

Computer underground Digest    Sun Jan 24, 1993   Volume 5 : Issue 06
                           ISSN  1004-042X

       Editors: Jim Thomas and Gordon Meyer (TK0JUT2@NIU.BITNET)
       Archivist: Brendan Kehoe
       Shadow-Archivists: Dan Carosone / Paul Southworth
                          Ralph Sims / Jyrki Kuoppala
       Coyp Editor: Etaion Shrdlu, Junior

CONTENTS, #5.06 (Jan 24, 1993)
File 1--Introduction to Second SPA & BSA Issue
File 2--Re: Taking a Look at the SPA (CuD 4.63)
File 3--Reaction to SPA statements in CuD 4.63
File 4--SPA EDUCATES THE PUBLIC ON SOFTWARE COPYRIGHTS - NOT!
File 5--A Comment on the SPA (Gray Areas Reprint)
File 6--Nintendo News Release (Re: BSA APL Bust - Oct '92)
File 7--The BSA, APL BBS, and Anti-Piracy Crackdowns

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----------------------------------------------------------------------

Date: 22 Jan 92 02:41:33 CST
From: Moderators <tk0jut2@mvs.cso.niu.edu>
Subject: File 1--Introduction to Second SPA & BSA Issue

The growing aggressiveness of organizations such as the SPA (Software
Publisher's Association) and the BSA (Business Software Alliance) has
raised questions about the limits of acceptable enforcement of
software copying.  The SPA is often criticized for its aggressive
punitive actions against software piracy.  CuD #4.63 began to take a
look at what the SPA is and how it operates. Below are a few responses
to that issue and an opinion on the SPA taken from a Gray Areas
interview.

CuD #5.08 (31 Jan.) will summarize a few conversations with SPA
personnel who elaborate on a broad range of activities it provides for
members. Although its Copyright Protection Program draws the most
notoriety, it offers educational, marketing, and other services to
both members and the public.  Subsequent issues will critically
examine both sides of the software "piracy" debate.

------------------------------

Date: Tue, 08 Dec 92 14:35:36 -0600
From: Neil W Rickert <rickert@CS.NIU.EDU>
Subject: File 2--Re: Taking a Look at the SPA (CuD 4.63)

In article <1992Dec06.234359.16097@chinacat.unicom.com>
TK0JUT2%NIU.bitnet@UICVM.UIC.EDU writes:

> Our goal is to encourage debate and
>we welcome readers' thoughts on the subject (of the SPA).

Let me illustrate the problem by describing how the SPA would expect
you to go about purchasing a spread sheet program.

Assumption:  You need a spread sheet.  You are unsure whether to
purchase Excel, Lotus 1-2-3, Quattro-Pro, or SuperCalc 5.  Assume they
each cost approx $300 dollars at typical retail stores.

Case I: You represent a financial business.  The $300 cost of the
package is trivial compared to the value it has for the members of
your staff.

Procedure:  You call each of the companies.  They provide you a copy
of their software for evaluation.  You may share this copy with
several members of your staff, provided you agree to delete all copies
in one month at the end of the evaluation period.

At the end of the evaluation period you negotiate a site license with
the company selling the preferred version of the software.  This will
allow you to obtain the software for substantial discount.

Net cost:  $100 per copy.


Case II: You are the treasurer of a small not-for-profit organization.
You would like the software to aid you in preparing monthly reports.
But it will take you many years to recoup benefits equal to the retail
price of a package.

Procedure:  You visit the nearest software retail store.  You purchase
a shrink-wrapped copy of each of the packages, and after deciding
which one you want, you throw away the other three.

Net cost: $1200 per copy.

