PC pirates who sail the software seas: Rogue programs are bad news for supplier and user alike, warns Martin Whybrow

TWO-THIRDS of all software installed in the UK is illegal, according to estimates from the Federation Against Software Theft (Fast). Mind you, that is still better than most of the rest of Europe. In Germany, only about 24 per cent of installed software is legal, and in Italy the figure is just 18 per cent.

With software suppliers losing an estimated dollars 4.6bn a year from illegal copying in Western Europe alone, it is not surprising that they are touchy about the subject.

However, the problem can spell bad news for users as well. For one thing, the existence of rogue software greatly increases the chances of being struck by a software virus. It may also attract the attentions of another unwelcome visitor. Over the past few years software suppliers have banded together to tackle the problem. This has resulted in the establishment of Fast in the UK and similar bodies dedicated to reducing software theft in other countries.

Where there is evidence of widespread infringement within an organisation, these industry bodies have started to get tough. In the UK this has involved presenting the evidence in court and obtaining something called an Anton Piller order, which allows the holder to enter and inspect a premises. The first an alleged offender is likely to know about this is when he or she receives a knock on the door from a team of lawyers and computer experts, court order in hand. The order gives them the right to carry out an audit of every PC within the organisation, and anyone denying them access is likely to be found in contempt of court.

Being raided by Fast is a fate that has so far befallen Marconi Instruments, York and County Press (part of the Financial Times Group), Mirror Group Newspapers, the London Borough of Greenwich Housing Authority and, most recently, the UK operations of the Taiwanese computer manufacturer Tatung.

If illegal software is found, the offending company may be prosecuted, although in the UK all raids to date have resulted in out-of-court settlements. That is not to say, however, that the guilty party can avoid the bad publicity. Shrewdly, Fast issues a press statement after every settlement. This is, no doubt, a major reason why Fast's corporate membership scheme stands at more than 130.

'We wanted to be seen to be doing something,' Derek Walklate, systems security manager at HFC Bank, says. The possibility of a heavy fine and bad publicity were strong incentives to join Fast, he says. It is an effective ploy. After the Greenwich Housing Authority gained the dubious distinction of being the first UK public-sector user to be raided, Fast was inundated with membership inquiries from other such organisations.

HFC Bank now has 1,700 personal computers. When systems ran on large, central mainframes, there was little problem, but the proliferation of PCs has caused control problems. Some organisations do not even know how many PCs they have, let alone what is running on them. Much of the illegal software may well be installed and copied by theend-users, but it is the employer who is liable.

It is also possible that the company has bought illegal software unwittingly from an unscrupulous dealer. Some users discover that they have been using illegal software only when they turn to the original developer for support or upgrades. If an application is based on a third- party database or fourth-generation language, for instance, licences are needed for these as well.

Some illegal software may be packaged to look like the real thing. The Far East is a common source of pirated software, and a recent raid on premises in Hong Kong by the US-based Business Software Alliance resulted in the seizure of dollars 8m worth of software.

Users should be wary of buying PCs running pre-installed software. In June this year a liquidator based in London, McGill & Co, pleaded guilty to selling computers that included business software installed in breach of copyright law. The software had been loaded less than 24 hours before the PCs were offered for sale, so the intention was clearly to enhance the value of the computers. The company was convicted on six specimen charges and fined more than dollars 4,000. A user buying those PCs may well have been none the wiser.

'In the majority of cases, we are satisfied that there is no deliberate intent,' Bob Hay, chief executive of Fast, says. 'But that is not to say that there is no knowledge.' At the Mirror Group, for instance, 700 out of the 800 software programs in use were found to be illegal. At another company, a set of disks was found with 'rip-off copy of Lotus 1-2-3' written on them. And on some raids, as Fast has been going in the front door, users have been trying to smuggle evidence out the back.

It is basically up to the user to provide proof of ownership. Lack of intent or knowledge is, of course, no defence in the eyes of the law. It is the user's responsibility to know what software is installed within the organisation. Software audit tools are available for this purpose, but despite the high-profile tactics being adopted by suppliers, most companies continue to use software illegally. They might be well advised to carry out audits themselves, before someone bearing a court order does it for them.

(Photograph omitted)

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