Software Piracy in the Philippines
(This was a paper I submitted for my Masteral class this Summer, 2004. I got a grade of 1.0 for it, the highest possible grade that can be given where I study, U.P. [University of the Philippines]. Minor edits made, mostly due to typos.)
I searched the Internet for Philippine software copyright laws. I hardly found any appropriate. The closest and most common law that I found was the Philippine Republic Act 8293, otherwise known as the Intellectual Property Code. After reading it, I was very little wiser.
After analyzing what I found, I came to the conclusion that although piracy is a very common idea here in the Philippines, very few laws actually discuss it.
That is, not to say pirates can run rampant here in the Philippines. Software manufacturers protect themselves more through alliances such as the BSA (Business Software Alliance) and SPA (Software Publishers Association), which also exist in the Philippines. Besides these, companies such as Microsoft and Novell themselves invest in creating groups within their corporation that focus on busting software pirates. They try to prevent piracy through publicity campaigns and offering large sums of money (as much as one million pesos) to anyone who will report the use of pirated software that will lead to a successful conviction.
So who creates the rules on what are the rights granted to a software user? The manufacturer of the particular software concerned. Commonly, such rules will be indicated in a EULA, or End-User Licensing Agreement. Commonly, before a particular software can be installed, the EULA is presented by the installer, to which the user must agree to; otherwise the user will not be able to install therefore unable to use the software. Frequently, the EULA will state usual provisions such as the software cannot be copied and distributed. Another rule implemented by most software manufacturers which is apparently unknown to many is that the licensed software can only be installed in one computer. Therefore if anybody installs the software in more than one computer at one time, all the other installations are also considered pirated.
I remember a former co-teacher of mine said all the software in her computer was licensed. Upon seeing her computer, I saw that the software in her computer would have cost over one hundred thousand pesos, a cost I did not believe she could have afforded. She said that they were licensed because what she did was she would “borrow” the licensed software of the company she used to work for so that she could install it on her computer. So was she right in what she said? No. Only the installations in her company would be licensed, any further installations would be pirated. Another friend once said that a copy of a licensed software would be different from a copy of a pirated software. Again, that’s not true. Both copies would be pirated, even if the copy was a direct duplicate of licensed software.
Therefore if a particular institution needs the software to be installed on several of their computers, they would have to pay a license for each installation.
So, how much do licensed software cost in the Philippines? It also depends on the edition your using. Example, the home version of Windows XP costs =P= 5,650.00 , but the professional edition would cost =P= 9,350.00. And that’s relatively cheap. And remember, that is licensed for only one installation. If there are thirty computers in your office, the professional edition would already cost almost =P= 300,000.00. And that’s only the operating system. MS-Office XP (the software package that contains such popular software as MS-Word, MS-Excel and MS-Powerpoint) costs =P= 11,250.00. Again, that’s good for only one computer.
So in order to save the money, offices and companies would resort to piracy, because the money saved can easily amount to over one million pesos. Even software used in schools here in the Philippines are commonly pirated. If a particular software costing around =P= 10,000.00 per license was to be installed in a computer lab with thirty computers, it’s already a whopping =P= 300,000.00. And that’s just one software. Although in actuality, most software manufacturers release an academic edition of their software which can be as little as half the price of the professional edition, most schools, especially the smaller ones, still decide they cannot afford it and go the pirated way. Only the larger and better known universities in the Philippines make a conscious effort to ensure that all software used in their institution is licensed, mostly due to fear of litigation and avoiding the bad publicity it would generate.
And most institutions bear that same mindset. They may not be fearful of the legal action that may be brought against them. In the Philippines, I have yet to read about a particular person sentenced because of using pirated software (although software manufacturers have brought cases against companies, the result of which is not well publicized). What most companies avoid is the bad publicity that may affect their image to society, which may result to a loss of patronage and a loss of profit.
That is, not to say that there are no benefits to using licensed software. There are three basic differences between licensed and pirated software. The price, the legality and technical support.
It is a false belief that the quality or performance of pirated software would be less than the licensed version. This belief is brought about because we are familiar with pirated cassette tapes, the quality of which is definitely less than the licensed version (or what we commonly refer to as the original). But that does not apply to software, simply because cassette tapes are analog while compact disc’s and other computer media are digital, and one of the most important features of using digital is that copies of anything digital will be exactly the same. Yes, EXACTLY the same. Let me discuss this in terms of data transfer; the difference between an analog wave and a digital wave (although this will be an oversimplified discussion). Unlike analog which can have any value from zero to one, digital can only have one of exactly two values: zero or one. If a piece of data with a value of one was sent and it encounters interference or noise to the point that the value was affected and changed to 0.9, in analog, it would be interpreted as 0.9 once received, thus the values would have been changed and depreciated. But in digital, that would not happen, because there is no 0.9 value, because there are only two values, zero and one, and if ever that would occur, it would simply be interpreted to the value nearest to it, which is one, thus the value is not changed (unless there is extreme noise or interference). Thus, if there are problems encountered in a pirated copy not encountered in a licensed copy, that would be more of an exception rather than the rule, and most likely the fault of the copying procedure the copier used, or how the disc was handled before it was sold.
