Software Piracy: Status And Legal Remedies Under Belgian Law
Effectively protecting the intellectual rights attached to the creation of software is very burdensome. Pirating software has developed into a widespread global activity, most markedly in emerging economies such as China, India or Brazil, where many people cannot afford authentic software. As the official price offered by legitimate sellers is expensive, many people in developing countries opt for cheaper – albeit illegal – methods of obtaining software. Simply copying software application programs and installing them on several computers, has given way to easier methods where software can also be downloaded through direct downloads and peer-to-peer networks. For example, the operating system Windows 7, officially released on October 22, 2009, was already available for download on several peer-to-peer networks, in various languages, several weeks prior to its official date of release.
Although it appears harmless or even justified to some, software piracy remains an illegal activity. The infringement of copyright laws is subject to severe punishment, even if sanctions are rarely implemented. This article will first present an overview on software piracy and the type of activities that constitute software piracy, followed by possible lawful alternatives to piracy. Finally, the article will address the legal status of software piracy and possible sanctions against it in Belgium.
I. What Is Software Piracy ?
A. General Background
Software piracy is the unauthorized use, copying or distribution of software protected under intellectual property laws, in violation of its license agreement (commonly referred to as “end user license agreement”, hereinafter: “EULA”). These violations generally take place by copying, downloading, sharing, selling, or installing multiple copies onto personal or work computers.
The real impact of software piracy’s negative effects for the software industry and governmental authorities is highly controversial. Some claim that every year, software piracy results in important losses for the software industry, destroys jobs and causes a loss of tax revenue to domestic governments2. Others state that such consequences are largely exaggerated. Those advocating the limited economic impact of software piracy argue that people who use pirated software would not use the original software if they were obliged to buy it at its regular price, especially in developing countries. The real cost of software piracy on the software industry and on the economy in general is extremely difficult to assess and there is no clear evidence to accurately determine its impact on the software industry and on national economies.
The problem of software piracy closely parallels the global phenomenon of illegal music and films downloading. In this framework, a debate took place in France regarding the so-called “Hadopi Law”3 that was adopted in 2009, but partially censored by the French Constitutional Council, according to which restraining a fundamental right such as the freedom of expression could not be carried out by an administrative authority – as originally provided by the law – but should instead be subject to due process4. The law provides a principle of graduated sanctions, ranging from a simple warning by email to the suspension of the person’s Internet connection. But the Hadopi Law’s ability to reduce illegal downloading and protect intellectual rights was seriously challenged by its opponents, who also pointed out numerous controversial legal issues raised by this law, namely regarding privacy, not to mention the technical difficulties it represents. The French debate in the context of that law shows that controversy exists around the type of sanctions and their efficiency to effectively reduce pirating through internet in general.
B. Infringement
When people purchase and install so-called “proprietary software”, they are in fact – although they are often unaware of it – purchasing a license to use the software, not the actual software itself. Just like the buyer of a CD does not become the owner of a particular song, software remains the property of the person who created it. Thus, the buyer only obtains a limited right to use and install the software under the extent permitted by the license. As software is protected by intellectual property rights, EULAs determine the applicable terms of use between the software producer and its purchaser.
The license specifies how many times software users are allowed to install or copy the software5. The non-respect of this limitation – for instance by copying the software on additional computers – is an infringement of the EULAs and constitutes software piracy. Therefore, a careful consumer who has a doubt regarding the extent of the actions he is allowed to undertake with its software should, in theory, always refer to the provisions set forth in the EULAs. As one can easily imagine, this kind of reflex is rarely implemented by ordinary consumers. It also adds to the explanation why software piracy is a widespread practice and the software industry’s attempts to prevent piracy have, so far, proven ineffective to achieve this goal.
C. Different Types of Software Piracy
Software piracy can take several forms, depending on its origin or use. There are four main types of software piracy: end user piracy, software counterfeiting, hard disk loading and internet piracy. While some piracy results from the ignorance of the end-user, other acts are the conscious exploitation in order to make a profit.
(i) End User Piracy
The first form of software piracy is end user piracy. End user piracy is when an individual or a company uses or copies software without having the appropriate license to do so. This is for example the case when company employees make copies of software or share an installation CD without buying new licenses. Many people are guilty of end-user piracy even if they are not even aware that they are committing an infringement.
(ii) Counterfeiting
The second form is software counterfeiting, which predominately takes place in developing countries. Contrary to end user piracy, software counterfeiting results from the specific intent of a pirate to copy and resale an authentic copyrighted product, sometimes trying to make it appear genuine by also imitating the packaging, the license agreement, etc. This fake software is illegal and may not even work properly on the buyer’s computer, while it can contain viruses or spywares.
(iii) Hard Disk Loading
The third form of software piracy is hard disk loading, which occurs when a seller of computer hardware loads unauthorized copies of software onto the machines it sells in order to make the purchase of machines more attractive. The customer who buys a computer with preloaded pirated software will not have a valid license to use the software and will not be eligible for support or upgrades. In other words, because of the seller’s dishonesty, the customer (who may not even be aware of the illegality) encounters the risk of possessing an illegal product for which he does not benefit from any guarantee and may be liable to pay damages to the software author.
