Software Piracy Poses Global Threat

New SPA Study Urges Increased Government Attention to Enforcement in
Foreign Markets

July 5, 1994 (Washington, DC) - The Software Publishers Association (SPA)
announced today the release of a new analysis of intellectual property
products in global markets. This study is the software industry's largest
and most comprehensive effort to understand the extent of the piracy
problem, and place it in context. The SPA's analysis estimates that a
total of $7.4 billion of business application software was pirated in
1993, a piracy rate of 48%.

"To put the software piracy problem into perspective, thieves last year
stole as much business software as McDonald's sold hamburgers," says Ken
Wasch, SPA's Executive Director. "Compare our $7.4 billion losses in 1993
to the $7.3 billion in sales reported by McDonald's, and you begin to see
the magnitude of the problem we are battling."

While the U.S. leads the world in terms of dollar losses to the industry
from software piracy, it has a relatively high share of legally acquired
software. According to the study, the United Kingdom boasts the highest
percentage of legal software, at 73%. This compares with the U.S. at 67%,
France at 48%, Italy at 39%, Taiwan 18%, and 5% in India. As the computer
revolution spreads to developing nations, software piracy issues will grow
rather than diminish in importance .

"This study illustrates the need for stronger protection and enforcement
for software around the world," commented SPA counsel, Mark Traphagen.
"The US Trade Representative has been very responsive to the problem of
software piracy, resulting in better protection for the industry. We
applaud the US Trade Representative's decision last Friday to investigate
China's enforcement of intellectual property rights, and to continue
reviewing India's protection of computer programs. "

High national incomes do not, by themselves, predict low piracy rates.
Strong legal protection for intellectual property, coupled with effective
enforcement of those protections, must also be in place. The SPA noted
that Italy, Belgium, Luxembourg, the Netherlands and the Nordic countries
have high national incomes, but their low levels of enforcement encourage
relatively high piracy rates.

The SPA also compared sales of PC software to sales of CD recordings,
books, and movie admissions. End users can easily copy computer software
with just a few keystrokes. On the other hand, music pirates do not yet
make widespread use of digital copying technology, audiences cannot copy
first-run movies, and readers cannot easily photocopy a book, despite the
prevalence of copying machines. As these products become increasingly
available in digital form, those industries are likely to experience the
same difficulties currently facing the software industry.

Copies of the "SPA Report on Global Software Piracy" are available by
calling the SPA Piracy Hotline at 1-800-388-7478. The report is also
available on-line in the SPA Forum on CompuServe (GO SPA).

The Software Publishers Association is the principal trade association of
the PC software industry. Its 1,100 members represent the leading
publishers in the business, consumer, and education markets. The SPA has
offices in Washington, DC, and Paris, France.

Software Publishers Association
1730 M St, Northwest, Suite 700, Washington, D.C. 20036
202-452-1600,  Fax: 202-223-8756

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