So, seeing that the quality of a pirated copy will not normally differ from a licensed copy, the motivation to use pirated software increases. Why pay more if the quality of the pirated software, which cost less than 1% of the licensed, will be the same as the performance of the more expensive licensed software?
Well, as discussed above, apart from the assurance that you won’t have software companies breathing down your neck, and avoiding the bad publicity, the other difference is the supposed assurance of technical support, meaning should there be problems with your software, you have a recourse to solve it. Which is another reason why larger companies choose to invest in licensed software even if it’s more expensive, they want the assurance of full technical support should anything go wrong. Or at least they would have someone to sue just in case the software messes up.
It’s very easy to pirate anything. It costs very little and takes only a few minutes or seconds. But nonetheless illegal. The problem doesn’t seem to concern us, if anything, as Jessica Zafra mentioned in her article, it’s not our problem, it’s the manufacturers’ problem. In the point of view of the user, pirates benefit the small people ‘cause they make products, which would normally be beyond our budget, accessible to us. It’s typically also not a good idea to pay a lot of money for a cd that is actually a bust once you’ve used it. Manufacturers’ will most likely not go after the home users anyway, probably because they wouldn’t get any money from us and they would end up losing more money in the process. So they go after those with the big bucks.
But the perspective changes when we look at the situation in the point of view of the manufacturer. As a programmer myself, I know it has discouraged myself and my friends to put our ideas into actual programs and software because of fear that once we’ve sold one copy, it would simply be pirated and we would not even be able to recover our investment, so we only develop software once there is a sure buyer who can pay the whole amount of the investment, which is not a small amount, considering the salary of a programmer is in five figures per month, to say the least, and a software project takes months to finish. Indeed, programming is a very lucrative job, earning six figures for a project, again to say the least. But this is not overpriced considering the amount of expertise required to create these software, and only a handful of people with above average logic can perform the job effectively.
BSA reported that billions of dollars are lost due to piracy. Thus, because of piracy, software ideas have been postponed, ideas which would have optimized processes in the industrial, agricultural and business sectors, increasing the profitability and efficiency of such firms.
These ideas are postponed until a better way to control piracy can be done. Software manufacturers have tried different ways to control piracy of their software. Some create special hardware to be attached to your computer (such as a special key to be connected to the printer port) so that the software can only be used if this hardware is attached. Therefore, even if you could copy the software, you can’t use it unless you can copy the hardware too. Another is by placing a physical mark (such as a nick) on a specific sector of the disk so that when the software runs, it will detect if the mark is present on the disk, otherwise it will not work. Thus, even if you can copy the software, you’re going to need very specialized hardware to copy the physical mark on the exact same sector to be able to use it, and such hardware is very expensive and too specialized.
So what would the recourse of a company short on finances but would want to follow the law do? The best alternative would be to use freeware. As the term suggests, they are software, usually downloadable from the Internet, which are totally for free. Computers need an operating system, but if MS-Windows is too expensive, they can opt for the open source code operating system UNIX, which is actually more powerful and more flexible than MS-Windows, and regarded by many experts as a better alternative than MS-Windows, backed up by what I believe is Microsoft’s greatest challenger Sun Microsystems, although its downside is that it is more difficult to use for the typical user. Sun Microsystems also develops other freeware such as the compiler for its very popular programming language Java. To create dynamic websites, PHP is a popular freeware alternative, which is very easy to integrate with another very popular database software, MySQL, and then for your webserver you can use Apache. There is an abundance of freeware on the Internet, users only need to seek them out.
Piracy that is more often dealt with in the Philippines is piracy involving music and video because the people involved in the manufacture of these are more visible and therefore more vocal. During the crackdown against pirated VCD’s and ACD’s, it was very hard to locate pirated versions of these, although still very easy to find pirated software. Which can be rather ironic because often these software are more important than these entertainment cd’s. If anything, well just to quote a joke, we should patronize pirated acd’s and vcd’s of local entertainers so that the local entertainment industry would die and we would not have any more entertainers running for public office.
