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How the BSA Nets Piracy Suspects

The Business Software Alliance collects tens of millions of dollars in settlements from companies it accuses of software piracy, but it doesn't have to file lawsuits to do it. Instead the BSA usually gets companies to convict themselves through a "self audit."

The BSA generally begins investigating businesses after a tip from an employee. Software vendors can also initiate or lend credence to a complaint if they tell the BSA that an organization has, for example, bought suspiciously fewer software licenses than it has employees.

Next, a law firm representing the alliance will send a company a letter informing its management that it is suspected of violating software copyrights, a crime that carries penalties of up to $150,000 per infringed work.

The letters will then state that the BSA is willing to avoid court and settle amicably -- if the company audits its computers to see whether they contain unlicensed copies of software made by the group's members.

That turns out to be the key step. Usually, companies go along, and report to the BSA's attorneys what they've found. With that information, the BSA will demand payments, plus penalties and attorneys' fees, for the unlicensed software.

At that point, it's mainly a matter of settling on the amount and negotiating whether BSA can publicize the crackdown in a news release.

Attorneys who represent companies in BSA claims say the self-audit request is misleading.

"No target of the BSA is legally obligated to cooperate," said Rob Scott of Scott & Scott LLP.

Tom Adolph of Jackson Walker LLP, who has defended against BSA claims, objects to the fact that BSA letters instruct companies not to try to rectify their situations by catching up and buying licenses for the software in question. Indeed, the letters tell businesses to hold off on buying any software at all from the vendors whose works were involved in the case.

Adolph said that demand hamstrings companies, especially because cases sometimes drag on for a year or two. "I personally think that's an improper instruction," he said.

Adolph and Scott advise companies to have their lawyers conduct software audits and issue directions on which software licenses they need. Depending on the situation, findings from this kind of audit can be shielded by attorney-client privilege. BSA could still try to file a lawsuit in hopes of proving past infringement, but it is unlikely to go that expensive route, Adolph said.

It's not necessarily simple: The BSA in some cases will file complaints under court seal and win a judge's approval to raid companies so it can gather evidence on its own.

The group's enforcement director, Jenny Blank, said her group resorts to raids only when it suspects that a company might try to destroy evidence of its copyright infringement.

Even then, however, the case doesn't end in a courtroom.

"The parties don't litigate," Blank said. "They settle on dollar amounts."

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