Russia has a well-respected law on copyright, covering computer software as explicitly and carefully as in the laws of the United States or Western Europe. Yet at the same time if someone tried to buy all of the illegal software now used by Russian state enterprises and government ministries they would need more money than the entire annual federal budget.


There have so far been no cases of Western companies attempting to enforce ownership rights over software products in Russia. Faced with a situation in which up to 95 percent of all software in circulation is an illegal copy, opinion is divided among companies over what is most sensible as a first move.


Some would target local firms blatantly reselling stolen software. Others argue that the real problem is the large state organizations that run on massive amounts of illegal software.


The first action against an illegal user is critical since it sends an important message throughout the industry.


Several major software firms have said they have no interest in taking such legal action. Instead, they stress the commercial argument against piracy. Ilya Billig, marketing manger at Microsoft Russia, argues that the strongest incentive to purchase legal software is that it makes business sense. He says that once a program becomes a serious foundation of a business, customers almost always buy a legal copy. This factor is certainly visible in the commercial-banking sector, where increased competition has meant many banks are having to strive for levels of efficiency only possible using legal software.


Billig is echoed by Adam Banker, a marketing manager at Lotus Development Russia, who says distributors and dealers should confront this problem since it directly affects their profits. Microsoft and Lotus both argue that sales volumes are growing slowly and the degree of understanding both in the state organizations and in the media is slowly increasing. The approach to illegal users should be education rather than intimidation.


In contrast, Sergei Savinov of Symantec Moscow says that the time for education has passed and deterrents must now be used. He would like to see a small number of actions against relatively large users that buy single copies of programs and then duplicate them for hundreds of employees.


He says this kind of example would be persuasive enough for many other user organizations to go legal.


The majority of the economy, including much of the government, the industrial ministries, large numbers of banks, and the security services, all operate using mostly unlicensed software.


Among these big illegal users are the very bodies that will enforce the copyright law -- the Interior Ministry and the Justice Ministry.


Without confronting this problem head-on, Savinov says, no significant progress against piracy will take place.


According to Savinov, many users are fully aware of the legal and moral situation yet calculate that it is in their best interests to continue copying software. Today, he claims, there are many companies with the financial wherewithal to buy software, but none feels any risk in stealing it.


In a recent sales visit, Savinov offered a large commercial bank the chance to legalize its use of Symantec software. He says the bank checked the situation carefully and told him that, given the prevailing legal situation, it had absolutely no good reason to buy the software.


Savinov says even special low Russian prices do not make any difference to such users.


To successfully pursue a piracy case against a large illegal user will mean making Russian legal history and will require much preparation, time and lobbying. However it is both theoretically possible and very necessary.


If thousands of Russian factories can continue to treat computer programs as gifts from God, then software companies will always be donating more than they sell. If that happens we are likely to see the Russian software industry vanish completely.





Robert Farish is the editor of Computer Business Russia: 265-4214