Beware the Software Rats

I figured Bob Kruger, vice president of enforcement for the Business Software Alliance might be a tad sheepish about his organization's way of encouraging employees to rat out their bosses. Heck no! Harnessing employees' vengeful tendencies to find out whether companies are using more copies of software than they have licenses for is what the alliance is all about. Kruger says BSA gets about 1,500 calls a year from its hotline (888-NOPIRACY) and about as many leads from e-mails sent to its Web site. And it follows up on most of these tips.

"Those with an ax to grind, those who are disgusted with some aspect of the company, or have been mistreated" is how Kruger characterizes BSA's whistle-blowers. "Sometimes it's a person with a vendetta," he acknowledges in a phone interview. But it can be a vendetta with some good information."

Thanks to these legions of the disaffected, BSA recently collected $512,000 in fines from eight California businesses, some almost mom-and-pop in size. Since 1988 the alliance, acting on behalf of software companies such as Adobe, Apple, Microsoft, and Symantec, has collected approximately $59 million from the corporate world (the money goes back into BSA "enforcement and education" programs for the prevention of future software theft).

Here's how this situation starts: A company may buy one copy of a software program but, for whatever reason, spreads it across five or 10 computers in the workplace. Some companies purchase multiple licenses to cover such additional users -- licenses can cost as much as the cost of the original software but are usually sold at a discount -- but many don't. BSA estimates that 25 percent of all business software in the United States is illegally copied this way.

So obviously, Adobe and Symantec and other makers of commercial software want businesses to buy their products the same way they purchase pens, staples, or automobiles--if you need cars for 10 workers, you buy 10 cars. The problem is getting office managers, who probably don't spend much time thinking about "software licenses," into line with the industry's thinking. What better way to do so than a few well-publicized "software raids" accompanied by heavy fines for software misuse? And what better way to ferret out such misuse than relying on the many, many desk jockeys who would love to see their office managers sweat?

Kruger speaks with a rough-hewn, gravelly voice. It's a voice I suspect is attached to the kind of body I wouldn't want to meet up in a dark alley with a 100 bootlegged copies of Quark XPress. He tells me that the key is finding an informant willing to go on the record. BSA can only get a court order to do legally do an audit of the suspect firm's computers if it has someone willing to vouch that a business is using software illegally. ("We don't like to call [an audit] it a raid, but in reality that's what they are -- raids," Kruger says.) Then the alliance corroborates the info with other resources -- for instance, it can check the software company's registration records or consult with its regional sales office.

Once the alliance has a judge's OK, a team of auditors -- usually BSA accountants with laptops -- shows up at the business under suspicion, along with a few U.S. marshals. The auditors check what software is on each computer, then asks to see the company's licenses. For each software use for which the firm doesn't have papers, it's fined. While each violation carries with it a fine of up to $150,000, Kruger says, the actual figure comes down to a dance between BSA lawyers and the offending party's chosen reps. He assures me that the alliance's intent is to make its point via the company's bottom line: "It's one awfully rude way for companies to realize it's a lot more expensive to violate copyright laws than to comply with them."