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Posted By Ted Miracco on March 10, 2022

Why Litigation is not the Only Route in Software Piracy

Amicable resolution for software vendors

Software vendors have long endured outright theft and inadvertent unlicensed use of their products, through pirated software and illegal key generators. Prior to the development of robust anti-piracy technologies, there was little that could be done by the software vendors, and many software consumers were duped into "purchasing" counterfeit licenses to non-genuine software.  

Today, robust technology can be deployed to detect tampering, uncover illegal downloads, and tracks the use of software without a legal license. These technologies are increasingly being adopted by software developers as they see other companies successfully protecting their intellectual property and recovering lost revenue.

A properly configured license compliance solution can deliver a wealth of usage data, while also providing credible evidence that helps companies successfully negotiate settlements, or if necessary, present to a court of law. However, software companies are in the business of developing innovative technologies – not litigation – so how are most infringement cases dealt with? Most software piracy cases are settled outside of the legal system, and in many cases to the mutual satisfaction of both parties. 

Some defense attorneys would have you believe otherwise, but there are alternative remedies to denial that can be much more effective for all parties concerned.

Our recent paper – ‘Software Vendors Want Amicable Resolution Not Litigation’ – looks at exactly this and covers some recent verdicts in cases won by software companies, but litigation is rare, expensive and easily avoidable, so it is often the last resort for a software vendor.

The paper gives advice to those approached by a software vendor with an allegation of unlicensed use of their product by an individual or the company. It provides advice on what steps to take when a demand letter is received, that can resolve the problem to both parties’ satisfaction prior to dedicating the time, effort, and expenses associated with challenging what may be rather compelling evidence of copyright infringement.

The paper also explores some of the risks to individuals, with the personal responsibility if caught using illegal software, but also the liability the employee’s company and its owners, directors, and senior management can have with unlicensed software on their corporate networks.

The company’s reputation could be on the line, and the employee could be facing reprimand or even potentially at risk of dismissal. Conversely, if a company supplies an employee with or asks them to use software illegally, the employee could be liable even though they did not personally steal it.

In addition to the risks of prosecution for using illegal software, applications downloaded from so-called discount websites and torrents often carry malware and ransomware with them, which then can infect not only the individual machine to which it is downloaded, but can also penetrate the entire enterprise network, costing thousands, even millions, in lost data, downtime, and loss of reputation.

In conclusion, software vendors simply want to be compensated for the use of their products and to protect their intellectual property (IP). They do not seek litigation, and alternative routes will always be preferable, as they want to build their customer base and add new customers.

That said, and contrary to the claims of some defense attorneys, software vendors will resort to court if required and, from the cases highlighted in the paper, they are seeing success in recovering lost revenue by leveraging license compliance technologies that collect actionable usage data and will use it to negotiate settlements or prove damages that result in large court awards.

Read the paper


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Joyce Kuo
Marketing Communications

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