OEM Software: What you need to know

Thousands of websites claim to offer original equipment manufacturer (OEM) software: it’s cheap, widely available, and easily obtained, often even downloadable. But is it legal? Most often, the answer is no. In fact, it is very likely not even OEM software.

OEM software is simply a special version of a software title that is specifically licensed to be distributed either pre-installed in a new proprietary computer system or bundled with qualifying new hardware devices, such as a new motherboard, hard drive, or memory. OEM software comes without a manual or box; it is often just a CD in a paper sleeve. When distributed and used as described in the End User License Agreement (EULA), OEM software is legal. A good example of this is the operating system that comes on new computers—installed as part of an agreement between the software company and the computer manufacturer.

If, however, the conditions in the licensing agreement are not met, the software is illegal and considered pirated, even if it is the original software from the manufacturer. This is referred to as gray ware: software that is sold outside the scope of the licensing agreement. If an authorized reseller purchases, for example, ten hard drives that qualify for EOM software and sells five of those hard drives without the software, the reseller has five copies of the software remaining—copies that cannot be legally resold or used. This overage is sometimes illegally resold to consumers without the requisite accompanying hardware purchase or sold to bulk purchasers who then resell it illegally online. In an attempt to deceive customers into believing that the “accompanying hardware” requirement has been met, some unscrupulous sellers ship token hardware, such as a mouse or cable, with the software; however, the hardware must be non-peripheral to qualify, and what exactly can be sold with which hardware is contractually designated. Even buying a motherboard with the OEM software does not guarantee that it is legal.

Because the sale of gray ware is so prevalent, many consumers are left with the impression that, as so much seems to be available and the sales are so visible, it must be legal. This is not the case. To avoid alienating customers, though, large software companies have toned down their enforcement tactics, choosing to provide consumers with tools to evaluate the legitimacy of their software and with assistance in acquiring legal copies rather than criminalizing them. Focusing on the sellers proves difficult, though, as many are overseas and the registered domains are frequently dropped or changed.

Most online sales and auction sites, however, are selling pirated copies of the software—not OEM software at all. The OEM tag is applied to try to explain away the lack of documentation, manual, and packaging. Instead, if indeed the consumer gets anything at all, the software is a copy, sometimes sophisticatedly produced and other times just a CD-R with a handwritten label.

Illegal software cannot be registered, updated, or supported through the software company. Some consumers argue that they have no need of technical support or registration, so they are not bothered by this limitation. The consumer’s perceived needs aside, the sale, purchase, or use of pirated software is, in a word, theft. However, even if legal liability and ethical mores are not enough to halt an illegal software purchase, and even if a consumer is confident that he or she will not need technical support or want an upgrade, there are still compelling reasons to rethink that pirated purchase.

The first thing to consider is your financial security. Even if you would buy that insanely cheap handbag or watch from the man on the street hawking his stolen or counterfeit wares, would you hand him your credit card? Obviously not, right? Yet that is exactly what every person who falls for these “OEM” scams does—gives his or her credit card information to a criminal.

It is also important to recognize that intellectual property and copyright theft is increasingly becoming the domain of international organized crime and terrorist organizations, due to the relatively low cost and minimal risk because of the complications of international enforcement. Even if it does not bother you to take money out of someone’s pocket, consider whose pocket you may be putting that money into instead and what activities they may be funding with your illegal software purchase.

Also at risk is your computer security. These copies may not be of the latest version of the software, leaving you vulnerable to all the bugs and quirks of whatever previous version the counterfeiter copied for you. Also, there may be viruses, worms, or trojan horse programs present on the copies, which can infiltrate your system and cost you money, time, and data.

Many software titles require activation before they are executable. An illegal copy of a software program will not have a legal activation key. It may be cracked, duplicated, or simply missing. For many consumers, this means that they have purchased an unusable CD-R for $50 or $100—not such a bargain after all.

It is important to note that not everyone who purchases from an OEM scammer encounters all of these risks. Many consumers receive no product at all.

For small businesses, there is additional liability. A software audit can result in substantial fines if illegal software is found on the computer systems.

So how can you tell the difference? Generally, the simple application of common sense is all that is required, though software companies advise consumers who are unsure to call the software manufacturer directly and ask.

Here are a few things to keep in mind when considering a software purchase:

• The price: if the advertised price is a fraction of the retail value, the software is not genuine.
• The offer: if the “Full Version” comes without discs, a manual, or packaging, it is not the full version, and a true OEM can only be sold as described in the licensing agreement.
• The company: if no contact information or physical address is listed for the company, it is worth being suspicious about.
• The website: if the website takes special pains to assure you that it is perfectly legal, it is safe to assume that it is not.
• The fine print: if the seller advises that the software is for “back-up purposes” only, asserts that it is the buyer’s responsibility to procure the required hardware separate from the software, or informs the buyer that he or she will not be able to register the product, it is illegal.

In short, the old maxim holds true: if it sounds too good to be true, it probably is.