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Information technology: Industry and the internet
Kilen Mathews Special to the Middle East Times Everyone knows that you can buy copies of just about any computer program made "on the street" for a few Egyptian pounds or get any software CD copied for under E£50. Just how big a problem is pirated software in Egypt? Well, it is considered a huge worldwide problem by software manufacturers. According to Overview: Global Software Piracy Report: Facts and Figures, 1994-1996 prepared by the International Planning and Research Corporation for the Software Publishers Association (SPA), the 1996 worldwide dollar losses attributed to software piracy exceeded $11 billion (a 20 percent increase from 1995). Actually, the dollar loss figures are dropping, almost entirely due to the continuing price erosion in business software and software/suites. The good news: the overall world piracy rate is dropping - it is down from 49 to 43 percent. But it isn't dropping everywhere. Only Eastern Europe (84 percent) exceeded the Middle East (80 percent) in regional software piracy rates in the reported period. But the Middle East may take top (dis)honors by the end of this year. Asia is making great strides in halting software piracy but still has some areas where, it seems, no one pays for legal copies of software. For example, Vietnam had a piracy rate of 99 percent. That means only one out of every 100 installed software packages was bought from a proper software vendor with a license. With a 74 percent piracy rate, this region lost over an estimated $500 million to software piracy in 1996. While the Middle Eastern region is relatively small in comparison to other world markets, the demand for software applications grew 46 percent in 1996, following a 37 percent increase in 1995, making it one of the fastest-growing markets. But the real losses to Egypt for this kind of rampant copyright infringement are the losses of industry development. With the high demand for software products, the amount of software piracy is growing - fast. Information technology (IT) suppliers are reluctant to invest in countries with out-of-control software piracy. This lack of investment hurts the local economy. So in an exploding market where software publishers should be spending, marketing and hiring, they are wary of the massive software copying that continues. For sure, other countries in the region have a worse record than Egypt: Oman, Bahrain, Qatar and Kuwait all are reported to have at least a 90 percent piracy rate. But Egypt has the talent and trained personnel to attract significant IT and software investment. It would be a pity if Egypt had to add IT to its "brain drain" rolls. Over the past few years, there have been several foreign software entrepreneurs who have visited Egypt with high hopes and left to take their money and expertise elsewhere. There are also many unintentional copyright violations, which in other countries are just as punishable under the law as intentional violations. Many Egyptian users are actually buying pirated software in good faith and are surprised when they find out their software is an illegal copy that has been resold dozens of times. Two years ago, Novell, which estimated that it was losing 98 percent of potential revenues in Egypt, got some help from Egyptian authorities to crackdown on piracy and has seen some success. Like many other software vendors, Novell sees another dangerous side of software bought on the street corner: pirated copies can damage its reputation. It is very rare (but not unheard of) that commercial software is released containing software viruses. However, often illegal software is poor quality, coming without instruction manuals and possibly infected with software viruses, and a trashed computer network caused by a software virus can also trash the software company's name. With the new technologies of the cheap recordable CD-ROM drives, it is possible to cram as much as E£90,000 retail value of software onto a single CD. No longer do people need to carry cartons full of diskettes to be able to sell pirated copies of the latest software suites to users. While Egypt has made moves in the establishment and enforcement of software copyright protection laws, much more needs to be done in news areas with the internet revolution.
Although the internet is a wonderful resource and offers
a wealth of information, it also is a haven for computer
hackers and software pirates. In internet "first
world" countries, Internet Service Providers
(ISPs) and web hosting services have been found liable
when their clients have used their business to pirate
software or even to provide serial number codes and
cracker software for shareware use beyond the trial
period. Copyright Infringement Categories There are at least three classification groups for copyright violation activities and not all of these are addressed by current local efforts. The most obvious is direct copyright infringement. It is illegal for business and individuals to download, upload or transmit software, or to make software available for those activities if it is pirated. Indirect or contributory infringement covers the assistance to others for illegal software duplication. To prevent this, and to avoid being guilty of this, ISP must police their web sites and any web sites they host for both content and links to pirate software resources. ISPs are now beginning to offer "personal web pages" to individual clients free or at a low cost with their dial-up accounts. It can be difficult to monitor the content of each of these sites which may soon change. And some ISPs are even offering web hosting both in Egypt and the United States. That means that their clients may be using internet servers in the US, which are under US legal jurisdiction. There is a third classification, also mainly set up for ISPs and newsgroup and chatroom administrators, called Vicarious Liability for Infringement by Another Person. This has been successfully used to prosecute systems which host pirate software sites or who have known software stealers as customers. Another area where copyright infringement takes places is in the abuse of software known as "shareware." This is software readily available and offered by vendors on giveaway disks and via the internet. Many personal computer magazines include disks and CDs full of shareware programs. Shareware is a way of marketing commercial software with a "test drive" feature. You get to run the software for free for a short trial period for evaluation period. After that, if you decide to continue using it, you must send in the registration fee documented in the package. So much of this software comes from the US and Europe that there is little chance that most users will send in a registration fee if they can find any way around it. And there are ways around it. Many Internet newsgroups and chatrooms are known to be sources of the serial numbers that will unlock shareware after its trial period has expired. "The Times, they are a changin'," so the song goes. Egypt has the chance to ride the Internet revolution to gains in prosperity. With its successes in establishing uncensored internet, Egypt has enhanced its information technology position in the region. Add to that its growing skilled and computer literate work force and the potential to become a major player as an "offshore" software development area - similar to what is being done in India, the Philippines and increasingly elsewhere.
We will wait and see if the new initiatives to clamp
down on software piracy in Egypt are swords - or
just words - to help in the battle to bring the inchoate
- and potentially lucrative software development
market to Egypt.
The author welcomes your comments and questions on Information
Technology and the Internet. Also, if you would like
to report software piracy (in complete confidentiality),
send an email to: kilenm@bigfoot.com
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