Software Infringement – Siemens 2016 Updates
We are seeing more incidents of Siemens filing lawsuits against companies that are alleged to have infringed their copyrights by not paying for the proper software licenses. This blog provides general resources and updates in this area and answers some important questions business owners have been asking us.
Siemens makes several different software products. Here is an explanation of some of their main ideas and a short list of some of their products from their corporate website:
“Siemens PLM Software currently provides out-of-the-box industry-specific solutions for a wide variety of industries, including:
• Aerospace and defense
• Automotive and transportation
• Consumer products
• Government, education and services
• High tech and electronics
• Machinery and industrial products
• Life sciences
• Energy and utilities”
Basically, one of their main products is the PLM (Product Lifecycle Management) software. The benefits of their products is made clear by their corporate fact sheet which notes:
“Product lifecycle management is an integrated, information-driven strategy that speeds the innovation and launch of successful products. It is built on a common platform which serves as a single repository of all product-related knowledge, data and processes. As a business strategy, PLM lets distributed organizations innovate, produce, develop,support and retire products as if they were a single entity. It captures best practices and lessons learned, creating a storehouse of valuable intellectual capital for systematic and repeatable re-use.”
One way to think of it is they help companies accelerate product launches. This is important because many industries have a “first to market” competitive advantage
Illegal software installation allegations – legal process
Our intellectual property software law firm fields calls from many different types of business owners. One of the important questions CEO’s and business owners ask us is “what do I do when I receive a copyright infringement notice from Siemens.” They want to know what is going on. What the process is. The following is typical of what MIGHT be going on (every case is different):
- Your company was found to be illegally using Siemens software.
- Possibly your were tracked illegally downloading software on a peer-to-peer file sharing website such as Bittorrent.
- You receive a notice from your ISP (internet service provider) informing you that your IP address was the source of the download and the ISP provides you with notice that they were served a subpoena to turn over your name and address and possibly other subscriber information.
- The ISP subpoena notice informs you that you have a right to file a motion to quash, vacate, or seek a protective order. If you do, they will HALT providing the requested subpoena information. NOTE: IF YOU RECEIVE A SUBPOENA NOTICE THIS IS THE TIME TO CALL A LAWYER. Many companies hope the situation will go away. Probably it wont. Even smart CEO’s have called at the eleventh hour after they missed a chance to file a motion to quash the subpoena.
- Once Siemens or their attorneys receives your information, they are able to amend the “DOE” lawsuit and add you or your company as a Defendant in the lawsuit. Once you are named in the lawsuit (which would normally be filed in federal court), your company will them be searchable on the Federal Pacer Website. This means, its basically a public record. We have had companies that are trying to sell their businesses that DREAD this situation because they will be forced to disclose that they are “under investigation” or “possibly facing a lawsuit” or that they are “currently involved in legal action.” This of course can kill the deal and could literally cost a business owner millions of dollars in lost value. Why? Who wants to buy a company that is facing federal copyright infringement of $150,000 per infringement, and even possible lost profits, attorney fees, and negative publicity being labelled as a software pirate. Yes, this happens in real life.
- During this period, it is possible that you receive a letter from the Siemens “sales” team looking to settle the case. Possibly, because they want to try to win your business as a legitimate paying customer. This is another key time to CALL YOUR SOFTWARE LAWYER FIRST BEFORE TRYING TO NEGOTIATE A DEAL. If you make damning admissions that are not protected by attorney-client privilege or FRE 408 confidentiality agreements, you could be shooting yourself in the foot and digging a bigger hole for yourself than you are already in. We offer low flat rate fees to make having legal representation affordable. At least explore your options before opening your mouth.
