As the multi-billion dollar software industry continues to become more and more financially lucrative, some of the more unethical entrepreneurs in America are attempting to get in on the moneymaking action by distributing pirated software. Often carried out online, software piracy can cost the industry millions of dollars in lost revenue, and the offense can carry hefty punitive fines and prison sentences.

According to reports from the United States Department of Justice Computer Crime and Intellectual Property Section (http://www.cybercrime.gov/), Operation FastLink, a federal program called "the largest global enforcement action ever undertaken against online piracy," since 2004 has been responsible for confiscating over $50 million worth of pirated media from distributors. Additionally, the USDJ's Intellectual Property Task Force recently released its 2006 progress report, highlighting the achievements of the organization in exceeding the goals put forth in its 2004 report. The federal government is taking decisive steps to combat software piracy and piracy of other media such as movies and music, and games, and the consequences for dealing in pirated merchandise are becoming increasingly heavy.

The term software piracy is used in reference to the copying and selling for profit of copyrighted software without permission of the copyright holder. Distribution of pirated software is also in violation of copyright law in the U.S., even if no profit is made, with the exception of copies made for educational purposes and other circumstances that fall under U.S. fair use laws. Under current U.S. law, fair use allows for the reproduction of a particular work for purposes such as  "criticism, comment, news reporting, teaching, scholarship, and research." Four factors specified in sections 107 through 118 of the Copyright Act must be met when claiming fair use:

1. The purpose and character of the use, including whether such use is of commercial nature or is for nonprofit educational purposes;
2. The nature of the copyrighted work;
3. Amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
4. The effect of the use upon the potential market for or value of the copyrighted work.

Fair use does not apply, of course, to the distribution or sale of illegally copied software or the resale of original software.

In June 2006, 37-year-old Danny Ferrer pleaded guilty to one count of conspiracy and one count of criminal copyright infringement for selling pirated software online. Ferrer ran what was one of the largest online distribution services of illegal software in the U.S., and is responsible for losses up to $20 million for the software industry. He operated www.BUYUSA.com, selling reproductions of copyrighted software at low prices, from 2002 until 2005, when the Federal Bureau of Investigation shut down the site. He is currently awaiting his August 25, 2006 sentencing, at which time he could be faced with a maximum of 10 years of prison time and fines up to $500,000. Federal investigators hope this and similar cases will serve as a warning to those who attempt to profit from software piracy.