Although we still use pirated software in our homes and say that we will continue to do so until they are sold at a more affordable price, at the very least, I advise that it would be honorable that when you are actually making money off of a particular software, you should pay for it.
I searched the Internet for Philippine software copyright laws. I hardly found any appropriate. The closest and most common law that I found was the Philippine Republic Act 8293, otherwise known as the Intellectual Property Code. After reading it, I was very little wiser.
After analyzing what I found, I came to the conclusion that although piracy is a very common idea here in the Philippines, very few laws actually discuss it.
That is, not to say pirates can run rampant here in the Philippines. Software manufacturers protect themselves more through alliances such as the BSA (Business Software Alliance) and SPA (Software Publishers Association), which also exist in the Philippines. Besides these, companies such as Microsoft and Novell themselves invest in creating groups within their corporation that focus on busting software pirates. They try to prevent piracy through publicity campaigns and offering large sums of money (as much as one million pesos) to anyone who will report the use of pirated software that will lead to a successful conviction.
So who creates the rules on what are the rights granted to a software user? The manufacturer of the particular software concerned. Commonly, such rules will be indicated in a EULA, or End-User Licensing Agreement. Commonly, before a particular software can be installed, the EULA is presented by the installer, to which the user must agree to; otherwise the user will not be able to install therefore unable to use the software. Frequently, the EULA will state usual provisions such as the software cannot be copied and distributed. Another rule implemented by most software manufacturers which is apparently unknown to many is that the licensed software can only be installed in one computer. Therefore if anybody installs the software in more than one computer at one time, all the other installations are also considered pirated.
I remember a former co-teacher of mine said all the software in her computer was licensed. Upon seeing her computer, I saw that the software in her computer would have cost over one hundred thousand pesos, a cost I did not believe she could have afforded. She said that they were licensed because what she did was she would “borrow” the licensed software of the company she used to work for so that she could install it on her computer. So was she right in what she said? No. Only the installations in her company would be licensed, any further installations would be pirated. Another friend once said that a copy of a licensed software would be different from a copy of a pirated software. Again, that’s not true. Both copies would be pirated, even if the copy was a direct duplicate of licensed software.
Therefore if a particular institution needs the software to be installed on several of their computers, they would have to pay a license for each installation.
So, how much do licensed software cost in the Philippines? It also depends on the edition your using. Example, the home version of Windows XP costs =P= 5,650.00 , but the professional edition would cost =P= 9,350.00. And that’s relatively cheap. And remember, that is licensed for only one installation. If there are thirty computers in your office, the professional edition would already cost almost =P= 300,000.00. And that’s only the operating system. MS-Office XP (the software package that contains such popular software as MS-Word, MS-Excel and MS-Powerpoint) costs =P= 11,250.00. Again, that’s good for only one computer.
So in order to save the money, offices and companies would resort to piracy, because the money saved can easily amount to over one million pesos. Even software used in schools here in the Philippines are commonly pirated. If a particular software costing around =P= 10,000.00 per license was to be installed in a computer lab with thirty computers, it’s already a whopping =P= 300,000.00. And that’s just one software. Although in actuality, most software manufacturers release an academic edition of their software which can be as little as half the price of the professional edition, most schools, especially the smaller ones, still decide they cannot afford it and go the pirated way. Only the larger and better known universities in the Philippines make a conscious effort to ensure that all software used in their institution is licensed, mostly due to fear of litigation and avoiding the bad publicity it would generate.
And most institutions bear that same mindset. They may not be fearful of the legal action that may be brought against them. In the Philippines, I have yet to read about a particular person sentenced because of using pirated software (although software manufacturers have brought cases against companies, the result of which is not well publicized). What most companies avoid is the bad publicity that may affect their image to society, which may result to a loss of patronage and a loss of profit.
That is, not to say that there are no benefits to using licensed software. There are three basic differences between licensed and pirated software. The price, the legality and technical support.
It is a false belief that the quality or performance of pirated software would be less than the licensed version. This belief is brought about because we are familiar with pirated cassette tapes, the quality of which is definitely less than the licensed version (or what we commonly refer to as the original). But that does not apply to software, simply because cassette tapes are analog while compact disc’s and other computer media are digital, and one of the most important features of using digital is that copies of anything digital will be exactly the same. Yes, EXACTLY the same. Let me discuss this in terms of data transfer; the difference between an analog wave and a digital wave (although this will be an oversimplified discussion). Unlike analog which can have any value from zero to one, digital can only have one of exactly two values: zero or one. If a piece of data with a value of one was sent and it encounters interference or noise to the point that the value was affected and changed to 0.9, in analog, it would be interpreted as 0.9 once received, thus the values would have been changed and depreciated. But in digital, that would not happen, because there is no 0.9 value, because there are only two values, zero and one, and if ever that would occur, it would simply be interpreted to the value nearest to it, which is one, thus the value is not changed (unless there is extreme noise or interference). Thus, if there are problems encountered in a pirated copy not encountered in a licensed copy, that would be more of an exception rather than the rule, and most likely the fault of the copying procedure the copier used, or how the disc was handled before it was sold.
