Software piracy is on the increase, costing the industry billions each year. Since its establishment in 1994 however, ELSPA's crime unit has been fighting back. Gareth Lofthouse reports.
John Loader doesn't have much time for journalists. As chief investigator tor ELSPA's crime unit, he realises that a certain amount of public relations work is required, but you get the feeling his heart's not really in it.
When interviewed at the ECTS, Loader was polite, but he gave the impression it was a bit of a chore. In contrast to all the PR people chattering away throughout Olympia that day. Loader exhibited no interest in making over-inflated claims for his organisation. A down-to-earth man with 30 years experience in the police force behind him, he seemed oddly out of place in the hot air environment that constitutes the European Trade Show.
His comments on the extent of the problem facing the industry, however, are as revealing as they are brief. According to ELSPA's figures published in May 1995, the game industry loses $2.7 billion a year, while the business software community loses an astounding $7.8 billion to fraud. Loader admits even that estimate might be conservative, however — Nintendo US boss Howard Lincoln claimed $5 billion was lost every year by the games industry alone.
Given these figures. Loader has to be realistic about what ELSPA's crime unit can achieve. "On a target by target basis we've had almost 100 per cent success," he remarked. "But the limited resources mean we're not going to solve the problem."
Limited resources indeed — the words crime unit might sound rather grand when you realise it's comprised of just John Loader and his assistant investigator Karen Batlin. This has not stopped them from busting some of the most serious counterfeiting operations in the country.
Since its inception in April 1904, the crime unit has uncovered criminal software theft conspiracy, illegal Bulletin Board operators and even the seizing of illegal software at car boot sales. With such a broad range of criminal activity to cover, Loader's team found that just seizing illegal software at the point of sale was not fighting the problem at the root.
Now the crime unit hires private investigators on a job by job basis to follow up on tip offs. Information often comes from employees within companies with dubious operations as well as from customers that receive suspicious goods.
Investigators will sometimes make test purchases to prove counterfeited software is being sold, but in the case of the larger criminal operations, Loader's team has worked closely with the police, obtaining search warrants and accompanying them on raids to collect the evidence required to bring the pirates to justice.
Given the importance of working closely with the police and the trading standards authorities, Loader's experience and understanding of police procedure is vital. However, the crime unit will undertake private prosecutions on behalf of its members when the police won't take certain cases to court.
Many in the games industry had hoped that the transition to CD-ROM as the main software format would help to reduce piracy, but Loader quickly puts pay to that theory. "It's as easy to copy software now as it ever was," he states. "You just have to spend £5000 on a decent computer, tapestreamer and a CD writer. Then you just need the gold discs, which cost as little as £5 each when bought in bulk."
Nor does he think it's likely that advancements in the technology of piracy protection will solve the problem in the foreseeable future. From the outset of video gaming, developers have sought to outsmart the code crackers with a whole range of tricks, all to no avail. Loader is equally non-plussed by the latest efforts by companies like Nimbus and Disk Express, stating, "We've yet to see anything that works in practice. It seems that if you can make it, someone else can break it." In fact, as is the case with hackers obsessed with breaking into the most protected computer systems in the world, there is a whole community of crackers who enjoy the challenge of overcoming the latest protection systems.
Loader was actually approached by such a crew while at the show, and they asked him if he thought they were the villains. "Maybe not," he responded, "but they provide the tools that make the crime possible."
Few Amiga owners take the problem of piracy particularly seriously. The music business has been claiming that illegal copying is killing off music, but this has never done anything to stop people taping CDs, and the same attitude applies to software.
Tedious sermonising is not Amiga Computing's style but you might be interested in how these crimes affect you as an end user. It is well known that the Amiga has suffered particularly at the hands of blackmarket traders, and this has led to higher prices and nervousness in the industry about developing for the platform.
