The BSA’s “nauseating” anti-piracy tactics

Stewart Mitchell Read more March 16, 2012

The Business Software Alliance (BSA) has been accused of heavy-handed tactics that could drive small companies to incriminate themselves.

The issue came to light after one small-business owner approached PC Pro with a letter received from the BSA, an industry anti-piracy body whose members include Microsoft and Adobe.

The business owner believes the demand was sparked by a tip-off from a disgruntled employee using the BSA’s incentive scheme, which pays up to £20,000 for such information. The BSA says a quarter of cases involve payments to informants.

The BSA won £2.2 million in settlements and licensing fees in 2010, without taking a single case to court

“I’m quite nauseated by the BSA’s tactics,” the owner of the 15-employee company told PC Pro. “It is basically harvesting allegations from disgruntled employees and farming them out to expensive law firms. It seeks proof of compliance, but we’re a small company with nine-year-old PCs – even though someone could stand and wave a finger and say ‘You should know exactly what’s on those systems’, but the truth is I don’t. The reality of running a small business, particularly in a recession, is that you don’t.”

The letter accused the small business of running unlicensed software and demanded the firm submit to a software audit, asking for receipts for software purchased as long as seven years ago. The BSA letter “required” the audit to be submitted within 21 days, and warned that courts may award “damages in respect of flagrant infringement” – even though the BSA told PC Pro it hasn’t pursued a single court case in the past five years. Neither does the BSA have the power to search a company’s computers under warrant.

Legal letters

The letters are vague about what action the BSA would take if the company refused to submit to the audit, but the strong wording could convince companies to pay up to make the problem go away.

The BSA’s tactics were criticised by the Open Rights Group (ORG), which says rights holders – and their representatives – must be clear about what action they can take. “Businesses do need to use licensed software, but where intermediary firms are used there needs to be real care around how the proposition is communicated, so that it doesn’t lead to people being unfairly strong-armed into paying settlements or submitting themselves to onerous auditing,” said Peter Bradwell, a copyright campaigner at the ORG.

The letter, seen by PC Pro, was sent by law firm Bristows, and states that the “BSA has received a complaint alleging that your company is using unauthorised or unlicensed copies of software”. The letter demands the recipient conduct a full software audit, saying that if it reveals improper copies of software, the companies could “claim various remedies, including that the unlicensed installations be deleted” and “compensation in the form of damages be paid for the period of unlicensed use”.

The letters appear to be having the desired effect: the BSA won £2.2 million in settlements and licensing fees in 2010, without taking a single case to court. The most recent case publicised by the BSA saw an architecture firm pay £15,000 in damages, plus £18,000 to “correct the under-licensing”, while last year a plumbing firm paid £19,000 in total, and a labelling company paid £24,000.

The BSA has confirmed to PC Pro that it keeps the damages, but not the licensing fees, generated via its actions to “go towards BSA’s running costs, helping to fund BSA’s activities, including local education programmes”.

The BSA makes no secret of its tactics, or the scale of its operations, with the company last year publicising a campaign targeting 1,500 companies in Yorkshire, asking them “to declare the software of BSA members installed on company-owned computers, devices and networks to check that it is fully licensed”. Businesses were directed to complete an online self-audit form.

According to the BSA, any company flagged as under-licensed is given 30 days to become legally compliant or face “investigation and potential legal action”. The BSA said it only instructs solicitors to start action if it’s convinced an offence has been committed, so companies taking part in a self-audit could be incriminating themselves.

The letters were written to generate maximum impact without necessarily having much power to act

“The BSA’s solicitors only contact businesses with requests for software audits when the BSA strongly believes there to be a case of under-licensing/software infringement,” said Julian Swan, director of compliance marketing for the BSA in Europe. “If a company continues to deny that it’s using illegal software, against all the evidence, then the BSA may resort to legal action via the courts.”

“Scaring recipients”

As the BSA letters tend not to lead to court cases, one lawyer suggested the letters were written to generate maximum impact without necessarily having much power to act.

“It’s designed to scare the recipient into thinking that they’re obliged to provide certain information when, in fact, it’s difficult to see that they are,” said David Woods, a senior associate within the IT team at Pinsent Masons. “There are references to an unspecified complaint that seems to have been made, and after that it’s a fishing exercise.”

The right course of action for any company receiving such a letter would depend on the circumstances, but two lawyers told PC Pro that companies should think twice before submitting to the BSA’s demands. “I would expect that, in terms of a business model, what the BSA will not be doing is pursuing each of these matters to their ultimate conclusion,” said Woods.