Counterfeit software is entering the retail channel

Two years ago, when Amanda Barr tried installing what she thought was legitimate software, she was soon to learn she had become an unwitting victim of software counterfeiters.

When she began the install Barr was informed by Microsoft’s Windows Genuine Advantage Program that, indeed, her software wasn’t as genuine as she’d thought. Today counterfeit products and software are becoming so sophisticated it’s often hard for users to distinguish the real from the fake.

During the twelfth annual Kestenberg Siegal Lipkus LLP anti-counterfeiting training conference this week in Markham, Ont., industry experts were on hand to raise awareness of the dangers, and costs, associated with counterfeiting and piracy.

Michael Hilliard, corporate counsel at Microsoft Canada, said that, according to an IDC white paper from 2006, software counterfeiting is on the rise as the margins are huge. Even more troubling, criminals are also using the software as means of stealing personal information.

“We’re starting to see pirates becoming more sophisticated in their ways as counterfeit software is now being sold off of the Internet and is available for download,” Hilliard said.

According to the same IDC report, said Hilliard, 20 per cent of the Web sites that IDC investigated saw not only counterfeit product keys and counterfeit software, but also included key generators that would also attempt to install malicious code or unwanted software on the user’s computer.

And if that wasn’t enough, according to Supt. Ken Hansen from the RCMP, piracy and counterfeit goods are also now being sold in major retail stores too.

“Some retailers aren’t doing their due diligence when it comes to making sure these goods are legitimate,” Hansen said.

This was the case when Barr purchased the software from her local computer store in Midland, Ont.

“They (the computer store) told me I hadn’t installed the program properly and I had to take it out and do it again,” Barr said. “The store manager even threatened me and became abusive.”

Companies such as Microsoft, Hilliard says, are trying to crack down on this issue by offering its partners education and training through its Web site. In addition, he says Microsoft also focuses on the three Es, which include education through events, engineering specific software features so that it’s harder to replicate, and through enforcement practices.

“This should be a level playing field for our partners,” Hilliard said. “Their ability to compete effectively and to provide high quality software and services to their customers is undermined by people who are engaging in this unlawful activity. It would be great if partners could jump on board with us and help us to communicate this message out.”

While Greg Myers, vice-president of marketing at IT distributor Tech Data Canada, says his company has not had any direct occurrences with counterfeit goods or piracy, he does offer some advice to resellers working in the industry.

“Resellers need to emphasize to their customers that their software is legitimate,” Myers said. “Here at Tech Data, we guarantee the product comes from the software publisher. A bullet-proof approach for partners to best protect themselves is to make sure they buy their products from authorized software distributors.”

If partners don’t do this, Myers says there’s no way of knowing where the software came from.

“The risks with piracy are huge and it’s also horrible publicity for your company,” he adds.

On Microsoft’s end, Hilliard says if partners have a Microsoft product that they’re suspicious of, they should contact Microsoft directly.

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Maxine Cheung
Maxine Cheung
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