Piracy Unmasked

Does the secret side of the Amiga harm the machine's future or has it actually contributed to its survival? David Taylor tackles the sensitive subject of software piracy, talks to all sides and unearths some interesting ideas.

"Piracy is a multi million pound industry... it exceeds the size of the legitimate software industry."

Nobody can claim that software piracy is legal, but surprisingly, every side involved in this area thinks that they are right. Many people think that piracy is harmless fun with little impact on the real world. The truth of the matter is that piracy is a multi-million pound industry, that it exceeds the size of the legitimate software industry and that it threatened to spark off an international trade war.

The Entertainment and Leisure Software Publishers Association (ELSPA) has recently broken a piracy ring which they claim was draining £100 million a year from the software industry. These phenomenal sums of money are ironically linked to the rise of the media that they claimed would save the market from piracy, the CD-ROM.

When the CD arrived on the market a few years ago, the fact that it couldn't be duplicated cheaply and contained too much material to be copied to floppy disks, meant that publishers hailed it as their saviour. However, the price of CD-R, the recording equipment that allows the creation of gold CDs (i.e. CD originals) has dropped from tens of thousands of pounds to a matter of hundreds. Instead of being the death knoll for pirates, it has provided them with a way of distributing copies even more cheaply. Geoffrey Webster, chief executive of the Federation Against Software Theft (FAST), says, "Piracy of software, games and educational data is a major problem for publishers and knows no technical/hardware boundaries. The size of the problem has been estimated at £600 million lost to the industry in 1994. (43 per cent of total sales.) We and ELSPA have found that cartridges and increasingly CD-ROMs are the subject of piracy through copying and counterfeiting. There isn't a technology that is immune or safe."

Police action

ELSPA and the West and South Yorkshire police carried out raids just before Christmas '95, in a joint venture called Operation Hard Drive; they recovered over 500 CD-ROM compilations, each one containing up to 400 programs. Their retail value would have been approaching £30,000, yet the CDs were being sold at car boot sales for as little as £25. These raids netted over £5 million worth of pirated CD software. The gang responsible was estimated to have a turnover of £2 million per week.

Piracy is a multi-layered phenomenon. Taken from the bottom end up, there is quite blatant infringement of copyright in the Public Domain in the form of software emulators of old platforms like the Spectrum and Commodore 64. "Snapshots" (which are forms of data that the emulator can read) of old games from years ago are freely available. It seems unlikely, because these games are from redundant platforms and sometimes from companies that no longer exist, that any action will ever be taken because no income is being lost. This has become an accepted end of what still amounts to piracy. Even clones of old games, where none of the original code is used, are in dubious territory.

This, however, is not the area that worries the authorities and the companies. It is the current and future platforms that are under threat and losing massive profits. Copies of PlayStation and 3D0 games not even released yet are available. CDs and DAT tapes containing every available release for the Amiga have been discovered. Compilations of PC software containing every business and leisure title of note have also been found.

It's often believed that the majority of pirated software is games, but Geoffrey Webster says otherwise: "The majority of piracy takes place with business software, with £400 million of the total falling into this category. The size of the problem in the home market is unclear, but a survey carried out by us last year showed that home computer users had up to 74 per cent of their software unlicensed."

Global pirates

Such is the level of the problem that last year it was at the root of an argument between the USA and China, where many companies exist purely to pirate goods. America was concerned with the level of illegal copying of all US products, from T-shirts and audio CDs to films and computer software. China argued that the problem was no worse than in Western countries until recently and that it was unrealistic to expect them to stamp out the problem, something which no other country had managed. The US threatened sanctions in the form of 100 per cent punitive tariffs on more than $1 billion worth of Chinese exports; China retaliated with threats of equal counter measures.

Some sources claim that the underlying argument was not about software piracy, but the next generation of copyright infringement that is looming — the copying of hardware. One source was reported as saying quite simply, "CDs would not be worth provoking a trade war over."

