By: Corby D. Bell
Most companies realize that their employees are their most important asset. As a result, employers have implemented a variety of programs to reward and protect their employees to maintain high company morale. While it is true that your people are your most important asset, can you imagine how your company would operate without software? Unfortunately, many employers do not give much thought to the software that is vital to their company’s everyday operation. For many reasons, including the intangible nature of software, that most common software titles come pre-installed on computers, and the relatively inexpensive cost of and easy access to software, many companies incorrectly view their software as a commodity that they own. The reality is that the majority of software running on your company’s computers is only licensed to you, and failure to abide by that license agreement can cause your company to face a claim of copyright infringement.
The Business Software Alliance (“BSA”) and the Software and Information Industry Association (“SIIA”) have made it their jobs to make sure your company does not take software license compliance lightly. In fact, the BSA proclaims itself as the voice of the world’s commercial software industry. Both companies run national radio and internet marketing campaigns asking your employees to turn you in if they suspect you have more software installations than you have licenses to use. Why would your employees do that? The BSA and the SIIA offer a reward up to $1,000,000.00 for information that they then use to allege copyright infringement. According to the BSA, their anti-piracy program has been used to bring thousands of companies into compliance with their software licenses. In other words, this is big business for the BSA. In fact, the BSA has collected over $22,000,000.00 in fines from companies it has targeted based on information received from its hotline.
Software License Audits
The BSA and the SIIA have developed an efficient business model for their clients. Each gets information from a telephone hotline or through its internet site. The Business Software Alliance or Software and Information Industry Association then sends a letter alleging copyright infringement and offers you the opportunity to prove you have not infringed their members’ copyrights by conducting a software audit and reporting the results, rather than requiring their clients to prove you have committed copyright infringement. Basically, the business model of the BSA and SIIA allows their respective software publishers to sit back and let you do all of the work, then issue a demand for a fine when you turn over the results of the software license audit. Unfortunately, many companies do not realize the impact of the information that they send to the BSA or SIIA as a result of an internal audit until they receive the demand for payment.
Why Should I Worry?
Can you imagine being held liable for a bank robbery that your employee committed on his lunch break? Under the copyright laws, there are circumstances which would allow the executives of the company to be held personally liable for the software that is pirated by the company’s employees. Most companies do not manage software the same way they manage more tangible property, such as business equipment. However, poor software management increases not only the legal and financial risks for a company, since software is protected intellectual property under U.S. copyright law, but it can also lead to lost productivity and inefficiency.
What Should I do?
Software license compliance is the use of software consistent with the terms of the software license agreement. Software licenses can be complex and vary from software publisher to software publisher, from product to product by the same software publisher, and even from release to release of the same software title. A thorough understanding of software licenses is critical to comprehensive IT governance. Because of this and the risks associated with non-compliance, you should first and foremost be proactive about ensuring your company’s software license compliance, whether that means using your internal IT staff or hiring an experienced third-party for assistance.
If you do get a letter from the BSA or SIIA, whether you feel your company is in compliance with its software licenses or not, it is imperative that you understand that the self-audit process is an adversarial proceeding, just like any other threatened litigation. You should seek experienced intellectual property counsel, and specifically counsel who has experience defending companies against software license audits by the BSA and SIIA.
Corby Bell is a partner at Dorman Bell, a business and technology focused law firm located in Dallas, Texas. Dorman Bell has a dedicated practice group to defend companies against software license audits by the Business Software Alliance and the Software and Information Industry Association. For more information, call us at (214) 736-7168 or visit our contact page and we will get back with you as soon as possible.