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John B.
Farmer

 

Lawrence E. Laubscher, Jr.

 

Ian D. Titley

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Is the Business Software Alliance’s Bite as Fierce as its Advertised Bark?

Monday, February 25th, 2002

Published in the Richmond Times-Dispatch
(February 25, 2002)

Should your company fear the Business Software Alliance and, if so, how much?

The BSA is a coalition of the world’s largest software manufacturers, such as Microsoft and IBM. Its most visible purpose is to combat the illegal copying of its members’ software.

The BSA’s mere existence demonstrates how much the computing world’s view of software has changed.

In 1957, IBM introduced its FORTRAN programming language by giving it away to its largest computer hardware customers – aircraft makers and the like.

Ironically, IBM called this customer group “SHARE,” a word software makers rarely use today in association with their products.

Nowadays, the BSA trumpets its antipiracy program. It warns sternly of the penalties available for copyright infringement. If you infringe someone’s copyright by making an unauthorized copy of software, under federal law you can be ordered to pay damages of up to $150,000 for each piece of software.

Seven regions targeted

Brandishing this legal club, the BSA recently targeted seven regions of the United States for increased anti-piracy publicity, including Richmond and Hampton Roads.

The BSA extensively advertised a “software grace period” for Richmond and Hampton Roads for January 2002.

Under this program, a business could report itself to the BSA and use January to procure sufficient software licenses. In return, the BSA promised not to pursue a piracy claim against that business if it got legal by the end of January.

Now that the grace period is over, we wait to see whether the BSA’s bite will be as fierce as its bark.

The BSA harnesses the power of workplace displeasure. Its ads solicit tips from disgruntled employees, no doubt successfully.

Small staff to process tips

Yet, the BSA does not have a large staff to process these tips. The BSA indicates it has only 12 people “involved in enforcement” in the United States, all located in Washington. The BSA claims to multiply this force by using eight law firms to pursue infringers.

Some media speculation exists as to whether the BSA has the power to take infringers to court. Only the copyright owner of software can sue for illegal copying unless that owner has delegated its authority to someone else.

I found no reported cases of the BSA suing someone for copyright infringement. The BSA responds that it has “power of attorney” to file suit against infringers and, if it does so, it sues in the name of the software company affected.

That explains why the BSA does not appear in case reports. Yet, working this way conceals how often the BSA files suit.

The BSA claims it does not file many lawsuits because the companies it contacts usually cooperate. That makes sense, because a company probably will not have a good defense if it has made too many copies of software.

To raise its intimidation level, the BSA sometimes publicly posts the scalp of a business it has pursued successfully for piracy.

Making an example

Typically, the BSA targets a small or medium-sized business and forces it to pay a couple or several hundred thousand dollars in software license fees and penalties. Unfortunately, these reports do not indicate the extensiveness or willfulness of the piracy.

Regardless, because of the expense of hiring attorneys, no doubt these businesses spent more money to fix the problem than they would have spent to avoid it. The BSA hints that these settlements tend to be two to four times the cost of acting legally.

Overall, some BSA watchers contend that the BSA does not pursue all of the piracy leads it generates and that the BSA’s primary activity is intimidation via advertising rather than enforcement.

The BSA responds that it “pursued” over 1,100 cases last year (what constitutes pursuing a case is fuzzy) and that it pursues every good lead.

Because the BSA does not publish statistics on piracy reports and its enforcement activities, it’s hard to make an assessment. Still, the BSA likely will take some action in the wake of its recent grace period.

Appropriate response

If your company gets a menacing letter from the BSA, so what should it do?

  • Do not bury this letter. Inform your company’s president immediately.
  • Hire a lawyer to handle all communications with the BSA. Anything you say to the BSA might become an admission of liability.
  • Remember that the BSA is not the police. The BSA does not have any power by itself to take against you; only a court or law enforcement officer does.

The BSA touts software called “GASP” that allows you to self-audit your software usage (it’s available at bsagrace.org). Yet, to download this software, you must provide identifying information. The BSA states that it doesn’t get any information back from use of the software, although the download terms do not make this clear. Until the BSA clarifies its terms, I would not use this software.

Don’t get the wrong impression. Copyright infringement is theft. But if your business finds itself in the spotlight, take the time to respond thoughtfully.

By John B. Farmer

© 2002 Leading-Edge Law Group, PLC. All rights reserved.