The negotiations continued and a cliffhanger agreement was signed hours after the original deadline. China agreed to combat piracy by setting up task forces whose job it would be to search premises and destroy pirated goods and manufacturing equipment used. In particular, the USA wanted 29 known factories to be targeted.

These were attempts to close down the business end of piracy where the goods are cloned as nearly as possible by operators, including packaging, so that they can be sold on as originals to unsuspecting customers at low prices. It did nothing to address the problem that ELSPA and the police have been facing of pirates compiling CDs with cracked software.

Believe it or not, the UK has quite a good record as far as piracy goes. A recent estimate set the percentage of legal software in the market at 46 per cent in the UK, which although less than half was far better than the 14 per cent achieved by other countries like Italy and Spain. Despite every country improving its record over time, the estimated value of pirated software still runs into billions of pounds.

Aside from the compilation of CDs by the "professional" pirates, there are two real areas of piracy. The first is the so-called playground piracy. This is where software that has no protection system and relies on respect for the copyright is copied by people. This is a simple disk-to-disk copy which anyone with basic knowledge of a computer can do. It might be children at school swapping games or employees at work copying software from the company.

Copying at work

Until recently the level of illegal copying of software in the workplace was not regarded as a serious problem by employers. In fact, in a study a few years ago it was considered less serious than hacking the company's computer system and only slightly more serious than speeding or illegal parking. It certainly was not in the same league as personal theft.

Licence to copy?

The problem is compounded because some software packages have licences that allow the program to be copied for use on a home computer, on the assumption that both copies will not be in use at the same time. This has happened possibly because of the growth of portable computers where the package can obviously be used wherever the computer is; which is only one step away from the package being used on two machines by the same person but at different times of day.

However, companies have woken up to the fact that separate licences are required for each copy of the software used within the office. This has been caused partially by legal proceedings against companies discovered using pirated software. A division of GEC was last year forced to pay out undisclosed damages after admitting software piracy. They admitted to using 177 unauthorised copies and ended up buying not only the additional licences required but also paying what is suspected to be considerable damages. Companies are beginning to decide the risk might not be worth the massive cost if caught.

The two laws used to stop pirates are the Copyright, Designs and Patent Act 1988 and the Trademarks Act 1994, which allow for prosecution leading to up to 10 years in prison and unlimited fines. It's unlikely that companies would end up having executives facing prison, but the threat of fines is very real.

The other driving force behind companies cleaning up their hard drives has been the threat of viruses. Virus programmers often use illegal copies of programs as trojan horses in which they can hide their virus code. Companies may not like shelling out for proper software, but they like the thought of losing valuable data to viruses even less.

The threat of prison and fines doesn't seem to deter the second set of pirates. These are actual coders grouped together as cracking crews who make it their aim to get hold of new software releases as fast as possible and remove any copy protection they find so that the software can be easily duplicated.

Copying made easy

On the Amiga, playground pirates found that some software had been written that used different disk systems from AmigaDOS. These disks were non-DOS and couldn't be copied with a simple disk copier. Bits of hardware appeared on the market that attempted to sync up internal and external drives so that they could copy these unusual formats. This allowed people with no computer knowledge to continue copying software for their friends.

The hardware was legal and could, and indeed still can, be bought from computer stores. Its theoretical use was for people to make a single backup for their own personal use, should they damage their original disks. The adverts in magazines often stated that the manufacturers did not condone the use of their hardware to duplicate copyright software. Companies that used custom disk formats were unconvinced and often claimed that backing up was unnecessary because they would replace any original disks that were damaged.

Password system

Companies then introduced another idea — that of the code sheet. The idea is a simple password system, where the program insists on a word or figure, taken from either a dedicated sheet or from the manual, being inputted. The program asks for a different code every time the program is loaded and checks the entry against its database of correct answers.

In games software the password system might be called several times during play to make it more difficult for the system to be circumvented. Playground pirates got around this by simply photocopying the manuals and code sheets. Companies then produced the code sheets in such a way as to prevent photocopying, often using a glossy colour over a similar matt shade. This meant that you could read original copies, but that copies could not pick up the subtle difference in colour.

