The copyright infringement of software refers to several practices when done without the permission of the copyright holder:

• Creating a copy and selling it. This is the act most people refer to as software piracy. This is copyright infringement in most countries and is unlikely to be fair use or fair dealing if the work remains commercially available. In some countries the laws may allow the selling of a version modified for use by blind people, students (for non-educational product) or similar. Differences in legislation may also make the copyright void in some jurisdictions, but not the others.
• Creating a copy and giving it to someone else. This constitutes copyright infringement in most jurisdictions. It is not infringing under specific circumstances such as fair use and fair dealing. In some countries, such as Israel, creating a copy is completely legal, as long as it was done from non-profit intentions.
• Creating a copy to serve as a backup. This is seen as a fundamental right of the software-buyer in some countries, e.g., Germany, Spain and Brazil. It can be infringement, depending on the laws and the case law interpretations of those laws, currently undergoing changes in many countries. In the US, legal action was taken against companies which made backup copies while repairing computers and as a result, US law was changed to make it clear that this is not copyright infringement.
• Renting the original software. Software licenses often try to restrict the usual right of a purchaser of a copyrighted work to let others borrow the work. In some jurisdictions the validity of such restrictions are disputed, but some require permission from the copyright holder to allow renting the software.
• Reselling the original software. Licenses often say that the buyer does not buy the software but instead pays for the right to use the software. In the US, the first-sale doctrine, Softman v. Adobe and Novell, Inc. v. CPU Distrib., Inc. ruled that software sales are purchases, not licenses, and resale, including unbundling, is lawful regardless of a contractual prohibition. The reasoning in Softman v. Adobe suggests that resale of student licensed versions, provided they are accurately described as such, is also not infringing.

Copyright infringement of software is extremely common in Mexico, China, Indonesia, Russia, Brazil, United States, and several other parts of the world where it too operates without restraint. However it is illegal and enforced in most western countries.

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Software licenses

Some believe that, in some jurisdictions, unauthorized users may not be violating any software license that is created on consent by contract. By using an unauthorized copy, they do not become parties to the sales contract, and hence not bound by the license. Only the original purchaser may be found in infringement. However, most software requiring installation has a licensing dialogue that requires the end user to accept the license before installation is completed (referred to as a "click-through license"), which obviously prevents subsequent installations. Most, if not all software now has a first installation license that a user agrees to by opening the shrink-wrap around the product (a "shrink-wrap license"), and even though such installation is gratuitous it may nevertheless be enough to create a contract between the copyright holder and the end user (who benefits from the use of the software). However, as the second installation in the shrink wrap license may not be done by the person who removed the original shrink wrap (or opened a sealed envelope or some such variation), the click-through license is preferred because it will bind all subsequent installations.

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There have been numerous advertisements attempting to deter people from unauthorized copying. In this case, the image is attempting to stop people from selling illegally copied DVDs.

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Although the question has not been addressed in court, some journalists have questioned whether such a license is enforceable if a minor completes the licensing dialogue, since minors are not allowed to enter into contracts in some jurisdictions and any contracts they do sign are legally void unless confirmed. However, many jurisdictions do recognize rental and sales contracts to minors made in the regular course of business as being valid, otherwise children's parents could ask for money back after the children play video games in arcades.

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Unauthorized copying as ethical choice

Some, such as Richard Stallman, contend that any license not allowing a person to share with their neighbors is ethically wrong. Still others, while laying less stress to the ethics of copyright restrictions in and of themselves, nevertheless see it as a dangerous slippery slope. Other arguments for unauthorized copying being the ethically correct choice can include having bought software, but either losing the original box, the software being deleted from their hard drive, or both, and wanting to reuse it again without having to rebuy the software.

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Also, the argument can be made, particularly by those living in poverty in the developed world or in third world countries, that it is OK, or at least morally ambiguous, to copy software which would otherwise lie entirely outside one's means to purchase. A parallel argument may be made if copyright infringement serves some other public purpose. For example, a community center might host a LAN game using multiple copies of software when only one is licensed, and the organizer may feel that the good of "keeping the kids off the street" outweighs the bad of using multiple copies of the software when not licensed to do so.

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Another example might be a non-profit foundation that installs an unlicensed copy of Windows when it refurbishes old computers to be given to the poor. They recognize that a retail-boxed, licensed version of Windows can cost more than a new computer, and both of them are outside the budget for their organization. For various reasons, Microsoft created the Microsoft Authorized Refurbisher Program to provide authorized and reduced cost licensing for these organizations.

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Console video games

One argument for the unauthorized/illegal distribution of console game ROMs is to cite that the Nintendo company no longer produces many of their older titles and does not provide repairs or technical support for their old systems as was promised to customers in their "Lifetime" guarantees/warantees (although this is purely a misunderstanding on the part of the consumer as "lifetime warranty" refers to the life of the product, i.e. until they stop making it, not the lifetime of the consumer). Proponents of this view argue that because of this the number of working systems and cartridges in the world will steadily decrease until there are very few left if steps are not taken to preserve the games by making as many electronic copies as possible. Some proponents of this view also often cite Nintendo's censorship policies as being morally repugnant and claim that buying used cartridges isn't legally paying for the games anyway.

Software "pirates" who engage in this practice have also illegally modified the roms to produce Japanese-to-English translations of games that were never translated by the company and have also produced alternate translations that are arguably better than the company's official version. Also, there is a process called "rom hacking" in which a completely new game is produced by changing the text, graphics and/or rules of an existing commercial game.

