Business Software Alliance fines firms using products they haven't paid for

Watchdog group works to take bite out of software pirates
By JOHN RUSSELL

While you're busy working on that power speech to the National Vise & Tool Association with your door closed, do you have any clue that your workers down the hall are passing around software CDs like baseball cards?

And putting your company in jeopardy of criminal and civil penalties?

Even if you don't know about the software swapping, just about everyone else in your organization does.

What do you care? That speech needs more work, and after that, you need to check out the latest sales numbers and then worry about the cost of health care. Who has time to worry about software copyright laws?

Getting caught is expensive

Maybe you should check out these headlines:

A hardware-product distributor in Aliso Viejo, Calif., was caught using unlicensed software and agreed to settle for $200,000.

An insurance agency in Sterling Heights, Mich., was caught using unlicensed software and agreed to settle for $75,000.

A manufacturing company in Arlington Heights, Ill., was caught using unlicensed software and agreed to settle for $120,000.

A company in Akron, Ohio, was found using unlicensed software and agreed to pay $564,350, the largest U.S. settlement ever.

Surprised? That's what the companies say, too, when they get caught.

"They all say they had no idea it was going on," said Jenny Blank, director of enforcement for the Business Software Alliance, which watches out for the interests of the big software manufacturers, including Microsoft, Adobe, Apple and Symantec.

Many organizations cooperate when lawyers from the BSA call, asking about a tip that they're using unlicensed software. They'll often agree to audit themselves, settle and tighten their controls.

And for good reason. It's expensive - and illegal - to use software that you haven't been licensed to use.

Get caught, and you face thousands of dollars in fines and up to five years in prison.

Really buying license

It's not just the big-time software counterfeiters and distributors who are guilty of piracy. So is your organization, if your workers are loaning disks to each other or your PC technicians are underreporting the number of software installations.

When you buy a piece of software, it's different than buying a filing cabinet or a paper cutter. You don't really own it.

Software is intellectual property owned by the people who created it. When you "buy" software, you're really buying a license to use it.

Most often, you're allowed to install and use a licensed copy of a program on only one computer at a time. (One exception: You're usually allowed to make a backup copy for archival purposes or in case a tornado hits. But you'd be smart to store them elsewhere.)

So your job is to figure a way to manage your software without breaking the law.

The easiest way, of course, is just to buy only what you need and make sure you use it on only one machine.

That's easier for employees to follow when your company has a no-tolerance policy for piracy and other strict software policies.

Companies are strict

It can be tempting to spread the cost around.

Software can represent 25% of an organization's information technology budget, according to the BSA. A single piece of software can run from $40 to $20,000.

So it can seem cost-effective and easy, when you're in a pinch, to install software on a second or third machine.

Software companies are strict about cracking down on pirates. Most of their tips come from employees and former employees who don't like it when a company is using software illegally. They often call the BSA's toll-free hot line at (888) 667-4722.

That's when BSA lawyers and enforcement workers start digging around.

First, they will check to see if Microsoft, IBM or another software maker has licensing records on your company.

If the investigators find you've got Word software installed on 30 machines, and the software company says you've only bought licenses for one or two, you get the phone call.

What happens next is up to you.

Often, BSA will let a company do its own audit, which is less intrusive than having outside enforcers come in and disrupt business.

When companies don't cooperate, BSA lawyers start the legal paperwork.

That's not to say BSA is all stick and no carrot.

The watchdog group says it is sensitive to the need to educate people about software piracy, and helping companies manage it. Its Web site (www.bsa.org) has a tool kit to help business owners set up software policies and audit their networks.

From the January 26, 2004 edition of the Milwaukee Journal Sentinel