The idea was to lead to a stalemate, where playground pirates were stopped. In fact this is where the cracking crews enter the arena. While companies still use both systems of protection and have developed disk systems that even the hardware copiers can't deal with, cracking crews have circumvented the entire question by removing the password system from software and copying the programs on to standard DOS disks. Playground pirates are back in business.

The question that arises from all this is what exactly do the pirates hope to gain from spending their time cracking the protection? These are not the people distributing large quantities of the software and actually making the money from other people's products and work.

It's a cracker...

One member of the Amiga "scene" explains: "Cracking software is simply another way for a group or an individual to get their name known. There is demand for pirated software; so if a group can fill that demand and be recognised for it, they'll spend time disabling protection and putting the game on to easily copyable standard DOS disks, with the addition of a small intro.

"Cracking is also a challenge. Some people enjoy coding; some people enjoy writing music and some people enjoy cracking games."

It is the addition of an intro, a small piece of code that tags the pirated software with the group's signature, which proves that they were responsible. The intros vary from a simple text screen to those including short animations. The idea is that the quicker a product is cracked and released with an impressive intro, the more street cred (although modem cred is more accurate). Once cracked the software is made available through "warez" BBSs, which are bulletin boards that contain pirated software.

The BBSs, which used to be quite blatant and readily accessible, have become closed systems. These are private BBSs that stop just anyone from accessing them, especially the authorities. There has also been a move towards legal scene BBSs, which allows the SysOp to have a wide range of users without the worry of being arrested. Some sceners have taken this as a sign of weakness and equate "legal to sad". Thankfully, those narrow views seem to be taken by the younger members, while the adults take a more astute view.

While the idea of competition between groups is certainly true — charts showing groups' successes exist — some pirates give a more tangible reason. They claim that the price of software is far too high, particularly in the games market where £30 can often be wasted on an appalling game.

Passing the buck

Companies don't tend to wear this view very well. Daniel Pettitt from Digita says: "The popular response from someone breaking the law is transferring the blame to another party. What pirates do not realise is the cost of producing a piece of software. There is also no real guarantee that you will actually sell enough to return your costs.

"For example, a new product like Organiser took eight months and many thousands of pounds to develop. Once finished, you have to advertise in the popular magazines so that users are aware of it and can place an order.

"It is not a cheap business!

"It is very difficult to estimate how much business you lose through piracy because there is no way of quantifying it. It also depends a great deal on the product's popularity, price and the platform it is running on.

"However, we estimate that for every one legitimate copy of Wordworth, there are between eight and ten pirated copies."

Tony Bullock from Softwood says the matter is very clear cut: "Piracy is theft and there is no excuse for theft. Every time someone copies a software title, the developers lose a sale. Every sale they lose, they lose money. If they lose money, they go out of business. Some other Amiga software developers have already followed this path and if piracy escalates further it will eventually lead to no software development on the Amiga."

Trial offer

Pirates often argue that they give people the chance to try out the product before deciding to buy it. As one pirate put it; "It's like an extended demo or Shareware and we do encourage people to buy the original if they like it. Some do, because people like owning the whole boxed thing, but others don't, although it's unlikely that they would have ever forked out for the original anyway."

Michael Console Battilana from Cloanto agrees in part. "Pirated copies used by people who cannot afford to buy the original package should not be counted as 'lost business'. Several statistics are apparently affected by this mistake. Unfortunately, however, piracy is also available to those who can afford an original package and this of course hurts both the industry and honest users."

The solution, claim pirates is to offer even better value for money. "Reducing the price will stimulate sales — there is no doubt about that. The old line 'we have to keep the price high to compensate for piracy' that the software houses keep coming out with is so naive. Some pirates do buy software. They buy Alien Breed 3D, they buy Breathless, they buy Sensible Soccer, because they're quality software and they don't mind forking out £25 for that. Now if these games were £15, you would get more pirates getting a game from a BBS and then buying the original. Many of today's cracked games come with a message from the crackers asking the user to buy the original if they like the software."

