Business Software Alliance Names Manufacturing Industry #1 for Software Piracy

BSA Audit Defense Attorney offers Manufacturers Suggestions on How to Protect Themselves

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Robert J. Scott, Managing Partner

Know it, Report it, Reward it

Dallas, Texas (Vocus) June 10, 2009

The Business Software Alliance revealed that the manufacturing industry was #1 in their Top 10 industries list based on the number of software piracy reports the BSA received in 2008.

The BSA, is a global software industry group funded by big name companies, including Adobe, Apple, Autodesk, and Microsoft. Since July 2007, the organization has been aggressively advertising their “Know it, Report it, Reward it” whistleblower program, offering informants up to $1 million in cash for reports of software piracy. The BSA press release of May 28, states…BSA solicits and receives more than 2,500 confidential reports of PC software piracy each year from informants across the United States.

“In our experience, Robert J. Scott, Managing Partner, of Scott & Scott, LLP, BSA software audit law firm, business owners targeted by the BSA frequently believe that the person suspected of making the report to the BSA either was responsible for failing to maintain compliance or maliciously installed software without the owner’s knowledge.” The data released by the Business Software Alliance shows approximately 77% of informants identified themselves as information technology personnel, with a median age of 36.

Scott & Scott, LLP questions whether the Business Software Alliance is actually encouraging software piracy by giving disgruntled employees cash rewards with the belief that they have a chance to become a millionaire.

Many companies, particularly the small to mid-sized businesses targeted by BSA, often do not have the resources necessary to invest in costly compliance programs; and the software industry as a whole has failed to do its fair share to reduce the burden of compliance for well-meaning but resource-constrained businesses.

Scott says: “The software industry and its trade groups have not done enough to ease the burden of compliance management on its customers. This leaves the onus of compliance entirely on the customers – the very businesses that the software publishers actively pursue through trade groups such as the BSA.”

How manufacturing companies can protect themselves:
Scott & Scott, LLP recommend manufacturing companies implement the following business practices:

Create Standardized Agreements With Publishers: Many companies do not realize that they have leverage when negotiating license agreements with publishers. In fact, companies can develop favorable software license agreements with the assistance of their own legal counsel. Favorable provisions can include “no audit” clauses or voluntary “true-ups” to reduce the costs of compliance management and the total costs of ownership.
Retain Proofs of Purchase and Keep Accurate Records: Contrary to popular belief, trade associations and publishers only accept dated proofs of purchase, with an entity name matching that of the audited company. Anything less will fall short of publishers’ mandated proof of ownership and therefore, repurchase of the assets in question may become necessary.
Choose Integrated, IT Asset Management Tools: Asset management should be built into every company’s ongoing business processes to ensure that this process and license compliance become core competencies. The ability to conduct routine reconciliations is required to ensure software license and Sarbanes-Oxley compliance.
Obtain Expert Assistance in the Event of An Audit: Audit defense is most effective with the representation of specialized legal counsel to avoid the common mistakes that may jeopardize a company’s legal position. Any automated discovery that is conducted under the supervision of legal counsel will be protected by attorney-client and work-product privileges, should an out-of-court resolution not be possible.

For additional free resources visit: http://www.bsadefense.com/resources.asp . Hundreds of companies have found Scott & Scott’s BSA Fine Calculator to be a helpful risk assessment tool.

About Us: Scott & Scott, LLP (http://www.scottandscottllp.com and http://www.bsadefense.com ) is one of the only U.S. law firms with a practice group dedicated to BSA and SIIA Defense. Scott & Scott’s legal and technology professionals provide software audit defense and software compliance solutions and have years of experience successfully defending software defense cases.

Robert Scott, a recognized expert on software compliance and defense, is available for interviews.

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