Ashton-Tate Lawsuits Claim Two Firms Pirated Software
In a further display of its get-tough posture with software pirates, Ashton-Tate said Wednesday that it has sued two companies for copyright infringements.
One of the cases, against Horn Computer International, comes on the heels of a two-month FBI investigation that included a raid of Horn’s El Monte premises. The FBI said Rick Huang, president of Horn Computer, faces criminal charges of federal copyright violations.
The suit accuses Horn of putting illicit copies of Ashton-Tate’s popular dBase III and Framework software programs onto storage devices that it sold to customers as add-on devices for personal computers.
The other suit alleges that the Anaheim division of Volt Delta Resources, a New York company, unlawfully copied Ashton-Tate programs for use by its employees.
An attorney for Ashton-Tate said the company is investigating other possible cases of copyright abuse and expects to file a similar lawsuit shortly.
Ashton-Tate, based in Torrance, is one of the top five software developers in the country. Its programs, especially the dBase line, are almost perpetually on lists of best-selling software.
Software programs are complex instructions to computers that help computer users perform specific tasks. Despite intricate protection devices, copying programs has become a major problem within the software industry. The industry’s trade group, ADAPSO, estimates that U.S. companies lose $800 million a year to domestic software pirates.
Although it is difficult to measure, software industry experts believe that most of the pirating, or illegal copying, goes on in business offices where one purchased copy is duplicated over and over again.
Companies said they are exploring ways to halt piracy before it becomes a socially accepted practice--as it is already in the music industry. As part of the process, companies are exploring use of so-called site licenses, in which a company pays a fee for the right to make a certain number of copies of a program that it has purchased rather than pay for multiple packages. But so far among the major software developers only Microsoft of San Rafael, in Marin County, has developed a site-license program.
Ashton-Tate, which is wrestling with the licensing issue, said “an extensive investigation . . . uncovered an alleged company policy at Volt Delta Resources of copying the dBase programs for company use rather than purchasing them.”
A spokeswoman for Volt Delta called the suit “a relatively insignificant commercial dispute involving events which may have occurred under prior management.”
In the Horn Computer case, a raid April 2 netted FBI agents equipment used in the illegal duplication of software, including computers, hard disks, floppy disks and magnetic tapes and business records believed to reflect sale and distribution of the pirated software, according to an FBI statement.
An attorney for Horn Computer said his clients denied any wrongdoing and declined further comment.
Geoffrey Berkin, associate counsel for Ashton-Tate, said the Horn Computer case began after an advertisement in a computer magazine offered the disk from Horn with “tons of software.”
Lotus 1-2-3 Program
The FBI in its statement said lawyers from Ashton-Tate and Lotus Development of Cambridge, Mass., “assisted in identifying the copyrights violated by (Horn Computer President) Huang and company.”
The Lotus 1-2-3 program, a business standard for spreadsheet software, is believed to have been among the programs on the Horn hard-disk storage devices. A Lotus spokesman said Wednesday that the company was not pursuing action against Horn Computer, although it has sued other companies for copyright infringement.
Of the spate of recent lawsuits against software pirates, the majority have ended in settlements in which the defendants agree not to copy programs and to pay the companies an undisclosed lump sum.
Berkin said Ashton-Tate is “more interested in stopping the practice than having a drawn-out trial. . . . We’re not interested in trying to skewer people.” Ashton-Tate prefers to seek criminal prosecution of software pirates because criminal penalties are a more effective deterrent than civil penalties, he said.
Indictments Expected
The company participated with the FBI in investigations of three cases last fall in which individuals allegedly were selling illegally duplicated software programs through classified advertisements. The U.S. attorney’s office said federal grand jury indictments are expected in those cases.
But criminal copyright infringement is a misdemeanor that carries a maximum penalty of one year in prison or a $25,000 fine. Software companies and federal authorities say the cases would get greater attention if the copyright law were changed to make such illegal duplicating a felony.
That is one of the aims of ADAPSO, an Arlington, Va., trade group that said it believes that a vigorous anti-piracy campaign has slowed the estimated 15% annual growth rate in the amount of revenue lost to pirates.
The measures, which include standard locking devices, are coming because companies are feeling “backed up against an economic wall” by software pirates, ADAPSO President Jerome Dreyer said.
