With the possibility of imitation, we discuss the pricing strategy of an inventor and the piracy-deterrence policy of a government. When inventor and imitator have asymmetric manufacturing costs, piracy may not be deterred by the government. When the inventor¡¦s cost of production is low enough, the inventor always stays in the market and the piracy only occurs if the social welfare is enhanced by the competition. When the inventor¡¦s cost of production is high, a monopoly market emerges and the identity of the monopolist, which can be the inventor or the imitator, is determined by the government through the piracy-deterrence policy such that the social welfare is maximized.