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PEZA: Advisory on the Risks of Using Pirated Software

FOR:
ALL ECOZONE DEVELOPERS AND LOCATOR ENTERPRISES
ALL ECOZONE ADMINISTRATORS | MANAGERS | OFFICERS-IN-CHARGE

FROM: Director General TERESO O. PANGA

DATE: 03 April 2024

SUBJECT:  Advisory on the Risks of Using Pirated Software

In relation to the concern that some PEZA-registered companies may unknowingly or accidentally use counterfeit and pirated software from third-party sources, PEZA sees the need to raise awareness about the potential dangers and penalties associated with such practices as provided in R.A. 8293 or the “Intellectual Property Code of the Philippines” as well as R.A. 9239 or the “Optical Media Act of 2003”. This memorandum circular aims to promote ethical software practices among PEZA locators and developers that would bring several long-term benefits including enhanced reputation as a responsible and trustworthy partner in the industry.

As defined, software piracy involves the unauthorized copying, distribution and use of copyrighted software without proper licensing or permission from the copyright holder. Common forms of software piracy include the following:

  1. Softlifing / end-user piracy which purchasing of a single licensed copy of software and loading it on several machines;
  2. Counterfeiting which is the illegal duplication or distribution/selling of software;
  3. Hard disk loading which occurs when a computer hardware reseller loads unauthorized copies of software into the machine it sells;
  4. Software rental which is the act of renting out a copy of software for temporary use, without the permission of the copyright holder;
  5. Client-server overuse when the number of users who are using a particular software exceeds the number of licenses a company has; and
  6. Online piracy also known as internet piracy occurs when illegal software is shared, sold or acquired through the internet; and many others.

Using pirated software carries significant risks which can be far-reaching such as the following:

  1. Legal consequences. Software piracy is a violation of the copyright provisions of R.A 8293 and R.A. 9239 as abovementioned. It must be noted that anyone who possesses or uses pirated software is potentially liable for software piracy and can face legal ramifications for copyright infingement. This includes not only the counterfeiter but also users of the counterfeit software. Law enforcement agencies may investigate and prosecute cases of piracy and confiscate pirated products and devices with installed counterfeit software which may be vital to the daily operations of the company. Those found guilty of software piracy can face up to 9 years of imprisonment, fines of up to P 1.5 million, revocation of travel visas, and suspension of operation of business closure.
  2. Cybersecurity threats. Using pirated software poses serious cybersecurity risks as it often contains malwares such as viruses, spyware and ransomware, which can cause irreparable damage to devices and lead to identity theft, data breaches and loss of irretrievable sensitive and confidential data.
  3. Lack of updates and support. Using pirated software that typically lacks access to updates and support, also carries the risk of failure of the software that can cause operational disruption. Legitimate software licenses, on the otherhand, offer regular updates, security patches, and technical assistance to maintain smooth operation.
  4. Damage to reputation. Violation to patents and copyrights can negatively impact stakeholders’ trust and confidence, company credibility, and public perception. This may lead to loss of partners and clients who value integrity, controversies and backlash.

Provided below are some of the best practices to safeguard against software piracy..

  • Purchase software from repurable sources;
  • Do not use licensed software that the company did not procure;
  • Do not give licensed software installers, license keys and account credentials to someone else;
  • Avoid downloading software from illegitimate file sharing sites;
  • Restrict software installation to few authorized personnel;
  • Perform regular inventory and software audit by checking the activation status of software licenses and examining indications of counterfeiting; and
  • Educate personnel on the basics of copyright laws, intellectual propery rights and the risks associated with downloading or distributing pirated content.

For your information and guidance.

PEZA-DTS
1316-2024-00018

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