A company called V.i. Laboratories Inc. is proposing a new approach called CodeArmor Intelligence, which embeds stealth algorithms inside programs that "phone home" with information about the unauthorized usage of software, including their Internet domain and even a company location on a Google Map.

"We go after organizations that are using illegal software, giving rewards of up to a million dollars to insiders that report and help us document misusage," said Keith Kupferschmid of the Software and Information Industry Association. "But with V.i. Labs' new technology, organizations can potentially generate high-quality leads to recover revenue from businesses using pirated software without insiders."

Software industry groups offer legal services to vendors using the new anti-piracy tool, helping them to recoup income lost due to piracy by pressuring companies using unlicensed software to pay licensing fees.

"Often we are not dealing with companies that use pirated software, but rather ones that purchase 10 copies legally, but then load it onto 50 people's machines," said Kupferschmid.

EDA software tools and other expensive software tools for engineers have been hard hit by piracy. V.i. Labs charges vendors $50,000 or more to monitor its programs, providing daily reports on unauthorized usage.

V.i. Labs claims that vendors using its tool can recover lost revenue by documenting misuse of unlicensed software and pinpointing the offenders location. Victor DeMarines, vice president of products at V.i. Labs, said: "We gather forensic evidence that [vendors] can use to recover lost licensing revenue, including in many cases their location on a Google map."

Vendors that build CodeArmor algorithms into an update of their software application receive daily reports from the field about companies are using unlicensed copies. Pirates can crack the licensing and activation protection in an application, but can't hack the anti-piracy tool because it lies dormant until the software is used.