Though Illegal, Copied Software Is Now Common

By John Markoff
The New York Times

SAN FRANCISCO, July 24, 1992 -- In his home in the heart of Silicon Valley, Charles Farnham, a software writer, has a remarkably complete collection of commercial programs for his Apple Macintosh computer. Like millions of other people, Mr. Farnham has not bought many of them; he has copied his friends' software instead.

Federal law is clear that in almost all cases it is illegal to make duplicate copies of software. But that does not seem to faze many computer users: people who would not steal a book or cheat on a test seem to have no qualms about obtaining software illegally.

"If I feel good about a product I'll buy it," Mr. Farnham said. "But first I want to decide whether a program is really worth 500 bucks."

Mr. Farnham offers two justifications: most software is too expensive for anyone but a corporate buyer, and there is nothing ethically wrong with sampling a program before spending $500 or more.

No Fear of Being Caught

Some people acknowledge that using unlicensed software is wrong but say they have no fear of being caught; some say the software is often flawed and they want to test it before they buy it. Most frequently people who illegally use software say the industry makes such huge profits from its corporate customers that individuals should be free to help themselves.

Taken together, these rationalizations and excuses reflect a widespread attitude that electronic information is, in effect, in the public domain and should not be protected as private property.

The software industry estimates that $2.4 billion worth of their products in the United States and Canada -- almost half the total of $5.7 billion in sales -- was stolen in 1990. Last year's figures are not yet available.

Although the industry remains hugely profitable and competitive, some experts say the amount of theft reduces the incentives that developers have to create programs. But software creators are trying to fight back.

Last year, the Software Publishers Association, a trade group, conducted 75 raids, sent 561 warning letters and filed 33 lawsuits against organizations and individuals it suspected of software piracy.

But the laws are rarely enforced against individuals. In June, the Federal Bureau of Investigation raided a computer bulletin board known as Davey Jones's Locker after a complaint by the association. The bulletin board, run out of a house in Millbury, Mass., offered more than 200 commercial programs that subscribers could copy. No arrests have been made in the case.

Far more common than such organized activities is the simple exchange of floppy disks among friends.

"A person's feelings of closeness to a friend take priority over some abstract ethical principle," said Carol Gould, a philosophy professor at the Stevens Institute of Technology in Hoboken, N.J., who has written on the subject of ethics and computers. "This is especially true when the principle is abstract and you're dealing with corporations who are abstract and seem to be making so much money anyway."

Revolution in Software

When software for a wide variety of business and personal uses became easy to buy, it ignited the personal computer revolution in the early 1980's. But now that revolution is being shaken by the ease with which programs and data can be copied from one machine to another.

At first, many software companies protected their programs by building in codes that made them impossible to copy. But customers complained loudly, and as it became common for personal computers to have hard disks, the sale of protected software ended, in part because buyers needed to be able to copy their programs, which are sold on floppy disks, onto their hard disks.

"There was a battle over copy protection between the software industry and the users, and the users won," said Kenneth Wasch, executive director of the Software Publishers Association, which is based in Washington.

Illegal copying is also a concern in other media. But copying computer data is far easier than duplicating video or audiotapes, or photocopying an entire book. A computer disk can be copied simply by putting a blank diskette into the computer and hitting a few keys. Total time involved: less than 10 seconds. Because it is so easy -- and so little stigma seems to be attached to it -- more and more people are making illegal copies.

"In this new digital universe, there is no cop on the corner," said Todd Gitlin, a sociologist at the University of California at Berkeley. "Not only is there no cop on the corner, there is no corner."

Big Companies Are Strict

Most large corporations, government agencies and schools have strict rules that prohibit copying software -- even when employees are trying only to make their work easier. Yet illegal sharing of software is a rapidly growing phenomenon and a widely accepted practice by the millions of people who use personal computers at work, at school, or in their homes.

Not long ago, for example, at the Dalton School, a private school on the Upper East Side of Manhattan, a student brought a copy of a popular personal computer game called Spectre to a computer laboratory. Soon there were dozens of copies of the game on floppy disks being taken home in student's backpacks.

"They know it's stealing but they think that no one will every catch them," said a 12-year-old sixth grader.

Officials at the school said that despite educational efforts, it was difficult to enforce laws that have so little apparent impact.

"We've been struggling with this and there's no simple solution to it," said Frank Moretti, the Dalton School's headmaster. "It takes the whole problem of xerography and raises it a power higher."

Situation Overseas Is Worse

And the situation is far worse in other countries where there is no tradition of protecting intellectual property, software industry executives say. A recent survey in Germany, for example, determined that there are fewer software programs purchased than computers -- a certain indication that piracy is widespread.

The Business Software Alliance, an international trade group, estimates that $12 billion worth of software is stolen each year, an amount equal to total worldwide software sales.

"The concept of copyright is not that deeply embedded in the hearts and minds of very many people in this world," said Jack Valenti, president of the Motion Picture Association of America, a trade group in Washington.

In the view of many computer experts, the situation is only going to get worse, as more information -- like films or books -- is available in digital form, stored inside computers.

"We are the only industry in the world that empowers every customer to become a manufacturing subsidiary," said Mr. Wasch of the software association.

Role for Schools Is Urged

Last month the Departments of Justice and Education jointly issued a report calling on the nation's schools to expand their teaching of ethical use of computers and other information technology. And many large corporations, concerned about potentially bad publicity should they illegally use software, conduct regular audits of their employees' personal computers. But small companies frequently have a more casual approach.

At a management training company in San Francisco that employs about 40 people and has dozens of personal computers, an unusual compromise was reached not long ago, said one employee who agreed to be interviewed only if she and the company were not named.

Executives wanted to buy only a single copy of each program because of its high cost. But the company's computer-support manager -- concerned about unethical practices -- persuaded them to buy a separate copy for each department. Now the company, which uses software both in the administration of its business and as part of the services it provides, shares one copy for every three or four machines.

Disagreement on Ethics

"I have an ethical model in my mind, but my company disagrees with me," said the employee. "They told me: 'Why can't we just buy one copy? What difference will it make?' "

The problem will only get worse, industry executives say, as each new technology makes it easier to copy digital information.

Apple Computer Inc. has found itself struggling with copyright questions since the introduction last year of its Macintosh Quicktime software, which is intended to make it easy for personal computer users to add snippets of digital video to their programs.

Apple has encouraged users to convert vast libraries of video footage into digital Quicktime format. But the company has found that once the videos are in this easy-to-manipulate medium, they are extremely easy to copy.

Another perspective is that new computer technologies will eventually generate a technical fix to the problem that will prohibit illegal copying without interfering with the convenience of using software and digital information.

"We have been having serious discussions with Apple about ways to make sure that we're likely to be paid for the sharing of information," said Michael Mellin, publisher of Random House's electronic publishing division.

Many in the industry feel that finding a way to protect copyrights is essential for the industry to avoid a crisis.

"Our current intellectual property laws are in danger of breaking down completely in the face of this digital revolution," said Mitchell D. Kapor, the founder and former chairman of the Lotus Development Corporation. "And big publishers are hesitant to move forward without more of a feeling of comfort that they have copyright protection in the new digital world."

GRAPHIC: Photo: Charles Farnham with the commercial programs he has copied from his friends' software. "If I feel good about a product I'll buy it," he said. "But first I want to decide whether a program is really worth 500 bucks." (Terrence McCarthy for The New York Times) (pg. D3)