DON’T DRIVE WITHOUT YOUR (SOFTWARE) LICENSE

Author: Joel W. Baar
Date: 10/06/2009

Candidly, many computer users regard copying software as ‘no big deal’. A business might even consider the illegal duplication of software a ‘business risk’. The penalties, however, can be severe. Software companies lose billions of dollars each year due to illegal copying of software. As a result, software companies and their trade groups are increasingly willing to enforce their legal rights against those who illegally copy software in violation of the copyright laws or license agreements.
As a general rule, it is copyright infringement to make a copy of a protected work without the copyright owner's permission. If you buy Microsoft Word from a retailer, you've bought one copy of the software. You own that copy, but you don't own the copyright. You cannot duplicate the one copy you purchased. If you have illegally copied software, and are caught, the damages are severe. You may be liable for actual damages suffered by the plaintiff as well as the amount of profits resulting from the infringement, or statutory damages under the Copyright Act. Judges have great latitude in determining the amount of statutory damages. The Copyright Act provides for damages awards of between $500 and $20,000 per infringed work, and up to $150,000 per infringed work can be awarded if the judge believes the infringement was willful.
What should you do? First, conduct a software audit. Identify all software installed on each computer and determine its accessibility from a network. There are programs available that help conduct a self-audit. Once all software is identified, you will need to determine if you have a valid license for each installed copy. It is important to keep your purchase order, invoice, and all original documentation to prove a valid license. Any unauthorized copies of software should be removed.
Secondly, educate your employees regarding acceptable use of software, and implement a company-wide policy regarding software usage. We've assisted clients who have run into problems because their employees are illegally installing copies of software from their home computers onto their work computers. Thirdly, designate an employee as the Software Manager, responsible for maintaining records and ensuring compliance with software licensing issues. In our office, our Office Manager has been delegated that responsibility. Any software purchase and installation must go through her, and all supporting documentation is housed in one location.
Establishing and adhering to reasonable policies against unauthorized copying of software are key to any company's efforts to minimize potential liability in this area.