Windows XP for fifty dollars? Yes, it is too good to be true; in fact, it's so good it's criminal. A growing number of online piracy operations are selling cheap copies of software, calling them "backup" copies in an attempt to circumvent copyright law.

"This is probably the fastest-growing means of pirating software; it's becoming a serious problem," says Keith Kupferschmid, the US Software and Information Industry Association's vice president of intellectual property policy and enforcement.

While the wording of the copyright law provides no actual legal shield for these software resellers, the commerce sites have proliferated. From October 2003 through May 2004, the SIIA tracked 163 operations that purport to sell CDs of backup versions of software. Two-thirds of the domain names were registered within the previous eight months.

Copyright law permits "the owner of a copy of a computer program to make... another copy". This is the language the sites' proprietors claim allows them to make copies of various software products and sell them to consumers who already own a license of the software. But nothing indicates the sellers verify that their customers already have a license for the software for which they seek a "backup copy". The buyers are actually seeking software on the cheap, industry groups say.

Most backup sites also offer pirated service packs and updates for the applications they sell, in an attempt to bypass any need for legitimate license agreement with the software publisher, according to the SIIA.

"The copyright law is being misused to disguise software piracy," Kupferschmid says.

The Business Software Alliance, a software manufacturers' advocacy group, has sued some of the sites for copyright violation and piracy. However, many of the sites originate outside the USA and are difficult for the body to prosecute.

The Department of Justice declines to comment on any ongoing investigations of the backup sites, although it too has sued pirates in the past.

Backup sites are often nondescript, yet appear respectable enough in design so as not to arouse suspicion. Web shoppers might be willing to provide a credit card number without much worry, especially if they're tempted by the low price of the software.
The sites do, however, make it clear that none of the retail packaging and literature is shipped with the copies, and that the software cannot be registered with the company that published it. Software vendors note that this is a clue to its illegitimacy.

Some backup sites not only provide the specific application, but also a serial number or crack (a small application that deactivates the software's copyright protection mechanism), according to the SIIA.

One thing you will not see on many of these sites is a phone number to contact the seller. A proper privacy statement is likely to be missing as well.

The backup copy scheme is just one of many forms of piracy that have contributed to those numbers, the BSA says. Another emerging piracy scheme is the so-called OEM sites, which also sell cheap software copies with no packaging or product literature.

"Original equipment manufacturer" copies are the discs you get when you buy a new computer, CD copies of the various software applications already preloaded onto the machine.

Software publishers send these copies to computer distributors expressly for distribution with new hardware. Kupferschmid says distributors often end up with a surplus of these CDs, and some break the copyright by selling the CDs either to other distributors or to OEM sites.

By doing so, the OEM site is not overtly violating the criminal law, but is clearly violating the OEM contract between the software publisher and the hardware distributor. The contract stipulates the OEM software is not to be sold independent of the hardware it's installed on.