What’s Missing in the BSA Software Piracy Study?

The Business Software Alliance has released its  annual global software piracy study.  Here’s the relevant part for the Philippines:

Software piracy rate in the Philippines went down to 71% in 2004, a decrease of 1% from the 2003 level. However, losses due to software piracy increased to US$69 million (PhP3.7 billion) from US$55 million last year. In the Asia Pacific, 53% of the software installed on personal computers was pirated in 2004, the same level as in 2003, with losses increasing from US$7.5 billion to almost US$8 billion.

I’m not going to argue the methodology. Suffice it to say that the losses can’t be that big simply because they assume everyone in the country can afford their software.   This is an obvious error.  People resort to piracy because they’d rather buy other things (say, food) than programs.  It is wrong to think that stronger IP enforcement will  force people to buy software.  They’d probably junk their computers or seek other alternatives.

The fact is that if BSA acheived the strict IP law enforcement they want for this country, their members’ profits or market share will not rise.  Faced with prosecution or imprisonment, local users will simply shift to free/open source software (FOSS) applications such as OpenOffice, Firefox, Thunderbird, etc.

Additionally, the study does not take into consideration the full impact of free open source software (FOSS) in the local market.  This should be no suprise since BSA is made up of proprietary software vendors and as an organization it is intended to expand the market for their members’ goods rather than diminish them.  So, FOSS plays no part in their strategy to combat software piracy:

Efforts continue by BSA and others to stem the growth of piracy, including implementation of educational programs, policy initiatives to strengthen copyright laws and enforcement of those laws. These are effective inhibitors to piracy.

This statement is a misleading in two (2) respects.

First, the Philippines no longer needs to strengthen our copyright laws.  Our IP legal environment is very strong with not only local statutes dating back at least 50 years (and an even older one during the Spanish era), but the Philippines has acceded to all major copyright treaties (say the same for all IP treaties like TRIPS, The Patent Cooperation Treaty, the WIPO Treaty, the WIPO Internet Treaties, etc.). 

We even have regulations here that don’t exist in the U.S. like the Optical Media Law and the Supreme Court Rules on Search and Seizure in IP Infringement Cases.   The Supreme Court has even established special IP trial courts all over the country despite the fact that it has resisted forming special Bouncing Checks Courts in the face of so many cases clogging the lower courts. (In other words, the many victims of bouncing checks were not treated the same as IP rights  holders despite the fact that much of the IP registered in this country belongs to foreigners.)
So, there’s not much more the Philippines can do in strengthening its IP laws. 

Second, as to the enforcement aspect, foreign observers often criticize the Philippines for its supposedly lax enforcement of IP laws.  Well, IP rights are private rights that can only be enforced if there is a right-holder who complains.  In other words, if BSA members do not formally initiate infringement proceedings against pirates, the government can’t prosecute. 

The reason is simple — without someone claiming a right which has been violated, there is no evidence to show that the acts of “pirates” is not otherwise licensed.  There’s a story that someone selling DVDs in front of the IP Office in Makati was not prosecuted but merely asked to sell it further down the road.  Since noone had complained to the IP Office that their movies were being pirated, the IP Office couldn’t prosecute.

My point is that enforcement is not the primary responsibility of government, that role goes to the IP rights holders like BSA’s members.  If they don’t complain, then government is powerless to do anything.

More importantly, if BSA truly believed in inhibiting piracy, then it would promote the use of FOSS in the Philippines.  In third world countries like ours, FOSS represents an ethical approach to software use that supports IP laws.  Greater FOSS adoption means the piracy index of  the Philippines will go down.  

From the standpoint of government agencies, like the CICT, FOSS adoption could go a long way in increasing IP enforcement in this country and would contribute to our removal (or at least re-classification) from the dreaded US Special 301 IP Watchlist.  Why the CICT has not taken a stronger stance on FOSS is beyond me.

So, when you’re reading the BSA report, please remember it’s not all gospel truth.