+++++++++++

I put it to you that if there is a question of ethics involved, it is
the SPA whose practices are unethical.  They attempt to prevent
libraries from having borrowable copies of software.  They insist on
shrink wrapping, with no right of return if the product is unsuitable.
They charge outrageous prices.  In book publishing, the retail price
of a popular book is not much more than the cost of printing, storing,
packaging and distributing, with a small markup for profit; with
software publishing the profit margins are far higher.  They use these
high profits to pay for lobbying so that they can persuade government
agencies to support them as they charge unrealistic prices for their
software.  And they try to prevent the development of a free market by
filing "look and feel" and patent lawsuits against their potential
competitors.

If you happen to find a problem with their product (a software bug),
and report it to them, their first reaction is to not believe there is
such a bug, and to suggest that how could a mere professor of computer
science know the difference between a bug and a user error.  If you
spend enough hours of work to fully document the bug they will
eventually accept your report, but they will not offer you a
replacement of your current software with a bug free one, unless you
are willing to pay the full upgrade price to the next version.  [This
paragraph based on personal experience with reporting bugs to software
vendors, including Microsoft.]

------------------------------

From: bei@DOGFACE.AUSTIN.TX.US(Bob Izenberg)
Subject: File 3--Reaction to SPA statements in CuD 4.63
Date: Thu, 10 Dec 1992 15:35:20 -0600 (CST)

Issue 4.63 of Computer underground Digest included the Software
Publisher's Association manifesto.  I've read it, and it shows a very
narrow awareness of the state of software licensing.  The SPA asks
(and answers) the question, "Is it Okay to copy my colleague's
software?" by saying,

   No, it's not okay to copy your colleague's software. Software is
   protected by federal copyright law, which says that you can't make
   such additional copies without the permission of the copyright holder.

Permission has been explicitly given with a number of software
products.  Some of the compiler products contain license agreements
that specify terms of use:  The software may be used "like a book."
One person at a time can read the book, or use the software.
Recently, I've seen more packages that allow the purchaser a
"travelling license."  Either the software comes with permission to
copy the software for use at home (or, presumably, at work if you
bought it for home use,) or an inexpensive second copy can be
purchased for use on a second machine.

The above "experiments" in licensing procedures show that the "one
program, one copy" philosophy has some viable competitors out there in
the world.  What the SPA should be saying is, conform to the license
agreement that came with your software.

The SPA goes on to say that

   By protecting the investment of computer software companies in
   software development, the copyright law serves the cause of promoting
   broad public availability of new, creative, and innovative products.

What it promotes in practice are new, derivative, un-innovative
knock-offs of popular programs, the profusion of which has been manna
from heaven to look and feel lawyers everywhere.  Not many developers
that I know feel comfortable using the words "new" "creative" and
"innovative" all in the same sentence.  It's the language of
promotion, not innovation.  Read the words of industry commentators on
the operating systems that we'll have for use in the next ten years.
"Where are the applications?"  they ask, the new VisiCalc or Dbase
III?  On the way, perhaps, but I think it safe to say that the SPA
will have a small or nonexistent role in their development.  The
statement above, that ripping off products impedes future development,
needs more evidence before I can believe it.  Lotus 1-2-3, certainly
one of the more illegally copied programs around, hasn't withered on
the vine.  It's evolved, expanded to new platforms, and in general not
suffered the fate that the SPA claims awaits victims of software
piracy.  Yes, this is a very big example, but if the software was a
piece of junk, all the piracy raids in the world would only add a year
or more to the closing of the coffin lid.

The onanistic Q&A continues with this howler:

   That makes sense, but what do I get out of purchasing my own software?

   When you purchase authorized copies of software programs, you receive
   user guides and tutorials, quick reference cards, the opportunity to
   purchase upgrades, and technical support from the software publishers.
   For most software programs, you can read about user benefits in the
   registration brochure or upgrade flyer in the product box.

