The Software & Information Industry Association threatens to sue eBay, frustrated by the lack of proactive measures against sellers who distribute pirated software on their site. The group previously recommended several measures to reduce sales of illegal software, but eBay disregarded their advice. The SIIA estimates that 75% of the software sold on eBay is illegal and says it cannot identify most of the pirated software because of the large volume being traded.

eBay said through a spokeswoman that piracy is here to stay because it is a global phenomenon that will not disappear overnight. The company is allegedly doing enough to contain the illegal software business by taking down all auctions identified as trading pirated software. eBay previously said it cannot be forced a act as a counterfeit expert in software and other items.

Keith Kuperschmid, senior VP of intellectual property policy and enforcement for SIIA, said that SIIA isn't going to sue eBay right away, but the option is being pondered and is "on the table."

However, legally, they do not have many chances against eBay. A similar lawsuit related to counterfeit Tiffany items was won by eBay, as Judge Richard Sullivan said in his ruling that trademark laws do not require the company to pre-check items for authenticity and removing them upon notice is sufficient.

Meanwhile, a 23-year-old Oregon man, Jeremiah Joseph Mondello, was sentenced this week to four years in federal prison for selling more than $1 million worth of pirated software on eBay. He used keystroke logging programs to steal people's identities in order to set up multiple eBay and PayPal accounts.

Mondello will serve 48 months in jail, followed by three years of supervised release and 450 hours of community service, and he was left without $220,000 in cash and the government will also seize his three-bedroom, 1,130 square foot house and surrounding land, valued at $225,000.