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Man Who Sold $100 Million Worth of Pirated Software Gets 12 Years In Prison

Soulskill posted about a year ago | from the go-big-or-go-home dept.

Piracy 304

An anonymous reader sends this quote from Bloomberg: "A Chinese national was sentenced to 12 years in a U.S. prison for selling more than $100 million worth of software pirated from American companies, including Agilent Technologies Inc., from his home in China. Li and his wife, of Chengdu, China, were accused of running a website called 'Crack 99' that sold copies of software for which 'access-control mechanisms had been circumvented, the U.S. said in an unsealed 46-count indictment. The pair was charged with distributing more than 500 copyrighted works to more than 300 buyers in the U.S. and overseas from April 2008 to June 2011. The retail value of the products was more than $100 million, the government said. Li is the first Chinese citizen to be 'apprehended and prosecuted in the U.S. for cybercrimes he engaged in entirely from China,' prosecutors said in court filings."

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His mistake is obvious (5, Funny)

TrollstonButterbeans (2914995) | about a year ago | (#43982883)

He should have done the transactions in bitcoin.

Re:His mistake is obvious (-1)

Anonymous Coward | about a year ago | (#43983003)

Hi, bitcoins weren't even in existence in 2008.
Thanks for playing.

~ Murder Doll.

Good (3, Insightful)

gigaherz (2653757) | about a year ago | (#43982889)

THIS is proper use of the copyright laws.

Re:Good (4, Insightful)

Krneki (1192201) | about a year ago | (#43982907)

Is it ?

I'm don't know about copyright laws in China, but unless you breach your country law, the US can fuck off.

Re:Good (5, Insightful)

TrollstonButterbeans (2914995) | about a year ago | (#43982983)

He sold to US buyers establishing jurisdiction. If he did not sell to US buyers and to only -- as an example --- Chinese buyers, US courts would likely not have jurisdiction ....

.... Although in this "new post-Megaupload Wikileaks kill people with drones NSA monitors all" world maybe the US government has no limits any longer as the US courts no longer are willing to rule that such limits exist.

Re:Good (3, Insightful)

Anonymous Coward | about a year ago | (#43983009)

I think with all the drone strikes in the world you would realize the US has jurisdiction where ever it fucking feels like.

Re:Good (5, Funny)

L4t3r4lu5 (1216702) | about a year ago | (#43983759)

They can damn well try! I'm behind seven proxi###&4%f2a664#NO CARRIER

Re:Good (4, Funny)

Sponge Bath (413667) | about a year ago | (#43983825)

...and then there were no remaining AOL users.

Re:Good (4, Interesting)

Anonymous Coward | about a year ago | (#43983095)

So if I sell to Chinese buyers I'm bound by Chinese law? You don't see how that might be a very bad thing?

Can't have it both ways. If Chinese citizens are bound by US law then US citizens must be bound by Chinese law. For China to agree to extradite without tit for tat would make them very stupid.

Re:Good (5, Informative)

bloodhawk (813939) | about a year ago | (#43983261)

If you are trading with chinese citizens on chinese soil then then yes you are bound by chinese laws for those dealings, actually in most circumstances you are bound by the laws of both countries. It is one of the reasons many of the big multinationals need so many friggen lawyers as every countries laws are slightly different and they are regularly bound by multiple countries laws when trading and selling goods.

Re:Good (0)

Anonymous Coward | about a year ago | (#43983653)

This is what the UN proposes--extradite a foreign national to your country for an infraction that was committed in outside your country.
This is quite frightening.

Next, people will be extradited for so-called "hate speech".

Re:Good (1)

Krneki (1192201) | about a year ago | (#43983153)

Depends where the servers were located, if they were in China, then the only one to blame are the US citizens that bought the goods.

It's the same if you go to a foreign country and buy drugs not allowed in your country. The seller there can't be persecuted.

Re:Good (4, Informative)

julesh (229690) | about a year ago | (#43983539)

Depends where the servers were located, if they were in China, then the only one to blame are the US citizens that bought the goods.

It's the same if you go to a foreign country and buy drugs not allowed in your country. The seller there can't be persecuted.

Your argument makes good logical sense. Unfortunately, it is not the approach courts have taken to deciding questions of this kind. The courts have instead asked where the was customer when he made the purchase, and used this as the basis of deciding what laws apply to the sale. The original reason for this was to make things easier for consumers, who shouldn't be expected to have to know the laws of the countries of sellers they deal with (particularly as they may not even have any way of knowing where the seller is), but it has been extended since then into areas where this justification makes no sense.

Re:Good (0)

Anonymous Coward | about a year ago | (#43983683)

He sold to US buyers establishing jurisdiction. If he did not sell to US buyers and to only -- as an example --- Chinese buyers, US courts would likely not have jurisdiction ....

A more appropriate approach would be to prosecute the US buyers. They are on US soil and should be familiar with US copyright laws.

Re:Good (5, Interesting)

ranulf (182665) | about a year ago | (#43982987)

He was on US soil, so he can be arrested for actions illegal under US law. This is a fairly common precedent when the law was broken in the US but they have since left. This is newsworthy because the crimes occurred outside the US but he was still considered to have broken US law.

