Illinois Ranks High in BSA Software Piracy Leads Scott & Scott, LLP Recommends Illinois Businesses Be Prepared

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Illinois was one of six states that accounted for nearly half of all software piracy tips received in 2010 by the Business Software Alliance, commonly known as BSA. Intellectual property and technology law firm, Scott & Scott, LLP, with a practice area focused on software license defense, lists what Illinois companies need to know about software audit requests from software publishers or their trade associations.

Scott & Scott, LLP

The BSA entices disgruntled employees to report their current and former employers with the promise of cash rewards.

The Business Software Alliance (BSA) reports that Illinois was one of the six states – California, Florida, Michigan, New York and Texas - that accounted for 49.3% of the software piracy reports received in 2010. Manufacturers and distributors were the top industry sectors.

The Business Software Alliance, a global software industry trade association owned and funded by big name companies, including Adobe, Apple, Autodesk, Microsoft, and Symantec, conducts copyright enforcement actions on behalf of its members.

“While we understand the Business Software Alliance’s desire to protect the intellectual property rights of its software publisher members, the firm believes the association has done nothing to simplify or standardize the unique, lengthy and complex license agreements of its member companies. This leaves the onus of compliance entirely on software customers”, says Robert J. Scott, Managing Partner of Scott & Scott, LLP, an intellectual property and technology law firm with a practice area focused on software license defense.

Scott continues, “In my opinion, many of the Business Software Alliance’s practices are questionable. The BSA entices disgruntled employees, many of whom were responsible for any license compliance gaps, to report their current and former employers with the promise of cash rewards”.

What Illinois Businesses Need to Know:

The Business Software Alliance usually initiates an investigation after it receives a confidential report of unauthorized software use. Targeted companies are contacted by the BSA’s attorneys, who request that the company conduct a self audit and report the results. Companies targeted for audit are not required to cooperate with trade associations or publishers, but resolution without litigation is highly unlikely unless the target company agrees to participate in a voluntary audit. “We usually recommend cooperation and not litigation”, Scott says.

A number of legal issues are implicated in software audits. Although software usage is governed by a contractual license, the software industry generally relies on the stronger protections afforded b the federal Copyright Act of 1976. The act provides stiff penalties – up to $150,000 per violation if the infringement is willful. In addition, officers and directors of corporations who infringe copyrights may be found individually liable.

The audit process is lengthy and arduous and often affected by costly mistakes. Scott says, “I have seen many businesses make the mistake of scrambling to purchase additional software upon receipt of the Business Software Alliance letter.

Another mistake is the use of an inadequate tool to conduct the kind of audit called for by the Business Software Alliance.

There are many ways a business can tackle a software audit. It may hire a law firm that specializes in software audits or hire an external IT consultant or do an in-house audit.

The Business Software Alliance often suggests a number of tools to assist with a self-audit, many available for little or no licensing fee, making them appear to be attractive alternatives. Because software tools are not sophisticated enough to discern between free trial software or remnants from previous installations and full installations, it can result in significant consequences. When conducting an in-house software audit, look for any mistakes in the audit results to ensure that the report reflects what was installed as of the effective date of the audit before submitting any information to the auditing entity.

For additional free resources, visit http://www.scottandscottllp.com and http://www.bsadefense.com, where you’ll also find Scott & Scott’s Fine Calculator. Hundreds of firms have found it to be a helpful risk assessment tool.

About Scott & Scott, LLP:
Scott & Scott, LLP (http://www.scottandscottllp.com and http://www.bsadefense.com) is a boutique intellectual property and technology law firm with an emphasis on software disputes, technology transactions, brand management, and federal litigation. Our lawyers and technology professionals take a principled approach to each engagement, leveraging our experience to provide value. Our clients range from mature small businesses to publicly traded multi-national corporations who work proactively with us to creatively solve business and legal issues. We regularly work as part of a team of in-house and outside attorneys managing large-scale legal projects. We take the time to listen to a client’s objectives and understand its business before developing a custom strategy and project plan designed to give the client visibility into the process and the potential outcomes.

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