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Software Licensing Audits & Litigation Overview – We have vast legal experience and a verifiable passion for helping businesses resolve software licensing disputes! We offer low flat rate fees, superior services and demonstrated results! Watch our videos for more help!!!
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Click here to learn more about the Attorney and to learn about our Federal Court Experience. Make sure you hire a firm with demonstrated passion, experience and credentials in this area of law. There are many younger attorneys “hanging out their shingle.” This can be a costly move to go with a IP firm with limited experience in this area. If they cannot explain what a “software troll” is they probably don’t understand this complex area of law.
Click here for our industry leading “common defenses to explore in every software license audit case.“
Click here for our essential software audit checklist – 30 questions your company must be thinking about NOW if you received a software audit letter from BSA, SIIA or an individual software publisher.
We can help with the following types of audits: BSA | AUTODESK | MICROSOFT SAM | IBM | ORACLE | SAP | ADOBE | SIIA | VERO | SIEMENS PLM [CNC MASTERCAM NX, CAD, SOLID EDGE] MICROSOFT SPLA and other publishers who threaten copyright infringement lawsuits / injunctions / declaratory judgment actions.
Overview of Autodesk License Compliance Audits (case example)
VIDEO: Click on the picture above to watch Attorney Steve discuss how a software audit can progress into a federal lawsuit against a company and its officers/directors. Make sure to click on the Red “V” to subscribe to our legal information channel. We are now up over 300,000 page views and 2,100 subscribers. Thank you for all your support!!
Were you caught downloading software off Bittorent?
VIDEO: Here is another way companies such as Architects, Designers and Civil Engineers can get busted downloading Autocad, Revit, Microsoft, Adobe or other software online. “Torrent streams” can be monitored by anonymous peer investigators. If you downloaded movies or software and did not pay for a license for each installation, this could trigger the notice of copyright infringement, notice of subpoena or other legal demand letter, such as demand that you submit licensing proofs and receipts. To join our movement and SUBSCRIBE to our growing youtube legal challenge, simply click on the RED “V” in the corner of the video once it launches.
The Role of Software License Audits in Mergers and Acquisitions
PODCAST: Listen to this episode of Vondran Legal Hour to lear more about software licensing issues when buying or selling a business. Here is another good article dealing with a merger triggering a software audit.
Watch our two videos on what happens during an audit (keep in mind each case is different)
VIDEOS: These two videos will explain the software audit process in more detail. Make sure to SUBSCRIBE to our legal channel! Simply click on the RED “V” for Victory! Thank you for all your support. We are over 2,000 subscribers now and over 300,000 visitors!!
Software Licensing Audit Defense
Our law firm can help your company settle cases dealing with BSA, SIIA, Autodesk (Autocad), Microsoft (including CAL license shortage cases) or other software compliance licensing audits. These types of cases can result in federal copyright litigation and worse, can affect your brand, as most federal lawsuits are now posted online through the federal PACER website and on other websites such as find law, Google Scholar, and Justia. We work hard to negotiate your case to a final resolution as cost-effectively as possible. While other firms may charge you retainer fees as high as $20,000 (as we have been told) we have affordable legal fees that can help small and medium size business navigate the software audit process and limit your legal exposure to the extent possible.
Here is a list of frequently asked questions in regard to corporate software licensing audits. When you receive a “voluntary audit letter” the first thing you should due is contact intellectual property law counsel to review their demands and discuss your options. Our goal in providing information on this page is to help you get a feel for the legal landscape you will be dealing with.
What is the BSA? Click on the picture to watch our Software Law video.
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This is a common question that companies have when they get a audit letter from the BSA. BSA stands for the “Business Software Alliance.” This is the organization that aims to fight software piracy around the world. The members of the BSA are software heavyweights such as:
Adobe Altium ANSYS, Inc., Apple, Autodesk, Bentley Systems, CA Technologies, CNC Software – Mastercam DELL, IBM, Intel, Intuit, Microsoft, Minitab, Oracle, PTC, Rockwell Automation, Rosetta Stone, Salesforce.com, Siemens, PLM Software, Inc. Symantec, Tekla, The MathWorks, Trend Micro.
As you can see, these are some of the largest software companies in the world and they are out in full force to protect their intellectual property. For example, Microsoft might seek to enforce SQL server licenses.
Here is a description of the Business Software Alliance from wikipedia. Here is a link to an episode from our software law podcast where Attorney Steve discusses the role of the BSA in software audits.
The other major software industry group is the SIIA (who also conducts audits). SIAA stands for the Software & Information Industry Association.
