Home : Software Licensing 101 : Lesson 2

What is Illegal Software?

Software piracy is the illegal reproduction or distribution of software. There is nothing in the definition of software piracy that states you need to be aware that your actions are illegal and the punishments can be steep. In this lesson we will discuss some common ways small businesses become software pirates, and some of the risks involved.

Common Ways Small Businesses become Software Pirates

The number one way businesses participate in software piracy is over-installation of software. Over-installation is when you install or use a piece of software by more clients than you own licensing. You can't do that. If you purchase one copy of a piece of software, you can only install it once. If you purchase 5 copies, you can only install it 5 times. If the licensing is per user and you purchase 5 users, you need to check one more thing. With user licensing, it might be concurrent licensing. Concurrent licensing would state that at any one time only 5 users can use the software. However, if it is not specified, chances are you simply can use it by 5 users.

Another common way of acquiring illegal software is through downloading. Not all downloaded software is illegal. For instance, we offer a free trial of our DGard Software Compliance Manager product. However, it is a trial, and you can use it for 30-days. This is common with many legally downloadable products. Many people mistakenly think that shareware is free software. Shareware is software that you can try for free, and if you like it can purchase a full unlocked version. Freeware is the term used for actual free software. Many times open source software is freeware. When dealing with free software you want to be careful. Many titles are free for personal use, but not commercial.

When downloading software, a simple way to know if you are downloading legally would be to check where you are downloading from. If you are downloading from the manufacturer of the software, chances are they let you. If you are downloading from a respectable download site like download.com you are probably ok. Most download sites will tell you if there is a price involved or if the software is free. If you are downloading from a peer-to-peer network, or places with names like "crack" or "hack", chances are you are not downloading legitimate software. If you find yourself unsure, contact the manufacturer of the software and ask.

One thing to note is that employees like to download software that is useful for them elsewhere. Alot of times downloaded software isn't something you know about until after the fact. We'll discuss detecting this software in lesson 5.

What are the Risks?

The software vendors are not helpless in their fights to control software piracy. Organizations like the Business Software Alliance (BSA) and the Software and Information Industry Association (SIIA) fight software piracy. Software piracy can incur penalties up to $150,000 per copyrighted work infrined. In the case of willful software piracy, criminal penalties may also be assessed.

Since January 1, 2000 the BSA has settled with over 1,600 companies totalling over $81 million in settlements. With numbers like these, you have to ask yourself "why would anyone risk it?"

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