What you get, more often than not, are promotional discounts for
CompuServe, which is a sneaky way of adding the cost of a CIS
subscription for the life of the product to the product's cost.  You
get ads for magazines, books, add-on products from third-party
vendors, et cetera.  While these may or may not have value to the
purchaser of the product, they are not benefits.  They are sales
brochures for other companies.  Technical support is an uneven
offering, and who's to say that in ten years all tech support will not
be reached by dialing a 900 number?  Even upgrades are not what they
once were.  More than a few companies will accept a competitor's
product as qualification for an upgrade.  Most of the benefits of
doing the right thing are either exaggerated in their value or
underestimated in the cost to the consumer.

   A good rule to remember is that there must be one authorized copy of a
   software product for every computer upon which it is run.

No problem here...  Just don't forget to get a definition of what "authorized"
means for that product.

   These companies devote large portions of their earnings to the
   creation of new software products and they deserve a fair return on
   their investment.

No, they deserve to be evaluated on the merit of their products.  (I
don't expect to hear that the SPA believes differently, but I could be
wrong.)

   Also, suggest that your management consider conducting a software
   audit.

Oh, yes, let's have more of these!  (sarcasm)  Something that sends
people scurrying to every Mac and PC snooping for unlicensed software,
at hours that won't interfere with the normal work of the business...
No one who'd have to foot the bill for one of these would propose it
unless they *already knew* that there was a problem, and that the
funds to get legal would be there.  Ah, the stories that I could
tell...  to the SPA's 800 number, for a cut of the money in bringing
these big-time software desperadoes to justice.

   THE LAW

   Software is automatically protected by federal copyright law from the
   moment of its creation.

No, it's protected by copyright when the copyright symbol is affixed
to the work.  This protection does not last forever, either.  (A
lawyer will no doubt know how long copyrights stay in effect.)

   This fact, however, does not make it legal to violate the rights of
   the copyright owner.

You can be a copyright holder, but not a copyright owner.  Did you buy
some-thing when you put the copyright symbol on your work?

   Software development involves a team effort that blends the creative
   talents of writers, programmers and graphic artists.

It may, or it may not.  There are more than a few one or two person
shops out there that don't bring big production budgets to their
efforts.

   Piracy diminishes the value of a program and further, deprives the
   developers of fair compensation.

Playing Devil's Advocate for a moment, it can pay off for some
developers in some ways.  Piracy can be like pollination...  It gets
your software seen by people who likely would never have bought it.
You may curse the lost revenue, but I know a developer or two that
turn a blind eye to bug reports from unauthorized users.  Who's to say
that somebody may buy a copy of something that he saw as pirated way
back when?  I know that I have.  It's not all as black and white as
the SPA makes it out to be.

   Newer and better software can be developed only if the software
   development team receives a fair price for its efforts.

If only the cause and effect chain were as firmly established here as
the SPA suggests that it is.  Revenue == better software, instead of
revenue == that new Porsche.

   The SPA has established a special toll free number for reports of
   copyright violations: 1-800-388-7478.  The SPA has filed many lawsuits
   against individuals and companies engaged in the unauthorized
   duplication of PC software and will continue to do so when it becomes
   aware of situations that warrant such action.

Yes, speaking of fair return on investment...  What is the SPA's cut
of these lawsuits?

   If you are an individual user, don't break the law.

If you are a software publisher, don't push cruddy software, don't
price it too high, don't include shoddy, misleading or no
documentation, don't scrimp on help for your customers in using the
product, don't go out of business in a year, don't sell your product
to a software conglomerate that will raise the price into the
stratosphere or take it in directions incompatible with current
releases, et cetera.

   When a few people steal software, everyone loses.

No, business writes it off as a loss.  Everyone else rolls over and
goes back to sleep.  :-) About that rap song, well, anybody's a bigger
rap fan than I am, but that's crap, not rap.

   Female: Yeh. And what are you doing in our computer?

It's an SPA virus...  and don't think that somebody hasn't thought of
it:

Unlicensed software detected...  erasing partition table, root
directory area...  Re-formatting your hard drive.  You will see some
SPA messages during this process.  Consult your vendor documentation
to re-install your licensed software.

   Tetris and the others,
   They're all going to fail.

