Is your license suspended?

Is your software licensing in compliance? How do you know if it is? You may be surprised by the consequences if it is not. Many believe that only large companies are targeted by software compliance investigations. In reality, any individual or company, large or small, can end up paying large settlements for inappropriately-used software.

We’ve all been there: It’s the eleventh hour, the press is waiting, that big job has arrived—and we don’t have the font, or we can’t open the file because we don’t have the correct version of the application. The job has to get done. Somehow the solution appears, and we resolve that we will correct the indiscretion as soon as we can, but for now we turn a blind eye and complete the task at hand. The next thing you know, it’s six months later and the correction is forgotten.

The major software companies formed an alliance several years ago to investigate these indiscretions, which are also known as software theft or piracy. Known as the Canadian Alliance Against Software Theft, CAAST, or the Business Software Alliance, BSA, this alliance is protecting software developers’ intellectual property, which they worked hard to produce and which we need to conduct business. Statistically, there is a 40% chance that at least some of your software is illegal, according to CAAST ( In 2003, software theft constituted $419 million in lost sales and 32,000 lost jobs.

The owner of a company is liable for the action of his or her employees, and enticing rewards are offered to those who report piracy. Piracy fines of up to $20,000 per infraction can cripple and in some cases bankrupt a company. Software manufacturers have instituted complex activation schemes that seem to hamper software use, but ultimately they aim to prevent software piracy. Many have also allowed the use of their software for 30 days without activation so that you can try the software before you buy it. You could conceivably use Adobe, Quark and some Microsoft products for a month before having to pay for them.

How does illegal software end up on our computers? You can be given a copy of an application, you could have bought the software at a great price from an online auction, or you may have downloaded it using “peer-to-peer sharing” software. You may have the same license installed on two computers because the installer allows it. An employee may have brought it in “from home” or it may have come with a used computer you bought. Fonts are often traded but should be owned by anyone who creates original content.

Look at that license agreement that you “agreed” to when the software was installed. Simply stated, the license is intended to be installed on one computer that is used by one user. Most people think of buying software, but a more accurate understanding is that you are buying a license to use the software. When Adobe bought Macromedia for $3.4 billion—they bought the software. A license for Dreamweaver CS3 costs a mere $399 or less, and by comparison is quite a bargain.

While you can put an app on your desktop and your laptop, it cannot be used concurrently. For example, installing Acrobat Distiller on one machine and having everyone on your network send PostScript files to that single machine to produce PDFs contravenes the “single use” license agreement.

Be aware that online auctioneers may be providing counterfeit software. And be leery of “great deals”—if it sounds to good to be true, it usually is. If you buy a used computer with licensed applications, you may not have bought the license. You also cannot use educational versions of software in a business application.

What can you do to ensure that you are properly licensed? Start by taking inventory or hire a consultant to audit your software assets. Make sure your software is being used correctly. Next, check your licenses and verify the ownership. You should have a license agreement and a bill of sale to match. Create a database of your software licenses and obtain licenses for your unauthorized software. Find out about licensing at .