Superseding Audit Rights for Software Copyright Infringement

Keli Johnson Swan, Lexology, July 2017

Many software copyright infringement claims are resolved informally and often the terms are set forth in a settlement agreement. The critical terms in every settlement agreement purporting to resolve copyright infringement claims include the release of liability, confidentiality, warranties and representations, monetary sums to be paid, and in cases of software, future auditing rights.

Third-party auditing entities such as BSA| The Software Alliance (the “BSA”), or Software & Information Industry Association (“SIIA”), organizations that acts on behalf of software publishers to enforce copyrights, craft their own settlement language, which is generally approved by the software publishers they represent.

However, it is possible that the audit request itself, in addition to the language in the settlement agreement may conflict with an existing software license agreement. The following are conflicts to consider.

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Key Provisions in Software Settlement Agreements

Keli Johnson Swan, Lexology, November 2016

The end of the year is a busy time for software publishers and entities like the BSA | The Software Alliance (“BSA”) and the Software & Industry Information Association (“SIIA”) to resolve an audit target’s copyright infringement dispute by entering into settlement agreements. While it may be advantageous for a company to reach a quick resolution by the end of the year in order to resolve any outstanding disputes or potential monetary penalties, it is critical not to rush through settlement without carefully considering provisions in a draft settlement agreement.

The following are a few provisions that should be carefully considered before executing an agreement.

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Software piracy claims can ruin your business and reward those responsible

Robert J. Scott, TechCrunch, May 2016

There is a highly divisive and costly practice that software companies have inflicted on their customers for nearly a decade. This practice brings with it significant emotional duress, time investment and financial penalties — all of which divert meaningful resources from revenue-driving activities.

And to add insult to injury, this practice very often rewards with financial gains the very perpetrators of bad behavior.

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Software Audit Risks – What Are The Chances Your Company Will Be Next?

Christopher Barnett, Mondaq, October 2014

There is a set of related questions our software-audit clients frequently ask us that boil down to variations on one or more of the following: Why am I being audited? What if anything did I do to cause this? How can I avoid it in the future?

Unfortunately, those questions often do not have clear answers.

Most software publishers offer little, meaningful information regarding their criteria for initiating audits of their customers. Any publisher will initiate a review if it receives information indicating that software is being used without sufficient licenses rights. However, while that model may be standard for audits initiated by BSA | The Software Alliance ("BSA") or by the Software & Information Industry Association ("SIIA"), it likely is not the norm for the majority of publisher-initiated audits. Most publishers will tell you that their standard procedures result in all of their customers eventually being audited, and that, in effect, it is just a matter of time before your company's name is called. This probably is true to an extent, though it does not tell the whole story.

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Beware of the License Police

Robert Scott, Law Technology News, February 2006

Shrinking IT budgets, fierce competition and a mature software market have increased the motivation for software publishers (such as Microsoft Corp., Adobe Systems Inc., Oracle) to conduct software licensing audits — investigating their customers to determine if they have purchased enough licenses.

Software audits can either be initiated by the software publishers themselves or via their trade associations, such as the Business Software Alliance or the Software and Information Industry Association. Although these groups have no independent regulatory or enforcement authority, publishers have granted them a power of attorney to pursue copyright infringement claims on their behalf.

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Software Police Increase Enforcement: Efforts How to Protect Your Company

Robert J. Scott, Yahoo! Finance

DALLAS—On the corporate high seas, piracy is everywhere. Companies are filled with computers but not enough software. When you cut costs and install programs on more than one workstation, you’re walking a thin plank.

The Business Software Alliance, established in 1988, is cracking down on software compliance and piracy in the workplace. The BSA is owned and funded by big name member companies such as Microsoft, Apple and Adobe.

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