Sidebar: It Could Happen to You

IT executives have varying degrees of knowledge on the topic of counterfeiting. "My general feeling is it's not as high on people's agendas as it should be," says Ed Trainor, senior vice president of information systems at Paramount Pictures.

Officials at the Business Software Alliance say that companies contribute to the problem by either knowingly installing more copies of software than licenses allow or unwittingly buying pirated versions.

Randall Palm, now chief technology and information security director of CompTIA, says he discovered two illegal copies of Microsoft Windows during a software audit in 1998 when he worked for an IT rental company.

"The packaging, the printing, the subtleties of the printing, the hologram sticker, the coloring -- it was all a perfect match," he says, adding that he spotted the pirated copies when he noticed that they had identical serial numbers.

The mistake cost the company only the $100 it had paid for each illicit copy, but others have lost much more.

Nick Tidd, president of the Alliance for Gray Market and Counterfeit Abatement, tells of a government organization that bought multiple networking products worth $500 each but learned that they were counterfeit when the products needed repairs.

"A lot of folks have the misconception that because it's technology, it's not prone to counterfeiting because of the complexity of the products," Tidd says.

Another company paid $300,000 for a server system that would have normally cost $400,000, says Marla Briscoe, a lawyer in the brand protection group at Hewlett-Packard Co. and secretary of AGMA. When the system arrived without the proper software licenses, cables or manuals, company officials realized that some of its components were counterfeit.

Briscoe wouldn't name the organization, but she says it was a large U.S. company.

"Should they have known better?" she asks. "That's hard to say. That's part of this whole awareness campaign."

Copyright © 2005 IDG Communications, Inc.

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