China and Russia Again Named "One-Copy" Countries by SPA in Special 301
Report

Software Piracy Over 90 Percent for Second Year in a Row

Washington, D.C., February 20, 1996 - For the second year in a row, the
Software Publishers Association (SPA) has identified China and Russia as
"one-copy" countries, where piracy is so high, virtually a single
legitimate copy of software could satisfy the entire country's demand. SPA
estimates more than 90 percent of business application software used in
China and Russia in 1995 was illegal, with South Korea and Greece
following close behind at an estimated 80 percent. The losses to U.S.
software developers and publishers from these countries alone is estimated
to be more than $700 million.

These findings led SPA to call on the U.S. Trade Representative (USTR) to
take action against China under Section 306 of the Trade Act of 1974 for
failing to improve enforcement of intellectual property rights in computer
software. SPA also asked the USTR to place Russia and Korea on the Special
301 Priority Watch List in order to review their intellectual property
laws and enforcement.

These findings and recommendations are part of a report SPA filed for the
USTR's annual "Special 301" review of unfair trade practices. The Trade
Act of 1974 requires the USTR to identify foreign countries that deny
adequate and effective protection of intellectual property rights or that
deny fair and equitable market access to U.S. intellectual property
companies for possible investigation and trade sanctions. Because software
piracy, defined as copying computer programs without permission from the
copyright owner, is a form of copyright infringement, SPA considers the
protection and enforcement of software an important part of the Special
301 review.

Today's report is the third SPA has filed with the USTR. In the report, SPA
estimates that business software piracy last year cost U.S. software
companies at least $250 million in China and at least $117 million in
Russia. Although the piracy rate in South Korea is slightly lower, the
estimated losses were more than $350 million - nearly twice as much as in
Russia. Because the estimates do not include operating system software or
multimedia, SPA believes total losses are much higher.

"SPA remains committed to its pledge to teach software users in China why
they should not make illegal copies," said Mark Traphagen, SPA counsel.
"As Chinese authorities celebrate their New Year, we call on them to now
make good on their promise to take credible and effective action to
control illegal CD-ROM manufacturing by establishing a title verification
program and aggressively prosecuting rogue factories for software piracy.
SPA stands ready to help the Chinese keep CD-ROM factories legal in the
future, while at the same time protecting the interests of hundreds of its
member companies.

"Last year, SPA gave China and Russia credit for enacting copyright laws
that specifically protect computer programs and other software. But each
year, software piracy costs U.S. companies billions of dollars, which
dampens hiring in one of the most dynamic industries in the U.S. economy,"
Traphagen said. "It also stifles the ingenuity of local software
developers in countries such as China, Russia and Korea and undermines
what should be an important priority for them - the development of a
vibrant, home-grown software industry."

SPA's focus is on companies developing and publishing software applications
and interactive content. SPA is the leading trade association of the
desktop software industry, representing the leading publishers as well as
many start-up firms in the business, consumer and education markets. Its
1,200 members account for 90 percent of the sales of the U.S. packaged
software industry. SPA is an international organization with offices both
in the United States and Europe. SPA press releases are available through
CompuServe (GO:SPAFORUM), on SPA's Web site at http://www.spa.org or
through Fax-on-Demand at (800) 637-6823.

Software Publishers Association
1730 M St, Northwest, Suite 700, Washington, D.C. 20036
202-452-1600,  Fax: 202-223-8756
 
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