Re:Good (5, Interesting)

xelah (176252) | about a year ago | (#43983075)

An interesting parallel would be people in the US who allow seditious comments harmful to public order in China (or so they'll say) to be posted on their websites, which are then accessed by Chinese people. Will China now feel a whole lot happier about arresting Americans for this should they go anywhere where China has enough influence, or have their flights diverted? Or, indeed, just accuse Americans of stuff to keep them out or stop them selling stuff there.

Re:Good (4, Interesting)

mrbester (200927) | about a year ago | (#43983101)

I like how he got less than someone who *doesn't* sell what they pirate can get. There's a lesson there...

Re:Good (1)

gl4ss (559668) | about a year ago | (#43983269)

He was on US soil, so he can be arrested for actions illegal under US law. This is a fairly common precedent when the law was broken in the US but they have since left. This is newsworthy because the crimes occurred outside the US but he was still considered to have broken US law.

Sorry, but there's nothing newsworthy about that!

Re:Good (5, Informative)

Malc (1751) | about a year ago | (#43983039)

He went to Saipan where he tried to sell software and data to US agents pretending to be business men. Isn't Saipan US territory? Perhaps you should try RTFA before sounding of like a dickhead.

Re:Good (2, Interesting)

AK Marc (707885) | about a year ago | (#43983125)

Yes, he was entrapped in Saipan, and prosecuted for crimes he didn't commit while in the US. His mistake was not equating Saipan with Washington DC. He might as well have been on the lawn of the White House selling bootlegs. At least it's good to know that entrapment is legal again.

Re:Good (2, Insightful)

Anonymous Coward | about a year ago | (#43983163)

Luring someone to where you can arrest them has always been legal. How is this any different from the old tactic of police sending messages saying "Come to this address, you've won a boat!" to people who have warrants out against them?

Re:Good (1, Insightful)

Anonymous Coward | about a year ago | (#43983335)

I really have trouble understanding your mindset and others like you that believe it is A-OK for someone to illegally acquire commercial software (or movies or music or books) and sell it. These "resellers" are not taking expensive software and giving it away in the spirit of communal sharing, they are taking that software and selling it to make a profit for themselves. They made no contributions to the development of the software, they have no stake in the company that hires staff and takes financial risk to produce said software. These people are parasites. It is disheartening that you believe it is worthwhile to defend them.

Re:Good (5, Insightful)

Anonymous Coward | about a year ago | (#43983523)

I really have trouble understanding your mindset and others like you that believe it is A-OK for someone to illegally acquire commercial software (or movies or music or books) and sell it. These "resellers" are not taking expensive software and giving it away in the spirit of communal sharing, they are taking that software and selling it to make a profit for themselves. They made no contributions to the development of the software, they have no stake in the company that hires staff and takes financial risk to produce said software. These people are parasites. It is disheartening that you believe it is worthwhile to defend them.

I defend them when the accusers claim that their retail value is $200,000 dollars a copy and the penalty for copying some CDs is 12 years. Rapists and murderers rarely get 12 years. If you can't see that the motivation behind this is pure greed - as opposed to actual justice - then I pity you.

Re:Good (5, Insightful)

Savage-Rabbit (308260) | about a year ago | (#43983677)

I really have trouble understanding your mindset and others like you that believe it is A-OK for someone to illegally acquire commercial software (or movies or music or books) and sell it. These "resellers" are not taking expensive software and giving it away in the spirit of communal sharing, they are taking that software and selling it to make a profit for themselves. They made no contributions to the development of the software, they have no stake in the company that hires staff and takes financial risk to produce said software. These people are parasites. It is disheartening that you believe it is worthwhile to defend them.

I defend them when the accusers claim that their retail value is $200,000 dollars a copy and the penalty for copying some CDs is 12 years. Rapists and murderers rarely get 12 years. If you can't see that the motivation behind this is pure greed - as opposed to actual justice - then I pity you.

That price tag has less to do with any real belief that a CD is worth 200 grand a copy and a lot more to do with the unshakable American belief in the effectiveness of the brand of 'come down on them like a ton-o-bricks' justice that has filled your jails with hoards of people doing rediculously long mandatory minimum sentences for things that are misdemeanours in most other countries.

Re:Good (3, Informative)

thebigmacd (545973) | about a year ago | (#43983433)

You have no idea what entrapment is, do you? Entrapment by nature cannot be performed by undercover police pretending to be something else.

Entrapment is when a police officer *who identifies themselves as a police officer* orders or asks someone to do something illegal and the person complies *because they are a police officer*. They then proceed to arrest the person for committing a crime they told them to do. THAT is entrapment.

Police have the authority to direct you to do something illegal such as drive the wrong way down a one-way street, if the situation warrants. If they arrest you for doing what they said, they have entrapped you.

Re:Good (4, Informative)

Anonymous Coward | about a year ago | (#43983673)

Not entirely correct. Your description matches one of two tests, but is narrower.

from Wiki

Two competing tests exist for determining whether entrapment has taken place, known as the "subjective" and "objective" tests. The "subjective" test looks at the defendant's state of mind; entrapment can be claimed if the defendant had no "predisposition" to commit the crime. The "objective" test looks instead at the government's conduct; entrapment occurs when the actions of government officers would have caused a normally law-abiding person to commit a crime.

