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Those of you responsible for inventorying your company’s software licenses, take heed. The Business Software Alliance, or BSA, is coming soon to a desktop near you. The alliance is the enforcement arm of a group of software giants that includes Microsoft, Adobe, Macromedia and others who take very seriously the notion of unlicensed or pirated software. Just as the Recording Industry Association of America has taken serious steps to shut down trading in unlicensed music files, so too has the BSA been cracking down on the use of unlicensed business software. And as many employees are becoming concerned about intrusive uses of desktop “big brother” software to monitor their Internet browsing, their employers may start to wonder whether a “bigger brother” is monitoring them to enforce its software licensing procedures. For example, in Great Britain the BSA made news when it paid an employee of an accounting firm a five-figure fee for tipping off the BSA that the company was using unlicensed software. BSA has been known to pay �10,000 for a tip, which is about $14,400 stateside. While this particular whistleblowing effort made headlines, it has been the BSA’s policy for some time to offer rewards for information leading to a successful settlement or prosecution for unlicensed software. For some reason the number of unlicensed copies in recent reports seems in each case to hover near the 400 mark, but we suspect that the BSA is willing to take enforcement matters seriously for a much smaller number of unlicensed copies. In the British accounting firm incident, the 400 unlicensed copies were of Microsoft Windows and Microsoft Office. Please also note that ignorance or other negligence is no defense, as the BSA is not willing to waive its claims based on carelessness or mistake. The accountants blamed poor software auditing for the mishap, but still settled for an undisclosed amount. But lack of knowledge was not the issue with the accountants’ neighboring software users to the north in Scotland. The Clackmannanshire Council, which oversees Scotland’s smallest county of about 26,000 Scots in a region 20 miles northwest of Edinburgh, was the subject of a claim by the BSA for the unauthorized use of 470 copies of Microsoft Office 97 without valid software licenses. Let it be known that these are not examples of the company’s tech department burning CDs for additional copies in the wee small hours and distributing them to desktop users. No, the council originally had a “Select Agreement” with Microsoft that provided significant discounts for the proper purchase of Microsoft licenses. In an apparent effort to ingrain the stereotype of Scottish frugality, the council bought 470 additional “loose end-user licenses at further discounted price” (as in, off the back of a truck) which according to one news account were delivered to the council “in plastic supermarket bags.” One would think that this might have tipped off the council that they were playing with something as unpalatable as freeze-dried haggis, but the council refused to take “no” for an answer when Microsoft declared the software illegal and the licenses counterfeit. After Microsoft referred the case to the BSA and the council refused to conduct an audit or legalize its software, litigation ensued. As with the ne’er-do-well accountants, the council and BSA reached an out of court settlement for an undisclosed amount. These settlements can often be in the hundreds of thousands of dollars. The settlements in Great Britain should be enough to make U.S. corporations consider a very thorough audit of their existing software licenses, before the BSA does. In fact, the BSA gives advance notice with grace periods to give operators in suspected areas an advance opportunity to get their house in order. See the BSA site to keep up with their success and disclosed settlement amounts at www.bsa.org. (We of course assume those rumors about cookies from the site that audit your hard drive for bootleg copies of Microsoft Money and Adobe Photoshop are totally untrue.) The BSA is not always called in based on a tip from a whistleblowing employee. The more likely scenario is that someone in a corporate computer department makes a routine call on a technical issue and it turns out that the warranty key number or serial number for the installed software doesn’t match or the number of licenses issued for a particular software product doesn’t match the number of users. Before you start thinking that the biggest problems that the BSA faces are Third World or other remote locations in the world, consider these statistics. According to the BSA, one in four pieces of software used in Great Britain businesses is illegal. The BSA is currently investigating over 500 companies across Great Britain suspected of not having enough software licenses. Six of the firms are government funded and only 26 of that 500 are in Scotland. However, there are limits to the long arm of the BSA’s enforcement powers. The final frontier appears to be Sweden. There, along with Napster, Gnutella and other shareware sites for music, were also sites that facilitate the distribution of copyright-protected business software as well as sites that may enhance their stealth capabilities for illegal downloading. Certain sites, known as “warez” sites offer downloads of software stripped of its copyright protection. Warez sites are in a game of cat and mouse with the BSA, which has closed many (see www.warez.at). As a result, these sites frequently move from place to place setting up shop and closing down in a sort of nomadic voyage along the information super highway. They need new road signs to point users to their new location. Enter name redirection services. Certain Internet sites provide free, short domain names and related redirection services that are favorites of those who operate warez sites. The BSA wanted to block one Swedish redirection service, seeking a court warrant to raid the premises of a Swedish promoter by the name of Maximilian Andersen whose service known as “kickme.to” essentially traffics in short domain names used by warez operators. In a case that sounds like a law school torts exam seeking the limits of proximate causation, the BSA argued that Andersen’s service made it easier to download and sell the pirated copies of its members’ software, so liability for the infringing software should extend to him. Andersen argued that his service merely provided free short domain names, which was not sufficient to warrant the issuance of a warrant for copyright infringement. A Swedish court agreed with Andersen and denied the warrant, stating that although the service may assist the warez sites, its service does not in itself constitute infringement of the BSA members’ copyright. BSA appealed and lost. While we applaud the Swedish court for defining the limits of copyright infringement liability, we would respectfully suggest the court confirm that its software license inventory is in order and that none of its staff is in dire need of an extra $14,400. Scott Austin advises software development, e-commerce and high-technology companies as a partner in the Boca Raton, Fla., office of Adorno & Zeder. He can be reached at [email protected].

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