- If you can settle the case, you may be able to keep your company from being named in the “DOE” lawsuit. If you are not willing to settle, or cannot reach terms (Note: knowing the common defenses to copyright infringement may help you negotiate a deal), then your company COULD be named in the lawsuit. In contentious situations where “software piracy” appears obvious (i.e. you have never paid Siemens a penny for using their software to help you launch your products), you could find yourself in a serious pickle. In these cases, officers and directors of the company might be personally named in the lawsuit in an attempt to “pierce the corporate veil.“
- If you are able to reach an agreement, the case could be dismissed with prejudice, and you could possibly achieve an anonymous settlement. Many companies look for this type of settlement.
- If you cannot settle, you can find yourself in a 1-2 year copyright infringement battle with a very well financed company and their army of skilled intellectual property lawyers (which coincidentally are why many Defendants settle).
This is a general overview of what you can expect if you receive a letter from Siemens or their IP attorneys. Of course, knowing whether or not you might have any defenses to infringement is always important in settlement negotiations. Here is what a sample federal court docket may like like (pulled from a Houston Texas case):
NOTE: Usually at this stage you have NOT been named to the lawsuit, nor has your company, so there is often time to try to get the case settled anonymously before extensive litigation has to ensure.
Common Defenses to Copyright Infringement
IMPORTANT BLOG: Click on the picture above to review the legal information blog. It may give you some ideas that will be important to help you minimize your risks and lower your damages (which makes the settlements lower). Not knowing your rights and defenses is a recipe for disaster.
Can you settle your case?
Company owners (CEO) that call our firm (and also IT directors, CIO’s and CFO’s), usually want to know “what will my case settle for.” I have the same answer for everyone, it depends on many factors such as:
- Have you ever paid for Siemens software? If not, you can expect a stronger opposition
- Do the officers and directors have personal assets to go after (many owners tell me “we don’t make any money”). This in and of itself will not end the inquiry. If there is a “deep pocket” to go after, you could find yourself named personally in the lawsuit if the facts warrant such.
- How many copies of the software did you install?
- How many copies of the software does your business actually need?
- Do you have any legitimate defenses to willful copyright infringement?
These are some of the basic questions to ask, but of course there are others. Call us at (877) 276-5084 for a free initial consultation. In most every instance, we are able to achieve a confidential settlement that closes the book on the case and allows you to move on confidentially. One CEO recently asked me “do these cases go to trial, have you ever been involved in a litigation over unlicensed software? I informed the caller that I have been involved in federal litigation over unlicensed software in the Northern District of California. Click here to view our federal court experience. Do not hire a law firm that cannot prove it is battle tested in the federal courts. Naturally, an opposing law firm will take notice of this fact or the absence of such experience.
Siemens Litigation Updates – Product Lifecycle Management
Here are a few links to help you in your research if you received an infringement notice and want to learn more about this company.
- Allegations of corruption and bribery
- Suing DOES
- Texas lawsuit – 2014
- I got a Siemens subpoena, now what?
You may have received a communication from the Reed Smith law firm. Products at issue may include NX 7, NX 8, and Solid Edge product design and CAD tools. Infringement lawsuits have been filed in New York and Texas.
If I just installed PLM for training purposes and to build job skills could this be considered a non-infringing fair use?
VIDEO: Click the image above to listen to the video of an Attorney Steve legal podcast. Click on the RED “V” to subscribe to our popular law channel. Now over 2,000 subscribers strong!
Bonus Materials: Click here for our blog that closely analyzes a potential fair use claim for installing software (either through a thumb-drive or torrent website) and using it to build job skills.
Contact a Software Litigation Attorney
If you received a notice of infringement or notice of subpoena from your internet service provider, call us IMMEDIATELY and BEFORE you call them of their attorneys. Speaking without legal representation could jeopardize your legal rights and the call could be tape recorded depending on state laws on illegal phone recording. We offer free initial consultations to discuss the general legal process. Also, unlike many other intellectual property firms, we do not bill hourly and we offer low FLAT RATE LEGAL FEES for non-litigation services. Call us to discuss at (877) 276-5084.
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