SAN FRANCISCO (KPIX 5) — If you suspect that your boss is up to something shady when it comes to software, employees can get paid for blowing the whistle.

In the old days, spotting pirates used to be easy, But not any more. “Worldwide we are looking at a 42 percent piracy rate, which equates to a $63.4 billion a year commercial loss,” Peter Beruk with the Business Software Alliance told KPIX 5.

The Business Software Alliance is an industry group that hunts down software pirates on behalf of more than 80 companies, including Apple, Adobe and Microsoft. “We get about 2,500 tips a year,” he said.

Beruk said nabbing pirates depends on those tips, from employees who become informants, like Chuck Kost. “Some of the programming software we used literally said you are on day 245 of a 30 day trial,” he said.

Kost is a computer science teacher, who said he got frustrated when his public school district wouldn’t stop using pirated software. “A lot of students ask questions: You are telling us to legally download our music, but we are using software here that expired three years ago,” he said.

Kost filed a report through the Business Software Alliance’s website.

“You had to be concerned about your job, or some sort of retaliation?” we asked him.

“You know it crossed your mind but really no, it was very confidential,” Kost said.

He can’t name the school district he ratted on, that too is confidential. Businesses that are caught can pay extra to keep the settlement private.

KPIX 5 knows of at least one Bay Area company that was busted last year in Pleasanton. It was Elitigation Solutions, an online legal firm that has since closed down. The owner said he paid the fine but he didn’t have what he calls the hush money.

Beruk said punishment is harsh for those who are caught. “The fines can be up to $150,000 for each infringed title. If the matter is pursued criminally, the fines can jump up to $250,000 with the possibility of five years in jail.”

Last year, the Alliance settled eight piracy cases across the country involving more than $2.5 million in stolen software. A percentage of the fines go to informants as a reward.

“That could be a minimum of $5,000, up to one million dollars, to sort of help you or encourage you to make that report,” Beruk said.

But not everyone asks for it. Chuck Kost did not. “It was more about being ethical about it than it was that there might be money at the end of the tunnel,” he said.

According to the Business Software Alliance, only about half of their tipsters ask for a reward, which is only given out after the case settles. The BSA said in a lot of cases, companies will get a polite letter in the mail, and settle discreetly.

(Copyright 2013 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)


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