By Associated Press Trade in bootleg software is booming in Egypt. By Yosrey Aql Many consumers refuse to spend hundreds of pounds on something they see as a necessity, not a luxury.

By Osama Diab

Ahmed, like many others, doesn’t feel he’s doing anything wrong by selling copied versions of software for LE 25 a piece. Ahmed works for his cousin, a hardware store owner, in Giza. He understands it is illegal to sell unlicensed copies of computer programs; therefore, he is extra-cautious and only sells software to friends and acquaintances.

“I know the police are trying to catch us, this is why I always refuse to give someone I don’t know software,” says Ahmed. “You never know. They can always be the police.”

At the computer mall where Ahmed works, a customer, Ali, was looking for a hard drive, but was he planning to store legal software on it?

“As a home user, I don’t feel guilty using counterfeit software,” says Ali. “The prices of software are very high and if people had to buy it, most of them would give up the idea of owning a computer.”

Ali also thinks that software companies can make enough money out of selling their product to corporations. Microsoft’s revenues in 2008 were $60.42 billion (LE 329.29 billion) — 15% of Egypt’s $403.96 billion (LE 2.2 trillion) GDP in 2007. Its market cap (share price multiplied by the number of shares) was $259.75 billion (LE 1.42 trillion). In a New York Times article titled “Gates Hits $100 Billion Mark, More or Less” on July 17, 1999, it was reported that if Microsoft were a country, it would have the ninth-largest economy in the world.

“Computers are not a luxury item anymore. Everyone should have one, not only the rich,” Ali adds. But in a country where just over 40% of the population lives on under $2 a day, and the price of a Microsoft Windows Vista license is a few hundred pounds, a very small segment of the population might be able to ‘legally’ own a PC.

The term ‘software piracy’ was first brought to life by software companies to connote crime. A more neutral term is ‘copyright infringement of software.’ There is widespread criticism of software companies for using the word ‘pirate’ to describe a user who makes an illegal copy of software, since it implies that the copyright violator is a serious criminal. Much of this criticism comes from advocates for ‘open source’ software, i.e. software that is free to own, distribute and edit.

It is hard to imagine a world where anyone could edit a novel, change its events and characters, give it the same name, and publish it without severe legal consequences. This is how the idea of ‘intellectual property’ (IP) arose. IP is a concept whereby an intangible intellectual product is treated like physical property, where you have the right to own, use or sell it. Computer software — in most cases — is treated as a form of IP.

Copyright infringement of software is therefore considered a breach of intellectual property rights. Intellectual property rights are protected by law in most countries, including Egypt.

Article 113 of Law 82 of 2002 states: “Without prejudice to any more severe punishment under any other law, shall be punishable by imprisonment for a period of not less than two months and by a fine of not less than 5,000 pounds and not more than 20,000 pounds, or by either punishment, any person who: [] fraudulently uses counterfeit or imitated trademarks [] knowingly sells, offers for sale or distributes, or acquires for the purpose of sale, products bearing a counterfeit or imitated mark, or on which the mark was unlawfully affixed.”

However, there are some arguments against criminalizing the unlicensed and illegal use of software: Most who advocate these views argue that software is over-priced and most users cannot afford it. They believe that if software companies reduce their prices, people will start buying original copies.

Open source is a software development method where every program must have its source code available to developers to modify the program. This contrasts with the ‘closed source’ method of software development. Advocates of proprietary software accuse open source software of being less innovative because developers do not receive monetary rewards for their products and are therefore less motivated to improve their products.

Some advocates of open source software, especially activists and professionals in the software industry, think that software should not be treated like ‘property’ and human knowledge should be shared with the general public so it is available for everyone’s benefit. They also believe that the source code (the instructions, in human-readable code, that allow a program to run) should be ‘open’ for anyone to use, change or improve the software for personal use or redistribution. There is also a general belief that open source software is more secure because anyone can fix security defects that might later be discovered in the code.

In 2007, Egyptian consumers spent more than $1.17 billion (LE 6.38 billion) on information and communications technology (ICT), including hardware, software and IT services, according to Microsoft. This accounts for about 1% of GDP. About 49,000 Egyptians work in the IT industry.

According to the Business Software Alliance (BSA), a global nonprofit trade association created to advance the goals of the software industry and its hardware partners, if the software piracy rate in Egypt was lowered by 10% it could create some 1,700 jobs and generate $153 million (LE 834 million) in local industry revenue.

According to BSA figures, the current software piracy rate in Egypt stands at 60%, just 1% below the world average, falling from 63% last year. Hazem Nabil, director of intellectual property rights at Microsoft Egypt, said that he hopes the software piracy rate will continue to decline this year by another 3%.

Despite the fall in the piracy rate by 3%, the costs resulting from software piracy have increased from $88 million (LE 480 million) to $131 million (LE 714 million) per annum — in absolute numbers — due to rapid growth in the ICT market in Egypt.

“The decline happened due to the joined forces of the Ministries of Justice, Interior, Communications and Information Technology, and Finance,” Nabil added. He called for a continuation of efforts, in addition to raising awareness among all sectors of society.

Microsoft, probably the company most affected by infringement of software copyright, is working hard on combating software piracy and the breach of intellectual property rights. The software giant firmly believes that protection of IP rights encourages innovation by financially rewarding owners of the ‘property,’ and is taking steps to reduce the illegal copying of its products.

Microsoft intends to launch an Arabic website to help prevent intellectual property theft in cooperation with the Arab League in October 2009. This initiative is the first of its kind and is supported by the BSA.

Nabil claims that the new website will contain information and data on events, initiatives and campaigns to do with IP rights in the Arab world, through cooperating with government offices responsible for IP regulation and all interested and concerned parties. He also says that the website will include more than 350 legal documents and links to Arabic and foreign websites that provide information and IP-related services. Microsoft refuses to unveil the website’s name until it is officially launched by the Arab League.

Nabil adds that the increasing awareness of IP rights in Egypt and the Arab world in the last few years encouraged the introduction of many initiatives which aim at spreading a culture of respect for IP — a culture that encourages innovators to pursue their creative endeavors. He described the protection of IP rights as the backbone of development and knowledge.

Microsoft recently reported a major IT company to the Department of Investigation and Protection of Intellectual Property Rights, a task force run by the Ministry of Interior. The company, which has its headquarters in Nasr City, has been working against the law by installing counterfeit Microsoft Windows and Microsoft Office on the computers it sells.

Ali, the customer at the computer mall, wants his to children to become computer engineers and he bought a PC for each of them so they will each be able to spend more time learning about information technology. Ali wants his children to contribute to Egypt’s booming IT industry and give something back to their country, but will he be forced to break the law to achieve his legitimate goal? bt