Obtaining Payment Terms for BSA Settlements

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Negotiating a settlement with the Business Software Alliance (“BSA”) to resolve a copyright infringement dispute over allegedly unlicensed software can be arduous and costly. The BSA typically demands a penalty based on some multiple of the MSRP of each product alleged to have been infringed, in addition to the BSA’s attorney’s fees and, usually, a premium for confidentiality if the targeted business wants to avoid unflattering press releases regarding the settlement.

Generally, the BSA’s settlement demands are premised on a lump-sum payment.  However, many businesses often find themselves unable to pay expensive settlement fees. Therefore, negotiating extended settlement-payment terms can be an important way to make the settlement fee more affordable.  Depending on the size of the settlement payment and financial situation of the company, settlement payments may be spread out over 3 to 6 months or even more, in some cases.  However, extended terms often are available only if the business is able to demonstrate an inability to pay the full lump sum. That demonstration often requires the disclosure of balance sheets or profit & loss statements, which company officers may be hesitant to disclose.

The process to negotiate a settlement with the BSA – regardless of the inclusion of any special provisions pertaining to confidentiality or payment terms – can be complex.  It is important to seek legal counsel who has experience negotiating with the BSA in order to secure the most palatable settlement.