THE LAW Software is automatically protected by federal copyright law from the moment of its creation. The rights granted to the owner of a copyright are clearly stated in the Copyright Act, which is found at Title 17 of the US Code. The Act gives the owner of the copyright the exclusive rights to "reproduce the copyrighted work" and "to distribute copies ... of the copyrighted work" (Section 106). It also states that "anyone who violates any of the exclusive rights of the copyright owner ... is an infringer of the copyright" (Section 501), and sets forth several penalties for such conduct. Persons who purchase a copy of software have no right to make additional copies without the permission of the copyright owner, except for the rights to (i) copy the software onto a single computer and to (ii) make "another copy for archival purposes only, which are specifically provided in the Copyright Act (Section 117). Software creates unique problems for copyright owners because it is so easy to duplicate, and the copy is usually as good as the original. This fact, however, does not make it legal to violate the rights of the copyright owner. Although software is a new medium of intellectual property, its protection is grounded in the long-established copyright rules that govern other more familiar media, such as records, books, and films. The unauthorized duplication of software constitutes copyright infringement regardless of whether it is done for sale, for free distribution, or for the copier's own use. Moreover, copiers are liable for the resulting copyright infringement whether or not they knew their conduct violated federal law. Penalties include liability for damages suffered by the copyright owner plus any profits of the infringer that are attributable to the copying, or statutory damages of up to $100,000 for each work infringed. The unauthorized duplication of software is also a Federal crime if done "willfully and for purposes of commercial advantage or private financial gain." Criminal penalties include fines of as much as $250,000 and jail terms of up to 5 years. USE OF SOFTWARE Anyone who purchases a copy of software has the right to load it onto a single computer and to make another copy "for archival purposes only." It is illegal to load that software onto more than one computer or to make copies of that software for any other purpose unless specific permission has been obtained from the copyright owner. The law applies equally, for example, to a $25 game and a $750 project management program. Each product reflects a substantial investment of time and money by many individuals. Software development involves a team effort that blends the creative talents of writers, programmers and graphic artists. Piracy diminishes the value of a program and further, deprives the developers of fair compensation. Software piracy inhibits innovation. The software industry is filled with new developers trying to break into a crowded market. They can survive only if their products are purchased. Each theft makes staying in business more difficult. RENTAL OF SOFTWARE It has always been illegal to rent unauthorized copies of software. However, concern over the fact that the rental of authorized or original software frequently resulted in the creation of pirated software led Congress to enact the Software Rental Amendments Act of 1990 (Public Law 101-650), which now prohibits the rental, leasing, or lending of original copies of any software without the express permission of the copyright owner. Consequently, it is important to recognize and comply with this clarification of the copyright law. USE OF SOFTWARE BY SCHOOLS Public or private educational institutions are not exempt from the copyright laws. To the contrary, because of their unique position of influence, schools must remain committed to upholding the copyright laws. Just as it would be wrong to buy one textbook and photocopy it for use by other students, it is wrong for a school to duplicate software (or to allow its faculty or students to do so) without authority from the publisher. Some people claim that software publishers should allow schools to copy programs because it is the only way some school systems can afford to provide enough software for their students. However, the acquisition of software is no different than any other product or service required by a school. Schools purchase books, audio-visual equipment and classroom furniture, and they pay a fair price for them. Newer and better software can be developed only if the software development team receives a fair price for its efforts. Many software firms offer special sales arrangements to schools. These include discounts for additional copies of programs, reduced-priced lab packs (a quantity of programs sold together) and site license agreements (an arrangement that allows a school to make a specified number of copies for one location at a fixed price). Schools should make every effort to uphold the law, because it is by their example that students will learn to have respect for intellectual property. USER GROUPS The personal computer industry owes much of its success to the proliferation of user groups. These groups provide a valuable service as forums for sharing computing experience and expertise. User groups should, however, ensure that their meetings are not used to promote illegal duplication or distribution of software. The unauthorized duplication or distribution of software by user groups or at user group meetings places many people in a vulnerable position. The individuals who duplicate or distribute software, as well as the user group itself and the owner of the meeting place, may be held responsible as copyright violators. A close relationship between user groups and the software publishing community is mutually beneficial. User groups should encourage ethical software use among their members. Likewise, software publishers should respond to users' needs for proper support and updates. BUSINESS USERS In the workplace, softlifting is characterized by two common incidents: extra copies of software are made for employees to take home, and extra copies are made for the office. Both situations mean a greater number of computers can run more copies of the software than were originally purchased. Unless a special arrangement has been made between the business user and the publisher, the user must follow a simple rule: one software package per computer. This means that a copy of software should be purchased for every