Monday, February 11, 2008

A massive 35% of all computer software used in the South African economy is thought to be unlicensed or pirated.
This equates to a staggering annual loss to the economy of R1,5 billion’
Recent studies have suggested that if the software piracy rate was reduced by 10%, this would result in an additional spend of R6 billion in the IT sector, plus the creation of more than 1 000 high-income jobs.
Not only does software piracy have economic consequences; it also has legal consequences.
Computer programs are protected as copyrighted works in terms of the Copyright Act 98 of 1978. Accordingly, the unlicensed use of computer software amounts to copyright infringement – which means that software vendors such as Adobe, Symantec and Microsoft can sue users of unlicensed computer software in both the criminal and the civil courts.
The penalties in the criminal courts for the use of unlicensed software is R5 000 per illegal copy and/or imprisonment for the first offence, and R10 000 per illegal copy and/or imprisonment for the second offence. Hence, if, for example, you are using 100 illegal copies of Microsoft Windows XP, your fine will be R500 000 – a number that would bankrupt most businesses.
Since the penalties are high, why pirate computer software? Because computer software is often perceived by companies as being expensive. And, true, computer software can be expensive when you look at the price in computer retail stores.
What companies often forget, however, is that most software vendors have volume licensing programmes in terms of which computer software can be bought at a discounted rate. Not only can companies make use of volume licensing but they can also look at making use of open source solutions such as OpenOffice.
Whilst OpenOffice may not have all the “bells and whistles” of the likes of Microsoft Office, if basic word processing is all you need from a word processor, then maybe a program like OpenOffice would suit your needs better than Microsoft Office.
Self-evidently, if you want the “Rolls Royce” of word processors, then you must be prepared to pay “Rolls Royce” prices.
How, then, can a company get and stay legal? There are a number of steps to follow:
·         The fundamental first step is to conduct a computer software audit, which entails establishing what computer software is running on your computers and how many licenses you have.
·         If you have a licensing shortfall, you may need to contact a computer software vendor or distributor to establish how you can go about purchasing the additional licenses at the most cost-effective rate.
·         Record the serial numbers of the computer software that is running on each machine;
·         Conduct a computer software audit on at least an annual basis; and
·         Ensure that your acceptable computer usage policies regulate the ability to load computer software onto your machines. We have encountered a number of instances where employees have loaded Microsoft Golf and Microsoft Age of Empires onto their machines, the installation of which could result in the company being liable in terms of the Copyright Act for having the software installed without the requisite licences.
Although these steps relate more to best practice than legal requirements in terms of the Copyright Act, by conducting an annual computer software audit, you will ensure that you are mitigating your legal obligations under the Act as well as doing your bit for the South African economy.
Warren Weertman is a Senior Associate at commercial law firm Bowman Gilfillan