Adobe Software Infringement Overview - The ins and outs! Call us at (877) 276-5084 if you received an audit demand letter, email or notice of a lawsuit.
November 2023 Adobe Software Compliance Updates
It appears that Adobe has now retained the Business Software Alliance to pursue Adobe software compliance updates. I have already spoken with a few business owners and based upon these conversations, the audits may be (a) random (b) no evidence of fault and (c) threats to shutdown your legitimate paid software may be leveled. This is a really strong arm approach, if true, and it would make sense to contact an established software defense law firm such as Vondran Legal®. You can reach us at (877) 276-5084 or fill out our contact form.
February 2023 update
Adobe is a member of the Business Software Alliance ("BSA"). The BSA is a company that hunts down software piracy cases and seeks settlements with companies that have been using unlicensed software. Their demands tend to be rather large, and many times in the six-figure range. BSA has been very quiet for the last few years, but we have seen them pop up in a few cases here and there. Recently, we have seen an audit demand letter from BSA dealing with the alleged unlicensed usage of Adobe software. The letter does not actually accuse the business owner of infringement but asks them to conduct an audit and fill out a "declaration of compliance." If you receive one of these letters, call our office to discuss them before you reach out to them. We can discuss any shortages your company may have of products like Acrobat Pro, Photoshop, Illustrator, InDesign, Lightroom, and Premiere Pro (see more products below). We have helped several hundred companies, from small to large survive legal audits. Call us at (877) 276-5084 or fill in our contact form below, or hit the "chat" button at the bottom right of this page.
In general, Adobe's software is licensed, not sold, from inception. In order to have validly licensed software, you will need to show a proper “chain of title,” so to speak. Meaning you need to show you or your company purchased (“licensed”) their software from a valid and authorized source. If you cannot show that title has passed from Adobe to any distributor, for example, Adobe may find this to be infringing and may come after you. I have found dealing with them that can be VERY aggressive, so dealing with them on your own or with inexperienced counsel can prove to be a costly mistake.
According to the Adobe website (Adobe/Genuine):
"Did you get a notification from us?Adobe runs software validation tests to check for tampering and invalid licenses. When we discover an issue, we notify the end user or organization and we provide options to resolve the issue. If you or someone in your organization has received a notification about a particular machine, it means the software on that machine isn't genuine Adobe software. It isn't covered by a warranty or our support programs. And because it may not perform as we intended, it could pose risks to you and your work."
We can help if you are dealing with a BSA audit demanding an inventory of Adobe products.
What does the Adobe End User License Agreement say?
YOU MAY FIND REQUIRED NOTICES ABOUT NON-ADOBE MATERIALS AT THAT SITE. THE SOFTWARE MAY CAUSE YOUR COMPUTER TO AUTOMATICALLY CONNECT TO THE INTERNET. SEE SECTIONS 14 AND 16 FOR ADDITIONAL INFORMATION.
THE SOFTWARE MAY INCLUDE TECHNOLOGY DESIGNED TO PREVENT UNAUTHORIZED USE AND COPYING. THIS TECHNOLOGY MAY CAUSE YOUR COMPUTER TO CONNECT TO THE INTERNET WITHOUT NOTICE ON INSTALL, ON LAUNCH, AND ON AN INTERMITTENT OR REGULAR BASIS THEREAFTER. ONCE CONNECTED, THE SOFTWARE WILL TRANSMIT INFORMATION TO ADOBE VIA AN INTERNET CONNECTION, ADOBE MAY USE THE TRANSMITTED INFORMATION, AS WELL AS OTHER INFORMATION YOU OR THIRD PARTIES MAY PROVIDE TO US, TO DETECT OR PREVENT USE OF ADOBE SOFTWARE THAT IS FRAUDULENT, NOT VALIDLY LICENSED, OR NOT USED IN ACCORDANCE WITH A VALID LICENSE.
SOFTWARE THAT FAILS TO CONNECT TO ADOBE AND SOFTWARE THAT CONNECTS TO ADOBE WHOSE USE IS FOUND NOT TO BE PERMITTED MAY OFFER ONLY LIMITED FUNCTIONALITY OR MAY NOT OPERATE AT ALL.