A non-uniformed government agent can indeed entrap someone. Asking if you'll sell them pot isn't entrapment. Haranguing them until the finally agree to sell you pot is.

Re:Good (1)

ATMAvatar (648864) | about a year ago | (#43983767)

Entrapment [wikipedia.org] has no requirement that the officer identify him- or herself as such. Rather, the primary definition of entrapment deals more with the idea that the otherwise law-abiding individual committed the crime due to the officer's actions, identified or not. If self-identification of the officer were a component, then there would never be any question of entrapment by undercover officers.

Re:Good (0)

Anonymous Coward | about a year ago | (#43983815)

IANAL, but this webpage begs to differ
http://legal-dictionary.thefreedictionary.com/entrapment
The relevant bits are
"Persons who commit these types of crimes are most easily apprehended when officers disguise themselves as willing victims."
"On the other hand, an officer cannot use chicanery or Fraud to lure a person to commit a crime the person is not previously willing to commit."

Re:Good (-1, Flamebait)

DaveV1.0 (203135) | about a year ago | (#43983477)

You don't know the meaning of the word "entrap", you stupid fuck.

Re:Good (4, Funny)

pantaril (1624521) | about a year ago | (#43983569)

You don't know the meaning of the word "entrap", you stupid fuck.

And you obviously lack few slaps from your parents which would tech you good manners.

Re:Good (0)

Anonymous Coward | about a year ago | (#43983837)

actually it was an agent provocateur - https://en.wikipedia.org/wiki/Agent_provocateur [wikipedia.org] - not entrapment.

Re:Good (1)

Krneki (1192201) | about a year ago | (#43983167)

That is why I put a question mark in my sentence and I used a hypothetical situation.

Re:Good (-1)

Anonymous Coward | about a year ago | (#43983367)

So you're just plain lazy.

It is, however, definitely appropriate. (-1)

Anonymous Coward | about a year ago | (#43983237)

If you made $100M (really that, not RIAA funny-math $100M, mind) then that is $100M that the original owners could have made.

HOWEVER, you should be allowed to play in your defence the fact that these were sales that were not being made because the original owners did not play that market.

E.g:

Not available AT ALL in that region. Clearly 100% not a lost sale: you can't lose something you have evidently not wanted in the first place.

Not available at that price. Negotiating a price is entirely what the Free Market is about. If the goods would have sold at half the price (look at Steam sales) but is not made available at that price, then someone else cracking it and selling the cracked version at half price has not removed all that profit, since it wasn't made available at a price most of those buying the warez version were willing to pay. Again, not the warez site's fault.

Unacceptable EULA. Since there are more and more restrictions on EULAs and more and more people are getting pissed off at them, then the warez version does not require the acceptance of the EULA and, since accepting a license is not required to use a copyrighted work that has been purchased in the manner it is meant to be used (e.g. copied to HDD), again, the original owner has decided they DO NOT WANT the money that is on the table, therefore cannot claim to hae lost it.

Re:It is, however, definitely appropriate. (4, Insightful)

stanIyb (2945195) | about a year ago | (#43983327)

If you made $100M (really that, not RIAA funny-math $100M, mind) then that is $100M that the original owners could have made.

Except when you consider that the prices official sources charge are usually much more. People most likely bought software from him because he was selling it at a cheaper price. Would they have bought it otherwise? Who knows? But why should we assume they would have?

Re:It is, however, definitely appropriate. (0)

Anonymous Coward | about a year ago | (#43983701)

This guy ^

He sold $100m of software that he got for free!.. Well then, he must have $100m, right? No? Only $50k? Well then, he sold $50k of software, learn to math.

Re:Good (-1)

Anonymous Coward | about a year ago | (#43982943)

How so?

Re: Good (1)

Anonymous Coward | about a year ago | (#43983273)

B-b-b-but what about about his freedom of speech? Surely if "sharing" software that someone else created can be considered a personal expression of political opinion, he should be allowed to charge for his opinion?

Regardless, this clearly wouldn't have happened if software prices met my arbitrary definition of reasonable, or the developers sold the software on the terms I agreed with, or they didn't have teh DRMs, or if HBO's subscriber agreement allowed me to share the software with 30 million of my closest friends via torrent.

Re:Good (4, Interesting)

loonycyborg (1262242) | about a year ago | (#43983659)

Really? 12 years in prison just for possibly decreasing someone's profits? That's definitely cruel and unusual punishment.Such terms should be reserved for murderers and what-not.

Re:Good (1)

Sponge Bath (413667) | about a year ago | (#43983847)

By that standard, Jeffrey Skilling (Enron) should get off because he was *only* decreasing someone else's retirement account.

Nuber not that impressive (4, Informative)

mysidia (191772) | about a year ago | (#43982899)

500 copyrighted works to more than 300 buyers in the U.S. and overseas

The retail value of the products was more than $100 million, the government said.

In other words... on average ~$200,000 per product, and ~$333 thousand per buyer

This makes sense, when you are talking about companies like Agilent that sell overpriced products, that retail for probably approximately $500,000

That's why the "pirated $100 million in software" is neither impressive, nor indicating a particularly outrageous pirate.

The outrage, should be the pricing of Enterprise software, not the" inflated retail price " as some sort of metric of the pirate's activity.

Obviously, the buyers weren't willing to pay the price the maker wanted to sell the software at. Therefore, those sales by definition were not worth the retail price.

