Group Targets Small Businesses Using Software Illegally

BSA group puts teeth into anti-piracy rules by tracking users


BSA audits zing companies for software that came with used computers they bought to save money. The BSA considers software pirated if a company can't produce a receipt for it, no matter how long ago it was purchased. Software boxes or certificates of authenticity are no help, because the BSA argues the software could have been obtained from an illegitimate source.

No wonder, then, there are companies that exist mainly to help other businesses track and comply with their software licenses.

Robert Holleyman, who has headed the BSA since 1990, countered by saying a lot of companies have figured out how to get their software licenses in order.

"I don't agree with the assumption that license management is necessarily a complex task," he said. "I think that to suggest that it's impossible to do - which is not your word, but is your inference - would belie the heroic efforts of the vast majority of software users."

Yet it's safe to say the software industry has not exactly handed its customers a product that is easy to manage. That's one reason why Britain's Federation Against Software Theft - an industry group that, like the BSA, pursues scofflaw companies - has a sister division that educates companies, for a fee, on how to stay compliant.

John Lovelock, the British group's director, said that if it undertook enforcement without the education program, "it would be half of a virtuous circle. It would give us only half of a solution."

The BSA does have some software-management tools and advice on the Web. And this summer, it partnered with the federal Small Business Administration to develop and publish educational materials about software compliance.

However, software-management gurus say the BSA could be far more active in assisting companies - which are, after all, its members' customers.

"Instead of just being the software police, be the police in the sense of helping old ladies across the street," said Barbara Scott, a software consultant for Redemtech Inc. "The BSA could become more of a partner with organizations that they're hammering as well."

Rather than a helping hand, BSA targets say they feel a stinging slap.

After an audit, the BSA generally demands at least twice the retail price of software deemed out of compliance. It also seeks the "unbundled" price of software that is sold together. So if a company loaded too many copies of a $300 package of Microsoft Office, the BSA might tally the retail value of every element in the package - Word, PowerPoint, Excel, etc. - which totals more than $1,000, and then at least double that.

Rob Scott, an attorney with Scott & Scott LLP who specializes in defending against BSA claims, argues that by charging the unbundled rate, the alliance misrepresents U.S. copyright law, which counts product compilations as single works when it comes to assessing damages. (The BSA says Scott's reading misdefines "compilation.")

The BSA accurately points out that under copyright law, it could collect up to $150,000 per infringed work if it prevailed in a lawsuit, or $30,000 if the incident was unintentional. Neil MacBride, the group's head of legal affairs, calls the law's figures "draconian" and says that by seeking less, the BSA gives violators a break.

Another way the BSA used to rebut accusations that its copyright crackdown was all stick and no carrot was through occasional "grace periods" or "software truces." In those periods, the BSA would air ads in certain cities, reminding companies of software copyright rules and giving them 30 days to buy new licenses without penalty.

But the group no longer offers such amnesties.

"We just moved on to something different," Blank said. "You just don't do the same thing all the time or it gets old."

Lately, there's been another change in BSA tactics.