Eight Canadian companies in various industry sectors have agreed to pay a total of almost $270,000 to settle claims relating to unlicensed copies of software programs installed on their computers.
The companies were investigated by the Canadian Alliance Against Software Theft (CAAST), a sister organization to the Business Software Alliance (BSA), a watchdog group that represents the world’s leading software manufacturers.
According to a recent study by IDC, 36 per cent of software installed on computers in Canada was pirated in 2004, representing a loss of $1.1 billion.
“People ask us why we do these investigations,” says Al Steele, past president of CAAST and general manager of Autodesk Canada.
“The point is let the 64 per cent users with legal software know we’re protecting them. If they purchase software to run a business, it’s actually costing them more to run it than those that don’t. This is like shoplifting and insurance fraud: all consumers end up bearing the cost of these thefts and frauds.”
Most of CAAST’s investigations begin with an anonymous phone call to its hotline or an online report on its website. CAAST receives thousands of leads annually, often from disgruntled or former employees.
CAAST has a defined due diligence process to verify the leads and find evidence of an infraction. Research is conducted to compare the number of registered users to the actual number of employees using software obtained from public sources such as the company Web site sources. If discrepancies are found, CAAST contacts these companies with a legal letter to comply and works with them to conduct a software self-audit.
If there is reason to believe the company may destroy evidence, courts may grant an Acton Piller Order (effectively a search warrant) to allow CAAST to conduct a “software raid” to investigate the system directly. Most companies prefer to reach an amicable resolution out of court.
Under Canadian copyright law, CAAST has the right to seek civil damages of up to $20,000 for copyright infringement without having to prove losses. Companies investigated by CAAST need to either remove illegal software from their systems, or incur further costs to purchase it legally.
The $270,000 represents total damages only collected from the eight companies involved in the settlement: Ensminger, Beck, Thompson; Global Vehicle Systems; IP Marketing; Labtronix; MEP technologies; Oberfeld Snowcap; Optima Analyse de march