(iv) Internet Piracy
The last method is internet piracy, which occurs when individuals buy or download for free unauthorized copies of software from the Internet through pirate websites or peer-to-peer networks that enable unauthorized transfer of copyrighted programs. The internet permits the distribution of unauthorized software at a very fast speed and on a large scale. However, it offers no guarantee regarding the purchase of downloaded software that is likely to not function or to contain spyware and viruses.
Generally, the user or buyer of pirated software will always face two different kinds of risks: first, a technical risk regarding the potentially poor quality of the software which could contain spyware and viruses; and second, a legal risk that deals with the civil and criminal sanctions from national laws.
As mentioned, software piracy can take several forms and can even be carried out unwillingly by negligent consumers. The variety of actions likely to constitute software piracy explains the importance of the phenomenon and makes it difficult to control and sanction.
II. Lawful Alternatives to Piracy: Free Software License
Not all software is protected by copyright laws. On the contrary, some are expressly created with the intention of being copied and redistributed through a “free software license” mechanism. However, this does not mean that users can acquire such a software free of charge. The said freedom only refers to the user’s freedom to modify and redistribute software or to use some of its elements in new programs. Such license is to be understood within the wide concept of free software and/or open source software, under which “free software comes with permission for anyone to use, copy, and/or distribute, either verbatim or with modifications, either gratis or for a fee. In particular, this means that source code must be available”6. A free software license belongs to the so-called “copyleft” category7. The cornerstone of copyleft licenses is that anyone who has acquired software with this license is compelled to redistribute it without making any restriction on the modifications they have brought to the program. Thus, the new software will automatically benefit from the free access and modification mechanisms attached to the previous one and no copyright restriction can be attached to the work carried out by an intermediate author.
This obligation was held legally enforceable, when the Paris Court of Appeal condemned a company for not providing one of its clients with the source code of a free software, and for wrongfully removing the terms of the software license belonging to the category of GNU General Public License (hereinafter: “GNU GPL”), the most widely used free software license. This decision is very interesting, as the author of the software was not even implicated in the judgment. The company’s client decided to bring the case to justice as a mere user of the software8. The Court held that since the software was subject to the terms of the GNU GPL license and the company had not respected the license, the software user was entitled to terminate the contract with the company at the expense of the company. This judicial decision demonstrates that violating the terms of a free software license can be regarded as serious enough to lead to judicial proceedings.
Notwithstanding these innovative forms of copyright licensing that provide for a partial waiver of copyright, the vast majority of software continues to be proprietary software subject to EULAs and is used by the general public, while being licensed under the terms of strict EULAs. Therefore, lawful alternatives such as free software licenses cannot be regarded as the only and ideal solution to stem software piracy.
III. The Legal Status of Software in Belgium
A. Scope of Protection
According to the European Directive 91/250/CEE of the Council of May 14, 1991 (replaced by Directive 2009/24/EC of April 23, 2009), computer programs and any associated design material are protected by copyright and regarded as literary works in the meaning of the Berne Convention for the Protection of Literary and Artistic Works9. Pursuant to this European legislation, EU Member States are required to take special measures of protection in accordance with their national legislation, including appropriate remedies regarding certain acts of software piracy, such as possessing illegal copies of computer programs for commercial purposes or consciously distributing illegal copies10.
In Belgium, the 1991 Directive was transposed into Belgian law by the Law of June 30, 1994 concerning the Legal Protection of Computer Software (hereinafter: “the Law”). Pursuant to Article 2 of the Law, software is protected if it is original, meaning if it is an intellectual creation of its author. No other criteria apply to determine whether software is legally protected or not. The protection granted by the Law applies to any and all forms of expression and realization of software, but the ideas and principles that led to the programming of the software are not protected as such. The author of protected software is exclusively entitled to the permanent or temporary reproduction, the translation, the adaptation and the distribution of its work. This legal protection applies for seventy years from the death of the author, who is also allowed to dispose of his/her rights, by means of a definitive transfer to a third party, or by the conclusion of a license agreement.
Article 3 of the Law also states that when software is conceived and programmed by an employee in the context of their employment, their employer is legally deemed to be the owner of the copyright, unless an agreement between parties (for example an addendum to the employment agreement) provides otherwise. This is in accordance with the general rule that inventions, as a result of the tasks of the employment agreement, belong to the employer. The employer is entitled to the result of the labour of his employees11. Nevertheless, this is in contradiction with the fact that the economic right of created literature or art during the employment agreement, belongs to the creator, unless otherwise agreed between employee and employer12.
This demonstrates that the scope of the protection awarded by the Law is large, thanks in part to European legislation on the issue.
B. Legal Remedies
Generally, software piracy is difficult to trace, however the illegal use of software is regularly discovered by means of anonymous tips from a former employee, an unhappy customer or a competitor. The following outlines a brief list of actions likely to be undertaken in such instances.
