Software Information Industry Association (SIIA) Settlement Agreement Provision Regarding Purchase of Software

Settlement Agreements with the SIIA, a trade association for the software and digital content industry, often contain provisions requiring the audited company to not only purchase software to satisfy licensing deficiencies it carries going forward after settlement, but also to purchase software from an “authorized reseller.” An authorized reseller is a vendor with permission to sell the software publisher’s products. Software publishers often publish lists of authorized vendors on their websites. Many audited companies looking to rectify past purchasing oversights by buying software from the first reputable vendor they locate may breach their SIIA settlement agreement if the agreement contained the provision requiring that all purchases must be made from an authorized reseller.

After an SIIA settlement, the audited company must submit a list of software products together with the proof-of-purchase documentation for software it purchased after the date the SIIA sent its initial letter. If the company includes in its list of purchased software any products sold by vendors not authorized to sell an SIIA-member publisher’s software, the SIIA will require the audited company to repurchase the software from an authorized reseller. Companies that do not carefully investigate their vendors’ authorization to sell software may encounter significant unnecessary expenses in repurchasing identical software products. The inability to return most opened software makes purchasing software from unauthorized resellers even more risky.

If your company has been audited by the SIIA, you should contact counsel experienced in guiding companies through the audit matter process to help protect your company from unplanned expenses and unnecessary repurchase of software.