A number of suppliers of production software for the film, television and animation industries have voiced their concerns recently about the high levels of licensing non-compliance among users of their various solutions in the South African industry.
One such vendor, who preferred to remain anonymous, contacted Screen Africa at the end of 2015, to draw attention to a problem that, while ongoing for some time, goes largely unnoticed. According to this source, post-production and animation companies that are not compliant are able to underquote on projects because they aren’t paying the necessary licence fees. “Around 25 to 30 per cent of these operators are compliant,” the source says. “They are able to come in at a fraction of the market price and compliant companies simply can’t compete because they have to cover those licensing fees. The number of companies losing out across the board is actually phenomenal.”
Autodesk, the software developer behind Maya, one of the leading 3D animation suites in the industry, is among the intellectual property owners feeling the impact of non-compliance. Autodesk’s licence compliance manager Susan Moremi says that non-compliance takes various forms. “These scenarios range from cracked copies of Autodesk software to over-deployment of one licence across more than the allowed number of PCs,” she explains. In some cases, she says, end users may not even know that they are not complying.
In an industry that is experiencing tightened budgets across the board, the use of cracked software or the overextension of licences can often be seen as a necessary evil, one of many cost-cutting measures employed by operators whose resources are already stretched thin. However, the long-term ill effects on the industry as a whole can far outweigh the short-term benefits to individual companies. Darren Olivier, a lawyer specialising in intellectual property and brand protection at Adams & Adams, has dealt with numerous licensing non-compliance cases (around 400 a year), explains: “Apart from the dangers of malware embedded in pirated code, the unlicensed use of software naturally means that the developers are not paid correctly, disincentivising them from investing in research and development and improving their services. Hence the industry as a whole suffers. It’s like saying ‘don’t pay the engineers’ and then still expecting a world class road system.”
Moremi adds: “How would [non-compliant users] react if someone used their stove, utensils and house to run a catering business, without permission and without any form of compensation being offered? By knowingly using an unauthorised product, one is simply stealing from the software provider as well as the industry – since revenue is reinvested in improving the very same products that make them competitive in their particular industry. In the long run, should that product no longer be competitive, due to lack of resources, they too lose business.”
While infringements can often happen as a result of an honest mistake, this is certainly not always the case and deliberate non-compliance, while rather hard to prove, carries some weighty consequences. “Damages are calculated according to what the user would have paid had the licence been obtained in the first place,” Olivier says. “If prosecuted they may also face a jail sentence or a fine. There is also the risk of having the company deregistered for fraudulent trading (the use of unlicensed software robs the country of taxes ordinarily paid for licensed products).”
Autodesk and other software developers work with the BSA| The Software Alliance, an international trade group representing the industry’s interests, particularly on questions of intellectual property. BSA members use several types of audits and reviews to ensure that end users are aware of their compliance positions. “This is to ensure that our end users minimise the financial and legal risk if there are unauthorized installations,” Moremi explains. “Users who gain access to unauthorised software often get copies from the internet and unauthorised dealers, and often aren’t even aware that they are running illegal copies.” Despite these safeguards, illegal software use continues.
Our anonymous source suggests that one way of ensuring compliance would be to throw the weight of the Department of Trade and Industry (dti) behind software vendors. Since the dti’s production rebate is one of the most important financial incentives in the industry, it may make sense for legal and fully compliant production software to become one of the pre-requisites needed to qualify for the rebate. No such requirement currently exists in the dti’s application process and it might go some way toward remedying the problem. Moremi also stresses the value of education programmes to ensure that transgressors understand the implications of piracy – for the supplier, the user and the industry at large.
