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Upstart hopes copy-protection plan sells

Hoping to make buyers out of samplers, Smarte Solutions is working with software publishers to incorporate its technology that allows people to use limited features of programs.

Software makers have tried all sorts of heavy-handed measures to prevent illegal copying of their programs, but an Austin, Texas-based start-up thinks stealth is better.

Privately held Smarte Solutions is working with software publishers to incorporate its SmarteCD technology into their wares. Unlike existing copy-protection schemes, which prevent CD burners from copying a disk, SmarteCD allows the user to burn a copy of the disc, explained company President Bala Vishwanath.

The software can be installed from the bootleg disc and will appear to run normally, until the program reaches a point determined by the software publisher. Then the application will halt and present users with an invitation to purchase a legal, fully functional version of the software.

Publishers of a shooting game, for example, could limit the copied disc to one level, or an image-editing package could shut down after processing a half-dozen photos. The idea is that by then, the consumer will already be hooked on the program and will buy a legal version to keep using it. Vishwanath said he expects most publishers will choose to have SmarteCD run silently in the background.

"That's the beauty behind it--if you make a copy of a CD protected with our technology, there's no sign that you haven't been successful," Vishwanath said. "The pirate user all along thinks they made a copy, until they reach the point you decide to stop them. That's the optimal moment to capture that pirate user and turn them into a paying customer."

SmarteCD is part of a suite of products covering various means of software distribution. SmarteSecure helps protect software distributed over the Internet, while SmarteMaster covers CDs burned in small batches directly by the software publisher, such as beta releases of a program. SmarteManager helps ensure that enterprise software is being used in compliance with licensing terms.

Vishwanath said all the products use "polymorphic" code that executes in a different way each place it's installed, preventing useful distribution of any successful hacking attempts.

"The chance for somebody to break it are extremely slim," Vishwanath said. "But even if a hacker figures out how to break it, that hack only works for that one copy."

Piracy is a multi-billion dollar problem plaguing nearly every segment of the software industry. The Business Software Alliance, a trade group that helps enforce licensing restrictions for major business-software makers such as Microsoft and Adobe, estimated that 40 percent of all business software installed worldwide last year was pirated, resulting in almost $11 billion in lost sales.

The Interactive Digital Software Association, the main trade group for the video and computer game industry, estimates that worldwide piracy cost the game industry $3 billion last year.