SIIA ANTI-PIRACY
2005 YEAR IN REVIEW
This report is a snapshot of the activities and profiles of SIIA's Anti-Piracy activities for 2005.
It has been an extremely successful year in the fight against software piracy and we are proud
to share our results and data with you.
SIIA Corporate Anti-Piracy Program
For almost 20 years, SIIA's Corporate Anti-piracy program has been combating software piracy in
the workplace. SIIA receives reports from people who witness companies illegally using software
in one of three ways: through SIIA's website at www.siia.net/piracy/report), by e-mail at
piracy@siia.net or calls to our hotline at (800) 388-7478. Those who report piracy may be eligi-
ble for a reward through SIIA's Reward Program – up to $200,000 for verifiable reports of cor-
porate piracy. In 2005, 13 rewards were given, at an average of $2,270.
SIIA thoroughly investigates reports to decide whether to pursue a case against a "target" com-
pany. Before SIIA proceeds against a company, it requires credible, detailed information that
demonstrates the nature and extent of the piracy. SIIA's approach is conservative, and a target
that is the subject of an SIIA enforcement action should understand that SIIA has reliable and
extensive evidence demonstrating illegal software use.
Once SIIA decides to proceed and its members approve the case, our counsel will contact the tar-
get company to request that the company voluntarily audit its workstations and servers.
Companies often find it preferable to work cooperatively with SIIA through the audit process as
an alternative to costly and time-consuming litigation, especially given the type and amount of evi-
dence SIIA has documented and the free audit tools provided by SIIA. Once the audit is complet-
ed, SIIA analyzes the results against the company's license documentation to determine what soft-
ware is unlicensed. Based on the results, SIIA and the company sign a settlement agreement that
provides a monetary penalty of three times the retail value of the unlicensed software and requires
that the company license replacement software. SIIA also requires that the company destroy any
illegal software, conduct regular compliance audits, attend SIIA's Certified Software Manager
Seminar, and adopt company-wide software compliance policies to prevent future infractions.
In 2005, SIIA received 366 reports of alleged piracy – nearly one a day. Of these, 272 were judged
sufficiently reliable to pursue. Where do these reports come from? Nearly three-quarters were
made online on our web reporting forms, with 17% called in to our hotline. The remaining share
came in through fax, e-mail and postal mail.
A profile of those reporting software piracy indicates that most reports come from former IT
staff - these are the people who would be most aware of the illegal use of software. Sixty percent
of reports come from IT staff or managers, 5% each from senior management, sales staff and con-
sultants. More than three-quarters of those sending in reports are no longer employed by the tar-
get company.
Cases are not concentrated by industry - while 15% involve manufacturing companies and 11 %
involve "IT", no other category rises above 10%. Most cases pursued by SIIA represent relatively
larger companies - the average number of staff is 1,465 with average annual sales of $109 million.
While it may not appear that these are large companies, they are, compared to the 90% of firms
that have fewer than 20 employees (according to the Small Business Administration).
The largest states, naturally, are home to the largest number of piracy cases -- California leads with 18%
and Texas & New York follow with 7% each. Only five more states are required to reach half of all cases:
Florida, Ohio, Colorado, Illinois and Massachusetts each represent about 5% of the total cases.
The largest number of software titles pirated fall in the security and productivity categories - anti-
virus, firewalls, word processing, office suites, etc. - the software used most often in businesses.
The share of reports is a little different, as illustrated in the table below.
TYPES OF PIRATED SOFTWARE
IN 2005, SIIA... REPORTED TO SIIA IN 2005
Software type Share of
titles
...gave 13 awards (averaging $2279) Server software 42%
through the SIIA Corporate Anti-Piracy Security 35%
Reward Program Mapping 32%
CAD 29%
...received 366 reports – nearly one Productivity 28%
a day – of alleged piracy 272 of which Document management 23%
were judged sufficiently reliable to pursue Operating systems 19%
Software/web development 12%
...received reports across industries Creative 11%
– while 15% involve manufacturing Accounting 10%
companies and 11% involve IT no other Database 10%
category rises above 10% Utilities 5%
Media management 3%
SIIA Internet Anti-Piracy Program
2005 was a very active year for SIIA in Internet anti-piracy enforcement. Several major pirates
were sentenced to record jail terms and fines with SIIA's assistance.
Three major pirates faced charges of criminal copyright infringement for their involvement in the
manufacture and widespread distribution of pirated software and digital content. All three were
initially investigated by SIIA and then referred to law enforcement agencies such as the Federal
Bureau of Investigation and U.S. Customs.
SIIA also continues its ongoing enforcement efforts targeting piracy of members' products on
websites, auction sites, P2P networks and other forms of electronic distribution on the Internet.
Dashiell Ponce de Leon, was sen- Nathan Peterson, owner and Adam Perahia, a pediatrician, was
tenced in October 2005 to over 4 operator of iBackups, signed a charged with copyright infringe-
years in prison and ordered to pay plea agreement with the US ment and child pornography. An
restitution of $1,154,396 for his Government in early December initial investigation by the SIIA
crimes. He is currently serving his 2005. Peterson pled guilty to two into Perahia's involvement in an
sentence in federal prison. Ponce counts of criminal copyright electronic message board group
de Leon started a website, infringement and agreed to pay (which provided pirated copies of
Powerbackups, to sell "backup" restitution of $5,402,448 and a medical textbooks and other
copies of PC software and video $250,000 punitive fee. He will copyrighted medical info) led
games. These "backups" were noth- also serve prison time (up to five investigators to seize Perahia's
ing more than pirated copies re- years for each count--a maximum computer. One of the most dis-
sold en masse to consumers. After of 120 months) and forfeit any turbing examples of the pirated
he was caught once, he signed a assets related to the offenses. content were the pirated medi-
legally binding agreement to imme- Peterson admitted in a plea cine dosage charts that were
diately cease the activity. But, less agreement that he generated at reposted incorrectly, resulting in a
than a year later, he resumed his least $5.4 million in software fatal dosage listed. Perahia was
operation, making revenues of over sales between April 2003 and sentenced to two years in prison
$1 million dollars. SIIA referred the February 2005, thereby making and five years of supervised
case to the FBI, and the subsequent his operation the largest for-prof- release in July 2005.