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Existing and proposed laws

To many of these attempts at circumventing these end user license agreements (EULA) software vendors counter that if a user somehow obtains software without agreeing to or becoming bound by the end user license agreement, then they do not have any license to use the software at all.

In most developed countries, the term of a copyright greatly exceeds any useful life a program may have. The oldest legacy computer systems used today are still less than 40 years old. The copyright on them will not expire in the United States and Europe until about 2030. Changes in computer hardware, operating systems, network environments and user expectations usually make programs obsolete much faster than in 70 years (current copyright length).

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Under the proposed US Uniform Computer Information Transactions Act (UCITA), a controversial model law that has been adopted in Virginia and Maryland, software manufacturers are granted broad rights to shut down unauthorized software copiers without court intervention similar to some of the provisions found in Title II of the US DMCA, the Online Copyright Infringement Liability Limitation Act, which allows copyright holders to demand that an online service provider (OSP) expeditiously block access to infringing materials. If the OSP complies, it is granted a safe harbor, providing it immunity from infringement claims. If it doesn't comply, it doesn't become liable, but may instead rely on the protection of the Communications Decency Act.

Title I of the US DMCA, the WIPO Copyright and Performances and Phonograms Treaties Implementation Act has provisions that prevent persons from "circumvent[ing] a technological measure that effectively controls access to a work". Thus if a software manufacturer has some kind of software, dongle or password access device installed in the software any attempt to bypass such a copy prevention scheme may be actionable — though the US Copyright Office is currently reviewing anticircumvention rulemaking under DMCA — anticircumvention exemptions that have been in place under the DMCA include those in software designed to filter websites that are generally seen to be inefficient (child safety and public library website filtering software) and the circumvention of copy prevention mechanisms that have malfunctioned, have caused the software to become inoperable or which are no longer supported by their manufacturers.

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Most commercially exploited software is being made in the United States, Japan and Europe, hence for those located in economically disadvantaged economies it can be prohibitively expensive to pay for all the end user licenses for those products rather than to purchase just one license and then copy the software without paying any additional licensing fees. Some critics in the developing countries of the world see this as an indirect technology transfer tax on their country preventing technological advancement and they use this type of argument when refusing to accept the intellectual property laws that are in force in most technologically advanced countries. This idea applies to patent and trademark laws as well.

Preventing copyright infringement

Some approaches used for prevention of software copyright infringement:

• Legal action against infringers or those who make infringement possible: penalties can be extreme and vary from country to country. The recent RIAA settlement with students operating music download file servers from several universities in the US (including Princeton University, Rensselaer Polytechnic Institute and Michigan Technological University) is an example of this type of aggressive prevention policy (though with respect to digital music sharing, not software).
• Prevention of importation of pirated hardware or software into the US, the Homeland Security confiscates this in the same way that they confiscate weapons and contraband .

The effects of copyright infringement on digital culture

Illegal copying has changed the landscape of digital culture drastically. Peer to peer (P2P) file sharing technology and IRC have allowed for the unauthorized distribution not only of software, but also massive amounts of information. In his book Free Culture, Lawrence Lessig, a prominent figure in science and technology studies, mentions that "the Internet has unleashed an extraordinary possibility for many to participate in the process of building and cultivating a culture that reaches far beyond local boundaries. That power has changed the marketplace for making and cultivating culture generally, and that change in turn threatens established content industries." Thus, on the surface illegally copying software looks like a simple crime of stealing another person's or company's information or material, when in the regard of software piracy is never theft, but copyright infringement or piracy; however, piracy has in a sense opened up once closed doors and has allowed for the easy spread and access of once closed software and code. Hence, piracy is not merely about the illegal sharing of software or protection of personal property, there is more at stake when it comes to the freedom to share all information without restrictions. In his book, Lessig argues that the laws imposed through the bidding of big industry have "massively increased the effective regulation of creativity in America." The law, in essence, is restricting the spread of information, technology, and culture. Thus, when addressing the "problem" of software piracy one cannot just see it in black or white, right or wrong. Software piracy and piracy in general are complicated and multifaceted topics which affect almost every aspect of our lives. What we decide to do about enforcing copyright as a society will determine our own cultural development or lack thereof in the future.

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Objections to the term "piracy"

Some groups, including the Free Software Foundation, object to the term "software piracy". Their objection stems from the idea that to label one as a pirate creates a prejudice that is used to gain political ground. Evidence of this can be seen in the Free Software Foundation's list of confusing words.

Publishers often refer to prohibited copying as "piracy." In this way, they imply that illegal copying is ethically equivalent to attacking ships on the high seas, kidnapping and murdering the people on them.

If you don't believe that illegal copying is just like kidnapping and murder, you might prefer not to use the word "piracy" to describe it. Neutral terms such as "prohibited copying" or "unauthorized copying" are available for use instead. Some of us might even prefer to use a positive term such as "sharing information with your neighbor."

One organization that campaigns against software copyright infringement refers to the practice as software theft. This would be seen as an inappropriate label by those who argue that the illegal copying of software is, and always has been, copyright infringement and that copyright theft implies that the legal copyright has been seized in some way. See Federation Against Software Theft.

On the other hand, many self-proclaimed "software pirates" take pride in the term, thinking of the romanticised Hollywood portrayal of pirates and sometimes jokingly using "pirate talk" in their conversations.