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Damages for unlawful software use not high enough, says industry body

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Software companies should be entitled to bigger damages for the use of copied software, industry lobby group the Business Software Alliance (BSA) has said.

Damages law needs to be changed so that companies are entitled to damages greater than the current rate of the equivalent to the cost of the software which has been copied, the body said.

"The current damages law isn't tough enough to deter those businesses that still think it is acceptable to use unlicensed software," said Sarah Coombes, senior director of legal affairs at BSA. "The Ministry of Justice acknowledged this in 2007, suggesting this issue would be addressed, but no progress has been made to date.

"Legislation that strengthens the availability of court awarded damages would act as a deterrent for those that continue to use illegal software," she said, according to a statement on the BSA website.

The BSA has published a 2010 Global Software Piracy Study in which it claimed that the value of unlicensed software being used in the UK was £1.2bn.

"Sales of personal computers surged 14 per cent globally in 2010, compared with just 4 per cent in the previous year, as the computer industry rebounded from the recent recession. On the strength of that robust growth, businesses and consumers bought nearly $95bn worth of PC software – but illegally installed another $59bn worth. This means that for every dollar spent on legitimate software in 2010, an additional 63 cents worth of unlicensed software also made its way into the market," the 2010 Global Software Piracy Study said (20-page/2.89MB PDF).

Commercial software piracy globally has nearly doubled since 2003 to value $38bn, the report claimed.

The report said governments should lobby retailers to sell low-cost software to turn illegal software users into customers.

Governments should promote measures that encourage customers to self-audit their software usage, the report said. Governments should also be encouraged to conduct public education campaigns to promote better respect for IP laws and deter piracy, it said.

The report was issued shortly before a major report into the state of the UK's IP framework is due.

Professor Ian Hargreaves, chair of Digital Economy at Cardiff University, is expected to advise the Government on how to overcome barriers to economic growth that exist within rules and regulations covering how IP is created, used and protected.

Hargreaves is leading the Government's Review of Intellectual Property and Growth, which was announced late last year.

The review will see if the UK IP framework needs to be relaxed to provide more support to digital businesses.

Speaking to industry representatives in November 2010, the Prime Minister had said he wanted to see a US-style approach to IP laws, including a 'fair use' exemption to allow copyrighted material to be used freely without permission under certain conditions.

However, submissions to Professor Hargreaves' review panel indicated strong opposition to the idea from a range of media industry bodies including ITV, the CBI and News Corporation.

An imminent review of EU laws on IP, also due this month, will likely offer similar protections to creators' rights.

The government has already promised to modernise the current copyright system, with simplified payments and minimal transaction costs, in response to Hargreaves' review as part of the Treasury's Plan for Growth (131-page/1.7MB PDF). The report also commits the government to no further broad IP rights reviews during this Parliament.

The review will also include recommendation to free up access to "orphan works", where the original rights-holder cannot be contacted, according to the Treasury report.

Mr Hargreaves is also expected to recommend legalising copying works to a different format for private use, such as converting tracks on a CD into a digital music library, according to a Sunday Telegraph report.

Copyright © 2011, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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