Definition

• Software piracy includes any unauthorized copying or use of software, according to Emory Law School's Information Technology site. Unauthorized copies include copies made to a separate media, such as copies burned to CD, or copies made on separate machines, such as loading a program from the same CD onto multiple computers.
  
  

User Responsibility

• When you purchase software, you are not purchasing an unlimited right to the software itself, according to the Business Software Alliance. Rather, you are purchasing a "license," or a limited right to use the software. To avoid software piracy, make sure all the software used by you or your business comes with licensing documentation and manuals. If you hire a separate company to install your business software, make sure the company provides you with the licenses, manuals, and any other documentation packaged with the software. Also, pay attention to your employees: a business may be liable for an employee's piracy of software the business uses, even if the managers or owners did not know about the piracy.
  
  

Penalties

• Penalties for software piracy may be civil or criminal. According to the University of Illinois, the maximum civil penalty for software piracy is the amount of damages the copyright owner suffered, plus lost profits from the copying. Statutory damages may also be available for piracy, up to a maximum of $150,000 for each piece of pirated software. The maximum criminal penalty is five years in prison, a $250,000 fine or both.
  
  

Exceptions

• The U.S. Copyright Act provides three exceptions to the software piracy prohibition. First, a software purchaser may make a single copy of the software as a "backup" copy. Second, under the "first use" doctrine a software purchaser may sell or give away the software, as long as he does not keep a copy. Finally, certain elements of software may be copied under the "fair use" doctrine, which allows for sampling of works for educational or archival purposes.
  
  

Digital Millennium Copyright Act

• The Digital Millennium Copyright Act (DMCA), passed in 1998, added further restrictions on software use and extended the number of actions that are subject to civil or criminal penalties. Under the DMCA, software users may not attempt to circumvent copyright protection measures, either by tampering with the software itself or by creating a program or machine that can circumvent copyright protection measures. The DMCA allows an exception for circumventions that are invented solely to test software's copyright protection measures or to advance research in cryptography.