computer on which it will be used. For example, if the business has 10 computers on which employees use spreadsheet software, it must purchase 10 copies of such software. If there are 25 secretaries using word processing software on their computers, each secretary must have a purchased copy, etc. Another option that has proven successful is for firms to enter into special site licensing purchase agreements with publishers. These agreements compensate the publishers for the lost sales they might have made on a package-by-package basis because the company agrees to pay a certain amount for a specific number of copies they will make and not exceed on site. At the same time, they eliminate the possibility that copyright violations will occur. By buying as many programs as it will need, a company removes the incentive for employees to make unauthorized copies. Adhering to these rules will pay off in the long run, because a firm that illegally duplicates software exposes itself to tremendous liability. Many software applications are sold in "Local Area Network" (LAN) versions. If your company has a LAN, be sure to follow the publisher's guidelines for the use of software on the LAN. It is a violation of the copyright laws and most license agreements to allow a single-copy version of software on a LAN to be simultaneously accessed by more than one user. Finally, it has been found that when companies enact a policy statement stating their intention to ensure employee compliance with copyright regulations, the risk of software piracy is reduced. A sample corporate policy statement is included on the back panel of this brochure. REPORTING COPYRIGHT VIOLATIONS The SPA has established a special toll free number for reports of copyright violations: 1-800-388-7478. The SPA has filed many lawsuits against individuals and companies engaged in the unauthorized duplication of PC software and will continue to do so when it becomes aware of situations that warrant such action. SPA MATERIALS The SPA has a variety of materials about the legal use of software. Our Self-Audit Kit describes procedures appropriate for ensuring that a business or organization is "software legal." The Kit includes SPAudit, a software management tool, and is available free of charge to businesses and organizations (DOS or Macintosh versions). In addition, the SPA has a 12 minute videotape on the subject of software piracy entitled "Its Just Not Worth The Risk." The video is a useful tool for instructing business users about the legal use of software products and is available for $10. We also publish additional brochures and a poster on the subject of software piracy. Please call or write the SPA if you are interested in obtaining any of these materials. CONCLUSION Most people do not purposely break the law. They would never consider stealing money from someones pocket. But those who copy software without authorization are stealing intellectual property and they should understand the consequences of their actions. If you are an individual user, dont break the law. Everyone pays for your crime. If you are part of an organization, see to it that your organization complies with the law, and that it issues an appropriate policy statement that is signed and respected by all involved. SAMPLE CORPORATE POLICY STATEMENT Company/Agency Policy Regarding the Use of Microcomputer Software 1. (Company/Agency) purchases or licenses the use of copies of computer software from a variety of outside companies. (Company/Agency) does not own the copyright to this software or its related documentation and, unless authorized by the software developer, does not have the right to reproduce it for use on more than one computer. 2. With regard to use on local area networks or on multiple machines, (Company/Agency) employees shall use the software only in accordance with the license agreement. 3. (Company/Agency) employees learning of any misuse of software or related documentation within the company shall notify the department manager or (Company's/Agency's) legal counsel. 4. According to the US. Copyright Law, illegal reproduction of software can be subject to civil damages of as much as $100,000 per work copied, and criminal penalties, including fines and imprisonment. (Company/Agency) employees who make, acquire or use unauthorized copies of computer software shall be disciplined as appropriate under the circumstances. Such discipline may include termination. (Company/Agency) does not condone the illegal duplication of software. I am fully aware of the software protection policies of (Company/Agent) and agree to uphold those policies. Employee Signature and Date SOFTWARE PUBLISHERS ASSOCIATION 1730 M St., NW, Suite 700 Washington, D.C. 20036 Phone: 202-452-1600 Fax: 202-223-8756 Piracy Hotline-1-800-388-7478 Everyone benefits from a healthy computer software industry. With each passing year, evolving software technology brings us faster, more sophisticated, versatile and easy-to-use products. Business software allows companies to save time, effort and money. Educational computer programs teach basic skills and sophisticated subjects. Home software now includes a wide array of programs that enhance the user's productivity and creativity. Computer graphics have turned PCs into a veritable artist's palette, and new games are increasingly inventive. The industry is thriving and users stand to benefit along with the publishers. Along the way, however, the problem of software theft has developed, and threatens to impede the development of new software products. Romantically called "piracy," the unauthorized duplication of software is a Federal offense that affects everyone: large and small software publishers and legitimate users. Even the users of unlawful copies suffer from their own illegal actions. They receive no documentation, no customer support and no information about product updates. When a few people steal software, everyone loses. This guide is intended to provide a basic understanding of the issues involved in ethical software use. It will tell you what the laws are, how to follow them and why you should adhere to them. We encourage you to make and distribute copies of this brochure. This guide is only one component of an ongoing effort by the Software Publishers Association to increase public awareness of software piracy. If you have any questions about the legal use of software, or would like additional copies of this pamphlet, please call the Software Publishers Association at (202) 452-1600.