Software Piracy FAQ's – Copyright Infringement - Piracy Defenses! Call us for a free consultation if you received a letter, summons or subpoena!
2022 Compliance Updates - Get ready, I think it's going to happen. After being out of the compliance auditing game since the pandemic started, Microsoft / BSA appears that it MIGHT be back in the software license dispute arena. This is very important and it is time to SELF-AUDIT your laptops, computers, and servers to ensure you have proof of purchase and proper licensing for all products you have installed. Four Common problems leading to software licensing and compliance issues are:
- Installing cracked software (sometimes this happens without your knowledge and it is an employee who did it). Cracked software many times will happen when very expensive software is involved (ex. Solidworks products, Vero software, Oracle, and IBM). The use of BitTorrent may be involved.
- Over-installing software (for example, Autodesk software - AutoCAD and Revit can easily be over-assigned), can lead to an audit letter from Donahue Fitzgerald in the bay area of California, or an internal audit.
- Over-sharing of licenses (simultaneous uses that can be permitted by the end-user licensing agreement)
- Installing and using counterfeit software (ex. buying it off the internet at severely discounted prices, by unauthorized resellers)
- Remote employees logging in from home
- Contractors coming into the office using unlicensed or unassigned software
- Using student versions or educational software for commercial business purposes
- Failure to exercise the proper due diligence in the purchase-sale of business or merger (we can help you with assignment and transfer issues)
Here are some of the frequently asked questions we get dealing with software piracy. Our law firm has helped clients across the United States with Autodesk, Ansys, Microsoft, Adobe, CNC, Siemens, Vero software, and others with audits, investigations, and litigation cases involving federal copyright infringement allegations. Contact us at the number above for a free consultation if you are facing a legal issue, subpoena, or lawsuit.
What is “Piracy of Software?”
There are several different definitions of software piracy. Here are a few I found on the internet.
According to TechTarget.com:
“Software piracy is the illegal copying, distribution, or use of software. It is such a profitable “business” that it has caught the attention of organized crime groups in a number of countries. According to the Business Software Alliance (BSA), about 36% of all software in current use is stolen. Software piracy causes significant lost revenue for publishers, which in turn results in higher prices for the consumer.”
According to Microsoft:
“Software piracy is the unauthorized copying, reproduction, use, or manufacture of software products. On average, for every authorized copy of computer software in use, at least one unauthorized or “pirated” copy is made. In some countries or regions, up to 99 unauthorized copies are made for every authorized copy in use. Software piracy harms everyone in the software community including you, the end user. Piracy results in higher prices for duly licensed users, reduced levels of support, and delays in the funding and development of new products, causing the overall selection and quality of software to suffer.”
Autodesk has one of the most frequently pirated software programs. As it notes:
“Using pirated software, even unknowingly, can cause system failure, endanger your personal data, and negatively affect your business productivity. CAD software is the fourth most pirated software in the world, according to a study by the Software & Information Industry Association. AutoCAD® is the most frequently pirated software from Autodesk obtained through torrents or cracks.”
Is it a Crime to use unlicensed software?
Installing certain “thresholds” of pirated software could amount to a crime resulting in criminal charges brought by the United States Government. Here are two blogs we wrote on this issue if you are concerned:
What are the penalties for illegal software usage?
Installing and using unlicensed software can bring on unwanted civil and criminal penalties, fines, and fees. In the civil context, a Defendant could face misdemeanor or felony charges. From a civil standpoint, the damages can vary and can include either lost profits (ex. lost licensing fees or profits made from a particular part that was made using illegal software) and the Copyright statutes allow a registered copyright holder to seek up to $150,000 per infringed title (ex. a Microsoft Office Suite contains individually registered copies of Excel, Word, Powerpoint, Outlook, etc.). When involved in a Microsoft audit these products can be UNBUNDLED leading to a large number of damages being sought for infringing use.
VIDEO: Click on the picture below to watch a video discussing this topic. Make sure to SUBSCRIBE by clicking on the Red “V”.
What are “cracks” and “torrents”?
This refers to illegally accessing the software via the use of tools that allow a user to circumvent access control technology.
Many companies rely on software piracy to help them with their profits (which many times are going SOUTH).
We can help defend against these predatory claims!
Listen to Attorney Steve® explain how to argue INNOCENT COPYRIGHT INFRINGEMENT and save a TON of MONEY on settlements
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What is a software piracy reward?
This refers to various publishers of software that give rewards to whistleblowers that report piracy. Here are two podcasts on this point:
If you work for a large organization (50 or more employees) and have knowledge of software infringement, our law firm can help in reporting the infringement and MAKING SURE YOU GET PAID pursuant to a structured UPFRONT deal. Call us for more information. Some software trade associations offer up to ONE MILLION in reward money for reporting theft and use of unlicensed pirated software such as Microsoft, Adobe, `Autodesk, CNC and others.
What happens if a company is engaged in Autodesk software piracy?
