Piratical War Against Computer Pirates

The state’s toleration of computer, audio, and video piracy has seriously impaired Ukraine’s international image, particularly in the intellectual and creative circles of the international community. Ukraine actually stole (and continues to steal) the fruit of their creative imagination and strained mental labor. This, of course, damaged their personal and corporate interests, and they sustained billions of dollars in losses. Compared to this piratical reputation, Ukraine’s cassette scandal was a minor nuisance. Incidentally, this could well have been one reason for its quick fading into the background of world events. In any case, the anti-piracy campaign in Ukraine entered a new active phase this spring.

It all began with closing several factories producing unlicensed CDs and has continued as a series of raids on those who sell and use pirate products, with the authorities showing special vigilance when inspecting software at various businesses. First, this is because the level of computer piracy has reached an unprecedented level. After all, who can expect a normal Ukrainian to buy licensed software worth $500 if an identical pirate copy sells at 10-12 hryvnias (about $2)? And such copies have until recently been sold practically everywhere. After several years of such rampant software piracy the situation has become grotesque; users not only bought CDs without the slightest qualm, while regularly transgressing the legitimate producers’ (primarily Microsoft’s) copyright, but did not even bother to read the licensing agreements they came with. Experts taking part in the anti-piracy campaign note that most legal entities sued (more often than not by Microsoft agents in Ukraine) did not even know they were criminally liable for using such piratical software.

Yet another important reason for the Ukrainian authorities (especially law enforcement) stepping up the struggle against computer piracy is the mounting pressure on Ukraine from the United States, which threatened and then applied sanctions against Ukrainian metals on the US market. Experts believe Ukraine will lose over $110 million as a result. The United States is trying to protect the interests of its world-renowned corporation, Microsoft, which is really a monopolist on the software market. Washington repeatedly raised the matter during high-level talks, but official Kyiv actually responded only when sanctions began to be imposed. After that the struggle against computer piracy in Ukraine accelerated considerably. Certain operators of the nation’s computer technology market attribute this escalation also to the enactment on September 1 of the new criminal code, but even the old one envisaged criminal prosecution for the dissemination, duplication, and use of unlicensed software. Thus it appears that US sanctions are the main reason. Incidentally, China found itself in a similar situation several years ago, but managed to avoid the superpower’s wrath by taking exceptionally severe measures against the pirate software producers and distributors. Most likely, Washington will expect Kyiv to follow suit, but...

BELATED LEGALIZATION

It is common knowledge that the ignominious nationwide computerization took place before the government’s very eyes using unlicensed software. Practically all computers in Ukraine, including those in state offices, the corporate sector, businesses, and homes operate pirated Windows. It is hard to imagine the amount of budget spending that would be necessary to fully legalize state computers.

It stands to logic that the bodies of state authority, once they set about putting this sphere in order, should start with the public sector. Yet the law enforcement attack was aimed at computer clubs. Why? Because the target was an easy one. Ukraine numbers some 2,000 such clubs, including more than 300 in Kyiv. IT Consulting manager Oleksandr Bernatovych (his company experts check software jointly with colleagues from the Institute of Forensic Examination) told The Day that the process of preventing computer crimes consists of the following stages. Law enforcement authorities (more often than not people from the Economic Crime Investigation Division, district and regional prosecutor’s offices, and tax police) impound computers owned by organizations that are suspected to have pirated software. The said computers are examined by experts and their findings warrant lawsuits by the title- holding firms. District prosecutor’s offices start criminal proceedings, and those found guilty of transgressing intellectual property are levied fines numbering tens of thousands of hryvnias. Sometimes the punishment is even more severe, including a term of up to three years. In the end such criminal activity is terminated and the impounded property (top quality computers in the case of computer clubs) is sold at cut-rate prices.

Computer clubs appeared in Ukraine only three years ago but have become an inalienable component of our urban pastime, especially for the younger generation. Adults, too, like to visit off and on, enjoying the cozy atmosphere, watching all those machines, each offering a journey to the wonderland of the Internet. Here they can send letters to friends in different cities or countries, or just relax and hunt for virtual monsters. Regrettably, far from every Ukrainian family can afford a PC, selling at an average of $500, so for most computer clubs are perhaps the only way to learn to operate a computer, receive useful data from the worldwide web or enjoy an interesting game. This is primarily important for children and teenagers who, being denied an opportunity to learn their computer ABCs, could later find themselves unable to perform a great many public functions. Moreover, every modern boy and girl must know not only how a computer looks, but also how it works; they must know how to operate it, if they are to become full-fledged members of our future society.

As it is, the Ukrainian computer clubs are on the verge of extinction. The trouble is that even if their owners wanted to they would not be able to buy licensed Windows, because Ukraine does not have enough such products, let alone countless other components, training, and entertainment programs. By the start of the anti-piracy campaign the local licensed distributors had just twenty boxes of popular operating systems (which is precisely what the computer clubs need, a box for every computer). In other words, the amount available would be enough for only one medium-size club. Clubs would order, get negative responses and consequently have to close and even liquidate themselves, because several months of idling (while having to pay the rent, etc.) is enough for the owner to go bankrupt.

NEEDLES IN DOORWAYS INSTEAD OF COMPUTERS?