Cloanto concur with the view that quality sells. "Although we do have to take legal actions from time to time, I think that a good product at a good price with good distribution is the most practical way to fight piracy."

However, companies also point out that legitimate demos of programs exist on Aminet and magazine Coverdisks. As Michael of Cloanto put it: "On the one hand, I agree that pirated software provides a means of introducing software to potential users. But from that perspective, the publication and distribution of demo versions should have almost the same effect. We do have demo versions of all our packages, yet the pirate BBSs carry the latest commercial versions, sometimes even tampering with the serial number just to make their version look newer — e.g. PPaint 6.2, which was never released by us!" With full programs also often given away by magazines, companies ask how anyone can justify not paying £4 for a legitimate copy.

Free software?

"What if a company like Softwood released a full working version of a new software title on a magazine Coverdisk and offered free registration? Would the pirates register and buy the manual? On the front cover of your sister magazine, Amiga Format [March 1996] there is a Final Writer Lite Coverdisk; a full working version of our new word processor which you can register to receive product information and news free." Tony Bullock doesn't believe that the cost of the software is an excuse for pirates to legitimise their activities. "Saying that reducing the price of software will reduce piracy is like saying that thieves won't rob jewellers if they dropped their prices!"

Perhaps there is not as much discrepancy between the two arguments as it seems. Some pirates claim that the "warez" are simply a commodity and that they rarely even look at the software they are plying. The aim is purely to become the most respected (from members of the scene) BBS with the most uploads and downloads. The competition is the all, not the products themselves. Many of the products might never be used by the pirates, so the question of lost sales might not be relevant to those people.

However, that doesn't apply to playground pirates or the traders who do little more than copy disks. Without getting hold of the cracked products, these people would be left with no option but to pay for the proper software. The difficulty in cracking software "depends on the protection system being used. Simple systems like the manual/novella protection ("Enter word x on page y") are dead easy; just find the bit of code that checks the user's input against the correct answer and hack it out. Trackloading games, where the game is stored on a non-DOS disk are a bit more tricky, but no problem to an experienced cracker. Cracking isn't for the novice though; it takes a good knowledge of 680x0 code and the internal workings of the Amiga to crack a game," explains one scener.

Boosting sales

However, they argue that it is precisely this action, the one that enables novices to pirate software that leads to the popularity of a platform. "There is no doubt in my mind that piracy encourages the sales of a machine. For example, if three of your mates have Amigas and they all get the software for free, wouldn't you want an Amiga and free software too? Result — another Amiga sold." If this were true, it would mean an increased market out of which the same percentage would buy original products, but resulting in a larger number of sales.

This argument is partially accepted by some companies, as Cloanto explain. "The most immediate way to protect commercial software from piracy would be, in our opinion, the implementation of a unique serial number in each computer. Mainframes have had serial numbers for decades and software packages were personalised to run only on one computer.

"According to statistics, the modest cost of a hardware serial number could have prevented the loss of hundreds of pounds worth of software for each computer and maybe the price of today's software would be less as a result. But, maybe, computer manufacturers had other priorities, last but not least that there should be a "lot of software" for user on their systems?"

Software companies know that piracy is not going to disappear. A number of busts have meant that some sceners are leaving piracy behind and turning legal, but the problem will never disappear. While there is still a demand, despite the risks, there will always be people ready to take their place. However, the threat of legal action is not a solution in itself because most pirates consider it almost inconsequential. "For Joe Bloggs, who downloads stuff from BBSs and trades disks by post, there's not a chance in hell that he's going to be prosecuted unless he's mailing out thousands of disks a day. Partly this is down to the enforcement agencies — FAST are understaffed and the local police forces don't really care. Hell, I know a couple of policemen who pirate stuff regularly," claimed one scener.