BONUS MATERIALS: Watch our amazing video on Autodesk Audits. This is especially important for architects, engineers and designers.
What to do when you get a letter from the Business Software Alliance
Does the BSA have the power of law enforcement?
No, the BSA does not have the official powers of law enforcement and they cannot arrest you for software piracy. They can, however, seek the assistance of local or regional law enforcement to help them carry out a software licensing raid. I have had one law firm tell me they could go to federal court and obtain a warrant to go raid the office of the company if they wanted to. I told them “good luck with that.” While this may be possible, it is not very likely. That being said, there are news accounts of prior raids that have occurred.
Does the BSA conduct software licensing raids?
Yes. Here are a few examples of the software piracy raids in the press. While this may not happen in your case, I recently spoke with an intellectual property lawyer who told me point blank: “do you want your Client raided, we can do that.” This evidences the seriousness of the situation in every software license case. Whether they will actually follow through or not is another question.
1. Freeze, this is a software raid (from BusinessWeek)
2. How do BSA raids work (Slashdot)
3. Anti-piracy software raids (Fox News)
Here is a blog you MUST read if your company is concerned about the legal process of starting a software raid on your business.
How did the BSA or software company learn about our software licensing shortages?
Bonus Materials: Click on the picture to watch the video where we discuss the top three ways companies like Microsoft, Symantec, Corel, Rossetta Stone and Autodesk find out about a companies software compliance issues. Click on the RED “V” in the corner to subscribe to our FREE video law updates.
What is the BSA software audit process?
Here is what you can expect if you get a letter demanding a voluntary BSA software license audit or audit from some other “software compliance company.”
1. Your company gets a letter demanding that you submit to a “voluntary software licensing audit.” By voluntary, I mean that they will tell you that you do not have to do it, but they may suggest that if you don’t you could end up in a costly and public copyright infringement lawsuit that could bring down your company. This is the basic angle they will take.
2. You wonder “do I have to submit to a BSA audit“? The answer is NO, you do not have to do the audit, its just that it could become a game of “chicken.” If you don’t submit, will they file a federal copyright infringement lawsuit? This is the basic question you will be faced with. Of course, they will point out how much you have to lose in statutory and other damages for software theft and may threaten personal liability to officers and directors of the company.
3. You call your business & intellectual property law firm (yes, that’s us) and we send a letter of representation and demand that all discussions are confidential under state and federal rules of evidence (ex. FRE 408). While FRE 408 is not a complete safety zone, it does afford some protections in the event the case does not get settled.
4. Your company, usually through your IT department, audits all your computers, laptops and servers, and documents all software installations on each piece of hardware. The results can be put into an excel spreadsheet. There are also software programs such as LAN SWEEPER that can help the process where you have larger companies, companies spread across multiple locations, or companies that do not have an IT team and are used to “outsourcing” or “contracting” for this function.
5. You gather proof of all your software license purchases (ex. receipts, emails from authorized resellers, credit card purchase receipts, etc.), showing the software was paid for through approved vendors and that you have proof that you properly paid for each software license your organization is using. The BSA, Microsoft and Autodesk will require hard proof. Keep in mind there is no law that I am aware of that says you cannot accidentally lose your licenses or that it is a crime not to have records of purchases for the software, CAL licenses, or OEM, etc.
6. If you cannot provide sufficient proof of your software licenses, then the BSA, SIIA or its lawyers, might demand that you pay a sum of money to settle your case (or risk them filing a civil lawsuit against you). The demands will often include “a multiplier” (of 2-4x’s MSRP), a “pursuit” or “attorney” fee and other charges.
7. We can help you negotiate your software licensing settlement with these large companies and/or other “software compliance company.” If settlement can be reached, a confidential settlement agreement will be drafted and executed by all parties. Negotiating fair terms to a settlement agreement is also another task that requires skillful lawyering and negotiation. The software lawyers will want all kinds of clauses in the contract (ex. the right to audit the company three years into the future) and we fight to trim down their demands to make the final payment a full settlement of the case.
NOTE: There are SCAM software compliance companies out theres. We had one company try to send our client a demand letter. We demanded proof of their credentials and ability to conduct business in the state of California. We eventually forced a “take nothing” on this company, that we believed to be a fraud. So weird things happen out there, and business owners are cautioned to be very careful.
8. You pay the lump sum, or make the payments, and the case is closed. With Autodesk, when you pay the final settlement amount, you will get the latest version of the AutoCad software send to you, along with a maintenance program. The settlement is also a time when you can possibly upgrade to the newest version of the software. Discuss this with IP counsel. As part of settling a case, the software company representatives will probably demand that you discuss the software code of ethics with all your employees, and agree to employ these practices. You may also be asked to send in an “annual certification” attesting to your compliance with the terms of any software licensing agreements, and to certify that no software piracy is going on at your place of business.
