“Software piracy” is a favorite catch-phrase used by the Business Software Alliance (BSA) and the software companies it represents.  Most people understand software piracy to involve the intentional copying and, in many cases, distribution of copyrighted software to third parties without permission of the copyright owner.  Understandably, the term has extremely negative connotations, and most businesses will go to great lengths to avoid behavior that could reasonably be branded as “piracy.”

Unfortunately, the BSA’s definition of software piracy is considerably more broad than the common understanding and may be confusing to companies audited by the BSA who have never knowingly copied unlicensed software.  During a BSA-initiated software audit, the BSA requires the businesses it targets to provide dated proofs of purchase for each software product installed on their computers.  There are specific types of documentation the BSA accepts, and it usually rejects purchases from E-bay, Amazon, or similar Internet-based re-sellers.  Therefore, if a company unknowingly purchases software from an unauthorized retailer or simply is unable to find receipts for products it purchased, the BSA will penalize the company as though it intentionally violated copyright law and “pirated” the software.

Worse, typically after an audit the BSA will enter into settlement agreements with the companies it accuses of copyright infringement.  Unless a provision for confidentiality is included in a settlement agreement (usually only in return for a significant additional amount to be paid at settlement), there is nothing to prevent the BSA from publishing a press release identifying the targeted company, the software products involved, and the settlement amount, and otherwise making express or implied statements that the company is guilty of “software piracy.”

As a general rule, companies should keep all receipts from software purchases indefinitely, and they should purchase software only from authorized dealers.  Additionally, recipients of letters from the BSA should seek experienced legal counsel to assist with the audit and to help negotiate a resolution that may prevent the unnecessarily negative publicity that can result from the BSA’s overzealous application of the “pirate” label.