How to survive an Autodesk Audit – Legal tips from the software licensing trenches!
Bonus Materials: Vondran Legal Hour Podcast revealing Autodesk Audit Tips!
So you got the Autodesk Audit “love letter” from a law firm demanding that you submit to a “voluntary” software licensing audit. What do you do? Do you call a copyright attorney? Do you just try to handle the problem on your own by writing a software dispute letter? Do you destroy your Autodesk software and hope the problem goes away? Just what do you do? This blog provides a general legal overview of handling a BSA software licensing case involving Corel, Autodesk, and Adobe software.
How did Autodesk find out about unlicensed CAD software?
VIDEO: Click on the image above to find out ONE WAY which we BELIEVE (based on comments with past clients) that Autodesk learns about unlicensed software at a design, architect or engineering firm. Make sure to Click on the RED “V” to subscribe to our legal channel.
Attorney Steve’s top 5 tips to surviving an Autodesk Audit
Here are a few of my observations and tips, having handled numerous software licensing audits, when you receive a demand to audit your internal networks for software installs:
1. Contact a lawyer when you get the audit demand letter. Some people will say “does this make me look guilty.” I say when your company and business is on the line you need to get legal protection. The attorneys on the other side (representing the software companies) have no concern whether or not they force your company out of business or into bankruptcy. If your case goes converts to a lawsuit, you will be in a federal court most likely facing accusations that your business has “willfully, intentionally and maliciously” infringed the copyrights of Autodesk, Adobe or Corel. These are just a few of the companies that might join in a federal copyright lawsuit against your organization. So to NOT lawyer up could only add to the mistakes, and get you into an argument with the intellectual property attorneys that represent the software companies.
2. Do not destroy software that you have installed on your servers or race to pay for license(s) to use the software. Destroying software or racing to purchase a software license are not recommended. In fact, destroying evidence when you might be potentially involved in a copyright infringement lawsuit, could lead to presumptions that will work against you if you wind up in federal court.
3. Try to dig up all your software licenses and see what you have purchased. One of the first things I would do is to see how many receipts you can dig up to show you have paid for the software you are using. In many cases, we have found clients who do not retain receipts, or who may have lost receipts (we no of know law that requires you to keep all your receipts, and business owners, IT professionals, and CIO’s may not have all the receipts saved. But it is helpful to know what you have and do not have.
4. Compare your license installs with your receipts (did you have proof of purchase for all license installs on your networks)? This is basically the audit that the BSA or other software company or their IP lawyers will want you to investigate. In other words CAN YOU PROVE YOU HAVE PAID FOR ALL THE SOFTWARE AND UPGRADES THAT YOUR COMPANY IS USING? This helps us get a handle on your potential legal exposure
5. Take a close look at who the potential “informant” may be. Most software licensing cases I have dealt with, if not all, involve the use of a so-called “informant” who is either currently working for (or more likely, used to work for) the company being audited. But a few things have to be asked about the informant – who normally wishes never to be identified, and instead is basically seeking a financial reward for turning you in.
a. Is the former employee in breach of a termination, non-disclsoure (NDA) or confidentiality agreement? If so, we can examine your contract and determine if the ex-employee is subject to being sued for breach of contract.
b. Check-out the former employees computer, (a good IT guy, or computer forensic analyst) can check the hard-drive of the informant. The informant is always kept confidential by the law firms that represent the software companies. Yet, this is their KEY WITNESS. We have often found ex-employee informants to be disgruntled, and motivated by malice to go against their ex-employers and try to turn them in for alleged software licensing shortages. Yet, these same employees have been found to have been surfing pornography sites on company time (in violation of company policies and procedures manual) and have been found to have engaged in other damaging and nefarious activities against the company being audited.
If a federal copyright lawsuit ensues, the name and veracity of the informant will be sought to be ascertained through discovery, and this informant can potentially be brought into the lawsuit in a cross-complaint. Again, this is determined on a case by case basis and may not always apply. But where the information is a bad actor, and has unclean hands, and has committed acts that have injured the company, this might be the time to bring the informant (who wishes to remain confidential status – hiding in the shadows and making accusations) into the lawsuit to seek recovery of damages caused by the informant.
If you are engaged in a software licensing audit, it is important to have legal counsel doing everything possible to examine these key issues and determine what defenses and remedies might be available to your business.
What software products does Autodesk have?
