SOFTWARE PUBLISHERS ASSOCIATION

                        COPYRIGHT PROTECTION CAMPAIGN

                           Background Information
                                  May, 1996

----------------------------------------------------------------------------

TABLE OF CONTENTS

   * Introduction
   * Piracy - The Problem Defined, Types of Software Piracy
   * Why People Pirate Software
   * Software Piracy Equals Higher Software Prices
   * Public Awareness and Education Programs
   * Investigations
   * Litigation
   * Chart of Increases From 1994-1995
   * Corporate Audits
   * International Efforts
   * How to Reach SPA
   * Worldwide Anti-Piracy Hotline Telephone Numbers

                       For more information, contact:
                   David Phelps, Public Relations Director
                           202-452-1600, ext. 320
                             202-223-8756 (fax)
                              dphelps@spa.org

----------------------------------------------------------------------------

                                INTRODUCTION

In 1985, the Software Publishers Association (SPA) initiated a
comprehensive, industry wide effort to fight software piracy. The campaign
has two broad charters:

   * Educate personal computer users about the copyright law and provide
     them with the tools necessary to comply with it, and
   * Execute a legal campaign to fight software piracy.

The SPA's efforts since 1985 have grown dramatically. Since that time, SPA
has received over $16 million in settlements from its anti-piracy actions.
Those funds are used to support anti-piracy activities by the SPA, SPA
Europe, and other anti-piracy organizations around the world.

SPA's anti-piracy efforts, like all of the SPA's programs, are conducted at
no charge on behalf of any member who wants to be involved. SPA members are
plaintiffs in cases in which their products have been pirated. The SPA's
membership now exceeds 1,200 companies.

                        PIRACY - THE PROBLEM DEFINED

Piracy is a very serious problem. Conservative analysis by the SPA estimates
revenue lost to software piracy in the U.S. during 1994 was $1.05 billion.
Worldwide, the problem is estimated at $8.08 billion. The federal copyright
law, which governs the use of commercial software, is very straightforward
-- it is illegal to make a copy of a piece of software for any reason other
than as a back-up without permission from the copyright holder. Civil
penalties for companies and individuals who break the law can be as high as
$100,000 for eachcopyright infringed. Since October 1992, commercial piracy
of software is a felony offense. Penalties include prison terms of up to
five years (ten years for repeat offenders) and fines of up to $250,000.

Forms of software piracy include:

   * Softlifting, purchasing a single licensed copy of software and loading
     it on several computers, contrary to the license. This includes sharing
     software with friends, co-workers and others;
   * Renting, software for temporary use, like you would a video;
   * Software counterfeiting, which is the illegal duplication and sale of
     copyrighted software in a form designed to make it appear to be
     legitimate;
   * Hard disk loading, whereby computer dealers load unauthorized copies of
     software onto the hard disks of personal computers, often as an
     incentive for the end user to buy the hardware from that particular
     dealer;
     and
   * Downloading of unauthorized copyrighted software to users connected by
     modem to electronic bulletin boards and/or the Internet.

The unauthorized copying of personal computer software for use in the office
or at home, or "sharing" of software among friends, is the most pervasive
form of piracy encountered is estimated to be responsible for more than half
the total revenues lost by the industry. Though it is a misdemeanor to make
fewer than ten unauthorized copies of a program, small-scale offenders may
be subject to substantial civil penalties.

                         WHY PEOPLE PIRATE SOFTWARE

Although there are many reasons why people pirate software, some of them
include greed, carelessness, lack of awareness of the law, or general
disregard for the importance of treating software as valuable intellectual
property. Managers who duplicate software to trim costs may feel that
"everyone else is doing it." Others may mistakenly believe that it is legal
to make and distribute copies so long as the copier derives no profit from
the distribution or use. Still others may truly believe that software
copying is a harmless activity that "doesn't hurt anyone" or "isn't really
stealing."

Software presents a unique theft problem for the industry because it is so
easy to duplicate and because the copy functions identically to the
original. Unlike other products such as audio and video tapes, there is no
degeneration in quality from copy to copy. And the copying process is
effortless. A program that reflects years and millions of dollars of
development takes only a few seconds to copy. The cost, too, is negligible;
a product that may cost anywhere from $20 to $20,000 can be copied by any PC
user for no more than the cost of a few blank diskettes, and hard disk users
avoid even that minimal cost.

                SOFTWARE PIRACY EQUALS HIGHER SOFTWARE PRICES

Software piracy, however, harms all software companies and ultimately the
end user by leading to higher prices. Piracy is also a significant drain on
the resources of one of America's most competitive industries. Few other
industries lose as much revenue to theft. This ultimately curtails the
industry's competitiveness. If software were not stolen so frequently,
developers could recover their development costs more quickly and go on to
fund new development efforts, creating even better software. And the problem
has a ripple effect on everyone - from distributor to retailer and even to
end user. It translates into fewer jobs and less revenue to local economies.
For the end user, pirated software means there is no support, documentation,
warranties or updates provided by the software publisher. In the long run,
illegal software duplication costs more time and money for everyone.

