Software makers fire across possible pirates' bows; ten L.A. companies are among those audited in 1992.

Ten Los Angeles-area companies suspected of software piracy were forced into audits during 1992 by the Software Publishers Association, according to the publishers' trade group.

Such scraps will become more dangerous in 1993, because illegal duplication of software is now a felony under a new law signed by former President Bush late last year.

Nationwide, violation of the federal copyright law cost the PC software industry more than $1.2 billion in 1991, the SPA estimated.

The 10 L.A. businesses were given a choice of audit or lawsuit on behalf of the SPA's 1,000 members, which include publishing giants like Microsoft Corp. and many smaller outfits.

In L.A., the targeted companies included two manufacturers, two mail-order houses and two retail establishments, said Ilene Rosenthal, SPA general counsel. Others were a bank, an insurer, an entertainment company and a distributor, she said, declining to supply names.

All 10 proved their innocence or settled with the Washington, D.C.-based SPA, which binds suspects to an agreement signed prior to the audit, said SPA spokeswoman Terri Childs.

The agreement requires them -- if they are found pirating -- to pay into SPA's "copyright protection fund" an amount equal to the cost of buying all the pirated programs, typically $10,000 to $150,000, plus pledge to replace them with purchased copies, doubling their costs. One company, whose name was not revealed, paid nearly $500,000 in 1992 to settle a case involving 66 SPA members, the group reported.

"Los Angeles is an area where a lot of piracy goes on, because there's a lot of high-tech and sophisticated organizations," Rosenthal said.

The L.A. companies were among 218 businesses, schools, computer bulletin boards and other outfits audited or sued in 1992 nationwide by the SPA for violating U.S. copyright law. The typical case originated from a tip to the group's telephone hotline that a business was copying software programs for employee use, rather than buying them.

"I know of one CPA firm that bought one word-processing program that's been shared with at least 25 people," said a long-time member of an L.A.-area software users group. "That's morally and ethically wrong, but I see both sides."

Armed with court orders and accompanied by federal marshals, the SPA has entered business' premises and sought "unauthorized" copies of software. Childs said, however, searches are done with little disturbance to the business.

Los Angeles patent attorney Gary Hecker said publishers also independently stalk pirates. Hecker, representing Santa Monica-based Quarterdeck Office Systems, won a court order to raid a Garden Grove bulletin board last year with federal marshalls. The so-called Purple Dragon was allowing users to download pirated software to their computers via telephone, he claimed.

"We ride the bulletin boards," he said. "We watch, we check and we file" for seizure and restraining orders, he said.

The No. 1 pirated product in 1992 was Norton Utilities, marketed by Santa Monica-based Peter Norton Group.

The top-selling maintenance program, used for locating seemingly lost data in microcomputers, probably held that notorious slot because it is compact and easy to use without a manual, speculated Rod Turner, general manager for the Norton Utilities product group.

He said pirating in America is less egregious than abroad. Worst are Mexico, Brazil, Spain, Greece and Russia, Turner said. Norton lost some $20 million in sales worldwide last year to pirating, he estimated. Industry sources said that roughly equals Norton's legal sales.

The SPA said 95 percent of serious U.S. cases involved corporations. An ambitious group, the SPA is even prodding children over video-game software duplication. It gave away nearly 25,000 copies of its "Don't Copy That Floppy" informational video in 1992 to schoolchildren.

Under the new law, prison terms of up to five years, or fines up to $250,000, may be imposed on people convicted of infringing on a copyright for more than nine copies of a single program or any combination of programs with a value greater than $2,500.

Formerly, a misdemeanor conviction could bring one year in prison and a $10,000 fine, at most.