Software Licensing Enforcement Is Getting Serious
Small firms targeted
Throughout the United States, the Business Software Alliance (BSA), headquartered in Washington DC, is looking for businesses that are not in compliance with software licensing, which is what we all agree to when we install software. You know that annoying check box next to “do you agree” when you load your software that you just check so you can get to work? Next to that is “laywerese” language no one reads but in fact is a legal document that is binding, and, if not followed, will cost you dearly.
The BSA has collected nearly $22 million in fines since 2005 and it is intensifying its efforts. Larger companies with in-house IT departments and legal counsel have created whole divisions to lock up their PCs and control licensing issues within their companies. “It’s the small to medium size companies, unfortunately that, while they want to be legal, are multitasking and wearing too many hats so that software compliance falls between the cracks,” Rodger Correa, BSA spokesman warns.
Regardless of the reason, the BSA is not showing signs of sympathy. And, with hot lines open to anonymous tips, whistle blowers are being awarded up to $1 million to come forward with information that leads to copyright infringement and piracy of software.
An employer often believes he is in compliance with the software he’s bought, but what he doesn’t know is that he is also responsible for how employees use the software, including any software an employee may download onto company equipment with or without company knowledge. The company is responsible for what employees do on company equipment and can be held liable under both civil and criminal law – even if they know nothing about it. And the potential for non-compliance is high.
Fueling this drive to find licensing fraud is three large facets.
1. Software companies lose approximately $40 billion to piracy and incompliance. It’s estimated that 22% of software in use is not in compliance with agreements in North America.
2. New laws allow government and non-profit agencies representing software companies to collect very lucrative fines.
3. Large rewards are guaranteed whistle blowers and they are assured anonymity.
What to do
Conduct your own audit. The application of the law and the rights of the BSA to audit companies and obtain search warrants is unique and unlike most legal circumstances a company will face. It is important to note that the BSA is not inclined to settle a case if they first must go to court to obtain the audit. In such cases the BSA tries to recover as much as possible. This can be a potentially fatal experience for a company of any size. The best course of action is to find the problem, quantify it and fix it. The wrong course of action is to wait and get caught.
1. You can purchase software (read the licensing agreements carefully) that can help conduct an audit across your network and compile a report of what is on them. You’ll then compare this against the licensing agreements for each of your software programs. It is best to have legal counsel. The BSA has a list of suggestions for auditing software.
2. You can hire an outside consulting group to come in, perform a thorough audit, provide you with a report that is compared against licensing in the office, or against licensing of the software products downloaded and, with legal counsel to back up the audit, provide you with non-disclosure of the conducted audit, and provid an insurance policy against any fines for infractions on or prior to the audit. In addition, an outside consultant can help your firm with Software Asset Management (SAM):
a. Aid in planning, preventing over/under-licensing
b. Control software access and the introduction of unlicensed software on networks
c. Usage reports and asset identification
d. Build an ongoing program to guard against the unlicensed use of software in the future.
For more information or for assistance with your software licensing compliance, contact WMS at (425) 438-1146.
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