By Sam Ulhaq. May 29, 2020.
High profile software vendors: Microsoft, Adobe and Quest, have taken a business to court for using illegal copies of their software. The infringement took place in India and on the 26th of May 2020, the New Delhi court awarded the plaintiffs Rs3,000,000 ($40,000) and ordered the defendant and its associates, to cease its illegal use of pirated software.
The defendant is Chetu, a US-based software developer, founded in the year 2000, with over 1800 developers.
The case centers around the defendant’s use of numerous products including Windows Pro, Office applications, Adobe Illustrator, CS3 and Quest TOAD. The court heard that software piracy was reported to the plaintiffs via the website of the BSA (bsa.org), the organization that advocates for the software industry.
Once the BSA communicated the issue to Microsoft, Adobe and Quest, private investigators were enlisted to carry out a thorough inspection of the defendants use of the vendors’ software – even covertly interviewing employees of the defendant. Following investigation of their own license entitlement records for Chetu, the plaintiffs found that unlicensed software was present in more than 200 systems at the defendant’s premises.
When asked for license information, initially, no information was provided by Chetu and on the second opportunity, Chetu provided several licenses but with no accompanying invoice evidence.
It also claimed that being a Microsoft Certified Partner, its use of Microsoft software should be covered by the Microsoft Partner Network agreement. This was not the case and subsequently, the defendant did not contend its use of unauthorized software by Microsoft or Adobe.
The financial impact to Chetu is expected to be much more than $40,000, as significant court costs and the cost of purchasing software for the unlicensed machines – in some cases at undiscounted prices, is expected to be high. The reputational damage to the brand is expected to be significantly higher – pirated software poses business morality and security risk questions from potential customers or partners.
Public compliance cases like this are rare. The publicity generated for the license infringer, as well as the software publisher, leads to significant brand damage. Of course, taking court costs into account, litigation will always become expensive for all parties. In compliance circles, the thinking is that for every case that goes to court, 1,000 are settled out of court.
In the unprecedented era of Covid-19 and its impact on business, the SAM industry unanimously agrees that software vendors will increase audits in a bid to recoup lost revenues and organizations will be also direct their IT teams to reduce IT costs. The case for a mature SAM strategy, with cost control at its heart, has never been stronger.
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