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Software piracy matters to local developers, too

by DAVID DIZON, abs-cbnNEWS.com | 10/21/2008 7:57 PM

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Software piracy is often described as a victimless crime that only affects the pockets of software giants such as Microsoft and Oracle. Just don't tell that to "mentor capitalist" Joey Gurango, founder and CEO of local company Gurango Software Corp..

A former managing director of Microsoft's R&D division, Gurango says that while software piracy does bite into the profits of major software firms, it also kills smaller startups that do not have the money to protect their creations from unscrupulous business owners who want to cash in on other people's investment.

He cited the case of one five-man startup company in Manila that spent close to three years building proprietary software for public schools. He said the company was able to get several clients only to discover that its much touted new software was already being copied and used by other schools without paying a single centavo in license fees. 

"Now, two of their employees want to quit. This isn't an isolated case. There are literally hundreds of people who invested their time, blood, sweat and tears into their products and are being deprived of their just rewards. These are Filipinos like us," he said at the launch of Global Anti-Piracy Day in Makati.

Gurango said one problem with a high software piracy rate is that it discourages local developers from creating and marketing software for the local market. He adds the "general acceptability" of software piracy also affects the value of proprietary software being sold to local businesses.

"The software might not be copied but the respect for intellectual property is lower than average. You know, our software sells for a much higher value in other countries because the local community doesn't attach the same value to our software compared to the global community," he said.

Effect on IPR standing

The Intellectual Property (IP) Coalition also warned that the Philippines could stay on the United States 301 Watchlist until next year because of the country's high software piracy rate.

IP Coalition vice-chairman Eduardo Sazon said software piracy in the Philippines remains a concern for the Office of the US Trade Representative (USTR) despite a two-point dip in software piracy cases last year.

According to the Business Software Alliance (BSA), software piracy in the Philippines has dropped from 71 percent in 2006 to 69 percent in 2007. However, the same BSA study also said industry losses due to software piracy in the Philippines rose from $119 million to $147 million last year.

Sazon, a former chairman of the Videogram Regulatory Board, said "quantitative and qualitative" improvements in the judicial resolution of IPR cases and enforcement capabilities of government authorities could lead to the Philippines' delisting from the USTR watchlist.

He said that while software piracy in the country has been steadily decreasing, the government should impose bigger sanctions on Intellectual Property Rights (IPR) violators to deter other people from engaging in the illegal activity. Under the Intellectual Property Code of the Philippines, software violators could be jailed for up to nine years and fined P1.5 million.  

Sazon said Congress should also pass measures that would enable the enforcement of the World Intellectual Property Office (WIPO) Copyright Treaty and WIPO Performance and Phonograms Treaty in the Philippines. "These twin Internet treaties will afford more copyright protection in the online world. However, it has been several years already since the bills were proposed and they're still pending in Congress," he said.

Lack of IP-savvy courts

Lawyer Bienvenido Marquez III, meanwhile, decried the lack of dedicated intellectual property courts that can handle IPR cases. "Imagine going to court and facing a judge who has no idea about IPR laws," he said.

Marquez, a consultant to the BSA Philippines Committee, said the software alliance has so far won three convictions against resellers of pirated software. He added, however, that BSA has filed numerous cases against end-users or owners of companies that use pirated software.

He said one challenge faced by local software firms is getting a search warrant for an IPR-related violation. He said failure to get a search warrant could often spell the difference in IPR cases against business owners.

"Cases against resellers are easy to prosecute. Cases against end-users are difficult because you have to get info that they authorized the installation of the pirated software," he said.
 

as of 10/22/2008 12:52 PM