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Licensing: Software by the numbers
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by Alan Joch

Think of a pirate. It’s not an image you might associate with architects, unless perhaps you’re Bob Kruger, vice president for enforcement for the Business Software Alliance (BSA) in Washington, D.C.

The BSA, an industry group composed of software heavyweights such as Microsoft, Adobe, Apple, Autodesk, and Bentley Systems, considers anyone who makes illegal copies of commercial applications a pirate. Kruger says a “fair number” of them are CAD users within the architecture industry. “Most of the companies we investigate are not fly-by-night operations,” he says. “They’re good, well-managed companies that pay taxes and obey Occupational Safety & Health Administration requirements. But when it comes to software management, they have a blind spot.”

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Architects are not alone. Across all industries, about a quarter of the commercial software in the U.S. is being used illegally, representing approximately $2.6 billion in lost revenues for software companies, according to the BSA. In response, the group is becoming more aggressive—some say excessively so—in enforcing licensing agreements. Currently, 500 companies are negotiating with BSA lawyers to resolve compliance issues. Over the past 12 years, the organization has received more than $83 million in penalties.

Claims can include fines of up to $150,000 for each copyright infringement, in addition to charges of two to three times the standard price for any software a violator must purchase so that the number of licenses they own is equal to the number of people using the software. In extreme cases, software vendors may attempt to recover profits attributable to their software in court, a potentially deadly blow to an architectural office that routinely uses CAD applications. License violators may also face prosecution under federal copyright laws, which carry maximum fines of $250,000 and jail time.

Getting religion

Almost all of the BSA’s enforcement cases begin with a lead submitted to its “hotline” by a disgruntled employee who reports an employer that is out of compliance. If BSA investigators find merit in the claim, they usually send the alleged violator a warning letter designed to instill fear. Some letters even advise the software user to close down its business until any licensing discrepancies are resolved, says Robert Zielinski, chair of the intellectual property and information technology practice at Wolf, Block, Schorr and Solis-Cohen, a Philadelphia law firm.

 

Most software makers offer only individually licensed copies of their products (diagram, far left). But Autodesk and Bentley Systems offer network server licenses for their CAD software, in which license information resides in a single place (near left). Users are notified automatically in cases of noncompliance.

Images: Courtesy Bentley Systems

 

Zielinski says these letters are becoming more commonplace, with more of them going to smaller companies that may once have felt they could fly under the radar screens of big software vendors. “Before they receive a letter, these companies don’t understand the importance of software licenses,” Zielinski says. “But once the letter comes, they get religion very quickly.”

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