Thoughts on Protection from Software License Non-Compliance

by Sheshagiri Anegondi (Sheshu)

How does a company protect itself from the risk of non-compliance . Below are a five ways that you could use.

Thoughts on Protection from Software License Non-Compliance

The rate at which software publishers and their trade groups are requesting audits is increasing by the year. Industry associations such as the Business Software Association (BSA) and the Software and Information Industry Association (SIIA), are expected to substantially increase audits over the next year.

How does a company protect itself from the risk of non-compliance? There are five ways to ensure that your organization remains compliant.

Standardized Agreements

Few compainies realize that they have bargaining power when negotiating software license agreements. With a bit of effort, most companies can negotiate less lop-sided terms by instructing their own counsel to ask for a sweeter deal. For example, the inclusion of “No audit” clauses.

Maintain Accurate Records

Many executives and staff incharge of the licensing process mistakenly believe that proof of purchase can include invoices, physical media or license keys. As a matter of fact, trade associations only accept dated proofs of purchase. The company name must match that of the audited company. Anything less falls short of the publishers proof of ownership demands and the company may be forced to repurchase software assets.

Integrated IT Asset Manageent Tools

Business executives must appreciate the need for proactive management of the organization’s IT assets and put in place adequate systems and personell to do so. The tools used must specifically be designed for IT asset managment. Document managements systems and other systems are not up to the task. The system chosen must allow staff to visualize usage rights and risks inherent in contracts. Personell must be taken through continuous professional training to keep their skills up to date.

Seek Expert Assistance During an Audit

In the event of an audit, the best defense is offense. Retain qualified counsel with the relevant IT experience to help you navigate through the mine field of a software audit. Automated discoveries conducted with the supervision of legal counsel is protected by attorney client priviledges in the event it isn’t possible to settle out of court.

Since publishers have resorted to license reviews as a strategy to grow revenues, organizations must actively review their compliance. Being proactive with IT asset management is the best strategy to reduce compliance risk and minimize response time in the event of a negative audit finding.

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