BSA software alliance – audit essentials [third party liability]

Introduction

Every now and again in a software audit defense case we come across a case where a company that was subject to the audit put into a position where they are asked to pay a large settlement for what amount to acts of corporate sabotage by an employee, agent, or even independent contractor for the company.  The acs of sabotage could be many things:

1. An IT guy installing software he knows is unlicensed because he plans on quitting in two weeks and seeking a BSA reward for ratting out the company.
2. Someone in the company may have personally brought in software from their homes and used it for corporate benefit not knowing about EULA licensing requirements.

These are just two examples.  But what do you do when these third parties intentionally or negligently cause the company to undergo an audit that may lead to a costly settlement in the 5 or 6 figures?  You might want to retain the right to use them if they were acting outside the scope of their job duties, and/or not following corporate software installation policy.

Confidentiality clause

Many settlements with Autodesk, Microsoft, the SIIA or the business software alliance (“BSA”) a good software licensing attorney will be able to negotiate an “confidentiality clause” that prevents the software publisher or trade association from trying to issue press releases after the settlement is reached.  However, you have to rad these causes carefully.  In some cases the language might prevent you from settling the case and then going after the “informant” or other person who may have been responsible for your less, especially if your employment agreement had an “indemnity clause.”.  If you are facing the situation where the IT guy, or other employee should be held liable, you may want to negotiate the settlement agreement carving out an exception to the confidentiality clause basically requesting to reserve all rights to sue the known or suspected sabatoguer.  If the software vendor doesn't want to go for it (so they can possibly protect the identity of their informant/whistle-blower) you may want to try to negotiate a lower settlement based on this information.  These are just some things to think about.

Carve out an exception for acts of corporate sabotage

For more information on taking on the informant or corporate insider with vengeance on their mind, call us to discuss.  We have several strategies that can work in our favor if you retain us.  We offer low flat rate (predictable) legal fees for most non-software litigation cases.  Call (877) 276-5084 for a no cost initial discussion.