Vero Software Lawsuits (Hexagon) – The need to take legal demand letters serious. Lee & Hayes law firm punching hard!
June 2021 Updates - It sounds like Lee & Hayes will no longer be counsel for Vero software infringement cases. On information and belief the new firm will be Kutak Rock, LLP.. If you receive a letter from this firm, let us know and we offer a free initial consultation.
If you are dealing with Vero software in a software licensing dispute, this is a very important blog. You need to realize from the outset that Vero will file a copyright infringement lawsuit, and that is a threat that needs to be taken very serious when you receive an infringement notice, and are given a chance to negotiate a settlement.
If you have received a demand letter from Vero directly, or perhaps a law firm they may engage Lee & Hayes out of Washington State, contact us for a free initial case evaluation.
August 2020 Software Litigation Updates: Vero is hitting very very hard, even during these tough Covid-19 times for many small businesses and companies. You may get hit with very high demands exceeding 6 figures. We receive constant threats of litigation as well. Call us if you have received a letter from a guy named "Mike."
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How did they find out I was using Alphacam, Surfcam or Edgecam?
Possibly it could be by tracking you with monitoring technology that supposedly you agreed to by clicking “I agree” when you installed the software. Their End User License Agreement (“EULA”) states:
“By Selecting the ‘I Accept' button or other button or mechanism designed to acknowledge agreement to the terms of an electronic copy of this License, or by installing, downloading, accessing, or otherwise copying or using all or any portion of the Licensed Materials you:
(i) accept this Licence on behalf of the entity for which you are authorized to act (e.g., an employer) and acknowledge that such entity is legally bound by this Licence (and you agree to act in a manner consistent with this Licence) or, if there is no such entity for which you are authorized to act, you accept this Licence on behalf of yourself as an individual and acknowledge that you are legally bound by this Licence, and
(ii) you represent and warrant that you have the right, power and authority to act on behalf of and bind such entity (if any) or yourself. You may not accept this Licence on behalf of another entity unless you are an employee or another agent of such other entity with the right, power and authority to act on behalf of such other entity.”
Another peculiar thing: I have seen that Vero uses some type of tracking technology that tracks LONGITUDE and LATTITUDE of the alleged infringer. This is the only company I have seen do this in my software defense cases. For example, in the infringement letter or piracy log you may see:
"ABC company infringed Vero's Alphacam software numerous times from January 1, 2019 through at least December 25, 2019. The latitude 22.1457092 and longitude -55.912688 (for example only) are traced to your client's residence located at 12345 Main Street."
Frequently Asked Question: If Vero can get into your computer network, why can't it just SHUT OFF any pirating or infringing uses? I am told that Vero cannot remotely shut down access to pirated software, however, they CAN terminate access to validly licensed software under some circumstances (for example, if someone is found infringing and refuses to stop).
But I found their software for free download on the internet
Here is another explanation we hear from time to time, but it usually falls on deaf ears with Vero legal counsel. Some people report downloading Edgecam, Surfcam, or Cabinet Vision off the internet (for example, they see a download link on YouTube and assume it's okay to just download their software and use it for no charge. Some will argue that this results in:
- abandoning their copyrights
- consenting to use their software (if they did not issue a simple cease and desist letter to YouTube or other social media website, are they allowing or luring people into these software downloads so Vero and their law firm can profit from pursuing software infringement settlements)?
- Is this a "failure to mitigate damages?"
- Is this "unclean hands"
These are some of the things people want to know, and in the past, I have asked Vero and other software companies about things like this. I remind them that they have a "duty" to police their intellectual property, and by not taking these types of sites down (which I believe they could easily do), are they just promoting the "infringement recovery" profit center? This is a question that remains to be answered, but you can see how these types of destinations on the internet could draw curiosity, and potential unwitting download by those not skilled in the intricacies of copyright law. Call us for a free consultation, this company is very aggressive and settlements can be high. The threat of litigation from their legal counsel (even during Covid) is virtually non-stop. You may have received an infringement notice from the Washington Law Firm of Lee & Hayes.
