When you think of Internet piracy you aren’t likely to think of your company. Instead, you may imagine warehouses filled with copying machines running 24/7 to produce bootlegged versions of popular software. You might want to revise that view. Corporate software piracy is more common than you likely think.

Two Forms

In business, software piracy comes in two forms:

  1. Copies made for employees take to home.
  2. Copies to distribute around the office.

Both situations may seem efficient and cost-effective. After all, more computers can run more copies of the same software for less money. But, unless you’ve worked out an arrangement with the software maker, the rule of thumb is one software package per computer.

Legal Issues

Businesses can be sued on civil and criminal charges if employees install unauthorized software copies on company computers or acquire illegal software through the Internet. It doesn’t matter whether managers knew about it. Software is automatically protected by federal copyright law from the day it is created.  Moreover, violators are legally liable even if they don’t know that their actions are against the law.

Penalties include liability for damages suffered by the copyright owner, plus profits you make that can be attributed to the copying. In addition, convicted violators who knowingly infringe a copyright can be fined as much as $1,000,000 and imprisoned for as long as five years. In addition to the legal consequences, piracy can damage your business in several ways, including:

  • Exposure to viruses and defective software.
  • No warranties and insufficient documentation. Lack of technical product support and ineligibility for software upgrades.
  • Serious system disruptions if serial numbers clash.
  • Inability to back-up or recover programs when there are no original disks.
  • A tarnished reputation if found guilty of copyright infringement.


If you don’t already have a policy to fight piracy in your business, here are some steps to consider:

  1. Ban the duplication, distribution, and use of copyrighted materials in your office and be sure employees know the law and the potential penalties.
  2. Reinforce your policy with detailed instructions for handling original software and ensuring that it is not copied illegally.
  3. Keep detailed inventories of software purchased and where it is installed.
  4. Audit networks and workstations regularly to match software against your records and immediately remove any unauthorized copies.
  5. Install site-metering software to monitor application usage and prevent overuse of a networked application.
  6. Purchase software only from authorized dealers and contact that dealer if you suspect you have a counterfeit copy.
  7. Facilitate the purchase of software to avoid providing an incentive to pirate software that is needed quickly.
  8. Check to ensure that all software you buy comes with documentation and licenses. This helps avoid purchases of illegally bundled software on computer systems that have been preloaded with several copies of programs. (See box above for more tips to avoid buying pirated software.)

Various Forms of Piracy

  • Social piracy. The duplication of only the information found on legitimate products. There is no pretense that these are legitimate products. Software copied for coworkers falls into this category.
  • Counterfeit piracy. Copies of prerecorded information as well as original artwork, label, trademark, and packaging. These copies are passed off as the real thing and usually sold.
  • Bootleg recordings. Unauthorized recordings of live concerts, movies, or musical broadcasts on radio or television.
  • Online piracy. Uploading copyrighted material to be made available to the public and downloading copyrighted material from an Internet site or a Peer-to-Peer network, even if the information isn’t resold.

Categories and Cautions

To help ensure you buy legal software, be wary of:

  1. Prices too good to be true,
  2. Products without documentation or manuals,
  3. Packaging or materials that have been copied or are of inferior quality,
  4. Sellers offering to make “back-up “copies,
  5. Products labeled academic, OEM, NFR or CDR,
  6. Compilations from more than one manufacturer or programs that are not typically sold together, and
  7. Mail order or online offers without appropriate guarantees of legitimacy.