In simple economic terms... the high price places their product out of demand.

By definition, they're worth what the buyer was willing to pay the pirate for the procureent.

If you're selling a $500,000 software product; going after pirates is not a winning business strategy -- it's figuring out, why the heck you can't pitch your product to legal buyers, and make your desired revenue there. Either the pricing is all wrong, or your marketing or product targetting is all wrong.

Re:Nuber not that impressive (5, Interesting)

Pubstar (2525396) | about a year ago | (#43982945)

If you read TFA, you would have realized that most of the sales were to counties that have US trade embargoes imposed.

Re:Nuber not that impressive (4, Funny)

king neckbeard (1801738) | about a year ago | (#43983517)

So, the Chinese citizen is Prometheus and the US government is Zeus? Didn't they have anything better to do, like turn into swans and rape young women?

Re:Nuber not that impressive (1)

TrollstonButterbeans (2914995) | about a year ago | (#43982957)

"If you're selling a $500,000 software product; going after pirates is not a winning business strategy -- it's figuring out, why the heck you can't pitch your product to legal buyers, and make your desired revenue there. Either the pricing is all wrong, or your marketing or product targetting is all wrong. "

That is operating on the assumption that the pricing is wrong. Photoshop, Office and Visual Studio are $1000 because many casual users and small businesses will pirate the product or install the office's software on a personal computer (I'm not saying this is right, but I know too many photoshop thieves), but most medium-sized and large businesses and government will purchase the product.

The pricing isn't wrong, the pricing adapted to the marketplace in a way that rewards very high cost and fewer sales.

And super-expensive software often occurs in small markets where the seller is very reliant on trade secrets and does not want their product floating around in the wild for competitors to study, typically in very lucrative and super-specialized niche markets.

Re:Nuber not that impressive (3, Funny)

stanIyb (2945195) | about a year ago | (#43983085)

I'm not saying this is right, but I know too many photoshop thieves

If you know a lot of people who steal other people's copies of photoshop, you're probably hanging out with the wrong crowd.

Re:Nuber not that impressive (1)

ccguy (1116865) | about a year ago | (#43983187)

If you know a lot of people who steal other people's copies of photoshop, you're probably hanging out with the wrong crowd.

Because of the stealing, or because they use photoshop?

Anyway - if Adobe had "per use" licensing, they would get my money. I'm not going to buy their product outright, and I'm not going to pay their huge monthly rental license. I'm sure for a lot of people it's a reasonable cost, but for me (which need to do very casual, and trivial, editing) it makes no sense.

But let me pay $5 per photo I edit, and I'm in. It's still expensive, of course, but I can afford to pay that the 2-3 times I year I actually need photoshop.

Re:Nuber not that impressive (2, Funny)

Anonymous Coward | about a year ago | (#43983351)

Personally, I steal only pirate copies of photoshop. That's not as bad, because the people I took it from had no right to have it in the first place.

Re:Nuber not that impressive (1)

stanIyb (2945195) | about a year ago | (#43983375)

Wouldn't you have to take and/or mess around with their physical property before you could do that, though?

Re:Nuber not that impressive (0)

Anonymous Coward | about a year ago | (#43983739)

Nah, I just sneak in to their houses and get access to their computers, copy photoshop onto my USB drive, then delete photoshop from the hard drive I got it from. That makes it theft. If I didn't delete it then it would be like copyright infringement - I certainly wouldn't want to be caught doing that.

Re:Nuber not that impressive (5, Insightful)

ranulf (182665) | about a year ago | (#43982971)

I wanted to make this point, but more so. The guy sold copyrighted material to 300 people. Let's say $100 a pop, which sounds high for someone to fork over for known pirated material. That's $30,000 which is by my reckoning about 4 months salary for the typical person in the US. But this was actually over a 3 year period.

Piracy is bad, and I don't agree with it, and even more so because my livelihood comes from software development of things that are typical targets of piracy, but the punishment here seems massively out of proportion to the crime. 12 years in prison is in the same ballpark as a murder.

Re:Nuber not that impressive (2)

unkiereamus (1061340) | about a year ago | (#43983045)

I'd just like to point out that the median personal income in the US in 2012 was 42,693 USD.

I don't know where you're living, but I'd like to live there if the typical personal income is 90k.

Re:Nuber not that impressive (0)

Anonymous Coward | about a year ago | (#43983117)

Average salary in Norway is 80k USD, not that far off.

Re:Nuber not that impressive (1)

Grishnakh (216268) | about a year ago | (#43983311)

I don't know where you're living, but I'd like to live there if the typical personal income is 90k.

Maybe he lives in Manhattan or Silicon Valley. With typical rents being $3k/month and up, someone making $43k would never be able to afford to live there.

Re:Nuber not that impressive (0)

Anonymous Coward | about a year ago | (#43983379)

Well, what's the median personal income in Manhattan or Silicon Valley?