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Is it legal to track users in corporate networks? Technology Protection Measures (“TPM”)
According to Vero it is. They rely on their EULA above which also states:
“The Licensor and its licensors and affiliates take all legal steps to eliminate piracy of their software products. In this context, the Licensed Materials may include a security mechanism that can detect the installation or use of illegal copies of the Licensed Materials, and collect and transmit data about those illegal copies. Data collected will not include any customer data created with the Licensed Materials, but may be personally identifiable data.
By using the Licensed Materials, you consent to such detection and collection of data, as well as its transmission and use if an illegal copy is detected. We reserve the right to use any technical protection measures (TPM) to protect the integrity and intellectual property rights of the Licensed Materials.
You must not attempt in any way to remove or circumvent any such TPM, nor to apply, manufacture for sale, hire, import, distribute, sell, nor let, offer, advertise or expose for sale or hire, nor have in your possession for private or commercial purposes, any means whose intended purpose is to facilitate the unauthorized removal or circumvention of such TPM.
Any personally identifiable data collected as part of such TPM will be used solely to help enforce compliance with this License, and will not be used for sales or marketing purposes.
A key question becomes whether or not a company actually agreed to the “clickwrap” licensing agreement (most people never read the EULA, however, this does not necessarily mean you are not bound when you click “I agree.”
What does the VERO (Hexagon) EULA license say about software piracy?
Section 3.6 - If the Licensed Materials become, or in our opinion are likely to become, the subject of an infringement claim, we may, at our sole option and expense, either:
(i) substitute non-infringing software of substantially similar functionality;
(ii) modify the infringing Licensed Materials so that it no longer infringes but remains substantially similar in functionally;
(iii) obtain for you, at our expense, the right to continue use of such Licensed Materials;
(iv) if none of the foregoing is commercially feasible, we will take back the Licensed Materials involved, and grant you a refund or credit for the unused portion of the license fees actually paid to us for the Licensed Materials involved.
For thirty-year License Types, the unused portion shall be calculated using a straight-line method of depreciation over a thirty-six (36) month period from initial delivery of the Licensed Materials.
THIS SECTION 3.6 STATES OUR ENTIRE LIABILITY AND YOUR SOLE AND EXCLUSIVE REMEDY FOR INFRINGEMENT CLAIMS AND ACTIONS.
According to copyright counsel for Vero, this creates an opportunity for them to charge you for a fully unlocked version of their software (which is why you may be facing a rather large financial demand)
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The Vero software approach to copyright compliance & enforcement
Here is the general pattern I have seen these cases take:
- The first thing that may happen is you receive an email, letter or a telephone call from a Vero representative claiming your company is using unauthorized or pirated software. Edgecam is one of their main products. Alphacam is another.
- The letter you receive may threaten you with a copyright crime in a “not so subtle” fashion. For example, here is one piece of a demand letter I reviewed (we used to see use of the FBI symbol in their communications):
“As you can see, this is significantly lower than the original quote I sent you and much less than a potential $150,000.00 Statutory Damages penalty that could be handed down in Federal Court under U.S. Copyright Law, 17 U.S.C. §§ 501-506, which could include not only a civil penalty against the Company, but also a criminal penalty against the individual responsible for downloading the illegal license. I also am including a link below for your records so as to educate yourself, and your employees of the potential legal ramifications with this type of offense.” The compliance rep then offers a link to:
The email may also carry a reference that says:
“The unauthorized reproduction or distribution of a copyrighted work is illegal. Criminal copyright infringement, including infringement without monetary gain, is investigated by the FBI and is punishable by fines and federal imprisonment.
Largely this is meant to scare you and is usually done by a “non-lawyer” (lawyers cannot ethically threaten criminal prosecution to try to gain an advantage in a civil suit. In most cases, you will not be looking at going to jail or prison for copyright infringement, but then again, if everything your company is using is pirated, there can be no guarantees. Read up on our blogs regarding criminal copyright infringement.
3. You may be given a quote to settle your case by purchasing one or more copies of their software (often with a “copyright removal fee”) which is like an infringement penalty.
4. If you can afford to buy the software and settle the case you may want to request a confidential settlement agreement with the release of all claims against the company and its officers and directors (who can be personally named in a federal court lawsuit).
