Pirates Reign Supreme

FOLLOWING the latest amendments to the Indian Copyright Act, which make computer software piracy a criminal offence, four traders hawking illegal software copies were jailed for seven days in October and also fined between Rs 15,000 and Rs 1 lakh each. But, for the Indian software industry which lost Rs 120 crore to piracy in 1994-95 and for global software giants whose products are illegally copied on a massive scale in this country, the first ever criminal convictions have come as a small consolation.

Apparently buckling under pressure from global software giants, India has probably become the first country to treat software piracy as a criminal offence. The world over, the offence is dealt with by civil courts. However, giving the law more teeth may not by itself prove an effective deterrent in a country where enforcement of legislation is generally lax and the wheels of justice move grindingly slow.

In 1995-96, the loss to the Indian infotech industry on account of software piracy is projected to touch Rs 250 crore, twice that of the 1994-95 figure, says Dewang Mehta, executive director, National Association of Software and Service Companies (NASSCOM). For every 100 legal software packages sold in India, there were 68 pirated ones being peddled in May 1994, according to a survey conducted by NASSCOM and the Washington-based Business Software Alliance (BSA). There has been a marginal drop, though, in software piracy levels, which hit 65 per cent in the second survey conducted in May this year, claims NASSCOM.

"Our target is to bring software piracy down to 50 per cent by May 1996," says Mehta. That, however, may be overambitious, feel industry insiders. For, pirating software is so simple that any half-competent computer operator can do it at the flick of a keystroke. As such, the practice is rampant not only among individual computer users, but also large corporates and government departments.

A central government organisation, which otherwise performs the laudable task of linking India to the information superhighway, has the dubious distinction of being the largest user of pirated software in the country, says a top executive of a leading software company on condition of anonymity. "The small fry may be caught, but who will touch this big fish and earn the wrath of the establishment?" he asks.

The first four criminal cases involve two traders in Delhi and one each in Thiruvananthapuram and Guwahati. The suspects were identified by NASS-COM and BSA, whose members include US software megacorps like Microsoft Corporation, Novell Inc, Autodesk Inc, Santa Cruz Operations (SCO) and Word Perfect.

On July 6, Tata Consultancy Services (TCS), Microsoft, Novell and Autodesk filed suits in the Delhi High Court against two Delhi-based software traders. The court appointed a commissioner, who on July 7 sent a decoy customer to buy pirated software from the duo, identified by NASSCOM as Braino Systems and Expert Computers. The "trap purchases" led to the seizure of pirated software, including Microsoft Word for Windows Version 6.0, MS Excel, Novell Netware, Autodesk Autocad Release 12 and E.X.2.0.

The quick arrests and expeditious convictions of the four traders belies the generally held notion that the law courts move slowly in India, says Mehta. The amended Copyright Act came into effect on May 10, the raids were conducted in July and the sentences were pronounced in October. But top executives of software companies feel that the quick disposal of these cases may well turn out to be a flash in the pan if the drive against software piracy is not sustained. "Where is the money to push the drive against software piracy?" asks K. Bose, resident director, Tata Unisys Ltd. The amended copyright law, which "equates piracy with theft, is good", says Bose, but adds: "It may be difficult to explain to a policeman what software piracy is." Law enforcement vis-avis software piracy may not be so easy when it comes to extending it on a large scale all over the country.

Phiroz Vandrevala, vice-president, TCS, echoes similar views. He says the convictions were "really a small simulated exercise, like an experiment, which has gone off well, but I don’t know whether it will succeed if extended countrywide". Besides, there are several large operators involved in the racket, he points out, making the busting of the racket more difficult. And the raids and convictions may remain merely symbolic acts.

But is strict legislation the most effective way to control software piracy? "The best way to curb piracy is to make software cheap and not worth the risk of copying," says Dilip Londhe, general manager of the Bombay-based software company, Silverline Industries Ltd, which was the fourth largest software exporter in 1994-95. Software from the US and other developed countries should be available in India and other Asian countries at lesser prices, he feels. After all, Indian software is not expensive when sold in the US; so why should that country’s software cost so much, asks Londhe.

HOWEVER, it is debatable whether lower prices reduce piracy levels. Though duties on software have been reduced from 110 per cent to 10 per cent and the prices have come down, the piracy rate has hardly fallen. But how much lower can the prices get? The software pirate bears no R&D expenditure and management overheads. At most, he spends money on the floppies he requires for copying the software.

Companies have now begun importing software and hardware locks to foil unau-thorised copying. "It is possible to put a code or a password to insulate against software piracy," says Mohit Goyal, executive director, IIS Infotech. But according to Londhe, some locks are foolproof, others are not.

"The only proactive way to control software piracy is education," feels Goyal. Surely, building of awareness against software piracy is the best way to tackle the problem, claims V. Chandrasekaran, president of the Bangalore-based Wipro Systems. A campaign against software piracy should be an on-going, continuous process, he says. "Software companies have to continue shouting from the rooftops, if they want their voices to be heard," he notes. But offenders should be weaned away through persuasion, believes Chandrasekaran. "You pick up sticks to attack software pirates only as a last resort," he adds.

For example, Mehta reveals that three lakh folders have been sent to corporates, educational institutions and other software users, explaining the dangers of piracy.

Is there light at the end of the tunnel? Among large corporates, there is now a greater tendency to buy legal software, affirms Nandan Nilekani, deputy managing director of the Bangalore-based Infosys Technologies Ltd, which is fifth among Indian software exporters. About five years ago, software companies, too, were guilty of piracy, recalls Saurabh Srivastava, managing director, IIS Infotech. "Things have, however, changed since," he clarifies.

But other top executives of software companies do not share Srivastava’s optimism. "It’s too early to say whether software piracy is under control," says Vandrevala of TCS. "It may take a generation to control software piracy," adds Bose.

Finally, law or no law, software piracy may die out in India only through a natural process of technology evolution. It is only a matter of time before floppies are replaced by CD-ROMs, which may browbeat pirates into obsolescence. While copying from one floppy disk to the other is easy, it is not feasible to do the same with CD-ROMs, except in a factory, says Goyal. But cynics still abound. The CD-ROM is a safe bet against software piracy now, but it may not be long before our expert copiers find a way to duplicate even CD-ROMs, predicts Bose.

And a word of caution. Watch your back when you switch on your PC the next time. NASSCOM and BSA are planning some raids on residences with computers this month.