PODCAST: listen to Attorney Steve® provide insights in this episode.
Here are some other contractual provisions:
3. Use of Services and Software.
3.1 License. Subject to your compliance with the Terms and applicable law, we hereby grant you a non-exclusive, limited, revocable right for you to install, access and use the Services and Software that we make available to you, and that you license from us. Each license is to be used by only one (1) person and cannot be shared. At the end of your license term, your license(s) will expire as set forth in your order document(s), or the Subscription and Cancellation Terms. The version(s) of the Services and Software available at your renewal date may be different from the version(s) available when you first licensed them from Adobe. The versions of the Services and Software that Adobe supports can be found here. You agree that your decision to use, access, or license the Services and Software is not contingent on the delivery of any future functionality or features, or dependent on any oral or written public comments made by us regarding future functionality or features.
3.2 Adobe Intellectual Property. We (and our licensors, as applicable) remain the sole owner of all right, title, and interest in the Services and Software. Except as stated in the Terms, we do not grant you any rights to patents, copyrights, trade secrets, trademarks, or any other rights in respect to the items in the Services or Software. This means you may not use our trade names, trademarks, service marks or logos in connection with any product or service that is not ours, or in any manner that is likely to cause confusion. We reserve all rights not granted under the Terms.
1.4 Business Email Domains. As a Personal User or a Business User, you may create an Adobe account using an email address provided or assigned to you by a Business (such as your work email address). If the Business establishes a direct relationship with us, they may want to add your account to such relationship. If this happens, the Business may, with prior notice from the Business or us, roll your account into the Business's account. This means the Business may (A) access the account; (B) take control over the account and any Content therein whether stored, uploaded, or imported before or after the date the Terms were last updated; and (C) recommend any non-Business Content associated with such account to be moved to a new account that utilizes an email address not associated with such Business. You, as a Personal User with an Adobe account assigned to a Business or a Business User, also acknowledge that Adobe may provide your personal information to such Business (including, for clarity, sharing your information with an administrator of your Business), such as your name, email address and Entitlement information. If you do not want a Business to access, use, remove, retain, or control an account or profile, then do not use a Business email address with that account. Information regarding Content storage and access, and how you may change the email address associated with your account may be found here. Adobe may share information about the Business, such as name and email address of the administrator, to a Business User.
15. Audit Rights. If you are a Business, then we may, no more than once every twelve (12) months, upon at least seven (7) days' prior notice to you, appoint our personnel or an independent third-party auditor who is obliged to maintain confidentiality, to inspect (including manual inspection, electronic methods, or both) your records, systems, and facilities to verify that your installation and use of Services or Software comply with our Terms. Additionally, you will provide us with all records and information requested by us within thirty (30) days of our request in order for us to verify that the installation and use of any and all Services and Software is in conformity with your valid licenses. If the verification discloses a shortfall in conformity with the licenses for the Services and Software, you will immediately acquire any necessary licenses, subscriptions, and applicable back maintenance and support or other applicable action in order to remedy any such non-conformity(ies).
When using electronic signature services, the "sender" sends a document to the "signer." The signer may be required to provide personal information about him or herself in order to complete form fields and electronically sign the document. Adobe collects some of this information on behalf of the sender of the document and other information for the purposes of providing the electronic signature service.
Information collected on behalf of the sender: Where Adobe collects and uses information on behalf of the sender of the document (or the organization to which the sender belongs), the sender is the controller of this information. This may include, without limitation, information embedded within a document, collected via form fields, or other information regarding the signer's access and use of the electronic signature service such as the date and time of a signature or transaction event, IP address, and other information about the browser or device used to send, sign, delegate, approve, or take other actions with respect to the document. For example, IP address is recorded as part of the “activity log” and/or "audit trail" that is linked to the electronically signed document. The activity log and audit trail are generally made available to senders, signers, and other “participants” in a document workflow and is retained according to the agreement between Adobe and the sender.
Additionally, a “sender” may elect to employ additional authentication methods to apply a more stringent standard for verifying the identity of a “signer.” For example, a sender may request that a signer take a photo for identity verification purposes and upload documents (such as a government-issued ID) that help the sender (not Adobe) verify the identity of the signer. To facilitate the sender's verification request, the signer may be asked to provide a mobile number to receive instructions on their mobile device.
