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In part because software is often so expensive, copying it has become popular. Some software companies put special codes into the programs to prevent illegal duplication, but the codes are frequently broken. When that happens, a copy can be made in a procedure that is not much more complicated than making a duplicate of a cassette tape. Successful copiers like to refer to themselves as "pirates." Complains William ("Trip") Hawkins, 30, founder and president of Electronic Arts, a San Mateo, Calif., firm selling entertainment software: "Calling people pirates is a lot more palatable than calling them what they are—thieves."
Pirate or thief, one high school student in Alpine, N.J., interviewed by TIME is typical. The 15-year-old sophomore owns an Apple He computer and augments his allowance of $10 a week by bootlegging software. He buys a game like Commodore's Omega Race for $29.95, copies it onto a blank disc that costs him about $3 and sells it to his buddies for $10. "It's really simple," says the boy. "Nothing's easier than copying software."
All software, even the systems software inside the computer, can be protected by copyright, but that does not stop dedicated pirates. Ric Giardina, general counsel of MicroPro, which publishes WordStar, estimates that as many as 20 fraudulent copies of a program may be made for every one sold. Manufacturers are aggressively defending their products. In February Lotus Development sued Rixon, a Silver Spring, Md., computer-accessory manufacturer, for $10 million, charging it made copies of Lotus' popular business program 1-2-3 for its own use. Declared Lotus President Kapor: "Software piracy is the theft of intellectual property." When the suit was settled in March, Rixon agreed to return all unauthorized copies to Lotus and pay an undisclosed sum of money.
Game manufacturers have probably been hardest hit by piracy. Says Michael Katz, president of Epyx, a California company: "It's like the weather. We accept it as something we cannot control but wish we could. Any smart kid can figure out how to break into a game." Some companies plot profits around the safeguards built into the software; once the pirates have cracked the codes, sales quickly fall off. No one in the industry can accurately estimate the extent of the copyright theft involving games.
The most dangerous potential threat to American software manufacturers, surprisingly, has not materialized. While the Japanese are making initial forays into the hardware side of personal computers in the U.S., the only major Japanese software export hits have been games like Pac-Man and Donkey Kong. Concedes Hisao Ishihara, managing director of the Japan Software Industry Association in Tokyo, which represents nearly 200 companies: "The number and variety of Japanese products are indeed behind American ones, and our industry will