Relates to the illegal use of stolen or misappropriated computer software; includes definitions and penalties.
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 supply services using stolen or misappropriated software, including software that does not have the necessary license agreements.
The Attorney General and third parties adversely affected by reason of a violation of this section, are 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 or supply services 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, and the companies that are adversely affected, the legal construct to fight back against this pernicious use of stolen computer software and the intellectual property behind it.
PRIOR LEGISLATIVE HISTORY: 2011-12: S.5089 - Died in Consumer Protection 2009-10: (A.11395-A) Amended and recommitted to Economic Development
FISCAL IMPLICATIONS: According to a 2007 study, software piracy alone costs New York taxing jurisdictions more than $344M in lost tax revenue alone. This bill is a saves revenue
EFFECTIVE DATE: This act shall take effect 90 days after it becomes law.
STATE OF NEW YORK ________________________________________________________________________ 856 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________Introduced by Sen. PARKER -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer Protection 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, OR TO PROVIDE A SERVICE, WHILE USING COMPUTER SOFTWARE THAT SUCH PERSON KNEW, OR SHOULD HAVE KNOWN, WAS STOLEN OR MISAPPROPRIATED, INCLUDING, BUT NOT LIMITED TO COMPUTER SOFTWARE FOR WHICH LEGALLY VALID LICENSE AGREEMENTS DO NOT EXIST, WHERE ANY SUCH PRODUCTS OR SERVICES ARE SOLD OR OFFERED FOR SALE IN THIS STATE. 3. (A) THE ATTORNEY GENERAL, OR ANY PERSON WHO HAS SUFFERED DAMAGE BY REASON OF ANY VIOLATION OF SUBDIVISION TWO OF THIS SECTION, 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. LBD02889-01-3 S. 856 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 ninetieth day after it shall have become a law.