VIDEO: Watch this video that discusses what happens if you have shortages of Microsoft Office product where unbundling damages may be sought. Here is another blog showing a calculation of damages using the unbundling approach.
Can we just ignore the audit demand letter?
Can I just delete the software and avoid software compliance issues?
Bonus materials: Click on the picture above to hear FAQ on whether or not you can just delete the pirated software from your computers to avoid a copyright infringement lawsuit. Make sure to click on the RED “V” to subscribe to our intellectual property law updates.
What is the SIIA? (Click on the picture to watch the video)
The SIIA stands for the software and information industry association. They are another trade organization made of of information company, publishers, software companies and even some financial institutions who (among other things) fight to protect their intellectual property rights on the internet and in the private business marketplace. Some of the member companies you may have heard of are:
- Thomson Reuters
- Mc-Graw Hill Education
Click here for a complete list of SIIA member companies. An SIIA copyright infringement letter must be taken just as serious as a letter from the BSA.
Video on how to handle a SIIA Audit
VIDEO: Click on the picture above to review an important and helpful video that tells you what you need to know about audits with the software & information industry association. Know your legal rights!! Click on the Red “V” for Victory to subscribe to our legal channel
Should I talk to the legal representatives of Microsoft, BSA, Autodesk or SIIA?
Personally, I don’t think you should. For more information on my opinion, listen to my legal podcast by clicking on the picture below.
How much will my company have to pay to settle the BSA software licensing audit?
This will depend on various factors such as (a) the size of your company, (b) the number of copyright infringements they believe you have, and (3) the demands of the BSA, SIIA or their representatives and their willingness to file a federal copyright infringement lawsuit (often based on the strength and credibility of the “secret informant” they claim to have. Keep in mind, when they send you letters claiming you will owe them $150,000 for “statutory damages” for copyright infringement, you have to take that threat serious. In many cases, our companies and their employees cannot handle anything near that type of damages award. We fight to limit and reduce your damages.
With just a few minor missing licenses (i.e. failure to produce receipts for one or two pieces of software), you could settle your case for as low as a “TAKE NOTHING” as we call it, or for as low as $1-15,000 (again, it depends on the MSRP of the software, number of shortages truly at issue, and other factors). Usually, they will also seek their attorney fees if an IP lawyer is involved, and this again can be from hundreds to thousands of dollars. For more extensive violations, the law firm might request mid five or even six figure settlements. So it is important that you take the demand letter serious, and contact a business and & IP litigation firm as soon as you receive the letter. You should not simply disregard it and hope they will go away. Usually, they will not in my experience.
Is it legal to buy software during the middle of the audit process?
How did the BSA find out about my company and why am I being targeted?
The software industry likes to offer rewards for reporting the use of unlicensed software. The BSA and SIIA have a “piracy hotline.” This, of course, attracts whistleblowers (usually current or former disgruntled employees, crafty contractors, some from Craigslist) who seek to rat your company out in the hopes of personal financial gain (which can be a percentage of the profits recovered in the software settlement) and retribution. At times the informants (who are never identified), have an axe to grind and are violating corporate trade secrets and may be engaged in acts of extortion, corporate espionage or other violations of law. We investigate these angles with our client.
If your are curious on the “reward” programs for reporting software piracy, simply google: “report software piracy” and you will get a sense of what is out there.
Legal Podcast discussing the role of “the secret informant” in software audit cases
What are the different types of software audits?
Software publishers and their industry trade groups could initiate several different types of software audits. Among those are a voluntary software licensing self-audit of your internal network to see if you can prove up all your licenses. The software publisher or their representative law firm may claim authority to make this demand by virtue of the software licensing agreements that you sign (or should I say “agree to”) whenever you license business software from one of the companies mentioned above. A voluntary self audit involves you looking into your own internal networks, taking inventory of your software licenses, and reporting back to the software publishers.
Independent third-party audits. Some software publishers may claim the right to hire a third party auditing company to come in and audit your software installs. They may claim that you have to pay for this type of audit if there is infringement greater than 5%. You should always consult with a business law firm before agreeing to a third party software license audit (which could inadvertently result in the loss of company trade secrets and expose your company to huge legal liability), and to not just succumb to the BSA, SIIA or software publisher legal demands for a private third party audit.
