Software Licensing and Copyright Infringement

A private member bill entitled the Copyright, etc and Trade Marks (Offenses and Enforcement) Act 2002, an amendment to the Copyright, Designs and Patents Act 1998, received Royal assent on 24th July 2002. The bill, sponsored by Dr Vincent Cable and Lord Razall, gives the police rights to search premises and seize equipment as evidence of an infringement of copyright. Essentially under the provisions of this Act the police can search a business and seize any computer running unlicensed software or any item as evidence of an infringement of copyright. The new Act makes it an offense punishable by a fine of up to 1000 per item of unlicensed software.

FAST (Federation Against Software Theft), representing both software publishers and end users, has been a long time campaigner, raising awareness of software piracy. One of the ways it has done this is to initiate legal action against companies suspected of breaking copyright laws. Until now, taking legal action could be an expensive and time consuming process. The new Act provides an inexpensive and expedient way for software publishers and suppliers to initiate legal action against companies suspected of infringing copyright. Such actions are likely to be initiated more for their deterrent effect than anything else and while a fine of 1000 per item should prove deterrent enough for most, the disruption to a business caused by the seizure of computer systems and backups should convince all but the most ill-advised.

The solution is simple: ensure that software is only installed in agreement with the terms of the licenses you hold. In practice achieving this isn't so simple. The software audit procedure has three distinct phases; data gathering, license reconciliation and a final remedial phase. Even in its simplest form, which entails going to each machine and recording the details of the software installed, the data gathering phase can be laborious and time consuming and may not be as straightforward as counting the desktop icons. Server licenses can be on a per seat basis or on a concurrent connection basis so determining how many licenses are in use at one time and therefore how how many licenses you need is far from straightforward. Reconciling the list of licenses in use with the list of licenses you hold should be simple but how many of us keep or even read the terms of the license agreement we effectively signed when we broke the seal or installed the software on the hard disk. The current Office XP license agreement in its first section "Grant of License" describes three alternative methods of licensing. While the first entitles you to install one copy of the software on an individual's machine and a second copy on a portable device for the exclusive use of the same user, the second requires that when you install the same software on a networked device such as a file server you should have a license for the software installed on the server and additional licenses for each device used to access the software on the the server. The two options are mutually exclusive so the number of licenses you require may not only depend on how many users you have but also on how you installed the software. The process of finding what you need and determining what you have are complex enough and the final phase of the software audit which is to remedy any shortfalls isn't made any easier by the choice and variety of software licensing deals currently available. Which altogether may make a software audit seem like a great deal of effort for little reward.

The obvious benefit of conducting an audit is peace of mind however regular software audits can produce other benefits. The audit can provide the vehicle to conduct a regular, review of software in use in the organization. If in addition to recording what software is installed on a machine, users are asked to evaluate their need for that software. Software that isn't being used or is not required can be identified and moved to where it is, resulting in savings in disk space while obviating the need to buy additional licenses to meet new demand. So not only does an audit ensure that the software in an organization is legal it also generates a list of software assets and, by highlighting where software is unused, it can also lead to efficiencies and savings.

Information on Software copyright laws, auditing procedures and audit software is available from FAST and

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