Re:Nuber not that impressive (0)

Anonymous Coward | about a year ago | (#43983503)

Just checked citi-data for median household income:
Manhattan, NY: $68,706
San Jose, CA: $76,495
Sunnyvale, CA: $88,364
Cupertino, CA: $118,904
Santa Clara, CA: $82,714
Mountain View, CA: $92,504
Palo Alto, CA: $118,989
Redwood City, CA: $67,611

That should be most of the valley. Just for comparison's sake, I live in Austin, TX where there is a lot going on: $50,132. In my slightly above middle class zip code: $65,230

Now if you really want to have fun, go back and run a cost of living calculator for those places. :)

Re:Nuber not that impressive (1)

Intrepid imaginaut (1970940) | about a year ago | (#43983059)

A typical person in the US makes $90,000 a year? What?

Re:Nuber not that impressive (2)

rockout (1039072) | about a year ago | (#43983531)

On the Upper East Side of Manhattan, per capita income is over $90,000/year, and well over $100K/household on average.

But yes, in most other parts of the country, he's way off. Perhaps he lives in Manhattan and has a skewed sense of what people make.

Re:Nuber not that impressive (1)

Sponge Bath (413667) | about a year ago | (#43983861)

They also own a yacht and have oil wells. I saw it on an episode of Dallas.

Re:Nuber not that impressive (0)

Anonymous Coward | about a year ago | (#43983229)

Not sure how accurate the article is but by the sounds of it it was not just $100 a pop, some of it was up to $1200 a pop. But considering said software retails for 10's to 100's of thousands that is still a bargain. most likely it was easily in excess of 100k in made, possibly several hundred k depending on the software sales mix.

Re:Nuber not that impressive (0)

Anonymous Coward | about a year ago | (#43983731)

>That's $30,000 which is by my reckoning about 4 months salary for the typical person in the US. But this was actually over a 3 year period.

Wow. Out of touch. The median household income in the US is $50k/year. That includes households where multiple people work. That's more around 9 months salary for average homes. I'm a EE with over five years in industry and I don't make $30k in 4 months. I do live in a really cheap part of US, but you may need to check your privilege. It's almost two year's salary for people stuck at minimum wage (before taxes) ($7.25/hour * 40 hours/wk * 52 wk/yr = $15800/year).

Just think a bit more about those numbers a bit, please.

Re:Nuber not that impressive (2)

fustakrakich (1673220) | about a year ago | (#43983809)

The corporations that build and operate our prisons demand a minimum occupancy, and by god, they're gonna get it, if we have to lock up the whole country.

Re:Nuber not that impressive (1)

Anonymous Coward | about a year ago | (#43983203)

Obviously, the buyers weren't willing to pay the price the maker wanted to sell the software at. Therefore, those sales by definition were not worth the retail price.

The market price is the price at which their is maximum supply and demand. That is, it is both the highest price at which consumers demand it and the lowest at which sellers are willing to supply it. And we're typically talking about the price over time because most "cheating" can only be temporary, eventually cheaters run out of money.

A supplier can always sell under the market price, but eventually they have to make a profit or go out of business. A supplier can steal from another supplier and sell below market price, but only so long as they aren't caught, or the people they're stealing from run out of stuff to steal.

When temporary activity ceases, you then get a market correction, and prices will rise.

It's copyright, not market. (0)

Anonymous Coward | about a year ago | (#43983353)

Therefore they will sell at the maximum price they can get maximum profit at. NOT your market price.

Because, as this event shows, there IS NO MARKET, you buy from one mandated sole supplier or GTFO.

That is not a market, unless you're going to accept being able to vote for the party in power makes Soviet Russia a democracy.

Re:Nuber not that impressive (3, Interesting)

Anonymous Coward | about a year ago | (#43983235)

...If you're selling a $500,000 software product; going after pirates is not a winning business strategy -- it's figuring out, why the heck you can't pitch your product to legal buyers, and make your desired revenue there. Either the pricing is all wrong, or your marketing or product targetting is all wrong.

Legal trade embargoes obviously cast aside for a moment, I'd say you truly don't understand how difficult it might be to price certain types of software. A product used in engineering and design that costs $100,000 and $10,000 per person per year to maintain sounds like it might be priced fairly when talking about using it to design our next-generation communication satellites or Mars space rover. That investment in design might make you the preferred vendor generating millions in revenue.

But the instant you start talking about that same $100,000 software package being used to design the perfect rubber dildo or fake vomit, suddenly it's a complete rip-off, and should be priced cheaper? Why, because ironically they ended up designing and selling the #1 sex toy in multiple countries and made twice as much revenue as the guy making satellites and space rovers?

I'm not arguing that some software packages are overpriced. They are. However, it's quite easy to see based on the application of certain software packages it becomes very difficult to pin an appropriate price tag on it.

Re:Nuber not that impressive (5, Insightful)

Registered Coward v2 (447531) | about a year ago | (#43983359)

500 copyrighted works to more than 300 buyers in the U.S. and overseas

The retail value of the products was more than $100 million, the government said.

In other words... on average ~$200,000 per product, and ~$333 thousand per buyer

This makes sense, when you are talking about companies like Agilent that sell overpriced products, that retail for probably approximately $500,000

That's why the "pirated $100 million in software" is neither impressive, nor indicating a particularly outrageous pirate.

The outrage, should be the pricing of Enterprise software, not the" inflated retail price " as some sort of metric of the pirate's activity.

Obviously, the buyers weren't willing to pay the price the maker wanted to sell the software at. Therefore, those sales by definition were not worth the retail price.

In simple economic terms... the high price places their product out of demand.

