Panama Cracks Down on Computer Pirates

By Silvio Hernandez, IPS, 8 June 1999

PANAMA CITY, Jun 8 (IPS) - Panamanian authorities, heeding the demands of the United States and powerful transnational companies, are cracking down on the distributors of pirate computer software.

Police have stepped up raids, seizing equipment and handing out legal summons to dealers and users of computers and software lacking a product license.

Authorities also have confiscated goods with fake brand names on the stalls of local vendors operating in the international free trade zone of the Caribbean city of Colon and in the Panamanian capital.

The head of the Panamanian Chamber of Commerce, Luis Pimentel, concedes that, in the war on piracy, "some injustices are being committed" against people who installed software in their computers before the activity was prohibited.

At the start of 1998, Panama enacted a law to protect authors' rights and intellectual property, which stipulates fines and prison terms of between two and four years for offenders.

Pimentel says that "no law can take effect retroactively," in spite of which, in many cases the raids and equipment seizures are being carried out against businesses and individuals that installed the programs before 1995.

Until the middle of last year, 64 percent of the software used in Panama was unlicensed, alleges the non-governmental organisation Business Software Alliance (BSA), which groups the 104 biggest software producing companies in the United States.

A similar situation exists in other Central American countries, in particular, El Salvador, where 92 percent of all software use is unauthorised, followed by Guatemala, 89 percent and Costa Rica, 86 percent.

Still, the biggest buyers of pirated software are in the United States itself, according to US researcher Estevan Mitchell in a study carried out in Panama in May.

Mitchell affirmed that the companies affiliated with BSA lose 11 million dollars per year in the United States due to this illegal activity.

Piracy causes serious losses for businesses, as well as lost sources of work. If this was reduced by only 15 percent, it could create 30,000 new jobs in the United States, and provide 300 million dollars in lost tax revenue, Mitchell says.

Lawyer Harry Diaz, who represents BSA in Panama, says that since the raids and equipment seizures were stepped up in the past year, sales of computer software products have risen some 20 percent in the Panamanian market.

Diaz says a grace period established by BSA, for the users of counterfeit software to purchase the proper licenses will expire June 11 - after which date the group will initiate legal proceedings against violators.

The United States pressure on Panama began in June 1997 when Washington warned Panama it would apply "strong sanctions" for tolerating the illegal use of software and the pirating of films and video games.

Diaz expressed confidence that an accord could be reached with users who were breaking the law, "since the sector involved does not want to face criminal proceedings against them."

However legal proceedings were started in Sept. 1998 against the owners of a firm that sold computers with installed software, without paying the author.

They were summoned to court in March by the public prosecutor, Jose Ayu Prado and when the judge assigned to the case sets a trial date, it will become the first case of its kind in this country since the intellectual property rights law was passed.

Another trial for falsification of a brand name was initiated on May 5 against the businessman Avner Moris Ben-Naim for manufacturing 3,400 pairs of glasses under the brand name "Ray- Ban," with a market value of some 500,000 dollars.

But the judge for the fourth circuit, Bethsabe Jaen, absolved Ben-Naim, because he had not yet sold the counterfeit glasses and the prosecutor was only able to prove that he was in possession of them.

Movies, clothing, shoes, watches and other internationally famous brand-name products figure on the list of counterfeits found in Panama. This activity garners earnings of about 20 million dollars annually, note the representatives of the labels targeted by pirates. (FIN/IPS/sh/dm/if/ks/mk/99)