For the photo verification feature, Adobe's third-party provider may create biometric information from your photo (e.g., facial recognition) to perform the identity verification. Adobe and the sender receive a confirmation of the verification from the third-party provider (e.g., verified or not verified). No biometric information is shared with Adobe or the sender, and the third-party provider deletes any biometric information created by the provider within 180 days after collection.
For the document upload feature, the sender will receive and store copies of the documents (e.g., government-issued ID) or images provided by the signer, and these may be stored in the audit trail along with the electronically signed copy of the document. If the sender requests that the signer's identity be verified through other identity verification processes (challenge questions or SMS verification code), then additional information may be collected from the signer. As part of this process, information such as the signer's identification details and answers to challenge questions may be passed through the Adobe electronic signature service. That information is used only to verify the signer's identity on behalf of the sender. The documents and images uploaded during the authentication/identity verification process will be retained for as long as the sender retains the document in the Adobe electronic signature service.
By default, Adobe's electronic signature services send a copy of the electronically signed document to both the sender and the signer. The sender also controls how long documents are stored by Adobe and available to signer to access or download. The sender is responsible for configuring any security options available within the service to protect the documents and their exchange between the sender and signer.
Information collected by Adobe to provide services: Adobe collects information about how senders and signers use and access features and capabilities of the electronic signature services. We collect and use this information to operate, improve, and personalize the electronic signature services.
BEWARE of the BILLABLE HOUR SOFTWARE AUDIT LAW FIRM - WE HAVE DOCUMENTED ABUSES
VIDEO: Watch this warning about hiring a law firm that puts 1-3 attorneys on your case and seeks to BILL their TIME hourly. This can lead to a very COSTLY legal bill. Hire us; we won't drain you on legal fees. Just enough to get the job done right.
Types of software dispute cases we may accept
- Adobe license audits are conducted through the Business Software Alliance (BSA is a trade association that may audit your company when Adobe “participates” in the audit, as they say).
- Adobe Software Asset Management (SAM) - internal software license disputes
- “True-Up” – internal self-audits may be requested
- Declaration of non-infringement
- Declaratory judgment actions
- Software arbitration, mediation, and litigation
- Demand letters – selling Adobe software online without authorization (see below)
You may find yourself contractually bound to submit to an audit, or the audit may be more along the lines of a “voluntary” audit. While you may be told that the audit is INFORMAL, be careful, the risks of unlicensed software usage can be ENORMOUS, and once they have you on the hook and you see the potentially STAGGERING settlement figures they are throwing at you, you may wish you would have hired a copyright lawyer from the outset. Note: Adobe may not be engaging in all of the above audits, and I have heard that some of the auditings has ceased, but it is clear as of the date of this blog that audits through the BSA are still ongoing.
Selling Adobe Software without authorization
One type of case that can pop up is if a company or individual is selling software that is not a full retail version of the software. You cannot take software of theirs that comes bundled with hardware, called OEM, (ex., a printer that comes with an Adobe disc) and try to sell that disc separately. If you do this, you might find they are scanning the internet, and you may end up getting a cease and desist letter. To them, this violates Adobe's exclusive rights when selling their copyrighted product separate from the hardware.
Non-exclusive list of Adobe software products
In some cases, you may be charged with copyright infringement from both Autodesk and Adobe (and sometimes Corel). Adobe's software products include multimedia software, creativity software, and other programs. Most of us know Adobe as the company that allows us to make and read PDFs. However, they have many more products than just the Acrobat reader. Here is a list of known products from Adobe software that could lead to software licensing shortage allegations:
1. Adobe Acrobat 6, 7, 8, and 9 professional software
2. Adobe Acrobat XI
3. After Effects (great software to enhance video editing)
4. Adobe Captivate 5.5,6, 7 software
5. Adobe Creative Suite 2.0, 2.3, 4.0, 5.0, 5.5, 6 design standard software & web premium
6. Adobe Dreamweaver CS5, CS5.5, and CS6 software
7. Adobe Fireworks
8. Flash Catalyst CS5, CS5.5, CS6
9. Adobe Illustrator 8.0, 10.0, CS2, CS3, CS4, CS5, CS6
10. InDesign, CS2, CS4, CS5, CS5.5, CS6
11. Adobe Photoshop 6.0, 7.0, CS2, CS3
If you are being asked to audit one or more of these software products, give us a call at (877) 276-5084.
