Most U.S. Businesses Should Co-Operate With BSA Audit Demands…To A Point

in Blogs

Co-operate with BSA | The Software Alliance Audit Demands

An article published by a U.K. business journal suggested that U.K. businesses should refuse to co-operate with demands by the Business Software Alliance (BSA) for information regarding BSA-member software installations and licenses.

The article’s sources appear to base their suggestions on a combination of personal experience and, perhaps, assumptions about the BSA’s operating procedures in U.K.-based software audit matters. One source is cited as suggesting that “companies being chased to complete audits should only do so if the BSA is willing to disclose why they are being targeted, which is something it would have to do as part of any litigation process.”

However, at least in U.S.-based audit matters, the BSA is generally unwilling in any circumstances short of a federal lawsuit to disclose any information regarding the source of its information. In addition, the BSA in the U.S. operates under powers of attorney signed by the software publisher-members it represents, and it has, in the past, shown itself to be willing to pursue software audit matters in court, in the event that business targets either refuse to co-operate with its audit demands or provide information that materially and significantly diverges from the information obtained from its confidential sources.

Notwithstanding the understandable reservations many businesses may have – and should have – regarding disclosing otherwise confidential information to third parties, businesses confronted by the BSA with allegations of software copyright infringement should, at the very least, engage knowledgeable counsel in an effort to evaluate the advisability of co-operating with such demands based on all of the facts. For most businesses in that situation, it will make more sense to co-operate with the BSA in reaching an out-of-court resolution. Such an informal process allows a business to control the flow of information to the BSA and to preserve the confidentiality of any negotiated resolution. Costs and expenses associated with co-operation also generally are significantly less than those associated with a federal lawsuit, and the potential for a lower agreed settlement amount usually will be greater as well.

There are exceptions, of course, and it is equally important to keep in mind that it may make more sense, for any number of reasons, either to refuse to co-operate or, possibly, to file a pre-emptive lawsuit, usually in the form of a request that a court issue a declaratory judgment regarding the absence of copyright infringement. Again, however, these are decisions that businesses must make only after consulting with an attorney who is knowledgeable regarding the issues presented and the potential for exposure.