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Subject: Mitch Kapor's Forbes Column on S.893
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From: (Mitchell Kapor) 
Date: 6 Feb 93 08:25:00 GMT
Reply-To: (Mitchell Kapor) 
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From: Mitchell Kapor <>
Date: Thu, 4 Feb 1993 19:05:31 GMT

Software Felonies
Copyright 1993 Mitchell Kapor

If you copy this, please include the complete article including header

(First Published in the February 15, 1993 issue of Forbes)
(Mitch Ratcliffe, Editor-at-Large of Mac Week, provided research assistance
for htis article.)

It doesn't take much to persuade Congress to jack up the penalties for
white-collar crime, and last fall's amendments to the Copyright Act were no
exception. With a little prodding from the Software Publishers Association,
legislators made a felony of possession of ten unauthorized copies of a
program, collectively valued at as little as $2,500. The new law is a powerful
bargaining chip for an industry that has learned to enforce its property
rights through intimidation. A little too powerful, I'll wager. Under the new
law, just about any computer department manager could be charged as a felon.

There's no doubt that software companies need help enforcing their property
rights against brazen counterfeiting schemes, as a recent action brought by
Microsoft shows. Its civil suit against Taiwanese defendants alleges that
hundreds of thousands of counterfeit copies of the MS-DOS operating system
were sold to unsuspecting customers. Armed with seizure orders, attorneys for
Microsoft staged elaborate raids on secret warehouses in southern California,
carting off truckloads of contraband. Use of the new criminal provisions of
the copyright law makes sense in an extreme situation such as this.

But should it be a felony to make ten unauthorized copies of a program? In
public speeches on this topic, I routinely ask members of the audience how
many of them will stand up to declare they have no unauthorized copies on
their hard disks. Only a tiny minority will do so. This suggests to me that,
under the new law, any manager with a handful or more of employees could be
prosecuted and sent to jail.

Software producers, of course, have to protect themselves against more than
the counterfeiters. The software association estimates that its members lose
between $1 billion and $2 billion a year in revenue from customers who buy
fewer copies of business software than they should.

At Lotus, we tried to solve this problem by adopting technical measures to
restrict the copying of files. As I learned to my chagrin, this approach had
the unacceptable consequence of also restricting legitimate uses by paying
customers. Nowadays very few software producers use copy protection devices.
They're too likely to be broken by serious hackers and too likely to alienate
innocent users. As a simple technical matter, there is no barrier today to
anyone walking off with a $500 product in a shirt pocket, or to a corporate
software customer that wants to use more copies than it is willing to pay for.
But the solution to this problem is not a rigid prohibition on copying. Even
in the overwhelming majority of honest companies, including many with
stringent internal policies, employees routinely make copies of their
applications for use on portable and home computers, temporary copies for a
co- workers, multiple back-up copies, and the like. Unauthorized copies
proliferate. Careful lines must be drawn, dividing software duplication into
three different grades of behavior: totally innocent copying, unfair use that
might give rise to a lawsuit, and criminal piracy. The new anti-piracy law
fails to make these distinctions.

The software association claims it has no intention to use the criminal law to
enforce essentially civil claims against customers who make and use multiple
copies. ``I don't need to call the FBI to beat on corporations,'' says Ken
REAL NAME Wasch, the association's executive director. ``There's absolutely no
intention of criminalizing the inadvertent copier in a corporation. We have a
very adequate civil remedy.'' By its own accounting, Wasch's group has done
very well in civil court.

Nonetheless, with these stiff new provisions in place, I can't imagine that
sooner or later the felony criminal provisions won't be used, in practice or
as threat, against less than obviously flagrant violators. Here's one
scenario: The software association will knock politely and ask to review XYZ
Corp.'s computers for illegal copies. If XYZ refuses to allow the audit, the
enforcers can now do more than file a civil action. They can threaten to call
in the Department of Justice for a criminal investigation.

This law is simply prone to abuse. It won't stop piracy, nor will it
contribute to a new ethic that respects the hard work and research dollars put
into application software.

Software vendors could take one step in the right direction by rewriting their
license agreements to be more realistic. Most licenses don't permit a user to
install the same copy of a product twice under any circumstances, except to
make a backup. However, a few companies permit customers to make multiple
installations of a single copy of software as long as only one copy is in use
at any time.

With more executives using a desktop computer in the office and a notebook
computer on the road, broadening the terms of acceptable use just represents
common sense. It would also go a long way to ease tensions with customers who
find themselves uncomfortable at the prospect of being branded as felons.

We live in a difficult era in which, as Stewart Brand puts it, information
wants to be free, yet it also wants to be expensive. Until both vendors and
users sincerely acknowledge this paradox, efforts to reduce piracy are likely
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