A software audit is a right of review often sought by licensors. A software audit typically entails the licensor hiring a third-party auditor whose job is to undertake an independent examination of the licensee’s compliance with the terms of the license. Software audits have become prevalent, so much so that companies offering “audit management software” have proliferated in recent years. This is likely a response to market indicators showing that the software audit industry will grow demonstrably by 2025.

Unsurprisingly, software audits are more frequently becoming a point of contention in litigation throughout the emerging technology space. For instance, in one of the largest patent disputes this decade, a California court was asked to order a software audit to determine how the licensee/patentee was using the software’s source code. The subject of this column is another recent case involving a dispute over a licensee’s refusal to allow a software audit which was designed to determine the licensee’s compliance with its use of the license keys. See Master Tax LLC v. Ultimate Software Group Inc., No. 2:18-cv-01463-DLR (D. Ariz. Aug. 31, 2018).