5. If the case is not settled, it is possible Vero will file a federal court lawsuit. A recent review of the Pacer Federal Court Search shows only 3 lawsuits have been filed, so the litigation threat is LOW, but REAL.
When an infringer misappropriates Vero's software, Vero may require the infringer pay for the cost of the illegal download(s) and use of the misappropriated fully unlocked software (what we call the "Cadillac version") during the infringing period, purchase new a license(s), purchase a three-year support and maintenance plan, and pay for anti-piracy and compliance fees. This can create some VERY LARGE DEMANDS FOR USING INFRINGING SOFTWARE. We can usually help, give us a call at (877) 276-5084.
Here is the Hexagon software piracy policy:
"Hexagon actively uses TPM to catch and bring to justice all illegal users of our software.
If Hexagon detects illegal copies of its licensed materials, we will seek an amicable agreement. This requires the infringer to immediately accept, a rental payment for the period of the installation of illegal use of the licensed materials, purchase any necessary software licenses, purchase a three-year support & maintenance agreement (SMA) plus pay for any anti-piracy and compliance fees. If the infringer does not accept this amicable agreement to resolve the non-compliance issue, Hexagon reserves the right to seek any other remedies available at law or in equity."
The fee to be negotiated can vary depending upon many factors such as the company size, how long they have been using the software, reasons for piracy, cost of a fully UNLOCKED version, and other factors. It is definitely wise to have a knowledgeable and experienced software license defense firm on your side to handle these negotiations, make sure you get the best terms of the settlement, and negotiate the settlement and copyright infringement release agreement.
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Vero lawsuit sample allegations
Here are a few sample allegations you might see in a copyright lawsuit involving Vero:
- That a user downloaded their software or installed without authorization
- That the piracy is “willful infringement”
- That the court should issue an injunction (See our video on injunctions)
- That the Defendant should be required to pay damages including attorney fees (see our copyright damages and penalties video)
A person sued with a federal court lawsuit has 21 days to respond to the complaint. A response can include filing a motion to dismiss (ex. court has no jurisdiction), or a Defendant can file an answer with affirmative defenses, and potentially a counterclaim (depending upon the facts of the case).
One of the challenges may be the use of “monitoring technology” that “phones home” certain information, (purportedly a user agrees to this when it installs the product and agrees to the end-user license agreement which purportedly discloses this), another defense may be the copyright statute of limitations (generally three years from the date of discovery). Other defenses to copyright infringement can also be explored. A countersuit might be for breach of their support or maintenance or other causes of action that might exist.
Email from Vero representative – use of FBI anti-piracy symbol
Very has previously used a very aggressive demand letter to seek to enforce their copyrights in their software programs such as Edgecam, Surfcam, and Cabinet Vision. One tactic I have seen is for their representative to place an FBI piracy warning symbol in their emails which, to me, implies a criminal investigation is possible. I am not sure if they are still doing this or not, but they were. Don't let this intimidate you. While there is such as thing as criminal copyright, I have not seen Vero take action to refer a case out to a federal prosecutor for prosecution.
Contact a software infringement law firm to respond to your Copyright complaint
If you need help dealing with a Vero software demand letter or responding (defending) against a copyright lawsuit, call us to discuss your options. You might have received an infringement demand letter from Winter Law Firm (Florida) or Lee & Hayes (Washington). The last letter I viewed claimed over $300,000 in software piracy damages. Thus, these cases need to be taken very seriously, especially since officers and directors can be held personally liable for copyright infringement.
We also handle software audits and license compliance issues with software publishers such as Autodesk, Microsoft, Software Compliance Group, Siemens, Solidworks, Business Software Alliance ("BSA"), VB Conversion, and SIIA.
Software piracy can have tremendous liability risk for a company and its officers and directors (who can be held personally liable for willful copyright infringement, which may include "recklessness."
We can be reached at (877) 276-5084.
We can offer low flat rate fees for most non-litigation cases. We have appeared in over 175 federal court cases and have handled many Vero demand letters and legal cases. In this area of law, there is simply no substitute for experience software and technology counsel. IT IS WISE NOT TO ATTEMPT TO CONTACT THEM ON YOUR OWN AS YOU MAY MAKE DAMNING ADMISSIONS.
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