Take DMA Design, for example. Makers of the phenomenally successful Lemmings, DMA suffered so much from piracy it was the major reason for their subsequent abandonment of the Amiga. Simon Little, Lemming's designer and now development manager for Gametek, commented "I don't think there were many Amiga owners that didn't have a copy, and a high percentage of those were pirated." Worse, he points out, the more popular a program is the more people will want to crack it.
Piracy in the music and games industries are both similar problems, but the comparison sometimes conceals some important differences. For example, Little believes the selling of bootleg copies in carboot sales and markets is more common with games. Music CDs cost £13 whereas games cost £30, so obviously the bootlegger can make much more of a profit out of the latter. The difference between a music CDs price and a gold disc is not so rewarding.
Given how widespread this activity now is, are ELSPA doing enough to fight the problem? "Well it's one of those things where you can never do enough," Little says. He pointed out that progress will be slow, since getting as far as a prosecution for illegal copying takes months.
Unlike with the music business, where the transition to CD has probably encouraged more home illegal duplication thanks to its superior sound quality, the game industry's move to CD could radically reduce the amount of casual copying of games by individuals.
Simon doubts, however, that it will have any such benefits as far as the commercial and industrial pirates go. As he knows from his own experience with another game called Journeyman, the professionals can manufacture high quality, convincing copies of everything from a game's CD to its packaging and artwork, and then go on to flood whole markets in the Far East with their illegal versions.
PIC: Lemmings was phenomenally successful, but DMA lost out big time thanks to piracy.
In its short history the ELSPA crime unit has successfully uncovered several major criminal conspiracies, each of which show how easy it is for individuals to make pirate copies of software without spending a fortune on equipment.
In true Crimewatch tradition, the piracy underworld has its own characters that crop up again and again. One such person is Trevor Bell, a redundant British Rail Signaller known throughout the international pirate BBS network by his handle of 'Hot Tuna.'
Bell was selling pirated versions of major software titles when he had the misfortune of being approached by John Loader acting as a customer. He offered Loader a CD containing £30,000 worth of Nintendo games, all for the price of £28. Bell also had CDs apparently containing every current game and business program available for the PC, which he was selling for the same price. He was duly prosecuted and sentenced to 200 hours community service with a warning that failure to carry it out could result in a prison sentence.
That was back in May this year. Bell obviously found his previous line of work too rewarding to abandon, however, because by August the ELSPA crime unit had fresh information about the 24-year old man's activities. This led to a raid on 31 August when Loader, trading standards officers, and members of West Mercia CID, uncovered illegal property in houses in Redditch and Kidderminster. Bell was at the Kidderminster address at the time of the raid.
As well as discovering two ROM writing machines and two DAT tapestreamers, they also uncovered a library of over 200 gold CDs, including one containing Windows 95. A number of copied CDs were already boxed and set for shipment, including Windows 95, the BT phone disk and lots more Nintendo and PC software. These finds, combined with illegal products discovered at a separate bust made in Yorkshire, meant the crime unit had uncovered millions of pounds worth of pirated gold CDs in that month alone.
Funnily enough, while carrying out the Kidderminster raid they also found a number of items identified as coming from a recent burglary at the ELSPA offices.
Another colourful character, Nicolas Vivaldi, made a rather feeble attempt to escape conviction when he was charged with four offences of Copyright theft in July. Pleading not guilty to any of the offences, Vivaldi went on to accuse John Loader of planting a total of 41 counterfeit CDs on him and of altering letters to accomplices found on the suspect's computer.
Not surprisingly the Magistrate dismissed these allegations and ruled that ELSPA's Crime Unit had acted correctly and uncovered clear evidence of his dealings in copied software. Loader later estimated the total value of the software in Vivaldi's possession at over one million pounds — none of which was paid for.
PIC: John Loader, ex-policeman, now heading the ELSPA crime unit.
PIC: A steady flow of successful crimebusts have caught CTW, the trade newspaper's attention.
PIC: The boffins have tried to beat the pirates before. This time Disc Express have a go.
This article was originally published in Amiga Computing issue 93 from December 1995 on pages 62-63.
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