By Martin Brampton, 10 May 2005 07:00
COMMENT To many, the recent sentencing of the DrinkOrDie software pirates was the end of a drawn-out trial. But to Martin Brampton it was just the beginning of a larger discussion on the true nature of the software industry and the vagaries of intellectual property theft.
Last Friday jail sentences were handed down in a case described as the UK's biggest software theft. While the big software companies will doubtless be cheering, some might question the comments made by the judge in the case.
One of the many interesting features of the case is that it did not involve computer-specific legislation. The men were charged with the long-established offence of conspiracy to defraud. If successful prosecutions can be brought under older legislation, one wonders why so much fuss has been made about the alleged need for new specialist laws.
But the character of the charges has also been criticised. In particular, questions have been asked about why it was necessary to bring conspiracy charges rather than more straightforward individual offences. Simpler charges might have been dealt with in a few days, while the conspiracy charges have involved complex evidence and an Old Bailey trial lasting six months.
Friday's sentences are the culmination of an investigation lasting five years and heavily involving the FBI in the US. That has been another source of concern, since the US cases have involved plea bargaining that is not permitted in the UK. Evidence from suspects in the US runs the risk of being contaminated by incentives relating to plea bargaining, and it is not clear whether the UK trial adequately tested this aspect of the case.
The men sentenced to actual or suspended jail sentences were said to be members of the DrinkOrDie group, believed to have been established in Moscow in 1993 by someone using the name 'Deviator'. Membership quickly grew and became international, and the group even had its own website at www.drinkordie.com, a URL that is now up for sale.
Even the prosecution conceded that the group was not motivated by money. Their stated goal has been simply to make software more readily available to people who otherwise might not be able to afford it. The prosecution claimed that the real motivation was to achieve status in a virtual internet world of hackers and crackers.
The judge was unsympathetic. He suggested that the men's activities "struck at the very heart of software trading". This statement leads directly to a central question hanging over this whole issue: what is the precise nature of the software industry? Is it about the creation of software or is it simply a matter of trade?
Although the judge ventured the opinion that "the cost to software owners through piracy is staggering", there is little hard evidence to suggest that pirated software substantially undermines the revenues of software companies. This is especially dubious given the widely held belief that software owners frequently connive at piracy as a route to establishing market domination.
Moreover, the sentences of up to two and a half years in jail are a bizarre contrast to the many recent financial fraud cases where prosecutions have collapsed, despite plain evidence of massive losses by victims. What is depressing is that the key difference seems to be that this case involves action against businesses, while the failed fraud trials usually involve defrauding ordinary consumers.
The existence of the open source movement is only one of many indications that the cost of creating software is very much lower than the price at which it is sold. There are numerous reasons for the high price of much software, some good and some bad. While no action is taken even against the bad reasons, it is hardly surprising if some individuals choose to flout the rules the big companies would have us live by.
The notion of theft came about in a context where to take property from another was to deprive them of that property. Breach of copyright is not like that, and it is not at all obvious exactly what rights should be given to creators of novelties. There is general agreement that some rights should be given but that is not the same thing as an absolute right.
Society grants copyright and patent protection for the sole reason that it is in the long term interests of society to grant incentives to innovators. By the same token, society is perfectly entitled to judge the extent of the rewards that are needed and to adjust the rules accordingly. Especially in a world where the main beneficiaries of so-called intellectual property are often not the actual creators of that 'property'.
Comments
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1. Mark SPLINTER
DOUBLE BRAVO. IP is not owned by the I's, and it is not P.
2. anonymous
I find this remark surprising:
"This is especially dubious given the widely held belief that software owners frequently connive at piracy as a route to establishing market domination."
Having worked in the software industry for several years, I've never come across any intimation whatsoever that software companies have colluded in piracy in order to establish market domination. Market domination does not have a great deal of value unless revenue is derived from sales or maintenance renewal, which is clearly not the case where software is pirated.
However, I do think it is probably the case that software vendors spanning the divide between professional and consumer users - for example, Adobe with Photoshop - build a business model that effectively acknowledges that many of the home users will not pay for the software, and derives revenue from the business end of the market.
To address the article's main points - I will paraphrase a quote, I think from a FAST representative: "Corporate users need to realise that illegally copying and using software is no different than walking into PC World and stealing an arm full of software from the shelves." For further discussion perhaps.
3. anonymous
You say: ...... the cost of creating software is very much lower than the price at which it is sold.
Well actually the cost of creating most things in the western world is lower than the price at which they are sold - that is the nature of the capitalist society. If we want roads, healtcare, society and all the other things in the Western world it the way it is & we must protect the wealth creators.
By all means create a cheaper alternative and take your chances in the market, but ripping off some-one's product is theft pure and simply.
4. Ian Savell
I'm beginning to think, like many radicals, that copyright is no more than a fraud perpetrated by big business on individuals.
No-one pays ongoing fees to the dustman because the rubbish he clears stays cleared, and similarly no-one should pay ongoing fees to an artist because the work he/she creates stays created.
The value of an artist is in the ability to create, not what is created. Much of the intellectual input to software comes from the salaried writer not the commissioning businessman. Legislation like the US copyright act hands power to corporations that should belong to individuals. Copyright, like patents, should have a strictly limited life if any at all.
5. sjj
Why bother trying to convict in a convoluted massive fraud trial when you can get more convictions in a simple 'lower' software case.
Crime figures look much better, plus , we have done as Uncle Sam has told us to.
6. Joe Whitehead
In the US we had a debacle called the "mickey mouse laws" where the old films of many companies were about to go out of copyright. I hate to think that in 10 years congress adds another 50 years to copyright length.
7. anonymous
You say "The existence of the open source movement is only one of many indications that the cost of creating software is very much lower than the price at which it is sold".
Really? If all the people who contributed their free time in developing Open Source software charged a normal rate for their services - how cheap would the cost really be? The Open Source movement only proves that if everyone works for nothing - the cost of the end product can be negligible!
The fact that they are able to do this with quality is largely because of experience gained in paid development careers.
I am a fan of Open Source and its great seeing it continually evolve - but I also would like to be able earn enough from IT to live on!