Software Piracy Law

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 What Is Software Piracy?

Software piracy involves the copyright infringement of software. It typically occurs by doing any of the following with copyrighted software:

  • Copying;
  • Selling; or
  • Buying.

Under software piracy laws, there are several different types of conduct that may be considered copyright violations, including:

  • Copying and distributing the software directly: This is what most individuals think of as piracy. This type of violation will subject the perpetrator to a civil lawsuit for copyright violation and possibly even criminal liability;
  • Downloading a pirated software program: While file sharing is most commonly thought of in terms of movies and music, many software programs are also illegally downloaded;
  • License violations: Most software is purchased with a license agreement that limits the use of the software. A violation of this license can be copyright infringement;
    • The license typically comes in the form of a pop-up that appears when the software is initially installed and the user must click to agree to it before the program is installed;
    • The license restricts the use of the program, for example, limiting the installation to a certain number of computers, typically one or two;
  • Resale: Some licenses claim that, when an individual buys the program, all that is purchased is the license to use it and not the program itself, and therefore, the buyer cannot sell the program to someone else. However, most courts have ruled that resale is permitted, so long as the license agreement is not violated in other ways;
    • The laws on this issue may be somewhat contradictory given that several courts have ruled that this is a violation; and
  • Circumventing software restrictions: The Digital Millennium Copyright Act prohibits the interference with any anti-piracy protection that is included with the software. For example, if an individual uses a program to de-code an anti-piracy protection that prevents the software from being copied.

Back-Up Copies Exception

There is an exception to software piracy, called the back-up copies exception. Under this exception, it is not a copyright violation to copy the software solely for the purpose of creating a back-up copy for an individual’s personal use.

Although many licenses directly provide for this, federal laws do as well.

Why Should an Individual Copyright Their Software?

Although the inventor of software has an automatic copyright upon saving that software on their data stick or computer, registering with the United States Patent and Trademark Office (USPTO) has many benefits.

For example, copyrighting and registering software with the USPTO provides an inventor with the exclusive right to:

  • Make copies;
  • Prepare derivative works;
  • Distribute copies; and
  • Display the software publicly.

Registration with the USPTO is necessary in order to enforce many of the protections that are offered under copyright laws.

Copyright Infringement Fines

Copying software, also called software piracy or software infringement, is considered to be an act of copyright infringement. Software piracy penalties may include both civil and criminal penalties.

The penalties for copyright infringement may be considerably more serious than for other types of intellectual property claims. This is due to the fact that federal laws have made it a criminal offense to engage in the infringement of copyright materials.

These copyright infringement laws are also referred to as anti-piracy laws. They aim to protect electronic media, including:

  • Songs;
  • Movies; and
  • Computer files.

Copyright infringement may result in criminal penalties including a short jail sentence, criminal fines, or both. These criminal fines may be hundreds or thousands of dollars.

In addition to state or federal criminal penalties, the owner of a copyright may also be able to file a civil lawsuit against the infringer. This may result in additional legal consequences for the perpetrator, for example, a damages award.

In order for a plaintiff to obtain damages in a civil lawsuit, they must be able to prove the value of the intellectual property rights that were infringed upon. Some of the more common legal penalties that are associated with copyright infringement include:

  • Compensatory damages: The infringing party will be required to pay the copyright holder the money that they gained from the use of the copyright;
  • Statutory damages: This includes damages that are established by statute, specifically Section 504 of the Copyright Act. Statutory damages give the owner of a copyright the right to recover a specified amount of damages, usually between $200.00 and $150,000.00 per work that is infringed. Statutory damages will be higher for a party that willfully violates a copyright, and lesser for a party that was not aware that they were violating a copyright;
  • Injunction: An injunction is a court order that orders the party who is violating the copyright to stop engaging in their infringing acts;
  • Orders of seizure: If the infringing party possesses illegal copies of the copyrighted work, a court will typically order that the illegal property be seized; and
  • Criminal penalties: If willful copyright infringement occurs, the infringer may also be held criminally liable. The perpetrator may face criminal penalties for each violation, including:
    • imprisonment for a period of up to 5 years;
    • fines of up to $250,000.00; or
    • both.

It is important to be aware that copyright infringement lawsuits may involve a combination of the above-listed damages in addition to attorney’s fees and court costs. Under the Digital Millennium Copyright Act (DMCA), an individual may also face criminal penalties if they attempt to circumvent a copyright control, for example, a digital rights management (DRM) technology or encryption.

Copyright controls may either keep an individual from accessing a work, called access controls, or they may limit what they can do once they access it, called copy controls. Circumventing access controls is banned.

Although there is not a ban on circumventing copy-control measures, it is illegal to receive the tools to do so and the perpetrator may be infringing. It is also common for access controls and copy controls to be merged.

What Is the Statute of Limitations on Software Piracy?

A copyright infringer may be sued civilly and, in certain cases, prosecuted criminally for the same act on infringement. There is a civil statute of limitations of 3 years to file a copyright infringement lawsuit.

However, the statute of limitations for a federal prosecutor to bring a criminal case against an infringer is 5 years. The copyright must have been registered in order to bring a felony copyright infringement action.

The prosecutor will be required to show that the perpetrator willfully infringed for a commercial advantage or for financial gain by reproducing or distributing 1 or more copies or phonorecords of 1 or more copyrighted works that have a total retail value of more than $1,000 during a 180-day period.

Or, the prosecutor can show that the perpetrator distributed a work that was being prepared for commercial distribution by making that work accessible to the public on a computer network, although the perpetrator was aware it was intended for commercial distribution.

Do I Need a Lawyer?

The laws that govern software copyrights are very complex and are always changing to keep up with technology. If you have been accused of violating an electronic copyright law, it is important to consult with a copyright lawyer as soon as possible.

Your attorney can advise you regarding your rights and any defenses that may be available in your case. Your lawyer will also represent you during any of your court appearances.

If you are considering copying or distributing a work and you are unsure of the ramifications, it is always best to seek legal advice before taking any actions to ensure that your conduct does not violate any laws.

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