Protecting Your Business From a BSA Audit and Software Piracy Claims

May 10, 2018

In recent years, a growing number of businesses have discovered that missteps related to software licensing – regardless of how minor – are unlikely to be tolerated and will be met with relentless vigor.

One of the organizations best known for representing and enforcing the interests of software developers is the BSA – The Software Alliance (BSA). The BSA is a private trade organization with a membership consisting of some of the largest and most ubiquitous software companies in the world – including, but not limited to, Microsoft, Adobe, Apple, IBM, Oracle, Symantec and Salesforce.

Upon joining the BSA, these software providers grant the organization power of attorney to act on their behalf if accusations of software piracy arise. They also provide the BSA with the power to enforce their rights under the respective license agreement and copyright law. Once the BSA receives a report of alleged software licensing infringements, they investigate the claim by requesting that the company conduct a self-audit on the software. Depending on the results of the audit, the BSA will either negotiate a settlement or file a lawsuit against the company – which can result in significant fines and penalties.

Unfortunately, middle market businesses are a vulnerable target due to the costs involved in implementing sophisticated software governance, controls and procedures. Here are a few best practices and potential modifications to existing processes that can help protect your business from a BSA audit and software piracy claims.

  • Evaluate current software licenses and develop licensing compliance policies: All software installed on computers should have licenses even if such programs are not being used. Therefore, before transferring PCs between users, ensure that each individual’s PC only has the software installed on it that such user needs to utilize.
  • Be diligent about tracking how many licenses you have for each program and that such programs are only installed on that number of computers.
  • Keep, and back-up, copies of your orders and receipts with respect to the payment of such licenses for as long as such programs are installed on any of your computers.

The software industry is well within its rights to ensure that copyrights and other intellectual property are not infringed upon. However, the BSA’s aggressive practices have blindsided countless businesses, many of which were unaware of their minor infractions. By leveraging best practices, slightly modifying existing processes and consulting with your advisors, you can help insulate your business from claims of software piracy and, if a claim does arise, be in a strong, defensible position.

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