The Jig Is Up Think no one knows about those bootlegged disks? The BSA has its eye on you.
By Mike Hogan
Opinions expressed by Entrepreneur contributors are their own.
It's just another day at the office. You're busy tryingto squeeze some cash flow out of your entrepreneurial dream whenyour assistant interrupts to announce there's a Federal marshalout front with a search warrant. Mistake? No, and your day just gota whole lot busier.
The marshal is accompanied by some guys in suits who claim torepresent the BSA-which sounds vaguely familiar, but Boy Scoutsthey definitely are not. BSA stands for Business Software Alliance,a trade association for the heaviest of software heavies-Microsoft,Adobe, Symantec, Autodesk.
No doubt, you've installed some of their programs on yourhard drives. In fact, BSA probably sent you a letter a while backasking for an insane amount of money because you made too manycopies. Didn't you read your software licensing agreements?Softletter editor Jeffrey Tarter translates the whereforesand whereases roughly as: "You don't own the programs you'bought'; you only get to use them under the conditions setby their different publishers."
Despite economic conditions in 2001, the globalPDA industry grew 18% over the previous year. SOURCE: Gartner Inc. |
Yeah, it's all a big misunderstanding. But before your lipscan form the words "Gimme a break," the guys in suitshave filed in and sat down at your desktops. In no time,they'll have all the proof they need to label you a softwarepirate.
It's a well-oiled routine that made businesses pay over $13million in penalties last year and about $70 million over the pastdecade. BSA recently collected $275,000 from three small Arizonacompanies, more than $439,000 from four Texas companies, almost$186,000 from three companies in Connecticut and $91,694 from asingle Missouri company. Those dollars will be invested ineducational and enforcement programs.
Think those few extra copies your employees make are not worthenough to get BSA's dander up? They will, says vice presidentof enforcement Bob Kruger. BSA blames casual copying for much ofthe $2.6 billion or so that business software publishers lose inthe United States every year. That costs America about 118,000jobs, $5.7 billion in wages and $1.5 billion in taxes annually, byBSA's reckoning.
Tarter, who has tracked the industry for 20 years, considersthose numbers grossly inflated: "I've gone through theirresearch methodology. It's Rube Goldberg stuff and entirelypolitical."
He may be right. But that won't help.
Amazingly Little Grace
The cold, hard truth is that the BSA can and will prosecute;and, like the IRS, it likes to make examples of small fries soyou'll tell a friend. Even if you choose not to tell anyone,expect to find your name on the next BSA press release branding youa corporate miscreant; and small-business miscreants are remarkablyeasy to flush out.
Usually, an office visit isn't necessary, says Kruger. Mostcompanies start bargaining after getting one of BSA'sheart-stopping letters. Those go out shortly after BSA'speriodic radio and direct-mail blitzes of select American cities.BSA will blanket a town with its 1-888-NO-PIRACY hotline, offering30 days of grace to any company that turns itself in and getsright. If a company is already under investigation, however, it isnot eligible for the grace period.
Maybe you're too busy to get all your drives checked in 30days. Maybe it'll take you that long just to get over the shockand check out the BSA. Or maybe a jilted current or former employeejotted down the toll-free number and is savoring the prospect of alittle payback.
That's what Steve McSwain figures happened to IPI Security.As general manager of the Irving, Texas, security firm, he wasupgrading IPI's 30 desktops when he got a BSA letter demandingmore than $100,000. McSwain is pretty sure he was ratted out by theex-employee who had brought the illegal software into IPI in thefirst place--an irony not uncommon.
Because federal copyright law specifies up to $150,000 indamages for each infringed work, BSA initially billed IPI for theretail price of every Microsoft Office component installed. In theend, they finally settled for about $69,000.
"Overall, they were very fair," says McSwain, who hadto delete the offending programs and buy new copies. Now, he spends30 hours quarterly ensuring all his software is legal.
The fines wiped out IPI's profits for the year. Butthat's the point BSA wants to make. "An importantprincipal [of enforcement] is to make it more expensive to copysoftware illegally than to buy it in the first place," saysKruger.
What to do? Spend a lot of time making sure every program inyour company is legal. Yes, it's expensive and hard to keepemployees in line during the everyday shot and shell of business.But don't rely on excuses or begging if you come into BSA'scrosshairs.
The only defense is not having more software than you can proveyou own. Oh, and it wouldn't hurt to stay close, close friendswith all your employees-current and former.
Want to keep the software police away?
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Contact Sources
- Business Software Alliance
888-NO-PIRACY, www.bsa.org
- IPI Security
(800) 367-9631, http://www.ipisecurity.com
- Softletter
(617) 924-3944, www.softletter.com