No, they're all going to be ported to X-windows, with the source
publicly available.  :-)

Lastly, the CuD moderator(s) describe the end of the rap video:

   And, fourth period be damned, they play another game (on presumably is
   a pirated game on the school computer).

Nope, it's a pirated computer...  A pre-Apple lawsuit Franklin Ace.
;-) I really dislike trade protectionism.  As a co-worker's button
says, "Keep your lawyers off of my computer!"  It's turned an
automobile manufacturer or two into immobile sloths that only twitch
every now and then to ask for more tariffs on imported cars.  Who's to
be the software industry's Lee Iacocca?  I don't know...  What's the
SPA president's name?

Bob

P.S.  The biggest repository of pirated software that I've run across
was kept on company computers near a hallway covered with SPA posters.
Yeah, guys, you really reach 'em.  Pity I can't remember the names of
individuals or the name of the company in question...  Not until
2/21/95, anyway.

------------------------------

Date: 13 Dec 92 22:18:19 CST
From: Lance Rose <elrose@well.sf.ca.us>
Subject: File 4--SPA EDUCATES THE PUBLIC ON SOFTWARE COPYRIGHTS - NOT!

((MODERATORS' NOTE: The following article is reprinted from Lance
Rose's Legally Online" column in BOARDWATCH Magazine (Nov., '92: pp
51-52).  A one-year (monthly) subscription to BOARDWATCH can be
obtained for $36 at: Boardwatch Magazine; 7586 West Jewell Ave., Suite
200, Lakewood, CO 80232)).

          SPA EDUCATES PUBLIC ON SOFTWARE COPYRIGHTS -- NOT!
                            By Lance Rose

Like many others I know who have some familiarity with computer law,
I've always figured that about half of what the Software Publisher's
Association (SPA) says about copyright law is true. The rest is
mystificationist propaganda designed to make corporate software users
run scared from the slightest thought of ever making a software copy
without paying someone for it.

For instance, the SPA insists to this day that shrinkwrap licenses are
airtight and enforceable. At the same time, every other court decision
I've seen so far on the subject has refused to enforce such licenses!
The SPA is not quite wrong on this subject yet, since shrinkwrap
license validity must be decided on a state by state basis; some state
court might agree with the SPA position somewhere along the line. The
issue could be left arguably open for a hundred years, with shrinkwrap
licenses getting cut down right and left by courts of different
states, and the SPA hanging on to its enforceability rhetoric in the
slim hope that out of 50 states, it will get lucky somewhere.
Plausible arguability.

Until now, though, I never caught the SPA in a flat-out falsehood.

A recent issue of the SPA newsletter distributed to its members
contains an article titled "Protect Your Copyrights, Register Software"
and subtitled "Register software or lose your rights." Within, it
contains several statements along the same lines, culminating in: "if
you don't register your software with the Copyright Office within 3
months, after first first publication, you cannot recover statutory
damages or attorneys fees." (This is a very important matter in
coyright, especially attorneys fees--if a successful copyright owner
cannot collect attorneys fees from the infringer, he could end up with
very little money after paying off his own lawyer).

Now, let's look at the actual section of the Copyright Act in
question, Section 412(b):

"no award of statutory damages or of attorney's fees...shall be made
for...any infringement of copyright commenced after first publication
of the work and before the effective date of its registration, unless
such registration is made within three months after the first
publication of the work."

In other words, after you circulate your software to the public, you
can receive statutory damages and attorney's fees in a case enforcing
your software copyright as long as you registered your software with
the copyright office before the infringement started. With one added,
short-term bonus: if you register your software within 3 months after
you first circulate it to the public, then you can receive statutory
damages and attorney's fees for any infringements within that same 3
month period, whether or not they came before the registration.

Under the statute, for example, you might wait 9 years after first
publication of our software before you bother to register.  That
registration will give you the right to claim statutory damages and
attorney's fees for any infringements occuring afterwards, but not for
any infringements that may have occured in the initial 9 year period
before you registered.

