software like databases, security packages and application software like office packages, finance and tax packages as well as computer games.

Perhaps taking these statistics into account, the Anti-Piracy and Counterfeit Unit – recently established at the Criminal Investigation Department (CID) – carried out a series of raids on an international group of companies suspected of infringing the intellectual property rights of the BSA members. The Police seized over 30 computers, installed with suspected pirated business software valued at Rs. 7.5 million. Clearly this is just the tip of the iceberg. The CID unit had previously raided several other corporate too including listed companies.

A business is ethically bound to use legal software, but at a realistic level piracy is so accepted and widespread to the level that most people as well as small and medium companies do not see anything wrong in saving money by using pirated software. Perfectly honest people who would never steal a desk or a chair for their business have no scruples about using pirated software and this mindset has proved very difficult to change.

Whilst some Sri Lankan companies may be quick to oppose CID raids or the fight against piracy, it needs to be stressed that Sri Lanka must recognise and respect Intellectual Property Rights. As Sri Lanka re-engineers itself to become a dynamic economy post-war, our own companies are likely to capture world markets with patented products. Technology is essential for development.

A popular argument is that it is mostly multinationals who with sufficient resources step up the fight against piracy, whilst their actions prevent budding enterprises in developing countries. However, the software companies insist that piracy is unnecessary as licensed or copyrighted products can be obtained at a reasonable price. Also the funds from legitimate sales are funnelled into research and development that would result in more advanced technology. The smaller companies find legitimate products prohibitive; hence whilst the Government facilitates crackdown on pirated products, it can reduce taxes so as to reduce cost.

Whichever way one might read these arguments, it is clear that the Sri Lankan economy needs technology to function and grow. More awareness and transparent policies would enable businesses which can afford to do so resort to legal means while assisting in the technology transfer essential for developing the overall economy. While this may not appear to be a full-blown scourge, it does need to be contained at a certain level and for more awareness to be made regarding open source software, which is less expensive.