Software publishers and entities like the BSA| The Software Alliance and the SIIA regularly audit companies to investigate copyright infringement claims. These entities seek monetary penalties if any infringement is discovered, and in the majority of cases, reach an out of court settlement for an agreed upon sum. Sometimes, settlement negotiations break down and one…
Software publishers have increasingly identified software audits as potential revenue-generating exercises, which has led to a rise in the number of companies targeted. Small, medium, and large companies all need to be aware that a software audit can result in extensive time and unbudgeted financial expenditures. Software audits may be initiated by publishers or through…
In a civil copyright infringement claim, many users of copyrighted material are surprised to learn that once the copyright owner has demonstrated that it owns a copyright in the work, the burden shifts to the copyright user to demonstrate that it had the right to use the work in the way it was using it. …
Companies faced with a demand for a software audit from a software publisher or an entity such as the Business Software Alliance or Software & Information Industry Association are increasingly turning to their own internal IT departments or hiring technology consultants to conduct software audits, the results of which may be discoverable in future litigation….
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…
Software publishers regularly audit their customers to help ensure that the customers are properly licensing their software. Some software publishers conduct audits directly, but many choose to audit through companies such as the BSA| The Software Alliance (“BSA”), or the Software & Information Industry Association (“SIIA”). The first step in addressing the software audit is…
Often the single most arduous and time-consuming task facing companies who are the subject of software audits is collecting entitlement information to prove ownership of licenses for software installed on its networks. Once a company receives an official audit letter from a software publisher, or one of its representative entities such as The Software Information…
Disputes involving software usage are on the rise for businesses of all sizes. In some cases, technical teams respond to a software publisher’s or a third party’s audit request and provide significant amounts of data without notifying anyone on the corporate governance or the legal teams. It is critical for those teams to evaluate the…
Most software audits initiated by the software publisher or a third party entity authorized to pursue copyright infringement claims on behalf of the software publishers, such as the BSA| The Software Alliance (“BSA”) or the Software & Industry Information Association (“SIIA”), are resolved outside of a courtroom. Many of the settlements require payment of a…
Modern financial history is chock full of embarrassing audit scandals, which caused executives and corporate brand names severe damage from intentional fabrication of revenues, or creating imaginary profits, or claiming assets that turn out to be a mirage. There’s a new scary cousin of traditional financial audits known as the software audit. It’s increasingly become…
I am a partner in Scott & Scott, LLP a firm that focuses on technology law matters in Southlake, Texas. We represent companies accused of software piracy by industry trade groups such as the Business Software Alliance and Software Information and Industry Association. I had my first encounter with the BSA in 2004 when they…
Don’t be in the dark on how to prepare and respond to software audits. An increasing number of companies face software audits initiated by software publishers and their trade associations, such as BSA | The Software Alliance and the Software & Information Industry Association. Most companies are totally unprepared; many underestimate their exposure and are…
It has been said that software is the new oil. It fuels the information revolution. And in this metaphor, software audits are the meters that measure the flow—and extract maximum revenue for software makers. The auditors arrive on your company doorstep to “true up” your license and make sure you’re paying for all the software…
Without a contractual provision to the contrary, ambiguous terms in a software license will be construed against the software publisher. Provided that there are no other business factors that would make litigation unwise, an ambiguous license agreement is the situation most likely to lead to litigation. Construction against the Drafter When dealing with ambiguities, it…
The need for United States and Canadian Businesses to have a GDPR Compliance Initiative in place is paramount. The General Data Protection Regulation (GDPR) became effective on May 25, 2018 (the “Effective Date”). GDPR is the widest sweeping privacy regulation to hit the global market since the 1995 EU Data Protection Directive. GDPR is a…
Traditionally, software audits were conducted by gaining access to software installations and reviewing entitlements. Theoretically, if a customer is using a cloud product accessed by login credentials, then audits wouldn’t be an issue because the software publisher would be in complete control of the customers’ access to its systems. But, audits can still be a…
Almost every business today operates with the support of digital tools. One survey put the number of companies investing in digital technologies to transform their business at an astounding 97 percent. Conducting business in this digital age means licensing software from major publishers, such as IBM, Oracle and Microsoft, and the subsequent acknowledgement and anxiety…
One of the most common mistakes I encounter in software audits is what I call the post-effective date software buying spree. The buying spree occurs in response to a letter from a publisher or publisher’s attorneys requesting a self audit. Many clients are discouraged to learn that software purchases made after the date of the…
Businesses that receive software audit demand letters from auditing entities such as the BSA or SIIA, or from software companies like Autodesk or Microsoft, often contend they cleaned up their network after receipt of the letter and should be released from any further obligation to conduct an audit or communicate with the auditor. Audited business should…
One of the tasks with which Scott & Scott’s clients most commonly request our assistance is how to conduct a software audit. While almost all companies, large and small, use software in order to conduct their business operations, many of those companies lack mature or even nascent software asset management practices. Consequently, when asked to…
