Software piracy audits conducted by the BSA and the SIIA threaten small and medium sized businesses. As the economy tightens, software publishers such as Microsoft, Adobe, and Autodesk hide behind software piracy enforcement groups to pursue customers accused of installing more software on corporate computers than they have purchased licenses for. If your company has been accused of software piracy, here’s what you should do:

• Hire an Attorney – BSA and SIIA have experienced software piracy attorneys working for them, you should too.
• Preserve Evidence – do not uninstall or change computer configurations until an accurate inventory of in-scope computers has been gathered.
• Avoid Knee-Jerk Purchases – a natural but counterproductive response to a software piracy audit is to run out and purchase software. I advise my clients to avoid making purchases until a complete inventory and case assessment has been completed.
• Maintain Confidentiality – client prepared audit materials and related documentation may be discoverable in a lawsuit. We conduct attorney-supervised audit reports protected by attorney-client and attorney work-product privileges.
• Condition Audit Disclosure – software piracy audit materials should only be disclosed after an appropriate agreement regarding confidentiality and non-use of the information has been signed by the software piracy enforcement agency.
• Estimate Software Piracy Fines – always review the draft audit materials with your attorney before they are produced to make sure everyone is clear on the potential financial exposure involved. Our software piracy fine calculators are available at: BSA Fine Calculator and SIIA Fine Calculator
• Argue Software Piracy Legal Issues – there are many legal issues involved in software piracy audits including what constitutes infringement, who has the burden of proof, how damages should be calculated, what constitutes proof of ownership and many others. We vigorously argue these legal points in an effort to reduce software piracy settlement demands.
• Negotiate Non-Monetary Terms – software piracy audit settlement agreements are incredibly one-sided and unfair to the targets. I advise my clients to carefully consider important issues like future audit obligations, confidentiality of the settlement terms, the nature and scope of the release being offered.
• Focus on Your Business – the only way to be successful in a software piracy audit is to continue to stay focused on running your business and taking care of your clients.

If you have been accused of software piracy please call Scott & Scott, LLP for a free consultation.

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Software Piracy penalties are sums collected by software publishers and their trade groups such as the BSA and SIIA in connection with software piracy audit activity.

The software piracy enforcement groups have developed a standard formula for assessing fines in software piracy audits. It is important to note that these groups such as BSA and SIIA are not governmental entities and have no independent authority to levy an enforceable software piracy penalty or fine. Software piracy penalties are therefore merely offered in settlement to avoid litigation and, like all pre-litigation settlement offers, are negotiable with the help of experienced counsel.

Dated Proof of Purchase Required to Avoid Software Piracy Penalty
Software piracy groups’ methodology for calculating fines starts by treating as unlicensed all software products for which there is a lack of adequate documentation, including dated proofs of purchase. All proofs of purchase must be dated prior to the software piracy audit initial letter to be considered valid evidence. Because companies may not always have access to the requisite dated proofs of purchase, software piracy penalties are often based, in part, on software titles that companies legally own and properly acquired.

Unbundling Software Suites in Software Piracy Penalties
Software piracy groups also unbundle the products in software suites such as Microsoft Office. So instead of proposing a fine based upon one copy of Microsoft Office, the BSA or SIIA proposes a fine for Microsoft Outlook, Microsoft Word, Microsoft Excel, and Microsoft PowerPoint. The result is a proposed software piracy penalty of $1,126 for a product that retails for $339.

The Arbitrary 3x Software Piracy Multiplier
After disallowing credit for valid software without dated proofs of purchase and unbundling all software suites, the software piracy groups then apply an arbitrary multiple of three times the full retail price for each software title. Accordingly, one allegedly unlicensed copy of Microsoft Office will carry a proposed software piracy penalty of $ 2,252.

Software Piracy Attorney’s Fees
To add insult to injury, the software piracy penalties will include a line item for $3,500 to pay the attorney’s fees for the auditing agency. While this is not usually a large number as a percentage, it should be taken into account when considering potential software piracy penalties. To calculate your potential software piracy penalty exposure, use our Business Software Alliance Fine Calculator.

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