Attorney Steve® Software Audit Essentials - 15 Common Types of Software Piracy!

Introduction - Software Piracy Defined

The terms software piracy can mean many different things.  Here is how I look at it as a copyright defense lawyer.

1.   Most all software is copyright protected (meaning, registered with the United States Copyright Office).  This means, infringement can be expensive.  Watch this video on calculating penalties for software infringement.  Since computer software is typically copyright protected, you cannot infringement on an owner's rights (ex. Microsoft, Adobe. McAfee, Symantec, Vero, Siemens, Autodesk, etc.)

2.   One way to pirate software is to download the software through the BitTorrent protocol and obtain crack codes to use the software without paying for a license.  This is piracy.  Installing and using software without paying for the proper license (ex. commercial license or personal license), is considered infringement.

3.   Using PERSONAL software (per the EULA) for COMMERCIAL PURPOSES (not paying for the more expensive commercial license and using the personal license outside the scope of permissible use.  We have handled many cases where the Business Software Alliance ("BSA") - which is the software trade association for companies like Dassault Systems, DropBox, Mastercam, Microsoft, intuit, PTC, IBM, Oracle, Altium and others (click here for the full list of BSA software members) - pursue companies for using "Personal Software" for commercial purposes.  Microsoft previously had a lot of problems because people would go to best buy and purchase a computer with software pre-loaded, (ex. Windows or Office) but it is installed with the PERSONAL Microsoft products.  BSA copyright attorneys (there are about 7 regional firms) would pursue software audit cases eluding to this as "SOFTWARE PIRACY, even though a license was obtained, just not the right license.  This has been treated as software piracy.

4.  Illegally distributing software (ex. on eBay, Etsy, Alibaba, etc.) - selling copies you do not have the legal right to sell (ex. no "first sale" doctrine applies) can be treated as software copyright infringement ('piracy").

5.  Over-installing software (ex. installing Vero software on 3 three computers when you only have a paid license for one.  This "over-use" can constitute software piracy

6.  Exceeding the terms of any end-user license agreement ("EULA").   If you are doing something in violation of the terms of use that you clicked on "I agree" to, can lead to a software compliance audit, or worse, a federal court lawsuit (NOTE:  there is now a Copyright Small Claims Court in Washington D.C. that will be opening its doors for claims up to 30k in December of 2021 (or June 2022 if extended).  As noted on the Copyright.gov website:

"In 2011, Congress asked the Copyright Office to study the current system for resolving copyright claim disputes with a relatively small economic value, as well as possible alternative systems. The Office examined the issues for two years, soliciting public comments and holding four days of hearings. The result was the Office's 2013 report, Copyright Small Claims, which provided recommendations and proposed legislative language. It recommended that Congress create a streamlined, voluntary adjudication process in the Office to resolve copyright infringement claims that do not exceed $30,000. The entity created would:

(1) administer proceedings through online and teleconferencing facilities without the requirement of personal appearances;

(2) streamline proceedings, with limited discovery and no formal motion practice;

(3) be staffed by three adjudicators, two of whom would have significant experience in copyright law, together having represented or presided over the interests of both owners and users of copyrighted works, with the third having a background in alternative dispute resolution;

(4) be a voluntary alternative for both parties;

(5) allow respondents to assert all relevant defenses, including fair use, as well as limited counterclaims arising from the infringing conduct;

(6) allow parties threatened with an infringement action to seek a declaration of noninfringement;

and

(7) issue decisions that would be binding only with respect to the parties and claims at issue and have no precedential effect, subject to limited administrative review for error as well as challenge in federal district court for fraud, misconduct, or other improprieties."

We suspect many software companies will start filing lawsuits in the newly created court and perhaps they will try to do this internally.  Time will tell if this Court will solve problems or create even more problems (since there is a right to "opt-out" of the small claims procedure forcing a federal court lawsuit to enforce one's rights.

7.  Some software publishers believe that if your independent contractors are using pirated software (ex. Solidworks), then you can be held liable for their infringement.

8.  Over-sharing of credentials or passwords can be treated as software piracy and new technologies are tracking this.

9.  Making more "back-up" copies than the EULA allows

10.  SPLA (Microsoft) providers under-reporting software sales.  Can be treated as a breach of agreement and/or copyright infringement.

11.  Using educational software for commercial purposes (many believe you can just hire a student or intern and they can use their educational software for business purposes.  This can put both the student and the organization in legal jeopordy.

12. Subscription licensing - using subscription-licensed software past the expiration date.

13.  Failing to maintain maintenance and (for example in the case of older Autodesk software licenses - ex. AutoCAD and Revit), you can LOSE PRIOR VERSION RIGHTS.  By then accessing the prior versions, they can pursue you for a software compliance claim.

14.  Selling counterfeit software can be treated as making illegal knock-offs that violate the bundle of rights enjoyed by a copyright holder.

15.  Computer refurbishers installing software without the proper rights and selling it to the end-user (who has not paid for a license per se).

These are some of the top things I see every month as a software compliance lawyer.

Innocent Infringement Defense

NOTE:  Whether software piracy is deliberate/intentional or not ("innocent infringement" defense), it is still illegal and punishable by law.

Watch Attorney Steve® Explain Copyright Infringement Damages

VIDEO:  Click to watch our video on "actual damages" in copyright infringement lawsuits.  Make sure to SUBSCRIBE to join nearly 30,000 others who love our legal videos!!!

Click here for a general overview of copyright damages.

Overview of Business Software Alliance software audits

VIDEO:  We have not heard much from BSA in 2021, but here is an overview of handling cases with them.  We have handled quite a few over the years!  This is NOT an area of law to trust to the lawyer in your family, or even your corporate lawyer.  Simply put, there is no substitution for experience in these "bet the farm" type of cases where initial demands can reach hundreds of thousands of dollars.

Contact a Software Audit, Licensing & Compliance Law Firm

Since 2004, our business and IP law firm has fought hard to defend companies (both large and small) and individuals in legal matters that in many cases have the potential for Officer and Director copyright infringement personal liability (despite the so-called "corporate veil) and we are a leader in the niche practice area of software audits, disputes, investigations, subpoena response and other matters relating to software piracy.  In most cases, they have lawyers on their anit-piracy team and so give that and the enormous amount of liability at stake (up to $150,000 per infringed work), it makes sense to discuss your case with legal counsel BEFORE you even think of responding to the software publisher, or worse, making the decision to throw the letter or email in the trash.

We offer low affordable FIXED RATE FEES for most software audits and this benefits you by not hiring a technology law firm that may want to put 1-3 attorneys on your case and "bill up the file."  This can have the unwanted effects of (1) unduly dragging your case on, and (2) getting a final legal bill that leaves you speechless.  With us, you know upfront what you will be paying, and we are incentivized to help you get your case settled - not to turn it into a year-long event.

Call us at (877) 276-5084 or email us through our contact form.