Software license violation penalty

Software companies understand this, which is why the number of audits has increased every year. In reality, a small flaw in software licensing may not be a priority in the grand scheme of IT compliance, but even a minor misuse can cost your company thousands of dollars or perhaps you your job.

Non-compliance, intentional or not, has expensive consequences, as organizations that are found using unlicensed software usually must pay a fine and then are required to purchase — at full list price — sufficient licenses to make them whole. This is why having highly reliable, accurate reporting on all software licenses is critical for organizations of all sizes.

Having the capability to track software assets reliably and accurately enables organizations not only to eliminate the cost of unnecessary software spend, but also avoid non-compliance penalties. So, what can be done to achieve and maintain compliance and avoid unnecessary license costs? One way is to develop internal licensing strategies that help your organization track all software licenses, adhere to copyright laws and reduce the spend on under-used software.

Paired with good preparation work, the following best practices can help your organization successfully achieve software license optimization and compliance:. Develop strong software asset management processes to reliably track all software assets for both licensing and usage, so you can avoid non-compliance and make sure usage is optimal.

A side-effect of the inability to accurately track software licensing and usage is the possibility that malware will find its way into your system on software that is unsupported or prohibited by IT. If you enter into a settlement to avoid going to court, the amount can include significant damages. The BSA reports that cases settle outside of court at 40 to 60 percent of the original demand. If you need help with understanding unlicensed software fines, you can post your legal need on UpCounsel's marketplace.

UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb. In addition, you are not responsible for the cost of the SAM engagement as Microsoft funds the selected partner. Any historical or contractual discounts the customer usually benefited from will not be applied.

You will need to read your agreement to understand what the exact terms of an audit with Microsoft are and what Audit Penalties you may be responsible for.

Settlements Settlements occur at the end of the software audit and determine the fine that the company will pay for being out of compliance. True-Ups True-ups are a lump sum payment that companies produce after a set period of time has elapsed such as a year or three years to the software vendor within 60 days of the date making the anniversary of the initial purchase of the software.

Wasted Resources One of the least known costs of a software audit is the loss of company time and resources. Over the years Metrixdata has successfully defended companies from nearly every industry and saved them millions of dollars in heavy fines.

The process is similar for both a SAM review and a software audit. At the time of this post, under a SAM, Microsoft will not charge you any penalties. In the US, copyright laws classify software piracy into three main categories. Infringement in any category may result in prosecution. Whenever piracy occurs, the copyright holder loses their rightful profits. If the accused party is found guilty, they will be responsible for paying for any lost profits and damages, in addition to legal fees.

If the accused has shared the software with others, they can also be responsible for lost profits and damages associated with each installed copy. Just like illegally downloading movies and music, software piracy is a federal crime. In some cases, the consequences may go beyond just paying back the copyright holder and may even cause federal statutory damages to be charged.