BSA Getting Tough On Software Pirates

May 6, 2002
| By Katy Rent |
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GRAND RAPIDS — Grand Rapids is one of only four cities nationwide that is in the first wave of a software piracy crackdown.

The Business Software Alliance (BSA) and Microsoft are offering a one-month grace period to allow businesses to become software compliant and “get legal.”

Business owners must make sure their software is licensed by May 31, and the ramifications of avoiding the law could be serious.

“They’re not playing games,” said Michael Noordyke, president of Remex Corp. “They’ve got radio ads for Grand Rapids that reference $150,000 fines and subtly encourage disgruntled current or former employees to turn companies in.”

The problem, according to the BSA, is that almost one in every four software programs in use in the United States is illegally copied. Michigan’s piracy rate is 14.7 percent. That translates into a retail loss in Michigan of $64.7 million — and $34.9 million lost in federal and state taxes.

“The problem is that people are not paying for these copies of software. They are not paying sales tax, and that causes production and sales figures to slump, in turn resulting in job loss and layoffs,” said Jennifer Bogdalek, anti-piracy manager for Microsoft’s Central Region, which includes Grand Rapids. “This really has a much greater and far more detrimental reach than people think. The numbers we have now report $184 million in lost wages and a total of 3,379 lost jobs. Michigan is looked at as a high-tech state, and I would rather see those dollars that are not being paid for software tax go toward something useful like funding our youth. But we won’t get the chance if this continues.”

The month-long grace period will allow businesses to review software inventory and acquire necessary licenses to get legal without facing penalties for software violations.

Many companies are simply unaware that software has been illegally copied within the organization, Bogdalek said, while others may not have managed the software assets properly. Ignoring the problem can lead to substantial financial exposure for every copyright infringed.

On May 14,Microsoft is conducting a seminar on software licensing from 9 a.m.-noon, May 14, in the MPR Room of the Crowne Plaza Hotel, 5700 28th St. SE. The seminar will give businesses information on piracy laws, how to detect imitation software, implementing a software management system and purchasing additional licenses for unlicensed software.

The briefing will present compliancy rules and ways to help manage the software programs already in place and still to come.

“The seminar will be in a very open forum where people can feel free to talk about what is going on in their business and what they are facing. We are also going to be able to figure out what is best for some companies,” said Bogdalek. “In some cases it might be necessary to move into a different piece of software, with a license, instead of purchasing a license for the old software and then have it become obsolete in that business.”

“It is important that businesses have the opportunity to inventory their software licenses and put a system in place so that from now on, any new software or upgrades are licensed and tracked,” said Janice Block, central region corporate attorney for Microsoft.

Block said knowing the importance and necessity of software licensing, the BSA is encouraging people to call in and report suspicious or unlicensed software in companies. “They do, in a way, encourage disgruntled employees or even employees who just know how important it is, to call the hotline and let them know about unlicensed software,” she said.

“A business may not know it is being targeted, and if the BSA shows up to do an inventory on every machine in your business and you have unlicensed software or maybe an employee brought something in and put it on their computer, you are going to be cited and fined for every piece of software you can’t produce a license for.”

A business can call the hotline at 1-888-NOPIRACY to see if it has been reported or is being targeted by the BSA.

“Now is the time to take advantage of the grace period if you have any doubt about your software licenses, because you won’t pay those fines. And the money that you will put out to maintain a good software and asset management program is going to be far less than what you would pay if the BSA came knocking at your door,” said Bogdalek.

Another problem is counterfeit software. Often companies will purchase software off the Internet. In this case, Bogdalek said, she has seen people receive software that is a CD-ROM with handwritten installation notes. “When something like that comes in the mail — no matter what kind of deal you got on it — it is not going to be worth it, and you know there is something shady,” she said.

She added that a piece of software like that could damage the user’s network, machines and other software programs.

“We want to educate the public on this issue, and this month is the perfect opportunity,” said Block. “This is really not different than other areas of compliance. Businesses keep up to date on security and environmental requirements, why not on software licensing? The truth is, you wouldn’t fly an airplane or drive a car that wasn’t licensed or that may be counterfeit. Why operate software that way?”

To participate in the grace period, visit the BSA’s Web site, www.bsa.org/usa and register your company.            

Grace Period Facts

Here are the criteria a business must meet to qualify for the software grace period:

  • Business must obtain a software grace period participation number either through receipt of a BSA letter or through registration on the BSA’s Web site. Business headquarters must be located within the following ZIP codes: Grand Rapids: 49301-49599; Milwaukee: 53001-53299 and 53401-53499; Salt Lake City: 84001-84199; and Tulsa: 74001-74199.

  • Business must not have previously received notice that the BSA or its members (listed below) have received a report of software infringement and are investigating it.

  • Prior to or during the software grace period (May 1-May 31), the business must have acquired sufficient software licenses to ensure that all software published by BSA members and installed on its computers is properly licensed.

  • If, after having participated in the grace period, a business becomes the focus of a BSA investigation, BSA will not seek to impose penalties for any unauthorized copying that occurred prior to May 31, 2002 (unless the organization has already been informed that it is under investigation). A software grace period number and software receipts will satisfy those inquiries.

For the purpose of the software grace period, BSA members are: Adobe, Apple, Autodesk, Bentley, Borland, CNC/Mastercam, FileMaker, Macromedia, Microsoft, Symantec and Unigraphics Solutions, an EDS company.

Businesses that are unsure about valid licensing can check the BSA’s Web site and click on “Audit Tools” to make use of the free GASP software audit tool to determine whether there is any unlicensed software. If a business isn’t fully licensed, contact software vendors immediately to purchase the software licenses before May 31.           

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