In past articles, we have discussed what to do if you have been contacted by the Business Software Alliance (“BSA”) regarding potentially unlicensed software. See Driving Your Computer without a License: Beware the Wrath of the BSA and Software Audit Demand from the BSA.

This article, however, will focus on the importance of getting an attorney involved early in the process. Recently, a potential client contacted the firm who was in the middle of negotiations with the BSA over alleged unlicensed software. By the time we were contacted, the company had already conducted an audit, without any limitations, and provided the results to the BSA. The company had subsequently received a settlement offer from the BSA and was looking for legal advice regarding the offer.

While it is smart to seek out legal representation, by this point almost all the leverage the company had to negotiate was gone. The company had given the BSA everything they had asked for and provided the BSA with evidence, evidence the company itself created, of the infringing software.

Had the company sought legal representation as soon as it received the first demand from the BSA, it would have had significantly more leverage to negotiate and would have likely not sent the BSA evidence that incriminated itself.

The BSA conducts fishing expeditions. The BSA takes some evidence of infringing software (e.g., a former employee reports a company to the BSA for having unlicensed copies of Microsoft Office) and attempts to use that information to “fish” for other potentially unlicensed software belonging to any of their member companies, which include Adobe, ANSYS, Apple, Autodesk, Bentley Systems, CA Technologies, CNC/Mastercam, DataStax, Dell, IBM, Intuit, Microsoft, Minitab, Oracle, salesforce.com, SAS, Siemens PLM, Splunk, Symantec, The MathWorks, Trend Micro, Trimble and Workday.

Essentially, the BSA will request that an audit of all software belonging to any of its member companies be conducted and a report furnished to it, despite only having information to support infringement of one product belonging to only one member company. If a company blindly follows this request, it could be turning over evidence to the BSA that the BSA will turn around and use against it for significant monetary damages (up to $150,000 per infringing work).

Involving an attorney early in the process will help ensure that any audit is limited only to the software for which the BSA has credible evidence of infringement and that any incriminating evidence is not disclosed to the BSA.

By doing this, the company can limit its exposure and keep significant leverage in negotiating any settlement. Once the cat is out of the bag, however, it is too late and the BSA will hold all the cards.

If you have received a demand letter from the BSA, you should contact an attorney at Smith & Associates to discuss your rights.