                   PUBLIC AWARENESS AND EDUCATION PROGRAMS

In an attempt to inform individuals and organizations about the law
governing software use, the SPA funds a comprehensive education program that
provides all PC users with the tools needed to comply with copyright law and
become software legal. Ensuring compliance with federal copyright law is not
difficult. SPA publishes a brochure entitled, "Software Use and the Law."
This brochure provides a summary of the copyright law in the United States
and Canada as well as a sample corporate policy statement. The SPA also
publishes a second brochure, "Is it Okay to Copy My Colleague's Software?"
These brochures are excellent guides for end users seeking to understand the
legal use of software and are available free of charge.

The SPA has compiled a free Self-Audit Kit with which organizations can
examine their installed software. SPAudit, version 3.1, a software inventory
management program which accompanies the SPA Self-Audit Kit, is designed to
help an organization track commercial software programs that are on all hard
disks. The MS-DOS version of the program searches PC hard disks for more
than 1500 of the most common programs used in business. KeyAudit, published
by Sassafras Software Inc., and distributed by SPA, searches for all
Macintosh software. To date, more than 150,000 copies of the audit kit have
been distributed free of charge. SPAudit has been translated into French,
Spanish, Swedish, German and Italian.

The SPA also has produced a videotape to help corporations understand the
copyright law. "It Could Have Been So Easy" is a seven minute dramatization
demonstrating not only how to avoid litigation and the negative publicity
associated with it, but also how to implement and receive the full benefits
of an effective software management program. This video is available for
$20.00.

The SPA Software Management Guide helps companies to audit their current
software policies, educate employees about the legal use of software, and
establish procedures to purchase, register, upgrade and backup computing
systems. The Guide provides an Internal Controls Analysis and Questionnaire,
a Software Audit Guide, and the SPA Eight Point Program for Ensuring
Compliance. It also contains copies of many of the SPA's current anti-piracy
materials. The items include: SPAudit (DOS and Macintosh versions), "It
Could Have Been So Easy" video, an Information Week feature article about
the SPA, and educational brochures that include suggested corporate
policies, a memorandum to employees, and information about the copyright
law. The Software Management Guide costs $99, including shipping and
handling charges.

The most comprehensive education tool is the SPA Certified Software Manager
(CSM) Course. This course is a total immersion training seminar that
contains all of the information and materials computer professionals need to
establish a complete software asset management program. The SPA Certified
Software Manager course stresses the fundamental issues of software
licensing and compliance, and also teaches the skills necessary to optimize
the legal use of software. Since June 1994, over 2,000 computer
professionals have attended a CSM seminar and 99% of these believe CSM will
enhance their job skills. CSM seminars are also being conducted in the UK,
France, Germany, Japan, and Singapore, and will be introduced in, India,
China, and seventeen Latin American countries in the first six months of
1996.

In its first effort at reaching young people, the SPA produced a rap music
video "Don't Copy That Floppy." The 8-minute video uses rap music and
hip-hop dance to teach students about the legal and ethical ramifications of
stealing intellectual property. More than 20,000 copies of the video and
accompanying lesson plan have been distributed to teachers nationwide.
"Don't Copy That Floppy" is available from the SPA for $15.

The association maintains an active anti-piracy speakers bureau. SPA
representatives regularly speak at seminars on the topic of software piracy
and the copyright law. Hundreds of presentations have been given to a
variety of audiences in cities across North America.

The SPA is continuing to heighten public awareness through the publication
of feature articles, print ad placements, and billboard advertising. Feature
articles have run in a wide variety of publications, including general
business, computer, accounting, and legal publications. The anti-piracy
awareness ad is also getting lots of attention, appearing in magazines and
journals, as well as on billboards.

                               INVESTIGATIONS

The SPA's Anti-Piracy Department investigates cases of copyright
infringement involving corporations, educational and non-profit
institutions, dealers, bulletin boards and Internet sites, and software
rental operations. Most investigations begin with a call to the anti-piracy
hotline (800-388-7478 or via email at piracy@spa.org). Many of the reports
come from employees, temporary workers and consultants. In dealer cases,
customers who have received illegal copies of software on their computer
hard disks may notice the absence of documentation or they may become aware
that they are not entitled to customer support or updates. Purchasers of
illegally "loaded" PCs realize that receiving a pirated copy of software is
no bargain.

In response to all calls, the SPA conducts a thorough investigation before
proceeding further. Depending on the strength of the information received
and the extent of the infringement involved, SPA's response can take one of
the following forms:

   * Cease and desist letters;
   * Corporate audits (in lieu of litigation)
     or
   * Litigation.

Since the SPA's anti-piracy activities are designed to pursue copyright
compliance on behalf of the entire PC software industry, SPA takes action
against businesses and individuals who pirate not only business software
applications, but also consumer and educational software products. Each
member whose copyright is violated is invited to join as a plaintiff.