By definition, they're worth what the buyer was willing to pay the pirate for the procureent.

If you're selling a $500,000 software product; going after pirates is not a winning business strategy -- it's figuring out, why the heck you can't pitch your product to legal buyers, and make your desired revenue there. Either the pricing is all wrong, or your marketing or product targetting is all wrong.

Not really. While i you are correct about pricing a d demand your conclusions aren't. The software vendors chose to forgo more sales in favor of higher prices; probably figuring the margins were better since there would be fewer users to support and the higher price justified the required level of support. That's their choice and does not mean someone else has the right to pirate and sell at a lower price point. The buyers were simply not target customers despite their desire to have the software.

Re:Nuber not that impressive (0)

Anonymous Coward | about a year ago | (#43983363)

If you're "outraged" by the high price of Enterprise Software go write an open source replacement.

And I'm calling shenanigans on this part:

>>Obviously, the buyers weren't willing to pay the price the maker wanted to sell the software at. Therefore, those sales by definition were not worth the retail price.

>>In simple economic terms... the high price places their product out of demand.

How can you simultaneously be outraged at the price and go on to say their business model is broken?
If they're model was broken they would be out of business.

I like free beer too. Not all beer is free. Some beer is cheap and some expensive. This is good, it gives us all lots of beer to chose from.

Re:Nuber not that impressive (0)

Anonymous Coward | about a year ago | (#43983369)

Eh this will basically never happen. Look at drugs. When I was in high school some kid got caught by police with ~$100 (what he actually paid) of marijuana in hit car. When the news report came out, they said it was $10,000 worth, and were all talking about how he was obviously on his way to distribute it to his friends so that they could split up and sell it in different parts of town. The reality was he always bought in bulk so he wouldn't have to go out and buy more every couple of days. But here, 15 years later, he's still in jail on drug trafficking charges.

Re:Nuber not that impressive (0)

Anonymous Coward | about a year ago | (#43983693)

>By definition, they're worth what the buyer was willing to pay the pirate for the procureent.
Please, try not to be such an idiot. They are worth whatever the seller is willing to sell them for.

>If you're selling a $500,000 software product; going after pirates is not a winning business strategy -- it's figuring out, why the heck you can't pitch your product to legal buyers, and make your desired revenue there. Either the pricing is all wrong, or your marketing or product targetting is all wrong.
It's this kind of thinking that makes me lose faith in the future. It is true that going after pirates who can't afford your legal product is a losing strategy. Going after people who can afford it is a very fucking good idea. If it's not worth $500k to you, then you obviously do not need it. Period. Make do without. If it's 100% required for you to do business, well, that's what people call a "cost".

Retail versus actual street price (1)

mathew42 (2475458) | about a year ago | (#43982975)

A more realistic figure would be software price after it has been discounted by the sales person.. Most (all?) enterprise software is discounted heavily and comes with large ongoing maintenance and support fees.

Re:Retail versus actual street price (0)

Anonymous Coward | about a year ago | (#43983263)

A more realistic figure would be software price after it has been discounted by the sales person.. Most (all?) enterprise software is discounted heavily and comes with large ongoing maintenance and support fees.

The legal system started that bullshit. Auto manufacturer makes the car for $5000, sends it off to their dealership priced at $25,000 and the car gets stolen off the lot. Gee, I wonder how much it's insured for...

Don't even get me started on the jewelry racket...

Perhaps a serious revamp there would be a start to end this nonsense of a 90% markup to MSRP "value".

Re:Retail versus actual street price (0)

Anonymous Coward | about a year ago | (#43983293)

They are talking about specialized engineering software here, not mass market enterprise stuff where there is huge various in pricing. The market is relatively limited hence it isn't something you can get a lot of large discounts on unless you are already spending a shitton of money with them.

Just another Day... (0, Troll)

lunacyq (2893005) | about a year ago | (#43982991)

Of the U.S.A ruling the world as normal. Move along, nothing to care about here.

So, an action only in one country is a crime ... (4, Insightful)

magic maverick (2615475) | about a year ago | (#43982995)

Let's pretend I host a website that allows you to download hundreds of novels and other works. These are all still under copyright in the USA. But I, and my website, are located in a place where all these works are in the public domain (e.g. Australia, and Russia).
If I then (perhaps I'm a masochist) visit the USA, can I be arrested and charged? Probably not actually.

But, if I suddenly allow you to download novels etc. that are not in the public domain in the country I operate in, I suddenly can be charged in the USA? Even though I never visited that country, nor had any dealings there?

Why the fuck do countries have laws that allow them to prosecute people who are did their criminal activity in another jurisdiction?

Re:So, an action only in one country is a crime .. (2, Insightful)

Anonymous Coward | about a year ago | (#43983135)

Obviously because so many crimes cross international borders. He sold illegal product to US citizens over the internet, and was then dumb enough to make a delivery on US soil. There's no room for outrage here unless you're the kind of edgy guy that thinks anarchy would be cool.

Re:So, an action only in one country is a crime .. (0)

Anonymous Coward | about a year ago | (#43983157)

Try reading the Bloomberg story before spouting off.

