WASHINGTON, Sept. 8 LAWFUEL – Legal News Network — Today, Nathan Peterson, owner and operator of iBackups, was sentenced in U.S. District Court in Alexandria, VA to more than 7 years in prison and he forfeited nearly all of his assets to the Court. This is the longest sentence ever given for software piracy — the average sentence over the past six years has been 22 months.
Peterson has agreed to pay restitution in the amount of $5,402,448. He will begin paying off the remaining $5 million in damages 60 days after his
release from prison, at the rate of $200 per month. Peterson pled guilty
last December to two counts of criminal copyright infringement for
illegally copying and selling nearly $20 million worth of computer
Working on behalf of its members, including Macromedia (now Adobe) and Symantec, the Software & Information Industry Association (SIIA) first
alerted the Federal Bureau of Investigation of possible software piracy in 2003 and subsequently worked with investigators and prosecutors to assure
that Peterson’s operation was stopped and that he was properly punished.
“SIIA appreciates the tireless work of both the FBI and the US
Attorney’s Office,” said Keith Kupferschmid, SIIA’s VP of Intellectual
Property Policy & Enforcement. “We brought this activity to light in order to stop a specific crime from being perpetrated against our members. Law
enforcement’s decision to aggressively pursue this case, I believe, sends a message to those who illegally copy and sell software that they will be punished to the fullest extent of the law.”
To put Peterson’s sentence in perspective, in criminal piracy cases,
the average damages resulting from pirated software are just over $9
million, or less than half of the $20 million caused by iBackups.
Additionally, the $5.4 million Peterson agreed to pay in restitution is
eight times the average fine of $659,000. This data is the result of a
recent SIIA study tracking FBI cases on software piracy reported since
There have been 75 cases of reported software piracy with 225
defendants in that period. The profile of the average defendant is a 35
year old man from California. The oldest defendant was 74 and the youngest 19. More than 34 percent of cases originated in California and 44 percent in the western states as a whole. Probation and jail time were given in
almost half of the cases. Average prison term was 22 months and average
probation term 35 months.
Comparing Peterson’s case to the Ferrer case — until now the longest
software piracy sentence — Peterson had even greater pirated software
sales (more than $5.4 million versus $4.1 million), had many more victims
(more than 25 versus 3), violated the terms of his supervised release and
was convicted of a felony in state court (for which he was sentenced to 16 months in prison).
iBackups sold pirated software over the Internet, claiming it was
“backup software” — legal copies of software to be used by the software
licensee for backup in case of system crashes. It is, however, illegal to
resell such copies.
As SIIA has emphasized in the past, software pirates are often not just intellectual property thieves, but are involved in other illegal
activities. Peterson was convicted in Los Angeles for the sale of six
handguns and an illegal assault weapon to an alleged heroin dealer while he was on bond in this case.
iBackups used Google “ad words” extensively to recruit customers. SIIA
would like to point out that this indicates a necessity for buyers to be
aware of the possibility that software being sold through such ads might
not be legal. The same vigilance that buyers need when buying software from other kinds of online sources should be maintained when contacting text ad sellers.
The Software & Information Industry Association (SIIA) is the principal
trade association for the software and digital content industry. SIIA
provides global services in government relations, business development,
corporate education and intellectual property protection to more than 800
leading software and information companies. For further information, visit