Compare this with the SPA quotes. According to the SPA, if you don't
register within 90 days after publishing the software, you have
entirely lost your ability to claim statutory damages and attorneys
fees when you enforce your copyright. If you wait 9 years to register,
you can't claim such amounts for infringements any time, either before
or after your registration.

So the SPA totally misread the statute. The only question is whether
it was through calculation or mental dullness, both of which SPA has
exhibited in the past. Actually, there is a third choice--sloppy
statute reading. But then you have to ask why they would shock their
members with a headline about the dire consequences of copyright
non-registration without taking the time to read the statute and
figure out how it really works.

Calculation is not out of the question, though. The effect of the
misinformation would be to scare software owners into rushing to
register their copyrights. This is not a bad thing, and it also serves
the SPA's enforcement objectives. SPA likes to threaten corporate
infringers of their members' products with copyright registrations in
hand. But why deceptively scare corporations into registering with
false information, when the correct information, properly presented,
would have the same effect? What is the relationship between SPA and
its members, anyway?

This has been a public service announcement. Don't take candy or
copyright law from the SPA.

------------------------------

Date: 22 Jan 92 11:01:59 CST
From: barlow@well.sf.ca.us
Subject: File 5--A Comment on the SPA (Gray Areas Reprint)

((MODERATORS' COMMENT: The following is extracted from an interview of
John Perry Barlow by Netta Gilboa from the November, 1992, issue of
GRAY AREAS. GRAY AREAS focuses on cutting edge cultural issues. The
editors can be contacted at grayarea@well.sf.ca.us))

GA: SOFTWARE PIRACY IS RAMPANT IN THE U.S. AND WE'VE IDENTIFIED
SEVERAL TYPES OF PIRACY RANGING FROM FRIENDS WHO TRADE DISKS TO PIRATE
BULLETIN BOARDS TO BUSINESSES WHO LITERALLY FORCE THEIR EMPLOYEES TO
USE PIRATED SOFTWARE IN ORDER FOR THE CORPORATION TO AVOID BUYING
MULTIPLE COPIES. DO YOU APPROVE OF THE SOFTWARE PIRACY ASSOCIATION'S
APPROACH TO STOPPING PIRACY?

JB: No, it's boneheaded. It is just plain stupid and, look, I think
that software piracy is pretty complex. I mean there are cases as in
the Next world where you've got such a limited market that a certain
amount of software piracy can completely destroy a product.  But
generally speaking, that's the exact opposite effect of what software
piracy has. I think you can make a pretty persuasive case that the
reason that Lotus, for example, continues to exercise an iron standard
among spreadsheets, is that it is also the most pirated software in
the world. Once something becomes a pirate classic, then it is out
there being distributed and distributed and distributed and gets
itself fixed in the public mind and, you know, becomes a valuable
item. So that often the best thing that can happen to you is to have
your software pirated from an economic standpoint. The SPA just
doesn't get it. They really don't. I mean people who pirate software
sooner or later buy it. There is an incredible amount of software
piracy going on and yet one of the most robust portions of the
American economy is software. You know there is reason for that.  It
is kind of like the home video tape thing. When video cassettes first
became popular in Japan there was a full court press on the part of
the movie companies and the traditional manufacturers of media to stop
them from hitting these shores. They arrived in America quite a bit
after they'd been developed because of legal efforts to stop them from
coming, because it was the conviction of everybody involved that
having this medium that could be so easily reproduced out there would
be the death of movies. Well, now more than half of all the revenue
that film companies derive is from videos and in fact they don't even
put movies in theatrical houses except to advertise the video.

GA: EXACTLY.

