Microsoft, BSA Warn Philippines Users of Piracy Dangers

Legalize your software or suffer the consequences. This was the message that Microsoft Corp. and the Business Software Alliance (BSA) brought to users in the southern Philippines of Davao, two months before a new law will impose stiffer penalties on software piracy. Asia, long a thorn in the side of the BSA's moves to reduce software piracy, is coming under increasing pressure to shape up.

Legalize your software or suffer the consequences. This was the message that Microsoft Corp. and the Business Software Alliance (BSA) brought to users in this southern city, two months before a new law will impose stiffer penalties on software piracy.

During the half-day Intellectual Property Rights (IPR) summit, officials from Microsoft and representatives of the BSA briefed users on what constitutes software piracy under the new Intellectual Property Code of 1997, which takes effect by January next year. Two similar summits earlier this year brought home the same message to users in Manila and Cebu.

In his presentation, Andre Betita of the Quisumbing Torres & Evangelista law office, said the new IPR Law would impose stiffer penalties on people who use illegally copied software. These include one to three years of imprisonment, plus a fine from P50,000 to P150,000 for a first offense, and six to nine years in jail and a fine of P500,000 to P1.5 million for third and subsequent offenses. This information took some users by surprise, including a local judge who said he had not even seen a copy of the new law yet.

Also during the IPR summit here, Department of Trade and Industry Assistant Secretary Zenaida Maglaya of the department's consumer welfare group, urged users to look beyond the short-term costs of buying legal software and focus on the harmful long-term effects of using pirated software.

In particular, Maglaya said, software piracy acts as a disincentive for local developers. “Why bother developing a program if you know it will just be copied?” she asked. Maglaya acknowledged that buying legal software would entail higher costs, but said the benefits are worth it in the long run. She stressed that government agencies should be among the first to legalize their software. “In government, it would be very hard to run after the pirates then go back to the office and use pirated software yourself,” Maglaya said.

MIS managers who talked to Computerworld on condition of anonymity said they are concerned that legalizing their entire PC software inventory in one go will cost millions of pesos.

“We are not 100 percent licensed,” said one CIO. “We have bought licensed software, but this has been replicated by so many users without our knowledge. My problem is, when I was costing this out, just for Windows and MS Office alone, I'll be spending P16 million to support 1,000 users.”

The MIS manager also expressed concern over the BSA's aggressive program to reward people who report IPR violators, saying it opened companies to harassment by disgruntled employees. Another CIO told Computerworld Philippines that a good approach is to reach an agreement with a software reseller to purchase licenses gradually.

“What we did was to reach an agreement with our supplier that we wouldn't be harassed [by the BSA],” the CIO said. “We gave them assurances that we would buy licenses year on year, until we reached the one license per PC ratio.”

Still another executive in charge of IS agreed. “I have about 5,000 users, so this is an investment that could kill the company,” the official said. “In the long run, we will have to be more serious about IPR, but the practical way to do it is to gradually increase your level of licensed software.”

In an interview with Computerworld, Microsoft Philippines country manager Dave de Leon said his company is open to proposals for a gradual phase-in of licenses, but said the mechanics would have to be worked out.

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