So, seeing that the quality of a pirated copy will not normally differ from a licensed copy, the motivation to use pirated software increases. Why pay more if the quality of the pirated software, which cost less than 1% of the licensed, will be the same as the performance of the more expensive licensed software?
Well, as discussed above, apart from the assurance that you won’t have software companies breathing down your neck, and avoiding the bad publicity, the other difference is the supposed assurance of technical support, meaning should there be problems with your software, you have a recourse to solve it. Which is another reason why larger companies choose to invest in licensed software even if it’s more expensive, they want the assurance of full technical support should anything go wrong. Or at least they would have someone to sue just in case the software messes up.
It’s very easy to pirate anything. It costs very little and takes only a few minutes or seconds. But nonetheless illegal. The problem doesn’t seem to concern us, if anything, as Jessica Zafra mentioned in her article, it’s not our problem, it’s the manufacturers’ problem. In the point of view of the user, pirates benefit the small people ‘cause they make products, which would normally be beyond our budget, accessible to us. It’s typically also not a good idea to pay a lot of money for a cd that is actually a bust once you’ve used it. Manufacturers’ will most likely not go after the home users anyway, probably because they wouldn’t get any money from us and they would end up losing more money in the process. So they go after those with the big bucks.
But the perspective changes when we look at the situation in the point of view of the manufacturer. As a programmer myself, I know it has discouraged myself and my friends to put our ideas into actual programs and software because of fear that once we’ve sold one copy, it would simply be pirated and we would not even be able to recover our investment, so we only develop software once there is a sure buyer who can pay the whole amount of the investment, which is not a small amount, considering the salary of a programmer is in five figures per month, to say the least, and a software project takes months to finish. Indeed, programming is a very lucrative job, earning six figures for a project, again to say the least. But this is not overpriced considering the amount of expertise required to create these software, and only a handful of people with above average logic can perform the job effectively.
BSA reported that billions of dollars are lost due to piracy. Thus, because of piracy, software ideas have been postponed, ideas which would have optimized processes in the industrial, agricultural and business sectors, increasing the profitability and efficiency of such firms.
These ideas are postponed until a better way to control piracy can be done. Software manufacturers have tried different ways to control piracy of their software. Some create special hardware to be attached to your computer (such as a special key to be connected to the printer port) so that the software can only be used if this hardware is attached. Therefore, even if you could copy the software, you can’t use it unless you can copy the hardware too. Another is by placing a physical mark (such as a nick) on a specific sector of the disk so that when the software runs, it will detect if the mark is present on the disk, otherwise it will not work. Thus, even if you can copy the software, you’re going to need very specialized hardware to copy the physical mark on the exact same sector to be able to use it, and such hardware is very expensive and too specialized.
So what would the recourse of a company short on finances but would want to follow the law do? The best alternative would be to use freeware. As the term suggests, they are software, usually downloadable from the Internet, which are totally for free. Computers need an operating system, but if MS-Windows is too expensive, they can opt for the open source code operating system UNIX, which is actually more powerful and more flexible than MS-Windows, and regarded by many experts as a better alternative than MS-Windows, backed up by what I believe is Microsoft’s greatest challenger Sun Microsystems, although its downside is that it is more difficult to use for the typical user. Sun Microsystems also develops other freeware such as the compiler for its very popular programming language Java. To create dynamic websites, PHP is a popular freeware alternative, which is very easy to integrate with another very popular database software, MySQL, and then for your webserver you can use Apache. There is an abundance of freeware on the Internet, users only need to seek them out.
Piracy that is more often dealt with in the Philippines is piracy involving music and video because the people involved in the manufacture of these are more visible and therefore more vocal. During the crackdown against pirated VCD’s and ACD’s, it was very hard to locate pirated versions of these, although still very easy to find pirated software. Which can be rather ironic because often these software are more important than these entertainment cd’s. If anything, well just to quote a joke, we should patronize pirated acd’s and vcd’s of local entertainers so that the local entertainment industry would die and we would not have any more entertainers running for public office.
Although we still use pirated software in our homes and say that we will continue to do so until they are sold at a more affordable price, at the very least, I advise that it would be honorable that when you are actually making money off of a particular software, you should pay for it.