As far as we have been able to ascertain (this is a non-exclusive list), here are some of the various Autodesk products that could result in an audit to determine whether the licenses have been properly paid for (versions from 2008, 2009, 2011, 2012, 2013, and 2014):
1. Autodesk 3ds Max
2. AutoCAD LT
3. Architecture 2012 software
4. Mechanical 2012 software
5. Buzzsaw 2011 software
6. Factory Design Suite 2012 software
7. Maya 2014 software
8. Autodesk Mudbox
9. Raster Design 2013 software
10. Autodesk Showcase 2013 software
11. SketchBook Designer 2013
12. Autodesk SketchBook Pro software
NOTE: Many products are now offered in the “cloud” as web based software working off a subscription model with basic support.
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Non-exclusive list of Adobe software products
In some cases, you may be charged with copyright infringement from both Autodesk and Adobe (and sometimes Corel). Adobe’s software products include both multimedia software, creativity software, and other programs. Most of us know Adobe as the company that allows us to make and read PDF’s. However, they have many more products than just the Acrobat reader. Here is a list of known products from Adobe software that could lead to software licensing shortage allegations:
1. Adobe Acrobat 6, 7, 8, and 9 professional software
2. Adobe Acrobat XI
3. After Effects (great software to enhance video editing)
4. Adobe Captivate 5.5,6, 7 software
5. Adobe Creative Suite 2.0, 2.3, 4.0, 5.0, 5.5, 6 design standard software & web premium
6. Adobe Dreamweaver CS5, CS5.5, and CS6 software
7. Adobe Fireworks
8. Flash Catalyst CS5, CS5.5, CS6
9. Adobe Illustrator 8.0, 10.0, CS2, CS3, CS4, CS5, CS6
10. InDesign, CS2, CS4, CS5, CS5.5, CS6
11. Adobe Photoshop 6.0, 7.0, CS2, CS3
If you are being asked to audit one or more of these software products, give us a call at (877) 276-5084.
Does Autodesk actually file lawsuits against software copyright infringers?
Yes. You can search the pacer court docket (shows all federal court lawsuits filed) to see they have filed lawsuits against alleged copyright infringers who are alleged to have software that infringes their copyrights, usually by not paying for proper number of licenses for software.
The law firm that you might see filing lawsuits on behalf of Autodesk is Donahue Fitzgerald, LLP. This is a very well known and established law firm we dealt with in the past. We have proof that they have filed lawsuits for LESS THAN 10 alleged infringed copies. So you have to assume it is possible even as a small business.
What types of Claims may be raised in a Copyright infringement lawsuit involving Adobe or Autodesk?
Some of the types of claims you may see filed (if you cannot get your audit resolved informally) are:
2. Willful, intentional, or malicious circumvention of access controlled technology – 17 U.S.C. 1201(a)
This legal concept is discussed further here.
If my company is sued for software infringement what types of damages or remedies can the software companies seek?
In general, you always want to try to avoid getting sued for copyright infringement. You do this by making a good case for settlement, or where other defenses exist, to make the argument that there is no sufficient grounds to file the federal lawsuit under either F.R.C.P. Rule 11. These require having software lawyers who are strong negotiators who can advocate on your behalf and try to get the case resolved, confidentially, for the minimum amount possible.
1. Statutory damages – (for each act of infringement):
a. Federal copyright infringement – 17 U.S.C. 504
b. Circumvention of access controlled technology – 17 U.S.C 1203(c)
2. Actual economic damages – (for each act of infringement). Could include Defendants profits derived from the illegal software use.
Same code sections as mentioned above.
Click here for more information about remedies a Plaintiff can seek in a Copyright infringement lawsuit.
In addition to being strong negotiators, we are skilled litigators who can defend your business against claims of copyright infringement to the fullest extent possible, using all available defenses, counterclaims, and cross-suits that might be available in your case.
How much does it cost to defend a BSA or Autodesk audit
While some BSA defense law firms might charge $10,000 or even $20,000 retainer fees, we are able to quote you an initial retainer fee much less than this and in some cases, we may be able to fix a low flat rate fee to handle your BSA, SIIA or Autodesk audit. While there are other copyright law firms that charge an arm and a leg to be retained, we believe we provide superior services at a reduced price. Pricing will depend on the size of the organization and number of software installs at issue. Fill out the contact form below to have one of our federal copyright attorneys contact you.
Contact a federal copyright lawyer to handle your Autodesk licensing audit
To discuss your case in confidence, contact one of our intellectual property lawyers at (877) 276-5084. We believe we provide the best and most cost-effective legal solution to your software audit issues. Our lawyers are responsive, and we listen to your concerns. We seek to resolve your case in the shortest amount of time, and to explain your case in terms you can understand. You may also email us at the address on the sidebar to this page (PLEASE LEAVE YOUR PHONE NUMBER). We will get back to you, normally, within the hour.
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