Another type of software audit is the “publisher-staffed” software license audit. In these types of audits, the software company may claim the right per the licensing agreement to employ and engage their own software audit team to come in and review your IT networks looking for software licensing theft. This should be fought to the fullest before caving in to this type of audit.
Is not having all your software licenses the same as engaging in software piracy?
Not necessarily, although the software companies will try to paint your business as being a “pirate” as they know this is a powerful stigma to attach to your company, and with social media publicity, they feel this will help them compel a financial settlement.
Vondran Legal Hour software law podcast – common defenses!
Is it a defense to copyright infringement that the management was not aware of the software piracy?
Not necessarily. Under the Federal Copyright Act (17 U.S.C. §501 et seq.) there is not a requirement to prove “knowing” or “intentional” software copyright infringement. So while other defenses might be available, do not pin your hopes on the “I didn’t know about it” defense. A lack of knowledge can help as far as defending against “enhanced damages” for “willful infringement” of copyright. This highlights the importance of conducting corporate self audits annually to make sure you know what’s going on inside your corporation.
Are there fake software alliance companies pulling scams?
Yes, as noted above, we believe there are. In one case, we challenged a software “compliance” company and demanded legal proof they were authorized to do business in a state, and authorized to act on behalf of the software company. They disappeared and never bothered our client again. We believe it was a foreign scam.
Everything you need to know to survive a Autodesk Software Audit
Key Information: You owe it to your self to watch this video if your business received a software audit letter from Autodesk in regard to AutoCad software. Make sure to click on the Red “V” to subscribe to our business, copyright and real estate law youtube channel.
What is legal software?
Legal software is software you have purchased and have proof of payment to license the software. When you are involved in a software audit, the attorneys for the BSA or Autodesk, etc. will demand that YOU PROVE your compliance. If not, they will try to paint you as a willful copyright pirate. We have even had threats where they will indicate that they want to post your business on their website. I even had one attorney tell me (in writing), “for another 5k you can purchase confidentiality” in the settlement. If you want to handle the case on your own, be prepared to counter or deal with that.
Can you challenge a software piracy raid as a Civil RICO violation?
It may be possible to make a Civil RICO challenge if the actions of the BSA software alliance or other software law firm amounts to extortion. This may come as a surprise to some of the giant software companies out there, but we have had calls from clients who claim “they are asking me to audit my networks for software infringement and I have never used that product.” In other words, the software company GOT IT WRONG and is SHAKING DOWN A COMPANY that has nothing to do with their software. Yet, when you try to explain this they play the “informant” game and say “we have very reliable information, trust me.” I say “with all due respect I do not trust you, you want money from my client and for yourself and you are FLAT WRONG.” In these cases we are forced to get very aggressive. Here are a few videos you can watch that will explain some of the things we have seen and gives some tips on the process.
Here is a video by Attorney Steve (this is a three part video series) that discusses this possible defense to a BSA software piracy lawsuit.
5 Tips to help avoid a BSA or SIIA software licensing audit
1. Conduct an annual self-audit (which should be part of your internal policies and procedures manual for your business)
2. Make sure you pay for all software licenses and keep proof in a guarded location (Good Software Management Practices). You should adopt corporate policies and procedures which will help you defend against claims of “willful copyright infringement.”
3. Train employees on the software code of ethics, and make sure they understand what copyright infringement is, and what the potential penalties are.
4. Consider getting a release of all claims from employees and independent contractors you are terminating (it may also be wise to offer a severance) so that you can hopefully prevent them from reporting any illegal software use (including lying and making false allegations) that piracy might exist in your organization.
5. Employ use of discovery tools or software applications known as Software Asset Management (“SAM”). A good SAM will help you manage how many software copies you have installed versus how many paid licenses you have. The goal is to seek to limit charges of software piracy against your organization. SAM will help you reduce your risk of IP infringement lawsuits and the negative publicity that would result from a copyright lawsuit.
What to do if you get a letter from Microsoft re SAM audits or “license verification process.”
Why should we hire your compliance and defense firm?
I get this question fairly frequently. While we never disparage our competitors here are the general reasons you would want to save time and hire Vondran Legal, the most obvious reason being there is no substitute for experience:
- We probably offer more REAL INFORMATION on the topic of software licensing audits and copyright infringement that any other firm. This clearly evidences our passion, knowledge and experience on the topic. At the end of the day, this is one of the most important reasons.
- We have a ton of great reviews about our legal services. Ask us for references.
