Software piracy in Malta has, for the first time ever, plunged below 50 per cent of sales but lost revenue still remains high, according to the latest Business Software Alliance Global Piracy Study.
Piracy rates in Malta have gone down to 48 per cent in 2002 from 77 per cent in 1995 but the continuing increase in IT penetration meant that lost revenue last year reached Lm1.4 million, up from Lm969,000 in 2001, the survey drawn up by the software industry watchdog has shown.
BSA's aim is to slash the rate by another 20 per cent in two years, Aly Harakeh, BSA representative for the Eastern Mediterranean, said.
Cracking down on piracy in a determined manner would give Malta credibility in the eyes of big companies, Mr Harakeh told The Times.
He explained that software piracy is measured as the amount of business applications software installed without a licence. The BSA study involves the reconciliation of two sets of data: the demand for new software applications and the legal supply of such applications.
A "pirate" can range from a student who trawls the net for illegal software to a dealer selling counterfeit packages.
Eastern Europe was once again the region with the highest piracy rate at 71 per cent, way above the EU average of 36 per cent.
Software piracy losses last year increased by 19 per cent over 2001 to reach $13 billion.
Mr Harakeh, who is in Malta to have a close look at the IT fair which kicks off today, will also be taking stock of the situation on the island in terms of awareness and enforcement.
After his visit during the same period last year, the BSA had threatened 16 local PC system builders with legal action for selling pirated software at the IT fair. Three were subsequently charged and fined.
Mr Harakeh is also scheduled to hold meetings with the IT Ministry in a concerted drive to launch an awareness campaign. He will also propose the assistance of BSA to offer training for Customs and police officers to identify counterfeit products.
The real challenge remains how to convince someone to pay several liri for a CD when they can easily pick up a copy for a fraction of the price.
Mr Harakeh admits that competing on price is a "no contest". But the BSA, which represents the fastest growing industry in the world, was trying to drive the message home to suppliers and system builders that legitimate software can add value to their services.
Likewise, users should be made aware that unauthorised software could contain viruses that can potentially damage individual computers and even an entire network, unlike licensed copies which offer customers a full package of guidance, guarantee and support.
Mr Harakeh urged the Maltese authorities to look at the vast volume of investment which poured into Dubai when it decided to crack down on piracy. "The same thing could happen in Malta. It's obvious. When big companies see countries permitting someone to steal so blatantly, they will fear that they too will fall victim to it," he said.
The campaign in Malta would be focusing on the damage caused by piracy and on the positive aspects of buying an original product.
He wondered why many still considered IT piracy to be a minor infringement when the profit margins of those who dabble in it were sometimes up to nine times as high as those of drug dealers.
How does one identify a pirated product?
Price is the main issue - most pirated products are sold at give-away prices to entice buyers. Secondly, pirated products are enclosed in cheap packaging, unlike original ones which come with a certificate of authenticity.
On a positive note, considerable awareness has been created in the last couple of years in Malta.
The EU and the government have introduced tougher measures, most notably the Copyright Act of 2000, to curb copyright and trademark abuse.
Penalties for the violation of copyright include fines up to Lm5,000 and imprisonment up to one year.