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Strong anti-piracy norms a necessity for protecting Southeast Asia’s trade ambitions

Rajiv Ghatikar, VP and GM, ASEAN and Australasia, Siemens PLM Software | Oct. 28, 2014
SaaS and the Cloud have made revolutionary software more affordable and easier to deploy than ever, so why do so many companies still steal software?

At the heart of every great company is a great idea. And every great idea takes inspiration from (and is informed by) the great innovators who came before it. Many of the world's most successful companies started off by imitating another venture, but true innovation can never be rooted in Intellectual Property (IP) theft.

The Business Software Alliance (BSA) recently reported that just a 1 percent rise in the use of properly licensed software would give a US$240 million boost to Singapore's economy. An additional 1 percent would drive a staggering US$18.7 billion for the regional economy. Software as a Service (SaaS) and the Cloud have made revolutionary software more affordable and easier to deploy than ever, so why do so many companies still commit IP theft?

The impact of unauthorized use of software hampering ASEAN's economic growth is more palpable today than it has ever been and can take a variety of forms including patents, copyrights, utility models, software and trade secrets. According to a survey conducted by KPMG, the majority of respondents said that the use of unlicensed software results in a loss of at least 10 percent of their companies' revenue, a loss that can be avoided simply by understanding, implementing and following the rules and regulations pertaining to procurement and usage of IP in general.

With increasing news of leading software manufacturing companies pitted against each other in copyright infringement lawsuits, improper and exploitative use of IP has become an alarming issue. Companies that fail to take heed of the evolving framework of laws governing software distribution, are pre-disposing themselves to monetary losses and technological stagnation. There are also adverse impacts on employment, the government (including decreased tax revenues), trade and foreign direct investment and consumers (including health and safety risks).

A Pirate No More - Mitigating Risks

Fighting this formidable threat requires stringent measures and continuous education on compliance and the risks of using unlicensed software. It requires a collaborative effort to create a well-regulated system of effective software management. While the legal framework for protecting IP across ASEAN is gradually improving, it is fair to say that the law is not as strong as it should be.

Accordingly, the industry itself must address these issues through supply chain management techniques. This concern is not just a matter of better corporate citizenship but also of strategic importance to businesses that want to ensure the sustainability of its supply chain.

Problems with unauthorized IP in the supply chain can affect even companies with rigorous IP compliance programs. A concerning aspect of this issue is the use of unauthorized IP not by individual companies, but by their suppliers. As a business ecosystem, we rely heavily on our partners, but while we trust them to keep the supply chain clean, it is a must for us to know their supply chain well. In order to address this problem positively, companies should insist on watertight contracts with suppliers where it is clearly stated that the products or components supplied will not contain unauthorized IP, and if the contract is breached they will be penalized severely.

 

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