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Surviving a Software Audit Or How to Avoid One. Athelene Gieseman

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Presentation on theme: "Surviving a Software Audit Or How to Avoid One. Athelene Gieseman"— Presentation transcript:

1 Surviving a Software Audit Or How to Avoid One

2 Athelene Gieseman

3 Experience Years ago started at a firm just after an audit Attended the Software Publishers Association Software Management Course Implemented several software licensing management programs

4 Agenda Understanding the audit process Understanding the rules Avoiding the audit or minimizing its impact

5 Who Will Audit? Software and Information Industry Association (SIIA) –SPA is a Division of this organization Business Software Alliance (BSA)

6 How Does this Happen? 1-800 number Disgruntled employee Not so disgruntled employee Vendor Anyone can call

7 Anti-Piracy Actions Cease and desist letter –Minor infringements –Further action based on response

8 Scare Letters How is your firm doing? Do I respond?

9 Anti-Piracy Actions Self audit –Voluntary –Confidential –Proof of ownership

10 Proof of Ownership Dated invoices, purchase orders and/or receipts showing the product and quantity Dated software or hardware reseller reports itemizing the products and quantity purchased

11 Proof of Ownership Does NOT include original software Does NOT include original manuals or license certificates No mixing and matching

12 Anti-Piracy Actions Litigation –Summons and Complaint Self Audit Penalties based on the US or Canadian Copyright Act plus court costs and attorneys fees Destroy illegal copies Purchase all necessary software –A matter of public record

13 Anti-Piracy Actions Ex-Parte Search and Seizure Order –Surprise Audit –Pay penalties based on US or Canadian Copyright Act, court costs and attorneys fees –Destroy illegal copies –Purchase all necessary software A matter of public record

14 What are the Penalties? Cooperative Audit –Penalty of 3 times the manufacturers suggested retail price of the software to SPA –Purchase all necessary licenses –Total = MSRP X 4

15 What are the Penalties? United States –Civil Penalties up to US$150,000 for each infringed title –Criminal Penalties up to US$250,000 for each infringed title and jail time of up to 5 years

16 What are the Penalties? Canada –Civil Penalties up to CDN$20,000 for each infringed title –Criminal Penalties up to CDN$1,000,000 for infringed title and jail time of up to 5 years

17 Understanding Licensing Its not the intent that counts Read the agreement carefully Get vendors to answer licensing questions in writing

18 Understanding Licensing Its not as easy as it looks –Concurrent –Home/remote/laptop use –Network licensing –Traditional or competitive upgrades –Client/Server licenses –ASP licenses

19 Understanding Licensing Individual and machine licenses –Individual licenses (one person, one workstation – never on a server) –Machine licenses (one machine) –Suites (applications cannot be split) –Competitive upgrades

20 Understanding Licensing Font licenses –CPU based –Printer based

21 Understanding Licensing Network licensing –Concurrent user licensing - metering –Network license The publisher defines network

22 Understanding Licensing Site licenses Enterprise licenses Volume license agreements Client/Server licenses

23 Understanding Licensing Groupware –Concurrent usage –Number of users –Number of installations

24 Understanding Licensing Shareware Freeware Public domain software

25 Understanding Licensing The legal industry types –By timekeeper (Elite) –By DMS user (Workshare, changed)

26 Understanding Licensing OEM copies Transfer and resale

27 Were being Audited! Negotiate the process Self-audit Gather the documentation Assess the damages Negotiate any penalties Cooperate!

28 Avoiding the Audit Documentation –Start with your accounting department Paid Invoices Purchase Orders Fixed Asset Systems Organizing the records

29 Avoiding the Audit Software manager –Trained on software management and licensing –Keeper of documentation –Watch dog over IT staff –Keeper of the media –Educator

30 Avoiding the Audit Purchasing process –Use purchase orders –Disallow purchases via credit card where possible –Have a small number of people who can purchase

31 Avoiding the Audit Self audit –SMS –Track-it

32 Avoiding the Audit Establish a policy –Make sure all employees are aware –Sign off on the policy –Visit for sample policies

33 Avoiding the Audit Education –Start with your IT Staff! –Next tackle management Demonstrate the costs in penalties Educate them on how easy it is to be a target –New hire training –Ongoing reminders –Announced and surprise audits

34 More Information Title 17of the U.S. Code, Sections 101, 106, 117, 501, 504 and 506 and Title 18 of the U.S. Code, Section 2319 The Software and Information Industry Association (SIIA) Business Software Alliance (BSA) The European Leisure Software Publishers Association (ELSPA)

35 Final Words Law firms can be special targets Start with your own attitude Go to a software management class

36 Thank You! Athelene Gieseman

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