Software Lawyer discusses the legalities of a corporate raid for copyright infringement issues.
If you are concerned about widespread software piracy at your company you need to understand the important topic of what happens with a software raid. Are these legal? Is your business likely to be targeted? Hopefully this blog will provide some of the answers to the key questions you are looking for.
Here are some of the top headlines in the area of software raids.
- Beware of the BSA
- Software audits in India cause problems (no backup of data allowed)
- In defense of the software raid
- Freeze this is a raid
- $235,000 in software settlements (and a public blemish)
- BSA sacks software pirates
- RISCISO Defendants indicted in conspiracy case with DOJ – 6.5 million
- Rosetta Stone applauds 13 arrests and 92 civil settlements
- Oracle – SAP 1.3 billion dollar verdict – largest ever
- Your odds for getting caught for illegal movie, music and software infringement
- Microsoft on the war path
As you can tell by looking at these links, corporate raids on a company CAN and DO happen although the actual numbers are probably not very clear. This blog discusses some things to know if you believe your company is about to be raided or if you are a software company who feels your software is being illegally infringed, reproduced, copied or distributed. We help both Plaintiff’s and Defendants in software law cases.
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What is a software raid?
A software raid can be defined as a raid on a business who is believed to be intentionally and illegally using (copying onto their computers without a license to do so, or in excess of a license), reproducing, or distributing software in violation of the rights of the copyright holder, thus, willfully infringing the copyrighted software of the publisher or creator of the software.
For an understanding the legal process of conducting a software raid this link will help.
Common types of software licensing compliance issues
- Company fails to have dated proof of purchase for all their software installs (suggesting bootleg copies)
- Exceeds rights under a Microsoft volume license in the enterprise (ex. failing to have proper number of licenses for all users)
- Using cracked versions of SQL server or other software (ex. serial # 66666 0r 646464 or 6969696)
- Failure to have proper number of Microsoft CAL licenses (server, exchange, etc.)
- Illegal use of Autodesk CAD software (or buying pirated copies online for less than full MSRP)
- Using illegal crack codes to download software (ex. illegal access of copyrighted software on sites like Bittorent)
- Buying counterfeit or infringing goods off the internet
- Illegally sharing adult pornographic videos or films through peer-to-peer file sharing, such as BitTorrent). Click the link to watch the VIDEO.
These types of issues can trigger an ex-employee, consultant, or even a CURRENT employee to want to become a WHISTLEBLOWER and turn your company in to the business software alliance (“BSA”) or the Software Industry Information Association (SIIA), Microsoft report counterfeit software unit, or even worse, to the United States Department of Justice, criminal copyright division.
What is the legal process for initiating a software piracy raid
Here is a general idea of some of the steps that might be taken in a software raid case. The steps and details may vary depending upon the software publisher, state of offense, political factors, geographic area, local federal court rules:
- Whistleblower reports software piracy
- The informant should be properly vetted for evidence, veracity and credibility
- It should be ascertained whether the whistleblower-informant has breached any NDA (non-disclosure agreements, trade secret agreements, employment severance agreements, etc.) These things could trigger a cross or countersuit against the informant. Other potential defenses to copyright infringement should be explored.
- The evidence of infringement should be gathered with proper exhibits documenting the case for illegal copyright activity
- Apply to the court for an order to raid the business
- Knock and announce (U.S. Marshalls accompanied by software company representatives). Again, BSA and SIIA are NOT law enforcement.
- Seize infringing software and may seize computers, laptops, servers and any other potential evidence in plain view
- Analyze items collected for software theft and unauthorized usage (may involve the use of computer forensics)
- Seek damages for all infringing uses (may involve the software publisher such as Microsoft filing a civil lawsuit against the infringing company, officers and directors.
- Refer to U.S. Department of Justice for possible criminal copyright referral
- Handle lawsuit, discovery, cross-claims, motions, hearings, etc. (will usually be in a federal court. Settle case or take to trial.
What grounds will a judge look at before granting an order?
Before issuing a court order or a search warrant, and judge will usually make sure there is sufficient evidence of wrongdoing to justify the issuance of the legal decree. However, its not a perfect process, so it is possible that at times there may be no illegal software usage, or no illegally downloaded movies, music, pictures or comics, but yet the informant (who may have had an axe to grind) provided the information of infringement either in retaliation (sometimes for not getting unemployment benefits after being fired), or with the false belief that there was corporate misuse of protected intellectual property.
Are they able to shut my business down?
If your business has engaged in intentional widespread infringement it is possible that your business might be closed down. Although, the 4th and 15th amendments to the United States Constitution do require due process of law before life, liberty, or property can be taken.
How many infringement reports are made each year?
According to a Cleveland.com (supposedly Cleveland, Ohio is a hot spot for software piracy/infringement):
Each year, BSA receives more than 2,500 reports of business software piracy from across the country. Over the past nine months, Ohio was identified as one of the top five states where it received reports, with a large portion coming from the Cleveland area.”
Keep in mind, the BSA is only ONE organization that is receiving software piracy tips. For example, look at these links where disgruntled employees or legitimate whistleblowers can report piracy to the software cops in the hopes of obtaining awards up to one million dollars. :
- Report Microsoft software piracy (counterfeit software reporting)
- Apple piracy (Apple taking action against app story piracy)
- BSA piracy
- Adobe piracy reporting form
- Symantec software pirate tip
- Software piracy reward program – SIIA
- 8 ways to report software piracy
NOTE: If you believe you have a case of widespread software infringement, contact our team to review your case. We may be able to help you negotiate a private settlement of your case. Call (877) 276-5084 to speak with our software lawyers.
Will the raid result in criminal software piracy charges?
We have written two blogs of criminal copyright infringement that might be helpful:
The short answer is IT IS POSSIBLE. Obviously it has to be something big enough for a federal prosecutor to want to get involved and may require situations where the matter is not as easily handled in a civil court. Click on the links above if you are seriously concerned about this possibility.
What to do if we think we about about to be raided
If you think your business is about to be raided, contact us to discuss. The first think you should do is LAWYER UP. Most likely they have lawyers working hard to trap your company and finding ways to try to extract a large settlement out of you, or worse, try to drive you to bankruptcy. [can you discharge copyright infringement award in BK court?] While lawyers can never advise you to throw all the computers in the Hudson or San Francisco Bay, we might be able to provide some insight on how to best manage the crisis.
Call a business software lawyer to discuss your case
We are a leader in copyright and software infringement cases. We have helped many companies navigate the complicated waters of software licensing, audits, infringement actions and other matters involving alleged copyright infringement. The stakes are high with the copyright laws being some of the most protective laws on the books, including the possibility of paying $150,000 per infringed work/title, having copyright counsel on your side can be the difference between a large settlement, possible jail time, and getting back to business. We can be reached at (877) 276-5084. We offer affordable flat rate legal fees, top notch customer service, and tenacious legal representation.
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