Relates to the illegal use of stolen or misappropriated computer software; adds definitions and penalties.

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S3718A-2011 Actions

• Jan 4, 2012: REFERRED TO CONSUMER PROTECTION
• Jun 10, 2011: PRINT NUMBER 3718A
• Jun 10, 2011: AMEND AND RECOMMIT TO CONSUMER PROTECTION
• Mar 2, 2011: REFERRED TO CONSUMER PROTECTION

S3718A-2011 Memo

BILL NUMBER:S3718A

TITLE OF BILL:
An act
to amend the general business law, in relation to stolen or
misappropriated computer software

PURPOSE OF THE BILL:
To make it unlawful for a person to develop or manufacture a product
or supply services using stolen or misappropriated software.

SUMMARY OF SPECIFIC PROVISIONS:
This bill adds a new �390-d to the General Business Law to make it
unlawful for a person to develop or manufacture a product or using
stolen or misappropriated software, including software that does not
have the necessary license agreements.

The Attorney General is empowered to enjoin further violation and to
recover actual damages, including treble damages upon a showing of a
pattern or practice of violating the provisions of this law.

JUSTIFICATION:
When businesses, including businesses in foreign countries, use stolen
software to make products that are offered to New York consumers,
they gain an unfair competitive advantage over businesses that use
legal, properly licensed software. This radically tilts the
competitive playing field by rewarding businesses that break the
law-costing New York businesses billions of dollars and costing New
York State and local governments hundreds of millions of dollars in
direct revenue.

Although federal copyright law allows software companies to combat the
act of software theft, there are currently few avenues to address the
harms to competition that flow from the use of stolen software.

This measure provides a crucial new tool to go after those who use
stolen or pirated software to hurt competitors, not just software
pirates. It does so by making the use of stolen/pirated software to
create and sell products unlawful, giving the Attorney General and
adversely-affected parties the enforcement tools to stop and punish
those who use stolen goods to harm New York businesses. Moreover, it
makes law-breakers liable not only for the first item sold, but also
for the full extent of the product or services made and sold based on
the stolen software.

The need for additional tools to combat the economic damage caused by
the illegal use of stolen software is obvious. In 2008, worldwide
software piracy was pegged at 41 percent representing losses of over
$50 billion. Yet, the real economic damage reaches well beyond the
piracy itself; it extends to the very fabric of the use of
intellectual property in the development of the innovative products
and services. It means fewer jobs in New York, less innovation,
hundreds of millions of dollars in lost tax revenue and reduced
economic growth overall.


This measure will provide the State, through the Attorney General, the
legal construct to fight back against this pernicious use of stolen
computer software and the intellectual property behind it.

PRIOR LEGISLATIVE HISTORY:
2010: S.7658A Passed Senate

FISCAL IMPLICATIONS:
According to a 2007 study, software piracy alone costs New York taxing
jurisdictions more than $344M in lost tax revenue alone.

EFFECTIVE DATE:
This act shall take effect 180 days after it becomes law.

S3718A-2011 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                   3718--A

                         2011-2012 Regular Sessions

                              I N  SENATE

                                March 2, 2011
                                 ___________

  Introduced  by  Sen.  ADAMS  -- read twice and ordered printed, and when
    printed to be committed to the Committee  on  Consumer  Protection  --
    committee  discharged,  bill amended, ordered reprinted as amended and
    recommitted to said committee

  AN ACT to amend the general business  law,  in  relation  to  stolen  or
    misappropriated computer software

    THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
  BLY, DO ENACT AS FOLLOWS:


    Section 1. The general business law is amended by adding a new section
  390-d to read as follows:

    S 390-D. ILLEGAL USE OF STOLEN OR MISAPPROPRIATED  COMPUTER  SOFTWARE;
  PENALTIES.    1.  FOR  THE  PURPOSES OF THIS SECTION, THE TERM "COMPUTER
  SOFTWARE"  SHALL  MEAN  AN  ORDERED  SET  OF  DATA  REPRESENTING   CODED
  INSTRUCTIONS  OR  STATEMENTS  THAT, WHEN EXECUTED BY COMPUTER, CAUSE THE
  COMPUTER TO PROCESS DATA OR DIRECT THE COMPUTER TO PERFORM ONE  OR  MORE
  COMPUTER OPERATIONS, OR BOTH.
    2.  IT IS UNLAWFUL FOR A PERSON TO DEVELOP OR MANUFACTURE A PRODUCT OR
  PRODUCTS  WHILE  USING  STOLEN  OR  MISAPPROPRIATED  COMPUTER  SOFTWARE,
  INCLUDING,  BUT  NOT LIMITED TO COMPUTER SOFTWARE THAT DOES NOT HAVE THE
  NECESSARY LICENSE AGREEMENTS, WHERE ANY SUCH PRODUCTS  OR  SERVICES  ARE
  SOLD OR OFFERED FOR SALE IN THIS STATE.
    3.  (A)  THE ATTORNEY GENERAL MAY BRING AN ACTION AGAINST A PERSON WHO
  VIOLATES THE PROVISIONS OF SUCH SUBDIVISION:

    (1) TO ENJOIN FURTHER VIOLATION OF THE PROVISIONS OF  SUBDIVISION  TWO
  OF THIS SECTION; AND
    (2) TO RECOVER THE GREATER OF:

    (A) ACTUAL DAMAGES; OR
    (B) ONE THOUSAND DOLLARS FOR EACH VIOLATION OF SUBDIVISION TWO OF THIS
  SECTION.
    (B) IN AN ACTION UNDER PARAGRAPH (A) OF THIS SUBDIVISION, A COURT MAY:


   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD07593-02-1

 S. 3718--A                          2

    (1)  INCREASE  THE  DAMAGES  UP  TO THREE TIMES THE DAMAGES ALLOWED BY
  PARAGRAPH (A) OF THIS SUBDIVISION WHERE THE DEFENDANT HAS BEEN FOUND  TO
  HAVE  ENGAGED  IN  A PATTERN AND PRACTICE OF VIOLATING THE PROVISIONS OF
  SUBDIVISION TWO OF THIS SECTION; AND
    (2) AWARD COSTS AND REASONABLE ATTORNEY'S FEES TO A PREVAILING PARTY.
    (C)  FOR  THE PURPOSES OF THIS SECTION, A VIOLATION SHALL BE DEEMED TO
  HAVE OCCURRED EACH TIME A PRODUCT OR SERVICE IS SOLD OR OFFERED FOR SALE
  IN THIS STATE.
    4. NOTHING CONTAINED IN THIS SECTION SHALL IN ANY WAY LIMIT THE RIGHTS
  OR REMEDIES WHICH ARE OTHERWISE AVAILABLE  UNDER  LAW  TO  THE  ATTORNEY
  GENERAL OR ANY OTHER PERSON AUTHORIZED TO BRING AN ACTION UNDER SUBDIVI-
  SION  THREE  OF  THIS SECTION, NOR SHALL IT LIMIT THE ENFORCEMENT OF ANY
  APPLICABLE PROVISION OF THE PENAL LAW.
    S 2. Severability. If any clause, sentence, paragraph, section or part
  of this act shall be adjudged by any court of competent jurisdiction  to
  be  invalid,  the  judgment  shall not affect, impair, or invalidate the
  remainder thereof, but shall be confined in its operation to the clause,
  sentence, paragraph, section or part thereof directly  involved  in  the
  controversy in which the judgment shall have been rendered.
    S 3. This act shall take effect on the one hundred eightieth day after
  it shall have become a law.