L.A. Schools in Software Piracy Bind

For years, Microsoft Corp. and other industry giants have tried to persuade public schools that computers belong in classrooms alongside textbooks and teachers.

Now the same firms are targeting the Los Angeles Unified School District in a different way, seeking $300,000 over allegations that teachers and other employees have illegally copied software programs.

The money is part of a proposed settlement the district is negotiating with a coalition of computer firms formed to protect software copyrights.

The real cost of the proposal--which is still subject to school board approval--is the fact that the Los Angeles school district would be forced to spend nearly $5 million over the next three years to replace the unlicensed software that has found its way into classrooms.

Los Angeles is the largest school system to be targeted by the industry, and the settlement is one of about a dozen agreements negotiated over the past 10 years with school districts nationwide. It was brokered by the Business Software Alliance, a Washington-based trade group formed 10 years ago by Microsoft and other software producers.

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Software executives said Tuesday that no matter how aggressively they market their goods for classroom use, piracy by public school teachers still boils down to ethics--and economics.

“This is no different than buying one textbook and putting it on the copier and making copies for every student,” said Greg Wrenn of San Jose-based Adobe Systems. “That amounts to copyright infringement. It’s illegal. It’s wrong. It’s theft. Why should they be permitted to do it?”

Software piracy costs the computer industry more than $11 billion a year, and software thefts drain the U.S. economy of jobs and wages, industry experts say.

Los Angeles school district policy prohibits the duplication of copyrighted computer programs, and district officials deny any wrongdoing.

Defenders of the district, which has for years been struggling to afford teacher salaries and the most basic supplies, say the computer giants are after the wrong culprit.

“Nothing has been proven,” said Los Angeles school board member David Tokofsky. “I wish that BSA, which serves as the repo man for bigger clients, would go repossess places that aren’t trying to change the future of California.”

Computer firm representatives sought to put a positive spin on the legal action.

“Parents need to set an example for children, schools need to set an example for children,” said Sarah Alexander, Microsoft’s international corporate issues manager. “Part of that has to do with respecting intellectual property rights.”

Robert Kruger, vice president of enforcement for the trade group, said the alliance could have recovered millions of dollars from LAUSD if it had investigated the use of unlicensed software throughout the district’s nearly 700 campuses.

“In a sense, this is a token payment,” Kruger said.

The agreement grew out of allegations three years ago that the district’s West Valley Occupational Center in Woodland Hills violated federal copyright laws by using nearly 1,400 unlicensed software copies. After receiving a tip, the computer alliance in March 1996 asked the school to investigate and threatened to file a lawsuit.

A district investigation found multiple copies of several software programs at the school, including 186 copies of the Corel WordPerfect program and 132 of Microsoft MS-DOS--programs that sold for $495 and $150, respectively. Some of the software programs alleged to have been copied sell for as much as $3,750 each.

Besides the cash payment, the settlement under consideration would require the district to review its computer practices districtwide. The district also would be required to establish an eight-member team of software technicians to seek out pirated software--at a cost of nearly $1.5 million--as well as set aside $3 million to replace any pirated materials over the next three years.

In all, the proposed settlement would cost the district $4.8 million.

While denying that there is widespread software pirating, district officials said they want to settle the dispute quickly.

“We don’t believe that it is as widespread as they allege,” said Richard K. Mason, the district’s general counsel. “But to avoid the cost of litigation we have agreed to resolve it on the terms litigated.”

Parents and others in the district noted the irony of the school district being penalized by the very companies that sought to build alliances with educators.

Microsoft, for example, sponsors Family Technology Nights across the country to introduce students and parents to their goods. Companies routinely offer discounts to schools that use their products to review how they work in the classroom. The firms sponsor studies that try to prove computers improve student performance.

LAUSD spent more than $8 million on computer technology during the 1995-96 school year, the latest year such figures are available.

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School district critics say the proposed settlement is another example of district mismanagement.

“What a great use of education funds because someone didn’t bother to read the fine print,” said Helen Fallon, a spokeswoman for the 10th District PTA, which covers the Westside, Eastside and South Los Angeles. “If they have a policy, they have to expect their employees to follow it. In this district, no one ever enforces anything.”

L.A. Unified is the latest target of the computer alliance, which has recouped more than $30 million from private industry and public agencies over the past five years, a spokeswoman said. All of the recovered money is being spent on investigations, as well as anti-piracy education and ad campaigns, Kruger said.