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The Software and Information Industry Association is blowing the whistle in an attempt to stop what it calls a new and growing type of software piracy. The piracy is made possible by the combination of inexpensive CD-Rewritable drives and data gathered at auction Web sites, the group says.

SIIA filed separate lawsuits against two men, alleging they sold illegal copies of software products to people who had bid for them at auction Web sites, says Peter Beruk, vice president of the antipiracy division at SIIA.

Named in the suits are Michael Chu of Los Altos Hills, California, and Christopher Julian Kish of Chicago, both of whom are accused of violating the U.S. Copyright Act, Beruk says. If found guilty, each of the defendants faces a fine of up to $150,000 for each title infringed upon.

SIIA, a Washington-based trade association with more than 1000 member companies, says it gathered evidence about Chu and Kish's activities in a sting operation launched late last year in which SIIA officials posed as buyers at auction sites, Beruk says.

Going Undercover

SIIA decided to set up the sting after doing a survey in April to determine how much pirated software is sold directly to bidders who are contacted by sellers after they are outbid at an auction. It reviewed Web auction sales of Adobe, Macromedia, Corel, and FileMaker products and found that 91 percent of such sales involved illegal copies.

In its definition of illegal, SIIA officials counted backup copies of software as well as CD-RW software, regardless of whether the owner had a license or not.

During the sting SIIA officials scanned Web sites of eBay, Yahoo, Microsoft's MSNBC.com, and smaller auction sites for software sales. After the SIIA official was outbid, he would receive an e-mail from a seller offering software for less than his lowest bid.

Beruk says this is a form of "e-mail stalking" that bidders are exposed to because their e-mail address becomes public when they participate in an auction.

Tips and Tricks

SIIA also published a white paper on Internet auction piracy on Wednesday, which says software sellers manipulate the rules of Internet auction sites to datamine e-mail addresses of bidders on software, creating a direct marketing channel.

EBay has tried to counter this by making it impossible to search for certain words, such as backup and CD-RW, in the software category. Yahoo is considering doing the same, Beruk says.

The SIIA white paper also shows how suspected pirates are using Internet auctions to turn better than a 90 percent profit from sales of illegal software products, and how they are reaching thousands of new customers with little effort or cost. Pirates also enjoy virtual anonymity through multiple screen names, the paper says.

The white paper provides resources for consumers to help them recognize illegitimate software offered on auction sites, and includes real examples of "stalking" e-mails sent directly to bidders after their addresses were gleaned from auctions. It also explains the risks consumers face when purchasing pirated software.

The association plans to file lawsuits against three other individuals who sold software to SIIA officials during the sting. In total, SIIA spent $900 for software with a retail price totaling nearly $175,000 in investigating the five cases. SIIA has information about other cases that it plans to turn over to the U.S. Federal Bureau of Investigation for possible criminal charges, Beruk says.

The lawsuits against Chu and Kish are the first civil cases filed by SIIA against suspected pirates who find customers by sending e-mail to people who bid on software at Web auction sites. SIIA decided to take civil action to draw attention to the problem, which the association says is mushrooming, especially with the falling price of CD-RW drives and the growing use of Web site auctions.

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