Software piracy is a legal issue that affects the sustainability of Indonesia’s digital industry, as it not only constitutes copyright infringement but also has implications for economic performance, innovation, investment, industrial competitiveness, and digital security. This study aims to analyze the impact of software piracy on the digital industry and examine legal protection and mitigation measures from the perspective of industrial law. This study employs a normative legal research method using statutory and conceptual approaches. Primary legal materials consist of laws and regulations related to copyright and industrial affairs, while secondary legal materials are obtained from books, scientific journals, legal articles, and relevant previous studies. Legal materials are collected through library research and analyzed using a descriptive qualitative approach. The findings indicate that software piracy may cause economic losses to developers, hinder innovation and investment, create unfair business competition, reduce industrial competitiveness, and increase data security risks. The prevalence of software piracy is influenced by licensing costs, low levels of legal awareness, weak law enforcement, and easy access to illegal software. Therefore, stronger law enforcement, public education, the use of legal or open-source software, and the provision of more affordable licensing options are necessary to establish a healthy, innovative, competitive, and sustainable digital industry ecosystem in Indonesia. These efforts also require synergy among the government, industry stakeholders, educational institutions, and society in respecting intellectual property rights.