Software piracy jumps to $185m as industry fights back

Software counterfeiting continues to be a multi-million dollar problem for the IT industry - and businesses are starting to fight back against it.

Entertainment media and software remain one of the most popular categories of goods to counterfeit, along with clothing and 'financial instruments' such as currency and credit cards, according to Canada's Gieschen Consultancy.

The value of pirated software hit $6.2m in August, down from $91m in June but totalling $185m in the first half of 2005.

Overall intellectual property theft was up 370 per cent in August, according to the consultancy, due in part to the overall increase in spending over the summer. Around a quarter of pirated goods were sold by street vendors or at seasonal markets and car boot sales.

Microsoft continues to be the top software brand to pirate, followed in the first half of the year by Sony, Adobe, Autodesk and Macromedia, Gieschen said.

The US was the clear leader in reported IP violations in August, with $76m in seizures and losses, followed by France with $9.7m and the UK with $4.9m.

These figures are echoed in a recent study by the Business Software Alliance and market researcher IDC, which showed 27 per cent of all software in use in the UK is pirated and estimated the cost of piracy to software makers worldwide to be in excess of £1bn.

Najeeb Khan, spokesperson for the BSA and anti piracy manager for software maker Adobe Systems, said: "If the UK achieved a 10 per cent reduction in software piracy, an additional £10bn could be raised towards UK GDP while 40,000 jobs could created in the IT sector."

The news comes as business executives from the world's largest IP developers - including Microsoft, record labels EMI and Universal, and pharmaceutical company GlaxoSmithKline - met this week in London to back a collaborative initiative called Business Action to Stop Counterfeiting and Piracy (Bascap).

Launched by the International Chamber of Commerce in November 2004, Bascap aims to combat piracy through raising awareness and encouraging governments to crack down on IP violations.

Khan said the BSA welcomes such efforts. "This initiative demonstrates that the damage arising from counterfeit goods affects the economy, and also has a negative impact on the consumer."