Italian Piracy Ruling Angers Software Makers

ROME (04/26/2000) - A ruling by a Turin judge last week that the copying of software programs is not illegal provided they are not sold for profit has angered manufacturers, who fear it will encourage an already booming software piracy sector in Italy. The judge acquitted a local businessman on Thursday of illegally copying word processing, accounting and industrial design software because he had done it only for use within his own company.

"We are extremely disappointed," said Maurizio Bedina, director of Microsoft Italy SpA's small and medium-size businesses division. "It's not the first time this has happened. There was a similar ruling by a judge in Cagliari a couple of years ago. But I am surprised that a second judge should have ruled in this bizarre manner, when dozens of other sentences have followed a correct interpretation of the law," Bedina said in a telephone interview.

"The judge correctly applied the 1941 law on copyright," Claudio Morra, a lawyer for the defendant, told reporters last week. "The law states that someone who violates copyright in order to obtain a profit is penally responsible. My client copied the programs not in order to sell them to a third party but just to use them within his company," Morra said.

The anti-piracy Business Software Alliance (BSA) also condemned the Turin ruling. "This sentence sets back by years the battle to protect software, and we are very worried about its possible implications," Claudia Pavoletti, a spokeswoman for BSA Italy, said in a prepared statement.

The confusion over software copyright has been caused by the unclear wording of the 1941 law and a 1992 decree interpreting and updating the legislation, Microsoft's Bedina said. "We don't expect this ruling to create a precedent.

The law is perfectly clear; it's just badly written," he said.

A new law clarifying the situation is currently under consideration by the justice committee of the Chamber of Deputies (the lower house of parliament), but its passage will inevitably be delayed by last week's government crisis, Bedina said. Parliamentary approval of the new measure, the text of which has been virtually finalized, could now take months to complete, he said.

Yesterday, a new cabinet led by Prime Minister-designate Giuliano Amato was launched, and parliament is still discussing support for it.

The Turin ruling will not necessarily have an impact on software producers' profits in Italy, but it sends the wrong kind of signal to potential pirates, Bedina said. "We hope that the prosecutor will appeal, so the sentence may not cost us anything," he said. The software industry loses almost 700 billion lire (US$350 million) per year to pirates in Italy, with piracy running at an average of 45 percent and reaching as much as 70 percent in the country's small and medium-size companies, Bedina said. The figure compares with a European average of around 18 percent.

"Italy will give the impression of being a third world country if it continues along the path traced by the Turin judge," the Microsoft official said. "The U.S. Department of Commerce is currently considering whether to put Italy on its 'watch list,' which would be an incredible humiliation. The Turin ruling may simply be an erroneous interpretation of the law, but it is nevertheless dangerous. Even the simplest types of piracy have to be punished, otherwise the software market will never really develop here."

Microsoft can be contacted in Segrate, Milan at +39-02-7039-8398 or on the World Wide Web at http://www.microsoft.com.

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