Storage of Copyright

Does it matter what Employees Store on your Computers?
You bet. Just ask the CEO of Budget Rent-A-Car or the President of Marketing Management, Inc., a Texas food label brokerage company. Each company paid $400,000 to settle claims that they had unlicensed software installed on their computer systems.

More recently in America, Gemini Industries, Inc., a custom electronics packaging wholesaler, headquartered in New Jersey, paid $275,000 for similar software copyright violations. Even higher education institutes are not fully aware of their responsibilities.

In 1998, the Berks Technical Institute paid over $100,000 to resolve copyright software infringement allegations.

Two of the largest software trade associations in the USA, the Business Software Alliance ("BSA") and the Software Publishers Association ("SPA") have estimated that approximately 228 million software applications installed around the world during 1997 were pirated. This was approximately 40% of all installations. Pirated software does not just include the illegal duplicating of computer discs.

Copyright Violation
When an employee brings a copy of a word processing programme, a drawing programme or game from home and installs it on a company workstation - this is a copyright violation. Soon others in your office want to use the programme or game and it can be easily downloaded to a disk and copied. Before you know it, your company has an illegal software problem and management may not even know about it.

Even worse, your MIS Manager tries to save money by only buying 50 licenses of Microsoft Office when you have 100 computers. Should this matter, since he only needs to install one copy of the program on the server? Well, when you fork over a 6-figure settlement, ask the former MIS Manager if it matters.

Copyright Law is not something to Fool with
One reason Bill Gates is so wealthy is because copyright law prohibits others from copying Microsoft programmes. Once the copyright owner discovers that you maintain unlicensed copies of software on your computers, there is almost no defence. Either you have licensed software on your system or you do not. Your company may still be liable even if management did not know that illegal/unauthorised software was installed on the company's computers.

Once you have been found liable for copyright infringement, then the copyright owner, at their choice, can request from the court statutory damages. These damages provide for penalties of $500 up to $20,000 per violation for non-wilful offences.

Even in instances where management is unaware of the problem, the company could still suffer up to $20,000 for each copyright violation. This adds up very quickly. If the copyright holder can show that the violations were wilful, then the damages can be increased up to $100,000 per violation. Explaining that to your Board of Directors could be a little embarrassing.

Well, you might be thinking how does the BSA or SPA find out what is on my computer systems.

Unless you are a "mom and pop" operation, you have probably terminated an employee at some point. It's possible that the employee, disgruntled over termination may have knowledge of the unlicensed software and use it to cause trouble for the company. Once the BSA or SPA or any copyright holder believes that your company is infringing their copyrights, do not expect a polite note asking you to stop.

Because the software and all evidence of your use of such software can be easily deleted, the copyright holder may secure a seizure orders from a Federal Court on an ex parte basis. This means that you will not know about it, until a lawyer and the authorities walk into your office demanding to conduct an audit of your entire computer system. Difficulties arise if your biggest client is sitting in your office at that time. While you are frantically calling your lawyer, the copyright holder is obtaining a printout of all computer programs in your system.

Is it worth it? Don't think so.