Software License Auditing

Software piracy is wrong! Few people will disagree with this statement. However, few people realize that inadvertent copyright infringement is considered software piracy.

Recently, a number of companies have received strongly-worded notices of allegations of copyright infringement by unauthorized duplication of computer software from the Business Software Alliance (BSA) and the Software Publishers Association (SPA). These two software industry associations have similar missions, that being to ensure their member companies that users of licenses of computer software products are in compliance with federal copyright laws. Both associations are aggressive in pursuing their missions.

These associations have every right to pursue their missions to eliminate unauthorized duplication of computer software (prevention of software piracy).

The penalties for unauthorized duplication of computer software can be painful. Copyright infringement is punishable under 17 U. S. C. Sec. 506(a) by a fine of up to $250,000 and imprisonment for up to five years. In addition, federal civil penalties provided in 17 U. S. C. Sec. 504(c) allow the recovery of actual damages based upon the number of copies actually produced, or statutory damages. Where the copyright owner proves that the infringement was willful, the court has discretion to increase the award of statutory damages up to $100,000 for each copyrighted product that has been infringed. Further, 17 U. S. C. Sec. 505 provides for the recovery of attorney fees by the prevailing party.

How does one become a target for these associations? Usually, disgruntled former employees allege copyright infringement by their previous employers.

If you, or your company receives such a notice, do not ignore it, immediately contact your attorney for legal advice. Ignoring such a notice will usually result in an unannounced visit by association representatives, accompanied by U. S. Marshals to your location, where they may either carry out a court ordered software audit of the computers at your location, or confiscate the computers to carry out the court ordered software audit at another location. In either event, your business will be seriously disrupted, and your company will be facing the severe penalties previously mentioned.

Be aware that there is virtually no defense to allegations of software infringement, as most organizations do not maintain proper documentation to prove their innocence.

How do you prevent or deter becoming a target for one of these associations? You can not !

How do you defend yourself against these allegations? Provide overwhelming licensing documentation and evidence that you have already implemented internal methods and procedures to discourage, reduce or eliminate unauthorized duplication of computer software within your business.

If your company is not already prepared to defend against these allegations, your only viable alternative is a negotiated settlement following a voluntary software audit. Negotiated settlements by inadvertent infringers typically range from $100,000 to $200,000 depending upon the severity of the infringements.

Kinder & Associates can assist your organization in defending against allegations of copyright infringement; or, better yet, show your organization how to implement the proper controls necessary for a successful defense or settlement before allegations are made.

Litigation Support

Using computer-based tools such as document imaging systems, and custom 4th Dimension databases, we can provide valuable assistance during discovery, and organize your case-related documents and data for optimum retrieval and analysis.

Through our service bureau, using our equipment and staff, we can provide imaging services to augment your efforts during discovery, and deliver the images in virtually any format, for any computer, on any magnetic or optical media.

In addition to imaged documents, we can also provide OCR and full text indexing services, which will allow your staff to perform full text searches on any imaged document.

If your opposing party has access to an eMail system, we may be able to assist in data-mining, or searching, their eMail system for documentation to support your case.

Expert Consulting

Kinder & Associates has in excess of fifty-five years of experience in the computer industry. We can assist your firm in developing and implementing strategies for high technology lawsuits.

Our areas of expertise include Operating Systems; Mainframe, Mini-computer, and Personal Computer hardware and peripherals; and the development of application software for the Insurance, Manufacturing, Distribution and Retail markets.

We can assist your professionals in preparing and taking depositions, analyzing data and documents related to high technology lawsuits, as well as provide insight and guidance during brief preparation.

Expert Testimony

Kinder & Associates has been court certified as an expert witness in various jurisdictions including U.S. District Court, American Arbitration Association, and several State District Courts.

A partial list of our clients include:

1. •    Xerox Corporation
   

2. •    Locke Purnell Rain Harrell (Dallas, TX)
   

3. •    Godwin & Carlton (Dallas, TX)
   

4. •    True & Sewell (Dallas, TX)
   

5. •    Crutsinger, Booth & Kanz (Dallas, TX)
   

6. •    David, Goodman & Madole (Dallas, TX)
   

7. •    Sopuch, Nouhan, Higgins & Arnett (Dallas, TX)
   

8. •    Sapp & White (Austin, TX)
   

9. •    Sanders, Baker & Jesko (Amarillo, TX)
   

10. •    Loewenstein, Hagen, Oehlert & Smith (Springfield, IL)
    

11. •    Mellon, Webster & Shelly (Doylestown, PA)
    

12. •    Littler Mendelson (Houston, TX)
    

13. •    Farris, Warfield & Kanaday (Nashville, TN)
    

14. •    Kershaw, Cutter & Ratinoff,  (Sacramento, CA)