Monday, February 24, 2003

Software

BSA urges companies to come clean with licenses

By Elizabeth Dinan

A phone call from the Business Software Alliance can be about as welcome as an IRS audit.

But with a BSA grace period in effect through Feb. 28, allowing Boston-based companies with unlicensed software to come into compliance without penalty, now's the time to come clean. Still, call a lawyer first, advises law firm Hale and Dorr, which has given a slew of clients the heads-up about BSA's free pass.

"Many of our clients have been approached by the BSA," said Jorge Contreras, vice chair of Internet and e-commerce for Hale and Dorr, adding, "We're simply reporting an item of news interest."

But why call an attorney before taking advantage of the grace period, reportedly without penalty?

Because compliance particulars can be as simple as a company's expanding the small number of programs it purchased to grow with a budding staff or as complex as secondhand hardware loaded with software licensed to an original owner. That's something Gov. Mitt Romney knows about.

Earlier this month, the governor's campaign committee was outed for a reported $30,000 worth of soft- ware on 60 computers it purchased secondhand. Romney spokesman Eric Fehrnstrom says the computers were purchased in April with operating systems already installed. The governor is working with Microsoft to comply, Fehrnstrom said.

If Romney were his client, Contreras said., he would tell him that the extent of his legal trouble depends on a number of factors, including whom the computers were purchased from and whether the software is basic or enterprise.

"If you buy a server for 100 users and the person who (originally purchased it), bought it for 20 users, it could be a problem," he said. "An innocent company can fall into this trap. But this is not high on (BSA's) list of priorities."

What is high on the list is unlicensed software from Adobe, Apple, Autodesk, Avid, Bentley, Borland, CNC/Mastercam, FileMaker, Internet Security Systems, Macromedia, Microsoft, Network Associates and Symantec. Companies that haven't renewed their software licenses with these companies or that have exceeded the number of licensed users have until the end of the month to get into compliance without BSA audit or penalty.

Carol Kazmer, general counsel for Tewksbury's Avid Technology (a new BSA member), said there's no way to qualify how much of her company's valuable software is pirated and hopes the amnesty campaign will result in a bottom-line bubble.

"I think it's about awareness and compliance," she said. "And I think it's becoming a bigger, hotter issue."

David Krall, Avid president and chief executive officer, said his company places "an extremely high value on protecting the intellectual property the company has been bringing to the market over the past 14 years."

He places similarly high value on Avid's relationship with BSA, which he said "has an impressive track record for educating computer users on software copyrights, advocating public policy as it relates to software piracy and implementing programs to combat illegal software use."

Debbie Bauman of BSA, a group that has power of attorney on behalf of member companies, says noncompliance penalties include fines of up to $150,000 for each infringement. BSA has collected more than $83 million in fines over the past dozen years and cites a recent survey indicating Massachusetts companies lost more than $246 million in wages due to software piracy, resulting in a $62 million loss of state taxes.

Bauman adds that the amnesty doesn't require companies to actually come forward, just to contact the software provider and purchase aboveboard. The objective, she says, is "to give companies a break."

But don't say Contreras didn't warn you.

"It puts you on their (BSA) radar screen. They'll probably be looking at you a little more closely," he said. "But maybe (the amnesty) will be a wake-up call to get into compliance."