JB: So this is another one of these cases where having this very fluid
easily reproducible, easily pirated version of intellectual property
has redounded to the benefit of the intellectual property creator. I
think that software piracy is a complex issue and I think that right
now what protects a lot of software from piracy is the fact that
people want to have the manual. As those manuals become more and more
an on-line kind of thing and software becomes easier and easier to
use, that kind of protection goes away. So you have to think about
other ways and other incentives that people have for buying software
and not simply pirating it.  And I think that what you are probably
going to see is if people are going to want it, they are going to want
to have the latest version of it which is not going to be easily
pirated.

GA: INDIVIDUALS THAT WE TALKED TO SEEM TOTALLY UNCONCERNED ABOUT THE
SPA, ESPECIALLY WHEN THEY ARE UNDER 18.  WHAT CAN BE DONE TO EDUCATE
THIS MARKET?

JB: Well, the first thing the SPA can quit being is so stupid.  I
think that the real unfortunate effect in the way in which the SPA
approaches this is that it breeds the kind of general disrespect for
the interest of the people they are protecting.

GA: AGREED.

JB: It is kind of like drug laws. You have these draconian drug laws
on the drugs that are least likely to cause damage and mayhem like
psychedelics and marijuana.  But they are all being couched as if you
take this stuff the world will end and your life will become a living
hell. The really dangerous drugs are the ones that are legal. But this
totally false message gets conveyed by the drug laws. Kids take
marijuana and say wait a second, this isn't going to kill me. This
isn't going to ruin my life. This must all be bullshit. Well, the fact
is that there's probably a pretty good reason for having a law against
cocaine. But if you concluded that it is all bullshit then you are not
going to pay any attention to the social strictures against cocaine.
Right.  So it is the same thing with the SPA and the way in which it
is trying to enforce software copyright. It breeds a general
disrespect for the whole idea that people should get paid for the work
that they do with their minds and that's unfortunate.

------------------------------

Date: Tue, 19 Jan 93 14:18:46 PST
From: metal@PNET01.CTS.COM(Conal G.)
Subject: File 6--Nintendo News Release (Re: BSA APL Bust - Oct '92)

NEWS RELEASE
FOR IMMEDIATE RELEASE

CONTACT:

Lynn Hvalsoe%Nintendo of America, Inc.
206/861-2096

James Bikoff/Arter & Hadden
202/775-7100

  NINTENDO JOINS IN SEIZURE AGAINST ILLEGAL BULLETIN BOARD SOFTWARE

     REDMOND, WA--As part of a continuing and aggressive effort to
halt counterfeiting of video games and business software, Nintendo of
America Inc.  and six major software manufactures filed an action
against distributors of a computer "bulletin board" network system
giving software acess to users.

     Illegal software was seized by authorities from APL, an electronic
bulletin board computer system (BBS) headquartered in Baltimore, MD.

     "Counterfeiting and illegal use of video games and business
software has grown immensely over the past few years.  We have and
will continue to prosecute those who've become part of the underground
counterfeiting network", said Lynn Hvalsoe, Nintendo's General Counsel.

     The legal action outlines that illegal software wass accessed
through operators who provide personal computer users a code to enter
the system via telephone and modem.  Illegal bulletin boards have
become a popular trend, with an estimated 5,000 systems in the United
States.  Illegal bulletin boards also have been found in Europe and
Asia.

     This case represents the first time video game and business
software companies have joined together to fight software pirating.
The business software companies, represented in this case through the
Business Software Association (BSA), include Aldus, Autodesk, Lotus
Development, Microsoft, Novel and WordPerfect.  All companies,
including Nintendo, are individual plaintiffs in the legal action.

     The action is part of Nintendo's large anti-counterfeiting
campaign much of which is aimed at illegal video games being
manufactured, sold and shipped from Taiwan, Hong Kong, and other
countries.

     "Counterfeiting is a very serious crime and Nintendo is working
hard to let violators know they will be pursued and charges will be
brought against them," added Hvalsoe.  Hvalsoe pointed to success
this year in the signing of Federal legislation (S893) which elevates
copyright infringement, such as that engaged in by bulletin board
operators, to a felony with penalties of up to $250,000/and up to five
years in prison.