investigation easily illustrated the it software piracy website ever
blatantly recidivist behavior of shut down by U.S. law enforce-
Ponce de Leon which led to the ment. The site caused software
very stiff sentence ordered by the companies to lose sales worth
federal court-one of the longest almost $20 million. Peterson also
sentences ever issued for a soft- admitted to spending about $1
ware pirate. million on Google AdWords to
lure people to his illegal site.
SIIA's Anti-Piracy Educational Programs
Managing information technology is not easy. Managers have to handle software licenses for
multiple users, maximize legal use of software and oversee huge asset inventories. That's why
the SIIA developed the Certified Software Manager (CSM) seminar. The SIIA CSM seminar
teaches the skills needed to diagnose, resolve and manage today's complicated software licens-
ing issues. The CSM Seminar is the only program that addresses the specific needs of the soft-
ware managers, technical support specialists, purchasing agents and value-added resellers who
must ensure that their organizations are software compliant. In 2005, thirty-five CSM Seminars
were taught in fifteen states.
In addition to the CSM seminars, SIIA staff also give speeches throughout the country to edu-
cate anyone who is willing to listen about the dangers of piracy and the benefits of software
and content compliance. SIIA provides a library of free resources on its website to further edu-
cate the public. It also certifies software resellers and audit tool providers to help companies
and individuals find trusted third parties who can help them comply with the copyright law and
software licenses.
SIIA signed a formal agreement with the FBI that allows SIIA members to use the new FBI Anti-
Piracy Warning Seal on software products. The seal was specifically created to increase public
awareness of the penalties associated with piracy and to deter piracy. The seal has been used in
the movie and music industry for many years and should be familiar to users by now. We antic-
ipate that the anti-piracy seal will begin appearing on software products in mid-2006.
SIIA Anti-Piracy Legislative Programs
SIIA is a leading advocate on Capitol Hill and to government agencies for strong intellectual
property protection. SIIA strongly supports copyright laws that provide effective protection to
software and digital content and we oppose legislation that would unjustly weaken these protec-
tions. SIIA works with government officials and other industry stakeholders on activities to com-
bat piracy of software and information products and services and advocates legislation that
would increase and/or improve funding, personnel, training, enforcement powers and other gov-
ernment resources to combat piracy. In 2005, we were most active in opposing bills that would
have narrowed the existing rights and remedies available to copyright owners under the Digital
Millennium Copyright Act and in supporting legislation to increase government funding and
resources to combat piracy.
What's Ahead for 2006
SIIA Targets Illegal eBay Sellers with Aggressive New Program
For several years, SIIA's Internet Anti-Piracy Program has monitored auction sites and removed
offending auctions, either through the DMCA's notice-and-takedown process or eBay's VERO
program. Despite our vigilance, auction piracy remains a big problem for software publishers.
Under a new program – referred to as SIIA's Auction Litigation Program – SIIA will sue the most
egregious software pirates. Through this program we hope that by year's-end software piracy over
auction sites will be a thing of the past.
SIIA To Launch a New Corporate Anti-Piracy Program for Content:
By mid-2006, SIIA also plans to unveil its new corporate anti-piracy program for content. By 'con-
tent', we mean digital text, like online magazines, books, directories, newsletters, newspapers and
website content. Like the corporate anti-piracy program for software, the content corporate anti-
piracy program will be a comprehensive and proactive campaign focusing not only on tracking
down illegal use of copyrighted content within organizations, but also balancing those efforts with
educational initiatives.
SIIA's Anti-Piracy Division will continue to work creatively and vigorously for its members in 2006.
Companies Participating in SIIA Anti-Piracy Staff
SIIA's Anti-Piracy Programs in 2005
Keith Kupferschmid
Vice President, Intellectual Property
Adobe Lieberman Software Policy & Enforcement,
Aladdin Macrovision +1.202.789.4442
Apple Mathsoft Rene Albury
Attest Microsoft Counsel, Intellectual Property Enforcement,
+1.972.607.2125
Autodesk McAfee
Avanquest Publishing Nero Jason M. Allen
Manager, Internet Anti-Piracy,
Big Hammer Novell +1.202.789.4477
Borland Oracle
Craig McKinnis
Citrix RightNow Technologies Manager, Content Anti-Piracy,
Corel Riverdeep Learning +1.202.789.4491
Encyclopedia Britannica SafeNet Jeffrey Linder
FileMaker Solidworks Anti-Piracy Case Management Assistant,
+1.202.789.4481
Intuit Sonic Solutions
Mardy Goote
Ipswitch Symantec Coordinator, Anti-Piracy,
J.J. Keller & Associates + 1.616.475.9902
To Report Software or Content Piracy
Phone: 1 -800-388-7478 | E-Mail: piracy@siia.net | Internet: www.siia.net/piracy/report.asp