Unlicensed software may result in security vulnerabilities, presenting a serious threat to a country’s information infrastructure.
Insufficient software IPR protection can lead to negative revenue impact to software vendors, potential cyber security threats and stifling of creativity and innovation.
Several issues arise if insufficient levels of software IPR enforcement exist in a country.
Direct economic impact on the software industry
In terms of economic issues, these would include issues such as the devaluation of software products and the negative revenue impact to software vendors.
Additionally, efforts and resources being put into the software industry would unnecessarily be expended.
Potential cyber security threats
Unlicensed software may include malware and typically does not receive the latest updates or patches. Some of these updates and patches are meant to address potential security issues, which, if left unaddressed, may result in a user’s PC being vulnerable to security threats.
In turn, a large-scale attack assisted by these vulnerabilities can present a serious threat to a country’s information infrastructure, and is capable of seriously crippling any country dependent on its information infrastructure to function.
Cyber-attacks have become increasingly common, with recent cyber-attacks occurring in Estonia, the United States, South Korea and Israel.
“Web War One” – the 2007 mass cyber-attack on the Republic of Estonia
In May 2007, the Republic of Estonia was subjected to a mass cyber-attack in the wake of the removal of a Russian World War II war memorial from Estonia’s capital, Tallinn. The mass cyber-attack was aimed at the essential electronic/information infrastructures of Estonia.
The mass cyber-attack was based on widespread distributed denial-of-service attacks, and lasted three weeks. It resulted in nearly all Estonian government ministry networks and two major Estonian bank networks becoming victims to the attack, resulting in severe issues such as a disabled ATM network in Tallinn.
For a country that prides itself as the most wired country in Europe, and performs a large majority of its day-to-day activities online (e.g., 98% of banking transactions are conducted online), the mass cyber-attack in 2007 was a serious threat to the national security of the country.
Source: Wired; various news sources
Stifling of creativity and innovation
The proliferation of unlicensed software products may result in a lack of creation and innovation from the software industry, particularly in developing products for the consumer segment.
As domestic developers and vendors realize that their products (targeted at the consumer / mass-market segment) are likely to be illegally duplicated for use, it may result in a lack of incentive to develop new consumer products. Software developers may then decide to focus instead on enterprise or customized products which may be less likely to be reproduced illegally.
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