     Nintendo of America Inc. is based in Redmond, Washington and is a
wholly owned subsidiary of Nintendo Co. Ltd., Japan, the worlds largest
manufacturer and marketer of video games.

-=-=-=-=-
Submitted by Metalhead of Rockin' Alliance
Phile 1/2

UUCP: %hplabs!hp-sdd ucsd nosc%!crash!pnet01!metal
ARPA: crash!pnet01!metal@nosc.mil

(I received this in the mail about 5 days after I received the
News Release)
++++++++++++++++++

                         ARTER & HADDEN
                 1801 K Street, N.W., Suite 400K
                   Washington, D.C. 20006-1301
                          202/775-7100
                     Facsimile 202/857-0172
                      Telex 6502156242-MCI

                          CLARIFICATION

      The News Release you received from Nintendo of America was
provided for INFORMATIONAL PURPOSES ONLY.  No response is required.
You were selected to receive this News Release, because you are a
person who is interested in or involved with bulletin boards.  The
fact that you received this News Release does not mean that you or the
BBS you operate are under investigation.  Moreover, Nintendo of
America has not singled out for investigation users of PCBoard
software.  The single civil lawsuit that was the subject of the News
Release was filed against the APL BBS, which was located in Baltimore,
MD.  This BBS was strictly a pirate board, and the system operator
actively encouraged users to upload and download large amounts of
copyrighted software.  CLARK DEVELOPMENT COMPANY, INC. WAS NOT
INVOLVED IN THIS LAWSUIT AND DID NOT SEE THE NEWS RELEASE IN ADVANCE
OF ITS DISTRIBUTION.  We recognize that there are many legitimate
bulletin boards and many honest system operators who support the
ethical use of software.  Unless you have questions about action taken
against the APL BBS, however, please do not call Clark Devolopment,
Nintendo of America or Nintendo of America's attorneys.

     Please pass this message on to anyone you know who received the
News Release.  You are encouraged to post this message on your BBS.


-=-=-=-=-
Submitted by Metalhead of Rockin' Alliance
Phile 2/2

------------------------------

Date: 23 Jan 93 13:22:55 PST
From: Jim Thomas <cudigest@mindvox.phantom.com>
Subject: File 7--The BSA, APL BBS, and Anti-Piracy Crackdowns

Since the press release submitted above, the Business Software
Alliance (BSA) case against APL has been settled (in October, '92).
The APL BBS, also known as "The Great American Exchange" in Baltimore,
Maryland, was raided on 1 October. According to BSA spokespersons and
court documents, the estimated value of the software seized was worth
over $100,000. A BSA press release indicates that the organization is
currently reviewing APL's records for possible additional legal action
against system users who may have illegally uploaded or downloaded
copyright programs. It should be noted that the raid occured prior to
the enactment of PL 102-561, signed into law on October 28, 1992,
which criminalizes a low threshold of software duplication and
dissemination.

According to Arter and Hadden, a Washington, D.C. law firm
representing BSA and Nintendo of America, the case was resolved with a
court order that issued a permanent injunction against the defendant
from resuming operations, and the equipment on which the board ran was
seized and will be turned over to BSA as part of the settlement.
Although the $25,000 estimate of the value of the equipment seems
over-estimated, the list of seized property indicates a substantial
loss. Seized property included two HST modems, nearly a dozen cases of
floppy disks, several boxes of data tapes, hard drives, a scanner, two
tower CPUs, a fax machine, and other equipment.

The case was brought as a federal civil action (MJG 92-2757) in the
U.S. District Court of Maryland. The investigation was conducted by
Software Security International on behalf of the BSA. According to a
BSA press release, the three Federal Marshalls participating in the
raid were Ricardo Guzman, Dave Hinman, and Kurt Vogan.