Re:So, an action only in one country is a crime .. (1)

stealth_finger (1809752) | about a year ago | (#43983309)

Let's pretend I host a website that allows you to download hundreds of novels and other works. These are all still under copyright in the USA. But I, and my website, are located in a place where all these works are in the public domain (e.g. Australia, and Russia). If I then (perhaps I'm a masochist) visit the USA, can I be arrested and charged? Probably not actually.

I would say yeah. They've shown all you have to do to be arrested on entry to America is post a few ill thought tweets.

Re:So, an action only in one country is a crime .. (1)

Grishnakh (216268) | about a year ago | (#43983331)

Why the fuck do countries have laws that allow them to prosecute people who are did their criminal activity in another jurisdiction?

Because they want to, and because they can. Why wouldn't they want to do so? If you're allowing US residents to download novels from your Russian website, you're causing the US publishers to lose money. Since the US government is a government by the corporations, and for the corporations, obviously they're going to be very interested in shutting you down.

Re:So, an action only in one country is a crime .. (0)

Anonymous Coward | about a year ago | (#43983385)

If it's legal in your country, they won't extradite you to another country to stand trial. Every time some reporter talks shit about a middle eastern country they start demanding that they be turned over to 'stand trial' for their blasphemy...we haven't turned anyone over yet. A lot of countries won't extradite to the US even if the crimes are illegal, because they know the system is bullshit. Like child support...they know if they extradite the person will just end up in jail for nonpayment, get out a month later, then end up in jail again for not being able to pay all the fines/fees/etc. Rinse/repeat until they die of old age.

Anyway, the US wouldn't be able to arrest you in your situation unless you went there. Then it's fair game on your ass. If you did something particularly bad, they might send people in after you..but they aren't going to do that over some $20 novels. Now if you had sold a joint somewhere....

Re:So, an action only in one country is a crime .. (2)

Bearhouse (1034238) | about a year ago | (#43983395)

Because they would probably never get prosecuted there, sometimes because there are no laws, other times because there is no effective system to apply the law, (even international law).

Whilst this tactic is of course open to abuse, and recently has been, it's also good for cases of war crimes etc.

Anyway, I think you're missing the point here; if you are party to/enable a 'crime' to be committed in a certain country, then they can go after you.
Seems fair enough. Remember, ignorance of the law is no defense. If you're doing business across borders, better know what you're doing.
Finally, you really think guy did NOT know what he was risking? He was selling stolen software!

Re:So, an action only in one country is a crime .. (0)

Anonymous Coward | about a year ago | (#43983417)

I think there's a big distinction between low touch sales where you do not distinguish the country of your buyer (eg. he's from "the Internet", and you're selling to "the Internet", and high touch sales where you directly deal with every sale and know that you're selling to the US and that it is illegal there. You fall on the latter side even more if you're directly and knowingly communicating with Americans to negotiate the sale.

In the latter case, I think it's perfectly fair to require that you don't break the law in either country, and for the US to have jurisdiction over your activity.

OTOH, if US citizens were to fly to Russia (using your example) to purchase goods or services in a transaction that is entirely legal in Russia, then the US citizens should be the sole ones culpable for breaking any US laws when they return home.

Re:So, an action only in one country is a crime .. (2)

Zontar_Thing_From_Ve (949321) | about a year ago | (#43983867)

Why the fuck do countries have laws that allow them to prosecute people who are did their criminal activity in another jurisdiction?

Many EU countries have such laws. Your post is mostly anti-US, but many EU countries assert legal authority over actions that never happened in their countries. I hate to resort to Godwin's Law but it does provide a great example. For instance, in the USA it is quite legal to own and sell Nazi memorabilia. Such violates French law. In fact, if it were up to the French they would prevent everybody in the world from doing this. They've sued Ebay in the past and other companies to force them to not show US listings of such to French citizens. I want to be sure I'm clear here - they don't want French citizens to see US listings intended only for US residents on such transactions. In the past Spain has prosecuted human rights violations that didn't occur in Spanish territory and didn't involve Spanish citizens. These are but a few cases.

The actions in this case are not as clear cut as some might like to think. The perp was engaged in software piracy or violations of copyright. The US government's official position is that software and media piracy is destroying the US economy and putting people out of work. It's an irrational argument, but it's what they say. So crimes like these are viewed as something like direct economic warfare against the USA, hence the overreaction in the penalty, which is meant to serve as a deterrent. Since the perp apparently sold his wares to US citizens, this provided the justification to go after him.

Just as a point of interest, Guam and the Northern Mariana Islands (Saipan is here) have special visa rules that don't apply to most US territories and Chinese citizens with a machine readable passport who fill out certain forms in advance are allowed visa free travel to the Northern Mariana Islands (they cannot travel to Guam without a visa though). Since the perp didn't need a visa to go to Saipan, that made it really easy to trick him into going there.

3.78 seconds (0)

Anonymous Coward | about a year ago | (#43983077)

per dollar.

standard has been set.

38 seconds for a 10 dollar movie.

so fuck the 5-10 for that... call it a five dollar fine/restitution and people can keep their stuff, even. you know damn well that 100+ million was not recovered.

Moral of the story... (5, Informative)

Wickedpygmy (907341) | about a year ago | (#43983079)

Don't travel to U.S territories if you're wanted for U.S crimes.

