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The Intellectual Property StrategistKickerSectionsNewsLJN Newsletters

Understanding, Averting and Surviving a Software Audit

By Richard Raysman and Peter Brown
October 02, 2003

According to a report released earlier this year by the Business Software Alliance, one out of every four business software applications installed in the United States is unlicensed, and thus a potential copyright infringement violation. Numbers like these have turned many businesses into targets in recent years, as software companies have made battling unlicensed software in the workplace a top priority. Armed with the threat of stiff penalties under the copyright law and backed by highly active trade groups, software vendors are increasingly making businesses aware of the unlicensed software problem and requesting that businesses perform a 'software audit,' in which the trade group will use an express or implied threat of litigation to ask that a company submit to a determination of whether unlicensed software exists on its computer system.

Unlicensed software can make its way onto a company's desktops and servers in a number of ways, most of them far removed from traditional notions of 'software piracy.' Employees may share applications with one another without going through the proper channels or load personal copies of a program onto their work computers, which copies may then, in turn, be shared. Business entities expand and undergo personnel changes, leading to unauthorized copying; often, the rights granted by a software license are not easy to discern. Of course, deliberate corporate cost-cutting exists as well and licenses can be especially burdensome in this economic climate, but the downturn cuts both ways: software companies are facing new pressures to generate revenue, leading perhaps to zealous pursuit of license fees from their customers.

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