(i) Seizure
When authors suspect someone is in possession of illegal material, they may file a unilateral request before the “judge of seizures” (Fr: “juge des saisies” / Nl: “beslagrechter”), which is a special type of judge entitled to seize goods or sums of money in certain cases. This request seeks to obtain an authorisation to proceed with a “descriptive seizure”, pursuant to Article 1369bis/1 of the Belgian judicial Code (which was introduced in 2007, following a European Directive13). To be declared admissible, the request must be filed by someone who has an interest in initiating such a procedure, e.g. by demonstrating prima facie that their intellectual rights have been infringed14. The President of the civil or commercial tribunal to whom a descriptive seizure request has been addressed will assess (i) whether the intellectual right allegedly infringed is a valid right at first sight and (ii) whether there are indications that the said right has been infringed or if a threat of such infringement exists15. A decision of the Belgian Supreme Court indicated that the mere possibility that a third party could infringe a protected intellectual right could not be regarded as a sufficient indication justifying a descriptive seizure16. Therefore, anyone who would like to initiate a “descriptive seizure” in order to safeguard its intellectual rights will ensure that serious indications of infringements exist. Failing which, such request will be declared not admissible.
A descriptive seizure requires a judicially appointed expert who will conduct an analysis of the suspected culprit’s computers and data storage devices. Then the expert will assess whether the suspect is in possession of illegal data. This expert will be allowed to take photographs of relevant documents and copies of essential data. He will be assisted by a bailiff and, if necessary, the police. The element of surprise is guaranteed since the person/company subject to the descriptive seizure is not informed beforehand of such seizure. This will prevent the said person/company from erasing evidence of pirated software. Depending on the circumstances and the gravity of the case at hand, the judge can decide to immediately confiscate any illicit material. To assess whether an actual seizure is appropriate in addition to the description measures (i.e. where suspect material or evidence are registered and described but not seized as such), the judge will verify that certain conditions are met. These conditions include: that the alleged infringed intellectual right appears to be valid prima facie; that the breach of intellectual property right cannot be reasonably challenged; and that – once the balance between the divergent interests at stake including public interest has been assessed – the circumstances of the case can reasonably justify a seizure in order to protect the alleged infringed right17.
Although the expert’s report is obtained by means of a unilateral procedure (the suspects do not have time to prepare counter-arguments for their defense), it will be considered as official and descriptive of the truth. Before a final decision is rendered by the competent judge, the alleged illegal material remains confiscated in order to determine which type of illegal copies and how many of them have been made, or when they were deleted. If an individual does possess pirated software, buying authentic software licenses after the seizure procedure was initiated in order to cover the prior infringement does in any case not prevent the user of illegal material from being sanctioned18.
(ii) Claim for Tort Damages
On the basis of the descriptive seizure report, the author of the software is permitted to request the immediate end to the unauthorized use of the software, and claim tort damages on the merits of the case. Such claim, based on an infringement of the Law and on Article 1382 of the Belgian Civil Code allowing any injured party to claim tort damages, should demonstrate the existence of fault resulting in damages to the author. However, a settlement may be concluded at any time between the parties.
The competent judge is entitled to evaluate the extent of damages to be paid to the injured party, either by trying to determine the exact amount of the prejudice or, if that is not possible, by awarding to the injured party a lump sum ex aequo et bono19. If illegal material is still in possession of the person who committed the offense, this material can also be seized, as well as the instruments that were used to fabricate it. The sum awarded to the author can reach up to tens of thousands euro20. Therefore, users of pirated software should realize the monetary risks they are taking by using illicit material and such risks are not to be underestimated if discovered.
(iii) Criminal Complaint
Finally, a criminal complaint may also be filed against those who, for profit-making purposes, distribute or are in possession of a copy of a software while being aware that it is illicit or should reasonably believe it. Such a complaint can moreover be filed against those who, for profit-making purposes, distribute or are in possession of any mean of which the purpose is to suppress or neutralize technical means protecting computer programs. Copyright violations may lead to imprisonment from three months up to three years, and a fine up to € 550,000. Those sentences can be doubled for second offenses within five years21.
Although legal solutions to prevent and punish software piracy exist in Belgium, these sanctions are rarely implemented. There is still a large gap to be filled between the wording of the Law and its actual implementation.
IV. Conclusion
The creation and development of commercial software is protected by intellectual property law in many countries. Although largely widespread and sometimes justified by its adepts in view of the expensive prices of authentic software, software piracy is an illegal activity punished by imprisonment and significant fines in Belgium. However, it is doubtful that such legal provisions will be able to deter the majority of pirated software users from doing so. This is demonstrated by the relatively few existing cases on the matter. Therefore, it is doubtful that an efficient answer to the issue of software piracy resides merely in legal sanctions.
Since a legal solution does not seem to be on the horizon, the enhanced development and use of free software may represent a lawful and credible alternative to the pirating of copyrighted software in the future. Moreover, by adapting the basic prices of software to the respective levels of income of the countries where software are distributed, software producers would encourage more honest and diligent to buy authentic products, instead of installing unguaranteed and potentially infected software on their computer.
Steven De Schrijver
Head of Corporate & M&A and IT & New Media Departments
Lorenz
Regentlaan 37-40 Boulevard du Régent
1000 Brussels
Telephone: +32.2.239 2000
E-mail: [email protected]