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 Five forms of software piracy

Softlifting: when somebody purchases a single licensed copy of software and loads it on several computers. An exception is the users right to make one backup copy for archival purposes.

Hard disk loading: when unauthorized copies of software are placed on the hard disk when you buy a new personal computer. PC retailers try to sell PCs that include as much software and hardware as possible as part of their competitive strategy.

Renting: it is illegal to rent software, even temporarily.

Downloading: Unauthorized copyrighted software on the Net can easily be distributed to users connected by modem.

Software counterfeiting: illegal duplication of software.

Digging up techdirt

One PC retailer who spoke only on anonymity said piracy investigators sometimes pose as home users and ask for specific software to be downloaded. Then after purchases are made, they either bring in enforcement officials or lawyers to "trap" the retailers into settlements. The settlements usually include placing public apologies in local newspapers.

He said that such moves work against PC retailers who are in the business of selling hardware and peripherals, not software.

"Most retailers don't make money from the software. Margins for selling the PCs are already razor-thin, as little as 10 percent. We make about RM300 to RM600 per box. We used to throw in the software for free or at marginal cost because customers demand it. If you put in original software that may load on 60 - 100 percent more onto the price per PC, consumers cannot afford that," he said.

The retailer is located in Petaling Jaya, a satellite town of capital city Kuala Lumpur, which has become a hotbed for information technology businesses. He added that established retailers have become more wary of raids and load software only for "known" customers, sometimes even making personal calls at their offices or homes to do so.

"For customers we're not sure of who insist on 'free' software, we send on to Imbi Plaza," he said, referring to a shopping complex in KL which is notorious for repeated raids on PC retailers who somehow sprout up again.

The retailer explained that new players are more willing to take risks. "They don't have the customer base yet and sell clones at rock-bottom prices. If they can make additional money from loading software and games, why not? I don't blame them. It's a tough business to make a buck."

The retailer, however, agreed that anti-piracy efforts were in the long-term interest of the industry, but would rather that enforcement focus on the bigger corporate users and not the retailers, smaller offices or home users. "Let the copyright message and education filter down from that direction. Then we, too, can establish the software end of our business and gradually move the SOHO (small office/home office) market in that direction," he said.

The Association of Computer Industry Malaysia (Pikom) said there is no simple or short-term solution to the piracy problem in Malaysia. Its executive director Alan Fung said that although retailers were not entirely to blame, a "few bad apples" are spoiling the industry by their flagrant disregard for the law.

He said the dual approach in educating home and corporate users and enforcement was crucial in the long term. "I am not agreeable to certain tactics being used, but if it improves the piracy rates, it should be a cause for celebration," he said.

Fung, whose association represents 300 computer vendors, retailers and traders, said the enforcement efforts make the industry more viable and credible, especially against the larger context of the MSC which is aimed at growing the software industry.

Fung added that he does not see software publishers reducing their pricing to alleviate the piracy problem. "That's the premium they charge for doing business overseas and that won't change."

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