October 9, 1992 (Washington, DC)--Congress has declared war on today's high
tech pirates with passage of legislation to elevate commercial software
piracy from a misdemeanor to a felony.

S. 893, The Software Copyright Protection Bill, was sponsored by Senator
Orrin Hatch (R-Utah) and originally passed the Senate on June 4th. The
bill was shepherded in the House by Representative William Hughes (D-NJ),
Chairman of the House Intellectual Property and Judicial Administration
Subcommittee. It passed the House by voice vote the night of October 3rd,
and late last night the Senate unanimously agreed to the House changes.
S.893 now goes to the President to be signed into law. Passage of the bill
has been a high priority of the Software Publishers Association (SPA).

The law defines commercial pirates as individuals who willfully copy
software for commercial advantage or private financial gain. Prison terms
of up to five years and fines of up to $250,000 can now be imposed on
persons convicted of infringing at least ten copies of a copyrighted
software program or any combination of programs with a retail value
greater than $2,500. Repeat offenses can include up to ten years'
imprisonment. The law does not target the individual who makes a single
copy of a program to use at home or to share with a friend.

"S. 893 protects software developers against criminals who steal and sell
intellectual property on a commercial basis," says Senator Hatch. "The
penalties it provides are on a par with those Congress enacted in 1982 to
protect the motion picture and sound recording industries from commercial
piracy."

"Pirates not only rob software companies of their hard-earned revenues,
they steal jobs and economic opportunities from our communities," says
Representative Hughes. "Their crimes hurt everyone from the young person
who can't get an entry level job at a software store to the home computer
user who is forced to pay higher software prices to make up for losses to
thieves."

According to the SPA, piracy in the US alone cost the industry $2.4 billion
in 1990. Worldwide losses that year are estimated between $10 billion and
$12 billion.

In testimony before the House Subcommittee on Intellectual Property and
Judicial Administration, the SPA cited three principal reasons for the
group's support of the bill. First, while the software industry is a
vibrant and growing segment of the US economy, it is particularly
vulnerable to piracy due to the unique nature of its products.

"We are the only industry that empowers each and every customer to act as
his own manufacturing subsidiary," says SPA Executive Director Ken Wasch.
"Anyone with a standard personal computer can make an unlimited number of
identical, perfect copies of a program. This leaves us especially
vulnerable to the most rapacious forms of commercial piracy."

Second, current misdemeanor criminal penalties and civil remedies are not
adequate to deter professional pirates. Software pirates operate on a
fly-by-night basis and are adept at avoiding legal process, avoiding
discovery, hiding assets and simply vanishing when served with a civil
complaint. A civil case seizure in California in 1991, for example,
uncovered counterfeit software with a market value in excess of one
million dollars. No civil damages were collected in the case, however,
because the only business record discovered for the entire operation was a
single spiral notebook.

Third, despite the economic impact of software piracy, federal prosecutors
and law enforcement agencies have been reluctant to pursue cases.

"Let's face it," says Wasch, "it is very hard to persuade an overworked
federal attorney to commit scarce public resources to a technical
investigation that can only result in a misdemeanor conviction. With its
felony penalties, S. 893 gives law enforcement the incentives it needs to
battle software pirates."

The Software Publishers Association is the principal trade association of
the personal computer software industry. Its more than 950 members
represent the leading publishers in the business, consumer and education
software markets. The SPA has offices in Washington, DC, and Paris,
France.

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

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