$20m software pirate sent to jail

Nathan Peterson, owner and operator of iBackups, pleaded guilty in a District Court in Alexandria, Va., to two counts of criminal copyright infringement for illegally copying and selling nearly $20 million worth of computer software.

Working on behalf of its members, including Macromedia and Symantec, the Software & Information Industry Association (SIIA) said it first alerted the FBI of possible software piracy in 2003 and subsequently worked with investigators and prosecutors to assure that Peterson's operation was stopped and that he was properly punished.

Sentencing guidelines call for a prison term of 70 to 87 months. Peterson has agreed to pay restitution in the amount of $5.4 million.

"SIIA appreciates the tireless work of both the FBI and the U.S. attorney's office," said Keith Kupferschmid, SIIA's vice president of Intellectual Property Policy & Enforcement. "We brought this activity to light in order to stop a specific crime from being perpetrated against our members. Law enforcement's decision to aggressively pursue this case, I believe, sends a message to those who illegally copy and sell software that they will be punished to the fullest extent of the law."

iBackups sold pirated software over the Internet, claiming it was "backup software" - legal copies of software to be used by the software owner for backup in case of system crashes. It is, however, illegal to resell such copies SIIA said.

The Copyright Act allows a copyright owner to recover monetary damages measured either by actual damages plus any additional profits of the infringer attributable to the illegal sale or statutory damages, of up to $150,000 for each copyrighted work infringed. The copyright owner also has the right to permanently enjoin an infringer from engaging in further such activities and may be awarded costs and attorneys' fees. The law also permits destruction or other reasonable disposition of all illegal copies and devices by which those copies have been made or used. In cases of willful infringement, like iBackups, criminal penalties may also be assessed.

Documents submitted by the U.S. attorney state that Peterson made $5.6 million selling pirated software with a total retail price of just under $20 million. District Court Judge T.S. Ellis accepted Peterson's guilty plea and is expected to hand down his sentence early next year.

Get daily email updates

SC Media's daily must-read of the most current and pressing daily news

By clicking the Subscribe button below, you agree to SC Media Terms and Conditions and Privacy Policy.