My piracy policy is, basically, a more long-winded version of the following:
Look, I know you’re going to pirate my stuff and I’ve made peace with that. Seriously though, I’m just a small self-publisher and don’t have a lot of money. So if you’ve blagged this off a torrent or something, please think about buying something else I’ve made to make up for it.
This seems to work out pretty well for me.
Just the other day I got a mail from someone who had downloaded one of my 100 Seeds books from a torrent site and, despite not having used the book yet he was so pleased with it that he bought ALL of 100 Seeds books on PDF from RPGNOW in a bundle.
This is pretty typical. People find my stuff on a filesharing or torrent site, check it out (if they’re a user rather than a collector) , then discover all my reasonably priced game books and material and end up paying me money.
They wouldn’t find my stuff, most likely, if it wasn’t for piracy and sharing. In many ways it’s the ultimate word of mouth.
Piracy is definitely a net positive for me and for my business. Not being an arsehole about things goes a long way.