Calls pour into the hotline at a rate of about 30 per day. Based on these
leads, the SPA took action in 1995 against 586 organizations, an increase of
23% from 1994. All money from settlements goes into a segregated bank
account and is used to fund worldwide educational anti-piracy programs.

                 Increase in Calls 94-95                 24%
                 Increase in Cases 94-95                 23%
             Increase in $100,000+ penalties             17%
          Increase in International Litigation
                          94-95                         100%

                                 LITIGATION

SPA, on behalf of its members, has filed hundreds of lawsuits against
corporations, computer dealers, training schools, bulletin board systems and
educational institutions. The statutory penalty for willful infringement is
up to $100,000 per copyright infringed. When it is warranted, the SPA will
apply to federal judges for permission to conduct ex parte searches (raids)
of defendants' computers. These searches are used to prevent the destruction
of evidence pending trial. Recently, a raid was conducted against a Florida
based Junior College, International Fine Arts College. The complaint, filed
March 1, alleged that International Fine Arts College had unlawfully
duplicated computer programs published by several software companies. The
court issued an ex-parte temporary restraining order ("TRO") one week later,
which allowed the plaintiffs' representatives, accompanied by deputy United
States marshals, to audit the computer programs installed on the defendant's
computers. The lawsuit was settled for $135,000 with the agreement that the
school destroy the illegal software and repurchase authorized software.

The SPA has a close working relationship with the Federal Bureau of
Investigation (FBI), U.S. Customs, and the Justice Department. When SPA
feels that it is necessary to enlist the assistance of these organizations,
SPA may forward information to these agencies to begin their own
investigations. SPA has cooperated with the FBI in bulletin board
investigations and counterfeit matters.

Only one of SPA's lawsuits has reached trial--a civil copyright infringement
suit against Global Software & Accessories, Inc. for unauthorized rental of
computer software. This lawsuit was the first case to test the Computer
Software Rental Amendments Act of 1990, which prohibited the unauthorized
rental of computer software. The software retailer, Global Software,
operated three stores on Long Island in New York at which software was
offered pursuant to a "deferred billing plan". The plan allowed customers to
take software home and keep it up to five days for a "non-refundable
deposit", which was only a fraction of the purchase price. If the customer
kept the software for more than five days, the customer was charged the
difference between the "non-refundable deposit" and the purchase price.
Evidence showed that the software was returned by the customer in 99% of the
cases. The court ruled in favor of the software manufacturers and ordered
$100,000 in damages.

In May 1991, the SPA received its largest public settlement to date in an
action against Parametrix, Inc., a Seattle-based environmental and
engineering consulting firm. The company paid $350,000 plus attorneys' fees
in settlement.

                              CORPORATE AUDITS

Sometimes after investigating reports against a company, the SPA will
request that the company submit to a confidential voluntary audit of its
software, in lieu of litigation. The principles of an SPA software audit are
simple:

   * Contents of each PC and file server are inventoried;
   * The inventory is compared with company purchase records;
   * The company agrees up front to make a penalty payment to the SPA
     Copyright Protection Fund in the amount equal to the suggested retail
     price of each illegal software program found during the course of the
     audit;
   * All unauthorized copies are destroyed, and the audited company agrees
     to purchase legitimate copies to fulfill their needs.

The SPA's audit program provides a confidential, cooperative alternative to
litigation for companies not in compliance with software copyrights or
licenses. It has been the SPA's experience that many organizations receiving
an audit request are both cooperative and appreciative of the opportunity to
become legal without having to go to court. If a company refuses to
cooperate with the voluntary audit, the SPA may sue them. The largest fine
collected to date under this scenario was $500,000.

                            INTERNATIONAL EFFORTS

In 1995, SPA took great strides to expand its anti-piracy efforts around the
world. As in the U.S., SPA believes that the two-pronged approach of
education and enforcement is necessary to reduce the use of illegal software
abroad.

Europe
SPA's affiliate office, SPA Europe, has created European versions of
SPAudit, the SPA's software inventory program, and of the Software
Management Guide, both of which are now available in six languages: English,
Spanish, French, German, Italian, and Swedish. SPAudit is also available in
Polish.

SPA Europe is localizing the Certified Software Manager (CSM) course for the
European market. The course is currently being given in the United Kingdom,
France, and Germany.

Finally, SPA Europe distributes the European version of the Model Software
License Agreement, which is consistent with European Union Directives on
software and consumer contracts. Supplements to the Model Software License
Agreement that reflect the national law of various European countries have
become available for the UK, France and Germany. Please contact SPA Europe
to obtain copies of these documents.

Asia/Pacific
In 1995, SPA initiated five criminal cases and five civil actions in
Singapore. The litigation proceedings filed this year in Singapore were
highly successful. Through its local counsel, SPA recovered close to
S$100,000 in damages and settlements on behalf of its membership. The>
----------------------------------------------------------------------------

Transfer interrupted!