Marketing firm FSA Group has settled a piracy case out of court with the Canadian Alliance Against Software Theft for $175,000.

It’s the largest settlement to

date for CAAST, according to the organization’s president Jacquie Famulak, who also serves as legal counsel for Apple Canada. Information about the FSA’s illegal software practices came to light from an anonymous tip left on CAAST’s piracy hotline in November, 2002.

“”We get thousands of them a year,”” said Famulak. “”The majority of them are asking for information about software piracy, but there are hundreds that are potential leads and we follow up every one of them.””

Famulak said CAAST gathered enough evidence to file a court action. The organization obtained an Acton Piller Order (effectively a search warrant) and went to FSA’s head office in Markham, Ont., with law enforcement officials. According to Famulak, the search turned up unlicensed copies of Adobe Systems, Autodesk, Microsoft and Symantec software.

“”The company wanted to settle,”” said Famulak. “”They didn’t want to go to court. They said, ‘What can we do?’ We were really happy because they were really cooperative.””

Famulak added that the company understood that their software practices were less than rigorous and have since offered to tighten their policies, delete unlicensed software, replace them with legal copies, and notify employees of the changes. FSA did not return calls for comment at press time.

The settlement fee of $175,000 will go towards CAAST’s information services, Web site and public relations efforts. CAAST’s member companies — which include Adobe, Apple, Microsoft, Macromedia, Network Associates and Symantec — all pay an annual fee to help subsidize those services.

According to Famulak, software piracy within an organization can have more to do with neglect in IT policy than deliberate flouting of licensing rules. It’s often small and medium-sized companies that have the hardest time keeping their practices in line, she said.

“”We find that large, international companies tend to have policy manuals — everything is documented, everything is communicated — because they need to have those controls in place because they’re so big,”” she said. “”With small and medium-sized companies, maybe because of rapid growth they haven’t established those consistent practices in the workplace and they’re just winging it as they go along.””

A smaller company, may for example, purchase 100 seats of a software package but neglect to update the licence when it needs to add 10 more users.

Many large companies have a policy of locking down desktops so that only qualified IT personnel can install software on them, said independent management consultant Rod Fox, based in Toronto. Fox has worked for a large utility and a TV cable company and was responsible for making sure that software licensing agreements were adhered to.

Sometimes even large companies have difficulties in keeping track of the software they install in-house. “”In this day and age, with end-user computing, it’s really hard to restrict senior people from putting demo software on their machines,”” he said. “”As soon as you open (software policies) up, you open yourself to them loading all sorts of software that isn’t legal onto their machines.””

Fox added that it’s often a task to keep up with changes in licensing policy from companies like Microsoft, but a lot of software policy management is contingent on keeping users up to date on the legal ramifications. “”A lot of end users don’t understand that stealing a piece of software is no different from walking by their neighbour’s house and stealing their ladder,”” he said.

Greg Lane, who’s in charge of business development for Ottawa-based Deloitte Consulting, said that software licensing is a top priority when dealing with client implementations. There are a number of contingencies that must be taken into account, such as: What happens if the company you are licensing the software from goes bankrupt? “”The clients’ view is they need to protect themselves and have the rights to the IP (intellectual property) in the event of a whole bunch of things happening,”” said Lane, who’s also vice-president of the Canadian Information Processing Society.

Lane said that Deloitte is vigilant about its own software practices. “”The ethical thing is, you never have software that you haven’t paid for. We don’t allow employees to copy music that they don’t have the authority for or to photocopy and plagiarize professional journals. It’s the same issue.””

Famulak has seen examples of a “”pack-rat mentality”” when it comes to desktop software. “”Your employer should be watching out for that kind of activity,”” she said.

CAAST routinely carries out information and learning sessions for Canadian companies and occasionally holds software amnesties. “”It’s a truce,”” explained Famulak. “”It’s like, ‘Get licensed now and we won’t come after you for any infringement that may have taken place in the past.'””

Comment: info@itbusiness.ca

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