bitlegging
pp. The illegal copying of software and digital music.

Example Citations:
Bitlegging (v): Downloading copyright-protected digital music files from the net. As illegal as bootlegging, but the sound quality is better.
—"Tech talk," Management Today, October 31, 2002

Bitlegging” describes the unlicensed downloading of copyright material, while “ransomware” denotes programs that illegally encrypt personal files to prevent access.
—Lawrence Wallis, “ An increasing fetish for offlish,” Printweek, May 17, 2007

Earliest Citation:
MP3.com makes available free, legal MP3 files from artists wanting the exposure. Visit the music section www.mp3.com/music/. Of course, downloading a ripped-off version of, say, the All Saints' Never Ever is the digital equivalent of bootlegging (bitlegging?).
—John Graham-Cumming, "Living with the Net: Make your PC really sing," The Guardian (London), March 11, 1999

Notes:
American Dialect Society member Grant Barrett alerted me to this blend of bit and bootlegging.

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