Corporate software piracy presents a huge challenge to software companies. Especially when it receives political backing.
A rogue company operating in China, for example, could use illegal or unlicensed software to gain an advantage over its global competitors. And, because of the protection provided by the Chinese government, the original developer has little to no legal recourse.
This practice has serious ramifications for Western economies.
Some argue that corporate piracy is unavoidable, so why bother trying to fight it? But that’s not strictly true. There are steps you can take to protect yourself – you just have to find the right approach.
How do anti-piracy laws work across jurisdictions?
Although the old real estate adage of location, location, location holds true for software compliance, there’s a certain degree of flexibility in the way laws are enforced across jurisdictions.
It’s possible, for example, to use laws in friendly intermediary jurisdictions to combat software piracy in others. Take the United States.
The US is one of the most diligent when it comes to copyright and trademark law. And, if you’ve fallen victim to software piracy, you can use that to your advantage so long as the perpetrator has some form of presence in the country – even if their company headquarters are located elsewhere.
During a dispute with ZTE – one of the world’s largest mobile phone manufacturers based in China – the AWR used US copyright laws against one of ZTE’s subsidiaries. Unlike ZTE, this company was based in the US and therefore subject to the country’s legislation on software piracy.
In this case, AWR used the End User License Agreement, commonly known as EULA. This is a routine click-through agreement within software that only lets users who comply with the agreement access their software. By setting a US jurisdiction in their EULA, they made piracy not just a copyright issue, but a contractual one.
A flimsy defence
ZTE argued that since they weren’t end-users themselves, the EULA didn’t apply to them. They hadn’t paid for the software and so weren’t bound to the terms of the contract. But the US judge dismissed that defence.
Forensics proved that the original downloads of the pirated software took place within the United States. And, since ZTE had a US-based subsidiary, AWR was able to show that it was subject to the terms of the agreement. It probably didn’t hurt that AWR showed the president of ZTE visiting the opening of their US-based company.
A summary judgement was handed down, and a settlement was reached.
If you need to report a software compliance breach, please complete the form on our website.