The Business Software Alliance, the main software trade group enforcing license and copyright restrictions, is offering a limited amnesty program this month to businesses using illegally copied software.
Under the program, businesses can conduct a software audit and begin paying proper license fees for all applications in use without the threat of penalties for past use, which can run as high as $150,000 for each incident of copyright infringement.
According to a recent BSA study, one out of every four copies of software used in the United States is illegal, which translates to an annual loss to software makers of $2.6 billion.
Violations most typically consist of copying software from one business PC to another without payment of extra license fees to the software publisher.
"For the most part, the problem exists because people just aren't paying attention to whether their software is properly licensed or not," said Bob Kruger, the BSA's vice president of enforcement.
"A lot of these businesses are good, well-managed companies. They pay their taxes; they obey OSHA (Occupational Safety and Health Administration) rules. When they need a new PC, they wouldn't steal one off a truck. Yet when they need software, they see nothing wrong with making illegal copies."
Laura DiDio, a software analyst for Giga Information Group, agreed that improperly copied software is a widespread problem in American business.
"At least 90 percent of the companies I speak with have some exposure (to liability) due to noncompliant software," she said, blaming increasingly complex licensing rules that have to be enforced by overworked corporate information-technology staffs.
Most companies, she said, don't go far enough in their management of IT assets and are careless in their procurement practices--forgetting, for example, to buy access licenses.
"It's a lot of sloppiness," DiDio said. "I don't see in the corporate world a deliberate trend to avoid software licensing."
Under the BSA amnesty program, businesses using the organization's Web site or calling the group, at 877-536-4272, are provided with tools to inventory all software in use. The business can then pay appropriate license fees without penalties for previous copyright infractions.
The program is valid through Jan. 31 in the following regions, where the BSA has sent promotional materials to more than 800,000 businesses: Billings, Bozeman and Missoula, Mont.; Houston; Indianapolis; Nashville, Tenn.; Norfolk and Richmond, Va.; Orlando, Fla.; and the San Francisco Bay Area.
Amnesty programs have been offered in 28 other cities since the BSA began such programs in August 2000. "Over time we expect we will have these in just about every major market," Kruger said.
Walking softly and carrying a big carrot
Kruger characterized the amnesty program as a more friendly "carrot" approach, compared with the more typical "stick" of the BSA's widely publicized software raids, which have resulted in $68 million in penalties against businesses ranging from Fortune 500 companies to local mom-and-pop stores.
"We tend to get more coverage and press for our enforcement actions," Kruger said. "In a way, this (program) is really the other side of the coin. We're saying, 'Take advantage of this opportunity so you can avoid starring in a BSA press release about an enforcement action against your company.'"
Kruger said software audits are more common than most business executives believe, thanks in no small part to a growing trend of disgruntled ex-workers calling in tips to copyright enforcers.
"Unless you have no current or former unhappy employees and don't expect to have any in the future, you're one phone call away from a BSA investigation," Kruger said.
DiDio agreed that the amnesty program could convince more businesses to update their software licensees.
"I like the idea of amnesty," she said. "If for no other reason, it provides a good opportunity for people to do some self-examination and self-policing."
But she doubted the program would lead to any widespread trend of businesses opening their records for software audits.
"There is a natural level of suspicion between the corporate community and the BSA and the (software) vendor community," DiDio said. "What everybody is afraid of, rightly or wrongly, is that if they have an audit, somehow Big Brother is going to get in and people outside their business are going to see more than they should."