DATE: Wednesday, June 25, 1997              TAG: 9706250465

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY AKWELI PARKER, STAFF WRITER 

                                            LENGTH:   98 lines

CONGRESS TO STUDY SOFTWARE PIRACY ILLEGAL DISTRIBUTION COSTS UNITED STATES $2.3 BILLION A YEAR, INDUSTRY SAYS

Psst. Want a copy of Microsoft Office 97? How 'bout Duke Nukem 3-D for Junior?

Many people wink at the illegal practice of pirating software and distributing it to friends. In their minds, it's no big deal.

U.S. Reps. Howard Coble, R-N.C., and Bob Goodlatte, R-Va., both members of the House Intellectual Property Subcommittee, think it's a very big deal. On Tuesday they announced congressional hearings on the matter, probably to be held in the fall.

``We need to get testimony in and see what we need to do,'' said Ellen Stroud, a spokeswoman for Roanoke-area politician Goodlatte, who compared the task of stamping out piracy to fighting illegal drugs.

The software industry says that piracy costs the United States more than $2 billion and 130,000 jobs annually. What's more, they say, it stifles innovation as programmers are discouraged at the prospect of their hard work winding up on some illegal bulletin board or website almost as soon as it hits store shelves.

Programmers aren't the only ones getting their pockets picked by pirates.

Software resellers lose out when some consumers refuse to pay high prices on legitimate software.

``If they're going out copying from their friends, from neighbors, from work, they don't buy and I don't make any money,'' says Kathy Wood, co-owner and manager of The Software Choice in Chesapeake.

For otherwise law-abiding consumers, it's a matter of economics.

``Why would you want to pay $500 for Microsoft Office,'' asks Wood, ``when you can get it off the Internet for free?''

Most consumers are unversed in copyright law and don't bother to read software license agreements, which are usually lengthy, soporific passages written in legalese.

Also there is plain old greed, according to the Business Software Alliance, an industry trade group based in Washington. Cost-cutting corporations are particularly egregious offenders, according to the alliance.

It's cheaper for a company to make illegal copies of a program that runs on different machines than to buy multiple licenses for the program.

Cheaper, that is, until the company gets caught.

Under civil law, software pirates can be sued for up to $100,000 in statutory damages on top of damages equal to the infringer's profits. Criminal penalties include fines up to $250,000, five years in jail or both.

Last year, the Business Software Alliance launched an aggressive ad campaign in New York that encouraged workers to blow the whistle on software-heisting employers with messages like ``Nail Your Boss, Report Software Piracy.''

``We strongly recommend that companies institute sound software management policies,'' says Business Software Alliance spokeswoman Kim Willard.

Some pirates are in it for the rush, not the cash.

So-called ``warez d00dz'' specialize in cracking commercial software - stripping it of its copyright protection and distributing it over bulletin boards and the Internet.

Warez (a slang term for bootlegged software) d00dz (pronounced ``dudes'') are often organized into complex, on-line distribution rings and almost always go by sinister-sounding names, or ``handles.''

D00dz gain prestige by cracking games, utilities and other applications as close to their release date as possible. They make the resultant ``warez'' available to the public on their personal websites, bulletin boards or newsgroups.

The practice can mean lots of headaches for d00dz' Internet service providers, who are usually quick to give such users the boot. Besides taking up valuable real estate on company servers, shady sites cause heavy traffic and bad publicity.

``We don't tolerate that kind of stuff at InfiNet,'' says Tom Manos, president of network services for the Norfolk-based Internet service.

InfiNet is partly owned by Landmark Communications Inc., parent company of The Virginian-Pilot.

Manos declined to say specifically how big a problem software pirates are at InfiNet, but allowed, ``as soon as we find out about it, we turn everything over to the police. We certainly don't want our resources used for that kind of thing.''

``Because the majority of our sites are commercial (customers) we don't have a big problem with that,'' says Dudley Atkinson, general manager of Great Bridge Internet in Chesapeake.

But, he says, if someone did try to use the company's servers to stash ill-gotten software, ``we'd have to require them to move it. We can't knowingly allow people to break the law.''

In addition to legal hassles, users of counterfeited and pirated software risk viruses, defective software, poor documentation, lack of technical support and the inability to upgrade.

Still, as long as there's the challenge of software codes to crack, there will likely be someone to take it up. In many foreign markets, the majority of software is pirated.

And the ubiquity of the World Wide Web makes pirates difficult to stop.

``The Internet certainly has caused us great concern,'' concedes Willard of the Business Software Alliance.

But even the relative anonymity of cyberspace isn't a permanent refuge from the industry's enforcement efforts, she says.

``We have online investigators around the world tackling this problem.'' ILLUSTRATION: Graphic

PRICE OF PIRACY

[For complete graphic, please see microfilm]

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