Inadvertent Software Piracy

Introduction: How Licensing Restricts Use

You get business productivity software from many sources:

• Included with a new computer or tablet,
• At the office supply store,
• Downloaded from the publisher, or
• Provided as part of a managed IT solution

What some business managers and users don't realize, though, is that all commercial software you buy is licensed, not sold. Sure, you paid for the download and have your own license key. Or, for older software, you own a hologram-stamped CD or DVD, and all the nice colorful manuals and the glossy cardboard box or plastic case it came in. But, the contents of the file you downloaded or the DVD you bought are intellectual property, protected by copyright. And the act of installing software on a computer or tablet constitutes copying, giving the publisher the right to control it.

This is why every software product comes with some kind of license agreement, telling you how many computers you can install it on, or how many users can use it at once. For retail software, it is called an End User License Agreement or EULA. In the old days this appeared on a printed card in the retail box, but now it will usually pop up on your screen when you download or install the software, requiring you to indicate that you accept the terms to continue using or installing it. You can also usually find the EULA for any software product on the software publisher's website. To purchase volume licensed software, you may have to actually sign a more comprehensive contract, called a Volume License Agreement or Enterprise Agreement, which applies to your entire business, not just the user installing the software.

The terms of these license agreements vary depending on the software product. For example, when you buy a desktop software application such as Adobe Acrobat or Intuit QuickBooks, each copy is typically licensed for a single user, which means you can install it on your desktop computer and your laptop, and use it on either computer (but not at the same time). Or, it may be licensed per device, meaning you have to buy two copies if you want to put it on both your computers.

If your company subscribes to a service that requires specialized software, such as a legal research system or a jury instructions compiler from Westlaw, or you use a standard user-based hosted application suite like Google G Suite or Microsoft Office 365, you can expect to pay for a certain number of users to access the software from anywhere.

Finally, for in-house server applications, you may need a license for each server it's installed on, plus licenses for each user that access the software on the server(s).

So, you can't borrow someone else's software and install it on your company computers without paying for the license. And you can't install more copies of retail software, or an application from your volume license account, than you paid for. These acts violate the publisher's copyright. And you can't sign up for a single user account to access a subscription service, and have multiple users log in with the same account; this may violate terms of service you agreed to on signing up. Frankly, many people do this knowingly, because the price difference between purchasing all the licenses you need, versus sharing the licenses improperly, can amount to a significant sum of money. But, many people do it because they honestly never thought about whether it was proper.

Potential Consequences of Piracy

If you violate a license agreement as described above, the software publisher could sue you for damages for violating their copyright.

Then again, so what? How would anyone get caught, and what are the penalties? Well, there are agencies that actively solicit employees of companies to report suspected software piracy, offering confidentiality and cash rewards! An example is the Business Software Alliance, whose website you can visit via this link. Years ago when we first posted this article, their site focused mostly on reporting, and offered a reward up to a million dollars. Now, they promote many initiatives to enhance the value of business software more broadly, but their enforcement and reporting operations are still active.

Click here to read a revealing article on how BSA works on the ITPro Today information web site (formerly Windows IT Pro). While it's from 2005, it's still quite relevant.

Here is an example of how BSA is viewed from the perspective of businesses targeted with accusations of piracy, on the website of Scott & Scott, LLP, a legal services firm that defends companies that are targeted by the BSA.

Clearly, just being unaware of how to properly deploy your software can expose your organization to significant risk. Sure, people have challenged some of the thorny aspects of these license agreements while defending themselves in court, and even won against giant software companies. But, these were unusual situations, and the risks and costs of the battles were enormous. And, overall, copyright law tends to fall on the side of the software companies.

About Cheap Software

Retail markup on software is relatively low. If you find software available for a fraction of the standard retail price you find in conventional outlets, it is almost certainly not the version you are expecting. For example, it might be a special edition for educational or government institutions, which is not licensed for a business to use. Or, it might simply be a stolen or counterfeit DVD, subject to confiscation if it's traced to you. J.D. Fox Micro has investigated some of the more common outlets for deeply discounted software who proclaim that their software is genuine and legal, and has found that the software you receive from such outlets will not be what they say it is. Not only that, we have found cases where seemingly geniune software from a well-known publisher, purchased on a well-known online retailer's website at near full price, turned out to be counterfeit, and did not activate or function properly.

Your best best is to always purchase from the most legitimate channels, either directly from the software publisher, or through a trustworthy value-added reseller, such as J.D. Fox Micro, who acquires software directly from the publisher or from its authorized distributors.

Help from J.D. Fox Micro

As part of your service agreement with J.D. Fox Micro, you may optionally request a software licensing audit. We will then help you fix any problems internally and confidentially.