The Importance of a Software Audit and
How to Respond to the BSA
By
Tom
Adolph
A common mistake of many businesses is to fail to conduct frequent software audits to determine whether the business has adequate licenses (licensed users, servers, facilities, etc.) for its use of software. Businesses that fail to follow this practice can find themselves fighting one of many enforcement arms of the software industry, such as the Business Software Alliance (“BSA”). Businesses would be wise to do the following:
- conduct periodic software audits to avoid becoming a target of the BSA and
- contact legal counsel immediately upon receiving a letter from the BSA or other software industry enforcers.
The BSA is an aggressive enforcer of software owners’ rights. The BSA encourages disgruntled employees and former employees to report their employer’s use of unlicensed software. The BSA encourages anonymous reporting, so the chances of false reporting are high. Anyone with an axe to grind against a business can cause the business months of aggravation by reporting the business to the BSA. In fact, at one time, the BSA conducted a “Bust Your Boss” advertising campaign that urged employees to report their bosses:
Bust Your Boss!
Is your current or former employer using pirated software in their office?
Hit em where it really hurts.
Report their illegal software use today.
Some advertisements even go so far as to promise cash rewards to the individual who provides the tip. Further, the BSA refuses to reveal its sources or even what its sources have reported, so targeted businesses often find themselves fighting shadows. Finally, the BSA earns revenue through settlements or lawsuits, so the BSA has no interest in a resolution in which the business simply purchases licenses.
The BSA boasts of its successes. In 2005, twelve BSA press releases reported that 38 businesses settled BSA claims for a combined $3,722,828.63, for an average of $97,969 for the reported settlements. One common factor in these cases was that the businesses self-reported, i.e., the businesses provided software audits to the BSA before obtaining advice of counsel. These software audits become admissions of liability.
Software audits are important tools to avoiding claims by the BSA, but even more important is the use of good legal counsel before responding to a BSA claim. Good legal counsel will minimize the ultimate payments to the BSA and often can completely deflect the BSA’s claims and help structure the software audit to avoid harmful admissions. Counsel can conduct a confidential and privileged software audit that will be the basis for determining the response to the BSA. The BSA’s own press releases show smaller settlements in matters in which counsel are involved.
Jackson Walker has substantial experience in advising clients on how to conduct a software audit and how to respond to BSA letters and other watchdog letters.
If you have any questions, please contact one of the members of our Business Software Alliance Response Team:
Houston
Tom Adolph at tadolph@jw.com or 713.752.4208
Mark Tidwell at mtidwell@jw.com or 713.752.4578
Dallas
Carl Butzer at cbutzer@jw.com or 214.953.5902
Chris Rourk at crourk@jw.com or 214.953.5990
Michael Taten at mtaten@jw.com or 214.953.5931
Brad Whitlock at bwhitlock@jw.com or 214.953.5687
San Antonio
Stephanie Chandler at schandler@jw.com or 210.978.7704
Mark Miller at mmiller@jw.com or 210.978.7751
Mike Moreno at mmoreno@jw.com or 210.978.7718
Austin
Sheri Hunter at shunter@jw.com or 512.236.2357
For further information, please review
another JW Techlaw e-Alert on software audits: EXTERNAL SOFTWARE INFRINGEMENT AUDITS: DEVELOP YOUR RESPONSE PLAN
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