Gotcha! Pursuing software pirates

The inside story of how corporate software piracy cases are investigated and prosecuted. Hint: They often start with an IT informant.

In more than seven years as an investigator, the one thing that Konczakowski says consistently amazes him is "how blatant the pirates are." He has seen plenty of cases where a single legal copy of a PC software program has been installed on hundreds of machines. Even more troubling is that most informants who report corporate software piracy to the BSA say that the company knows about the piracy.

Purposeful piracy

"Usually, our informant will say their company is aware of the problem and has made a deliberate decision not to buy the software but to pirate the software," says Blank. "Of course, when we investigate, we hear a different story from the company itself."

But the BSA doesn't put a legal press on all of the reports of piracy it receives. Rather, for a case to go forward, all BSA members must unanimously agree to move ahead with legal action. All leads and follow-up information are stored in a central database that licensing staffers and attorneys from the BSA's member companies access via an online portal. They then review the information and decide whether to take further action.

The cases that get escalated are those that involve "a reasonable number of computers and software" and have a "good lead," Blank says, although she declines to specify what the BSA considers a "reasonable number."

"It's not a set number of computers, but we're looking ultimately to reach a settlement with the company, so we have to look at whether it's worthwhile investing in legal fees," she explains. "If it's 20 copies of a $20 software program, that's not a great lead for me. But 10,000 computers and only three [legal] copies is a lot better lead. It's going to involve a larger case. So we're looking for a reasonable number of computers and a variety of software."

One other important note is that the BSA pursues only those cases involving software of its member companies. The group doesn't have the power of attorney to pursue cases on behalf of nonmembers.

If the case gets a green light, an attorney representing the BSA first sends the CEO of the target company written notice of the allegations and all of the details. The informant's identity remains confidential throughout the process. The organization also asks the company to perform its own investigation and an audit of all software published by BSA member companies.

Ultimately, the goal is to get the company to own up to the possession of whatever software it may be using illegally, agree to a financial settlement based on the retail price of the unlicensed software, and promise to comply with all licensing and copyright laws going forward -- all without litigation.

"Our goal is to work with companies collaboratively, not go to court," Blank explains. "There's a good reason. From a bang-for-the-buck perspective, I can sue two companies for the same amount of money I can do 20 audits. [Through audits] I can reach more companies and achieve more compliance. It's also cheaper for BSA and for the company defending itself."

Last year, the BSA received more than 2,500 informant leads, requested 920 audits, pursued one case in court and collected $9.5 million from settlements.

But the organization can and will take noncompliant companies to court. In June 2008, the BSA filed a copyright infringement lawsuit against Taney Engineering Inc. and Taney Cunningham Equipment LLC of Henderson, Nev., after the civil engineering company presented the BSA with an audit report whose findings varied significantly from the information provided by a confidential informant.

Unable to resolve the dispute during the audit process, the BSA filed a lawsuit and court proceedings began. Ultimately, however, Taney did reach a settlement with the group, which collected $205,000 in damages from the company.

"It probably would have been cheaper if they had just settled with us in the first place," says Blank.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags software piracyanti-piracypiracymovie piracy

More about Adobe SystemsAdobe SystemsAutodesk AustraliaBSABusiness Software AllianceIDC AustraliaMicrosoftNortonSolidWorksSymantec

Show Comments