The unlicensed use of any commercial software, such as Windows XP, is a form of copyright infringement, according to the Business Software Alliance. Copyright infringement is punishable by a $250,000 fine, five years in prison or both. The legal owner of the pirated software may also seek damages in civil court. These damages can be as high as $150,000.
Software piracy hurts the developer of the software, explains the Business Software Alliance. Most useful software requires the cooperation of a great deal of software developers, research and time for its production. Software development is very expensive and often receives funding from previously released software products. If the company that produces software fails to make a profit, they may not be able to continue to make software. This could result in many lost jobs and the stagnation of the technological advancements that normally come from software research and development.
Software piracy results in lower employment rates, lower economic activity and lower tax revenue, adds the Business Software Alliance. An estimated 10 percent reduction in the prevalence of software piracy would create 25,000 new jobs in the high-tech industry, $38 billion worth of economic activity, and a $6 billion increase in tax revenue.