The civil damages regime in the UK needs an overhaul to stop software theft harming the economy, innovation and future job creation.
Software piracy in the UK is rife. In fact a consumer survey, commissioned by Business Software Alliance (BSA), found that over a quarter (27%) of personal computer (PC) users readily confess to acquiring pirated software, while business decision makers admit to pirating software more frequently than other users. According to the 2011 Business Software Alliance (BSA) Global Software Piracy Study with market intelligence firm IDC, the net effect in the UK is a software piracy rate of 26% which means one in four software programmes installed on PCs last year were unlicensed; the commercial value of this piracy totaled £1.2billion..
Despite these concerning figures, BSA studies do show that there is strong widespread support for IP rights in principle. In fact, more than seven in 10 computer users globally, profess support for IP rights and protections. So why are so many people willing to take the risk of acquiring pirated software? As the UK endures a period of low economic growth, it has never been more important to protect our IT and creative industries' Intellectual Property (IP) and its vital contribution to the economy. In fact, in 2009, the creative industries, (which include software companies) contributed £36.3 billion in Gross Value Added (GVA) to the UK, and exported services to the value of £8.9 billion. In 2010, they accounted for 1.50 million jobs . Their critical contribution to the economy is reflected in the Government's original response to the Hargreaves Review of IP and Growth: "Britain's future depends on harnessing knowledge and ideas to their full potential" and that "IP's contribution to the UK's economy is...both substantial and vital."
The task of protecting our creative industries is exacerbated not just by the sheer scale of IP infringement but also by the relative impotence of the legal system. This is reflected in the finding that more than three quarters (77%) of UK PC users do not think the risk of getting caught is an effective deterrent to the use of unlicensed software. The Government needs to take stronger action to reduce software piracy. The current regime does not allow organisations to claim back the true costs of the losses they suffer from software theft. Government regulation needs to reflect the seriousness of the misdemeanor and recognise the risks businesses face by pirating software. The impact of piracy is real and far-reaching. While it causes significant damage to the software and technology industries it also stifles broader economic growth and job creation. It compromises users' computer security and discourages future innovations. Furthermore businesses that do abide by the law are put at a competitive disadvantage to their peers who do not. Everyone suffers when software piracy is allowed to persist.
There is a link between vigorous IP enforcement and economic growth. The digital economy will only deliver on its full potential if the legal and law enforcement protections for software and other copyrighted material keep pace with technological innovations. In the UK, there is still work to do. We need to fundamentally change the way we view and acquire software. It is not another utility - it powers everything we do to secure business success. As the engine for growth, software should be the very thing we invest in, not scrimp and steal, and anyone who uses software they have not paid for should face serious consequences.
Indeed, Business Software Alliance regularly takes legal action against businesses on account of their use of unlicensed software. Earlier this year, BSA focused on the Reading area to ensure businesses were aware of the need to be correctly licensed for all the software installed on their computers. BSA also doubled its existing maximum 'whistleblower' reward to up to £20,000 and created a new hotline making it even easier for people to report suspected cases of illegal software use. Crucially, the nationwide tour hasn't ended, nor has business exposure to punitive action.
Businesses would do well to observe that in the UK, the cost to businesses caught using unlicensed software was in excess of £3.6 million for the last three years alone (2009-2011). This figure includes both damages and the cost of acquiring new software licenses in order to become compliant. As long as businesses persist in flouting IP law, the BSA will continue to take a hard line.
The ubiquity of software piracy should be considered a source of concern in a mature market such as the UK. Stealing software is not too dissimilar from shoplifting and yet if over one in four (27%) people shoplifted (as they confessed to software piracy in the consumer survey mentioned above), there would be an outcry. To make a lasting impact on the piracy rate and protect our creative industries a dramatic shift in our attitude towards IP rights needs to happen. Only by ensuring that IP rights are valued, protected, and enforced, providing businesses and investors with the certainty to invest in the creative industries, will growth and employment be realised.
For more information on the BSA Global Software Piracy Study, visit http://portal.bsa.org/globalpiracy2011/.