Protect Your Business From Liability for Software Piracy

According to a study commissioned by the Business Software Alliance (BSA) and the Software Publishers Association, as many as 4 out of 10 software applications now in use are pirated. If your company—or firm—can’t document the license for every copy of each program installed on its computers, it is violating the law. The BSA maintains over 50 telephone hot lines around the world (888–NO-PIRACY or 888–667–4722 in the United States) and a Web site ( ) to facilitate whistleblowing. On behalf of its members—including Microsoft, Novell, Adobe and others, the association actively pursues credible tips. Under U.S. copyright law, people or companies caught with unlicensed software are liable for damages either up to $100,000 per program or all profits dependent on the pirated software or both.

According to Bob Kruger, the BSA’s vice-president of enforcement, “Most companies that we investigate are well-managed. They obey the law when it comes to taxes, OSHA and EPA regulations, but they have a better idea about how many paper clips they have than about how many copies of which software are on their computers.” Here’s what your firm should do to make sure it’s complying with the law:

  • Appoint a manager to be responsible for software planning and management.
  • Create a well-documented software usage policy confirming your organization’s commitment to ongoing compliance with copyright law. Clearly communicate it to all employees.
  • Periodically remind employees of their obligations under the copyright laws and company policy—and the consequences of violating either.
  • Establish procedures for obtaining and recording new software licenses.
  • Conduct an “audit” of all computers on a regular basis, at least yearly. That means counting how many computers the company has, determining what software is installed on each and matching a license to every installed program.
  • Schedule periodic spot checks of the software installed on the company’s computers. Investigate any unlicensed software found, determine who installed it and discipline the offender in accordance with company policy.
  • Institute a policy and procedures for removing software from computers being disposed of.
  • Be familiar with the licensing agreements for all the programs your company uses. Use software metering and monitoring components on your network.
  • Recognize software as an asset rather than an expense. Make sure that your company’s software budget is sufficient to allow employees to get their work done without stretching copyright law.


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