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The target is the corporate sector

By Syed M. Aslam
Oct 02 - 08, 2000

Corporate sector beware — using the pirated software can be hazardous. Or at least that's the message that the global software giant Microsoft, which started operations in Pakistan two years ago, is trying to send by issuing legal notices to some 200 companies in the country for the violations of copyrights.

According to Zulfiqar Khan, a lawyer specialising in Intellectual Property Rights (IPRs) whose firm represents Microsoft in Pakistan, the company is only targeting the big companies which can afford to buy licensed softwares but chose to use the pirated software. 'Some 15,000 companies in Pakistan are using 20 or more PCs each and while they can afford to buy licensed software the majority of them chose to use pirated copies with least regard to the IPRs. Our campaign is directed only against the companies having 15 or more PCs and not against the individual users such as students or small businesses," he added.

The Microsoft campaign against software piracy is calculated indeed as it primarily targets the corporate sector, the single top user of PCs in the country. By targeting the corporate sector Microsoft seems to send a signal that it wants to develop a legitimate market in a country where piracy has become an all-pervading environment. Despite a nine per cent reduction in the piracy level since 1994 the use of unlicensed software still stands at a high 86 per cent in Pakistan. The corporate sector being the biggest single user of the PCs is also the top user of pirated software products and that explains the Microsoft's reason to target this market exclusively.

The ongoing Microsoft campaign should also be viewed in the backdrop of the tremendous growth of knowledge-intensive industries and globalisation of the economic activities during the last decade that have resulted in the significant increase for the demand for the protection of Individual Property Rights backed primarily by the developed world. Developing countries today are facing increased pressure to improve standards of IPRs protection. Pakistan is no exception.

So what has been the response of the legal initiatives undertaken by the Microsoft? Sources at Khursheed Khan & Associates, the law firm specialising in Intellectual Property Rights and responsible for issuing legal notices of which Zulfiqar Khan is a part, told PAGE that of the 200 notices served to the companies nationwide many have chose not to even acknowledge the notice while others have written that they would buy licensed Microsoft products. 'We will keep sending reminders to the companies who chose not acknowledge the notice and may take the relevant legal measures after 5-6 months depending on the instructions received from our client,' they added. The sources said that the Microsoft sends it the list of companies to be issued legal notices after conducting its own investigation.

Zulfiqar said that despite offering a hefty 98 per cent discount by Microsoft on all its products to educational institutions not a single institution has shown interest to avail it in the country to help encourage the use of quality products backed by guarantee and support.

The lack of implementation and enforcement of IPRs protection in Pakistan could be attributed to the presence of a large informal sector, low per capita income, shrinking purchasing power and also on the absence of specialised IPRs courts, judges and lawyers. The low priority attached to the IPRs is also attributed by the observers on the political-economic considerations. It is also perceived as an issue which has more to do to protect the interests of the multinational companies and their deeper penetration of the markets in the developing countries. There is also a perception that the protection of IPRs is an issue of the developed world which enjoys a fearsome monopoly in the latest technological advances and concerns expressed at such highest levels as the UN that more open economies are more likely to benefit from stronger IPRs protection laws.

So could there be a compromise? In theory, yes. This could be possible as the developing countries face increased pressure to improve the standards of IPRs protection and also as the amount of technological knowledge in the public domain is far more accessible to everybody anywhere in the world compared to just a decade ago.

According to sources the government is losing a revenue of Rs 1.25 billion each year alone from software piracy. It is not that the general public is not aware of the piracy and the violations of IPRs but their inclination to buy pirated products be it software, videos, books, or music, is purely based on reasons of economics. As one observer puts it, 'while the poors cannot afford to buy licensed products the affluent don't want to see the abolishment of piracy due to their own vested interests and the fact that a load of black money is riding on the trade.

Living in an excessively piracy-prone environment which offers minuscule chances of ever getting caught due to immense use worsened by a low per capita income and an ever decreasing purchasing power makes piracy a lucrative business. Without addressing the ground realities all the legislation in the world could not help improve the IPRs protection.