Serhiy Rymarenko, manager of the Dune computer club closed two weeks ago, told The Day that they will be reopening soon, not because he found licensed Windows, but because they are installing a different operating system, Linux. Several other clubs will follow suit. This is hardly a way out of the situation. First, Linux is not very convenient for users. Second, this system cannot be used for games, because very few have been written for it.

The only right and realistic way out is to go legit, of course. But because of the reasons mentioned, this will take quite some time. A kind of vicious circle has materialized. The militia (police) and prosecutor’s office are acting under the law. Formally. Computer club owners accepting the new rules of the game are prepared to start using licensed software, but are unable to because the Microsoft dealers in Ukraine cannot supply enough such products. Thus, failing to receive support and understanding from the law, a number of computer club managers, among them IC Consulting’s Oleksandr Bernatovych, addressed a letter to NSDC Secretary Yevhen Marchuk, asking for support in their “desire to legally develop computer services and club networks in Ukraine... We understand the importance of protecting intellectual property rights and putting this sphere in order. Yet when investigating officers question suspects in their rooms, with computers on their desks containing that same unlicensed software, the whole thing looks more like a farce than a struggle against intellectual piracy... What is happening to computer clubs results in their closing en masse and threatens destruction to the whole movement. Closing computer clubs will cause negative social phenomena to increase, including juvenile delinquency and mounting social tensions,” reads the letter.

On November 6, Yevhen Marchuk met with 15 managers of Kyiv computer clubs, activists of the All-Ukraine Computer Clubs Association (the AUCCA founding convention took place on November 9 —Author) who gave a detailed account of the problem. Among other things they stated that many of the clubs still in operation conduct considerable social work. Serhiy Kozak’s computer class at School No. 228 offers training courses for children at very low cost (20 hryvnias a month), and children from problem families, without home, etc., can attend free of charge.

Another club, Web Skipper (manager: Yevhen Ilchenko), made an agreement with the Kyiv Social Service for Youth in the Sviatoshyno district, whereby physically handicapped children with motor dysfunction will have free admittance until lunchtime. As a result, says Mr. Ilchenko, such children can keep company with their coevals, no longer feel inferior, and enjoy themselves. Viktor Zakharchenko’s computer club at 59 Vernadsky Street also provided free training courses for the teaching staff of School No. 185.

All these clubs are closed, because the law can visit anytime and confiscate their computers. Mr. Bernatovych, AUCCA president, said, “36 criminal cases have been filed in Kyiv alone since April, and five club managers have received suspended sentences.” He further informed that several days ago the Moscow District Court of Kyiv heard a criminal case and levied a fine of 54,000 hryvnias on a young family with two children simply because they had received a loan and organized a small family computer club, the sum being the cost of the unlicensed software. On top of that the family faces a criminal penalty.

Mr. Bernatovych, acting IT Consulting manager, asked Quasar Micro (Ukraine’s leading supplier of licensed software from Moscow) whether they had boxes of Microsoft software. The reply read that “demand for these products has noticeably increased over the past two months, with computer clubs being among the principal customers. Windows 98 proves especially popular.” The letter further stated that the delivery terms are “close to two months for want of merchandise in store.” The said boxes are supplied from Ireland and transportation takes several months. “After that the clubs must receive special authorization from the Microsoft Corporation,” explains Mr. Bernatovych, which means another couple of months. In other words, going legit will take every club about half a year. A period long enough for a club to go under, so clubs are closing.

The paradox of the situation is also that the closed clubs will be unable to meet the copyright claims, and Microsoft will not like it. The corporation and its invariable president Bill Gates are unlikely to be aware of precisely how the Ukrainian law enforcement is coping with the problem of computer piracy. Such methods cannot be to the US monopolist’s liking also for the simple reason that computer clubs are the most active promoters of Microsoft products, paving the way for those that will use them later. Each such club usually attracts some 1,000 persons, mostly children and teenagers. Now many will once again be left to their own devices. “Over the past three years needles have vanished from doorways,” muses Mr. Bernatovych, adding that now the kids might once again start using them. Actually, they say they will. Perhaps by an angry irony of fate — or maybe it was someone’s malicious calculation — the peak of the anti-piracy campaign coincided with the school holidays.

Yet another negative aspect is that the impounded computers somehow turn out later to have been confiscated for the benefit of the state (along with monitors that have nothing to do with software), marked down, and sold. Mr. Bernatovych believes they are very likely purchased by law enforcement officers for token money. Maybe the law’s zealous approach to the campaign is explained by this.

Club managers see a solution to the problem in signing two agreements, one with law enforcement authorities, on imposing a moratorium on the impoundment of computers, and with the principle title-holders in Ukraine, on spreading payments for licensed software thus purchased. During this period the computer clubs will undertake to honor their commitments, wishing only one thing in return, a chance to survive. Of course, signing these agreements will not solve the problem of computer piracy in Ukraine, for stealing software has been possible for too long and too many business, government, and international interests have become intertwined; too many international legal, domestic legal, social, and ethical factors are involved.

One thing is clear and beyond doubt; every job must be paid for. Bill Gates’ programmers are no exception, of course. Piracy ruins this simple truth in our minds, Yet the current practice of making things legitimate — computer club pogroms, to be precise — benefits no one, Microsoft included.