Software Audits 101 – Dealing with the request for in-house (on site) audit

Introduction

This is general legal information only and not legal advice or a substitute for legal advice.

This short blog deals with another topic that could come up during a software compliance audit.  Your company may be requested to allow representatives of a software publisher (ex. Microsoft) to come into your business and look over your computers, servers and laptops to check for unlicensed software.  While this may seem really intrusive (and it is), here are some questions / comments you might want to post in response to such a request for a copyright collection lawyer:

1. Do you have a contractual right to enter my office?
2. You already claim to have evidence of infringement (ex. installed software that is unlicensed) purportedly given to you by an informant (in most cases) so why do you need to come to the office to confirm what you claim to already know?  Did the informant tell you how many computers our company has, and what computers particular alleged pirated software is installed on.  If the evidence is reliable why do you feel the need to come in house and confirm it?
3. If so, please produce the contract we signed
4. Who is going to be coming to our office (are they a licensed professional who knows what they are doing)?
5. Will you indemnify our company if you screw something up (ex. install a script with a virus, cause a data loss, etc.)
6. If you find nothing, will you pay us the sum of $5,000 for intruding in the workplace, causing a ruckus, and sending the implication to our employees that somehow the company (and implicitly officers and directors) are engaged in software piracy?
7. If you find nothing, will you issue an apology letter, and provide a confidential copyright release of all claims agreement?

These are some of the audacious things that you may face in a software licensing investigation which is brought under the implied threat of copyright infringement.  If unlicensed software is found, you can expect to be dealing with a large demand for settlement.  We help companies deal with these kinds of situations and have helped many companies large and small across the United States in defending these audit demands.  While the representatives of the software company may come across as helpful, trust-worthy and well intentioned, you can be sure once they get any potential evidence of unlicensed software they will pull out all the stops to recover as much money as possible, sometimes with the threat of not keeping things confidential (yes, sometimes they will demand extra money if you want to keep the settlement confidential).  Don't be fooled, contact counsel experienced in these matters.

Sample email

Here is a sample of an email (for reference purposes only)

Dear counsel:

My Clients have no problem having a representative come to their office to search their computers (as I have mentioned, they have nothing to hide), but there would have to be some conditions agreed to: 

1.    Investigator is a qualified Microsoft representative

2.    BSA (and Microsoft) agree to indemnify my Client for any damage that might be caused (accidentally deleted documents, etc.)

3.    If no shortages are found, my Client would want (a) a full and complete copyright release for the company and officers and directors and (b) a payment of $5,000 (similar to your attorney fee noted in your letter) for their costs and inconvenience.

4.    Audit to be conducted on ONE DAY and on a Saturday of their choice. 

If your client is willing to agree to these terms, I am happy to set up a time and date. 

Please let me know. 

Thank you

Our copyright law services

1. Protection of copyrightable software
2. IP audits (identify and protect your valuable copyrights, trademarks and trade secrets)
3. Cease and desist letters
4. DMCA “take down” notices
5. Youtube, Twitter and Facebook legal issues
6. Etsy store legal issues
7. Copyright arbitration
8. Copyright mediation
9. Willful Copyright infringement litigation (books, movies, pictures, digital content)
10. Counterfeit goods cases
11. Torrent Defense – illegal download of movies, software, music (ex. Malibu Media Defense)
12. Internet Plagiarism
13. Photo infringement cases (ex. Getty images)
14. Software licensing audits (Business Software Alliance, Autodesk, CNC, Siemens, SIIA, Vero, Solidworks and others)
15. DMCA anti-circumvention cases

Contact us

We offer predictable and affordable flat rate legal fees for software audit defense work.  When it comes to this area of law, in most cases even your in-house counsel will not understand how to deal with these cases (we get referrals from in-house counsel).  Call (877) 276-5084.