Autodesk has a wide variety of techniques they use to uncover infringement. Among those are:
1. Rely on “informants”
2. Search your LinkedIn profile (do you tout Revit, Autocad, Maya, or Inventor skills but not have licensed productsd? This could trigger an audit letter from Donahue Fitzgerald, LLP the main recovery firm for Autodesk.
3. See your company touting a product in a trade brochure or industry publication
4. Failure to renew support/maintenance
5. Sending “crash” reports voluntarily
6. Competitors who inform on you
7. Students using “educational” software who leave on bad terms
These are a few of the means we have seen. If you receive a letter, you should call us to receive a free initial consultation. We can discuss your case and general options available to you, and discuss your potential legal exposure which can be significant in these types of cases.
2020 Software Audit Updates - Ansys sends out infringement letter
"Ansys develops and markets engineering simulation software for use across the product life cycle. Ansys Mechanical finite element analysis software is used to simulate computer models of structures, electronics, or machine components for analyzing strength, toughness, elasticity, temperature distribution, electromagnetism, fluid flow, and other attributes. Ansys is used to determine how a product will function with different specifications, without building test products or conducting crash tests. For example, Ansys software may simulate how a bridge will hold up after years of traffic, how to best process salmon in a cannery to reduce waste, or how to design a slide that uses less material without sacrificing safety."
If you received a letter accusing your company of infringing their software (copyright violation) call us for a legal consultation. We offer low flat rate legal fees for software piracy defenses cases.
This company uses what we call "phone-home technology" (PDRSS as they describe it) and so if you have over-installed their software, you could receive an infringement notice. If you don't respond, they could file a lawsuit against you. We recently discussed their recent lawsuit and piracy detection techniques.
What NOT to do if you received a piracy notice or phone call from a representative like Vero software for example
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What are the penalties for using unlicensed Microsoft software?
We have talked about the typical “3x multiplier” used by the BSA when imposing penalties for licensing non-compliance.
Who is the business software alliance?
This is the main trade association that seeks to recover license revenue fees on behalf of its member companies which include:
• Adobe • ANSYS, Inc. • Apple • Autodesk • Bentley Systems • CA Technologies • CNC Software – Mastercam • DataStax, Inc. • DocuSign • IBM • Microsoft • Oracle • Salesforce.com • SAS Institute • Siemens PLM Software, Inc. • Splunk Inc. • Symantec • The MathWorks • Trend Micro • Trimble Solutions Corporation • Workday
What is the Software Information Industry Association (“SIIA”)?
This is another trade association that seeks to recover lost infringement fees. Watch the video here.
How do companies detect unlicensed software?
Some of the ways were listed above. Another way some companies find out about unlicensed software is via “phone home” technology that tracks users when they login in. These kinds of cases can be very serious and lead to large requests for monetary damages as the publisher may have sat around and watched your company rack up the logins over a period of one, two, three years, or more. They claim their right to do this is set forth in the EULA licensing agreement which they claim discloses this type of “spyware” technology.
What are the defenses to copyright infringement of software products?
Here is a popular video we did that discusses potential defenses to copyright infringement. Some of the common defenses/mitigating factors are:
1. I did not download the software (false piracy log)
2. I have a paid license (licenses must be followed however, over-installation can lead to problems)
3. My licensed software didn't work, and I needed to get a job done so I had to use a cracked version (while necessity is not a real defense in a case like this, sometimes people download trial versions to learn a new skill - especially now during this pandemic - we see this quite often)
4. Former employee is sabotaging us (they installed the software and left the company and reported us). The Business Software Alliance has a program whereby an informant can seek a reward for reporting pirated software.
5. Illegal spying on the corporate networks ("phone-home" technology not mentioned in the EULA). This could be a form of illegal spying on a network. Some companies use a PDRSS third-party provider to analyze, record, and report on piracy at an organization.
This is not an exclusive list and may vary depending upon your case.
Does your law firm help software companies recover lost licensing revenue?
Yes, if your company produces, develops, or distributes copyrighted software programs, mobile applications, videos games, photographs, jewelry, books, films, video or other types of copyrighted content, we have a contingency fee recovery program available for you to help you recover lost licensing revenue attributable to piracy, both on and off the internet including counterfeit goods. Click here for more information.
For more information
Call to speak with Attorney Steve®. We are a premier software audit and licensing compliance defense firm in the United States. We have handled HUNDREDS of audits including Microsoft SPLA audits, SIIA, Business Software Alliance (BSA), ITCA, Autodesk disputes with Donahue Fitzgerald, LLP (including new EULA audits we are seeing more of in 2021, Vero software, Solidworks, VB Conversion and others.
We can be reached at (877) 276-5084 or email us through our contact form.
For most non-litigation cases we are able to offer low (predictable) flat rate legal fees.
When it comes to this niche area of law practice, there is no substitute for experience.
We are often referred cases by other attorneys, including in-house business counsel and we can help with merger & acquisition licensing due diligence software licensing analysis.
There is nothing worse than buying a company and its infringement problems to go along with it.