Adobe Systems Inc. v. Kornrumpf
This is one case that may be cited to you if you are alleged to be infringing their copyrights in the software. In this case, a person sold OEM versions of Adobe software without the accompanying hardware and argued that the first sale doctrine applied and that he was not subject to any license. Both the district court and the 9th Circuit disagreed.
*Copyright is a federal law protection provided to the authors of ‘original works of authorship,' including software programs.” Vernor v. Autodesk, Inc., 621 F.3d 1102, 1106 (9th Cir.2010) (citing 17 U.S.C. §§ 101–103). “The Copyright Act confers several exclusive rights on copyright owners, including the exclusive rights to distribute their works by sale or rental.” (citing 17 U.S.C. § 106(3)). Copyright infringement occurs whenever someone “violates any of the exclusive rights of the copyright owner,” including the exclusive distribution right. 17 U .S.C. §§ 106(3), 501. “The exclusive distribution right is limited by the first sale doctrine, an affirmative defense to copyright infringement that allows owners of copies of copyrighted works to resell those copies.” However, this affirmative defense is unavailable to “those who are only licensed to use their copies of copyrighted works. A software user is a licensee rather than an owner of a copy where the copyright owner:
(1) specifies that the user is granted a license;
(2) significantly restricts the user's ability to transfer the software;
(3) imposes notable use restrictions.”
The Court issued a preliminary injunction.
Key Adobe Cases
Here are some other cases to review if you are involved in an Adobe copyright case:
Adobe Systems Inc. v. Bea's Hive LLC, Southern District of Florida
Apple Inc. v. Psystar Corp., 658 F.3d 1150 (9th Cir. 2011)
Microsoft v. Harmony Computers & Electronics, 846 F. Supp. 208 (E.D.N.Y. 1994)
Sun Microsystems, Inc. v. Microsoft Corp., 188 F.3d 1115 (9th Cir. 1999)
Adobe Systems Inc. v. Stargate Software Inc., 216 F. Supp. 2d 1051 (N.D. Cal. 2002)
Adobe Systems Inc. v One Stop Micro, Inc., 84 F. Supp. 2d 1086 (N.D. Cal. 2000)
Triad Systems Corp. v. Southeastern Express Company, 64 F.3d 1330 (9th Cir. 1995) [Read our Copyright Case Brief]
MDY Industries, LLC v. Blizzard Entertainment, Inc., 629 F.3d 928 (9th Cir. 2010)
Metal Morphosis, Inc. v. Acorn Media Publishing Inc., 639 F. Supp. 2d 1367 (N.D. Ga. 2009)
Wall Data Inc. v. Los Angeles Cnty. Sheriff's Dept., 447 F.3d 769 (9th Cir. 2006)
Options when dealing with settlement
Generally, when faced with a threat of software litigation, you can either:
(1) ignore the cease and desist letter (which has its risks since Adobe might take you to Court, as it has done many times, as is obvious given the above cases.).
(2) try to settle this case (using a skilled IP law firm can be worth looking into). You need to make sure you negotiate either for dismissal or the lowest possible settlement with the best possible terms of the settlement agreement.
There may be other options, such as going on the offensive and filing for declaratory judgment.
Contact an Adobe Software Defense Law Firm
If you have received a legal demand requesting a full and complete accounting of all Adobe sales and documentation identifying suppliers, quantities purchased, and purchase prices, call us BEFORE calling them.
We have vast experience dealing with software companies and their legal counsel. We have closed approximately 1,000 copyright cases dealing with a variety of software publishers, including:
- VB Conversion
- Business Software Alliance
In fact, we often get referrals not only from “inside counsel” but also from “intellectual property counsel” not familiar with software licensing issues such as how to handle an audit, how to know what a good deal is, essential terms of the settlement, and when willful copyright infringement really applies.
Call us at (877) 276-5084 or fill out our contact form for more information.