Re:Moral of the story... (0)

antifoidulus (807088) | about a year ago | (#43983115)

Did you actually read TFA? He went to Saipan for the express purpose of making a deal...it wasn't like he went on a vacation, landed on US soil and was immediately arrested, they caught him on US soil engaging in the crime.

Moral of this comment: RTFA.(Though I guess the summary is partially incorrect in that regard, it wasn't "entirely from China" if he traveled to Saipan to sell stuff)

Re:Moral of the story... (1)

Registered Coward v2 (447531) | about a year ago | (#43983365)

Did you actually read TFA? He went to Saipan for the express purpose of making a deal...it wasn't like he went on a vacation, landed on US soil and was immediately arrested, they caught him on US soil engaging in the crime. Moral of this comment: RTFA.(Though I guess the summary is partially incorrect in that regard, it wasn't "entirely from China" if he traveled to Saipan to sell stuff)

The real moral: You can't fix stupid

History of people arrested in the U.S. on vacation (0)

Anonymous Coward | about a year ago | (#43983753)

because they were involved in VICTIMLESS "crime" as defined by the U.S. (totally legal in their origin jurisdiction):

http://sports.espn.go.com/espn/poker/news/story?id=6362238 [go.com]

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aj..NNwfvacU [bloomberg.com]

There are a couple more but most of them related to online poker.

Edward Snowden have chosen to defect to China. He basically recognize the superior human rights of China. The only group of people that defects to China are North Koreans. Therefore USA = North Korea.

Re:Moral of the story... (1)

EmagGeek (574360) | about a year ago | (#43983633)

As the article states, these acts were committed in China, where they may or may not be legal.

Next thing we know, US Police will start writing tickets for people speeding in Belgium.

Quid Pro Quo? (0)

Mistakill (965922) | about a year ago | (#43983081)

Now, i wonder how many American's will be charged for crimes against the STATE in China, for example, supporting pro Tibet movements... After all, if its good enough for the goose...

Re:Quid Pro Quo? (2)

Skapare (16644) | about a year ago | (#43983431)

THIS is the danger! Maybe it is less so because technically this theft is illegal in China, too, and he did step onto US soil. But the danger is that things we in the US think of as perfectly legal, like putting up web sites about Tibet's political struggles, or insult the royal family in Thailand, or trade in historical Nazi artifacts, we run the risk of being arrested in one or more countries. And to the extent that the US government demands extradition for things that are illegal here, for acts done in the other countries, those countries might demand similar extradition the other way.

Re:Quid Pro Quo? (0)

Anonymous Coward | about a year ago | (#43983639)

Well, don't go to Chinese sovereign soil after doing so and you'll be just fine.

This asshat went to Saipan (Chinese people, but a U.S. territory) to sell warez to American cops.

If you go to China and help out a pro-Tibet rally, I expect you to be tossed into the pokey.

Whats the big deal? (-1)

Anonymous Coward | about a year ago | (#43983181)

The guy is offering a service. You can buy the discs from him already burned and in a nice pretty box for however much extra, or you can download it and play it for free.

I don't like a lot of clutter, so I just like to download things. But hey at least the guy is proving someone still buys plastic discs. Makes me feel sad...

http://www.youtube.com/watch?v=4N3N1MlvVc4 [youtube.com]

Brilliant example (0)

stealth_finger (1809752) | about a year ago | (#43983253)

Without googleing who the fuck are Agilent Technologies Inc.

Re:Brilliant example (1)

gl4ss (559668) | about a year ago | (#43983285)

well they sell high margin electronics analysis equipment and apparently software.

that's how they got the 100 000 000 figure. it's pulled out of a hat, completely.

Re:Brilliant example (0)

Anonymous Coward | about a year ago | (#43983405)

IT is high margin and expensive because the market for it is so small, if it wasn't high margin then it would not be worth any companies time, investment and risk to actually make said equipment and software. If it was such an incredibly lucrative market you would see lots of competitors driving price down, you don't because the market is too small. There are many many examples of such markets in the world and it isn't because of people pulling arbitrary prices out of a hat, it is because to stay in business each product sale has to account for a much more significant portion of your cost recovery and you profit base.

"Worth"? (1)

J'raxis (248192) | about a year ago | (#43983621)

Was this software "worth" $100M in the same way a single MP3 you could buy for $0.99 is "worth" tens of thousands of dollars when it comes to copyright claims?

Since when... (0)

Anonymous Coward | about a year ago | (#43983629)

... does US Law apply in China?

Oh, that's right, the US Government believes that US Law applies everywhere in the world.

That. Stop Doing That. (1, Insightful)

FuzzNugget (2840687) | about a year ago | (#43983679)

Stop calling it piracy, damn it. Did he sail the high seas then rape and pillage? No, he sold cracked software. It's called "commercial copyright infringement," but that doesn't sound so sexy, does it?

Every time you call it piracy, you let the corporatists win.

Re:That. Stop Doing That. (1)

Major Ralph (2711189) | about a year ago | (#43983775)

but... I like being called a pirate! It's makes me feel like a swashbuckling badass. But on the high seas of the internet.

Hmmm (3, Insightful)

Anonymous Coward | about a year ago | (#43983715)

100 million for 12 years in prison... Might be worth it...

The prices! (0)

Anonymous Coward | about a year ago | (#43983773)

This is only like 10 copies of Photoshop in Australia. Give the guy a break!

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