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Chris Chapel

THE software industry's legal action group, the Business Software Alliance (BSA), has tried to enlist the tax man in its battle with the pirate software shops of Shamshuipo's Golden Shopping Arcade.

  In a letter sent to the Commissioner of Inland Revenue last week, BSA lawyers Baker & McKenzie referred to the 22 retailers it had served with civil injunctions as part of its campaign against pirated software sales.

  The letter said: 'None of the shops display a business registration certificate . . . it is highly unlikely any pay the appropriate taxation on their very profitable businesses.'   The BSA filed a formal complaint with the Inland Revenue in the letter against shops on the ground floor and basement of the shopping complex.

  It said the shops carried out cash businesses and the failure to display business registration certificates was a breach of section 12 of the Business Registration Ordinance.

  The letter drew the Inland Revenue Department's attention to the Customs& Excise Department as a source of intelligence in any tax-based action against the Golden Shopping Arcade shops.

  The BSA has repeatedly called for the establishment of a task force linking different government agencies involved in anti-piracy, including Customs, the Inland Revenue and Fire Services.

  Any such task force 'would be rendered more effective during the course of its activities by the Royal Hong Kong Police,' said BSA vice-president Valerie Colbourn.

  The BSA's letter to the Inland Revenue Department is a sign that it has taken up the role of information provider between some departments in its effort to stamp out the sale of pirated goods.

  None of the 22 retailers the BSA recently served with civil injunctions prohibiting the sale of pirated software showed up at a Supreme Court hearing into the matter on Friday October 6.

  This was typical of the pirates lack of respect for the law, Ms Colbourn said.

  The BSA said it had evidence that they were selling illegal software copies the day after the injunctions were served on them and it therefore intended filing contempt of court proceedings.

  The software pirates are an organised and sometimes violent bunch.

   One server acting for BSA was chased out of the arcade by a group of men who pursued him into a Mass Transit Railway station.

  In a statement issued last week, the BSA said it would extend its anti-piracy action to 'other piracy black spots in Hong Kong', such as New Golden Computer Centre, 298 Hennessy Road and the Mong Kong Computer Centre.

 Meanwhile, a BSA report on software piracy in Europe points out that Western Europe could create 87,000 new jobs and generate $2.3 billion in new tax revenues by the year 2000 if it reduced piracy to US levels.

  The BSA, which commissioned the report, said more than 50 per cent of business software used in Europe was illegally copied, compared with 35 per cent in the US.

  'Software theft is the single biggest threat to the ongoing health of the computer software industry,' said Robert Holleyman, president of BSA.

  The report, prepared by Price Waterhouse consultants, looked at the economic impact of the losses in software sales due to piracy in Western Europe - estimated at US$4.8 billion in 1994.

  'Such losses are a serious constraint on the further growth of the industry, holding back further job creation, adversely affecting investment decisions, and limiting the development of software products,' it said.

  Mr Holleyman said companies and organisations that made illegal in-house copies accounted for most of the theft. By comparing hardware sales to software sales, BSA estimates that the piracy of packaged business software in Western Europe stands at 52 per cent and in all of Europe at 58.6 per cent.

  The former Soviet republics were the biggest offenders in 1994, with a rate of 97 per cent, while Switzerland had the lowest rate of 35 per cent.

  The BSA said Europe needed to strengthen its enforcement of copyright laws, imposing harsher criminal penalties and higher damage awards.

  Governments should also make greater use of court-ordered 'surprise' seizures of illegal software, it said.

  Italy was able to reduce its rate of illegal copying from 83 per cent to 50 per cent between 1992 and 1993 by cracking down on pirates, the Price Waterhouse report said.

  Robin Burton, the BSA's director of European public affairs, said the alliance was targeting Spain this year, trying to reduce its piracy rate of 73 per cent. He said it had set up a hotline for informers and offered a reward for tips.



BSA calls for help in battle with 22 pirates