User's Manual

9
2 Why should I protect software?
Illegal duplication of programs is a very widespread practice: it is very simple, cheap and does not require complex,
costly equipment. The methods used to prevent or at least, make copying difficult, have not proved effective, as they
could be overcome in a few months or even a few days. SmartKey approaches the problem in a different way: copying
is not prevented, but use of the program by an unauthorized person.
2.1 The menace of piracy increases the need for protection
In a world dominated by technology, software has become very important. The development of software calls for
enormous resource in terms of time, work, and money. That is why software has become the intellectual property of the
developer or of the company producing it. But this right of the developers is often breached, almost always causing
serious economic losses. Consequently, there is a need to protect software.
Companies need to control their intellectual properties to protect themselves against IT pirates, who alter and distribute
software to users without a license and registration. Moreover, loss of profits due to piracy has a chain-reaction
resulting in lower economic return for developers, employees and all who work in the Information Technology sector.
This puts a question mark on the availability of further funds for research and development, for paying qualified
developers, and, even for marketing for new products.
Another reason why piracy has become so widespread is because the falsification of this type of intellectual property
makes it possible to produce perfect, functional copies. This is in addition to large profits through the illicit sale of
software.
While the levels of piracy differ from county to country, the Business Software Alliance (BSA) announced that, in
2005, about 40% of software used in the world originated from piracy. This led, that year, to a loss of more than 10
million dollars in assets. BSA estimated that in 2005, 25% of software in the United Sates was obtained through piracy.
Permissive laws and lack of political commitment in developing countries to prevent piracy have only worsened the
problem.
2.2 Commercial reasons for protecting software
Piracy has put software developers on the defensive. In their market plans, managers take into consideration the loss of
profits due to piracy. In view of the alarming losses, the commercial reasons for creating a solution to protect software
have drawn the attention of an increasing number of the sector's operators.
An idea is taking shape in the community of developers: there could be a good balance between the costs of
implementing software protection and the benefits thus obtained. Furthermore, to convince managers about the
economic advantages of software protection, developers must consider the following factors:
•
The percentage of software pirated in one's own market niche, if one operates in such a niche. (If the
percentage is very high, one risks losing that niche).
•
The percentage of software pirated in the countries where one intends to sell software.
•
Considering the first two factors, is it necessary and useful to add a protection facility to one's application?
2.3 Piracy? Ruinous to the software industry
Information Technology piracy has endangered the very concept of intellectual property. In brief, IT piracy is the
practice of copying and using a software product without permission of the proprietor or developer. The idea that use
and duplication of proprietary software is illegal has only recently began to spread among users, although many still
show a general disinterest in treating software as intellectual property with its own value.
IT piracy occurs in different ways. We shall explain a few cases of this below:
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Theft of software: buying a single license and loading the software on several computers, in breach of the
contract clauses.
•
Upload and download: providing unauthorized copies of the software to users connected by modem to a
provider or to the Internet.
•
Forging of Software: unlawfully duplicating software and selling it as if it were new.
•
OEM unbundling: selling what was originally stand-alone software, while pretending it is an integral part of
one's own hardware.