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Canada Falls Behind U.S. In Software Piracy Fight - Market News Magazine - July 7, 2004

Toronto, ON, July 7, 2004: The Canadian Alliance Against Software Theft (CAAST) today announced that Canada is significantly behind the U.S. in its fight to reduce software piracy. The annual global software piracy study released today by CAAST and the Business Software Alliance (BSA) indicates that 35 per cent of software applications in Canada were pirated in 2003, in comparison to 22 per cent in the U.S.

The study, conducted for the first time by global technology research firm International Data Corporation (IDC), indicates that software piracy is having a significant impact on Canada, costing the economy CDN$990 million in lost retail sales of software. In comparison to global trends, Canada’s software piracy rate of 35 per cent is only slightly below the worldwide software piracy rate of 36 per cent. Globally, software piracy resulted in a loss of CDN$39 billion in 2003.

“It’s disappointing to see that Canada’s piracy rate is 13 percentage points higher than that of the U.S. and is not keeping pace with countries such as Sweden and the UK,” commented Jacqueline Famulak, President of CAAST. “In Canada, more than a third of software applications are pirated. It’s clear that software piracy is becoming a competitive disadvantage for us - robbing the country of retail sales, tax dollars and jobs. CAAST will continue to work with Canadian stakeholders, including governments of all levels, to ensure that the fight against software piracy is effectively addressed.”

The study reported that the piracy rate in North America was 23 per cent, with losses totaling CDN$9.6 billion. In the Asia/Pacific region, the piracy rate was 53 per cent, with dollar losses of more than CDN$10 billion. Eastern Europe saw whopping piracy rates of 71 per cent, with dollar losses at more than CDN$3.8 billion. In Western Europe, the rate was 36 per cent with CDN$12.8 billion in dollar losses. Latin America and Eastern and African countries saw piracy rates of 63 per cent and 56 per cent and dollar losses of CDN$1.7 billion and CDN$1.3 billion, respectively.

“Software piracy continues to be a major challenge for economies worldwide,” stated Robert Holleyman, President and CEO of BSA. “From Algeria to New Zealand, Canada to China, it deprives local governments of tax revenue, costs jobs throughout the technology supply chain, and cripples the local, in-country software industry.”

The study found that size of a regional software market is the critical link between piracy rates and actual dollars lost. For instance, 91 per cent of software installed in the Ukraine in 2003 was pirated, as compared to 30 per cent in the U.K. But dollar losses in the U.K. (CDN$2.13 billion) were about 17 times higher than those in the Ukraine (CDN$122.8 million). Th difference is attributed to a much larger total PC software market in the U.K. than in the Ukraine.

"Canada represents a perfect example of the problems presented by software piracy," added Alex Manfrediz, IDC Program Director, Global Projects. "Despite the presence of a healthy technology sector and strong copyright protection laws, Canada still managed to achieve a 35 per cent piracy rate resulting in more than CDN$900 million in lost revenues. Among the victims of software piracy are small Canadian software developers who need a strong local revenue base to survive."

“The fight for strong intellectual property protection and respect for copyrighted works spans the globe, and there is much work to be done,” Holleyman said. “BSA and CAAST will continue to work with governments to enact policies to protect software intellectual property as well as implement programs to raise business and consumer awareness about the importance of copyright protection for creative works. Lowering the piracy rate will stimulate local economic activity, generate government revenue, create job growth and cultivate future innovation.”

Conducted for the first time by IDC, this year’s CAAST and BSA global piracy study incorporated major software market segments including operating systems, consumer and local-language software. In previous years, the study was limited to business software applications. The study found that while CDN $107 billion dollars in software was installed on computers worldwide last year, only CDN$68 billion was paid for.

IDC used its own propriety statistics for software and hardware shipments, conducted more than 5,600 interviews in 15 countries, and used its in-country analysts around the globe to evaluate local market conditions. IDC identified the piracy rate and dollar losses by utilizing proprietary IDC statistics on PC, software and license shipments by all industry vendors in 86 countries.

For more information, visit www.caast.org.

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