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Vero Audits & Lawsuits

Vero Software Lawsuits – The need to take legal demand letters serious.

demand letter from Vero Software

Introduction

If you are dealing with Vero software this is a very important blog.  You need to realize from the outset that Vero will file a copyright infringement lawsuit, and that is a threat that needs to be taken very serious when you receive an infringement notice, and are given a chance to negotiate a settlement.

How did they find out I was using Alphacam or Edgecam?

Possibly it could be by tracking you with monitoring technology that supposedly you agreed to by clicking “I agree” when you installed the software.  Their End User License Agreement (“EULA”) states:

“By Selecting the ‘I Accept’ button or other button or mechanism designed to acknowledge agreement to the terms of an electronic copy of this Licence, or by installing, downloading, accessing, or otherwise copying or using all or any portion of the Licensed Materials you:

(i) accept this Licence on behalf of the entity for which you are authorised to act (e.g., an employer) and acknowledge that such entity is legally bound by this Licence (and you agree to act in a manner consistent with this Licence) or, if there is no such entity for which you are authorised to act, you accept this Licence on behalf of yourself as an individual and acknowledge that you are legally bound by this Licence, and

(ii) you represent and warrant that you have the right, power and authority to act on behalf of and bind such entity (if any) or yourself.  You may not accept this Licence on behalf of another entity unless you are an employee or other agent of such other entity with the right, power and authority to act on behalf of such other entity.”

Is it legal to track users in the corporate networks?  Technology Protection Measures (“TPM”)

According to Vero it is.  They rely on their EULA above which also states:

“The Licensor and its licensors and affiliates take all legal steps to eliminate piracy of their software products. In this context, the Licensed Materials may include a security mechanism that can detect the installation or use of illegal copies of the Licensed Materials, and collect and transmit data about those illegal copies. Data collected will not include any customer data created with the Licensed Materials, but may be personally identifiable data.

By using the Licensed Materials, you consent to such detection and collection of data, as well as its transmission and use if an illegal copy is detected. We reserve the right to use any technical protection measures (TPM) to protect the integrity and intellectual property rights of the Licensed Materials.

You must not attempt in any way to remove or circumvent any such TPM, nor to apply, manufacture for sale, hire, import, distribute, sell, nor let, offer, advertise or expose for sale or hire, nor have in your possession for private or commercial purposes, any means whose intended purpose is to facilitate the unauthorised removal or circumvention of such TPM.

Any personally identifiable data collected as part of such TPM will be used solely to help enforce compliance with this License, and will not be used for sales or marketing purposes.

A kew question becomes whether or not a company actually agreed to the “click wrap” licensing agreement (most people never read the EULA, however this does not necessarily mean you are not bound when you click “I agree.”

The Vero software approach to copyright compliance & enforcement

Here is the general pattern I have seen these cases take:

  1. The first thing that may happen is you receive an email, letter or a telephone call from a Vero representative claiming your company is using unauthorized or pirated software.  Edgecam is one of their main products.  Alphacam is another.
  2. The letter you receive may threaten you with a copyright crime in a “not so subtle” fashion.  For example, here is one piece of a demand letter I reviewed:

“As you can see, this is significantly lower than the original quote I sent you, and much less than a potential $150,000.00 Statutory Damages penalty that could be handed down in Federal Court under U.S. Copyright Law, 17 U.S.C. §§ 501-506, which could include not only a civil penalty against the Company, but also a criminal penalty against the individual responsible for downloading the illegal license. I also am including a link below for your records so as to educate yourself, and your employees of the potential legal ramifications with this type of offense.”  The compliance rep then offers a link to: 

https://www.law.cornell.edu/uscode/text/17/chapter-5

The email may also carry a reference that says:

The unauthorized reproduction or distribution of a copyrighted work is illegal. Criminal copyright infringement, including infringement without monetary gain, is investigated by the FBI and is punishable by fines and federal imprisonment.

Largely this is meant to scare you and is usually done by a “non-lawyer” (lawyers cannot ethically threaten criminal prosecution to try to gain an advantage in a civil suit.  In most cases, you will not be looking at going to jail or prison for copyright infringement, but then again, if everything your company is using is pirated, there can be no guarantees.  Read up on our blogs regarding criminal copyright infringement.

3. You may be given a quote to settle your case by purchasing one or more copies of their software (often with a “copyright removal fee”) which is like an infringement penalty.

4.  If you can afford to buy the software and settle the case you may want to request a confidential settlement agreement with release of all claims against the company and its officers and directors (who can be personally named in a federal court lawsuit).

5.  If the case is not settled, it is possible Vero will file a federal court lawsuit.

Vero lawsuit sample allegations

Here are a few sample allegations you might see in a copyright lawsuit involving Vero:

  1. That a user downloaded their software or installed without authorization
  2. That the piracy is willful
  3. That the court should issue an injunction
  4. That the Defendant should be required to pay damages including attorney fees

A person sued with a federal court lawsuit has 21 days to respond to the complaint.  A response can include filing a motion to dismiss (ex. court has no jurisdiction), or a Defendant can file an answer with affirmative defenses, and potentially a counterclaim (depending upon the facts of the case).

One of the challenges may be the use of “monitoring technology” that “phones home” certain information, (purportedly a user agrees to this when it installs the product and agrees to the end user license agreement which purportedly discloses this), another defense may be the copyright statute of limitations (generally three years from the date of discovery).  Other defenses to copyright infringement can also be explored.  A countersuit might be for breach of their support or maintenance or other causes of action that might exist.

Contact a software infringement law firm to respond to your Copyright complaint

If you need help dealing with a Vero software demand letter or responding (defending) against a copyright lawsuit, call us to discuss your options. We can be reached at (877) 276-5084.  We can offer low flat rate fees for most non-litigation cases.