Company initiatives

Companies have therefore developed their own plans. While they continue to pass on any information to the authorities when they can, they believe that there is more that they can do themselves. Some piracy arises from ignorance of the law, such as selling a hard drive which still has software on it. Education, think Digita, is the key and they attempt to inform users through "prominent sections in instruction books." They also think that providing more than just the software is the key. "Providing value for money with instruction books and quality technical support to registered users only. For example, we have commissioned author Larry Hickmott to write the Wordworth 5 manual so that users can get the most out of Wordworth. Also, we offer extra services to registered users such as free newsletters and special discounts."

Softwood too have followed this line. "We offer free technical support, reductions on other Softwood products and even extras like free fonts with certain products. We continue to develop our software adding to its functionality and ease of use and then make the upgrades available to registered users for a minimal charge. Only registered users can upgrade this way which leaves the pirate with an outdated piece of software."

The end result

Attitudes do seem to be changing. The figure of pirated goods is dropping and some pirates are giving up the game and encouraging others to do so. FAST are bringing pressure to bear with 250 actions each year leading to 60-70 search warrants and a similar number of court cases. Prison might not be a deterrent but the thought of losing all their hardware may be making some pirates think twice.

Serious pirates, the ones who make thousands of pounds a day from selling illegal software are not likely to stop, because they can, literally, afford the risk. But maybe the lower end users will think twice before buying more pirated software and realise what legitimate software offers them. And equally, companies may think about what more they can offer Amiga users to stop them from wanting pirated software. Only by destroying the demand for piracy can they stop the supply.

Many thanks

Thanks to everyone who answered my questions and for the frankness they showed; to the companies and to FAST for sparing some of their valuable time and to the sceners who got in contact. No handles or names have been used to protect anonymity and all correspondence and material supplied has been destroyed. Thanks to the sceners from Digital Candy BBS 0191 232 5527, which has shown how successful a 100 per cent legal scene BBS can be. Should anyone wish to comment on the points raised in this article, we would welcome a mature debate within our Talking Shop section. Send correspondence to the usual snail mail and E-mail addresses.

But I wrote it!

The extent to which copyright law applies to software was clarified by the courts back in 1993. The courts ruled that software using original code, but which still arrived at the same end, so called non-literal copying of "look and feel", could be considered as copyright infringement. In other words, two products with totally separate code but performing identical functions with similar interfaces. The UK case, John Richardson Computers Ltd vs Flanders and Chemtec Ltd, surrounded software designed specifically for use in the pharmaceutical industry. One company developed a different version of the program and was sued in a case that the courts partially upheld. The decision was readied using very strict boundaries which has meant that there haven't been floods of cases claiming that "they copied my word processor".

Fair cop

If you want to report an instance of software piracy, you can contact FAST on 01753 527999 or ELSPA on 01386 833810.

https://archive.org/details/Amiga_Shopper_Issue_60_1996-03_Future_Publishing_GB/page/n21

PIC: Programs often get pirated from versions that should never have been released.

PIC: CD-ROM drives were thought to be a solution because they were read only (above), but the price of recordable drives (right) has dropped and now CDs are the biggest danger.

PIC: Popular programs are released by cracking crews who add an intro to make sure their name is spread around as being "elite".

PIC: "The majority of piracy takes place with business software."

PIC: Games are a particular challenge to pirates because they have custom disk systems.

PIC: Digita forecast that for every single copy of their excellent Wordworth program, there are a further eight or nine pirate copies.

PIC: The protection system might be broken, but illegal copies iacif useful things like manuals and customer support, is it worth it?

CALLOUT: "Cracking software is simply another way for a group or an individual to get their name known."

PIC: Some companies are so worried that they have put multiple security checks on their programs...

PIC: ...like the brand new Counting House, but it's not likely to stop experienced pirates.

PIC: Only when you've passed both checks can you access Counting House itself.

PIC: This full game got mistakenly passed through PD houses and briefly made it on to Aminet.

PIC: Even Shareware programs are open to abuse. Not registering is often a breach of copyright, but oddly many pirates will register Shareware.

PIC: But not all, some people even crack Shareware programs, which is likely to deter programmers from creating new programs.