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Software Piracy Problems

NULLSoftware piracy is booming, depriving the industry of an estimated $40 billion in worldwide annual sales, according to the Business Software Alliance, an industry trade group based in Washington, D.C. But efforts to snare big-time thieves often end up dragging in small businesses that may have made an honest mistake.

“The Business Software Alliance acts as the ‘software police’ on behalf of the industry,” says Peter Frazza, a shareholder in the Short Hills law firm Budd Larner P.C. He defends companies involved in software disputes.

Frazza says an alleged violation may be unintended, like sharing a computer program with multiple users, even though the software is only licensed for a single user. Sometimes it may be intentional, as when an employee makes multiple copies, or bootlegs, of a program.

Smaller businesses may not have the staff to adequately police employee conduct, adds Frazza, noting the Business Software Alliance dangles bounties of up to $1 million to prompt workers to spill the beans about alleged software licensing violations at work.

Facing the threat of a lawsuit, companies routinely pay thousands of dollars apiece to the alliance to settle allegations. The alliance then uses the proceeds to fund its detective-like operations.

Frazza’s advice to companies: stay clean by maintaining employee handbooks that spell out software usage policies, and do an annual self-audit to identify and correct any violations.

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