The BSA, founded in 1988, is a coalitionion of eight high-revenue
software companies:  1) Apple Computer 2) Autodesk 3) Central Point
Software 4) Lotus Development 5) Microsoft 6) Novell 7) Symantec, and
8) Word Perfect.  These eight companies have about 71 percent of the
world's packaged software market, according to BSA officials.

A BSA spokesperson explained that the organization prefers to think of
itself as a coalition rather than a professional association. Like the
Software Publishers Association, the group aims to eradicate software
piracy but, also like the SPA, engages in other activities that
include education about copyright law, working with legislators and
law enforcement on policy and legislative issues to toughen especially
international anti-piracy laws, and working with customs agents to
alert them to the problems of identifying software purchased overseas
and imported back into the U.S. Although the BSA focuses primarily on
international piracy, it has recently turned its attention to domestic
concerns. According to a press release, the APL case was its first
legal action in the U.S.

According to BSA spokesperson Diane Smiroldo, the BSA represents its
eight members in their fight against piracy in more than 30 countries.
Although most of these companies are also members of the SPA, the SPA
does not represent them in their anti-piracy  efforts.  The SPA
represented the eight companies in the U.S. until July 1992, but since
JULY, the eight decided that they wanted the BSA to represent them for
efficiency's sake, because they head up the anti-piracy in other parts
of the world. According to Ms. Spiroldo:

    "It's important to emphasize that we don't just sue. We're
    not a 'litigation-only' organization. We launch education
    programs, we work with the local software associations in the
    different countries to get support for enforcement and strong
    copyright regulations."

The BSA estimates that world-wide piracy losses run between $10-$12
billion annually.  They also estimate that the piracy rate for PC
packaged software runs between 40-50 percent. Ms. Smiroldo adds:

     We see that particularly in countries like Asia and Latin
     American where there are some store fronts, vendors, where you
     can just walk up in Honk Kong, and there'll be a list of
     software available, and they'll download it and copy it on the
     number of disks needed, and you can buy it for about $10 or
     $15....We work closely with customs agents to recognize
     counterfeit and illegally copied products.

A few excerpts from BSA press releases and other documents illustrate
the organization's goals:

     The Business Software Alliance (BSA), citing a persistent link
     to the spread of computer viruses, today ((24 November, 1992))
     announced the launch of a new worldwide enforcement effort to
     crack down on electronic bulletin board systems (BBS) that are
     distributing illegal softare. Relying on specially-trained
     teams of lawyers and private investigators, and in cooperation
     with police, BSA announced today one of the first results of
     the new campaign--a sweep by the Berlin police of illegal BBS
     operators throughout that city, closing down and seizing
     equipment at 13 BBS operations that have been distributing
     illegal software copies throughout Germany. The operators of
     the bulletin boards now face criminal prosecution, with a
     maximum prison sentence of 5 years.

++++

     In Berlin the police force raided thirteen illegal electronic
     BBS operations on October 28 and seized approximately 25
     computers containing illegal software programs on over six
     gigabytes of storage capacity....The police acted after an
     investigation by the BSA found initial evidence of substantial
     illegal distribution throughout the country by the BBS
     involved. BSA then provided this evidence to the police and
     public prosecutor's office in Berlin, requested that they take
     action to close the offending operations, and provided ongoing
     investigative and legal assistance to further this
     effort...."We are determined to take vigorous actions to close
     down illegal bulletin board operators," said BSA European
     Counsel Bradford Smith. "We have witnessed during the last
     year the rapid proliferation of illegal bulletin boards
     throughout Europe, and believe that there is a persistent
     pattern linking these operators, not only with the
     distribution of illegal software, but also with the spread of
     computer viruses.  We now possess information pointing to
     illegal distribution by over 100 other BBS operators in
     Europe, and we will continue to bring more cases in additional
     countries."

The BSA also announced a crackdown on Belgian BBSes. CuD will
expand on BSA activities in future issues in an attempt to
bring the debate over software piracy into a public forum.

------------------------------

End of Computer Underground Digest #5.06
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