- Our firm is comprised of LITIGATION attorneys, (not collection attorneys). We have documentable experience in both state and federal courts that proves we know how to handle tough cases. This “battle tested” experience comes out in your case where we FIGHT for your rights. We do not “roll over” and accept whatever software damages multiplier the software company wants to throw your way. We fight for a TAKE NOTHING, or to limit the damages award. Other firms we have heard about say “oh you can expect to pay 3 or 4 times damages” and call it a day.
- We offer affordable FLAT RATE FEES so you know what you are going to pay. We do not charge ONGOING and PAINFUL monthly fees to try to resolve your software dispute. When you hire us, you know what you are going to pay, plain and simple. Any law firm that cannot guarantee you what your financial costs will be needs to be closely scrutinized, especially if they are telling you it will take MONTHS to resolve your case. In that event, you can expect a GIGANTIC legal bill.
- Steve Vondran, Esq. formerly worked for a software company and was previously elected as a member of the Arizona State bar intellectual property section. Why trust the fate of your business to a lawyer or firm that cannot document that type of executive leadership?
- We have often been complimented on our level of commitment to the cause and “Johnny on the spot” communication. When you call, text or email us, we get back to you THAT DAY (or shortly thereafter if we are tied up). We care about customer service and being responsive to your needs. Most firms TALK about it – we actually DO IT!
- We have helped many companies, from solo companies to large organizations, resolve licensing shortage issues and we can help you.
Will our companies settlement with the BSA or other software compliance trade group be kept confidential?
Bonus materials: Watch Attorney Steve, the Copyright lawyer, explain this topic. Make sure to SUBSCRIBE to our legal channel by clicking on the RED “V” (for Victory) to get updates FREE to your desktop. What other lawyer is keeping you in the loop?
PODCAST: Listen as Attorney Steve explains CNC Mastercam audit letter. NOTE: The “Software Compliance Group” claims on its website to recover lost profits due to software piracy from vendors such as Intergraph (geospatial software), Chemstations (chemical process stimulation software), Gerber Technology (fashion and apparel software), GEM Vision (matrix software) and IMST Design (TurboCad software) in addition to the Mastercam product. Typically, you may receive a letter from SCG and NOT a law firm, and you have a chance to settle with the SCG. However, if you look at the amounts of the settlement I provided on the links above, with settlements in the million dollar range can you really afford to handle the case on your own without the assistance of an experienced software law firm?
BSA, copyright & software defense key links & resources
27. Tips to filling out an audit worksheet (see sample)
28. Injunctions in copyright piracy cases (grounds to obtain injunction explained)
52. The role of software compliance in merger and acquisition transactions (sale of a business which includes computers and laptops and servers)
75. The problem of missing receipts and proofs of purchase (Podcast)
Contact a software audit & intellectual property lawyer
Our firm is a low-cost leader in providing BSA, SIIA and defense of other software infringement claims. We know how to handle big regional law firms and their threats of legal action and personal liability to the directors, officers and owners of a company, (many times small businesses such as engineering or architect firms being targeted). We know how to resolve licensing disputes and we can negotiate and settle your federal copyright infringement software case. If you are facing a licensing audit from companies such as Microsoft, Oracle, IBM, Adobe, McAfee, Symantec, Siemens, CNC Mastercam, SAP, SIIA, or the Business Software Alliance or other publisher, give us a call to assess your situation.
Click here to meet Attorney Steve, the software attorney. If you were looking for information on Satellite or Cable TV PPV piracy defense with JJ Sports or Joe Hand click here.
Click here for sample software settlements (DO NOT hire a law firm that cannot demonstrate sample victories. There is no substitute for experience in this high stakes area of the law, sometimes amounting to a “bet the farm” case.
Click here to see our federal court experience (DO NOT hire an attorney who cannot demonstrate that they have been involved in even ONE federal court intellectual property case). Keep in mind, opposing counsel can easily look up your counsel and see if they have litigation experience or not, and they may take your negotiations more serious when they see a track record of federal court experience. DO NOT HIRE A FIRM THAT CANNOT SHOW YOU THIS. There is simply too much on the line.
Attorney Steve Vondran is a former software company professional (TimeLedger.com) who can help you analyze your potential counterclaims and defenses when dealing with a software licensing audit. He was also previously elected as an executive council member for the Arizona State Bar, Intellectual Property section.
CAUTION: Before you hire any other law firm to handle your software audit, make sure you check out their website. Does it look like a real website or some amateur startup blog? I see newbie “copycat” sites coming up (mimicking the information I have put out) with firms that may not have much experience in this area of law. Check out their Avvo lawyer reviews. If they do not have at least 20 or more legitimate reviews, you should be careful in dealing with these companies. We look forward to working with you. We offer a free initial consultation at (877) 276-5084.