The software protection racket, Part 1

* Business Software Alliance uses hardnosed tactics against small businesses

Old Mafia movies portrayed the protection racket as almost honorable, and certainly not complicated. If you pay the crime boss some money each week, he made sure other criminals didn't bother you. The new Software Mafia, represented by the Business Software Alliance, isn't honorable or simple. Worse, they don't send goons with bats to break up your saloon like in the movies, they send lawyers (and lawyers backing up those lawyers) with inflated software fines piled so high no small business can fight back.

No problem, you're saying to yourself, I'm legal. I never bought pirated software. I have the original disks for the software I bought. I register the software, so the publisher knows I'm legal. The BSA can't bother me, and they don't want to anyway, because I'm a small business.

Let me scare you with the truth. The BSA goes after medium, small and tiny businesses. They pay thousands and thousands of dollars in reward money to "informants" to give them leads, but they'll never tell you who turned you in or what evidence they provided to the BSA that persuaded them to begin an investigation. What you consider one piece of software (Microsoft Office) they consider four pieces, and stack up separate fines, with penalties, for each of those four pieces. Worst of all, almost everything you believe proves you have legally purchased your software will not be accepted by the BSA as legal proof.

Here's the disclaimer section. Stealing software is stealing, period. Copying one purchased piece of commercial software onto 20 computers is stealing. Those spam messages offering Microsoft Office for $25 are not trying to resell legal software. If you download commercial software from a Web site that includes "warez" in the name or description, you're stealing.

Unfortunately, the nature of software strains common sense when dealing with user rights and publisher rights. For instance, you own the physical media the software comes on, the CD, but you don't generally own the software itself. Generally you only license the software, which you'll discover if you read the fine print.

Unlike a book, the intellectual property (the software programs) exist separately from the physical media, creating more work for lawyers. If you thought the music business, with all the arguments about intellectual property vs. physical CDs vs. fair use for customers, was the biggest legal screwup possible, you haven't seen software or intellectual property lawyers.

Speaking of lawyers, let's talk to one. Robert Scott, of Scott & Scott LLP (the other Scott is Robert's brother Jonathon), got into the BSA battling business by accident: one of his intellectual property clients was investigated by the BSA and he defended them. Since then, he has organized his practice around helping companies accused by the BSA and the smaller Software and Information Industry Association and provides two Web sites, BSA Defense and SIIA Defense, full of information about how to protect your company.

Here's a good scary quote from Scott to start with: "The biggest myth is that small and medium businesses don't need to worry. But actually they're at greatest risk." How small a company is at risk? BSA Director of Enforcement Jenny Blank says they've gone after companies with "a handful" of computers.

Scott provides exact numbers, saying that "two current clients under investigation fit the handful designation exactly. One client has four computers, and the other client has seven computers." Those are small, nay tiny, companies. I have six computers in my office just for my use, so that means sole proprietors like myself are at risk.

The BSA is a not for profit (so said Ms. Blank, but I can't find those details on their Web site) organization funded by software publisher members. Quoting their Web page: "BSA members include Adobe, Apple, Autodesk, Avid, Bentley Systems, Borland, Cadence Design Systems, Cisco, CNC Software/Mastercam, Dell, Entrust, HP, IBM, Intel, Internet Security Systems, McAfee, Microsoft, PTC, RSA Security, SAP, SolidWorks, Sybase, Symantec, Synopsys, The MathWorks, and UGS."

Look at each side of the negotiating table during a dispute. You on one side, and Microsoft, Cisco, Apple, McAfee, and Symantec et al on the other. They grant the BSA legal authority to represent them for software piracy cases, but the BSA is not a law enforcement agency. That distinction becomes important next week, in several ways that put you at even more disadvantage. Stay tuned for Part 2.


Copyright © 2006 IDG Communications, Inc.

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